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CLEVELAND, March 3, 2022 /PRNewswire/ -- Preformed Line Products Company (NASDAQ: PLPC) today reported financial results for its fourth quarter and full year ended December 31, 2021.
Net sales in the fourth quarter of 2021 were $131.4 million compared to $118.5 million in the fourth quarter of 2020, a 10.9% increase and a new record for fourth quarter shipments. Foreign currency translation reduced fourth quarter 2021 net sales by $0.7 million.
Net income for the quarter ended December 31, 2021 was $9.0 million, or $1.79 per diluted share, compared to $2.7 million, or $0.53 per diluted share, for the comparable period in 2020. The fourth quarter of 2021 net income benefited from the increased gross profit on incremental sales and the selling price increases announced in 2021 partially offsetting the impact of rising costs on key raw material inputs and transportation expenses. Also benefiting the year-over-year comparison were charges incurred for litigation reserves and loss on sale of assets in 2020 not recurring in 2021 as well as the timing of expense recognition for employee bonus plans.
Net sales for the full year 2021 were $517.4 million, compared to $466.4 million in 2020. This is the third consecutive year of record net sales and represents a 10.9% increase. Favorable foreign currency translation accounted for $9.3 million of the full year 2021 net sales increase.
Net income for the year ended December 31, 2021 was $35.7 million, or $7.19 per diluted share, compared to $29.8 million, or $5.98 per diluted share in 2020. Net income for the full year 2021 was negatively impacted by significant increases in raw material prices and transportation expenses. However, the increase in margin on incremental sales as well as the early-stage pricing benefit for announced price increases in 2021 helped offset those inflationary increases allowing us to substantially maintain our year-over-year gross profit comparison.
On March 2, 2022, we amended our line of credit agreement with PNC Bank, National Association to increase our facility limit from $65.0 million to $90.0 million, modified our index used to determine the interest rates from LIBOR to the Bloomberg Short Term Bank Yield Index ("BSBY") and extended the maturity from June 30, 2024 to March 2, 2026. Substantially all other terms remain the same.
Rob Ruhlman, Chairman and Chief Executive Officer, said, "The third consecutive year for record net sales and record earnings per share in 2021 is the result of the resolve, commitment and dedication of our global team. This also represents the fourth consecutive year of record domestic net sales with PLP-USA posting a year-over-year increase of 28%. That increase in domestic net sales and to a lesser extent the increase in net sales for EMEA more than covered shortfalls experienced in the America's and Asia-Pacific regions. The Asia-Pacific region relies heavily on government sponsored infrastructure projects which continue to be more negatively impacted by the COVID-19 pandemic than the other regions. As supply chain disruptions and significant inflation for core raw material commodities and transportation costs have impacted our global operations, we have announced price increases to combat these inflationary increases. While we expect these price increases to substantially offset inflation to date, continued cost inflation may require further price adjustments. We do anticipate COVID-19 will continue to challenge our business as well as the global economy well into 2022. As always, we are fully committed to providing our customers with the high-quality products they expect while staying focused on the safety and well-being of our employees, customers, vendors and their families."
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 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 2020 Annual Report on Form 10-K filed with the SEC on March 5, 2021 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 over 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 | ||||||||||
December 31, | December 31, | |||||||||
(Thousands of dollars, except share and per share data) | 2021 | 2020 | ||||||||
ASSETS | ||||||||||
