PREFORMED LINE PRODUCTS ANNOUNCES FIRST QUARTER 2024 FINANCIAL RESULTS
CLEVELAND, May 1, 2024 /PRNewswire/ -- Preformed Line Products Company (NASDAQ:PLPC) today reported financial results for its first quarter of 2024.
Net sales in the first quarter of 2024 were $140.9 million compared to $181.8 million in the first quarter of 2023, a 22% decrease due primarily to a slowdown in spending within the communications end market. Foreign currency translation increased first quarter 2024 net sales by $0.7 million.
Net income for the quarter ended March 31, 2024 was $9.6 million, or $1.94 per diluted share, compared to $21.4 million, or $4.28 per diluted share, for the comparable period in 2023. Net income for the quarter was lower as a result of decreased gross margins caused by the lower sales level, partially offset by a reduction in selling, general and administrative expenses due to cost containment efforts. Gross profit as a percentage of net sales was 31.3% for the first quarter of 2024.
Rob Ruhlman, Executive Chairman, said, "The decrease in quarterly net sales is a continuation of the decline in market demand that we saw coming mid-2023. Softness in communications end market demand continues to be caused by the higher borrowing rates, delayed BEAD stimulus funding, as well as elevated inventory levels, largely due to the overbuying that occurred in 2022 and early 2023. Our spend thrift philosophy as well as cost reduction activities instituted in mid-2023 led to reduced spending in areas not impacting customer service experience. Our excitement about the prospects of the markets that we serve allows us to 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, international hostilities, political instability, exchange rates and public health concerns, 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 impact of stimulus programs in driving demand, 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, and implement appropriate internal controls in, 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 | ||||
CONSOLIDATED BALANCE SHEETS | ||||
March 31, 2024 | December 31, 2023 | |||
(Thousands of dollars, except share and per share data) | (Unaudited) | |||
ASSETS | ||||
Cash, cash equivalents and restricted cash | $ 45,859 | $ 53,607 | ||
Accounts receivable, net | 111,527 | 106,892 | ||
Inventories, net | 141,508 | 148,814 | ||
Prepaid expenses | 8,314 | 8,246 | ||
Other current assets | 7,053 | 7,256 | ||
TOTAL CURRENT ASSETS | 314,261 | 324,815 | ||
Property, plant and equipment, net | 203,242 | 207,892 | ||
Goodwill | 28,603 | 29,497 | ||
Other intangible assets, net | 11,868 | 12,981 | ||
Deferred income taxes | 7,379 | 7,109 | ||
Other assets | 20,756 | 20,857 | ||
TOTAL ASSETS | $ 586,109 | $ 603,151 | ||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||
Trade accounts payable | $ 41,748 | $ 37,788 | ||
Notes payable to banks | 1,487 | 6,968 | ||
Current portion of long-term debt | 7,078 | 6,486 | ||
Accrued compensation and other benefits | 23,348 | 28,018 | ||
Accrued expenses and other liabilities | 26,043 | 32,057 | ||
TOTAL CURRENT LIABILITIES | 99,704 | 111,317 | ||
Long-term debt, less current portion | 47,928 | 48,796 | ||
Other noncurrent liabilities and deferred income taxes | 25,109 | 26,882 | ||
SHAREHOLDERS' EQUITY | ||||
Common shares – $2 par value per share, 15,000,000 shares authorized, 4,918,036 and 4,908,413 issued and outstanding, at March 31, 2024 and December 31, 2023 | 13,711 | 13,607 | ||
Common shares issued to rabbi trust, 238,641 and 243,118 shares at March 31, 2024 and December 31, 2023, respectively | (10,214) | (10,183) | ||
Deferred compensation liability | 10,214 | 10,183 | ||
Paid-in capital | 61,408 | 60,958 | ||
Retained earnings | 528,733 | 520,154 | ||
Treasury shares, at cost, 1,937,150 and 1,894,419 shares at March 31, 2024 and December 31, 2024, respectively | (123,701) | (118,249) | ||
Accumulated other comprehensive loss | (66,782) | (60,306) | ||
TOTAL PREFORMED LINE PRODUCTS COMPANY SHAREHOLDERS' EQUITY | 413,369 | 416,164 | ||
Noncontrolling interest | (1) | (8) | ||
TOTAL SHAREHOLDERS' EQUITY | 413,368 | 416,156 | ||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 586,109 | $ 603,151 | ||
See notes to consolidated financial statements (unaudited). | ||||
PREFORMED LINE PRODUCTS COMPANY | |||
STATEMENTS OF CONSOLIDATED INCOME | |||
Three Months Ended March 31, | |||
2024 | 2023 | ||
(Thousands of dollars, except share and per share data) | |||
Net sales | $ 140,904 | $ 181,824 | |
Cost of products sold | 96,773 | 115,541 | |
GROSS PROFIT | 44,131 | 66,283 | |
Costs and expenses | |||
Selling | 11,900 | 12,388 | |
General and administrative | 16,608 | 18,609 | |
Research and engineering | 5,431 | 5,193 | |
Other operating expense, net | (1,367) | 1,112 | |
32,572 | 37,302 | ||
OPERATING INCOME | 11,559 | 28,981 | |
Other (expense) income | |||
Interest income | 972 | 304 | |
Interest expense | (708) | (1,066) | |
Other income, net | 35 | 40 | |
299 | (722) | ||
INCOME BEFORE INCOME TAXES | 11,858 | 28,259 | |
Income tax expense | 2,255 | 6,840 | |
NET INCOME | $ 9,603 | $ 21,419 | |
Net income attributable to noncontrolling interests | (7) | (21) | |
NET INCOME ATTRIBUTABLE TO PREFORMED LINE PRODUCTS COMPANY SHAREHOLDERS | $ 9,596 | $ 21,398 | |
AVERAGE NUMBER OF SHARES OF COMMON STOCK OUTSTANDING: | |||
Basic | 4,915 | 4,937 | |
Diluted | 4,944 | 4,997 | |
EARNINGS PER SHARE OF COMMON STOCK ATTRIBUTABLE TO PREFORMED LINE PRODUCTS COMPANY SHAREHOLDERS: | |||
Basic | $ 1.95 | $ 4.33 | |
Diluted | $ 1.94 | $ 4.28 | |
Cash dividends declared per share | $ 0.20 | $ 0.20 | |
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SOURCE Preformed Line Products