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PREFORMED LINE PRODUCTS ANNOUNCES THIRD QUARTER 2024 FINANCIAL RESULTS

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Preformed Line Products reported Q3 2024 financial results with net sales of $147.0 million, down 8% from $160.4 million in Q3 2023. Net income decreased to $7.7 million ($1.54 per diluted share) from $15.1 million ($3.03 per diluted share). For the first nine months of 2024, net sales declined 19% to $426.6 million, with net income of $26.6 million ($5.37 per diluted share) compared to $57.0 million ($11.39 per diluted share) in 2023. The decline is primarily attributed to slowdown in communications end market spending and inventory destocking. Gross profit margin remained stable at 31.2% in Q3 2024.

Preformed Line Products ha riportato i risultati finanziari del Q3 2024 con vendite nette di 147,0 milioni di dollari, in calo dell'8% rispetto ai 160,4 milioni di dollari del Q3 2023. Il reddito netto è diminuito a 7,7 milioni di dollari (1,54 dollari per azione diluita) rispetto ai 15,1 milioni di dollari (3,03 dollari per azione diluita). Nei primi nove mesi del 2024, le vendite nette sono diminuite del 19% a 426,6 milioni di dollari, con un reddito netto di 26,6 milioni di dollari (5,37 dollari per azione diluita) rispetto ai 57,0 milioni di dollari (11,39 dollari per azione diluita) del 2023. Il calo è principalmente attribuito a una diminuzione della spesa nel mercato delle comunicazioni e a uno smaltimento delle scorte. Il margine di profitto lordo è rimasto stabile al 31,2% nel Q3 2024.

Preformed Line Products informó sobre los resultados financieros del Q3 2024 con ventas netas de 147,0 millones de dólares, una disminución del 8% respecto a los 160,4 millones de dólares del Q3 2023. La utilidad neta disminuyó a 7,7 millones de dólares (1,54 dólares por acción diluida) desde los 15,1 millones de dólares (3,03 dólares por acción diluida). Para los primeros nueve meses de 2024, las ventas netas cayeron un 19% a 426,6 millones de dólares, con una utilidad neta de 26,6 millones de dólares (5,37 dólares por acción diluida) en comparación con los 57,0 millones de dólares (11,39 dólares por acción diluida) en 2023. La disminución se atribuye principalmente a una desaceleración en el gasto del mercado final de comunicaciones y al desabastecimiento de inventarios. El margen de utilidad bruta se mantuvo estable en el 31,2% en el Q3 2024.

Preformed Line Products는 Q3 2024 재무 결과를 보고하며, 순매출이 1억 4,700만 달러로, Q3 2023의 1억 6,040만 달러에서 8% 감소했다고 발표했습니다. 순이익은 770만 달러(희석 주당 1.54달러)로 감소하였고, 2023년의 1,510만 달러(희석 주당 3.03달러)에서 줄어들었습니다. 2024년 첫 9개월 동안 순매출은 19% 감소하여 4억 2,660만 달러에 이르렀고, 순이익은 2,660만 달러(희석 주당 5.37달러)로, 2023년의 5,700만 달러(희석 주당 11.39달러)와 비교되었습니다. 이 감소는 주로 통신 최종 시장의 지출 감소와 재고 조정에 기인합니다. 총 이익률은 Q3 2024에서 31.2%로 안정적으로 유지되었습니다.

Preformed Line Products a annoncé les résultats financiers du Q3 2024, avec des ventes nettes s'élevant à 147,0 millions de dollars, en baisse de 8% par rapport à 160,4 millions de dollars au Q3 2023. Le revenu net a diminué à 7,7 millions de dollars (1,54 dollar par action diluée) contre 15,1 millions de dollars (3,03 dollars par action diluée) l'année précédente. Pour les neuf premiers mois de 2024, les ventes nettes ont chuté de 19% à 426,6 millions de dollars, tandis que le revenu net était de 26,6 millions de dollars (5,37 dollars par action diluée), comparé à 57,0 millions de dollars (11,39 dollars par action diluée) en 2023. Cette baisse est principalement attribuée à un ralentissement des dépenses dans le marché final des communications et à un déstockage des inventaires. La marge bénéficiaire brute est restée stable à 31,2% au Q3 2024.

