Preformed Line Products Announces Financial Results for the Third Quarter and First Nine Months of 2011

Nov 07, 2011, 07:40 ET from Preformed Line Products Company

MAYFIELD VILLAGE, Ohio, Nov. 7, 2011 /PRNewswire/ -- Preformed Line Products Company (Nasdaq: PLPC) today reported financial results for the third quarter and the first nine months of 2011.

Net income for the quarter ended September 30, 2011 was $6,660,000, or $1.24 per diluted share, compared to $9,879,000, or $1.83 per diluted share, for the comparable period in 2010.

Net sales in the third quarter of 2011 were $108,690,000, an increase of 16% from sales of $93,942,000 in the third quarter of 2010.

Net income for the nine months ended September 30, 2011 increased 29% to $22,044,000, or $4.09 per diluted share, compared to $17,107,000, or $3.17 per diluted share for the comparable period in 2010.  

Net sales increased 30% to $318,308,000 for the first nine months of 2011 compared to $244,987,000 in the first nine months of 2010.

Currency exchange rates favorably impacted sales by $4,704,000 for the quarter and $14,964,000 for the first nine months of 2011, while the favorable impact on net income was $351,000 for the quarter and $936,000 for the first nine months of 2011.

Rob Ruhlman, Chairman and Chief Executive Officer, said, "We experienced significant swings in foreign exchange transaction gains and losses during the quarter.  During the third quarter of 2010 we had gains of $2.1 million in transactions denominated in a currency other than the native currency. Conversely, we had losses of $2.1 million in the third quarter of 2011 due to foreign exchange transactions resulting in a $4.2 million change which is included in other operating expense.  These resulted primarily from intercompany receivables and payables which are marked to market at the month end date.  The weakening Australian dollar was the main cause of this significant change.  At September 30, 2011 the Australian dollar weakened temporarily to $1.02 Australian dollar to the U.S. dollar.   During October, the Australian dollar recovered to 93 cents to one U.S. Dollar and the $2.1 million loss from September was recovered.  When we exclude the impact of these foreign exchange changes, our operating income for the third quarter of 2011 improved 12% over the third quarter of 2010.

Our strong domestic sales are being driven by utilities investment in upgrading the power grid as well as the construction of new lines for transmitting the generation of renewable energy.  The realignment of our operations has positioned us to capitalize on this increased demand.  Our facilities in the Asia Pacific region continue to benefit from the integration of acquisitions."

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 three domestic manufacturing centers located in Rogers, Arkansas, Albuquerque, New Mexico, and Albemarle, North Carolina.  The Company serves its worldwide market through international operations in Australia, Brazil, Canada, China, England, Indonesia, Malaysia,  Mexico, New Zealand, Poland, South Africa, Spain and Thailand.

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 strength of the economy and demand for the Company's products, increases in raw material prices, the Company's ability to identify, complete and integrate acquisitions for profitable growth, and other factors described under the headings "Risk Factors" and "Forward-Looking Statements" in the Company's 2009 Annual Report on Form 10-K filed with the SEC on March 11, 2011 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

STATEMENTS OF CONSOLIDATED OPERATIONS

(UNAUDITED)

In thousands, except per share data

Three month periods ended

September 30,

Nine month periods ended

September 30,

2011

2010

2011

2010

Net sales

$ 108,690

$ 93,942

$ 318,308

$ 244,987

Cost of products sold

71,130

62,271

211,651

165,836

GROSS PROFIT

37,560

31,671

106,657

79,151

Costs and expenses

Selling

9,485

7,678

26,793

21,218

General and administrative

12,297

9,856

35,039

29,000

Research and engineering

3,239

2,915

9,816

8,474

Other operating expense (income)

2,459

(1,735)

1,671

(745)

27,480

18,714

73,319

57,947

OPERATING INCOME

10,080

12,957

33,338

21,204

Other income (expense)

Interest income

131

84

422

261

Interest expense

(177)

(162)

(654)

(458)

Other income

194

1,005

421

1,765

148

927

189

1,568

INCOME BEFORE INCOME TAXES

10,228

13,884

33,527

22,772

Income taxes

3,568

4,002

11,483

5,760

NET INCOME

6,660

9,882

22,044

17,012

Less net income (loss) attributable

to noncontrolling interests, net of tax

-

3

-

(95)

NET INCOME ATTRIBUTABLE TO PLPC

$     6,660

$   9,879

$   22,044

$   17,107

BASIC EARNINGS PER SHARE

Net Income to PLPC common shareholders

$       1.27

$     1.89

$       4.19

$       3.26

DILUTED EARNINGS PER SHARE

Net Income to PLPC common shareholders

$       1.24

$     1.83

$       4.09

$       3.17

Cash dividends declared per share

$       0.20

$     0.20

$       0.60

$       0.60

Weighted-average number of shares outstanding - basic

5,253

5,238

5,263

5,248

Weighted-average number of shares outstanding - diluted

5,381

5,390

5,386

5,396

PREFORMED LINE PRODUCTS COMPANY

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

September 30,

December 31,

Thousands of dollars, except share and per share data

2011

2010

ASSETS

Cash and cash equivalents

$         23,751

$        22,655

Accounts receivable, less allowances of $1,816 ($1,213 in 2010)

68,959

56,102

Inventories - net

85,014

73,121

Deferred income taxes

6,262

4,784

Prepaids

9,839

9,069

Other current assets

2,262

1,611

TOTAL CURRENT ASSETS

196,087

167,342

Property and equipment - net

78,855

76,266

Other intangibles - net

11,654

12,735

Goodwill

12,222

12,346

Deferred income taxes

4,032

3,615

Other assets

9,385

8,675

TOTAL ASSETS

$       312,235

$      280,979

LIABILITIES AND SHAREHOLDERS' EQUITY

Notes payable to banks

$           2,686

$          1,246

Current portion of long-term debt

605

1,276

Trade accounts payable

27,317

27,001

Accrued compensation and amounts withheld from employees

16,078

9,848

Accrued expenses and other liabilities

24,110

17,187

TOTAL CURRENT LIABILITIES

70,796

56,558

Long-term debt, less current portion

13,381

9,374

Other noncurrent liabilities and deferred income taxes

18,249

18,382

SHAREHOLDERS' EQUITY

PLPC shareholders' equity:

Common shares - $2 par value, 15,000,000 shares authorized,

    5,248,396 and 5,270,977 issued and outstanding,

    net of 639,138 and 586,746 treasury shares at par, respectively

10,497

10,542

Common shares issued to Rabbi Trust

(1,280)

(1,200)

Deferred Compensation Liability

1,280

1,200

Paid in capital

12,092

8,748

Retained earnings

198,668

184,060

Accumulated other comprehensive loss

(11,448)

(6,010)

TOTAL PLPC SHAREHOLDERS' EQUITY

209,809

197,340

Noncontrolling interest

-

(675)

TOTAL SHAREHOLDERS' EQUITY

209,809

196,665

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$       312,235

$      280,979

SOURCE Preformed Line Products Company



RELATED LINKS

http://www.preformed.com