Preformed Line Products Announces Third Quarter And First Nine Months Of 2020 Results

Rhea-AI Summary

Preformed Line Products Company (NASDAQ: PLPC) reported strong financial results for Q3 2020, with net income rising to $13.0 million ($2.59 per diluted share) from $8.0 million ($1.55 per diluted share) in Q3 2019. Net sales increased by 7% year-over-year to $127.5 million. For the first nine months of 2020, net income reached $27.1 million ($5.43 per diluted share), up from $17.7 million ($3.48 per diluted share) in 2019. Despite a negative impact of $3.7 million from currency translation for Q3, the company has capitalized on increased U.S. manufacturing to meet customer demand amid COVID-19 challenges.

Positive

• Net income for Q3 2020 increased 62.5% YoY to $13.0 million.
• Q3 net sales rose 7% YoY to $127.5 million.
• Net income for the first nine months increased 53.5% YoY to $27.1 million.
• U.S. manufacturing facilities have supported increased sales during COVID-19.

Negative

• Currency translation negatively affected Q3 net sales by $3.7 million.
• Currency had a negative impact of $0.3 million on Q3 net income.

MAYFIELD VILLAGE, Ohio, Oct. 30, 2020 /PRNewswire/ -- Preformed Line Products Company (NASDAQ: PLPC) today reported financial results for its third quarter and first nine months of 2020.

Net income for the quarter ended September 30, 2020 was $13.0 million, or $2.59 per diluted share, compared to $8.0 million, or $1.55 per diluted share, for the comparable period in 2019.

Net sales in the third quarter of 2020 increased 7% to $127.5 million, compared to $119.2 million in the third quarter of 2019.

Net income for the nine months ended September 30, 2020 was $27.1 million, or $5.43 per diluted share, compared to $17.7 million, or $3.48 per diluted share, for the comparable period in 2019.

Net sales increased 5% to $347.9 million for the first nine months of 2020 compared to $331.2 million in the first nine months of 2019.

Currency translation rates unfavorably impacted net sales by $3.7 million for the quarter and $15.0 million for the nine months ended September 30, 2020.  Currency had an unfavorable impact on net income of $.3 million for the quarter and $1.0 million for the first nine months of 2020.

Rob Ruhlman, Chairman and Chief Executive Officer, said, "The record quarterly net sales, net income and diluted earnings per share for the three months ended September 30, 2020 are a testament to the hard work and dedication of every employee at PLP.  COVID-19 has created new challenges for us to deal with as a company but also new opportunities.  Our number one priority continues to be the protection of our employees and their families through rigorous safety measures that we have put in place due to COVID-19.  The sacrifices made by our employees this year have enabled PLP to meet customer requirements in all regions, most notably the U.S. market.  One opportunity created by COVID-19 has been the increase in PLP-USA sales made possible by the significance of our uninterrupted U.S. based manufacturing facilities in Albemarle, North Carolina and Rogers, Arkansas.  Maintaining and growing our U.S. manufacturing footprint enables PLP to provide excellent customer service to our U.S. and export customer base.  The challenges brought on by COVID-19 may be with us for some time.  While the extent to which COVID-19 will impact our future operations is unknown, we will continue to focus on the safety and well-being of our employees, their families, our customers and our valued suppliers while continuing to provide the high quality products and services our customers appreciate."

