PREFORMED LINE PRODUCTS CO 10-K

Item 8. Financial Statements and Supplementary Data Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors of Preformed Line Products Company Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Preformed Line Products Company (the Company) as of December 31, 2025 and 2024, the related statements of consolidated income, comprehensive income, cash flows and shareholders' equity for each of the three years in the period ended December 31, 2025, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated March 5, 2026 expressed an unqualified opinion thereon. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates. Quantitative Impairment Assessment of Goodwill for the EMEA Reporting Unit Description of the Matter At December 31, 2025, the Company’s goodwill was $30.7 million and the goodwill attributable to the EMEA reporting unit was $17.0 million. As discussed in Note 1 and Note 12 to the consolidated financial statements, goodwill is tested for impairment at least annually at the reporting unit level or more frequently if impairment indicators arise. Goodwill is tested for impairment utilizing a combination of the income approach, which uses a discounted cash flow methodology, and the market approach, which uses comparable company market multiples, to estimate the fair value of each reporting unit. Auditing management’s quantitative goodwill impairment assessment for the EMEA reporting unit was complex due to the use of valuation methodologies to determine the fair value of a reporting unit. The fair value estimate was sensitive to significant assumptions, such as revenue growth rates, operating margins and discount rate, which are affected by expectations of future market or economic conditions. 28 How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s quantitative goodwill impairment process. This included controls over management’s review of the significant assumptions underlying the fair value determination described above. To test the estimated fair value of the Company’s reporting unit, we performed audit procedures that included, among others, assessing the valuation methodologies used, testing the assumptions discussed above, and testing the completeness and accuracy of underlying data used by the Company in its analysis. We assessed the historical accuracy of management’s estimates and performed sensitivity analyses of significant assumptions to evaluate the changes in the fair value of the reporting unit that would result from changes in the assumptions. We involved our internal valuation specialists to review the valuation methodologies and certain significant assumptions discussed above. We also assessed the appropriateness of the disclosures in the consolidated financial statements. /s/ Ernst & Young LLP We have served as the Company’s auditor since 2008. Cleveland, Ohio March 5, 2026 29 PREFORMED LINE PRODUCTS COMPANY CONSOLIDATED BALANCE SHEETS December 31, 2025 2024 (Thousands of dollars, except share and per share data) ASSETS Cash, cash equivalents and restricted cash $ 83,389 $ 57,244 Accounts receivable, net 113,175 111,402 Inventories, net 148,730 129,913 Prepaid expenses 12,961 11,720 Other current assets 5,206 5,514 TOTAL CURRENT ASSETS 363,461 315,793 Property, plant and equipment, net 222,781 195,086 Operating lease, right-of-use assets 9,708 10,117 Goodwill 30,684 26,685 Other intangible assets, net 10,140 9,656 Deferred income taxes 7,481 6,546 Other assets 9,366 9,994 TOTAL ASSETS $ 653,621 $ 573,877 LIABILITIES AND SHAREHOLDERS' EQUITY Trade accounts payable $ 49,520 $ 41,951 Notes payable to banks 1,213 7,782 Operating lease liabilities, current 1,722 1,588 Current portion of long-term debt 5,392 2,430 Accrued compensation and other benefits 29,207 25,904 Accrued expenses and other liabilities 22,407 25,503 Dividends payable 1,277 1,293 Income taxes payable 3,972 1,962 TOTAL CURRENT LIABILITIES 114,710 108,413 Long-term debt, less current portion 32,860 18,357 Operating lease liabilities, noncurrent 5,957 6,538 Deferred income taxes 5,707 3,766 Other noncurrent liabilities 18,836 14,479 SHAREHOLDERS' EQUITY Common shares $ 2 par value per share, 15,000,000 shares authorized, 4,907,787 and 4,913,621 issued and outstanding, at December 31, 2025 and December 31, 2024, respectively 13,860 13,752 Common shares issued to rabbi trust, 222,506 and 222,887 shares at December 31, 2025 and December 31, 2024, respectively ( 9,586 ) ( 9,575 ) Deferred compensation liability 9,586 9,575 Paid-in capital 67,217 65,093 Retained earnings 584,360 553,179 Treasury shares, at cost, 2,021,940 and 1,961,772 shares at December 31, 2025 and December 31, 2024, respectively ( 136,554 ) ( 126,800 ) Accumulated other comprehensive loss ( 53,365 ) ( 82,909 ) TOTAL PREFORMED LINE PRODUCTS COMPANY SHAREHOLDERS' EQUITY 475,518 422,315 Noncontrolling interest 33 9 TOTAL SHAREHOLDERS' EQUITY 475,551 422,324 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 653,621 $ 573,877 See notes to consolidated financial statements. 30 PREFORMED LINE PRODUCTS COMPANY STATEMENTS OF CONSOLIDATED INCOME Year Ended December 31, 2025 2024 2023 (Thousands, except per share data) Net sales $ 669,338 $ 593,714 $ 669,679 Cost of products sold 460,799 403,903 434,831 GROSS PROFIT 208,539 189,811 234,848 Costs and expenses Selling 52,011 48,722 51,078 General and administrative 75,176 67,477 74,643 Research and engineering 23,687 21,923 22,481 Other operating expense, net 2,530 932 2,492 153,404 139,054 150,694 OPERATING INCOME 55,135 50,757 84,154 Other income (expense) Interest income 2,317 2,573 1,811 Interest expense ( 1,303 ) ( 2,221 ) ( 3,905 ) Pension termination expense ( 11,657 ) — — Other income (expense), net 1,128 ( 339 ) 284 ( 9,515 ) 13 ( 1,810 ) INCOME BEFORE INCOME TAXES 45,620 50,770 82,344 Income tax expense 10,313 13,659 19,007 NET INCOME $ 35,307 $ 37,111 $ 63,337 Net income attributable to noncontrolling interests ( 24 ) ( 17 ) ( 5 ) NET INCOME ATTRIBUTABLE TO PREFORMED LINE PRODUCTS COMPANY SHAREHOLDERS $ 35,283 $ 37,094 $ 63,332 AVERAGE NUMBER OF SHARES OF COMMON STOCK OUTSTANDING: Basic 4,918 4,908 4,920 Diluted 4,942 4,947 4,997 EARNINGS PER SHARE OF COMMON STOCK ATTRIBUTABLE TO PREFORMED LINE PRODUCTS COMPANY SHAREHOLDERS: Basic $ 7.17 $ 7.56 $ 12.87 Diluted $ 7.14 $ 7.50 $ 12.68 See notes to consolidated financial statements. 31 PREFORMED LINE PRODUCTS COMPANY STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME Year Ended December 31, 2025 2024 2023 (Thousands of dollars) Net income $ 35,307 $ 37,111 $ 63,337 Other comprehensive income (loss), net of tax: Foreign currency translation adjustment 24,171 ( 21,708 ) 9,667 Pension adjustment, net of tax 5,373 ( 895 ) 14 Other comprehensive income (loss), net of tax 29,544 ( 22,603 ) 9,681 Comprehensive income attributable to noncontrolling interests ( 24 ) ( 17 ) ( 5 ) COMPREHENSIVE INCOME ATTRIBUTABLE TO PREFORMED LINE PRODUCTS COMPANY SHAREHOLDERS $ 64,827 $ 14,491 $ 73,013 See notes to consolidated financial statements. 32 PREFORMED LINE PRODUCTS COMPANY STATEMENTS OF CONSOLIDATED CASH FLOWS Year Ended December 31, 2025 2024 2023 (Thousands of dollars) OPERATING ACTIVITIES Net income $ 35,307 $ 37,111 $ 63,337 Adjustments to reconcile net income to net cash provided by operations: Depreciation and amortization 23,030 20,830 18,914 Provision for accounts receivable allowances ( 119 ) ( 875 ) 3,441 Provision for inventory reserves 3,065 4,498 8,081 Deferred income taxes ( 1,176 ) 1,084 ( 2,232 ) Share-based compensation expense 4,955 3,412 4,948 Pension termination expense 11,657 — — Loss (gain) on sale of property and equipment 8 ( 1,748 ) ( 2,478 ) Other, net 413 828 435 Changes in operating assets and liabilities Accounts receivable 6,989 ( 8,710 ) 16,969 Inventories ( 11,949 ) 6,784 ( 4,952 ) Prepaid expenses 3,998 ( 3,988 ) 5,961 Trade accounts payable and accrued liabilities 10 8,602 2,302 Accrued income and other taxes ( 1,270 ) 590 ( 937 ) Contributions to company pension plan ( 2,850 ) — ( 1,500 ) Other, net 1,399 ( 938 ) ( 4,647 ) NET CASH PROVIDED BY OPERATING ACTIVITIES 73,467 67,480 107,642 INVESTING ACTIVITIES Capital expenditures ( 40,132 ) ( 14,651 ) ( 35,332 ) Proceeds from the sale of property and equipment 273 3,454 2,631 Proceeds from sale of investments 1,679 1,993 — Purchases of investments ( 451 ) ( 3,154 ) — Acquisition of businesses, net of cash ( 4,746 ) — ( 12,089 ) NET CASH USED IN INVESTING ACTIVITIES ( 43,377 ) ( 12,358 ) ( 44,790 ) FINANCING ACTIVITIES (Payments) proceeds of notes payable to banks ( 6,679 ) 860 ( 11,081 ) Proceeds from long-term debt 22,207 96,410 169,172 Payments of long-term debt ( 6,634 ) ( 130,133 ) ( 186,179 ) Dividends paid ( 4,118 ) ( 4,076 ) ( 4,106 ) Proceeds from issuance of common shares 1,925 214 2,164 Stock incentive plan payments ( 4,704 ) — — Purchase of common shares for treasury ( 1,049 ) ( 226 ) ( 728 ) Purchase of common shares for treasury from related parties ( 8,705 ) ( 8,379 ) ( 18,164 ) Other ( 1,474 ) ( 2,473 ) — NET CASH USED IN FINANCING ACTIVITIES ( 9,231 ) ( 47,803 ) ( 48,922 ) Effects of exchange rate changes on cash, cash equivalents and restricted cash 5,286 ( 3,682 ) 2,438 Net increase in cash, cash equivalents and restricted cash 26,145 3,637 16,368 Cash, cash equivalents and restricted cash at beginning of year 57,244 53,607 37,239 CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF YEAR $ 83,389 $ 57,244 $ 53,607 See notes to consolidated financial statements. 33 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 January 31, 2023 $ 13,351 $ ( 10,261 ) $ 10,261 $ 53,646 $ 460,930 $ ( 99,303 ) $ ( 65,495 ) $ ( 4,492 ) $ 358,637 $ ( 13 ) $ 358,624 Net income 63,332 63,332 5 63,337 Foreign currency translation adjustment 9,667 9,667 9,667 Pension adjustment, net of tax 14 14 14 Total comprehensive income 73,013 5 73,018 Purchase of 102,693 common shares ( 16,101 ) ( 16,101 ) ( 16,101 ) Stock incentive plan activity 256 7,312 ( 175 ) ( 2,845 ) 4,548 4,548 Common shares distributed from rabbi trust of 2,268 , net 78 ( 78 ) — — Cash dividends declared - $ 0.80 per share ( 3,933 ) ( 3,933 ) ( 3,933 ) Balance at December 31, 2023 $ 13,607 $ ( 10,183 ) $ 10,183 $ 60,958 $ 520,154 $ ( 118,249 ) $ ( 55,828 ) $ ( 4,478 ) $ 416,164 $ ( 8 ) $ 416,156 Net income 37,094 37,094 17 37,111 Foreign currency translation adjustment ( 21,708 ) ( 21,708 ) ( 21,708 ) Pension adjustment, net of tax ( 895 ) ( 895 ) ( 895 ) Total comprehensive income 14,491 17 14,508 Purchase of 24,622 common shares ( 3,099 ) ( 3,099 ) ( 3,099 ) Stock incentive plan activity 145 4,135 ( 5,452 ) ( 1,172 ) ( 1,172 ) Common shares distributed from rabbi trust of 20,231 , net 608 ( 608 ) — — Cash dividends declared - $ 0.80 per share ( 4,069 ) ( 4,069 ) ( 4,069 ) Balance at December 31, 2024 $ 13,752 $ ( 9,575 ) $ 9,575 $ 65,093 $ 553,179 $ ( 126,800 ) $ ( 77,536 ) $ ( 5,373 ) $ 422,315 $ 9 $ 422,324 Net income 35,283 35,283 24 35,307 Foreign currency translation adjustment 24,171 24,171 24,171 Pension adjustment, net of tax 5,373 5,373 5,373 Total comprehensive income 64,827 24 64,851 Purchase of 54,334 common shares ( 8,873 ) ( 8,873 ) ( 8,873 ) Stock incentive plan activity 108 2,124 ( 881 ) 1,351 1,351 Common shares distributed from rabbi trust of 381 , net ( 11 ) 11 — — Cash dividends declared - $ 0.81 per share ( 4,102 ) ( 4,102 ) ( 4,102 ) Balance at December 31, 2025 $ 13,860 $ ( 9,586 ) $ 9,586 $ 67,217 $ 584,360 $ ( 136,554 ) $ ( 53,365 ) $ — $ 475,518 $ 33 $ 475,551 See notes to consolidated financial statements. 