Preformed Line Products hat die finanziellen Ergebnisse des Q3 2024 veröffentlicht, mit einem Nettoumsatz von 147,0 Millionen US-Dollar, was einem Rückgang von 8% gegenüber 160,4 Millionen US-Dollar im Q3 2023 entspricht. Der Nettogewinn sank auf 7,7 Millionen US-Dollar (1,54 US-Dollar pro verwässerter Aktie) von 15,1 Millionen US-Dollar (3,03 US-Dollar pro verwässerter Aktie). In den ersten neun Monaten 2024 fiel der Nettoumsatz um 19% auf 426,6 Millionen US-Dollar, während der Nettogewinn bei 26,6 Millionen US-Dollar (5,37 US-Dollar pro verwässerter Aktie) im Vergleich zu 57,0 Millionen US-Dollar (11,39 US-Dollar pro verwässerter Aktie) im Jahr 2023 lag. Der Rückgang wird hauptsächlich auf eine Verlangsamung der Ausgaben im Endmarkt für Kommunikation und auf die Lagerreduzierung zurückgeführt. Die Bruttomarge blieb im Q3 2024 stabil bei 31,2%.

Positive
  • Gross profit margin remained stable at 31.2% in Q3 2024
  • Cost reduction activities implemented in 2023 showing positive effects
  • Order backlog showing signs of increase
  • Strong liquidity position maintained
Negative
  • Q3 2024 net sales decreased 8% to $147.0 million
  • Q3 2024 net income dropped 49% to $7.7 million
  • YTD net sales declined 19% to $426.6 million
  • YTD net income decreased 53% to $26.6 million
  • Continued slowdown in communications end market spending

Insights

The Q3 2024 results reveal significant challenges for PLPC, with net sales declining 8% to $147.0 million and net income dropping by nearly 49% to $7.7 million. The year-to-date performance shows even steeper declines, with sales down 19% and earnings per share falling from $11.39 to $5.37.

The primary concern lies in the communications end market weakness, driven by higher borrowing costs and inventory destocking. However, there are some positive indicators:

  • Stable gross margin at 31.2%
  • Effective cost containment measures
  • Increasing order backlog suggesting potential recovery
  • Strong liquidity position
The company's maintenance of gross margins despite lower volumes demonstrates effective operational management, though the significant revenue decline remains a key concern for investors.

CLEVELAND, Oct. 30, 2024 /PRNewswire/ -- Preformed Line Products Company (NASDAQ: PLPC) today reported financial results for its third quarter of 2024.

Net sales in the third quarter of 2024 were $147.0 million compared to $160.4 million in the third quarter of 2023, an 8% decrease. The decrease in sales is primarily related to a continuation of the slowdown in spending in the communications end market. Foreign currency translation reduced third quarter 2024 net sales by $0.8 million.

Net income for the quarter ended September 30, 2024, was $7.7 million, or $1.54 per diluted share, compared to $15.1 million, or $3.03 per diluted share, for the comparable period in 2023. The third quarter of 2024 net income was impacted by decreased gross profit from lower sales levels, similar to our first half 2024 results, partially offset by lower period expenses from our cost containment initiatives, lower net interest expense and reduced income tax expense. Gross profit as a percentage of net sales was 31.2% for the third quarter of 2024, largely consistent with the second quarter of 2024.

Net sales decreased 19% to $426.6 million for the first nine months of 2024 compared to $524.1 million for the first nine months of 2023. The year-over-year decline in sales is due primarily to the slowdown in spending and inventory destocking within the communications end market. Currency translation rates reduced net sales by $1.1 million for the nine months ended September 30, 2024.

Net income for the nine months ended September 30, 2024 was $26.6 million, or $5.37 per diluted share, compared to $57.0 million, or $11.39 per diluted share, for the comparable period in 2023. YTD September 30, 2024 net income was impacted by decreased gross profit resulting from the decrease in sales which was partially offset by lower period expenses, lower net interest expense and reduced income tax expense.

Rob Ruhlman, Executive Chairman, said, "The decline in net sales continues, albeit at a slower pace, primarily related to the softness in the communications end market, caused primarily by a reduction in deployment due to higher borrowing costs and continued inventory destocking to re-align customer inventory levels with current manufacturing lead times.  The slower pace of the net sales decline and an increase in order backlog are indicators that we may be nearing the final stages of inventory destocking. Our gross margin percentage has been consistent throughout 2024 aided by our cost reduction activities implemented in 2023.  We remain optimistic about the prospects of the markets that we serve and will continue our investment in new product development, streamlining our manufacturing operations and expanding our customer service portfolio.  These actions, along with our continued strong liquidity, will allow us to take advantage of favorable market conditions when they return.  Our current focus is unchanged:  provide our customers with the high-quality products and timely service they have come to expect from PLP."

