PREFORMED LINE PRODUCTS ANNOUNCES FIRST QUARTER 2022 FINANCIAL RESULTS

Rhea-AI Summary

Preformed Line Products Company (PLPC) reported strong Q1 2022 results, with net sales increasing by 18% to $138.2 million from $117.6 million in Q1 2021. The diluted EPS surged 72% to $2.49, reflecting a net income of $12.3 million. The results were impacted by a $4.4 million gain from life insurance and a $1.0 million charge for winding down operations in Russia, alongside unfavorable currency translation effects of $2.5 million. While inflation is influencing costs, strong volume growth driven by acquisitions has been beneficial.

Positive

• Net sales increased by 18% to $138.2 million.
• Diluted EPS rose by 72% to $2.49.
• Net income reached $12.3 million, up from $7.2 million in Q1 2021.
• Completed two acquisitions contributing to growth.

Negative

• Charge of $1.0 million for the wind-down of the subsidiary in Russia.
• Unfavorable currency translation impact of $2.5 million on net sales.
• Inflationary pressure on gross profit percentage and earnings generation.

CLEVELAND, May 5, 2022 /PRNewswire/ -- Preformed Line Products Company (NASDAQ: PLPC) today reported financial results for its first quarter ended March 31, 2022.

Q1 2022 Highlights:

• Net sales increased 18%
• Diluted EPS of $2.49, an increase of 72%
• Results included a gain of $4.4 million from life insurance death benefits
• Charge of $1.0 million incurred to wind-down PLP-Russia
• Completed two acquisitions

Net sales for the first quarter of 2022 were $138.2 million, an increase of 18%, compared to $117.6 million in the first quarter of 2021. Currency translation rates had an unfavorable impact on 2022 first quarter net sales of $2.5 million, or 2%.

The Company posted net income for the first quarter of 2022 of $12.3 million, or $2.49 per diluted share, compared to $7.2 million, or $1.45 per diluted share, in the first quarter of 2021. First quarter 2022 net income included a non-taxable gain of $4.4 million from life insurance death benefits. The first quarter of 2022 also included charges of approximately $1.0 million related to the wind-down of the Company's subsidiary in Russia, which include a $0.4 million charge to write-down inventory balances. Currency translation rates had an unfavorable effect on net income of $0.2 million.  

Rob Ruhlman, Chairman and Chief Executive Officer, said, "We are pleased with our strong start to 2022. We enjoyed strong volume growth and incremental sales from our newest acquisitions and benefitted from selling price adjustments made necessary by the significant levels of inflation experienced last year and so far this year. The pace of inflationary increases on our raw material inputs and freight expense coupled with additional costs associated with supply chain disruption continue to negatively impact our gross profit percentage and earnings generation. As a result, we have instituted additional selling price increases. All regions except for Asia-Pacific reported an increase in net sales versus Q1 2021. PLP USA continues to lead the increase driven by growth in the communications product family as well as the significance of our U.S. based manufacturing and distribution facilities. Additional investments are well underway within our PLP USA operations to support this growth both today and into the future. While we have seen reductions in revenue in certain operations that rely more heavily on government-sponsored infrastructure projects that have been delayed due to COVID-19, our strength in other markets has more than offset the shortfalls to allow for both top-line and bottom-line growth. Customer satisfaction remains our primary goal – accomplished by providing high-quality products and services that meet or exceed expectations."

FORWARD-LOOKING STATEMENTS

This news release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 regarding the Company, including those statements regarding the Company's and management's beliefs and expectations concerning the Company's future performance or anticipated financial results, among others. Except for historical information, the matters discussed in this release are forward-looking statements that involve risks and uncertainties which may cause results to differ materially from those set forth in those statements. Among other things, factors that could cause actual results to differ materially from those expressed in such forward-looking statements include the uncertainty in business conditions and economy due to COVID-19 including the severity and duration of business disruption caused by the pandemic, the strength of the economy and demand for the Company's products and the mix of products sold, the relative degree of competitive and customer price pressure on the Company's products, the cost, availability and quality of raw materials required for the manufacture of products, the impact of global economic conditions (such as social unrest, acts of war, military conflict (including the ongoing conflict between Russia and Ukraine), international hostilities, terrorism and changes in diplomatic and trade relationships) on profitability and future growth opportunities; the Company's ability to identify, complete, obtain funding for and integrate acquisitions for profitable growth; and the Company's ability to continue to develop proprietary technology and maintain high quality products and customer service to meet or exceed new industry performance standards and individual customer expectations, and other factors described under the headings "Forward-Looking Statements" and "Risk Factors" in the Company's 2021 Annual Report on Form 10-K filed with the SEC on March 4, 2022 and subsequent filings with the SEC. The Annual Report on Form 10-K and the Company's other filings with the SEC can be found on the SEC's website at http://www.sec.gov. The Company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.

ABOUT PLP

PLP protects the world's most critical connections by creating stronger and more reliable networks. The company's precision-engineered solutions are trusted by energy and communications providers worldwide to perform better and last longer. With locations in over 20 countries, PLP works as a united global corporation, delivering high-quality products and unparalleled service to customers around the world.

