Preformed Line Products Announces Second Quarter And First Half 2020 Results

Rhea-AI Summary

Preformed Line Products Company (NASDAQ: PLPC) reported strong financial results for Q2 2020, with net income rising to $10.5 million ($2.11 per diluted share) from $7.9 million ($1.56 per diluted share) in Q2 2019. Net sales also increased by 2% to $117.6 million. For the first six months of 2020, net income reached $14.1 million ($2.84 per diluted share), up from $9.7 million ($1.92 per diluted share) year-over-year. However, currency translation adversely affected net sales by $7.1 million for Q2, impacting net income by $0.5 million. The company emphasizes its commitment to U.S. manufacturing amid ongoing COVID-19 challenges.

Positive

• Net income for Q2 2020 rose to $10.5 million, a 33% increase compared to Q2 2019.
• Net sales for Q2 2020 increased by 2% to $117.6 million.
• Net income for the first half of 2020 increased to $14.1 million, up 45% year-over-year.
• First half net sales grew by 4% to $220.5 million compared to the same period in 2019.
• Growth attributed to PLP USA, reflecting a strong domestic manufacturing footprint.

Negative

• Currency translation rates negatively impacted net sales by $7.1 million for Q2 2020.
• Currency translation also had an adverse effect on net income by $0.5 million for Q2 2020.
• The extent of COVID-19's future impact on operations remains uncertain.

MAYFIELD VILLAGE, Ohio, Aug. 6, 2020 /PRNewswire/ -- Preformed Line Products Company (NASDAQ: PLPC) today reported financial results for its second quarter and first six months of 2020.

Net income for the quarter ended June 30, 2020 was $10.5 million, or $2.11 per diluted share, compared to $7.9 million, or $1.56 per diluted share, for the comparable period in 2019.

Net sales in the second quarter of 2020 increased 2% to $117.6 million, compared to $114.8 million in the second quarter of 2019.

Net income for the six months ended June 30, 2020 was $14.1 million, or $2.84 per diluted share, compared to $9.7 million, or $1.92 per diluted share, for the comparable period in 2019.

Net sales increased 4% to $220.5 million for the first six months of 2020 compared to $212.0 million in the first six months of 2019.

Currency translation rates unfavorably impacted net sales by $7.1 million for the quarter and $11.3 million for the six months ended June 30, 2020.  Currency had an unfavorable impact on net income of $.5 million for the quarter and $.7 million for the first six months of 2020.

Rob Ruhlman, Chairman and Chief Executive Officer, said, "I am so proud of our PLP employees who have gone above and beyond to serve our customers during these challenging times.  Our year over year increase in net sales was largely attributable to growth in PLP USA which was certainly aided by our commitment to maintaining a significant manufacturing footprint in the USA.  We appreciate the relationships we have with our PLP USA customers who value our ability to serve their product needs from our plants in Albemarle, North Carolina and Rogers, Arkansas allowing them to quickly support their customers.  The challenges brought on by COVID-19 will unfortunately be with us for some time.  While the extent to which COVID-19 will impact our future operations is largely unknown, we will continue to focus on the safety and well-being of our employees, their families, our customers and our valued suppliers."

Founded in 1947, Preformed Line Products is an international designer and manufacturer of products and systems employed in the construction and maintenance of overhead and underground networks for energy, communications and broadband network companies.

Preformed's world headquarters are in Cleveland, Ohio, and the Company operates two domestic manufacturing centers located in Rogers, Arkansas, and Albemarle, North Carolina.  The Company serves its worldwide market through international operations in Argentina, Australia, Austria, Brazil, Canada, China, Colombia, Czech Republic, England, France, Indonesia, Malaysia, Mexico, New Zealand, Poland, Russia, South Africa, Spain, Thailand and Vietnam.

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 2019 Annual Report on Form 10-K filed with the SEC on March 6, 2020 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.

 

