What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-03-05 compared with 2025-03-13 · 89 added, 83 removed, 192 unchanged (47% of the section changed)

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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 provide helical solutions, string hardware, connectors, insulators, 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.

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Our business continues to be concentrated in the energy and communications markets.

During the past several years, industry consolidation continued as distributor and service provider integrations occurred in our major markets.

There has also been a historical lack of commitment by developed countries to upgrade and strengthen their electrical grids and communication networks despite the growing need.

More recently, increasing commodity prices, inflation, tariffs, rising interest rates, transportation costs, and foreign currency fluctuations have led to a challenging operating environment.

While these factors generally moderated in 2024, they may continue to provide inherent uncertainty going forward.

The increasing need for power generation and efficient communication systems has highlighted the need for bolstering grid reliability, strengthening grid resilience to climate events, upgrading aging infrastructure, enhancing communication networks and transitioning to new sources of energy.

Our focused portfolio is well-positioned to respond to these priorities.

We believe that our leadership position in the domestic energy and communications markets and the ability to deliver reliable products quickly will position us for continued growth as transmission grids and communication networks are enhanced, upgraded and extended.

We sit at the intersection of various economic and social megatrends impacting our markets, both domestically and internationally.

The digitalization and electrification megatrends, which are increasing the need for power generation, have highlighted the need for bolstering grid reliability, strengthening grid resilience, and upgrading aging infrastructure.

The continuing need for high-speed and efficient communication systems has led to further investment in network build-outs.

Our focused portfolio is well-positioned to respond to these trends and priorities.

While our markets remain robust, increasing commodity prices, inflation, tariffs, rising interest rates, transportation costs, and foreign currency fluctuations have led to a challenging operating environment.

Although some of these pressures have shown periods of moderation, they may continue to provide inherent uncertainty going forward.

We believe that our leadership position in the domestic energy and communications markets and the ability to deliver reliable products quickly will position us for continued growth as transmission grids, distribution lines, and substation projects, as well as communication networks, are enhanced, upgraded and extended.

Our international business is also mainly concentrated in the energy and communications markets.

Historically, our international sales were primarily related to the medium voltage distribution segment of the energy market but have grown through acquisition and new product development to include a significant contribution from the transmission and telecommunications markets.

We believe that we are well positioned to supply the needs of the world’s diverse energy and communication markets as a result of our focused portfolio and strategic operational footprint, including expansion from recent acquisitions and product designs and technologies.

The following discussion describes our results of operations for the years ended December 31, 2025 and 2024.

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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 $593.7 million for the year ended December 31, 2024 decreased $76.0 million year-over-year, mainly due to the continued inventory destocking occurring primarily in the U.S.

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 during the twelve months ending December 31, 2024.

If inflationary pressures persist or new tariffs are sustained, it may require further price adjustments to maintain profit margin and any price increases may have a negative effect on demand.

Net sales of $669.3 million for the year ended December 31, 2025 increased $75.6 million year-over-year, mainly due to an increase in energy and communication sales for the year.

The 2025 sales amount is among the highest annual sales amount in the Company's history, falling just behind the sales recorded in the year-ended December 31, 2023 of $669.7 million.

Additionally, the Company's backlog increased approximately 22% to $232.8 million, further showing the strength of our core markets.

As of December 31, 2025, our liquidity remains strong with our bank debt to equity percentage at 8.3%.

We can borrow needed funds at a competitive interest rate under our credit facility.

Our strong liquidity also allowed us to increase our quarterly dividend by 5% to $0.21 per share in the fourth quarter of 2025, the first such increase since the Company's shares began trading on NASDAQ stock exchange in 2001.

Notwithstanding the Company's positive momentum and strong core markets, the high tariff environment, especially on raw material imports, particularly steel and aluminum, continue to be impactful.

In 2025, the Company incurred tariff costs of approximately of $15.1 million.

Additionally, PLP-USA's LIFO inventory valuation costs have accelerated due to tariffs, resulting in pre-tax charges of $9.0 million for the year ended December 31, 2025.

While we remain steadfast in our commitment to U.S.

manufacturing, we continue to manage trade matters proactively.

Further tariff increases may give rise to inflationary pressures, which may require further price adjustments to maintain profit margin, and any price increases may have a negative effect on demand.

The tariffs outlook remains uncertain, particularly following the February 2026 U.S.

Supreme Court ruling that set aside unlawfully imposed tariffs, and the Company is unable to predict the upcoming effects of tariffs that remain in effect (including on steel and aluminum) or may be newly enacted, as well as any refunds that may be available.