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 2023 Annual Report on Form 10-K filed with the SEC on March 8, 2024 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 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
STATEMENTS OF CONSOLIDATED INCOME



Three Months Ended September 30,


Nine Months Ended September 30,


2024


2023


2024


2023

(Thousands of dollars, except per share data)






Net sales

$              146,973


$              160,438


$              426,597


$              524,076

Cost of products sold

101,195


106,301


292,415


337,328

GROSS PROFIT

45,778


54,137


134,182


186,748

Costs and expenses








Selling

12,318


12,732


36,146


38,133

General and administrative

16,414


17,794


48,272


54,624

Research and engineering

5,545


5,840


16,334


16,793

Other operating expense, net

1,109


(2,307)


186


(10)


35,386


34,059


100,938


109,540

OPERATING INCOME

10,392


20,078


33,244


77,208

Other (expense) income








Interest income

538


478


1,856


1,201

Interest expense

(564)


(998)


(1,840)


(3,198)

Other income, net

64


18


189


165


38


(502)


205


(1,832)

INCOME BEFORE INCOME TAXES

10,430


19,576


33,449


75,376

Income tax expense

2,734


4,431


6,783


18,348

NET INCOME

$                   7,696


$                15,145


$                26,666


$                57,028

Net income attributable to noncontrolling interests

(16)


(15)


(24)


(28)

NET INCOME ATTRIBUTABLE TO PREFORMED LINE
PRODUCTS COMPANY SHAREHOLDERS

$                   7,680


$                15,130


$                26,642


$                57,000

AVERAGE NUMBER OF SHARES OF COMMON STOCK OUTSTANDING:








Basic

4,904


4,906


4,911


4,929

Diluted

4,977


4,990


4,959


5,006

EARNINGS PER SHARE OF COMMON STOCK
ATTRIBUTABLE TO PREFORMED LINE PRODUCTS
COMPANY SHAREHOLDERS:








Basic

$                     1.57


$                     3.08


$                     5.42


$                   11.56

Diluted

$                     1.54


$                     3.03


$                     5.37


$                   11.39









Cash dividends declared per share

$                     0.20


$                     0.20


$                     0.60


$                     0.60

 

PREFORMED LINE PRODUCTS COMPANY
CONSOLIDATED BALANCE SHEETS




September 30, 2024


December 31, 2023

(Thousands of dollars, except share and per share data)


(Unaudited)



ASSETS





Cash, cash equivalents and restricted cash


$                       47,498


$                       53,607

Accounts receivable, net


110,888


106,892

Inventories, net


142,726


148,814

Prepaid expenses


13,053


8,246

Other current assets


6,479


7,256

TOTAL CURRENT ASSETS


320,644


324,815

Property, plant and equipment, net


201,194


207,892

Goodwill


28,672


29,497

Other intangible assets, net


10,983


12,981

Deferred income taxes


9,502


7,109

Other assets


20,958


20,857

TOTAL ASSETS


$                    591,953


$                     603,151

LIABILITIES AND SHAREHOLDERS' EQUITY





Trade accounts payable


$                       42,426


$                       37,788

Notes payable to banks


8,006


6,968

Current portion of long-term debt


2,618


6,486

Accrued compensation and other benefits


29,499


28,018

Accrued expenses and other liabilities


31,450


32,057

TOTAL CURRENT LIABILITIES


113,999


111,317

Long-term debt, less current portion


24,582


48,796

Other noncurrent liabilities and deferred income taxes


24,385


26,882

SHAREHOLDERS' EQUITY





Common shares – $2 par value per share, 15,000,000 shares authorized,
4,897,450 and 4,908,413 issued and outstanding, at September 30, 2024 and
December 31, 2023


13,715


13,607

Common shares issued to rabbi trust, 222,741 and 243,118 shares at September 30,
2024 and December 31, 2023, respectively


(9,557)


(10,183)

Deferred compensation liability


9,557


10,183

Paid-in capital


63,108


60,958

Retained earnings


543,743


520,154

Treasury shares, at cost, 1,959,512 and 1,894,419 shares at September 30, 2024
and December 31, 2023, respectively


(126,503)


(118,249)

Accumulated other comprehensive loss


(65,092)


(60,306)

TOTAL PREFORMED LINE PRODUCTS COMPANY
SHAREHOLDERS' EQUITY


428,971


416,164

Noncontrolling interest


16


(8)

TOTAL SHAREHOLDERS' EQUITY


428,987


416,156

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY


$                    591,953


$                     603,151






See notes to consolidated financial statements (unaudited).





 

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SOURCE Preformed Line Products

FAQ

What were PLPC's Q3 2024 earnings per share?

PLPC reported earnings of $1.54 per diluted share in Q3 2024, compared to $3.03 per diluted share in Q3 2023.

How much did PLPC's revenue decline in Q3 2024?

PLPC's revenue declined 8% to $147.0 million in Q3 2024 from $160.4 million in Q3 2023.

What was PLPC's gross profit margin in Q3 2024?

PLPC's gross profit margin was 31.2% in Q3 2024, remaining largely consistent with Q2 2024.

What is the main reason for PLPC's sales decline in 2024?

The main reason for the sales decline is the slowdown in spending and inventory destocking within the communications end market.

Preformed Line Products Co

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Electrical Equipment & Parts
Water, Sewer, Pipeline, Comm & Power Line Construction
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CLEVELAND