34 PREFORMED LINE PRODUCTS COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tables in thousands of dollars, except share and per share data, unless specifically noted) Note 1 - Significant Accounting Policies Nature of Operations Preformed Line Products Company and subsidiaries (the “Company”) is a designer and manufacturer of products and systems employed in the construction and maintenance of overhead and underground networks for the energy, telecommunication, cable operators, data communication and other similar industries. The Company’s primary products support, protect, connect, terminate and secure cables and wires. The Company provides helical solutions, connectors, fiber optic and copper splice closures, solar framing applications, and electric vehicle charging station foundations. The Company’s customers include public and private energy utilities and communication companies, cable operators, contractors and subcontractors, distributors and value-added resellers. The Company serves its worldwide markets through strategically located domestic and international manufacturing facilities. Principles of Consolidation and Noncontrolling Interests The accompanying consolidated financial statements, including the accounts of the Company and its wholly-owned subsidiaries for which it has a controlling interest, were prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") and include the assets, liabilities, revenues and expenses of all majority-owned subsidiaries over which the Company exercises control. Intercompany transactions and balances are eliminated in consolidation. Noncontrolling interests are presented in the Company’s Consolidated Financial Statements as if parent company investors (controlling interests) and other minority investors (noncontrolling interests) in partially owned subsidiaries have similar economic interests in a single entity. As a result, investments in noncontrolling interests are reported as equity in our Consolidated Financial Statements. Additionally, the Company’s Consolidated Financial Statements include 100 % of a controlled subsidiary’s earnings, rather than only our share. Transactions between the parent company and noncontrolling interests are reported in equity as transactions between stockholders, provided that these transactions do not create a change in control. Cash, Cash Equivalents and Restricted Cash Cash, cash equivalents and restricted cash (“Cash”) are stated at fair value and consist of highly liquid investments with original maturities of three months or less or with maturities of more than three months that can be withdrawn early without a significant economic penalty. Restricted cash, which is not material, is included in Cash, cash equivalents and restricted cash on the Company’s Consolidated Balance Sheets. Accounts Receivable Allowances The Company maintains an allowance for credit losses for estimated losses resulting from the inability of its customers to make required payments. In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Board ("ASC") 326 “Financial Instruments – Credit Losses", the Company uses a current expected credit loss model in order to immediately recognize an estimate of credit losses that are expected to occur over the life of the financial instruments, mainly trade receivables. Additionally, the allowance is based upon identified delinquent accounts, customer payment patterns and other analyses of historical data trends. The Company also maintains an allowance for future sales credits related to sales recorded during the year. The estimated allowance is based on historical sales credits issued in the subsequent year related to the prior year and any significant, preapproved open return good authorizations as of the balance sheet date. Inventories The Company uses the last-in, first-out (“LIFO”) method of determining cost for the majority of its material portion of inventories in PLP-USA. All other inventories are determined by the first-in, first-out (“FIFO”) or average cost methods. Inventories are carried at lower of cost or net realizable value. Reserves are maintained for estimated obsolescence or excess inventory based on past usage and future demand. Fair Value of Financial Instruments FASB ASC 825, “Disclosures about Fair Value of Financial Instruments,” requires disclosures of the fair value of financial instruments. The estimated fair value of financial instruments was principally based on market prices where such prices were available, and when unavailable, fair values were estimated based on market prices of similar instruments. Property, Plant and Equipment and Depreciation 35 Property, plant, and equipment is recorded at cost less accumulated depreciation or amortization. Property under finance lease agreements is carried at the present value of lease payments over the lease term less accumulated amortization. Depreciation is based on the estimated service lives of depreciable assets and is calculated using the straight-line method. Fully depreciated assets are retained in property and accumulated depreciation accounts until they are removed from service. The estimated useful lives for assets purchased new are: land improvements, 10 years; buildings, 39 years; building improvements, 5 years to 39 years; machinery and equipment, 3 years to 10 years; tooling, 5 years; and aircraft, 15 years. Appropriate reductions in estimated useful lives are made for property, plant and equipment purchased in connection with an acquisition of a business or in a used condition when purchased. Long-Lived Assets The Company records impairment losses on long-lived assets used in operations when events and circumstances indicate that the carrying value of the assets are impaired and the undiscounted future cash flows estimated to be generated by such assets are less than the carrying value. The Company’s cash flows are based on historical results adjusted to reflect the Company’s best estimate of future market and operating conditions. The net carrying value of assets not recoverable is then reduced to fair value. The estimate of fair value represents the Company’s best estimate based on industry trends and reference to market rates and transactions. The Company did not record an impairment to long-lived assets during the years ended December 31, 2025 and 2024. Goodwill and Other Intangibles In accordance with ASC 805, “Business Combinations,” the Company uses the acquisition method of accounting to allocate costs of acquired businesses to the assets acquired and liabilities assumed based on their estimated fair values at the dates of acquisition. The excess costs of acquired businesses over the fair values of the assets acquired and liabilities assumed are recognized as goodwill. Goodwill and other intangible assets are generally recorded as a result of a business acquisition. Goodwill represents the excess of purchase price over the fair value of the tangible and identifiable net assets acquired during a business combination and is not subject to amortization but is subject to annual impairment testing. Goodwill is reviewed for impairment annually on October 1 or more frequently when changes in circumstances indicate the carrying amount may be impaired. Such events or changes may include, but are not limited to, a significant deterioration in overall economic conditions, changes in the business climate of the Company's industry, overall performance indicators, a decline in the Company's market capitalization, business reorganization or restructuring or disposal of all or part of a reporting unit. Goodwill is tested for impairment at the reporting unit level, and is based on the net assets for each reporting unit, including goodwill and intangible assets. The Company’s reporting units are equivalent to the reportable operating segments, except for the Americas segment which has two reporting units (Canada and Other Americas). Goodwill is assigned to each reporting unit, as this represents the lowest level that constitutes a business and is the level at which management regularly reviews the operating results. The Company may use both quantitative and qualitative approaches when testing goodwill for impairment. A qualitative analysis is performed by assessing certain trends and factors, including projected market outlook and growth rates, forecasted and actual sales and gross profit margins, discount rates and other relevant qualitative factors. These trends and factors are compared to, and based on, the assumptions used in the most recent quantitative analysis performed for each reporting unit to determine if it is more likely than not that the fair value of the reporting unit exceeds its carrying amount. If that determination is made, no further evaluation is necessary. Otherwise, the Company performs a quantitative impairment test on the reporting unit. For the quantitative approach, the Company uses a combination of the income approach, which uses a discounted cash flow methodology, and the market approach, which uses comparable market multiples, in computing fair value by reporting unit. The Company then compares the fair value of the reporting unit with its carrying value to assess if goodwill has been impaired. The fair value estimates are subjective and sensitive to significant assumptions, such as future cash flows, revenue growth rates, operating margins, the weighted-average cost of capital ("WACC"), and estimated market multiples, of which are affected by expectations of future market or economic conditions. The future cash flows are based on the Company’s long-term operating plan and a terminal value was used to estimate the reporting unit’s cash flows beyond the period covered by the operating plan. The WACC is an estimate of the overall after-tax rate of return required by equity and debt market holders of a business enterprise. The Company believes that the methodologies, significant assumptions, and weightings used are reasonable and result in appropriate fair values of the reporting units. Intangible assets with definite lives, consisting primarily of purchased customer relationships, patents, technology, customer backlogs, trademarks and land use rights, are generally amortized over periods from 1 year to 99 years. The Company has no indefinite lived intangible assets other than goodwill. The Company’s intangible assets with finite lives are generally amortized over the period in which the economic benefits of the intangibles are consumed, using either a projected cash flow basis method or the straight-line method. The straight-line method is used in circumstances in which it better reflects the pattern in which the economic benefits of the intangible asset are consumed or otherwise expire compared to using a projected cash flow basis method. An evaluation of the remaining useful life of intangible assets with a determinable life is performed on a periodic basis and when events and circumstances warrant an evaluation. The Company assesses intangible assets with a determinable life for impairment when the 36 carrying amount may not be recoverable, consistent with its policy for assessing other long-lived assets. The Company did not record an impairment to intangible assets with finite lives during the years ended December 31, 2025 and 2024. Impairment assessments inherently involve management judgments regarding a number of assumptions such as those described above. Due to the multiple variables inherent in arriving at the estimates of the reporting unit's fair value, differences in assumptions could have an effect on the estimated fair value of a reporting unit and could result in goodwill impairment charges in a future period. Revenue Recognition Net sales include products and shipping and handling charges, net of estimates for product returns. 