Cash and cash equivalents | $ 36,406 | $ 45,175 | ||||||||
Accounts receivable, less allowances of $3,744 ($3,464 in 2020) | 98,203 | 92,686 | ||||||||
Inventories - net | 114,507 | 97,537 | ||||||||
Prepaid expenses | 19,778 | 17,660 | ||||||||
Other current assets | 3,217 | 3,256 | ||||||||
TOTAL CURRENT ASSETS | 272,111 | 256,314 | ||||||||
Property, plant and equipment - net | 149,774 | 125,965 | ||||||||
Goodwill | 28,194 | 29,508 | ||||||||
Other intangible assets - net | 12,039 | 14,443 | ||||||||
Deferred income taxes | 3,839 | 10,863 | ||||||||
Other assets | 23,061 | 23,994 | ||||||||
TOTAL ASSETS | $ 489,018 | $ 461,087 | ||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||
Trade accounts payable | $ 42,376 | $ 31,646 | ||||||||
Notes payable to banks | 16,423 | 17,428 | ||||||||
Current portion of long-term debt | 3,116 | 5,216 | ||||||||
Accrued compensation | 13,756 | 14,736 | ||||||||
Accrued expenses and other liabilities | 29,864 | 34,748 | ||||||||
TOTAL CURRENT LIABILITIES | 105,535 | 103,774 | ||||||||
Long-term debt, less current portion | 40,048 | 33,333 | ||||||||
Other noncurrent liabilities and deferred income taxes | 27,335 | 31,911 | ||||||||
SHAREHOLDERS' EQUITY | ||||||||||
Shareholders' equity: | ||||||||||
Common shares - $2 par value, 15,000,000 shares authorized, 4,907,143 and 4,902,233 issued and outstanding, as of December 31, 2021 and December 31, 2020, respectively | 13,185 | 13,028 | ||||||||
Common shares issued to rabbi trust, 243,138 and 265,508 shares at December 31, 2021 and December 31, 2020, respectively | (10,102) | (10,940) | ||||||||
Deferred compensation liability | 10,102 | 10,940 | ||||||||
Paid-in capital | 47,814 | 43,134 | ||||||||
Retained earnings | 410,673 | 379,035 | ||||||||
Treasury shares, at cost, 1,685,387 and 1,611,927 shares at December 31, 2021 and December 31, 2020, respectively | (93,836) | (88,568) | ||||||||
Accumulated other comprehensive loss | (61,719) | (54,551) | ||||||||
TOTAL PREFORMED LINE PRODUCTS COMPANY SHAREHOLDERS' EQUITY | 316,117 | 292,078 | ||||||||
Noncontrolling interest | (17) | (9) | ||||||||
TOTAL SHAREHOLDERS' EQUITY | 316,100 | 292,069 | ||||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 489,018 | $ 461,087 | ||||||||
PREFORMED LINE PRODUCTS COMPANY | |||||||||
STATEMENTS OF CONSOLIDATED OPERATIONS | |||||||||
(In thousands, except per share data) | Three Months Ended December 31 | Twelve Months Ended December 31 | |||||||
2021 | 2020 | 2021 | 2020 | ||||||
Net sales | $ 131,446 | $ 118,506 | $ 517,417 | $ 466,449 | |||||
Cost of products sold | 91,598 | 81,883 | 351,175 | 312,436 | |||||
GROSS PROFIT | 39,848 | 36,623 | 166,242 | 154,013 | |||||
Costs and expenses | |||||||||
Selling | 10,697 | 9,408 | 40,539 | 35,637 | |||||
General and administrative | 12,352 | 16,432 | 55,257 | 56,335 | |||||
Research and engineering | 4,953 | 4,676 | 19,188 | 17,625 | |||||
Other operating expense - net | 881 | 2,239 | 3,709 | 4,209 | |||||
28,883 | 32,755 | 118,693 | 113,806 | ||||||
OPERATING INCOME | 10,965 | 3,868 | 47,549 | 40,207 | |||||
Other income (expense) | |||||||||
Interest income | 92 | 33 | 169 | 259 | |||||
Interest expense | (544) | (464) | (2,023) | (2,396) | |||||
Other income - net | 1,452 | 726 | 3,201 | 2,501 | |||||
1,000 | 295 | 1,347 | 364 | ||||||
INCOME BEFORE INCOME TAXES | 11,965 | 4,163 | 48,896 | 40,571 | |||||
Income tax expense | 3,014 | 1,505 | 13,175 | 10,810 | |||||
NET INCOME | $ 8,951 | $ 2,658 | $ 35,721 | $ 29,761 | |||||
Less: Net loss attributable to noncontrolling interests | 23 | 11 | 8 | 42 | |||||
NET INCOME ATTRIBUTABLE TO PREFORMED LINE PRODUCTS COMPANY SHAREHOLDERS | $ 8,974 | $ 2,669 | $ 35,729 | $ 29,803 | |||||
AVERAGE NUMBER OF SHARES OF COMMON STOCK | |||||||||
OUTSTANDING: | |||||||||
Basic | 4,907 | 4,899 | 4,907 | 4,923 | |||||
Diluted | 5,026 | 5,027 | 4,970 | 4,984 | |||||
EARNINGS PER SHARE OF COMMON STOCK | |||||||||
ATTRIBUTABLE TO PREFORMED LINE PRODUCTS | |||||||||
COMPANY SHAREHOLDERS: | |||||||||
Basic | $ 1.83 | $ 0.54 | $ 7.28 | $ 6.05 | |||||
Diluted | $ 1.79 | $ 0.53 | $ 7.19 | $ 5.98 | |||||
Cash dividends declared per share | $ 0.20 | $ 0.20 | $ 0.80 | $ 0.80 | |||||
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SOURCE Preformed Line Products
