What changed in this filing

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Item 1. Financial Statements

2024-10-31 compared with 2024-08-01 · 220 added, 121 removed, 345 unchanged (50% of the section changed)

2 unchanged sentences

CONSOLIDATED BALANCE SHEETS

June 30, 2024

December 31, 2023

(Thousands of dollars, except share and per share data)

September 30, 2024 December 31, 2023

(Thousands of dollars, except share and per share data) (Unaudited)

Cash, cash equivalents and restricted cash $ 47,498 $ 53,607

6 unchanged sentences

Operating lease, right-of-use assets 10,742 11,671

Goodwill 28,672 29,497

Other intangible assets, net 10,983 12,981

Deferred income taxes 9,502 7,109

Other assets 10,216 9,186

TOTAL ASSETS $ 591,953 $ 603,151

LIABILITIES AND SHAREHOLDERS' EQUITY

13 unchanged sentences

SHAREHOLDERS' EQUITY

Common shares – $ 2 par value per share, 15,000,000 shares authorized, 4,913,496 and 4,908,413 issued and outstanding, at June 30, 2024 and December 31, 2023

Common shares issued to rabbi trust, 238,787 and 243,118 shares at June 30, 2024 and December 31, 2023, respectively

Common shares – $ 2 par value per share, 15,000,000 shares authorized, 4,897,450 and 4,908,413 issued and outstanding, at September 30, 2024 and December 31, 2023

13,715 13,607

Common shares issued to rabbi trust, 222,741 and 243,118 shares at September 30, 2024 and December 31, 2023, respectively

( 9,557 ) ( 10,183 )

Deferred compensation liability 9,557 10,183

1 unchanged sentence

Retained earnings 543,743 520,154

Treasury shares, at cost, 1,941,690 and 1,894,419 shares at June 30, 2024 and December 31, 2023, respectively

Treasury shares, at cost, 1,959,512 and 1,894,419 shares at September 30, 2024 and December 31, 2023, respectively

( 126,503 ) ( 118,249 )

Accumulated other comprehensive loss ( 65,092 ) ( 60,306 )

6 unchanged sentences

STATEMENTS OF CONSOLIDATED INCOME

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

(Thousands of dollars, except per share data)

Net sales $ 146,973 $ 160,438 $ 426,597 $ 524,076

Cost of products sold 101,195 106,301 292,415 337,328

GROSS PROFIT 45,778 54,137 134,182 186,748

Costs and expenses

Selling 12,318 12,732 36,146 38,133

General and administrative 16,414 17,794 48,272 54,624

1 unchanged sentence

Other operating expense (income), net 1,109 ( 2,307 ) 186 ( 10 )

35,386 34,059 100,938 109,540

OPERATING INCOME 10,392 20,078 33,244 77,208

3 unchanged sentences

Other income, net 64 18 189 165

38 ( 502 ) 205 ( 1,832 )

INCOME BEFORE INCOME TAXES 10,430 19,576 33,449 75,376

Income tax expense 2,734 4,431 6,783 18,348

NET INCOME $ 7,696 $ 15,145 $ 26,666 $ 57,028

Net income attributable to noncontrolling interests ( 16 ) ( 15 ) ( 24 ) ( 28 )

1 unchanged sentence

AVERAGE NUMBER OF SHARES OF COMMON STOCK OUTSTANDING:

Basic 4,904 4,906 4,911 4,929

Diluted 4,977 4,990 4,959 5,006

EARNINGS PER SHARE OF COMMON STOCK ATTRIBUTABLE TO PREFORMED LINE PRODUCTS COMPANY SHAREHOLDERS:

Basic $ 1.57 $ 3.08 $ 5.42 $ 11.56

Diluted $ 1.54 $ 3.03 $ 5.37 $ 11.39

See notes to consolidated financial statements (unaudited).