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. Revenue for shipping and handling charges are recognized at the time the products are shipped to, delivered to or picked up by the customer. Payment terms vary by the type and location of the customer and the products offered but are generally short-term in nature. The Company estimates product returns based on historical return rates. Research and Development Research and development costs for new products are expensed as incurred and are reported on the Statements of Consolidated Income. Income Taxes Income taxes are computed in accordance with the provisions of FASB ASC 740, “Income taxes” and include U.S. (federal and state) and foreign income taxes. In the Consolidated Financial Statements, the benefits of a consolidated return have been reflected where such returns have or could be filed based on the entities and jurisdictions included in the financial statements. The Company has elected to recognize Global Intangible Low-Taxed Income ("GILTI") as a period expense in the period the tax is incurred. Deferred Tax Assets Deferred taxes are recognized at currently enacted tax rates for temporary differences between the financial reporting and income tax basis of assets and liabilities and operating loss and tax credit carryforwards. Deferred tax liabilities and assets are determined based on the differences between the book and tax basis of particular assets and liabilities and operating loss carryforwards using tax rates in effect for the years in which the differences are expected to reverse. Deferred tax assets are recognized to the extent that the Company believes these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies and results of recent operations. We establish a valuation allowance to record our deferred tax assets at an amount that is more-likely-than-not to be realized. In the event we were to determine that we would be able to realize our deferred tax assets in the future in excess of their recorded amount, an adjustment to the valuation allowance would increase income in the period such determination was made. Likewise, should we determine that we would not be able to realize all or part of our net deferred tax assets in the future, an adjustment to the valuation allowance would be charged to expense in the period such determination was made. Uncertain Tax Positions We identify tax positions taken on the federal, state, local and foreign income tax returns filed or to be filed. A tax position can include: a reduction in taxable income reported in a previously filed tax return or expected to be reported on a future tax return that impacts the measurement of current or deferred income tax assets or liabilities in the period being reported; a decision not to file a tax return; an allocation or a shift of income between jurisdictions; the characterization of income or a decision to exclude reporting taxable income in a tax return; or a decision to classify a transaction, entity or other position in a tax return as tax exempt. We determine whether a tax position is an uncertain or a routine business transaction tax position that is more-likely-than-not to be sustained at the full amount upon examination. Under ASC 740, “Tax Benefits from Uncertain Tax Positions” that reduce our current or future income tax liability are reported in our financial statements only to the extent that each benefit is recognized and measured under a two-step approach. The first step requires us to assess whether each tax position based on its technical merits and facts and circumstances as of the reporting date, is more-likely-than-not to be sustained upon examination. The second step measures the amount of tax benefit that we would recognize in the financial statements based on a cumulative probability approach. A tax position that meets the more-likely-than-not threshold that is not highly certain is measured based on the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement with the tax authority, assuming that the tax authority has examined the position and has full knowledge of all relevant information. Advertising 37 Advertising costs are expensed as incurred and totaled $ 2.8 million in 2025, $ 2.5 million in 2024 and $ 2.4 million in 2023. Foreign Currency Translation Asset and liability accounts are translated into U.S. dollars using exchange rates in effect at the date of the Consolidated Balance Sheet. The translation adjustments are recorded in Accumulated other comprehensive income (loss). Revenues and expenses are translated at weighted average exchange rates in effect during the period. Transaction gains and losses arising from exchange rate changes on transactions denominated in a currency other than the functional currency are included in income and expensed as incurred. Aggregate transaction losses, including hedge activity, was $ 0.4 million for the year ended December 31, 2025, $ 0.5 million for the year ended December 31, 2024 and $ 3.2 million for the year ended December 31, 2023. Upon sale or substantially complete liquidation of an investment in a foreign entity, the cumulative translation adjustment for that entity is reclassified from Accumulated other comprehensive loss to earnings. Effective July 1, 2018, Argentina was designated as a highly inflationary economy as the projected three-year cumulative inflation rate exceeded 100%. As such, beginning July 1, 2018, the functional currency for the Company’s Argentina subsidiary became the U.S. dollar. Revenue from operations in Argentina was less than 1 % of total consolidated net sales for the years ended December 31, 2025, 2024 and 2023. Use of Estimates The preparation of financial statements in accordance with U.S. GAAP requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. The Company's consolidated financial statements include amounts that are based on management's best estimates and judgments. Actual results could differ from these estimates. Certain prior year amounts have been reclassified to conform to current year presentation. Business Combinations Upon acquisition of a business, the Company uses the income, market or cost approach (or a combination thereof) for the valuation as appropriate. The valuation inputs in these models and analyses are based on market participant assumptions. Market participants are considered to be buyers and sellers unrelated to the Company in the principal or most advantageous market for the asset or liability. The Company uses a discounted cash flow model to measure the fair value of intangible assets. The significant assumptions used to estimate the fair value of the intangible assets include discount rates and certain assumptions that form the basis of future cash flows (such as revenue growth rates, attrition rates, and royalty rates). These assumptions relate to the future performance of the acquired businesses, are forward-looking and could be affected by future economic and market conditions. Fair value estimates are based on a series of judgments about future events and uncertainties and rely heavily on estimates and assumptions. Management values property, plant and equipment using the cost approach supported where available by observable market data, which includes consideration of obsolescence. Acquired inventories are marked to fair value. For certain items, the carrying value is determined to be a reasonable approximation of fair value based on information available to the Company. Derivative Financial Instruments The Company operates internationally and enters into intercompany transactions denominated in foreign currencies. Consequently, the Company is subject to market risk arising from exchange rate movements between the dates foreign currency transactions occur and the dates they are settled. The Company currently uses foreign currency forward contracts to reduce the risk related to some of these transactions. These contracts usually have maturities of 90 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. The Company records the contracts at fair value in the Consolidated Balance Sheets. The Company does not hold derivatives for trading purposes. Recently Adopted or Issued Accounting Pronouncements Adopted In November 2023, the FASB issued Accounting Standards Update No. 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.” This ASU enhances reportable segment disclosures on both an annual and interim basis primarily in regards to the disclosure of significant segment expenses that are regularly provided to the chief operating decision maker (CODM) and included within the reported measure(s) of segment profit or loss. In addition, the ASU requires disclosure, by segment, of other items included in the reported measure(s) of segment profit or loss, including qualitative information describing the 38 composition, nature and type of each item. The ASU also expands disclosure requirements related to the CODM, including how the reported measure(s) of segment profit or loss are used to assess segment performance and allocate resources, the method used to allocate overhead for significant segment expenses and others. Lastly, all current required annual segment reporting disclosures under Topic 280 are now effective for interim periods. The ASU was effective for the Company's 2024 fiscal year and interim periods beginning with the quarter ended March 31, 2025. The adoption of this new standard did not have a material impact on the consolidated financial statements, other than the updated segment disclosures included within Note 15, "Segment Information". In December 2023, the FASB issued Accounting Standards Update No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” This ASU enhances income tax disclosures by providing information to better assess how an entity's operations, related tax risks, tax planning and operational opportunities affect its tax rate and prospects for future cash flows. This ASU requires additional disclosures to the annual effective tax rate reconciliation including specific categories and further disaggregated reconciling items that meet the quantitative threshold. Additionally, the ASU requires disclosures relating to income tax expense and payments made to federal, state, local and foreign jurisdictions. This ASU was effective for the Company's 2025 fiscal year end. The adoption of this new standard did not have a material impact on the consolidated financial statements, other than the tax disclosures included with Note 9, "Income Taxes". Not Yet Adopted In November 2024, the FASB issued Accounting Standards Update No. 2024-03, “Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses.” This ASU improves disclosures about a public business entity’s expenses and addresses requests from investors for more detailed information about the types of expenses commonly presented in expense captions. Coupled with recent standards that enhanced the disaggregation of revenue and income tax information, the disaggregated expense information required by the amendments in this ASU will enable investors to better understand the major components of an entity’s income statement. This ASU is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is evaluating the impact of adopting this ASU. In September 2025, the FASB issued Accounting Standards Update No. 2025-06, "Intangibles - Goodwill and Other – Internal-Use Software (Subtopic 350-40): Targets Improvements to the Accounting for Internal-Use Software." This ASU removes all references to software development "project stages." Instead, capitalization begins when the following conditions are met: management has authorized funding the software project, it is probable that the project will be completed and the software will be used for its intended function. This ASU is effective for annual periods beginning after December 15, 2027, and for interim periods within those annual reporting periods, with early adoption permitted. The Company is evaluating the impact of adopting this ASU. New Regulations On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain businesses. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The implementation of OBBBA resulted in an expected cash tax savings of approximately $ 3.0 million for the Company's 2025 fiscal year end. Note 2 - Inventories, Net Inventories, net December 31, 2025 2024 Raw materials $ 95,988 $ 75,138 Work-in-process 16,586 12,225 Finished products 55,442 52,792 Inventories, net of excess and obsolete inventory reserve 168,016 140,155 Excess of current cost over LIFO cost ( 19,286 ) ( 10,242 ) Inventories at LIFO cost $ 148,730 $ 129,913 Costs for inventories of certain material, mainly in the U.S., are determined using the LIFO method and totaled approximately $ 45.8 million and $ 46.5 million at December 31, 2025 and 2024, respectively. The net change in LIFO inventories for December 31, 2025 and 2024 resulted in an expense of $ 9.0 million and benefit of $ 0.3 million to Cost of products sold, respectively. The Company’s reserves for slow-moving and obsolete inventory at December 31, 2025 and 2024 was $ 17.7 million. 