PREFORMED LINE PRODUCTS CO - Quarter Report: 2024 September (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM

(Mark One)

Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the fiscal quarter ended

Transition Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

for the Transition Period From ________To _______

Commission file number

(Exact name of registrant as specified in its charter)



(State or Other Jurisdiction of Incorporation or Organization)						(I.R.S. Employer Identification No.)


,
(Address of Principal Executive Office)						(Zip Code)


()
(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

☒

Non-accelerated filer

☐

Smaller Reporting Company

Emerging Growth Company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No

The number of shares outstanding as of October 18, 2024: .

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PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

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	$	$
Accounts receivable, net
Inventories, net
Prepaid expenses
Other current assets
TOTAL CURRENT ASSETS
Property, plant and equipment, net
Operating lease, right-of-use assets
Goodwill
Other intangible assets, net
Deferred income taxes
Other assets
TOTAL ASSETS	$	$
LIABILITIES AND SHAREHOLDERS' EQUITY
Trade accounts payable	$	$
Notes payable to banks
Operating lease liabilities, current
Current portion of long-term debt
Accrued compensation and other benefits
Accrued expenses and other liabilities
Dividends payable
Income taxes payable
TOTAL CURRENT LIABILITIES
Long-term debt, less current portion
Operating lease liabilities, noncurrent
Deferred income taxes
Other noncurrent liabilities
SHAREHOLDERS' EQUITY
Common shares – $ par value per share, shares authorized, and issued and outstanding, at September 30, 2024 and December 31, 2023
Common shares issued to rabbi trust, and shares at September 30, 2024 and December 31, 2023, respectively	()	()
Deferred compensation liability
Paid-in capital
Retained earnings
Treasury shares, at cost, and shares at September 30, 2024 and December 31, 2023, respectively	()	()
Accumulated other comprehensive loss	()	()
TOTAL PREFORMED LINE PRODUCTS COMPANY SHAREHOLDERS' EQUITY
Noncontrolling interest		()
TOTAL SHAREHOLDERS' EQUITY
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	$

See notes to consolidated financial statements (unaudited).

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PREFORMED LINE PRODUCTS COMPANY

STATEMENTS OF CONSOLIDATED INCOME

(UNAUDITED)


	Three Months Ended September 30,		Nine Months Ended September 30,
	2024	2023	2024	2023
(Thousands of dollars, except per share data)
Net sales	$	$	$	$
Cost of products sold
GROSS PROFIT
Costs and expenses
Selling
General and administrative
Research and engineering
Other operating expense (income), net		()		()

OPERATING INCOME
Other income (expense)
Interest income
Interest expense	()	()	()	()
Other income, net
		()		()
INCOME BEFORE INCOME TAXES
Income tax expense
NET INCOME	$	$	$	$
Net income attributable to noncontrolling interests	()	()	()	()
NET INCOME ATTRIBUTABLE TO PREFORMED LINE PRODUCTS COMPANY SHAREHOLDERS	$	$	$	$
AVERAGE NUMBER OF SHARES OF COMMON STOCK OUTSTANDING:
Basic
Diluted
EARNINGS PER SHARE OF COMMON STOCK ATTRIBUTABLE TO PREFORMED LINE PRODUCTS COMPANY SHAREHOLDERS:
Basic	$	$	$	$
Diluted	$	$	$	$

See notes to consolidated financial statements (unaudited).

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PREFORMED LINE PRODUCTS COMPANY

STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME

(UNAUDITED)


	Three Months Ended September 30,		Nine Months Ended September 30,
	2024	2023	2024	2023

(Thousands of dollars)
Net income	$	$	$	$
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment		()	()	()
Recognized net actuarial gain
Other comprehensive income (loss), net of tax		()	()	()
Comprehensive income attributable to noncontrolling interests	()	()	()	()
COMPREHENSIVE INCOME ATTRIBUTABLE TO PREFORMED LINE PRODUCTS COMPANY SHAREHOLDERS	$	$	$	$

See notes to consolidated financial statements (unaudited).

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PREFORMED LINE PRODUCTS COMPANY

STATEMENTS OF CONSOLIDATED CASH FLOWS

(UNAUDITED)


	Nine Months Ended September 30,
	2024	2023
(Thousands of dollars)
OPERATING ACTIVITIES
Net income	$	$
Adjustments to reconcile net income to net cash provided by operations:
Depreciation and amortization
Deferred income taxes	()	()
Share-based compensation expense
Gain on sale of property and equipment	()	()
Other, net
Changes in operating assets and liabilities
NET CASH PROVIDED BY OPERATING ACTIVITIES
INVESTING ACTIVITIES
Capital expenditures	()	()
Proceeds from the sale of property and equipment
Acquisition of businesses, net of cash		()
NET CASH USED IN INVESTING ACTIVITIES	()	()
FINANCING ACTIVITIES
Proceeds (payments) of notes payable to banks		()
Proceeds from long-term debt
Payments of long-term debt	()	()
Dividends paid	()	()
Proceeds from issuance of common shares
Purchase of common shares for treasury	()	()
Purchase of common shares for treasury from related parties	()	()
Other	()
NET CASH USED IN FINANCING ACTIVITIES	()	()
Effects of exchange rate changes on cash, cash equivalents and restricted cash	()
Net decrease in cash, cash equivalents and restricted cash	()
Cash, cash equivalents and restricted cash at beginning of year
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD	$	$

See notes to consolidated financial statements (unaudited).

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PREFORMED LINE PRODUCTS COMPANY

STATEMENTS OF CONSOLIDATED SHAREHOLDERS' EQUITY

Accumulated Other
Comprehensive Income
(Loss)

(In thousands, except share and per share data)

Common Shares

Common Shares Issued to Rabbi Trust

Deferred Compensation Liability

Paid in Capital

Retained Earnings

Treasury Shares

Cumulative Translation Adjustment

Unrecognized Pension Benefit Cost

Total Preformed Line Products Company Equity

Noncontrolling Interests

Total Equity

Balance at December 31, 2023

()

Net income

Foreign currency translation adjustment

()

Pension adjustment, net of tax

Total comprehensive income

Share-based compensation

Purchase of common shares

()

Issuance of common shares

Common shares distributed from rabbi trust of , net

()

Cash dividends declared – $ per share

()

Balance at March 31, 2024

()

Net income

Foreign currency translation adjustment

()

Pension adjustment, net of tax

Total comprehensive income

Share-based compensation

Purchase of common shares

()

Issuance of common shares

Common shares issued to rabbi trust of , net

()

Cash dividends declared – $ per share

()

Balance at June 30, 2024

()