1 unchanged sentence

STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

(Thousands of dollars)

Other comprehensive (loss) income, net of tax:

Net income $ 7,696 $ 15,145 $ 26,666 $ 57,028

Other comprehensive income (loss), net of tax:

Foreign currency translation adjustment 7,483 ( 6,934 ) ( 5,053 ) ( 711 )

Recognized net actuarial gain 89 89 267 267

Other comprehensive (loss) income, net of tax

Other comprehensive income (loss), net of tax 7,572 ( 6,845 ) ( 4,786 ) ( 444 )

Comprehensive income attributable to noncontrolling interests ( 16 ) ( 15 ) ( 24 ) ( 28 )

3 unchanged sentences

STATEMENTS OF CONSOLIDATED CASH FLOWS

Six Months Ended June 30,

Nine Months Ended September 30,

(Thousands of dollars)

OPERATING ACTIVITIES

Adjustments to reconcile net income to net cash provided by (used in) operations:

Net income $ 26,666 $ 57,028

Adjustments to reconcile net income to net cash provided by operations:

Depreciation and amortization 15,982 13,602

1 unchanged sentence

Share-based compensation expense 1,949 4,090

(Gain) loss on sale of property and equipment

Gain on sale of property and equipment ( 1,939 ) ( 2,457 )

Other, net 999 6,218

Changes in operating assets and liabilities 2,768 12,710

13 unchanged sentences

Purchase of common shares for treasury from related parties ( 8,141 ) ( 17,671 )

Other ( 2,473 ) -

NET CASH USED IN FINANCING ACTIVITIES ( 40,802 ) ( 45,546 )

8 unchanged sentences

Comprehensive Income

Common Shares

Compensation Liability

Total Preformed Line Products Company Equity

Noncontrolling Interests

(In thousands, except share and per share data)

(In thousands, except share and per share data) Common Shares Common Shares Issued to Rabbi Trust Deferred Compensation Liability Paid in Capital Retained Earnings Treasury Shares Cumulative Translation Adjustment Unrecognized Pension Benefit Cost Total Preformed Line Products Company Equity Noncontrolling Interests Total Equity

Balance at December 31, 2023 $ 13,607 $ ( 10,183 ) $ 10,183 $ 60,958 $ 520,154 $ ( 118,249 ) $ ( 55,828 ) $ ( 4,478 ) $ 416,164 $ ( 8 ) $ 416,156

Foreign currency translation

Net income 9,596 9,596 7 9,603

Foreign currency translation adjustment ( 6,565 ) ( 6,565 ) ( 6,565 )

Pension adjustment, net of tax 89 89 89

2 unchanged sentences

Purchase of 42,731 common shares

( 5,452 ) ( 5,452 ) ( 5,452 )

Issuance of 52,354 common shares

Common shares distributed from rabbi

trust of 4,477 , net

Cash dividends declared – $ 0.20 per

104 67 171 171

Common shares distributed from rabbi trust of 4,477 , net

( 31 ) 31 — —

Cash dividends declared – $ 0.20 per share

( 1,017 ) ( 1,017 ) ( 1,017 )

Balance at March 31, 2024 $ 13,711 $ ( 10,214 ) $ 10,214 $ 61,408 $ 528,733 $ ( 123,701 ) $ ( 62,393 ) $ ( 4,389 ) $ 413,369 $ ( 1 ) $ 413,368

Foreign currency translation

Net income 9,366 9,366 1 9,367

Foreign currency translation adjustment ( 5,971 ) ( 5,971 ) ( 5,971 )

Pension adjustment, net of tax 89 89 89

2 unchanged sentences

Purchase of 4,540 common shares

( 568 ) ( 568 ) ( 568 )

Issuance of 146 common shares

Common shares issued to rabbi

trust of 146 , net

Cash dividends declared – $ 0.20 per

Common shares issued to rabbi trust of 146 , net

( 19 ) 19 — —

Cash dividends declared – $ 0.20 per share

( 1,020 ) ( 1,020 ) ( 1,020 )

Balance at June 30, 2024 $ 13,711 $ ( 10,233 ) $ 10,233 $ 62,361 $ 537,079 $ ( 124,269 ) $ ( 68,364 ) $ ( 4,300 ) $ 416,218 $ — $ 416,218

Accumulated Other

Comprehensive Income

Common Shares

Compensation Liability

Total Preformed Line Products Company Equity

Noncontrolling Interests

(In thousands, except share and per share data)

Net income 7,680 7,680 16 7,696

Foreign currency translation adjustment 7,483 7,483 7,483

Pension adjustment, net of tax 89 89 89

Total comprehensive income 15,252 16 15,268

Share-based compensation 632 632 632

Purchase of 17,822 common shares

( 2,234 ) ( 2,234 ) ( 2,234 )

Issuance of 1,776 common shares

4 115 119 119

Common shares distributed from rabbi trust of 16,046 , net

676 ( 676 ) — —

Cash dividends declared – $ 0.20 per share

( 1,016 ) ( 1,016 ) ( 1,016 )