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
					September 30,		December 31,
(Thousands of dollars, except share and per share data)					2020		2019
ASSETS
Cash and cash equivalents					$             41,248		$             38,929
Accounts receivable, less allowances of $3,536 ($3,849 in 2019)					96,712		83,517
Inventories - net					94,315		95,718
Prepaids					11,130		9,522
Other current assets					2,517		4,289
		TOTAL CURRENT ASSETS			245,922		231,975
Property, plant and equipment - net					134,440		124,018
Other intangibles - net					13,926		15,116
Goodwill					27,689		27,840
Deferred income taxes					6,515		7,564
Other assets					23,549		27,058
		TOTAL ASSETS			$            452,041		$            433,571
LIABILITIES AND SHAREHOLDERS' EQUITY
Trade accounts payable					$             30,299		$             28,282
Notes payable to banks					15,582		8,696
Current portion of long-term debt					7,198		3,354
Accrued compensation and amounts withheld from employees					17,764		11,817
Accrued expenses and other liabilities					27,352		28,924
		TOTAL CURRENT LIABILITIES			98,195		81,073
Long-term debt, less current portion					45,220		53,722
Other noncurrent liabilities and deferred income taxes					29,048		30,208
SHAREHOLDERS' EQUITY
Shareholders' equity:
	Common shares - $2 par value, 15,000,000 shares authorized, 4,914,543 and
	4,992,979 issued and outstanding, as of September 30, 2020 and December 31, 2019				13,013		12,848
	Common shares issued to rabbi trust, 265,508 and 267,641 shares at
	September 30, 2020 and December 31, 2019, respectively				(10,940)		(10,981)
	Deferred Compensation Liability				10,940		10,981
	Paid-in capital				42,047		38,854
	Retained earnings				377,384		353,292
	Treasury shares, at cost, 1,592,027 and 1,431,235 shares at
	September 30, 2020 and December 31, 2019, respectively				(87,320)		(79,106)
	Accumulated other comprehensive loss				(65,549)		(57,353)
		TOTAL PREFORMED LINE PRODUCTS COMPANY SHAREHOLDERS' EQUITY			279,575		268,535
	Noncontrolling interest				3		33
		TOTAL SHAREHOLDERS' EQUITY			279,578		268,568
		TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY			$            452,041		$            433,571

 

PREFORMED LINE PRODUCTS COMPANY
STATEMENTS OF CONSOLIDATED OPERATIONS
(In thousands, except per share data)				Three Months Ended September 30				Nine Months Ended September 30
				2020		2019		2020		2019
Net sales				$            127,463		$      119,217		$            347,944		$      331,212
Cost of products sold				82,549		79,874		230,554		226,798
		GROSS PROFIT		44,914		39,343		117,390		104,414
Costs and expenses
	Selling			8,884		9,410		26,228		26,868
	General and administrative			14,037		13,275		39,903		38,486
	Research and engineering			4,541		4,240		12,950		12,809
	Other operating expense - net			562		775		1,969		1,447
				28,024		27,700		81,050		79,610
		OPERATING INCOME		16,890		11,643		36,340		24,804
Other income (expense)
	Interest income			36		211		226		613
	Interest expense			(504)		(735)		(1,932)		(1,688)
	Other income - net			998		138		1,775		306
				530		(386)		69		(769)
		INCOME BEFORE INCOME TAXES		17,420		11,257		36,409		24,035
Income taxes				4,458		3,213		9,306		6,302
		NET INCOME		$              12,962		$          8,044		$              27,103		$        17,733
Less: Net income attributable to noncontrolling interests				(8)		(93)		30		(54)
		NET INCOME ATTRIBUTABLE TO PREFORMED LINE PRODUCTS COMPANY SHAREHOLDERS		$              12,954		$          7,951		$              27,133		$        17,679
BASIC EARNINGS PER SHARE
		Net Income Attributable to Preformed Line Products Company Shareholders		$                  2.63		$            1.58		$                  5.47		$            3.51
DILUTED EARNINGS PER SHARE
		Net Income Attributable to Preformed Line Products Company Shareholders		$                  2.59		$            1.55		$                  5.43		$            3.48
Cash dividends declared per share				$                  0.20		$            0.20		$                  0.60		$            0.60
Weighted-average number of shares outstanding - basic				4,917		5,024		4,963		5,039
Weighted-average number of shares outstanding - diluted				5,011		5,119		4,998		5,077

 

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SOURCE Preformed Line Products Company

FAQ

What were the Q3 2020 financial results for PLPC?

PLPC reported net income of $13.0 million ($2.59 per diluted share) in Q3 2020, a 62.5% increase from the previous year.

How did PLPC's net sales perform in Q3 2020?

Net sales for Q3 2020 reached $127.5 million, up 7% from $119.2 million in Q3 2019.

What was PLPC's performance for the first nine months of 2020?

For the first nine months of 2020, PLPC reported net income of $27.1 million ($5.43 per diluted share) and net sales of $347.9 million.

Did currency translation affect PLPC's financial performance?

Yes, currency translation negatively impacted Q3 2020 net sales by $3.7 million and net income by $0.3 million.

How has COVID-19 affected PLPC's operations?

COVID-19 has presented challenges but also opportunities, particularly in increasing U.S. sales due to robust domestic manufacturing.