Net income

Foreign currency translation adjustment

Pension adjustment, net of tax

Total comprehensive income

Share-based compensation

Purchase of common shares

()

Issuance of common shares

Common shares distributed from rabbi trust of , net

()

Cash dividends declared – $ per share

()

Balance at September 30, 2024

()

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PREFORMED LINE PRODUCTS COMPANY

STATEMENTS OF CONSOLIDATED SHAREHOLDERS' EQUITY

Accumulated Other Comprehensive Income (Loss)

(In thousands, except share and per share data)

Common Shares

Common Shares Issued to Rabbi Trust

Deferred Compensation Liability

Paid in Capital

Retained Earnings

Treasury Shares

Cumulative Translation Adjustment

Unrecognized Pension Benefit Cost

Total Preformed Line Products Company Equity

Noncontrolling Interests

Total Equity

Balance at December 31, 2022

()

Net income

Foreign currency translation adjustment

Pension adjustment, net of tax

Total comprehensive income

Share-based compensation

Purchase of common shares

()

Issuance of common shares

Common shares distributed from rabbi trust of , net

()

Cash dividends declared – $ per share

()

Balance at March 31, 2023

()

Net income

()

Foreign currency translation adjustment

Pension adjustment, net of tax

Total comprehensive income

()

Share-based compensation

Purchase of common shares

()

Issuance of common shares

Common shares distributed from rabbi trust of , net

()

Cash dividends declared – $ per share

()

Balance at June 30, 2023

()

Net income

Foreign currency translation adjustment

()

Pension adjustment, net of tax

Total comprehensive income

Share-based compensation

Purchase of common shares

()

Issuance of common shares

Common shares distributed from rabbi trust of , net

()

Cash dividends declared – $ per share

()

Balance at September 30, 2023

()

See notes to consolidated financial statements (unaudited).

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PREFORMED LINE PRODUCTS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(Tables in thousands of dollars, except share and per share data, unless specifically noted)

NOTE 1 –

Recently Adopted or Issued Accounting Pronouncements

NOTE 2 –

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Disaggregated Revenue

%%%%%Communications%%%%%Special Industries%%%%%Total%%%%%Three Months Ended September 30, 2023Product TypePLP-USAThe AmericasEMEAAsia-PacificConsolidatedEnergy%%%%%Communications%%%%%Special Industries%%%%%Total%%%%%Nine Months Ended September 30, 2024Product TypePLP-USAThe AmericasEMEAAsia-PacificConsolidatedEnergy%%%%%Communications%%%%%Special Industries%%%%%Total%%%%%Nine Months Ended September 30, 2023Product TypePLP-USAThe AmericasEMEAAsia-PacificConsolidatedEnergy%%%%%Communications%%%%%Special Industries%%%%%Total%%%%%

Credit Losses for Receivables

$ (Reductions) additions charged to costs and expenses() Write-offs()()Foreign exchange and other()()Allowance for credit losses, end of period$ $

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NOTE 3 –

$ Work-in-process Finished products Inventories, net of excess and obsolete inventory reserve Excess of current cost over LIFO cost()()Inventories at LIFO cost$ $

million at September 30, 2024 and $ million at December 31, 2023. An actual valuation of inventories under the LIFO method can be made only at the end of the year based on the inventory levels and costs at that time. Accordingly, interim LIFO calculations are based on management’s estimates of expected year-end inventory levels and costs. Because these estimates are subject to change and may be different than the actual inventory levels and costs at the end of the year, interim results are subject to the final year-end LIFO inventory valuation. During the three-month periods ended September 30, 2024 and 2023, the net change in LIFO inventories resulted in expense of $ million and $ million, respectively, to Cost of products sold. During the nine-month periods ended September 30, 2024 and 2023, the net change in LIFO inventories resulted in expense of $ million and of $ million, respectively, to Cost of products sold. The Company’s reserves for slow moving and obsolete inventory were $ million at September 30, 2024 and $ million at December 31, 2023.

NOTE 4 –

$ Buildings and improvements Machinery, equipment and aircraft Construction in progress Property, plant and equipment, gross Less accumulated depreciation()()Property, plant and equipment, net$ $

NOTE 5 –

In November 2016, the Company and its subsidiaries Helix Uniformed Ltd. (“Helix”) and Preformed Line Products (Canada) Limited (“PLPC Canada”), were each named, jointly and severally, with each of SNC-Lavalin ATP, Inc. (“SNC ATP”), HD Supply Canada Inc., by its trade names HD Supply Power Solutions and HD Supply Utilities (“HD Supply”), and Anixter Power Solutions Canada Inc. (the corporate successor to HD Supply, “Anixter”) and, together with the Company, PLPC Canada, Helix, SNC ATP and HD

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million Canadian dollars ($ million US dollars). The settlement reflects the Company’s desire to eliminate the burden, expense, distraction and further uncertainties of litigation, and the settlement does not constitute an admission of liability, wrongdoing or fault by the Company and its subsidiaries.

reserves for known global legal matters.

NOTE 6 –

$ $ $ Expected return on plan assets()()()()Recognized net actuarial loss Net periodic pension expense$ $ $ $

There were contributions to the U.S. Plan during the nine months ended September 30, 2024 and 2023. The Company is evaluating whether to make additional contributions to the U.S. Plan during 2024. In August 2023, the Board of Directors of the Company approved a resolution to terminate the U.S. Plan and certain administrative actions have been undertaken to proceed with the termination. Components of pension expense are included in Other income, net in the Consolidated Statements of Income.

NOTE 7 –

)$()$()$()$()$()Other comprehensive income before reclassifications:Foreign currency translation adjustment— — ()()Amounts reclassified from AOCI:Amortization of defined benefit pension actuarial gain (a) — — Net current period other comprehensive income (loss) ()()Balance at September 30$()$()$()$()$()$()

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)$()$()$()$()$()Other comprehensive income before reclassifications:Foreign currency translation adjustment— ()()— ()()Amounts reclassified from AOCI:Amortization of defined benefit pension actuarial gain (a) — — Net current period other comprehensive income (loss) ()() ()()Balance at September 30$()$()$()$()$()$()

(a).

NOTE 8 –

million that expires March 2, 2026. The interest rate for U.S. borrowing is defined as the Secured Overnight Financing Rate (“SOFR”) plus % unless the Company’s funded debt to Earnings before Interest, Taxes and Depreciation ratio exceeds to 1, at which point the SOFR spread becomes %. At September 30, 2024, the Company had utilized $ million with $ million available on the Facility. There were long-term outstanding letters of credit on the Facility as of September 30, 2024. Our bank debt to equity percentage was %. The Facility contains, among other provisions, requirements for maintaining levels of net worth and profitability. At September 30, 2024, the Company was in compliance with these covenants.