Balance at September 30, 2024 $ 13,715 $ ( 9,557 ) $ 9,557 $ 63,108 $ 543,743 $ ( 126,503 ) $ ( 60,881 ) $ ( 4,211 ) $ 428,971 $ 16 $ 428,987

PREFORMED LINE PRODUCTS COMPANY

STATEMENTS OF CONSOLIDATED SHAREHOLDERS' EQUITY

Accumulated Other Comprehensive Income (Loss)

Balance at December 31, 2022 $ 13,351 $ ( 10,261 ) $ 10,261 $ 53,646 $ 460,930 $ ( 99,303 ) $ ( 65,495 ) $ ( 4,492 ) $ 358,637 $ ( 13 ) $ 358,624

Foreign currency translation

Net income 21,398 21,398 21 21,419

Foreign currency translation adjustment 3,922 3,922 3,922

Pension adjustment, net of tax 89 89 89

2 unchanged sentences

Purchase of 41,573 common shares

( 3,740 ) ( 3,740 ) ( 3,740 )

Issuance of 72,477 common shares

Common shares distributed from rabbi

trust of 3,541 , net

Cash dividends declared – $ 0.20 per

140 244 384 384

Common shares distributed from rabbi trust of 3,541 , net

185 ( 185 ) — —

Cash dividends declared – $ 0.20 per share

( 1,050 ) ( 1,050 ) ( 1,050 )

Balance at March 31, 2023 $ 13,491 $ ( 10,076 ) $ 10,076 $ 54,956 $ 481,278 $ ( 103,043 ) $ ( 61,573 ) $ ( 4,403 ) $ 380,706 $ 8 $ 380,714

Foreign currency translation

Net income 20,472 20,472 ( 8 ) 20,464

Foreign currency translation adjustment 2,301 2,301 2,301

Pension adjustment, net of tax 89 89 89

2 unchanged sentences

Purchase of 40,078 common shares

( 6,100 ) ( 6,100 ) ( 6,100 )

Issuance of 9,655 common shares

Common shares distributed from rabbi

trust of 502 , net

Cash dividends declared – $ 0.20 per

18 262 280 280

Common shares distributed from rabbi trust of 502 , net

37 ( 37 ) — —

Cash dividends declared – $ 0.20 per share

( 1,024 ) ( 1,024 ) ( 1,024 )

Balance at June 30, 2023 $ 13,509 $ ( 10,039 ) $ 10,039 $ 56,943 $ 500,726 $ ( 109,143 ) $ ( 59,272 ) $ ( 4,314 ) $ 398,449 $ - $ 398,449

Net income 15,130 15,130 15 15,145

Foreign currency translation adjustment ( 6,934 ) ( 6,934 ) ( 6,934 )

Pension adjustment, net of tax 89 89 89

Total comprehensive income 8,285 15 8,300

Share-based compensation 1,299 1,299 1,299

Purchase of 50,717 common shares

( 8,559 ) ( 8,559 ) ( 8,559 )

Issuance of 26,285 common shares

50 1,306 1,356 1,356

Common shares distributed from rabbi trust of 185 , net

( 30 ) 30 — —

Cash dividends declared – $ 0.20 per share

( 1,018 ) ( 1,018 ) ( 1,018 )

Balance at September 30, 2023 $ 13,559 $ ( 10,069 ) $ 10,069 $ 59,548 $ 514,838 $ ( 117,702 ) $ ( 66,206 ) $ ( 4,225 ) $ 399,813 $ 15 $ 399,828

See notes to consolidated financial statements (unaudited).

11 unchanged sentences

In the opinion of management, these consolidated financial statements contain all estimates and adjustments, consisting of normal recurring accruals, required to fairly present the financial position, results of operations, and cash flows for the interim periods.

Operating results for the three and six months ended June 30, 2024 are not necessarily indicative of the results to be expected for the full-year ending December 31, 2024.

Noncontrolling interests a re 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.

Operating results for the three and nine months ended September 30, 2024 are not necessarily indicative of the results to be expected for the full-year ending December 31, 2024.

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 the Company’s consolidated financial statements.

10 unchanged sentences

The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company is evaluating the impact of adopting this ASU.

The Company is evaluating the impact of adopting this ASU and expects the standard will only impact its segment disclosures with no material impact to the consolidated financial statements.

In December 2023, the FASB issued Accounting Standards Update No.