PREFORMED LINE PRODUCTS COMPANY
CONSOLIDATED BALANCE SHEETS
								March 31,		December 31,
(Thousands of dollars, except share and per share data)								2022		2021
ASSETS
Cash and cash equivalents								$              34,630		$              36,406
Accounts receivable, less allowances of $4,541 ($3,744 in 2021)								115,764		98,203
Inventories – net								126,113		114,507
Prepaid expenses								19,111		19,778
Other current assets								3,458		3,217
		TOTAL CURRENT ASSETS						299,076		272,111
Property, plant and equipment – net								156,434		149,774
Goodwill								38,435		28,194
Other intangible assets – net								16,669		12,039
Deferred income taxes								5,645		3,839
Other assets								18,241		23,061
		TOTAL ASSETS						$            534,500		$            489,018
LIABILITIES AND SHAREHOLDERS' EQUITY
Trade accounts payable								$              51,499		$              42,376
Notes payable to banks								14,236		16,423
Current portion of long-term debt								3,261		3,116
Accrued compensation and other benefits								20,415		21,703
Accrued expenses and other liabilities								26,086		21,917
		TOTAL CURRENT LIABILITIES						115,497		105,535
Long-term debt, less current portion								60,594		40,048
Other noncurrent liabilities and deferred income taxes								29,500		27,335
SHAREHOLDERS' EQUITY
Shareholders' equity:
	Common shares - $2 par value, 15,000,000 shares authorized, 4,940,094 and
	4,907,143 issued and outstanding, as of March 31, 2022 and December 31, 2021, respectively							13,302		13,185
	Common shares issued to rabbi trust, 244,485 and 243,138 shares at
	March 31, 2022 and December 31, 2021, respectively							(10,201)		(10,102)
	Deferred compensation liability							10,201		10,102
	Paid-in capital							48,847		47,814
	Retained earnings							421,921		410,673
	Treasury shares, at cost, 1,788,283 and 1,685,387 shares at
	March 31, 2022 and December 31, 2021, respectively							(95,631)		(93,836)
	Accumulated other comprehensive loss							(59,529)		(61,719)
		TOTAL PREFORMED LINE PRODUCTS COMPANY SHAREHOLDERS' EQUITY						328,910		316,117
	Noncontrolling interest							(1)		(17)
		TOTAL SHAREHOLDERS' EQUITY						328,909		316,100
		TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY						$            534,500		$            489,018

 

PREFORMED LINE PRODUCTS COMPANY
STATEMENTS OF CONSOLIDATED OPERATIONS
	(Thousands of dollars, except per share data)		Three Months Ended March 31
			2022		2021
	Net sales		$        138,223		$        117,553
	Cost of products sold		96,272		77,361
	GROSS PROFIT		41,951		40,192
	Costs and expenses
	Selling		10,661		9,601
	General and administrative		16,309		14,394
	Research and engineering		4,774		4,611
	Other operating expense – net		756		818
			32,500		29,424
	OPERATING INCOME		9,451		10,768
	Other income (expense)
	Interest income		113		21
	Interest expense		(526)		(463)
	Other income – net		5,103		228
			4,690		(214)
	INCOME BEFORE INCOME TAXES		14,141		10,554
	Income tax expense		1,840		3,377
	NET INCOME		$          12,301		$            7,177
	Less: Net (gain) loss attributable to noncontrolling interests		(16)		2
	NET INCOME ATTRIBUTABLE TO PREFORMED
	LINE PRODUCTS COMPANY SHAREHOLDERS		$          12,285		$            7,179
	AVERAGE NUMBER OF SHARES OF COMMON STOCK
	OUTSTANDING:
	Basic		4,928		4,917
	Diluted		4,943		4,936
	EARNINGS PER SHARE OF COMMON STOCK
	ATTRIBUTABLE TO PREFORMED LINE PRODUCTS
	COMPANY SHAREHOLDERS:
	Basic		$             2.49		$             1.46
	Diluted		$             2.49		$             1.45
	Cash dividends declared per share		$             0.20		$             0.20

 

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SOURCE Preformed Line Products

FAQ

What were Preformed Line Products’ net sales for Q1 2022?

PLPC reported net sales of $138.2 million for Q1 2022, an 18% increase from the previous year.

What was the diluted EPS for PLPC in the first quarter of 2022?

The diluted EPS for PLPC in Q1 2022 was $2.49, reflecting a 72% increase year-over-year.

How did currency translation rates affect PLPC’s financial results in Q1 2022?

Currency translation rates negatively impacted PLPC's net sales by $2.5 million in Q1 2022.

What charges did Preformed Line Products incur in Q1 2022 related to its subsidiary in Russia?

PLPC incurred approximately $1.0 million in charges related to winding down its subsidiary in Russia.

What factors contributed to PLPC's earnings growth in Q1 2022?

Earnings growth was driven by strong volume growth, selling price adjustments, and contributions from acquisitions.