While uncertainty remains in the global economy due to tariffs and trade matters, we believe our business portfolio, including our significant U.S.

manufacturing footprint, as well as 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, including tariff-related impacts, increase sales volume and deliver value to our customers.

We closely monitor developments in trade policy and actively evaluate strategies to mitigate the impact of tariffs, including sourcing alternatives and optimizing our supply chain.

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.

Our financial statements are subject to fluctuations in the exchange rates of foreign currencies in relation to the U.S.

PLP’s foreign currency exchange gains or (losses) were primarily related to translating into U.S.

dollars its foreign currency denominated loans, trade receivables and payables from its foreign subsidiaries at the December 2024 year-end exchange rates.

The fluctuations of foreign currencies during the years ended December 31, 2024 and December 31, 2023 had an unfavorable impact on net sales of $4.2 million and a favorable impact of $0.4 million, respectively.

The effect of currency translation had an unfavorable impact on net income in the year ended December 31, 2024 of $0.7 million and an unfavorable impact of $0.2 million in the year ended December 31, 2023.

The fluctuations of foreign currencies during the years ended December 31, 2025 and December 31, 2024 had a favorable impact on net sales of $1.4 million and an unfavorable impact of $4.2 million, respectively.

The effect of currency translation had a favorable impact on net income in the year ended December 31, 2025 of $0.1 million and an unfavorable impact of $0.7 million in the year ended December 31, 2024.

On a reportable segment basis, the impact of foreign currency translation on net sales and net income for the years ended December 31, 2025 and 2024, respectively, was as follows:

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Total $ 1,406 $ (4,170) $ 52 $ (727)

Although customer destocking efforts in the PLP-USA communications and energy markets have impacted our 2024 results, we believe our business portfolio and our financial position are sound and strategically well-positioned.

While PLP-USA sales results were down compared to the period ended December 31, 2023, our international segments had sales amounts comparable with prior year, showing our international footprint provides cyclical benefits.

Our cash generation remains strong as evidenced through a significant reduction in debt levels.

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.

Our continued commitment to manufacturing in the U.S.

positions us well for Build America, Buy America requirements of the Broadband Equity, Access, and Deployment Program.

If 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 of approximately 8%.

Our liquidity remains strong with our bank debt to equity percentage at 6.8%.

We can borrow needed funds at a competitive interest rate under our credit facility.

A consolidated decrease in debt of $33.7 million as of December 31, 2024 was primarily a result of improved cash conversion and less funding needs for capital expenditures and business acquisitions.

See Note 7 "Debt and Credit Arrangements" in the Notes to Consolidated Financial Statements for more information related to our debt position.

The following table sets forth a summary of the Company’s Statements of Consolidated Income and the percentage of net sales for the years ended December 31, 2025 and 2024.

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OPERATING INCOME 55,135 8.2 50,757 8.5 4,378

Other income (expense), net 13 0.0 (1,810) (0.3) 1,823

Other (expense) income, net (9,515) (1.4) 13 0.0 (9,528)

INCOME BEFORE INCOME TAXES 45,620 6.8 50,770 8.6 (5,150)

Income taxes 13,659 2.3 19,007 2.8 (5,348)

Income tax expense 10,313 1.5 13,659 2.3 (3,346)

NET INCOME 35,307 5.3 37,111 6.3 (1,804)

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2025 RESULTS OF OPERATIONS COMPARED TO 2024

In 2024, net sales were $593.7 million, a decrease of $76.0 million, or 11%, compared to 2023.

Excluding the effect of currency translation, net sales decreased 11% as summarized in the following table:

In 2025, net sales were $669.3 million, an increase of $75.6 million, or 13%, compared to 2024.

Excluding the effect of currency translation, net sales increased 13% as summarized in the following table:

Year Ended December 31,

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Consolidated $ 669,338 $ 593,714 $ 75,624 $ 1,406 $ 74,218 13 %

The decrease in PLP-USA net sales of $78.9 million, or 23%, was primarily due to lower volumes in communications and energy product sales due to customer destocking efforts.

International net sales for the year ended December 31, 2024 were unfavorably affected by $4.2 million when local currencies were converted to U.S.

The increase in PLP-USA net sales of $45.9 million, or 17%, was primarily due to higher volumes in communications and energy product sales.

International net sales for the year ended December 31, 2025 were favorably affected by $1.4 million when local currencies were converted to U.S.

The following discussion of changes in net sales excludes the effect of currency translation.