4 unchanged sentences

This ASU is effective for fiscal years and interim periods beginning after December 15, 2024.

The Company is evaluating the impact of adopting this ASU.

The Company is evaluating the impact of adopting this ASU and expects the standard will only impact its income tax disclosures with no material impact to the consolidated financial statements.

NOTE 2 – REVENUE

6 unchanged sentences

The Company’s revenues by segment and product type are as follows:

Three Months Ended June 30, 2024

Three Months Ended September 30, 2024

Product Type PLP-USA The Americas EMEA Asia-Pacific Consolidated

Energy 61 % 79 % 71 % 78 % 70 %

Communications 32 % 18 % 24 % 3 % 23 %

Special Industries 7 % 3 % 5 % 19 % 7 %

Three Months Ended June 30, 2023

Total 100 % 100 % 100 % 100 % 100 %

Three Months Ended September 30, 2023

Product Type PLP-USA The Americas EMEA Asia-Pacific Consolidated

Energy 68 % 80 % 60 % 75 % 69 %

Communications 28 % 18 % 35 % 3 % 23 %

Special Industries 4 % 2 % 5 % 22 % 8 %

Six Months Ended June 30, 2024

Total 100 % 100 % 100 % 100 % 100 %

Nine Months Ended September 30, 2024

Product Type PLP-USA The Americas EMEA Asia-Pacific Consolidated

Energy 64 % 78 % 71 % 77 % 71 %

Communications 30 % 20 % 24 % 3 % 22 %

Special Industries 6 % 2 % 5 % 20 % 7 %

Six Months Ended June 30, 2023

Total 100 % 100 % 100 % 100 % 100 %

Nine Months Ended September 30, 2023

Product Type PLP-USA The Americas EMEA Asia-Pacific Consolidated

Energy 62 % 73 % 44 % 72 % 61 %

Communications 34 % 25 % 52 % 3 % 32 %

Special Industries 4 % 2 % 4 % 25 % 7 %

Total 100 % 100 % 100 % 100 % 100 %

Credit Losses for Receivables

4 unchanged sentences

The change in the allowance for credit losses includes expense and net write-offs, which are identified in the following table:

Six Months Ended June 30,

Nine Months Ended September 30,

Allowance for credit losses, beginning of period $ 8,260 $ 5,021

(Reductions) additions charged to costs and expenses ( 1,165 ) 1,349

Write-offs ( 209 ) ( 21 )

Foreign exchange and other ( 203 ) ( 17 )

4 unchanged sentences

The components of inventory are as follows:

June 30, 2024

December 31, 2023

September 30, 2024 December 31, 2023

Raw materials $ 90,653 $ 98,708

4 unchanged sentences

Inventories at LIFO cost $ 142,726 $ 148,814

Costs for inventories of certain material, mainly in the U.S., are determined using the Last-In First-Out ("LIFO") method and totaled approximately $ 53.9 million at June 30, 2024 and $ 60.1 million at December 31, 2023.

Costs for inventories of certain material, mainly in the U.S., are determined using the Last-In First-Out ("LIFO") method and totaled approximately $ 48.8 million at September 30, 2024 and $ 60.1 million at December 31, 2023.

An actual valuation of inventories under the LIFO method can be made only at the end of the year based on the inventory levels and costs at that time.

1 unchanged sentence

Because these estimates are subject to change and may be different than the actual inventory levels and costs at the end of the year, interim results are subject to the final year-end LIFO inventory valuation.

During the three-month periods ended June 30, 2024 and 202 3, the net change in LIFO inventories resulted in expense of $ 0.3 million and $ 0.6 million, respectively, to Cost of products sold.

During the six-month periods ended June 30, 2024 and 2023, the net change in LIFO inventories resulted in expense of $ 0.4 million and of $ 1.2 million, respectively, to Cost of products sold.

Th e Company’s reserves for slow moving and obsolete inventory were $ 18.3 million at June 30, 2024 and $ 17.6 million at December 31, 2023.

During the three-month periods ended September 30, 2024 and 2023, the net change in LIFO inventories resulted in expense of $ 0.2 million and $ 0.6 million, respectively, to Cost of products sold.

During the nine-month periods ended September 30, 2024 and 2023, the net change in LIFO inventories resulted in expense of $ 0.6 million and of $ 1.7 million, respectively, to Cost of products sold.

