PREFORMED LINE PRODUCTS ANNOUNCES FOURTH QUARTER AND FULL YEAR 2021 FINANCIAL RESULTS

Rhea-AI Summary

Preformed Line Products Company (NASDAQ: PLPC) reported record fourth quarter sales of $131.4 million for 2021, a 10.9% increase from $118.5 million in Q4 2020. Net income surged to $9.0 million ($1.79 per diluted share) from $2.7 million ($0.53 per diluted share) year-over-year. For the full year, net sales reached $517.4 million, marking a third consecutive year of record sales, while net income increased to $35.7 million ($7.19 per diluted share). Challenges from rising raw material costs and the COVID-19 pandemic persist, prompting announced price increases to counteract inflation.

Positive

• Record fourth quarter net sales of $131.4 million, a 10.9% increase year-over-year.
• Net income for Q4 2021 was $9.0 million, a significant increase from $2.7 million in Q4 2020.
• Full year 2021 net sales reached $517.4 million, increasing 10.9% year-over-year.
• Record earnings per share of $7.19 for the full year 2021.

Negative

• Net income impacted by rising costs of raw materials and transportation.
• COVID-19 pandemic continues to negatively affect operations, especially in the Asia-Pacific region.

CLEVELAND, March 3, 2022 /PRNewswire/ -- Preformed Line Products Company (NASDAQ: PLPC) today reported financial results for its fourth quarter and full year ended December 31, 2021.

Net sales in the fourth quarter of 2021 were $131.4 million compared to $118.5 million in the fourth quarter of 2020, a 10.9% increase and a new record for fourth quarter shipments. Foreign currency translation reduced fourth quarter 2021 net sales by $0.7 million.

Net income for the quarter ended December 31, 2021 was $9.0 million, or $1.79 per diluted share, compared to $2.7 million, or $0.53 per diluted share, for the comparable period in 2020. The fourth quarter of 2021 net income benefited from the increased gross profit on incremental sales and the selling price increases announced in 2021 partially offsetting the impact of rising costs on key raw material inputs and transportation expenses. Also benefiting the year-over-year comparison were charges incurred for litigation reserves and loss on sale of assets in 2020 not recurring in 2021 as well as the timing of expense recognition for employee bonus plans.

Net sales for the full year 2021 were $517.4 million, compared to $466.4 million in 2020. This is the third consecutive year of record net sales and represents a 10.9% increase. Favorable foreign currency translation accounted for $9.3 million of the full year 2021 net sales increase.

Net income for the year ended December 31, 2021 was $35.7 million, or $7.19 per diluted share, compared to $29.8 million, or $5.98 per diluted share in 2020. Net income for the full year 2021 was negatively impacted by significant increases in raw material prices and transportation expenses. However, the increase in margin on incremental sales as well as the early-stage pricing benefit for announced price increases in 2021 helped offset those inflationary increases allowing us to substantially maintain our year-over-year gross profit comparison.

On March 2, 2022, we amended our line of credit agreement with PNC Bank, National Association to increase our facility limit from $65.0 million to $90.0 million, modified our index used to determine the interest rates from LIBOR to the Bloomberg Short Term Bank Yield Index ("BSBY") and extended the maturity from June 30, 2024 to March 2, 2026. Substantially all other terms remain the same. 

Rob Ruhlman, Chairman and Chief Executive Officer, said, "The third consecutive year for record net sales and record earnings per share in 2021 is the result of the resolve, commitment and dedication of our global team. This also represents the fourth consecutive year of record domestic net sales with PLP-USA posting a year-over-year increase of 28%. That increase in domestic net sales and to a lesser extent the increase in net sales for EMEA more than covered shortfalls experienced in the America's and Asia-Pacific regions. The Asia-Pacific region relies heavily on government sponsored infrastructure projects which continue to be more negatively impacted by the COVID-19 pandemic than the other regions. As supply chain disruptions and significant inflation for core raw material commodities and transportation costs have impacted our global operations, we have announced price increases to combat these inflationary increases. While we expect these price increases to substantially offset inflation to date, continued cost inflation may require further price adjustments. We do anticipate COVID-19 will continue to challenge our business as well as the global economy well into 2022. As always, we are fully committed to providing our customers with the high-quality products they expect while staying focused on the safety and well-being of our employees, customers, vendors and their families."