On January 19, 2021, the Company received funding for a term loan from PNC Equipment Finance, LLC in the principal amount of $ million for the full amount of the purchase price for a new corporate aircraft. The term of the loan is months at a fixed interest rate of %. The loan is payable in equal monthly installments, which commenced on March 1, 2021 with a final payment of any outstanding principal and accrued interest due and payable on the final monthly payment date. Of the $ million outstanding on this debt facility at September 30, 2024, $ million was classified as current. The loan is secured by the aircraft.

The Company has other borrowing facilities at certain of its foreign subsidiaries, which consist of overdraft lines, working capital credit lines, and facilities for the issuance of letters of credit and short-term borrowing needs. At September 30, 2024, and December 31, 2023, $ million and $ million were outstanding, of which $ million and $ million were classified as current, respectively. These facilities support commitments made in the ordinary course of business.

The Company's Asia-Pacific segment had $ million and $ million in restricted cash used to secure bank guarantees at September 30, 2024 and December 31, 2023, respectively. The restricted cash is shown on the Company’s Consolidated Balance Sheets in Cash, cash equivalents and restricted cash.

NOTE 9 –

% and %, respectively. The higher effective tax rate for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 was primarily due to limitations on the deductibility of compensation and a lower excess tax benefit on share-based compensation which was partially offset by the favorable impact from the mix of earned income in certain foreign jurisdictions.

For the nine-month period ended September 30, 2024 and 2023, the Company’s effective tax rate was % and %, respectively. The lower effective tax rate for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 was primarily due to the favorable impact from discrete benefits recorded as a result of amending prior year federal tax returns and an increase in excess tax benefits on share-based compensation in relation to overall lower pre-tax book income.

The Company provides valuation allowances against deferred tax assets when it is more likely than not that some portion or all of its deferred tax assets will not be realized. During the period ended September 30, 2024, the Company did not record any additional valuation allowances in various jurisdictions on its deferred tax assets.

For the nine-month periods ending September 30, 2024 and 2023, the Company did not record any new uncertain tax positions.

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NOTE 10 –

$ $ $ DenominatorDetermination of shares (in thousands)Weighted-average common shares outstandingDilutive effect – share-based awardsDiluted weighted-average common shares outstandingEarnings per common shareBasic$ $ $ $ Diluted$ $ $ $

share-based awards excluded from the calculation of diluted earnings per share as there was no anti-dilutive effect .

NOTE 11 –

$()$ $()Land use rights () ()Trademark () ()Technology () ()Customer relationships () ()$ $()$ $()Indefinite-lived intangible assetsGoodwill$ $

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The Company’s only intangible asset with an indefinite life is goodwill. The Company’s goodwill is not deductible for tax purposes.

$ $ $ $ Currency translation () ()Balance at September 30, 2024$ $ $ $ $

NOTE 12 –

$ $ $ Total assets$ $ $ $ Liabilities: Foreign currency forward contracts$ $ $ $ Supplemental profit sharing plan Total liabilities$ $ $ $

Description

Balance as of December 31, 2023

Quoted Prices in Active Markets for

Identical Assets or Liabilities

(Level 1)

Significant Other Observable Inputs

(Level 2)

Significant Unobservable Inputs

(Level 3)

Assets:

Foreign currency forward contracts

Total assets

Liabilities:

Foreign currency forward contracts

Supplemental profit sharing plan

Total liabilities

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days or less and generally require an exchange of foreign currencies for U.S. dollars at maturity at rates stated in the contracts. These contracts are not designated as hedging instruments under U.S. GAAP. Accordingly, the changes in the fair value of the foreign currency forward contracts are recognized in each accounting period in Other operating expense, net on the Consolidated Statements of Income together with the transaction gain or loss from the related balance sheet position. For the three and nine months ended September 30, 2024, the Company recognized net losses of and $ million, respectively, on foreign currency forward contracts. For the three and nine months ended September 30, 2023, the Company recognized net losses of $ million and $ million, respectively, on foreign currency forward contracts.

The Company has a non-qualified supplemental profit sharing plan for its executives (the "Supplemental Profit Sharing Plan"). The liability for the unfunded Supplemental Profit Sharing Plan was $ million at September 30, 2024 and $ million at December 31, 2023.

$ $ $

NOTE 13 –

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$ $ $ The Americas EMEA Asia-Pacific Total net sales$ $ $ $ Intersegment salesPLP-USA$ $ $ $ The Americas EMEA Asia-Pacific Total intersegment sales$ $ $ $ Gross profitPLP-USA$ $ $ $ The Americas EMEA Asia-Pacific Total gross profit$ $ $ $ Net income attributable to Preformed Line Products Company shareholdersPLP-USA$ $ $ $ The Americas EMEA Asia-Pacific Total net income attributable to Preformed Line Products Company shareholders$ $ $ $

NOTE 14 –

million, net of cash as of the closing date. The purchase price is subject to a holdback of approximately $ million. To fund the Pilot Plastics acquisition, the Company borrowed on the Facility.

The acquisition of Pilot Plastics is accounted for using the acquisition method of accounting, which requires the assets acquired and liabilities assumed to be recognized at their respective fair values on the acquisition date. The process of estimating the fair values of certain tangible assets and assumed liabilities requires the use of judgment in determining the appropriate assumptions and estimates.

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Inventory Property, plant and equipment and other assets Accounts payable()Other current liabilities()Total identifiable net assets Total consideration, net of cash received$

Due to the consideration transferred equaling the fair value of the assets acquired, no residual goodwill was recognized.

All measurement period adjustments were completed within a year from the acquisition date, and such adjustments did not have a material impact on the Company's results of operations and financial position.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is intended to help the readers of our financial statements better understand our results of operations, financial condition and present business environment. The MD&A is provided as a supplement to, and should be read in conjunction with, our unaudited consolidated financial statements and related notes included elsewhere in this report.

OVERVIEW

Preformed Line Products Company (the “Company”, “PLPC”, “we”, “us”, or “our”) was incorporated in Ohio in 1947. We are an international designer and manufacturer of products and systems employed in the construction and maintenance of overhead and underground networks for the energy, telecommunication, cable operators, information (data communication), and other similar industries. Our primary products support, protect, connect, terminate, and secure cables and wires. We provide helical solutions, connectors, fiber optic and copper splice closures, solar hardware mounting applications, and electric vehicle charging station foundations. We also provide aerial drone inspection services for utility assets including transmission and distribution power lines, substations, and generation facilities. We are respected around the world for quality, dependability and market-leading customer service. Our goal is to continue to achieve profitable growth as a leader in the research, innovation, development, manufacture, and marketing of technically advanced products and services related to energy, communications and cable systems and to take advantage of this leadership position to sell additional quality products in familiar markets. We have sales and manufacturing operations in 20 different countries.