The Company’s reserves for slow moving and obsolete inventory were $ 18.6 million at September 30, 2024 and $ 17.6 million at December 31, 2023.

NOTE 4 – PROPERTY AND EQUIPMENT, NET

Major classes of property, plant and equipment are stated at cost and were as follows:

June 30, 2024

December 31, 2023

September 30, 2024 December 31, 2023

Land and improvements $ 21,267 $ 21,374

14 unchanged sentences

(“SNC ATP”), HD Supply Canada Inc., by its trade names HD Supply Power Solutions and HD Supply Utilities (“HD Supply”), and Anixter Power Solutions Canada Inc.

(the corporate successor to HD Supply, “Anixter”) and, together with the Company, PLPC Canada, Helix, SNC ATP and HD Supply (the

“Defendants”), in a complaint filed by Altalink, L.P.

(the corporate successor to HD Supply, “Anixter”) and, together with the Company, PLPC Canada, Helix, SNC ATP and HD

Supply (the “Defendants”), in a complaint filed by Altalink, L.P.

(the “Plaintiff”) in the Court of Queen’s Bench of Alberta in Alberta, Canada in November 2016 (the “Complaint”).

1 unchanged sentence

The Complaint alleged that the spacer dampers have and may continue to become loose, open and detach from the conductors, resulting in damage and potential injury and a failure to perform the intended function of providing spacing and damping to the Projects.

The Plaintiff was seeking an estimated $ 56.0 million Canadian dollars in damages jointly and severally from the Defendants, representing the costs of monitoring and replacing the spacer dampers and remediating property damage, due to alleged defects in the design and construction of, and supply of materials for, the Projects by SNC ATP and HD Supply/Anixter and in the design of the spacer dampers by Helix.

The Plaintiff was seeking damages jointly and severally from the Defendants representing the costs of monitoring and replacing the spacer dampers and remediating property damage, due to alleged defects in the design and construction of, and supply of materials for, the Projects by SNC ATP and HD Supply/Anixter and in the design of the spacer dampers by Helix.

On September 26, 2023, the Defendants and the Plaintiff entered into a settlement agreement which dismissed the action against all Defendants with prejudice.

2 unchanged sentences

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.

As of June 30, 2024 and December 31, 2023, there were zero reserves for known global legal matters.

As of September 30, 2024 and December 31, 2023, there were zero reserves for known global legal matters.

NOTE 6 – PENSION PLANS

1 unchanged sentence

Net periodic pension expense for the U.S.

Plan for the three and six month periods ended June 30, 2024 and 2023, respectively, follows:

Three Months Ended June 30,

Six Months Ended June 30,

Plan for the three and nine month periods ended September 30, 2024 and 2023, respectively, follows:

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Interest cost $ 387 $ 392 $ 1,162 $ 1,178

3 unchanged sentences

There were no contributions to the U.S.

Plan during the six months ended June 30, 2024 and 2023.

Plan during the nine months ended September 30, 2024 and 2023.

The Company is evaluating whether to make additional contributions to the U.S.

5 unchanged sentences

The following tables set forth the total changes in AOCI by component, net of tax:

Three Months Ended June 30, 2024

Three Months Ended June 30, 2023

Balance at April 1

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

Benefit Cost Cumulative

Adjustment Total

Benefit Cost Cumulative

Adjustment Total

Balance at June 30 $ ( 4,300 ) $ ( 68,364 ) $ ( 72,664 ) $ ( 4,314 ) $ ( 59,272 ) $ ( 63,586 )

Other comprehensive income before reclassifications:

3 unchanged sentences

Net current period other comprehensive income (loss) 89 7,483 7,572 89 ( 6,934 ) ( 6,845 )

Balance at June 30

Six Months Ended June 30, 2024

Six Months Ended June 30, 2023

Balance at September 30 $ ( 4,211 ) $ ( 60,881 ) $ ( 65,092 ) $ ( 4,225 ) $ ( 66,206 ) $ ( 70,431 )

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

Benefit Cost Cumulative

Adjustment Total

Benefit Cost Cumulative

Adjustment Total

Balance at January 1 $ ( 4,478 ) $ ( 55,828 ) $ ( 60,306 ) $ ( 4,492 ) $ ( 65,495 ) $ ( 69,987 )

4 unchanged sentences

Net current period other comprehensive income (loss) 267 ( 5,053 ) ( 4,786 ) 267 ( 711 ) ( 444 )

Balance at June 30

(a) This AOCI component is included in the computation of net periodic pension expense (income) as noted in Note 6 – Pension Plans .