The Americas net sales of $90.3 million increased $9.2 million, or 11%, primarily due to higher volumes in energy product sales, partially offset by lower communication sales.

The Americas net sales of $108.8 million increased $22.0 million, or 24%, primarily due to an increase in energy product sales and an increase in communications sales due to the acquisition of JAP Telecom in May 2025.

EMEA net sales of $133.1 million decreased $0.8 million, or 1%, primarily due to lower volume in communications sales, partially offset by increased volumes in energy product sales.

Asia-Pacific net sales of $108.5 million increased $6.5 million, or 6%, primarily due to volume increases in energy product sales.

Asia-Pacific net sales of $114.8 million increased $7.1 million, or 7%, primarily due to volume increases in energy product sales and special industry sales.

Gross Profit.

Gross profit of $189.8 million for 2024 decreased $45.0 million, or 19%, compared to 2023.

Excluding the effect of currency translation, gross profit decreased $43.5 million, or 19%, as summarized in the following table:

Gross profit of $208.5 million for 2025 increased $18.7 million, or 10%, compared to 2024.

Excluding the effect of currency translation, gross profit increased $18.6 million, or 10%, as summarized in the following table:

Year Ended December 31,

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Consolidated $ 208,539 $ 189,811 $ 18,728 $ 170 $ 18,558 10 %

PLP-USA gross profit of $93.0 million decreased by $46.0 million, or 33%, compared to the same period in 2023, primarily due to lower sales volumes and unfavorable product mix.

International gross profit for the period ended December 31, 2024 was unfavorably impacted by $1.6 million when local currencies were translated to U.S.

PLP-USA gross profit of $105.9 million increased by $12.9 million, or 14%, compared to the same period in 2024, primarily due to higher sales volumes and favorable product mix benefited by price increases enacted in 2025, partially offset by higher tariff and manufacturing costs, including LIFO valuation costs.

International gross profit for the period ended December 31, 2025 was favorably impacted by $0.2 million when local currencies were translated to U.S.

The following discussion of gross profit changes excludes the effects of currency translation.

The Americas gross profit increased $0.4 million, or 1%, which was primarily the result of higher sales volumes, offset by increased depreciation expense and freight costs.

EMEA gross profit decreased nominally, which was primarily driven by decreased sales volumes offset by favorable product mix and favorable resolution of a warranty claim.

Asia-Pacific gross profit increased $2.2 million, or 7%, which was primarily driven by favorable product mix.

The Americas gross profit increased $4.3 million, or 15%, which was primarily the result of higher sales volumes, offset by unfavorable product mix.

EMEA gross profit increased $0.9 million, or 3%, due to favorable product mix.

Asia-Pacific gross profit increased $0.5 million, or 1%, which was primarily driven by higher sales volume, partially offset by higher inventory reserves.

Costs and expenses.

Costs and expenses of $139.1 million for the year ended December 31, 2024 decreased $11.6 million, or 8%, when compared to 2023.

Excluding the effect of currency translation, costs and expenses decreased $10.9 million, or 7%, as summarized in the following table:

Costs and expenses of $153.4 million for the year ended December 31, 2025 increased $14.4 million, or 10%, when compared to 2024.

Excluding the effect of currency translation, costs and expenses increased $13.8 million, or 10%, as summarized in the following table:

Year Ended December 31,

(Thousands of dollars) 2025 2024 Change Change

Translation Change

Translation %

Translation Change Due to Intercompany Transactions Change Excluding

and Intercompany Transactions

Costs and expenses

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Consolidated $ 153,404 $ 139,054 $ 14,350 $ 576 $ — $ 13,774 10 %

PLP-USA costs and expenses of $72.6 million decreased $6.7 million, or 8% 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 year ended December 31, 2024 had a favorable impact by $0.7 million when local currencies were translated to U.S.

The following discussion of costs and expenses excludes the effect of currency translation.

The Americas costs and expenses of $18.7 million decreased $3.3 million primarily due to a legal settlement in the third quarter of 2023 and the impact of foreign currency remeasurement.

EMEA costs and expenses of $26.1 million decreased by $2.4 million primarily due to lower personnel costs and bad debt expenses.

Asia-Pacific costs and expenses of $21.7 million increased $1.4 million primarily due to the net impact of the sale of capital assets year over year and foreign currency remeasurement.

PLP-USA costs and expenses of $69.9 million increased $6.2 million, or 9% year-over-year.

PLP-USA’s increase was primarily attributable to personnel costs supporting strategic market growth in core product offerings in both energy and communications, primarily for sales, sales support and engineering resources, as well as higher selling and professional service costs.