39 Note 3 - Property and Equipment, Net Major classes of property, plant and equipment are as follows: December 31, 2025 2024 Land and improvements $ 27,293 $ 20,204 Buildings and improvements 131,619 125,076 Machinery, equipment and aircraft 274,919 252,759 Construction in progress 27,206 10,884 Property, plant and equipment, gross 461,037 408,923 Less accumulated depreciation ( 238,256 ) ( 213,837 ) Property, plant and equipment, net $ 222,781 $ 195,086 Depreciation of property and equipment was $ 22.0 million in 2025, $ 20.4 million in 2024 and $ 17.0 million in 2023. Note 4 - Contingent and Other Liabilities The Company can be party to a variety of pending legal proceedings and claims arising in the normal course of business, including, but not limited to, litigation relating to employment, workers’ compensation, product liability, environmental and intellectual property. The Company has liability insurance to cover many of these claims. Although the outcomes of these matters are not predictable with certainty, the Company records a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. In the event the Company determines that a loss is not probable, but is reasonably possible, and the likelihood to develop what the Company believes to be a reasonable range of potential loss exists, the Company will include disclosure related to such matters. To the extent that there is a reasonable possibility the losses could exceed amounts already accrued, the Company will adjust the accrual in the period in which the determination is made, disclose an estimate of the additional loss or range of loss and if the amount of such adjustment cannot be reasonably estimated, disclose that an estimate cannot be made. The Company is not a party to any pending legal proceedings that the Company believes would, individually or in the aggregate, have a material adverse effect on its financial condition, results of operations or cash flow. For the years ended December 31, 2025 and 2024, there were no reserves for known global legal matters. For the years ended December 31, 2025 and 2024, the Company has included $ 4.7 million and $ 6.7 million, respectively, of advanced payments by customers for future projects in Accrued expenses and other liabilities on the Consolidated Balance Sheet. Note 5 - Pension Plans The Company maintained a noncontributory defined benefit pension plan covering eligible U.S. employees (the "U.S. Plan"). On December 12, 2012, the Company approved a freeze on further benefit accruals under the U.S. Plan and notified the participants of the freeze on December 19, 2012. Beginning February 1, 2013, participants ceased earning additional benefits under the U.S. Plan and no new participants entered the U.S. Plan. In August 2023, the Board of Directors of the Company approved a resolution to terminate the U.S. Plan. The Company used a December 31 measurement date for the U.S. Plan. The Company completed its U.S. Plan termination in the third quarter of 2025 through the purchase of a group annuity contract. Prior to the termination, the U.S. Plan was amended to provide certain participants who are not currently receiving benefits the opportunity during an election period of April 1, 2025 to May 31, 2025 to elect to receive their benefit in the form of a lump sum. Lump-sum payments of approximately $ 13.1 million were made during July and August of 2025 in connection with such elections. In August 2025, the Company contributed approximately $ 2.9 million to the U.S. Plan and purchased an annuity contract through a financial institution for approximately $ 18.0 million to fully liquidate the U.S. Plan. Due to the termination of the U.S. Plan in August 2025, the Company remeasured the U.S. Plan at August 31, 2025. In the third quarter, the Company recorded a total non-cash pre-tax charge associated with the U.S. Plan termination of $ 11.7 million, of which $ 8.8 million represents the acceleration of deferred charges previously accrued in accumulated other comprehensive loss and $ 2.9 40 million represents the actuarial loss. This non-cash pre-tax charge is recognized within the pension termination expense line item on the Statement of Consolidated Income. The Company made no contribution to the U.S. Plan for the year ended December 31, 2024. Excluding the U.S. Plan termination charges, the following is the net periodic pension expense for the U.S. Plan for the years ended December 31: 2025 2024 2023 Interest cost $ 1,058 $ 1,540 $ 1,568 Expected return on plan assets ( 942 ) ( 1,940 ) ( 2,017 ) Recognized net actuarial loss 432 445 463 Net periodic pension expense $ 548 $ 45 $ 14 Components of net periodic pension expense, other than service cost, are included in other income (expense), net in the Consolidated Statement of Income. The following tables set forth the changes in benefit obligations, the change in plan assets, the funded status, and amounts recognized in the consolidated financial statements for the U.S. Plan at December 31, which is inclusive of the U.S. Plan termination: 2025 2024 Projected benefit obligation at beginning of the year $ 28,175 $ 29,773 Interest cost 1,058 1,540 Actuarial loss (gain) 2,856 ( 1,557 ) Benefits paid ( 954 ) ( 1,581 ) Benefits settled in lump sum window ( 13,150 ) — Benefits settled in annuity purchase ( 17,985 ) — Projected benefit obligation at end of year $ — $ 28,175 Fair value of plan assets at beginning of the year $ 29,094 $ 31,896 Actual return on plan assets 494 ( 1,221 ) Employer contributions 2,850 — Benefits paid ( 954 ) ( 1,581 ) Benefits settled in lump sum window ( 13,150 ) — Benefits settled in annuity purchase ( 17,985 ) — Fair value of plan assets at end of the year $ 349 $ 29,094 Pension asset $ ( 349 ) $ ( 919 ) 41 In 2025, in accordance with ASC 715-20, the Company recognized the over-funded status of the U.S. Plan as a non-current asset. The remaining pension asset will be settled once final census adjustments are completed in 2026. The amount recognized in Accumulated other comprehensive loss related to the U.S. Plan at December 31 is comprised of the following: 2025 2024 Balance at January 1 $ ( 5,373 ) $ ( 4,478 ) Reclassification adjustments: Pre-tax termination loss 11,657 — Pre-tax amortized net actuarial loss 432 445 Tax benefit ( 4,106 ) ( 104 ) 7,983 341 Adjustment to recognize loss on pension asset: Pre-tax loss ( 3,303 ) ( 1,605 ) Tax benefit 693 369 ( 2,610 ) ( 1,236 ) Balance at December 31, $ — $ ( 5,373 ) The 2025 reduction on the projected benefit obligation of $ 28.2 million was primarily due to the U.S. Plan termination and related lump sum window and annuity purchase that occurred in the third quarter of 2025. The U.S. Plan had assets in excess of accumulated benefit obligations as follows: 2025 2024 Accumulated benefit obligation $ — $ 28,175 Fair market value of assets $ 349 $ 29,094 Weighted-average assumptions used to determine benefit obligations at: August 31, 2025 December 31, 2024 Discount rate n/a 5.77 % Rate of compensation increase n/a n/a Weighted-average assumptions used to determine net periodic benefit cost at: August 31, 2025 December 31, 2024 December 31, 2023 Discount rate 5.77 % 5.34 % 5.55 % Rate of compensation increase n/a n/a n/a Expected long-term return on plan assets 4.75 % 6.25 % 7.00 % The net periodic pension cost for the eight-month period in 2025 prior to the U.S. Plan termination was based on a long-term asset rate-of-return of 4.75 %. This rate is based upon management’s estimate of future long-term rates of return on assets as invested at December 31, 2024 and is consistent with historical returns on such assets. At December 31, 2025, all plan assets were invested solely in cash. At December 31, 2024, the U.S. Plan assets were invested in pooled investment funds which are measured at fair value using the net asset value ("NAV"). The NAV is based on the value of the assets owned by the plan, less liabilities. These pooled assets are not quoted on an active exchange. The fair value of the U.S. Plan assets at December 31, 2025 and 2024 was $ 0.3 million and $ 29.1 million, respectively. 42 The U.S. Plan weighted-average asset allocations at December 31, 2025 and 2024, by asset category, are as follows: Plan assets at December 31, Asset category 2025 2024 Debt securities — % 100 % Cash and equivalents 100 — 100 % 100 % Other Benefit Plans The Company also provides retirement benefits through various defined contribution plans including PLP-USA’s Profit Sharing Plan. Expense for these defined contribution plans was $ 9.6 million in 2025, $ 8.2 million in 2024, and $ 6.6 million in 2023. The Company also provides retirement benefits through the Supplemental Profit Sharing Plan. To the extent an employee’s award under PLP-USA’s Profit Sharing Plan exceeds the maximum allowable contribution permitted under existing tax laws, the excess is accrued for (but not funded) under a non-qualified Supplemental Profit Sharing Plan. The Supplemental Profit Sharing Plan allows participants the ability to hypothetically invest their proportionate award into various investment options, which primarily includes mutual funds. The expense for the Supplemental Profit Sharing Plan for the year ended December 31, 2025, 2024 and 2023 was $ 1.8 million, $ 0.8 million, and $ 0.9 million, respectively. The Supplemental Profit Sharing Plan unfunded status for the years ended December 31, 2025 and 2024 was $ 10.8 million and $ 9.0 million, respectively, and is included in Other noncurrent liabilities. The Company also has established nonqualified foreign defined benefit plans, which provide post-employment benefits based on years of service. For the periods ending December 31, 2025 and 2024, the Company's benefit obligations related to these unfunded programs were $ 3.2 million and $ 3.1 million, respectively. During 2025, 2024 and 2023, the Company recorded benefit costs relating to these programs of $ 0.6 million, $ 0.3 million, and $ 0.6 million, respectively. Note 6 - Accumulated Other Comprehensive Income (“AOCI”) The following tables set forth the total changes in AOCI by component, net of tax: Year Ended December 31, 2025 Year Ended December 31, 2024 Unrecognized Benefit Cost Cumulative Translation Adjustment Total Unrecognized Benefit Cost Cumulative Translation Adjustment Total Balance at January 1 $ ( 5,373 ) $ ( 77,536 ) $ ( 82,909 ) $ ( 4,478 ) $ ( 55,828 ) $ ( 60,306 ) Other comprehensive income (loss) before reclassifications: Foreign currency translation adjustment — 24,171 24,171 — ( 21,708 ) ( 21,708 ) Loss on pension asset ( 2,610 ) — ( 2,610 ) ( 1,236 ) — ( 1,236 ) Amounts reclassified from AOCI: Amortization of defined benefit pension activity (a) 7,983 — 7,983 341 — 341 Recognition of deferred losses from pension termination (a) — — — — — — Net current period other comprehensive income (loss) 5,373 24,171 29,544 ( 895 ) ( 21,708 ) ( 22,603 ) Balance at December 31 $ — $ ( 53,365 ) $ ( 53,365 ) $ ( 5,373 ) $ ( 77,536 ) $ ( 82,909 ) (a) This AOCI component is included in the computation of net periodic pension expense as noted in Note 5 – Pension Plans. 43 Note 7 - Debt and Credit Arrangements December 31, 2025 2024 Short-term debt Notes payable to banks Thailand Bhat denominated at 3.20 % $ 318 $ 2,599 Thailand Bhat denominated at 3.50 % 318 — Poland Zloty denominated at 5.04 % 450 — China Yuan Renminbi denominated at 3.05 % — 685 China Yuan Renminbi denominated at 3.05 % — 412 Brazil Real denominated at 7.00 % 127 — Indonesia U.S. Dollar denominated at 5.86 % — 4,086 Current portion of long-term debt U.S. Dollar denominated at 2.74 % 2,050 2,050 Poland Zloty denominated at 5.04 % 1,462 — Spain Euro denominated at 2.60 % 466 — Spain Euro denominated at 2.65 % 684 — Spain Euro denominated at 2.50 % 570 — Brazil Real denominated at 8.30 % — 200 Czech Republic Koruna denominated at 3.00 % — 42 Czech Republic Koruna denominated at 4.00 % 101 86 Czech Republic Koruna denominated at 2.00 % 59 52 Total short-term debt $ 6,605 $ 10,212 Long-term debt, including current portion U.S. Dollar denominated at 2.74 %, due 2031 $ 10,592 $ 12,642 Poland Zloty denominated at 5.26 % due 2028 5,013 4,390 Poland Zloty denominated at 5.04 % due 2035 10,691 — Austria Euro denominated at 3.10 % due 2028 1,118 990 New Zealand Dollar denominated at 4.27 % due 2028 1,828 1,779 Brazil Real denominated at 8.30 % due 2025 — 200 Spain Euro denominated at 2.60 % due 2030 2,812 — Spain Euro denominated at 2.65 % due 2031 2,815 — Spain Euro denominated at 2.50 % due 2030 2,524 — Czech Republic Koruna denominated at 7.00 % due 2030 245 80 Czech Republic Koruna denominated at 4.00 % due 2031 555 560 Czech Republic Koruna denominated at 3.00 % due 2025 — 42 Czech Republic Koruna denominated at 2.00 % due 2026 59 104 Total long-term debt 38,252 20,787 Less current portion ( 5,392 ) ( 2,430 ) Total long-term debt, less current portion 32,860 18,357 Total debt $ 39,465 $ 28,569 PNC Bank Credit Facility As of December 31, 2025, the Company maintained a credit facility (the "Facility") with PNC Bank, National Association ("PNC") with a capacity of $ 60.0 million. On March 14, 2025, the Company amended the Facility to extend the maturity date from March 2, 2026 to June 30, 2028. In addition, the amendment increased the amount of unsecured borrowings that the Company is permitted to incur outside of the Facility from $ 40.0 million to $ 60.0 million and included PLP Spain as an additional borrower. 44 On July 30, 2025, the Company amended the Facility to reduce the borrowing capacity from $ 90.0 million to $ 60.0 million, as well as increase the permitted indebtedness limit secured by mortgages, security interests or other liens from $ 35.0 million to $ 55.0 million. There were no other material changes to the Facility. The interest rate for U.S. borrowing is defined as the Secured Overnight Financing Rate (“SOFR”) plus 1.225 % unless the Company’s funded debt to Earnings before Interest, Taxes and Depreciation ratio exceeds 3.00 to 1, at which point the SOFR spread becomes 1.600 %. At December 31, 2025, the Company had utilized $ 8.0 million with $ 52.0 million available on the Facility. There were no long-term outstanding letters of credit on the Facility as of December 31, 2025. Our bank debt to equity percentage was 8.3 %. 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. Corporate Aircraft Term Loan 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 $ 10.6 million outstanding on this debt facility at December 31, 2025, $ 2.1 million was classified as current. The aircraft has been pledged as collateral against the loan. International Borrowing Facilities 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 December 31, 2025, and December 31, 2024, $ 20.9 million and $ 8.8 million were outstanding, of which $ 4.6 million and $ 8.2 million were classified as current, respectively. Of the $ 20.9 million outstanding at December 31, 2025, $ 11.1 million is attributable to the Poland subsidiary and $ 8.2 million is attributable to the Spain subsidiary. These facilities support commitments made in the ordinary course of business. On July 16, 2025, PLP Poland (Belos) S.A. ("PLP Poland"), a subsidiary of the Company, entered into a non-revolving investment loan with Bank Polska Kasa Opieki Spolka Akcyjna ("Bank Pekao S.A") to finance the construction of a new manufacturing plant for an amount up to PLN 100.3 million ($ 27.9 million). The maturity date of the loan is January 31, 2035 and is payable in annual installments in the amounts of PLN 5.3 million ($ 1.5 million) in 2026, PLN 9.0 million ($ 2.5 million) in 2027, PLN 9.6 million ($ 2.7 million) in 2028 through 2034, and PLN 18.8 million ($ 5.0 million) in 2035. The loan bears interest at the one month Warsaw Interbank Offered Rate ("WIBOR") plus 1.0 % unless the Company does not meet the covenants as set forth in the Facility with PNC, at which point the WIBOR spread becomes 1.5 %. The current manufacturing plant owned by PLP Poland, the plant under construction and all fixed assets within the plants are pledged as collateral against the loan. The loan also is guaranteed by the Company. Restricted Cash The Company’s Asia-Pacific segment had $ 0.1 million in restricted cash used to secure bank guarantees as of December 31, 2025, and 2024, respectively. The restricted cash is shown on the Company’s Consolidated Balance Sheets in Cash, cash equivalents and restricted cash. Aggregate Maturities of Long-term Debt & Interest Paid Aggregate maturities of long-term debt during the next five years are as follows: $ 5.4 million for 2026, $ 6.4 million for 2027, $ 13.5 for 2028, $ 6.7 million for 2029, $ 6.3 million for 2030 and thereafter. Interest paid was $ 1.4 million in 2025, $ 2.2 million in 2024, and $ 3.8 million in 2023. Guarantees and Letters of Credit The Company has provided financial guarantees for uncompleted work and financial commitments. The terms of these guarantees vary with end dates ranging from the current year through the completion of such transactions. The guarantees would typically be triggered in the event of non-performance. As of December 31, 2025, the Company had total outstanding guarantees of $ 14.1 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 December 31, 2025, the Company had total outstanding letters of credit of $ 3.1 million. Note 8 - Leases The Company regularly enters into leases in the normal course of business. As of December 31, 2025, the leases in effect were related to land, buildings, vehicles, office equipment and other production equipment under operating leases with lease terms of up to 83 years. Some of the Company's leases include one or more renewal options, the exercise of which is generally at the Company's 45 discretion. In addition, certain lease arrangements may be terminated prior to their original expiration date at the Company’s discretion. The Company evaluates renewal and termination options at the lease commencement date to determine if the Company is reasonably certain to exercise the option on the basis of economic factors. The weighted average remaining lease term for the Company’s operating and financing leases as of December 31, 2025 was 18.8 years and 3.0 years, respectively. Lease expense is recognized for these leases on a straight-line basis over the lease term with variable lease payments recognized in the period those payments are incurred. The components of operating and finance lease costs are recognized in Costs and expenses and Interest expense, respectively, on the Company’s Consolidated Statements of Income. The Company’s operating and finance lease costs for the years ended December 31 were as follows: Year Ended December 31, 2025 2024 2023 Components of lease expense: Operating lease cost $ 2,438 $ 2,353 $ 2,767 Finance lease cost: Amortization of right-of-use assets 196 160 119 Interest on lease liabilities 55 49 17 Total lease cost $ 2,689 $ 2,562 $ 2,903 The discount rate implicit within each lease is often not determinable and, therefore, the Company establishes the discount rate based on its incremental borrowing rate. The incremental borrowing rate for the Company’s leases is determined based on lease term and currency in which lease payments are made. The weighted average discount rate used to measure the Company’s operating and finance lease liabilities as of December 31, 2025 was 5.58 % and 6.44 %, respectively. The weighted average discount rate used to measure the Company’s operating and finance lease liabilities as of December 31, 2024 was 5.53 % and 6.96 %, respectively. Future maturities of the Company’s lease liabilities as of December 31, 2025 are as follows: Year Ended December 31, 2025 Operating Leases Finance Leases 2026 $ 2,159 $ 248 2027 1,506 191 2028 1,236 234 2029 583 69 2030 and thereafter 6,700 6 Total lease payments 12,184 748 Less amount of lease payment representing interest 4,505 127 Total present value of lease payments $ 7,679 $ 621 Amounts recognized as finance lease obligations are reported in Accrued expense and other liabilities and Other noncurrent liabilities in the Consolidated Balance Sheets. The Company had de minimis sublease income for the years ended December 31, 2025 and 2024. Supplemental cash flow information related to leases for the years ended December 31 were as follows: Year Ended December 31, 2025 2024 2023 Supplemental cash flow information Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 2,442 $ 2,341 $ 2,775 Operating cash flows for finance leases 55 49 17 Financing cash flows for finance leases 258 189 171 46 Note 9 - Income Taxes Income before income taxes was derived from the following sources: 2025 2024 2023 United States $ 22,395 $ 19,476 $ 57,736 Foreign 23,225 31,294 24,608 Total income before income taxes $ 45,620 $ 50,770 $ 82,344 The components of income taxes for the years ended December 31 are as follows: 2025 2024 2023 Current Federal $ 4,633 $ 2,646 $ 12,263 Foreign 6,140 9,613 6,654 State and local 716 316 2,322 11,489 12,575 21,239 Deferred Federal ( 506 ) 2,139 ( 1,866 ) Foreign ( 431 ) ( 1,507 ) 11 State and local ( 239 ) 452 ( 377 ) ( 1,176 ) 1,084 ( 2,232 ) Income taxes $ 10,313 $ 13,659 $ 19,007 47 A reconciliation of the provision for income taxes to the amount computed by applying the 21 % statutory U.S. federal income tax rate to income before income taxes after the adoption of ASU 2023-09 is as follows: Amount Percent US Federal Statutory Tax Rate $ 9,594 21.0 % State and Local Tax, net of Federal Benefit (a) 326 0.6 Foreign Tax Effects 1,583 3.5 Effect of Changes in Tax Laws or Rates Enacted in the Current Period — — Tax Credits: Foreign Tax Credits ( 682 ) ( 1.5 ) Other ( 56 ) ( 0.1 ) Effect of Cross Border Tax Laws: Global intangible low taxed income 437 1.0 Other ( 99 ) ( 0.2 ) Valuation Allowances 149 0.3 Non-Taxable or Nondeductible items: Non-deductible Officers' Compensation 1,715 3.8 Excess Tax Benefit from RSUs ( 1,186 ) ( 2.6 ) Other 9 — Changes in Unrecognized Tax Benefits 34 0.1 Other Adjustments: Pension Termination ( 1,414 ) ( 3.1 ) Other ( 97 ) ( 0.2 ) Effective Tax Rate $ 10,313 22.6 % (a) State taxes in Arkansas and Texas make up the majority (greater than 50 percent) of the tax effect in this category. A reconciliation of the provision for income taxes to the amount computed by applying the 21 % statutory U.S. federal income tax rate to income before income taxes prior to the adoption of ASU 2023-09 is as follows: 2024 2023 Federal tax at statutory rate 21.0 % 21.0 % Non-deductible officers' compensation 4.0 1.5 Non-U.S. tax rate variances 3.2 2.0 Global intangible low-taxed income 2.3 3.6 Other, net 1.8 ( 0.4 ) Valuation allowance 0.5 0.7 State and local taxes, net of federal benefit 0.5 2.2 Uncertain tax positions 0.1 — Other U.S. federal permanent items ( 0.1 ) ( 0.2 ) U.S. tax credits ( 0.8 ) ( 1.3 ) Other stock compensation ( 2.4 ) ( 1.5 ) Foreign tax credits ( 3.2 ) ( 4.5 ) Effective income tax rate 26.9 % 23.1 % Income tax expense for the periods ended December 31, 2025, 2024, and 2023 was $ 10.3 million, $ 13.7 million, and $ 19.0 million, respectively. The decrease in the effective tax rate from 2024 to 2025 was primarily due to the impact of the U.S. 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. 48 Income Taxes Paid 2025 2024 2023 Federal $ 1,909 $ 4,500 $ 11,412 State and Local ( 353 ) 1,085 1,887 Foreign 9,869 7,518 8,572 Total Income Taxes Paid $ 11,425 $ 13,103 $ 21,871 Income taxes paid (net of refunds) exceeded five percent of total income taxes paid (net of refunds) in the following jurisdictions: 2025 Foreign Australia $ 1,492 Brazil 1,670 Mexico 705 United Kingdom 994 China 609 Canada 1,300 Indonesia 819 Spain 671 New Zealand 575 South Africa 1,091 Deferred Income Tax Assets and Liabilities Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred tax assets and liabilities were as follows: 2025 2024 Deferred tax assets: Benefit plan reserves $ 6,962 $ 5,947 Inventory valuation reserves 4,885 3,077 Research and development capitalization 3,169 6,483 Net operating loss carryforwards 2,209 1,967 Other accrued expenses 1,982 2,128 Foreign tax credit 1,337 1,337 Accrued compensation and benefits 1,279 1,147 Allowance for credit losses 711 1,298 Other 424 56 Gross deferred tax assets 22,958 23,440 Valuation allowance ( 2,009 ) ( 2,725 ) Net deferred tax assets 20,949 20,715 Deferred tax liabilities: Depreciation and other basis differences ( 15,896 ) ( 15,179 ) Intangibles ( 2,166 ) ( 2,003 ) Other ( 1,113 ) ( 753 ) Deferred tax liabilities ( 19,175 ) ( 17,935 ) Net deferred tax assets $ 1,774 $ 2,780 49 2025 2024 Change in net deferred tax assets: Ordinary movement $ 1,176 $ ( 1,084 ) Pension Termination ( 2,018 ) — Items of other comprehensive loss — 267 Deferred tax balances from business acquisitions ( 359 ) — Currency translation 192 24 Other 3 — Total change in net deferred tax assets $ ( 1,006 ) $ ( 793 ) As of December 31, 2025, various international subsidiaries had gross net operating losses totaling $ 9.1 million, resulting in deferred tax assets of $ 2.2 million. Of the international net operating losses, $ 1.3 million carryforward indefinitely, while the remainder, if not utilized, will expire between 2026 and 2030. It is more likely than not that certain net operating loss carryforwards will not be realized; therefore, we have recorded a valuation allowance of $ 0.7 million against them. The net operating loss carryforwards are subject to various annual limitations under the tax laws of the different jurisdictions. The Company considers earnings in our non-U.S. subsidiaries to be permanently reinvested and therefore did not record any associated deferred income taxes on such earnings. Accordingly, the Company intends to continue to invest approximately $ 172.2 million of such earnings, as well as our capital in these subsidiaries, indefinitely outside of the U.S. Unrecognized Income Tax Benefits The following is a tabular reconciliation of the total amounts of unrecognized tax benefits related to uncertain tax positions, excluding interest and penalties, for the year ended December 31: 2025 2024 2023 Balance at January 1 $ 410 $ 410 $ 482 Additions for tax positions of prior years — — — Settlements with tax authorities — — ( 72 ) Expiration of statutes of limitations — — — Balance at December 31 $ 410 $ 410 $ 410 The Company records accrued interest as well as penalties related to unrecognized tax benefits as part of the provision for income taxes. The accrued interest and penalties related to the gross unrecognized tax benefits, excluded from above, was de minimis in all years presented. Preformed Line Products Company and its subsidiaries file income tax return in the United States and various countries around the world. With few exceptions, the Company is no longer subject to United States federal examinations by tax authorities for years before 2022 and foreign, state, and local examinations by authorities for years before 2019. Note 10 - Share-Based Compensation 2016 and 2025 Incentive Plan The Company maintains an equity award program to provide the Company a competitive advantage in attracting, retaining, and motivating officers, employees and directors and to provide an incentive to those individuals to increase shareholder value through long-term incentives directly linked to the Company’s performance. The Preformed Line Products Company 2016 Incentive Plan (the “Incentive Plan”) was effective upon approval by the Company’s Shareholders at the 2016 Annual Meeting of Shareholders on May 10, 2016. Under the Incentive Plan, certain employees, officers, and directors were eligible to receive awards of options and RSUs. The total number of Company common shares reserved for awards under the Incentive Plan is 1,000,000 of which 900,000 common shares have been reserved for RSUs and 100,000 common shares have been reserved for share options. As of December 31, 2025, 77,500 options and 603,641 RSUs have been granted under the Incentive Plan. The Incentive Plan expires on May 10, 2026 with respect to awards granted under the Incentive Plan through May 13, 2025. The Preformed Line Products Company 2025 Incentive Plan (the "2025 Plan") was effective upon approval by the Company's Shareholders at the 2025 Annual Meeting of Shareholders on May 13, 2025. Effective as of May 14, 2025, no additional awards will be granted under the 2016 Incentive Plan. Shares subject to awards that are outstanding under the 2016 Plan will become available for future grants under the 2025 Plan if they are cancelled, forfeited or expire prior to being exercised. The total number of Company 50 common shares reserved for awards under the 2025 Plan is 618,859 , of which 518,859 common shares have been reserved for RSUs and 100,000 common shares have been reserved for share options. As of December 31, 2025, no awards have been granted under this 2025 Plan. Restricted Share Units For the regular annual grants issued in 2025 and prior, a portion of the RSUs is subject to time-based cliff vesting and a portion is subject to vesting based upon the Company’s performance over a set period for all participants except the CEO and Executive Chairman. All of the CEO’s and Executive Chairman's regular annual RSUs are subject to vesting based upon the Company’s performance over a set-year period. The RSUs are offered at no cost to the employees, however, the participant must remain employed with the Company until the restrictions on the RSUs lapse. The fair value of RSUs is based on the market price of a common share on the grant date. Dividends declared are accrued. A summary of the RSUs for the years ended December 31, 2025 is as follows: Restricted Share Awards Performance and Service Required (a) Service Required Total Restricted Awards Weighted-Average Grant-Date Fair Value Nonvested as of January 1, 2025 146,523 17,250 163,773 $ 87.86 Granted 40,392 7,384 47,776 145.31 Vested ( 61,654 ) ( 10,212 ) ( 71,866 ) 63.35 Forfeited — — — — Nonvested as of December 31, 2025 125,261 14,422 139,683 $ 120.12 (a) Nonvested, performance-based RSUs are reflected above at the maximum performance achievement level. For time-based RSUs, the Company recognizes stock-based compensation expense on a straight-line basis over the requisite service period of the award in General and administrative expense in the accompanying Statements of Consolidated Income. Annual compensation expense related to the time-based RSUs for the years ended December 31, 2025, 2024 and 2023 was $ 0.9 million in each year, respectively. As of December 31, 2025, there was $ 1.0 million of total unrecognized compensation cost related to time-based RSUs that is expected to be recognized over the weighted-average remaining period of approximately 1.5 years. For the performance-based RSUs, the number of RSUs in which the participants will vest depends on the Company’s level of performance measured by growth in pre-tax income and sales growth over a requisite performance period. Depending on the extent to which the performance criteria are satisfied under the Incentive Plan, the participants are eligible to earn common shares over the vesting period. Performance-based compensation expense for the years ended December 31, 2025, 2024 and 2023 was $ 3.7 million, $ 2.4 million, and $ 3.8 million, respectively. As of December 31, 2025, the remaining performance-based RSUs compensation expense of $ 7.9 million, if maximum performance is achieved, is expected to be recognized over a period of approximately 1.5 years. The excess tax benefits from service and performance-based RSUs was $ 5.7 million, $ 3.2 million, and $ 2.6 million for the years ended December 31, 2025, 2024 and 2023, respectively. This represents the reduction in income taxes otherwise payable during the period attributable to the actual gross tax benefits in excess of the expected tax benefits for RSUs vested in the current period. In the event of a Change in Control (as defined in the Incentive Plan), vesting of the RSUs will be accelerated and all restrictions will lapse. Nonvested performance-based awards are based on a maximum target potential payout. Actual shares awarded at the end of the performance period may be less than the maximum potential payout level depending on achievement of performance-based award objectives. To satisfy the vesting of its RSUs, the Company has reserved new shares from its authorized but unissued shares. Any additional granted awards will also be issued from the Company’s authorized but unissued shares. Deferred Compensation Plan The Company maintains a trust, commonly referred to as a rabbi trust, in connection with the Company’s deferred compensation plan. This plan allows for two deferrals. First, Directors make elective deferrals of Director fees payable and held in the rabbi trust. The deferred compensation plan allows the Directors to elect to receive Director fees in common shares of the Company at a later date instead of fees paid each quarter in cash. Second, this plan allows certain Company employees to defer restricted shares or RSUs for future distribution in the form of common shares. Assets of the rabbi trust are consolidated, and the value of the Company’s stock held in the rabbi trust is classified in Shareholders’ equity and generally accounted for in a manner similar to treasury stock. The Company recognizes the original amount of the deferred compensation (fair value of the deferred stock award at the date of grant) as 51 the basis for recognition in common shares issued to the rabbi trust. Changes in the fair value of amounts owed to certain employees or Directors are not recognized as the Company’s deferred compensation plan does not permit diversification and must be settled by the delivery of a fixed number of the Company’s common shares. As of December 31, 2025, 222,506 shares have been deferred and are being held by the rabbi trust. Share Option Awards Each of the Incentive Plan and 2025 Plan permits the grant of 100,000 options to buy common shares of the Company to certain employees at not less than fair market value of the shares on the date of grant; however, option grants will only be made under the 2025 Plan beginning as of May 14, 2025. Options issued to date under the Incentive Plan and 2025 Plan vest 50 % after one year following the date of the grant, 75 % after two years, and 100 % after three years and expire ten years from the date of grant. Shares issued as a result of stock option exercises will be funded with the issuance of new shares. The Company utilizes the Black-Scholes option pricing model for estimating fair values of options. The Black-Scholes model requires assumptions regarding the volatility of the Company’s stock, the expected life of the stock award and the Company’s dividend yield. The Company utilizes historical data in determining these assumptions. The risk-free rate for periods within the contractual life of the option is based on the U.S. zero coupon Treasury yield in effect at the time of grant. Forfeitures have been estimated to be zero . There were no options granted during the year ended December 31, 2025 and 7,500 and zero options granted in the years ended December 31, 2024 and 2023, respectively. The fair values for the stock options granted were estimated at the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions: 2024 Risk-free interest rate 4.2 % Dividend yield 1.1 % Expected life (years) 5 years Expected volatility 38.2 % Activity in the Company’s Incentive Plan and 2025 Plan for the year ended December 31, 2025 was as follows: Number of Shares Weighted Average Exercise Price per Share Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding as of January 1, 2025 26,425 $ 79.33 Exercised ( 7,925 ) 71.31 Outstanding (vested and expected to vest) at December 31, 2025 18,500 $ 83.60 6.9 $ 2,278 Exercisable at December 31, 2025 14,750 $ 71.19 6.3 $ 1,999 There were 7,925 , 3,575 , and 37,800 stock options exercised during the years ended December 31, 2025, 2024 and 2023, respectively. The total intrinsic value of stock options exercised was $ 0.8 million, $ 0.2 million, and $ 3.5 million for the years ended December 31, 2025, 2024 and 2023, respectively. Cash received for the exercise of stock options during the years ended December 31, 2025 and 2024 was $ 0.6 million and $ 0.2 million, respectively. The Company recorded compensation expense related to the stock options currently vested of $ 0.1 million, $ 0.1 million and $ 0.3 million during the years ended December 31, 2025, 2024 and 2023, respectively. The total compensation expense related to the stock options currently unvested as of December 31, 2025 and 2024 was $ 0.2 million and $ 0.1 million, respectively. The total compensation cost related to nonvested awards not yet recognized at December 31, 2025 is expected to be $ 0.2 million over a weighted-average period of approximately 1.97 years. The excess tax benefits from stock options for the year ended December 31, 2025 was $ 0.4 million. The excess tax benefits from stock options was zero and $ 2.4 million for each of the years ended December 31, 2024 and 2023, respectively. This represents the reduction in income taxes otherwise payable during the period attributable to the actual gross tax benefits in excess of the expected tax benefits for options exercised in the current period. 52 Note 11 - Computation of Earnings Per Share Basic earnings per share were computed by dividing net income by the weighted-average number of common shares outstanding for each respective period. Diluted earnings per share were calculated by dividing net income by the weighted-average of all potentially dilutive common shares that were outstanding during the years presented. The calculation of basic and diluted earnings per share for the years ended December 31 was as follows: 2025 2024 2023 Numerator Net income $ 35,283 $ 37,094 $ 63,332 Denominator Determination of shares (in thousands) Weighted-average common shares outstanding 4,918 4,908 4,920 Dilutive effect – share-based awards 24 39 77 Diluted weighted-average common shares outstanding 4,942 4,947 4,997 Earnings per common share Basic $ 7.17 $ 7.56 $ 12.87 Diluted $ 7.14 $ 7.50 $ 12.68 For the years ended December 31, 2025, 2024 and 2023, 10,336 , 7,500 , and zero share-based awards, respectively, were excluded from the calculation of diluted earnings per share as the effect would have been anti-dilutive. Note 12 - Goodwill and Other Intangibles The Company’s finite and indefinite-lived intangible assets consist of the following: December 31, 2025 December 31, 2024 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Finite-lived intangible assets Patents $ 4,806 $ ( 4,806 ) $ 4,806 $ ( 4,806 ) Land use rights 727 ( 147 ) 637 ( 122 ) Trademark 2,022 ( 1,736 ) 1,910 ( 1,685 ) Technology 7,240 ( 4,777 ) 6,582 ( 3,933 ) Customer relationships 19,528 ( 12,717 ) 17,399 ( 11,132 ) $ 34,323 $ ( 24,183 ) $ 31,334 $ ( 21,678 ) Indefinite-lived intangible assets Goodwill $ 30,684 $ 26,685 The aggregate amortization expense for other intangibles with finite lives, ranging from 1 year to 65 years, for the years ended December 31, 2025, 2024 and 2023 was $ 1.4 million, $ 1.8 million, and $ 1.8 million, respectively. Amortization expense is estimated to be $ 1.5 million for 2026, 2027, and 2028, $ 1.3 million for 2029, and $ 1.0 million for 2030. The weighted-average remaining amortization period is approximately 10.9 years. The weighted-average remaining amortization period by intangible asset class; land use rights, 64.7 years; trademark, 10.9 years; technology, 5.2 years and customer relationships, 8.5 years. The Company may use both quantitative and qualitative approaches when testing goodwill for impairment. For selected reporting units where the qualitative approach is utilized, a qualitative evaluation of events and circumstances impacting the reporting unit is performed to determine if it is more likely than not that the fair value of the reporting unit exceeds its carrying amount. If that determination is made, no further evaluation is necessary. Otherwise, the Company performs a quantitative impairment test on the reporting unit. 53 For the quantitative approach, the Company uses a combination of the income approach, which uses a discounted cash flow methodology, and the market approach, which uses comparable market multiples in computing fair value by reporting unit. The Company then compares the fair value of the reporting unit with its carrying value to assess if goodwill has been impaired. The fair value estimates are subjective and sensitive to significant assumptions, such as revenue growth rates, operating margins, the WACC, and estimated market multiples, which are affected by expectations of future market or economic conditions. The Company believes that the methodologies, significant assumptions, and weightings used are reasonable and result in appropriate fair values of the reporting units. Impairment assessments inherently involve management judgments regarding a number of assumptions such as those described above. Due to the multiple variables inherent in arriving at the estimates of the reporting unit's fair value, differences in assumptions could have an effect on the estimated fair value of a reporting unit and could result in goodwill impairment charges in a future period. As a result of actual performance for the EMEA reporting unit falling short of internal forecasts, combined with an increase in projected capital expenditures related to the construction of a new manufacturing facility in 2025 and 2026, management identified a potential indicator of impairment as of September 30, 2025. The Company performed an interim impairment assessment and based on this review, the estimated fair value of the EMEA reporting unit exceeded its carrying amount by approximately 30 % and management concluded that no impairment of goodwill was required for the EMEA reporting unit as of September 30, 2025. The interim impairment assessment was performed using the same methodologies as the annual assessments discussed in Note 1 - Significant Accounting Policies and included revised forecasts, which are subject to various risks and uncertainties, including forecasted revenue, expenses and cash flows. As of December 31, 2025, the Company concluded there were no material changes in quantitative or qualitative considerations from the interim impairment assessment. For all other reporting units, the Company performed the annual impairment test for Goodwill as of October 1. No other indicators of impairment were identified. There were no impairment charges recorded in 2025 or 2024. The change in the carrying amount of goodwill by segment is shown in the following table: PLP-USA The Americas EMEA Asia-Pacific Total Balance at January 1, 2024 $ 3,078 $ 10,582 $ 15,837 $ — $ 29,497 Currency translation — ( 1,724 ) ( 1,088 ) — ( 2,812 ) Balance at December 31, 2024 3,078 8,858 14,749 — 26,685 Acquisitions — 899 — — 899 Currency translation — 869 2,231 — 3,100 Balance at December 31, 2025 $ 3,078 $ 10,626 $ 16,980 $ — $ 30,684 The Company’s only intangible asset with an indefinite life is goodwill. The Company’s goodwill is not deductible for tax purposes. Note 13 - Fair Value of Financial Assets and Liabilities The Company measures and records certain assets and liabilities at fair value. A fair value hierarchy is used for those assets and liabilities measured at fair value that distinguishes between assumptions based on market data (observable inputs), and the Company’s assumptions (unobservable inputs). The hierarchy consists of the following three levels: Level 1 Inputs – Quoted market prices in active markets for identical assets or liabilities. Level 2 Inputs – Observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3 Inputs – Unobservable inputs that are not corroborated by market data. The following table summarizes the Company’s assets and liabilities, recorded and measured at fair value, in the consolidated balance sheets as of December 31, 2025 and 2024: 54 Description Balance as of December 31, 2025 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 $ — $ — $ — $ — Fixed income investments — — — — Total assets $ — $ — $ — $ — Liabilities: Foreign currency forward contracts $ 97 $ — $ 97 $ — Supplemental profit sharing plan 10,785 — 10,785 — Total liabilities $ 10,882 $ — $ 10,882 $ — Description Balance as of December 31, 2024 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 $ 65 $ — $ 65 $ — Fixed income investments 1,142 1,142 — — Total assets $ 1,207 $ 1,142 $ 65 $ — Liabilities: Foreign currency forward contracts $ 71 $ — $ 71 $ — Supplemental profit sharing plan 9,031 — 9,031 — Total liabilities $ 9,102 $ — $ 9,102 $ — The Company operates internationally and enters into intercompany transactions denominated in foreign currencies. Consequently, the Company is subject to market risk arising from exchange rate movements between the dates foreign currency transactions occur and the dates they are settled. The Company currently uses foreign currency forward contracts to reduce the risk related to some of these transactions. These contracts usually have maturities of 90 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 twelve months ended December 31, 2025 and 2024, the Company recognized net gain of $ 0.1 million and net loss of $ 0.4 million, respectively, on foreign currency forward contracts. The Company has a non-qualified Supplemental Profit Sharing Plan for its executives. The liability for this unfunded Supplemental Profit Sharing Plan was $ 10.8 million at December 31, 2025 and $ 9.0 million at December 31, 2024. These amounts are recorded within Other noncurrent liabilities on the Company’s Consolidated Balance Sheets. The Supplemental Profit Sharing Plan allows participants the ability to hypothetically invest their proportionate award into various investment options, which primarily includes mutual funds. The Company credits earnings, gains and losses to the participants’ deferred compensation account balances based on the investments selected by the participants. The Company measures the fair value of the Supplemental Profit Sharing Plan liability using the market values of the participants’ underlying investment accounts. The Company had zero fixed income investments as of December 31, 2025. The Company's fixed income investments as of December 31, 2024 of $ 1.1 million are recorded in Other assets on the Consolidated Balance Sheet and are valued using the closing price on the active market on which the securities are traded. The unrealized gains on the fixed income investments for the period ended December 31, 2024 were de minimis. The carrying value of the Company’s current financial instruments, which include cash, cash equivalents and restricted cash, accounts receivable, accounts payable and short-term debt, approximates fair value because of the short-term maturity of these instruments. 55 At December 31, 2025, the fair value of the Company’s long-term debt was estimated using discounted cash flows analysis, based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements that are considered to be Level 2 inputs. Based on the analysis performed, the fair value and the carrying value of the Company’s long-term debt are as follows: December 31, 2025 December 31, 2024 Fair Value Carrying Value Fair Value Carrying Value Long-term debt and related current maturities $ 35,080 $ 38,252 $ 17,474 $ 20,787 Note 14 - Revenue Revenue recognition Sales are recognized when obligations under the terms of the contract are satisfied and control of promised goods or services have transferred to our customers. Control is transferred when the customer has the ability to direct the use of and obtain benefits from the goods or services and is primarily based on shipping terms. Sales are measured as the amount of consideration the Company expects to receive in exchange for transferring products. Net sales include products and shipping and handling charges, net of estimates for product returns. The Company estimates product returns based on historical return rates. Revenue for shipping and handling charges are recognized at the time the products are shipped to, delivered to or picked up by the customer. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as fulfillment costs and are included in cost of goods sold. Payment terms vary by the type and location of the customer and the products or services offered. Generally, the time between when revenue is recognized, and payment is due is not significant. Sales, value added, and other taxes collected concurrent with revenue are excluded from sales. PLP records reductions to sales for returns, and customer and distributor incentives, primarily comprised of rebates, at the time of the initial sale. Rebates are estimated based on sales terms, historical experience, trend analysis, and projected market conditions in the various markets served. Sales commissions are expensed when the amortization period is less than a year and are generally not capitalized as they are typically earned at the completion of the contract when the customer is invoiced or when the customer pays PLP. Sales of products and services varies by segment and are discussed in Note 15, "Segment Information". Disaggregated revenue The following table presents the Company’s revenues disaggregated by segment and product type: Year Ended December 31, 2025 Product Type PLP-USA The Americas EMEA Asia-Pacific Consolidated Energy 63 % 80 % 74 % 77 % 71 % Communications 32 19 19 3 22 Special Industries 5 1 7 20 7 Total 100 % 100 % 100 % 100 % 100 % Year Ended December 31, 2024 Product Type PLP-USA The Americas EMEA Asia-Pacific Consolidated Energy 63 % 80 % 71 % 77 % 71 % Communications 30 18 24 3 22 Special Industries 7 2 5 20 7 Total 100 % 100 % 100 % 100 % 100 % Credit losses for receivables The Company maintains an allowance for credit losses for estimated losses resulting from the inability of its customers to make required payments. The Company uses a current expected credit loss model in order to immediately recognize an estimate of credit losses that are expected to occur over the life of the financial instruments, mainly trade receivables. Additionally, the allowance is based upon identified delinquent accounts, customer payment patterns and other analyses of historical data trends. Receivable balances 56 are written off against an allowance for credit losses after a final determination has been made. The change in the allowance for credit losses includes expense and net write-offs, which are identified in the following table: 2025 2024 2023 Allowance for credit losses, beginning of period $ 6,958 $ 8,260 $ 5,021 Additions (reductions) charged to costs and expenses 92 ( 750 ) 3,250 Write-offs ( 1,571 ) ( 260 ) ( 218 ) Foreign exchange and other 318 ( 292 ) 207 Allowance for credit losses, end of period $ 5,797 $ 6,958 $ 8,260 Note 15 - Segment Information The Company reports its segments in four geographic regions: PLP-USA, The Americas, EMEA (Europe, Middle East & Africa) and Asia-Pacific in accordance with accounting standards codified in FASB ASC 280, “Segment Reporting”. Each segment distributes a full range of the Company’s primary products. The PLP-USA segment is comprised of U.S. operations manufacturing the Company’s traditional products primarily supporting domestic energy, telecommunications and special industries products. The other three segments, The Americas, EMEA and Asia-Pacific support the Company’s energy, telecommunications, data communication and special industries 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 ("CODM") 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 company rather than the results of any individual business component of the segment. The amount of each segment’s performance reported to the CODM is for purposes of making decisions about allocating resources to the segment and assessing its performance. The Company evaluates segment performance and allocates resources based on several factors primarily based on gross sales and income before income taxes. The CODM uses both gross sales and income before income taxes for each segment predominantly in the annual budget and forecasting process as well as monitoring actual results. The CODM considers forecast-to-actual and actual to prior period variances for both measures when making decisions about the allocation of operating and capital resources to each segment. The CODM also uses segment sales and income before income taxes for the performance of each segment by comparing the results of each segment with one another and in determining the incentive compensation of certain employees. The accounting policies of the operating segments are the same as those described in Note 1. We have one customer accounting for 10.7 % of the Company’s consolidated revenue, generated within the PLP-USA, The Americas, and Asia-Pacific operating segments In certain circumstances, PLP-USA performs all manufacturing and shipping activity to US-based entities on behalf of EMEA, where the sales order is recorded. These sales and related profits have been reclassified for segment purposes only from EMEA to PLP-USA. The following table presents a summary of the Company’s reportable segments for the years ended December 31, 2025, 2024 and 2023. Financial results for the PLP-USA segment include the elimination of all segments’ intercompany profits in inventory. Year Ended December 31, 2025 PLP-USA The Americas EMEA Asia-Pacific Total Gross sales $ 321,671 $ 118,713 $ 139,225 $ 132,256 $ 711,865 Intersegment sales ( 9,052 ) ( 9,946 ) ( 6,102 ) ( 17,427 ) ( 42,527 ) Net sales 312,619 108,767 133,123 114,829 669,338 Less: Cost of products sold 206,762 77,030 93,856 83,151 460,799 Gross profit 105,857 31,737 39,267 31,678 208,539 Costs and expenses 69,922 25,566 32,000 25,916 153,404 Operating income 35,935 6,171 7,267 5,762 55,135 Interest income 630 1,191 371 125 2,317 Interest expense ( 264 ) ( 43 ) ( 651 ) ( 345 ) ( 1,303 ) 57 Other (expense) income, net ( 12,183 ) 160 334 1,160 ( 10,529 ) Income before income taxes 24,118 7,479 7,321 6,702 45,620 Income tax expense 4,606 2,084 1,955 1,668 10,313 Total noncontrolling interest — — ( 24 ) — ( 24 ) Total net income attributable to Preformed Line Products Company shareholders $ 19,512 $ 5,395 $ 5,342 $ 5,034 $ 35,283 Year Ended December 31, 2024 PLP-USA The Americas EMEA Asia-Pacific Total Gross sales $ 276,792 $ 98,554 $ 133,577 $ 123,585 $ 632,508 Intersegment sales ( 10,088 ) ( 8,274 ) ( 5,336 ) ( 15,096 ) ( 38,794 ) Net sales 266,704 90,280 128,241 108,489 593,714 Less: Cost of products sold 173,735 61,672 91,445 77,051 403,903 Gross profit 92,969 28,608 36,796 31,438 189,811 Costs and expenses 72,593 18,655 26,090 21,716 139,054 Operating income 20,376 9,953 10,706 9,722 50,757 Interest income 55 2,139 281 98 2,573 Interest expense ( 911 ) ( 81 ) ( 658 ) ( 571 ) ( 2,221 ) Other (expense) income, net ( 27 ) 141 133 ( 586 ) ( 339 ) Income before income taxes 19,493 12,152 10,462 8,663 50,770 Income tax expense 5,553 3,201 2,683 2,222 13,659 Total noncontrolling interest — — ( 17 ) — ( 17 ) Total net income attributable to Preformed Line Products Company shareholders $ 13,940 $ 8,951 $ 7,762 $ 6,441 $ 37,094 Year Ended December 31, 2023 PLP-USA The Americas EMEA Asia-Pacific Total Gross sales $ 387,913 $ 102,404 $ 110,661 $ 126,677 $ 727,655 Intersegment sales ( 9,350 ) ( 16,345 ) ( 8,531 ) ( 23,750 ) ( 57,976 ) Net sales 378,563 86,059 102,130 102,927 669,679 Less: Cost of products sold 239,603 56,054 65,758 73,416 434,831 Gross profit 138,960 30,005 36,372 29,511 234,848 Costs and expenses 79,289 22,724 28,193 20,488 150,694 Operating income 59,671 7,281 8,179 9,023 84,154 Interest income — 1,615 125 71 1,811 Interest expense ( 1,991 ) ( 255 ) ( 899 ) ( 760 ) ( 3,905 ) Other income, net 54 136 66 28 284 Income before income taxes 57,734 8,777 7,471 8,362 82,344 Income tax expense 12,342 3,022 1,670 1,973 19,007 Total noncontrolling interest — — ( 5 ) — ( 5 ) Total net income attributable to Preformed Line Products Company shareholders $ 45,392 $ 5,755 $ 5,796 $ 6,389 $ 63,332 58 Year Ended December 31, 2025 2024 2023 Expenditure for long-lived assets PLP-USA $ 6,049 $ 6,054 $ 25,317 The Americas 5,537 2,255 4,861 EMEA 27,350 4,454 2,849 Asia-Pacific 1,965 1,888 2,305 Total expenditure for long-lived assets $ 40,901 $ 14,651 $ 35,332 Depreciation and amortization PLP-USA $ 12,819 $ 11,768 $ 9,270 The Americas 3,740 3,821 2,702 EMEA 3,895 3,575 3,493 Asia-Pacific 2,967 3,102 3,449 Total depreciation and amortization $ 23,421 $ 22,266 $ 18,914 As of December 31, 2025 2024 Identifiable assets PLP-USA $ 276,840 $ 245,388 The Americas 114,111 103,456 EMEA 165,254 125,013 Asia-Pacific 97,416 100,020 Total identifiable assets $ 653,621 $ 573,877 Long-lived assets PLP-USA $ 113,261 $ 119,114 The Americas 25,692 20,446 EMEA 49,017 21,243 Asia-Pacific 34,811 34,283 Total long-lived assets $ 222,781 $ 195,086 Note 16 - Related Party Transactions During each of the years ended December 31, 2024 and 2023, the Company paid approximately $ 0.2 million and $ 0.2 million, respectively, in legal fees to Baker & Hostetler LLP, of which Steven Kestner, a member of our Board of Directors, was a Partner. On October 28, 2020, the Board of the Directors of the Company approved the appointment of David C. Sunkle to serve on its Board of Directors effective upon his retirement at December 31, 2020 for a term commencing January 1, 2021. At the annual meeting of shareholders on May 7, 2024, Mr. Sunkle was re-elected to serve on the Board of Directors to a term that expires in 2026. In addition, Mr. Sunkle had a consulting agreement with the Company that expired on December 31, 2025. Note 17 - Acquisitions of Businesses Acquisition of JAP Telecom On May 1, 2025, the Company acquired all issued and outstanding shares of J.A.P. Industria De Materiais Para Telefonia Ltda., (JAP Telecom) an entity headquartered in Pedreira, Brazil. JAP Telecom is a leading Brazilian designer, manufacturer, and supplier of connectivity solutions for the South American telecommunications infrastructure market with a product portfolio including fiber optic splice closures, connectivity devices, and infrastructure accessories tailored to the specific needs of the local market. JAP Telecom's annual sales for the year ending December 31, 2024 were approximately $ 4.6 million. The acquisition expands the Company's 59 operational capabilities in the region and strengthens the Company's position in the global communications market. The purchase price was approximately $ 5.8 million, net of cash received. The acquisition of JAP Telecom 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, identifiable intangible assets and assumed liabilities requires the use of judgment in determining the appropriate assumptions and estimates. The fair value of the identifiable net assets as acquired was $ 4.9 million. The Company expects to finalize the valuation in 2026; however, future adjustments are not expected to have a material impact to the Consolidated Statements of Income. Goodwill is calculated as the excess of the consideration transferred over the net identifiable assets recognized and represents the anticipated synergies of acquiring JAP Telecom. The goodwill recognized of $ 0.9 million is not deductible for tax purposes. From the date of the acquisition through December 31, 2025, the Company’s consolidated financial statements included JAP Telecom sales of approximately $ 3.7 million and is reported in The Americas segment. 60 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.