Balance at September 30 $ ( 4,211 ) $ ( 60,881 ) $ ( 65,092 ) $ ( 4,225 ) $ ( 66,206 ) $ ( 70,431 )

(a) This AOCI component is included in the computation of net periodic pension expense as noted in Note 6 – Pension Plans .

NOTE 8 – DEBT AND CREDIT ARRANGEMENTS

The Company maintains a credit facility (the "Facility") with a capacity of $ 90.0 million that expires March 2, 2026.

The interest rate is defined as the Secured Overnight Financing Rate (“SOFR”) plus 1.125 % unless the Company’s funded debt to Earnings before Interest, Taxes and Depreciation ratio exceeds 2.25 to 1, at which point the SOFR spread becomes 1.500 %.

At June 30, 2024, the Company had utilized $ 16.4 million with $ 73.6 million available on the Facility.

There wer e no long-term outstanding letters of credit on the Facility as of June 30, 2024.

The interest rate for U.S.

borrowing is defined as the Secured Overnight Financing Rate (“SOFR”) plus 1.125 % unless the Company’s funded debt to Earnings before Interest, Taxes and Depreciation ratio exceeds 2.25 to 1, at which point the SOFR spread becomes 1.500 %.

At September 30, 2024, the Company had utilized $ 12.7 million with $ 77.2 million available on the Facility.

There were no long-term outstanding letters of credit on the Facility as of September 30, 2024.

Our bank debt to equity percentage was 8.2 %.

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

At June 30, 2024, the Company was in compliance with these covenants.

At September 30, 2024, the Company was in compliance with these covenants.

On January 19, 2021, the Company received funding for a term loan from PNC Equipment Finance, LLC in the principal amount of $ 20.5 million for the full amount of the purchase price for a new corporate aircraft.

1 unchanged sentence

The loan is payable in 119 equal monthly installments, which commenced on March 1, 2021 with a final payment of any outstanding principal and accrued interest due and payable on the final monthly payment date.

Of the $ 13.7 million outstanding on this debt facility at June 30, 2024, $ 2.1 million was classified as current.

Of the $ 13.2 million outstanding on this debt facility at September 30, 2024, $ 2.1 million was classified as current.

The loan is secured by the aircraft.

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 June 30, 2024, and December 31, 2 023, $ 8.5 million and $ 13.3 million were outstanding, of which $ 7.7 million and $ 11.4 million were classified as current, respectively.

At September 30, 2024, and December 31, 2023, $ 9.3 million and $ 13.3 million were outstanding, of which $ 8.6 million and $ 11.4 million were classified as current, respectively.

These facilities support commitments made in the ordinary course of business.

The Company's Asia-Pacific segment had $ 0.1 million and $ 0.2 million in restricted cash used to secure bank guarantees at June 30, 2024 and December 31, 2023, respectively.

The Company's Asia-Pacific segment had $ 0.1 million and $ 0.2 million in restricted cash used to secure bank guarantees at September 30, 2024 and December 31, 2023, respectively.

The restricted cash is shown on the Company’s Consolidated Balance Sheets in Cash, cash equivalents and restricted cash.

NOTE 9 – INCOME TAXES

For the three-month period ended June 30, 2024 and 2023, the Company’s effective tax rate was 16 % and 26 %, respectively.

The lower effective tax rate for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 wa s primarily due to the favorable impact from the mix of earned income in certain foreign jurisdictions as well as discrete benefits recorded as a result of amending prior year federal tax returns.

For the six-month period ended June 30, 2024 and 2023, the Company’s effective tax rate was 18 % and 25 %, respectively.

The lower effective tax rate for the six months ended June 30, 2024 compared to the six months ended June 30, 2023 was primarily due to the favorable impact from the mix of earnings in certain foreign jurisdictions, discrete benefits recorded as a result of amending prior year federal tax returns and an increase in excess tax benefits on share-based compensation in relation to overall lower pre-tax book income.

For the three-month period ended September 30, 2024 and 2023, the Company’s effective tax rate was 26 % and 23 %, respectively.

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

For the nine-month period ended September 30, 2024 and 2023, the Company’s effective tax rate was 20 % and 24 %, respectively.

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

The Company provides valuation allowances against deferred tax assets when it is more likely than not that some portion or all of its deferred tax assets will not be realized.