We report our segments in four geographic regions: PLP-USA (including corporate), The Americas (includes operations in North and South America, excluding PLP-USA), EMEA (Europe, Middle East & Africa) and Asia-Pacific, in accordance with accounting standards codified in Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 280, “Segment Reporting”. Each segment distributes a full range of our primary products. Our PLP-USA segment is comprised of our U.S. operations manufacturing our traditional products primarily supporting our domestic energy, telecommunications, solar framing products and inspection services. Our other three segments, The Americas, EMEA and Asia-Pacific, support our energy, telecommunications, data communication, solar and other products in each respective geographical region.

The segment managers responsible for each region report directly to the Company’s Executive Chairman, who is the chief operating decision maker, and are accountable for the financial results and performance of their entire segment for which they are responsible. The business components within each segment are managed to maximize the results of the entire operating segment and the Company rather than the results of any individual business component of the segment.

We evaluate segment performance and allocate resources based on several factors primarily based on sales and net income.

PREFACE

The following discussion describes our results of operations for the three and nine months ended September 30, 2024 and 2023. Our consolidated financial statements are prepared in conformity with United States ("U.S.") generally accepted accounting principles ("GAAP"). Our discussions of the financial results include non-GAAP measures (e.g., foreign currency impact) to provide additional information concerning our financial results and provide information that we believe is useful to the readers of our financial statements in the assessment of our performance and operating trends.

Net sales of $147.0 million decreased $13.5 million for the three months ended September 30, 2024 year-over-year and net sales of $426.6 million decreased $97.5 million for the nine months ended September 30, 2024 year-over-year, mainly due to the continued inventory destocking at PLP-USA communications markets' customers and distributors. The inflationary headwinds we experienced in 2022 and early 2023 related to raw materials, specifically plastic resins, aluminum and sand (grit), have generally subsided. Costs related to shipping and freight have similarly fallen from their 2022 peak. Decreases in these underlying costs along with the impacts of our previous price increases benefited gross margins in 2023 and have not meaningfully impacted the results for the third quarter or nine months ended September 30, 2024. If inflationary pressures increase again, it may require further price adjustments to maintain profit margin, and any price increases may have a negative effect on demand.

Our financial statements are subject to fluctuations in the exchange rates of foreign currencies in relation to the U.S. dollar. The fluctuations of foreign currencies during the three and nine months ended September 30, 2024 had a unfavorable impact on net sales of $0.8 million and $1.1 million, respectively. The fluctuations on foreign currencies during the three and nine months ended September 30, 2024 had an unfavorable impact on net income of $0.1 million and $0.2 million, respectively. The fluctuations of foreign currencies during the three and nine months ended September 30, 2023 had a favorable impact on net sales of $1.4 million and unfavorable impact on net sales of $5.6 million, respectively. The fluctuations on foreign currencies during the three and nine months ended September 30, 2023 had an unfavorable impact on net income of $0.1 million and $0.7 million, respectively. On a reportable

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segment basis, the impact of foreign currency translation on net sales and net income for the three and nine months ended September 30, 2024, was as follows:


	Foreign Currency Translation Impact
	Three Months Ended September 30, 2024				Nine Months Ended September 30, 2024
(Thousands of dollars)	Net Sales		Net Income		Net Sales		Net Income
The Americas	$	(1,668)	$	(131)	$	(1,283)	$	(136)
EMEA	576		(6)		1,422		69
Asia-Pacific	283		9		(1,266)		(105)
Total	$	(809)	$	(128)	$	(1,127)	$	(172)

Although elevated inventory levels in the PLP-USA communications markets and other market headwinds have impacted our 2024 results, we believe our business portfolio and our financial position are sound and strategically well-positioned. We remain focused on assessing our global market opportunities and overall manufacturing capacity in conjunction with the requirements of local manufacturing in the markets that we serve. As necessary, we will modify redundant processes and further utilize our global manufacturing network to manage costs, increase sales volume and deliver value to our customers. Period cost containment has been a priority for the Company in 2024, shown through a reduction in costs and expenses. We have continued to invest in the business to expand into new markets for the Company, evaluate strategic mergers and acquisitions, improve efficiency, develop new products and increase our capacity. As of September 30, 2024, our liquidity remains strong with our bank debt to equity percentage at 8.2%. We can borrow needed funds at a competitive interest rate under the Facility.

RESULTS OF OPERATIONS

THREE MONTHS ENDED SEPTEMBER 30, 2024 COMPARED TO THREE MONTHS ENDED SEPTEMBER 30, 2023

The following table sets forth a summary of the Company’s Statements of Consolidated Income and the percentage of net sales for the three months ended September 30, 2024 and 2023. The Company’s past operating results are not necessarily indicative of future operating results.


	Three Months Ended September 30,
(Thousands of dollars)	2024				2023
Net sales	$	146,973	100.0	%	$	160,438	100.0	%	$	(13,465)
Cost of products sold	101,195		68.9		106,301		66.3		(5,106)
GROSS PROFIT	45,778		31.1		54,137		33.7		(8,359)
Costs and expenses	35,386		24.1		34,059		21.2		1,327
OPERATING INCOME	10,392		7.1		20,078		12.5		(9,686)
Other income (expense), net	38		0.0		(502)		(0.3)		540
INCOME BEFORE INCOME TAXES	10,430		7.1		19,576		12.2		(9,146)
Income taxes	2,734		1.9		4,431		2.8		(1,697)
NET INCOME	7,696		5.2		15,145		9.4		(7,449)
Net (income) loss attributable to noncontrolling interests	(16)		0.0		(15)		0.0		(1)
NET INCOME ATTRIBUTABLE TO PREFORMED LINE PRODUCTS COMPANY SHAREHOLDERS	$	7,680	5.2	%	$	15,130	9.4	%	$	(7,450)

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Net sales. In 2024, net sales were $147.0 million, a decrease of $13.5 million, or 8%, compared to 2023. Excluding the effect of currency translation, net sales decreased 8% as summarized in the following table:


