PREFORMED LINE PRODUCTS ANNOUNCES RECORD FOURTH QUARTER AND FULL YEAR 2022 FINANCIAL RESULTS

Rhea-AI Summary

Preformed Line Products Company (NASDAQ: PLPC) reported robust financial results for Q4 and the full year of 2022, marking the fourth consecutive year of record net sales. Q4 net sales surged 29% to $169.9 million, while net income reached a record $16.5 million, or diluted EPS of $3.28, an 83% increase from the prior year. For the full year, net sales totaled $637.0 million, a 23% increase, with net income at $54.4 million, or $10.88 per diluted share, up 51% compared to 2021. Notably, gross profit margins also improved, driven by effective price increases and incremental sales from recent acquisitions, despite challenges from foreign currency translation.

Positive

• Record quarterly net sales of $169.9 million in Q4 2022, a 29% increase year-over-year.
• Record quarterly net income of $16.5 million, leading to diluted EPS of $3.28, up 83% from Q4 2021.
• Full year net sales reached $637.0 million, a 23% increase from 2021.
• Full year net income hit $54.4 million, with diluted EPS increasing 51% to $10.88.
• Gross profit margin increased to 36.6% in Q4 2022, a rise of 630 bps versus Q4 2021.
• Successful price increases helped offset inflation in raw materials and freight costs.

Negative

• Foreign currency translation negatively impacted net sales by $8.0 million in Q4 2022 and $24.2 million for the full year.
• Asia-Pacific region experienced a slight decline in net sales in 2022.

CLEVELAND, March 1, 2023 /PRNewswire/ -- Preformed Line Products Company (NASDAQ: PLPC) today reported financial results for its fourth quarter and full year ended December 31, 2022.

Q4 2022 Highlights:

• Third consecutive record of quarterly net sales; increased 29% from comparable 2021 period
• Record quarterly net income of $16.5 million
• Diluted EPS of $3.28, an increase of 83% from Q4 2021, a new quarterly record

Full Year 2022 Highlights:

• Fourth consecutive record of annual net sales; increased 23% from comparable 2021 period
• Record net income of $54.4 million
• Diluted EPS of $10.88, an increase of 51% from 2021, a new annual record

Net sales in the fourth quarter of 2022 were $169.9 million compared to $131.4 million in the fourth quarter of 2021, a 29.3% increase and a new record for quarterly shipments. Foreign currency translation reduced fourth quarter 2022 net sales by $8.0 million.

Net income for the quarter ended December 31, 2022 was $16.5 million, or $3.28 per diluted share, compared to $9.0 million, or $1.79 per diluted share, for the comparable period in 2021. The fourth quarter of 2022 net income benefited from the increased gross profit from the incremental sales, selling price increases and incremental sales from recent acquisitions.  Gross profit as a percentage of net sales was 36.6% for the fourth quarter of 2022, an increase of 630 bps versus the same quarter in 2021.

Net sales for the full year 2022 were $637.0 million, compared to $517.4 million in 2021. This is the fourth consecutive year of record net sales and represents a 23.1% increase versus prior year. Foreign currency translation reduced full year 2022 net sales by $24.2 million.

Net income for the year ended December 31, 2022 was $54.4 million, or $10.88 per diluted share, compared to $35.7 million, or $7.19 per diluted share in 2021. Net income for the full year 2022 was favorably impacted by the increase in margin on incremental sales as well as the full year benefit of price increases which helped offset inflationary raw material and freight cost increases.  Gross profit as a percentage of net sales was 33.8% for 2022, an increase of 170 bps versus 2021.

Rob Ruhlman, Chairman and Chief Executive Officer, said, "The fourth consecutive year for record net sales and record earnings per share in 2022 continues to be the result of the resolve, commitment and dedication of our global team. This also represents the fifth consecutive year of record domestic net sales with PLP-USA posting a year-over-year increase of 32.1%.  The Americas and EMEA regions both enjoyed net sales growth while the Asia-Pacific region showed a slight reduction in net sales in 2022 with a decline in the pace of year-over-year reductions from the two preceding years.  The price increases we announced over the last two years have been effective at offsetting the significant inflation for core raw material commodities and transportation costs. We continue to invest capital in our global facilities to increase capacity and we continue to seek out the right opportunities for inorganic growth completing four acquisitions in the last five quarters.  We are fully committed to providing our customers with the high quality products and service they have come to expect from our dedicated workforce."