PREFORMED LINE PRODUCTS COMPANY
CONSOLIDATED BALANCE SHEETS
			June 30,		December 31,
(Thousands of dollars, except share and per share data)			2020		2019
ASSETS
Cash and cash equivalents			$       36,507		$         38,929
Accounts receivable, less allowances of $3,340 ($3,849 in 2019)			94,840		83,517
Inventories - net			95,454		95,718
Prepaids			8,369		9,522
Other current assets			3,051		4,289
		TOTAL CURRENT ASSETS	238,221		231,975
Property, plant and equipment - net			124,261		124,018
Other intangibles - net			13,786		15,116
Goodwill			27,048		27,840
Deferred income taxes			6,275		7,564
Other assets			26,675		27,058
		TOTAL ASSETS	$     436,266		$       433,571
LIABILITIES AND SHAREHOLDERS' EQUITY
Trade accounts payable			$       30,866		$         28,282
Notes payable to banks			12,402		8,696
Current portion of long-term debt			2,789		3,354
Accrued compensation and amounts withheld from employees			15,216		11,817
Accrued expenses and other liabilities			23,065		28,924
		TOTAL CURRENT LIABILITIES	84,338		81,073
Long-term debt, less current portion			57,657		53,722
Other noncurrent liabilities and deferred income taxes			30,115		30,208
SHAREHOLDERS' EQUITY
Shareholders' equity:
	Common shares - $2 par value, 15,000,000 shares authorized, 4,934,506 and 4,992,979 issued and outstanding, as of June 30, 2020 and December 31, 2019		13,003		12,848
	Common shares issued to rabbi trust, 264,886 and 267,641 shares at June 30, 2020 and December 31, 2019, respectively		(10,910)		(10,981)
	Deferred Compensation Liability		10,910		10,981
	Paid-in capital		40,385		38,854
	Retained earnings		365,443		353,292
	Treasury shares, at cost, 1,567,692 and 1,431,235 shares at June 30, 2020 and December 31, 2019, respectively		(86,097)		(79,106)
	Accumulated other comprehensive loss		(68,573)		(57,353)
		TOTAL PREFORMED LINE PRODUCTS COMPANY SHAREHOLDERS' EQUITY	264,161		268,535
	Noncontrolling interest		(5)		33
		TOTAL SHAREHOLDERS' EQUITY	264,156		268,568
		TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$     436,266		$       433,571

 

PREFORMED LINE PRODUCTS COMPANY
STATEMENTS OF CONSOLIDATED OPERATIONS
	(In thousands, except per share data)				Three Months Ended June 30				Six Months Ended June 30
					2020		2019		2020		2019
	Net sales				$     117,629		$      114,842		$      220,481		$     211,995
	Cost of products sold				78,063		77,035		148,005		146,923
			GROSS PROFIT		39,566		37,807		72,476		65,072
	Costs and expenses
		Selling			8,439		9,046		17,344		17,458
		General and administrative			12,432		12,893		25,865		25,211
		Research and engineering			4,113		4,428		8,408		8,569
		Other operating (income) expense - net			(225)		325		1,408		673
					24,759		26,692		53,025		51,911
			OPERATING INCOME		14,807		11,115		19,451		13,161
	Other income (expense)
		Interest income			79		223		190		402
		Interest expense			(719)		(585)		(1,428)		(952)
		Other (expense) income - net			(282)		97		776		167
					(922)		(265)		(462)		(383)
			INCOME BEFORE INCOME TAXES		13,885		10,850		18,989		12,778
	Income taxes				3,397		2,984		4,848		3,088
			NET INCOME		$       10,488		$          7,866		$       14,141		$         9,690
	Less: Net income attributable to noncontrolling interests				(7)		38		38		38
			NET INCOME ATTRIBUTABLE TO PREFORMED LINE PRODUCTS COMPANY SHAREHOLDERS		$       10,481		$          7,904		$        14,179		$         9,728
	BASIC EARNINGS PER SHARE
			Net Income Attributable to Preformed Line Products Company Shareholders		$           2.11		$            1.57		$            2.84		$          1.93
	DILUTED EARNINGS PER SHARE
			Net Income Attributable to Preformed Line Products Company Shareholders		$           2.11		$            1.56		$            2.84		$          1.92
	Cash dividends declared per share				$           0.20		$            0.20		$            0.40		$          0.40
	Weighted-average number of shares outstanding - basic				4,966		5,049		4,987		5,047
	Weighted-average number of shares outstanding - diluted				4,973		5,058		4,994		5,056

 

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SOURCE Preformed Line Products Company

FAQ

What were Preformed Line Products' Q2 2020 earnings?

Preformed Line Products reported a net income of $10.5 million for Q2 2020.

How did net sales perform in Q2 2020 for PLPC?

Net sales for Q2 2020 increased by 2% to $117.6 million.

What is the impact of COVID-19 on PLPC's operations?

The impact of COVID-19 on future operations is largely unknown, but the company is focusing on safety.

Did PLPC see growth in the first half of 2020?

Yes, net income for the first half of 2020 rose to $14.1 million, a 45% increase year-over-year.

What was the effect of currency translation on PLPC's financials?

Currency translation negatively affected net sales by $7.1 million and net income by $0.5 million in Q2.