	Three Months Ended September 30,
(Thousands of dollars)	2024		2023		Change		Change Due to Currency Translation		Change Excluding Currency Translation		% Change
Net sales
PLP-USA	$	65,554	$	81,727	$	(16,173)	$	—	$	(16,173)	(20)	%
The Americas	19,852		22,790		(2,938)		(1,668)		(1,270)		(6)	%
EMEA	32,937		28,798		4,139		576		3,563		12	%
Asia-Pacific	28,630		27,124		1,506		283		1,223		5	%
Consolidated	$	146,973	$	160,438	$	(13,465)	$	(809)	$	(12,657)	(8)	%

The decrease in PLP-USA net sales of $16.2 million, or 20%, was primarily due to lower volumes in communications and energy product sales. International net sales for the three months ended September 30, 2024 were unfavorably affected by $0.8 million when local currencies were converted to U.S. dollars. The following discussion of changes in net sales excludes the effect of currency translation. The Americas net sales of $19.9 million decreased $1.3 million, or 6%, primarily due to lower volumes in energy product sales. EMEA net sales of $32.9 million increased $3.6 million, or 12%, primarily due to higher volume in energy product sales. Asia-Pacific net sales of $28.6 million increased $1.2 million, or 5%, primarily due to higher volumes in energy product sales.

Gross profit. Gross profit of $45.8 million for 2024 decreased $8.4 million, or 15%, compared to 2023. Excluding the effect of currency translation, gross profit decreased $8.0 million, or 15%, as summarized in the following table:


	Three Months Ended September 30,
(Thousands of dollars)	2024		2023		Change		Change Due to Currency Translation		Change Excluding Currency Translation		% Change
Gross profit
PLP-USA	$	21,383	$	30,672	$	(9,289)	$	—	$	(9,289)	(30)	%
The Americas	6,770		8,053		(1,283)		(591)		(692)		(9)	%
EMEA	9,327		7,434		1,893		127		1,766		24	%
Asia-Pacific	8,298		7,977		321		83		238		3	%
Consolidated	$	45,778	$	54,137	$	(8,359)	$	(381)	$	(7,977)	(15)	%

PLP-USA gross profit of $21.4 million decreased by $9.3 million, or 30%, compared to the same period in 2023, primarily due to lower sales volumes and unfavorable product mix. International gross profit for the period ended September 30, 2024 was unfavorably impacted by $0.4 million when local currencies were translated to U.S. dollars. The following discussion of gross profit changes excludes the effects of currency translation. The Americas gross profit decreased $0.7 million, or 9%, which was primarily the result of lower sales volume. EMEA gross profit increased $1.8 million, or 24%, primarily due to higher sales volumes and favorable product mix. Asia-Pacific gross profit increased $0.2 million, or 3%, which was primarily driven by favorable product mix.

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Costs and expenses. Costs and expenses of $35.4 million for the three months ended September 30, 2024 increased $1.3 million, or 4%, when compared to 2023. Excluding the effect of currency translation, costs and expenses increased $1.6 million, or 5%, as summarized in the following table:


	Three Months Ended September 30,
(Thousands of dollars)	2024		2023		Change		Change Due to Currency Translation		Change Excluding Currency Translation		% Change
Costs and expenses
PLP-USA	$	17,358	$	19,205	$	(1,847)	$	—	$	(1,847)	(10)	%
The Americas	4,980		5,873		(893)		(442)		(451)		(8)	%
EMEA	7,224		5,742		1,482		115		1,367		24	%
Asia-Pacific	5,824		3,238		2,586		69		2,517		78	%
Consolidated	$	35,386	$	34,058	$	1,328	$	(258)	$	1,586	5	%

PLP-USA costs and expenses of $17.4 million decreased $1.8 million, or 10% year-over-year. PLP-USA’s decrease was primarily attributable to lower selling costs and lower personnel costs, primarily as a result of cost containment efforts. International costs and expenses for the three months ended September 30, 2024 were favorably impacted by $0.3 million when local currencies were translated to U.S. dollars. The following discussion of costs and expenses excludes the effect of currency translation. The Americas costs and expenses of $5.0 million decreased $0.5 million primarily due to a one-time legal settlement in the third quarter of 2023. EMEA costs and expenses of $7.2 million increased by $1.4 million primarily due to increased selling, general, and administrative costs and the impact of foreign currency remeasurement. Asia-Pacific costs and expenses of $5.8 million increased $2.5 million primarily due to a one-time gain of $2.5 million on the sale of capital assets in the third quarter of 2023.

Other income (expense), net. Other income, net for the three months ended September 30, 2024 was favorable by $0.5 million when compared to Other expense, net for the three months ended September 30, 2023 of $0.5 million. The favorable movement was due to lower interest expense from reduced debt balances and higher interest income earned on cash balances in certain international jurisdictions.

Income taxes. Income taxes for the three months ended September 30, 2024 and 2023 were $2.7 million and $4.4 million based on pre-tax income of $10.4 million and $19.6 million, respectively. The tax rate for the three months ended September 30, 2024 and 2023 was 26% and 23%, respectively. The effective tax rate for the three months ended September 30, 2024 was higher than the effective tax rate for the same period in 2023 mainly due to limitations on the deductibility of compensation and a lower excess tax benefit on share-based compensation which was partially offset by the favorable impact from the mix of earned income in certain foreign jurisdictions.

Net income. As a result of the preceding items, net income for the three months ended September 30, 2024 was $7.7 million, compared to $15.1 million for 2023. Excluding the effect of currency translation, net income decreased $7.3 million as summarized in the following table. The decrease in net income was due to decreases in operating income described above, partially offset by lower interest expense and lower tax expense:


	Three Months Ended September 30,
(Thousands of dollars)	2024		2023		Change		Change Due to Currency Translation		Change Excluding Currency Translation		% Change
Net income (loss)
PLP-USA	$	3,059	$	9,080	$	(6,021)	$	—	$	(6,021)	(66)	%
The Americas	1,574		1,411		163		(131)		294		21	%
EMEA	1,337		1,137		200		(6)		206		18	%
Asia-Pacific	1,710		3,502		(1,792)		9		(1,801)		(51)	%
Consolidated	$	7,680	$	15,130	$	(7,450)	$	(128)	$	(7,322)	(48)	%

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NINE MONTHS ENDED SEPTEMBER 30, 2024 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30, 2023

The following table sets forth a summary of the Company’s Statements of Consolidated Income and the percentage of net sales for the nine months ended September 30, 2024 and 2023. The Company’s past operating results are not necessarily indicative of future operating results.