International costs and expenses for the year ended December 31, 2025 had a unfavorable impact by $0.6 million when local currencies were translated to U.S.

dollars and was unfavorably impacted by intercompany transactions with PLP-USA.

The following discussion of costs and expenses excludes the effect of currency translation and intercompany transactions.

The Americas costs and expenses of $25.6 million increased $4.0 million primarily due to the acquisition of JAP Telecom in May 2025, an increase in personnel costs and the impact of foreign currency remeasurement.

EMEA costs and expenses of $32.0 million increased by $2.8 million primarily due to higher personnel and facility costs and a recovery of bad debt in the second quarter of 2024 that did not recur.

Asia-Pacific costs and expenses of $25.9 million increased $0.8 million primarily due to a gain on the sale of capital assets in the first quarter of 2024 that did not recur, offset by a recovery of bad debt.

Other (expense) income, net .

Other income, net as of the year ended December 31, 2024 was favorable by $1.8 million when compared to Other expense, net for the year ended December 31, 2024 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 year ended December 31, 2024.

Other expense, net as of the year ended December 31, 2025 was unfavorable by $9.5 million when compared to the nominal Other income, net for the year ended December 31, 2024.

The unfavorable movement was mainly due to the $11.7 million U.S.

Plan termination charge recorded in the third quarter of 2025, partially offset by government incentives received in 2025 related to our facility in China.

Income taxes.

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The effective tax rate for the years ended December 31, 2025 and 2024 was 22.6% and 26.9%, respectively.

Our effective tax rate increased primarily due to the limitations on the deductibility of compensation and the unfavorable impact from the mix of income earned in jurisdictions with a higher tax rate than the U.S.

This was partially offset by a favorable impact from increase in excess tax benefit on share-based compensation.

The decrease in the effective tax rate from 2024 to 2025 was primarily due to the impact of

Plan termination and a reduction in the unfavorable impact from the mix of income earned in jurisdictions with a higher tax rate than the U.S.

This was partially offset by an unfavorable impact from the decrease in certain tax credits.

The following items had the most significant impact on the difference between our statutory U.S.

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A $1.7 million, or 3.8%, net increase resulting from non-deductible officers' compensation

A $1.6 million, or 3.5%, net increase resulting from an increase in withholding taxes and from earnings in jurisdictions with higher tax rates than the U.S.

federal statutory rate where such earnings are permanently reinvested.

A $1.4 million, or 3.1%, net decrease resulting from the U.S.

pension plan termination charge.

A $1.2 million, or 2.6%, net decrease resulting from excess tax benefits from executive compensation in the form of restricted stock units (or "RSUs").

A $0.7 million, or 1.5%, net decrease resulting from the generation of foreign tax credits.

A $2.0 million, or 4.0%, net increase resulting from non-deductible officers' compensation.

A $1.6 million, or 3.2%, net increase resulting from earnings in jurisdictions with higher tax rates than the U.S.

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A $1.6 million, or 3.2%, net decrease resulting from generation of foreign tax credits.

A $1.2 million, or 2.4%, net decrease resulting from other stock compensation.

A $1.2 million, or 2.3%, net increase resulting from the inclusion of Global Intangible Low-Taxed Income.

A $3.7 million, or 4.5%, net decrease resulting from generation of foreign tax credits.

A $1.2 million, or 2.4%, net decrease resulting from excess tax benefits from RSUs.

A $1.2 million, or 2.3%, net increase resulting from the inclusion of Global Intangible Low-Taxed Income.

A $1.8 million, or 2.2%, net increase resulting from earnings in various U.S States.

A $1.7 million, or 2.0%, net increase resulting from earnings in jurisdictions with higher tax rates than the U.S.

federal statutory rate where such earnings are permanently reinvested.

As a result of the preceding items, net income for the year ended December 31, 2025 was $35.3 million, compared to $37.1 million for 2024.

Excluding the effect of currency translation, net income decreased $25.5 million as summarized in the following table.

Excluding the effect of currency translation, net income decreased $1.9 million as summarized in the following table and was primarily due to the U.S.

Plan termination charged recorded in 2025.

Year Ended December 31,

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Our investments include expenditures required for equipment and facilities as well as expenditures in support of our strategic initiatives.

In 2024, we used cash of $14.7 million for capital expenditures.

In 2025, we used cash of $40.1 million for capital expenditures, of which $24.8 million relates to the construction of the new Poland facility and purchase of the new Spain facility.