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 global business conditions and the economy due to factors such as inflation, rising interest rates, labor disruptions, military conflict, political instability, exchange rates and lingering effects of COVID-19, the strength of demand and availability of funding 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, opportunities for business growth through acquisitions and the ability to successfully integrate any acquired businesses, changes in regulations and tax rates, security breaches, litigation and claims 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
								December 31,		December 31,
(Thousands of dollars, except share and per share data)								2022		2021
ASSETS
Cash, cash equivalents and restricted cash								$              37,239		$              36,406
Accounts receivable, less allowances of $5,600 ($3,744 in 2021)								125,261		98,203
Inventories, net								147,458		114,507
Prepaid expenses								13,283		19,778
Other current assets								4,929		3,217
		TOTAL CURRENT ASSETS						328,170		272,111
Property, plant and equipment, net								175,011		149,774
Goodwill								28,004		28,194
Other intangible assets, net								14,082		12,039
Deferred income taxes								5,320		3,839
Other assets								17,892		23,061
		TOTAL ASSETS						$            568,479		$            489,018
LIABILITIES AND SHAREHOLDERS' EQUITY
Trade accounts payable								$              46,839		$              42,376
Notes payable to banks								18,098		16,423
Current portion of long-term debt								3,018		3,116
Accrued compensation and other benefits								24,356		21,703
Accrued expenses and other liabilities								23,024		21,917
		TOTAL CURRENT LIABILITIES						115,335		105,535
Long-term debt, less current portion								68,420		40,048
Other noncurrent liabilities and deferred income taxes								26,100		27,335
SHAREHOLDERS' EQUITY
Shareholders' equity:
	Common shares - $2 par value, 15,000,000 shares authorized, 4,917,020 and
	4,907,143 issued and outstanding, as of December 31, 2022 and December 31, 2021, respectively							13,351		13,185
	Common shares issued to rabbi trust, 245,386 and 243,138 shares at
	December 31, 2022 and December 31, 2021, respectively							(10,261)		(10,102)
	Deferred compensation liability							10,261		10,102
	Paid-in capital							53,646		47,814
	Retained earnings							460,930		410,673
	Treasury shares, at cost, 1,758,901 and 1,685,387 shares at
	December 31, 2022 and December 31, 2021, respectively							(99,303)		(93,836)
	Accumulated other comprehensive loss							(69,987)		(61,719)
		TOTAL PREFORMED LINE PRODUCTS COMPANY SHAREHOLDERS' EQUITY						358,637		316,117
	Noncontrolling interest							(13)		(17)
		TOTAL SHAREHOLDERS' EQUITY						358,624		316,100
		TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY						$            568,479		$            489,018

 

PREFORMED LINE PRODUCTS COMPANY
STATEMENTS OF CONSOLIDATED OPERATIONS
	(Thousands of dollars, except earnings per share data)		Three Months Ended December 31				Twelve Months Ended December 31
			2022		2021		2022		2021
	Net sales		$        169,924		$        131,446		$        637,021		$        517,417
	Cost of products sold		107,694		91,598		421,841		351,175
	GROSS PROFIT		62,230		39,848		215,180		166,242
	Costs and expenses
	Selling		12,139		10,697		45,712		40,539
	General and administrative		19,593		12,352		70,317		55,257
	Research and engineering		4,783		4,953		19,661		19,188
	Goodwill impairment		—		—		6,529		—
	Other operating expense, net		1,128		881		3,600		3,709
			37,643		28,883		145,819		118,693
	OPERATING INCOME		24,587		10,965		69,361		47,549
	Other income (expense)
	Interest income		272		92		631		169
	Interest expense		(1,085)		(544)		(3,214)		(2,023)
	Other income, net		429		1,452		6,926		3,201
			(384)		1,000		4,343		1,347
	INCOME BEFORE INCOME TAXES		24,203		11,965		73,704		48,896
	Income tax expense		7,715		3,014		19,305		13,175
	NET INCOME		$          16,488		$            8,951		$          54,399		$          35,721
	Net loss (income) attributable to noncontrolling interests		23		23		(4)		8
	NET INCOME ATTRIBUTABLE TO PREFORMED
	LINE PRODUCTS COMPANY SHAREHOLDERS		$          16,511		$            8,974		$          54,395		$          35,729
	AVERAGE NUMBER OF SHARES OF COMMON STOCK
	OUTSTANDING:
	Basic		4,927		4,907		4,931		4,907
	Diluted		5,032		5,026		4,999		4,970
	EARNINGS PER SHARE OF COMMON STOCK
	ATTRIBUTABLE TO PREFORMED LINE PRODUCTS
	COMPANY SHAREHOLDERS:
	Basic		$             3.35		$             1.83		$            11.03		$             7.28
	Diluted		$             3.28		$             1.79		$            10.88		$             7.19
	Cash dividends declared per share		$             0.20		$             0.20		$             0.80		$             0.80

 

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SOURCE Preformed Line Products

FAQ

What were PLPC's net sales in Q4 2022?

PLPC reported net sales of $169.9 million in Q4 2022, a 29% increase from the prior year.

What was PLPC's diluted EPS for the full year 2022?

The diluted EPS for PLPC for the full year 2022 was $10.88, an increase of 51% compared to 2021.

How much did PLPC's net income grow in Q4 2022?

PLPC's net income grew to a record $16.5 million in Q4 2022, up 83% from Q4 2021.

What impact did foreign currency translation have on PLPC's sales?

Foreign currency translation reduced PLPC's net sales by $8.0 million in Q4 2022 and $24.2 million for the full year.

How did PLPC address inflationary pressures in 2022?

PLPC implemented price increases over the last two years to offset inflation in raw materials and transportation costs.