	Nine Months Ended September 30, 2024
(Thousands of dollars)	2024				2023				Change
Net sales	$	426,597	100.0	%	$	524,076	100.0	%	$	(97,479)
Cost of products sold	292,415		68.5		337,328		64.4		(44,913)
GROSS PROFIT	134,182		31.5		186,748		35.6		(52,566)
Costs and expenses	100,938		23.7		109,540		20.9		(8,602)
OPERATING INCOME	33,244		7.8		77,208		14.7		(43,964)
Other income (expense), net	205		0.0		(1,832)		(0.3)		2,037
INCOME BEFORE INCOME TAXES	33,449		7.8		75,376		14.4		(41,927)
Income taxes	6,783		1.6		18,348		3.5		(11,565)
NET INCOME	26,666		6.3		57,028		10.9		(30,362)
Net income attributable to noncontrolling interests	(24)		0.0		(28)		0.0		4
NET INCOME ATTRIBUTABLE TO PREFORMED LINE PRODUCTS COMPANY SHAREHOLDERS	$	26,642	6.2	%	$	57,000	10.9	%	$	(30,358)

Net sales. In 2024, net sales were $426.6 million, a decrease of $97.5 million, or 19%, compared to 2023. Excluding the effect of currency translation, net sales decreased 18% as summarized in the following table:


	Nine Months Ended September 30,
(Thousands of dollars)	2024		2023		Change		Change Due to Currency Translation		Change Excluding Currency Translation		% Change
Net sales
PLP-USA	$	196,191	$	275,882	$	(79,691)	$	—	$	(79,691)	(29)	%
The Americas	60,026		66,852		(6,826)		(1,283)		(5,543)		(8)	%
EMEA	93,630		105,138		(11,508)		1,422		(12,930)		(12)	%
Asia-Pacific	76,750		76,205		545		(1,266)		1,811		2	%
Consolidated	$	426,597	$	524,076	$	(97,479)	$	(1,127)	$	(96,353)	(18)	%

The decrease in PLP-USA net sales of $79.7 million, or 29%, was primarily due to lower volumes in communications and energy product sales. International net sales for the nine months ended September 30, 2024 were unfavorably affected by $1.1 million when local currencies were converted to U.S. dollars. The following discussion of changes in net sales excludes the effect of currency translation. The Americas net sales of $60.0 million decreased $5.5 million, or 8%, primarily due to lower volumes in communications sales and energy product sales. EMEA net sales of $93.6 million decreased $12.9 million, or 12%, primarily due to lower volume in communications sales, partially offset by increased volumes in energy product sales. Asia-Pacific net sales of $76.8 million increased $1.8 million, or 2%, primarily due to volume increases in energy product sales and special industries sales.

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Gross profit. Gross profit of $134.2 million for 2024 decreased $52.6 million, or 28%, compared to 2023. Excluding the effect of currency translation, gross profit decreased $52.1 million, or 28%, as summarized in the following table:


	Nine Months Ended September 30,
(Thousands of dollars)	2024		2023		Change		Change Due to Currency Translation		Change Excluding Currency Translation		% Change
Gross profit
PLP-USA	$	66,821	$	114,012	$	(47,191)	$	—	$	(47,191)	(41)	%
The Americas	18,448		24,239		(5,791)		(466)		(5,325)		(22)	%
EMEA	27,009		26,199		810		336		474		2	%
Asia-Pacific	21,904		22,298		(394)		(331)		(63)		—	%
Consolidated	$	134,182	$	186,748	$	(52,566)	$	(461)	$	(52,105)	(28)	%

PLP-USA gross profit of $66.8 million decreased by $47.2 million, or 41%, compared to the same period in 2023, primarily due to lower sales volumes and unfavorable product mix, partially offset by cost containment measures. International gross profit for the period ended September 30, 2024 was unfavorably impacted by $0.5 million when local currencies were translated to U.S. dollars. The following discussion of gross profit changes excludes the effects of currency translation. The Americas gross profit decreased $5.3 million, or 22%, which was primarily the result of lower sales volumes. EMEA gross profit increased $0.5 million, or 2%, primarily due to a favorable resolution of a warranty claim and lower freight costs, offset by an increase in labor costs. Asia-Pacific gross profit decreased $0.1 million, which was primarily driven by favorable product mix.

Costs and expenses. Costs and expenses of $100.9 million for the nine months ended September 30, 2024 decreased $8.6 million, or 8%, when compared to 2023. Excluding the effect of currency translation, costs and expenses decreased $8.4 million, or 8%, as summarized in the following table:


	Nine Months Ended September 30,
(Thousands of dollars)	2024		2023		Change		Change Due to Currency Translation		Change Excluding Currency Translation		% Change
Costs and expenses
PLP-USA	$	52,461	$	59,570	$	(7,109)	$	—	$	(7,109)	(12)	%
The Americas	14,344		16,331		(1,987)		(268)		(1,719)		(11)	%
EMEA	18,742		19,255		(513)		214		(727)		(4)	%
Asia-Pacific	15,391		14,385		1,006		(196)		1,202		8	%
Consolidated	$	100,938	$	109,540	$	(8,602)	$	(250)	$	(8,353)	(8)	%

PLP-USA costs and expenses of $52.5 million decreased $7.1 million, or 12% year-over-year. PLP-USA’s decrease was primarily attributable to lower selling costs and lower personnel and professional services costs, primarily as a result of cost containment efforts. International costs and expenses for the nine months ended September 30, 2024 was unfavorably impacted by $0.3 million when local currencies were translated to U.S. dollars. The following discussion of costs and expenses excludes the effect of currency translation. The Americas costs and expenses of $14.3 million decreased $1.7 million primarily due to a one-time legal settlement in the third quarter of 2023 and the impact of foreign currency remeasurement. EMEA costs and expenses of $18.7 million decreased by $0.7 million primarily due to lower personnel costs and bad debt expenses. Asia-Pacific costs and expenses of $15.4 million increased $1.2 million primarily due to the net impact of the sale of capital assets year over year and foreign currency remeasurement.

Other income (expense), net. Other income, net of $0.2 million for the nine months ended September 30, 2024 was favorable by $2.0 million when compared to Other expense, net for the nine months ended September 30, 2023 of $1.8 million. The favorable movement was due to higher interest income earned on cash balances in certain international jurisdictions and lower interest expense from reduced debt balances for the nine months ended September 30, 2024.

Income taxes. Income taxes for the nine months ended September 30, 2024 and 2023 were $6.8 million and $18.3 million based on pre-tax income of $33.4 million and $75.4 million, respectively. The tax rate for the nine months ended September 30, 2024 and 2023 was 20% and 24%, respectively. The effective tax rate for the nine months ended September 30, 2024 was lower than the effective tax rate for the same period in 2023 mainly due to the favorable impact from discrete benefits recorded as a result of amending prior year federal tax returns and an increase in excess tax benefits on share-based compensation in relation to overall lower pre-tax book income.