At December 31, 2025, we had $83.4 million of cash, cash equivalents and restricted cash (collectively “Cash”).

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At December 31, 2025, our unused availability under our credit facility (the "Facility") was $52.0 million and our bank debt to equity percentage was 8.3%.

The Facility contains,

among other provisions, requirements for maintaining levels of net worth and profitability.

The Facility contains, among other provisions, requirements for maintaining levels of net worth and profitability.

At December 31, 2025, 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 years ended December 31, 2024 and 2023.

Our Asia-Pacific segment had $0.1 million in restricted cash for the years ended December 31, 2025 and 2024.

The restricted cash was used to secure bank debt and is included in Cash, cash equivalents and restricted cash on the balance sheet.

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See Note 7 in the Notes to Consolidated Financial Statements for more information.

On July 16, 2025, PLP Poland, a subsidiary of the Company, entered into a non-revolving investment loan with Bank Pekao S.A to finance the construction of a new manufacturing plant for an amount up to PLN100.3 million ($27.9 million).

The maturity date of the loan is January 31, 2035 and is payable in annual installments in the amounts of PLN5.3 million ($1.5 million) in 2026, PLN9.0 million ($2.5 million) in 2027, PLN9.6 million ($2.7 million) in 2028 through 2034, and PLN18.8 million ($5.0 million) in 2035.

As of December 31, 2025, the outstanding balance on the investment loan was $12.6 million, of which $1.9 million is classified as current.

See Note 7 in the Notes to Consolidated Financial Statements for more information.

We expect that our major source of funding for 2026 and beyond will be our operating cash flows, our existing cash and cash equivalents as well as our Facility agreement.

The Facility agreement has an expiration date of March 2, 2026.

The Company expects to extend the maturity date of the Facility over the coming year.

The Facility agreement has an expiration date of June 30, 2028.

Except for current earnings in certain jurisdictions, our operating income is deemed to be indefinitely reinvested in foreign jurisdictions.

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Net Cash provided by operating activities for the years ended December 31, 2025 and 2024 was $73.5 million and $67.5 million, respectively.

The $40.1 million decrease was primarily a result of a decrease in net income and decrease in cash from working capital.

The $6.0 million increase was primarily a result of the net favorable movement in non-cash items of $13.8 million, including the U.S.

pension plan termination, offset by changes in operating assets and liabilities.

Net Cash used in investing activities for the years ended December 31, 2025 and 2024 was $43.4 million and $12.4 million, respectively.

The $32.4 million decrease was primarily a result of decreases in acquisition activity and capital expenditures during the current period.

The $31.0 million change was primarily a result of the acquisition of JAP Telecom in May of 2025 and an increase in capital expenditures, primarily related to the acquisition of new land and a building in Spain and the construction of a new manufacturing plant in Poland.

Net Cash used in financing activities for the years ended December 31, 2025 and 2024 was $9.2 million and $47.8 million, respectively.

The year-over-year change was primarily the result of decreased share repurchases offset by increased net payments of long-term debt.

The $38.6 million change was primarily the result of a reduction in net payments of long-term debt.

We have commitments under operating leases primarily for office and manufacturing space, transportation equipment, office and computer equipment and capital leases, primarily for equipment.

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Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products.

All revenue is recognized when the

Company satisfies the performance obligations under the contract and control of the product is transferred to the customer, primarily based on shipping terms.

All revenue is recognized when the Company satisfies the performance obligations under the contract and control of the product is transferred to the customer, primarily based on shipping terms.

Revenue for shipping and handling charges are recognized at the time the products are shipped to, delivered to or picked up by the customer.

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Pension Obligations

We record obligations and expenses related to a pension benefit plan based on actuarial valuations, which include key assumptions on discount rates, expected returns on plan assets and compensation increases.

For the remaining international pension plans, we record obligations and expenses related to a pension benefit plan based on actuarial valuations, which include key assumptions on discount rates, expected returns on plan assets and compensation increases.

These actuarial assumptions are reviewed annually and modified as appropriate.

The effect of modifications is generally recorded or amortized over future periods.

The discount rate of 5.77% at December 31, 2024 reflects an analysis of yield curves as of the end of the year and the schedule of expected cash needs of the plan.

The 2025 expected long-term return on plan assets o f 4.75% reflects the plan’s historical returns and represents our best estimate of the likely future returns on the plan’s asset mix.

We believe the assumptions used in recording obligations under the plans are reasonable based on prior experience, market conditions and the advice of plan actuaries.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis