PREFORMED LINE PRODUCTS CO 10-K

Item 9A. Controls and Procedures Evaluation of Disclosure Controls and Procedures The Company’s Principal Executive Officer and Principal Financial Officer have concluded based on their review thereof that the Company’s disclosure controls and procedures as defined in Rule 13a-15(e) or Rule 15d-15(e) of the Securities Exchange Act of 1934, as amended, were effective as of December 31, 2022. Management’s Report on Internal Control Over Financial Reporting The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). The Company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and preparation of the consolidated financial statements in accordance with generally accepted accounting principles. Because of inherent limitations, internal control over financial reporting may not prevent or detect misstatements and even when determined to be effective, can only provide reasonable assurance with respect to financial statement preparation and presentation. Management, with the participation of the Company's Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of the Company's internal control over financial reporting as of December 31, 2022. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework (2013). Our evaluation of internal control over financial reporting did not include the internal controls of the entities that were acquired during 2022 (Maxxweld, Holplast and Delta), which are included in the 2022 Consolidated Financial Statements for the year ended December 31, 2022 and constituted approximately 5.0% of total assets (inclusive of acquired intangible assets) as of December 31, 2022 and approximately 2.4% of net sales for the year then ended. Based upon its assessment, management concluded that the Company’s internal control over financial reporting was effective as of December 31, 2022. The effectiveness of the Company’s internal control over financial reporting as of December 31, 2022 has been audited by Ernst & Young LLP, an independent registered public accounting firm, who expressed an unqualified opinion as stated in their report, a copy of which is included below. Changes in Internal Control Over Financial Reporting There have not been any changes in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f)) during the quarter ended December 31, 2022 that materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. 61 Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors of Preformed Line Products Company Opinion on Internal Control Over Financial Reporting We have audited Preformed Line Products Company’s internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Preformed Line Products Company (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on the COSO criteria. As indicated in the accompanying Management’s Report on Internal Control Over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of Maxxweld Conectores Eletricos Ltda. (Maxxweld), Holplast, s.r.o (Holplast) and Delta Conectores, S.A. de C.V. (Delta), which are included in the 2022 consolidated financial statements of the Company and on a combined basis constituted 5.0% of total assets as of December 31, 2022 and 2.4% of net sales for the year then ended. Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of Maxxweld, Holplast and Delta. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Consolidated Balance Sheets of the Company as of December 31, 2022 and 2021, 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, 2022, and the related notes and financial statement schedule listed in the Index at Item 15(a) and our report dated March 3, 2023 expressed an unqualified opinion thereon. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. 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 audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Ernst & Young LLP Cleveland, Ohio March 3, 2023 62 Item 9B. Other Information None. Item 9C. Disclosure Regarding Foreign Jurisdictions that Require Inspections None. Part III Item 10. Directors, Executive Offi cers and Corporate Governance The information required by this Item 10 is incorporated by reference to the information under the captions “Corporate Governance – Board Composition”, “Corporate Governance - Election of Directors”, “Section 16(a) Beneficial Ownership Compliance”, “Corporate Governance – Code of Conduct” and “Corporate Governance – Board Committees and Meetings – Audit Committee” in the Company’s Proxy Statement, for the Annual Meeting of Shareholders to be held May 9, 2023 (the “Proxy Statement”). Information relative to executive officers of the Company is contained in Part I of this Annual Report on Form 10-K. Item 11. Execut ive Compensation The information set forth under the caption “Directors and Executive Officers Compensation”, other than under the caption "Pay versus Performance", and “Compensation Policies and Risk” in the Proxy Statement is incorporated herein by reference. Item 12. Security Ownership of Certain Beneficial Ow ners and Management and Related Stockholder Matters Other than the information required by Item 201(d) of Regulation S-K the information set forth under the caption “Security Ownership of Certain Beneficial Owners and Management” in the Proxy Statement is incorporated herein by reference. The information required by Item 201(d) of Regulation S-K is set forth in Item 5 of this report. Item 13. Certain Relationships, Related Transactions and Director Independence The information set forth under the captions “Transactions with Related Persons” and “Election of Directors” in the Proxy Statement is incorporated herein by reference. Item 14. Principal Accou nting Fees and Services The information set forth under the captions “Independent Registered Public Accounting Firm”, “Audit Fees”, “Audit-Related Fees”, “Tax Fees” and “All Other Fees” in the Proxy Statement is incorporated herein by reference. 63 Part IV Item 15. Exhibits and Fina ncial Statement Schedules (a) Report of Independent Registered Public Accounting Firm (PCAOB ID: 00 42 ) Financial Statements and Schedule Page Financial Statements 31 Consolidated Balance Sheets 32 Statements of Consolidated Income 33 Statements of Consolidated Comprehensive Income 34 Statements of Consolidated Cash Flows 35 Statements of Consolidated Shareholders’ Equity 36 Notes to Consolidated Financial Statements Page Schedule 68 II - Valuation and Qualifying Accounts (b) Exhibits Exhibit Number Exhibit 3.1 Amended and Restated Articles of Incorporation (incorporated by reference to the Company’s Registration Statement on Form 10). 3.2 Amended and Restated Code of Regulations of Preformed Line Products Company (incorporated by reference to the Company’s Registration Statement on Form 10). 3.3 Amendment to the Amended and Restated Code of Regulations of Preformed Line Products Company, effective May 10, 2016 (incorporated by reference to the Company's Registration Statement on Form 10). 4 Description of Specimen Share Certificate (incorporated by reference to the Company’s Registration Statement on Form 10). 4.2 Description of the Registrant’s Securities Registered Under Section 12 of the Securities Exchange Act of 1934 (incorporated by reference to the Company’s 10-K filed for the year ended December 31, 2019) 10.1 Preformed Line Products Company 1999 Employee Stock Option Plan (incorporated by reference to the Company’s Registration Statement on Form 10).* 10.2 Preformed Line Products Company Officers Bonus Plan (incorporated by reference to the Company’s 10-K filed for the year ended December 31, 2007).* 10.3 Preformed Line Products Company Executive Life Insurance Plan – Summary (incorporated by reference to the Company’s Registration Statement on Form 10).* 10.4 Preformed Line Products Company Supplemental Profit Sharing Plan (incorporated by reference to the Company’s Registration Statement on Form 10).* 10.5 Amended and Restated Loan Agreement dated September 24, 2015 between the Company and PNC Bank, National Association (incorporated by reference to the Company’s 10-K filing for the year ended December 31, 2015). 10.6 Preformed Line Products Company 1999 Employee Stock Option Plan Incentive Stock Option agreement (incorporated by reference to the Company’s 10-K filing for the year ended December 31, 2004).* 10.7 Preformed Line Products Company Chief Executive Officer Bonus Plan (incorporated by reference to the Company’s 10-K filing for the year ended December 31, 2007) .* 10.8 Preformed Line Products Company Amended and Restated Long Term Incentive Plan of 2008 (incorporated by reference to Appendix A of the Company’s Definitive Proxy Statement filed on March 11, 2011).* 10.9 Deferred Shares Plan (incorporated by reference to the Company’s 8-K current report filing dated August 21, 2008). 10.10 Form of Restricted Shares Grant Agreement under the Amended and Restated Long Term Incentive Plan of 2008 (incorporated by reference to the Company’s 10-Q filing for the quarter ended September 30, 2008).* 64 10.11 Form of Restricted Stock Unit Award Agreement under the Amended and Restated Long Term Incentive Plan of 2008 (incorporated by reference to the Company’s 10-K filing for the year ended December 31, 2013).* 10.12 Form of Restricted Stock Unit Award Agreement under the Amended and Restated Long Term Incentive Plan of 2008 (incorporated by reference to the Company’s 10-K filing for the year ended December 31, 2014).* 10.13 Form of Restricted Stock Agreement under the Amended and Restated Long Term Incentive Plan of 2008 (incorporated by reference to the Company’s 10-K filing for the year ended December 31, 2015).* 10.14 Form of Restricted Stock Unit Award Agreement under the Amended and Restated Long Term Incentive Plan of 2008 (incorporated by reference to the Company’s 10-K filing for the year ended December 31, 2015).* 10.15 Amendment to Amended and Restated Loan Agreement dated November 6, 2015 between the Company and PNC Bank, National Association (incorporated by reference to the Company’s 10-K filing for the year ended December 31, 2015). 10.16 Preformed Line Products Company 2016 Incentive Plan (incorporated by reference to the Company's 10-K filing for the year ended December 31, 2020 ). 10.17 Promissory Note dated June 27, 2016, between the Company and PNC Bank, National Association (incorporated by reference to the Company’s Form 10-Q filing for the quarter ended September 30, 2016). 10.18 Amendment No. 2 to Amended and Restated Loan Agreement dated August 22, 2016 between the Company and PNC Bank, National Association (incorporated by reference to the Company’s Form 10-Q filing for the quarter ended September 30, 2016). 10.19 Amended and Restated Line of Credit Note dated August 22, 2016 between the Company and PNC Bank, National Association (incorporated by reference to the Company’s Form 10-Q filing for the quarter ended September 30, 2016) . 10.20 Amended and Restated Line of Credit Note dated March 13, 2018 between the Company and PNC Bank, National Association (incorporated by reference to the Company’s Form 10-Q filing for the quarter ended March 31, 2018 ). 10.21 Amendment No. 3 to Amended and Restated Line of Credit Note dated March 13, 2018 between the Company and PNC Bank, National Association (incorporated by reference to the Company’s Form 10-Q filing for the quarter ended March 31, 2018 ). 10.22 Term Note April 25, 2019 between the Company and PNC Bank, National Association (incorporated by reference to the Company’s 10-Q filing for the quarter ended March 31, 2019). 10.23 Joinder and Amendment No. 5 to Amended and Restated Line of Credit Note dated April 25, 2019 between the Company and PNC Bank, National Association (incorporated by reference to the Company’s 10-Q filing for the quarter ended March 31, 2019). 10.24 Amended and Restated Loan Agreement, dated April 17, 2020, between the Company and PNC Bank, National Association Joinder and Amendment No. 5 to Amended and Restated Line of Credit Note dated April 25, 2019 between the Company and PNC Bank, National Association (incorporated by reference to the Company’s 10-Q filing for the quarter ended June 30, 20 20). 10.25 Promissory Note dated December 31, 2020, between the Company and PNC Bank National Association (incorporated by reference to the Company's 10-K filing for the year ended December 31, 2020). 10.26 Amended and Restated Loan Agreement, dated March 2, 2022, between the Company and PNC Bank, National Association Joinder, (incorporated by reference to the Company's 10-K filing for the year ended December 31, 2021). 10.27 Amendment No. 12 to Amended and Restated Line of Credit Note, dated March 2, 2022, between the Company and PNC Bank, National Association, (incorporated by reference to the Company's 10-K filing for the year ended December 31, 2021). 10.28 Amendment No. 13 to Amended and Restated Line of Credit Note, dated August 31, 2022, between the Company and PNC Bank, National Association (incorporated by reference to the Company's 10-Q filing for the quarter ended September 30, 2022). 14.1 Preformed Line Products Amended Company Code of Conduct (incorporated by reference to the Company’s 10-K filed for the year ended December 31, 2019) 21 Subsidiaries of Preformed Line Products Company, filed herewith. 23.1 Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm, filed herewith. 31.1 Certification of the Principal Executive Officer, Robert G. Ruhlman, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith. 31.2 Certification of the Principal Accounting Officer, Andrew S. Klaus, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith. 65 32.1 Certification of the Principal Executive Officer, Robert G. Ruhlman, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, furnished. 32.2 Certification of the Principal Accounting Officer, Andrew S. Klaus, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, furnished. 101.INS Inline XBRL Instance Document. 101.SCH Inline XBRL Taxonomy Extension Schema Document. 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document. 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document. 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document. 104 Cover Page Interactive Data File (embedded within the inline XBRL document) * Indicates management contracts or compensatory plan or arrangement. 66 SIGNAT URES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized. Preformed Line Products Company March 3, 2023 /s/ Robert G. Ruhlman Robert G. Ruhlman Chairman, President and Chief Executive Officer (principal executive officer) March 3, 2023 /s/ Andrew S. Klaus Andrew S. Klaus Chief Financial Officer (principal financial and accounting officer) Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant in the capacity and on the dates indicated. March 3, 2023 /s/ Robert G. Ruhlman Robert G. Ruhlman Chairman, President and Chief Executive Officer March 3, 2023 /s/ Glenn E. Corlett Glenn E. Corlett Director March 3, 2023 /s/ Matthew D. Frymier Matthew D. Frymier Director March 3, 2023 /s/ Michael E. Gibbons Michael E. Gibbons Director March 3, 2023 /s/ R. Steven Kestner R. Steven Kestner Director March 3, 2023 /s/ Richard R. Gascoigne Richard R. Gascoigne Director March 3, 2023 /s/ J. Ryan Ruhlman J. Ryan Ruhlman Director March 3, 2023 /s/ Maegan A. R. Cross Maegan A. R. Cross March 3, 2023 Director /s/ David C. Sunkle David C. Sunkle Director 67 PREFORMED LINE PRODUCTS COMPANY SCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS Year Ended December 31, 2022, 2021 and 2020 (Thousands of dollars) For the year ended December 31, 2022: Balance at beginning of period Additions charged to costs and expenses Deductions Other additions or deductions Balance at end of period Allowance for credit losses $ 3,091 $ 2,108 $ ( 122 ) $ ( 56 ) $ 5,021 Reserve for credit memos 653 92 ( 161 ) ( 5 ) 579 Slow-moving and obsolete inventory reserves 10,636 4,001 ( 3,813 ) 11 10,835 Accrued product warranty 1,635 372 ( 931 ) 35 1,111 Foreign net operating loss tax carryforwards 3,550 1,812 ( 2,169 ) ( 471 ) 2,722 For the year ended December 31, 2021: Balance at beginning of period Additions charged to costs and expenses Deductions Other additions or deductions (a) Balance at end of period Allowance for credit losses $ 2,848 $ 931 $ ( 435 ) $ ( 253 ) $ 3,091 Reserve for credit memos 616 1,964 ( 1,918 ) ( 9 ) 653 Slow-moving and obsolete inventory reserves 9,900 3,052 ( 2,488 ) 172 10,636 Accrued product warranty 1,282 934 ( 553 ) ( 28 ) 1,635 Foreign net operating loss tax carryforwards 2,912 1,935 ( 1,297 ) — 3,550 For the year ended December 31, 2020: Balance at beginning of period Additions charged to costs and expenses Deductions Other additions or deductions (a) Balance at end of period Allowance for credit losses $ 3,224 $ 1,279 $ ( 1,527 ) $ ( 128 ) $ 2,848 Reserve for credit memos 625 774 ( 792 ) 9 616 Slow-moving and obsolete inventory reserves 8,877 2,035 ( 1,097 ) 85 9,900 Accrued product warranty 1,309 279 ( 314 ) 8 1,282 Foreign net operating loss tax carryforwards 3,137 1,176 ( 1,473 ) 72 2,912 68