Net income. As a result of the preceding items, net income for the nine months ended September 30, 2024 was $26.6 million, compared to $57.0 million for 2023. Excluding the effect of currency translation, net income decreased $30.2 million as summarized

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in the following table. The decrease in net income was due to decreases in operating income described above, partially offset by higher interest income, lower interest expense, and lower tax expense:


	Nine Months Ended September 30,
(Thousands of dollars)	2024		2023		Change		Change Due to Currency Translation		Change Excluding Currency Translation		% Change
Net income (loss)
PLP-USA	$	11,720	$	40,761	$	(29,041)	$	—	$	(29,041)	(71)	%
The Americas	4,268		6,050		(1,782)		(136)		(1,646)		(27)	%
EMEA	5,893		4,675		1,218		69		1,149		25	%
Asia-Pacific	4,761		5,514		(753)		(105)		(648)		(12)	%
Consolidated	$	26,642	$	57,000	$	(30,358)	$	(172)	$	(30,186)	(53)	%

APPLICATION OF CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our critical accounting policies are consistent with the information set forth in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, included in our Form 10-K for the year ended December 31, 2023 filed on March 8, 2024 with the Securities and Exchange Commission and are, therefore, not presented herein.

WORKING CAPITAL, LIQUIDITY AND CAPITAL RESOURCES

Management Assessment of Liquidity

We measure liquidity on the basis of our ability to meet short-term and long-term operating needs, repay debt, fund additional investments, including acquisitions, and make dividend payments to shareholders. Significant factors affecting the management of liquidity are cash flows from operating activities, capital expenditures, cash dividends, business acquisitions and access to bank lines of credit.

Our investments include expenditures required for equipment and facilities as well as expenditures in support of our strategic initiatives. During the first nine months of 2024, we used cash of $11.2 million for capital expenditures. We ended the first nine months of 2024 with $47.5 million of cash, cash equivalents and restricted cash (collectively, “Cash”). Our Cash is held in various locations throughout the world. At September 30, 2024, the majority of our Cash was held outside the U.S. We expect most accumulated non-U.S. Cash balances will remain outside of the U.S. and that we will meet U.S. liquidity needs through future operating cash flows, use of U.S. Cash balances, external borrowings, or some combination of these sources. We complete comprehensive reviews of our significant customers and their creditworthiness by analyzing financial statements for customers where we have identified a measure of increased risk. We closely monitor payments and developments which may signal possible customer credit issues. We currently have not identified any potential material impact on our liquidity from customer credit issues.

Total debt, including notes payable, at September 30, 2024 was $35.2 million. At September 30, 2024, our unused availability under our credit facility (the "Facility") was $77.2 million and our bank debt to equity percentage was 8.2%. The Facility contains, among other provisions, requirements for maintaining levels of net worth and profitability. At September 30, 2024, the Company was in compliance with these covenants.

Our Asia-Pacific segment had $0.1 million and $0.2 million in restricted cash for the periods ended September 30, 2024 and December 31, 2023, respectively. The restricted cash was used to secure bank guarantees and is included in Cash, cash equivalents and restricted cash on the Consolidated Balance Sheets.

On January 19, 2021, the Company received funding for a term loan from PNC Equipment Finance, LLC in the principal amount of $20.5 million for the full amount of the purchase price for a new corporate aircraft. The term of the loan is 120 months at a fixed interest rate of 2.744%. The loan is payable in 119 equal monthly installments, which commenced on March 1, 2021 with a final payment of any outstanding principal and accrued interest due and payable on the final monthly payment date. Of the $13.2 million outstanding on this debt facility at September 30, 2024, $2.1 million was classified as current. The loan is secured by the aircraft.

We expect that our major source of funding for 2024 and beyond will be our operating cash flows, our existing Cash as well as our Facility agreement. Except for current earnings in certain jurisdictions, our operating income is deemed to be indefinitely reinvested in foreign jurisdictions. We currently do not intend nor foresee a need to repatriate these funds. We believe our future operating cash flows will be more than sufficient to cover debt repayments, other contractual obligations, capital expenditures and dividends for the next 12 months and thereafter for the foreseeable future. In addition, we believe our borrowing capacity provides substantial financial resources, if needed, to supplement funding of capital expenditures and/or acquisitions. We also believe that we can further expand our borrowing capacity, if necessary; however, we do not believe we would increase our debt to a level that would have a material adverse impact upon results of operations or financial condition.

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Sources and Uses of Cash

Net cash provided by operating activities for the nine months ended September 30, 2024 was $43.4 million compared to $88.4 million in the comparable prior year nine-month period. The $45.0 million decrease was primarily a result of a decrease in net income and changes in operating assets and liabilities.

Net cash used in investing activities for the nine months ended September 30, 2024 was $7.7 million compared to $36.7 million in the comparable prior year nine-month period. The $29.0 million change was primarily a result of decreases in acquisition activity and capital expenditures during the current period.

Net cash used in financing activities for the nine months ended September 30, 2024 was $40.8 million compared to $45.5 million in the comparable prior year nine-month period. The $4.7 million change was primarily the result of increased net payments of long-term debt and decreased purchases of common shares from related parties.

We have commitments under operating leases primarily for office and manufacturing space, transportation equipment, office and computer equipment and finance leases primarily for equipment. At September 30, 2024, we had $1.6 million of current operating lease liabilities and $7.0 million of noncurrent operating lease liabilities. Total liabilities related to finance lease obligations were less than $0.6 million at September 30, 2024.

As of September 30, 2024, the Company had total outstanding guarantees of $12.2 million. Additionally, certain domestic and foreign customers require the Company to issue letters of credit or performance bonds as a condition of placing an order. As of September 30, 2024, the Company had total outstanding letters of credit of $1.0 million.

The Company has borrowing facilities at certain of its foreign subsidiaries, which consist of overdraft lines, working capital credit lines, and facilities for the issuance of letters of credit and short-term borrowing needs. At September 30, 2024, and December 31, 2023, $9.3 million and $13.3 million was outstanding, of which $8.6 million and $11.4 million were classified as current, respectively. These facilities support commitments made in the ordinary course of business.