During the period ended June 30, 2024, the Company did no t record any additional valuation allowances in various jurisdictions on its deferred tax assets.

For the six-month periods ending June 30, 2024 and 2023, the Company did no t record any new uncertain tax positions.

During the period ended September 30, 2024, the Company did not record any additional valuation allowances in various jurisdictions on its deferred tax assets.

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

NOTE 10 – COMPUTATION OF EARNINGS PER SHARE

1 unchanged sentence

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 periods presented.

The calculation of basic and diluted earnings per share for the three and six months ended June 30, was as follows:

Three Months Ended June 30,

Six Months Ended June 30,

The calculation of basic and diluted earnings per share for the three and nine months ended September 30, was as follows:

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Net income $ 7,680 $ 15,130 $ 26,642 $ 57,000

Determination of shares (in thousands)

3 unchanged sentences

Earnings per common share

For the three months ended June 30, 2024 and 2023, there were 5,570 and zero share-based awards, respectively, excluded from the calculation of diluted earnings per share as the effect would have been anti-dilutive .

For the six months ended June 30, 2024 and 2023, there were zero share-based awards excluded from the calculation of diluted earnings per share.

Basic $ 1.57 $ 3.08 $ 5.42 $ 11.56

Diluted $ 1.54 $ 3.03 $ 5.37 $ 11.39

For the three and nine months ended September 30, 2024 and 2023, there were zero share-based awards excluded from the calculation of diluted earnings per share as there was no anti-dilutive effect .

NOTE 11 – GOODWILL AND OTHER INTANGIBLES

The Company’s finite and indefinite-lived intangible assets consist of the following:

June 30, 2024

December 31, 2023

Gross Carrying

September 30, 2024 December 31, 2023

Gross Carrying

Amortization Gross Carrying

Finite-lived intangible assets

Patents $ 4,806 $ ( 4,806 ) $ 4,806 $ ( 4,806 )

Land use rights 679 ( 129 ) 1,109 ( 307 )

Trademark 1,959 ( 1,699 ) 1,988 ( 1,682 )

Technology 7,081 ( 4,095 ) 7,104 ( 3,738 )

Customer relationships 18,627 ( 11,440 ) 19,240 ( 10,733 )

$ 33,152 $ ( 22,169 ) $ 34,247 $ ( 21,266 )

Indefinite-lived intangible assets

Goodwill $ 28,672 $ 29,497

The Company’s measurement date for its annual impairment test for goodwill is October 1st of each year.

The Company performs additional interim impairment assessments as circumstances warrant.

There were no indicators of impairment noted for the period ending June 30, 2024.

There were no indicators of impairment noted for the period ending September 30, 2024.

The Company may use both quantitative and qualitative approaches when testing goodwill for impairment.

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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 weighted average cost of capital, and estimated market multiples, of which are affected by expectations of future market or economic conditions.

The fair value estimates are subjective and sensitive to significant assumptions, such as revenue growth rates, operating margins, the weighted

average cost of capital, and estimated market multiples, of 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.

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Changes in the carrying amount of goodwill by reporting unit are 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 — ( 826 ) 1 — ( 825 )

Balance at June 30, 2024

Balance at September 30, 2024 $ 3,078 $ 9,756 $ 15,838 $ — $ 28,672

NOTE 12 – FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES

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and (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 June 30, 2024 and December 31, 2023:

Balance as of

June 30, 2024

Quoted Prices in Active Markets for Identical Assets or Liabilities

The following table summarizes the Company’s assets and liabilities, recorded and measured at fair value, in the Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023:

Description Balance as of

September 30, 2024 Quoted Prices in Active Markets for

Identical Assets or Liabilities

Significant Other Observable Inputs

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Foreign currency forward contracts $ 95 $ — $ 95 $ —

Total assets $ 95 $ — $ 95 $ —

Foreign currency forward contracts $ 4 $ — $ 4 $ —

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Total liabilities $ 9,091 $ — $ 9,091 $ —

Balance as of December 31, 2023

Quoted Prices in Active Markets for Identical Assets or Liabilities

Description Balance as of December 31, 2023 Quoted Prices in Active Markets for

Identical Assets or Liabilities

Significant Other Observable Inputs

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Foreign currency forward contracts $ 158 $ — $ 158 $ —

Total assets $ 158 $ — $ 158 $ —

Foreign currency forward contracts $ — $ — $ — $ —

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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.

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.

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Accordingly, the changes in the fair value of the foreign currency forward contracts are recognized in each accounting period in Other operating expense, net on the Consolidated Statements of Income together with the transaction gain or loss from the related balance sheet position.

For the three and six months ended June 30, 2024, the Company recognized net losses o f zero and $ 0.2 million, respectively, on foreign currency forward contracts.

For the three and six months ended June 30, 2023, the Company recognized net losses of $ 0.5 million and $ 0.4 million, respectively, on foreign currency forward contracts.

The Company has a non-q ualified supplemental profit sharing plan for its executives (the "Supplemental Profit Sharing Plan").

The liability for the unfunded Supplemental Profit Sharing Plan was $ 9.2 million at June 30, 2024 and $ 8.2 million at December 31, 2023.

For the three and nine months ended September 30, 2024, the Company recognized net losses of zero and $ 0.2 million, respectively, on foreign currency forward contracts.

For the three and nine months ended September 30, 2023, the Company recognized net losses of $ 0.5 million and $ 0.9 million, respectively, on foreign currency forward contracts.

The Company has a non-qualified supplemental profit sharing plan for its executives (the "Supplemental Profit Sharing Plan").

The liability for the unfunded Supplemental Profit Sharing Plan was $ 9.1 million at September 30, 2024 and $ 8.2 million at December 31, 2023.

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 inve st their proportionate award into various investment options, which primarily includes mutual funds.

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.

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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.

At June 30, 2024 and December 31, 2023, the fair value of the Company’s long-term debt was estimated using discounted cash flows analyses, based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements that are considered to be Level 2 inputs.

At September 30, 2024 and December 31, 2023, the fair value of the Company’s long-term debt was estimated using discounted cash flows analyses, 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:

June 30, 2024

December 31, 2023

Carrying Value

September 30, 2024 December 31, 2023

Carrying Value Fair Value Carrying Value

Long-term debt and related current maturities $ 23,984 $ 27,200 $ 51,786 $ 55,282

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Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated by the CODM, or decision making group, in deciding how to allocate resources to an individual segment and in assessing performance.

The following tables present a summary of the Company’s reportable operating segments for the three and six months ended June 30, 2024 and 2023.

The following tables present a summary of the Company’s reportable operating segments for the three and nine months ended September 30, 2024 and 2023.

Financial results for the PLP-USA segment include the elimination of all segments’ intercompany profit in inventory.

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

PLP-USA $ 65,554 $ 81,727 $ 196,191 $ 275,882

The Americas 19,852 22,790 60,026 66,852

EMEA 32,937 28,798 93,630 105,138

Asia-Pacific 28,630 27,124 76,750 76,205

Total net sales $ 146,973 $ 160,438 $ 426,597 $ 524,076

Intersegment sales

PLP-USA $ 2,720 $ 4,083 $ 7,877 $ 25,058

The Americas 2,118 4,515 6,532 13,024

EMEA 1,396 3,514 4,194 6,470

Asia-Pacific 4,068 5,611 11,333 18,714

Total intersegment sales $ 10,302 $ 17,723 $ 29,936 $ 63,266

PLP-USA $ 21,383 $ 30,672 $ 66,821 $ 114,012

The Americas 6,770 8,053 18,448 24,239

EMEA 9,327 7,434 27,009 26,199

Asia-Pacific 8,298 7,977 21,904 22,298

Total gross profit $ 45,778 $ 54,137 $ 134,182 $ 186,748

Net income attributable to Preformed Line Products Company shareholders

PLP-USA $ 3,059 $ 9,080 $ 11,720 $ 40,761

The Americas 1,574 1,411 4,268 6,050

EMEA 1,337 1,137 5,893 4,675

Asia-Pacific 1,710 3,502 4,761 5,514

Total net income attributable to Preformed Line Products Company shareholders $ 7,680 $ 15,130 $ 26,642 $ 57,000

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Pilot Plastics is an injection molding manufacturer and the acquisition expanded the Company's injection molding capabilities and further enhanced the Company's domestic manufacturing footprint.

The purchase price was approximatel y $ 13.8 million, net of cash as of the closing date.

The purchase price was approximately $ 13.8 million, net of cash as of the closing date.

The purchase price is subject to a holdback of approximately $ 1.7 million.

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Accounts receivable $ 970

Inventory 585

Property, plant and equipment and other assets 13,628

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

What changed 10-Q

Item 1. Financial Statements