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, 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 2020 Annual Report on Form 10-K filed with the SEC on March 5, 2021 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
					December 31,		December 31,
(Thousands of dollars, except share and per share data)					2021		2020
ASSETS
Cash and cash equivalents					$              36,406		$              45,175
Accounts receivable, less allowances of $3,744 ($3,464 in 2020)					98,203		92,686
Inventories - net					114,507		97,537
Prepaid expenses					19,778		17,660
Other current assets					3,217		3,256
TOTAL CURRENT ASSETS					272,111		256,314
Property, plant and equipment - net					149,774		125,965
Goodwill					28,194		29,508
Other intangible assets - net					12,039		14,443
Deferred income taxes					3,839		10,863
Other assets					23,061		23,994
TOTAL ASSETS					$            489,018		$            461,087
LIABILITIES AND SHAREHOLDERS' EQUITY
Trade accounts payable					$              42,376		$              31,646
Notes payable to banks					16,423		17,428
Current portion of long-term debt					3,116		5,216
Accrued compensation					13,756		14,736
Accrued expenses and other liabilities					29,864		34,748
TOTAL CURRENT LIABILITIES					105,535		103,774
Long-term debt, less current portion					40,048		33,333
Other noncurrent liabilities and deferred income taxes					27,335		31,911
SHAREHOLDERS' EQUITY
Shareholders' equity:
Common shares - $2 par value, 15,000,000 shares authorized, 4,907,143 and 4,902,233 issued and outstanding, as of December 31, 2021 and December 31, 2020, respectively					13,185		13,028
Common shares issued to rabbi trust, 243,138 and 265,508 shares at December 31, 2021 and December 31, 2020, respectively					(10,102)		(10,940)
Deferred compensation liability					10,102		10,940
Paid-in capital					47,814		43,134
Retained earnings					410,673		379,035
Treasury shares, at cost, 1,685,387 and 1,611,927 shares at December 31, 2021 and December 31, 2020, respectively					(93,836)		(88,568)
Accumulated other comprehensive loss					(61,719)		(54,551)
TOTAL PREFORMED LINE PRODUCTS COMPANY SHAREHOLDERS' EQUITY					316,117		292,078
Noncontrolling interest					(17)		(9)
TOTAL SHAREHOLDERS' EQUITY					316,100		292,069
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY					$            489,018		$            461,087

 

PREFORMED LINE PRODUCTS COMPANY
STATEMENTS OF CONSOLIDATED OPERATIONS
	(In thousands, except per share data)		Three Months Ended December 31				Twelve Months Ended December 31
			2021		2020		2021		2020
	Net sales		$        131,446		$        118,506		$        517,417		$        466,449
	Cost of products sold		91,598		81,883		351,175		312,436
	GROSS PROFIT		39,848		36,623		166,242		154,013
	Costs and expenses
	Selling		10,697		9,408		40,539		35,637
	General and administrative		12,352		16,432		55,257		56,335
	Research and engineering		4,953		4,676		19,188		17,625
	Other operating expense - net		881		2,239		3,709		4,209
			28,883		32,755		118,693		113,806
	OPERATING INCOME		10,965		3,868		47,549		40,207
	Other income (expense)
	Interest income		92		33		169		259
	Interest expense		(544)		(464)		(2,023)		(2,396)
	Other income - net		1,452		726		3,201		2,501
			1,000		295		1,347		364
	INCOME BEFORE INCOME TAXES		11,965		4,163		48,896		40,571
	Income tax expense		3,014		1,505		13,175		10,810
	NET INCOME		$            8,951		$            2,658		$          35,721		$          29,761
	Less: Net loss attributable to noncontrolling interests		23		11		8		42
	NET INCOME ATTRIBUTABLE TO PREFORMED LINE PRODUCTS COMPANY SHAREHOLDERS		$            8,974		$            2,669		$          35,729		$          29,803
	AVERAGE NUMBER OF SHARES OF COMMON STOCK
	OUTSTANDING:
	Basic		4,907		4,899		4,907		4,923
	Diluted		5,026		5,027		4,970		4,984
	EARNINGS PER SHARE OF COMMON STOCK
	ATTRIBUTABLE TO PREFORMED LINE PRODUCTS
	COMPANY SHAREHOLDERS:
	Basic		$             1.83		$             0.54		$             7.28		$             6.05
	Diluted		$             1.79		$             0.53		$             7.19		$             5.98
	Cash dividends declared per share		$             0.20		$             0.20		$             0.80		$             0.80

 

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SOURCE Preformed Line Products