FORWARD LOOKING STATEMENTS

Cautionary Statement for “Safe Harbor” Purposes Under The Private Securities Litigation Reform Act of 1995

This Form 10-Q and other documents we file with the SEC contain forward-looking statements regarding the Company’s and management’s beliefs and expectations. Any forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. As a general matter, forward-looking statements are those focused upon future plans, objectives or performance (as opposed to historical items) and include statements of anticipated events or trends and expectations and beliefs relating to matters not historical in nature. Use of words such “anticipates,” “believes,” “may,” “should,” “will,” “would,” “could,” “plans,” “projects,” “expects,” “estimates,” “predicts,” “targets,” “forecasts,” “intends,” “contemplates,” and similar words may identify forward-looking statements. Such forward-looking statements are subject to uncertainties and factors relating to the Company’s operations and business environment, all of which are difficult to predict and many of which are beyond the Company’s control. Such uncertainties and factors could cause the Company’s actual results to differ materially from those matters expressed in or implied by such forward-looking statements.

The following factors, among others, could affect the Company’s future performance and cause the Company’s actual results to differ materially from those expressed or implied by forward-looking statements made in this report:

•The overall demand for cable anchoring and control hardware for electrical transmission and distribution lines on a worldwide basis, which has a slow growth rate in mature markets such as the United States, Canada, Australia and Western Europe and may grow slowly or experience prolonged delay in developing regions despite expanding power needs;

•The potential impact of global economic conditions, including the impact of inflation and rising interest rates, on the Company’s ongoing profitability and future growth opportunities in the Company’s core markets in the U.S. and other foreign countries, which may experience continued or further instability due to political and economic conditions, social unrest, acts of war, military conflict (including the ongoing Russian-Ukrainian and Israeli-Palestinian conflicts), international hostilities or the perception that hostilities may be imminent, terrorism, changes in diplomatic and trade relationships and public health concerns (including viral outbreaks such as COVID-19);

•The ability of the Company’s customers to raise funds needed to build the infrastructure projects their customers require;

•Technological developments that affect longer-term trends for communication lines, such as wireless communication;

•The decreasing demand for product supporting copper-based infrastructure due to the introduction of products using new technologies or adoption of new industry standards;

•The Company’s success at continuing to develop proprietary technology and maintaining high quality products and customer service to meet or exceed new industry performance standards and individual customer expectations;

•The Company’s success in strengthening and retaining relationships with the Company’s customers, growing sales at targeted accounts and expanding geographically;

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•The extent to which the Company is successful at expanding the Company’s product line or production facilities into new areas or implementing efficiency measures at existing facilities;

•The effects of fluctuation in currency exchange rates upon the Company’s foreign subsidiaries’ operations and reported results from international operations, together with non-currency risks of investing in and conducting significant operations in foreign countries, including those relating to political, social, economic and regulatory factors;

•The Company’s ability to identify, complete, obtain funding for and integrate acquisitions for profitable growth;

•The potential impact of consolidation, deregulation and bankruptcy among the Company’s suppliers, competitors and customers and of any legal or regulatory claims;

•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 any tariffs that may be associated with the purchase of these products. The Company’s supply chain could face disruptions and constraints from inflationary pressures and ongoing wars and military conflicts, which could have a material, adverse effect on the ability to secure raw materials and supplies;

•Strikes, labor disruptions and other fluctuations in labor costs;

•Changes in significant government regulations affecting environmental or other compliance or litigation matters;

•Security breaches or other disruptions to the Company’s information technology structure;

•The telecommunication market’s continued deployment of Fiber-to-the-Premises;

•The impact of any failure to timely implement and maintain adequate financial, information technology and management processes and controls and procedures; and

•Those factors described under the heading “Risk Factors” in Item 1A of Part I of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 which was filed on March 8, 2024.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company operates manufacturing facilities and offices around the world and uses fixed and floating rate debt to finance the Company’s global operations. As a result, the Company is subject to business risks inherent in non-U.S. activities, including political and economic uncertainty, import and export limitations and market risk related to changes in interest rates and foreign currency exchange rates. The Company believes that the political and economic risks related to the Company’s international operations are mitigated due to the geographic diversity in which the Company’s international operations are located.

There have been no material changes in the Company’s exposure to market risk since December 31, 2023. See “Item 7A. Quantitative and Qualitative Disclosures About Market Risk” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Company’s Principal Executive Officer and Principal Accounting Officer have concluded that the Company’s disclosure controls and procedures, as defined in Rule 13a-15(e) or Rule 15d-15(e) of the Securities Exchange Act of 1934, as amended, were effective as of September 30, 2024.

Changes in Internal Control over Financial Reporting

There were no changes in the Company’s internal control over financial reporting as defined in Rule 13a-15(f) and 15d-15(f) of the Securities and Exchange Act of 1934, as amended, during the nine-month period ended September 30, 2024 that materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Information regarding the Company’s current legal proceedings is presented in Note 5 of the Notes to the Consolidated Financial Statements.

ITEM 1A. RISK FACTORS

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There were no material changes from the risk factors previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on March 8, 2024. In addition, the ongoing conflicts between Russia and Ukraine as well as Israel and Palestine could potentially exacerbate other risks discussed, any of which could have a material adverse effect on the Company. The situation continues to change, and additional impacts may arise that the Company is not aware of currently.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On November 1, 2023, the Board of Directors authorized a new plan to repurchase up to an additional 212,952 of Preformed Line Products Company common shares, resulting in a total of 250,000 shares available for repurchase with no expiration date. The following table reflects repurchases for the three-month period ended September 30, 2024.


Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares that may yet be Purchased under the Plans or Programs
July	—	—		—	199,579
August	17,822	$	125.33	17,822	181,757
September	—	—		—	181,757
Total	17,822

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

None.

ITEM 5. OTHER INFORMATION

None.

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ITEM 6. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES


Exhibit Number						Exhibit

31.1						Certification of the Principal Executive Officer, Robert G. Ruhlman, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.

31.2						Certification of the Principal Accounting Officer, Andrew S. Klaus, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.

32.1						Certification of the Principal Executive Officer, Robert G. Ruhlman, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, furnished.

32.2						Certification of the Principal Accounting Officer, Andrew S. Klaus, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, furnished.

101.INS						Inline XBRL Instance Document.

101.SCH						Inline XBRL Taxonomy Extension Schema Document.

101.CAL						Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF						Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB						Inline XBRL Taxonomy Extension Label Linkbase Document.

104						Cover Page Interactive Data File (embedded within the inline XBRL document)

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


						Preformed Line Products Company

October 31, 2024						/s/ Robert G. Ruhlman
						Robert G. Ruhlman
						Executive Chairman
						(principal executive officer)

October 31, 2024						/s/ Andrew S. Klaus
						Andrew S. Klaus
						Chief Financial Officer
						(principal financial and accounting officer)

PREFORMED LINE PRODUCTS CO - Quarter Report: 2024 September (Form 10-Q)

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