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Item 2. Management’s Discussion and Analysis

2024-10-31 compared with 2024-08-01 · 160 added, 100 removed, 148 unchanged (64% of the section changed)

19 unchanged sentences

We evaluate segment performance and allocate resources based on several factors primarily based on sales and net income.

The following discussion describes our results of operations for the three and six months ended June 30, 2024 and 2023.

The following discussion describes our results of operations for the three and nine months ended September 30, 2024 and 2023.

Our consolidated financial statements are prepared in conformity with United States ("U.S.") generally accepted accounting principles ("GAAP").

Our discussions of the financial results include non-GAAP measures (e.g., foreign currency impact) to provide additional information concerning our financial results and provide information that we believe is useful to the readers of our financial statements in the assessment of our performance and operating trends.

Net sales of $138.7 million decreased $43.1 million for the three months ended June 30, 2024 year-over-year and net sales of $279.6 million decreased $84.0 million for the six months ended June 30, 2024 year-over-year, mainly due to the elevated inventory levels at PLP-USA communications markets' customers and distributors.

Net sales of $147.0 million decreased $13.5 million for the three months ended September 30, 2024 year-over-year and net sales of $426.6 million decreased $97.5 million for the nine months ended September 30, 2024 year-over-year, mainly due to the continued inventory destocking at PLP-USA communications markets' customers and distributors.

The inflationary headwinds we experienced in 2022 and early 2023 related to raw materials, specifically plastic resins, aluminum and sand (grit), have generally subsided.

Costs related to shipping and freight have similarly fallen from their 2022 peak.

Decreases in these underlying costs along with the impacts of our previous price increases benefited gross margins in 2023 and have not meaningfully impacted the results for the second quarter or six months ended June 30, 2024.

If inflationary pressures increase again, it may require further price adjustments to maintain profit margin, and any price increases may have a negative effect on demand.

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

The fluctuations of foreign currencies during the three and six months ended June 30, 2024 had a unfavorable impact on net sales of $1.1 million and $0.3 million, respectively.

The fluctuations on foreign currencies during the three and six months ended June 30, 2024 had a de minimis impact on net income.

The fluctuations of foreign currencies during the three and six months ended June 30, 2023 had an unfavorable impact on net sales of $2.5 million and $7.1 million, respectively.

The fluctuations on foreign currencies during the three and six months ended June 30, 2023 had an unfavorable impact on net income of $0.4 million and $0.6 million, respectively.

On a reportable segment basis, the impact of foreign currency translation on net sales and net income for the three and six months ended June 30, 2024, was as follows:

The fluctuations of foreign currencies during the three and nine months ended September 30, 2024 had a unfavorable impact on net sales of $0.8 million and $1.1 million, respectively.

The fluctuations on foreign currencies during the three and nine months ended September 30, 2024 had an unfavorable impact on net income of $0.1 million and $0.2 million, respectively.

The fluctuations of foreign currencies during the three and nine months ended September 30, 2023 had a favorable impact on net sales of $1.4 million and unfavorable impact on net sales of $5.6 million, respectively.

The fluctuations on foreign currencies during the three and nine months ended September 30, 2023 had an unfavorable impact on net income of $0.1 million and $0.7 million, respectively.

On a reportable

segment basis, the impact of foreign currency translation on net sales and net income for the three and nine months ended September 30, 2024, was as follows:

Foreign Currency Translation Impact

Three Months Ended June 30, 2024

Six Months Ended June 30, 2024

(Thousands of dollars)

Although elevated inventory levels in the PLP-USA communications markets and other market headwinds have impacted our first half 2024 results, we believe our business portfolio and our financial position are sound and strategically well-positioned.

Three Months Ended September 30, 2024 Nine Months Ended September 30, 2024

(Thousands of dollars) Net Sales Net Income Net Sales Net Income

The Americas $ (1,668) $ (131) $ (1,283) $ (136)

EMEA 576 (6) 1,422 69

Asia-Pacific 283 9 (1,266) (105)

Total $ (809) $ (128) $ (1,127) $ (172)

Although elevated inventory levels in the PLP-USA communications markets and other market headwinds have impacted our 2024 results, we believe our business portfolio and our financial position are sound and strategically well-positioned.

We remain focused on assessing our global market opportunities and overall manufacturing capacity in conjunction with the requirements of local manufacturing in the markets that we serve.

As necessary, we will modify redundant processes and further utilize our global manufacturing network to manage costs, increase sales volume and deliver value to our customers.

Period cost containment has been a priority for the Company in 2024, shown through a reduction in costs and expenses of 13% for the six months ended June 30, 2024.

Period cost containment has been a priority for the Company in 2024, shown through a reduction in costs and expenses.

We have continued to invest in the business to expand into new markets for the Company, evaluate strategic mergers and acquisitions, improve efficiency, develop new products and increase our capacity.

As of June 30, 2024, our liquidity remains strong with our bank debt to equity percentage at 9.2%.

As of September 30, 2024, our liquidity remains strong with our bank debt to equity percentage at 8.2%.

We can borrow needed funds at a competitive interest rate under the Facility.

RESULTS OF OPERATIONS

THREE MONTHS ENDED JUNE 30, 2024 COMPARED TO THREE MONTHS ENDED JUNE 30, 2023

The following table sets forth a summary of the Company’s Statements of Consolidated Income and the percentage of net sales for the three months ended June 30, 2024 and 2023.

THREE MONTHS ENDED SEPTEMBER 30, 2024 COMPARED TO THREE MONTHS ENDED SEPTEMBER 30, 2023

The following table sets forth a summary of the Company’s Statements of Consolidated Income and the percentage of net sales for the three months ended September 30, 2024 and 2023.

The Company’s past operating results are not necessarily indicative of future operating results.

Three Months Ended June 30,

Three Months Ended September 30,

(Thousands of dollars) 2024 2023

Net sales $ 146,973 100.0 % $ 160,438 100.0 % $ (13,465)

Cost of products sold 101,195 68.9 106,301 66.3 (5,106)

GROSS PROFIT 45,778 31.1 54,137 33.7 (8,359)

Costs and expenses 35,386 24.1 34,059 21.2 1,327

OPERATING INCOME 10,392 7.1 20,078 12.5 (9,686)

Other expense, net

Other income (expense), net 38 0.0 (502) (0.3) 540

INCOME BEFORE INCOME TAXES 10,430 7.1 19,576 12.2 (9,146)

Income taxes 2,734 1.9 4,431 2.8 (1,697)

NET INCOME 7,696 5.2 15,145 9.4 (7,449)

Net (income) loss attributable to noncontrolling interests (16) 0.0 (15) 0.0 (1)

2 unchanged sentences

Excluding the effect of currency translation, net sales decreased 8% as summarized in the following table:

Three Months Ended June 30,

(Thousands of dollars)

The decrease in PLP-USA net sales of $37.1 million, or 38%, was primarily due to lower volumes and unfavorable product mix in communications sales and energy product sales.

International net sales for the three months ended June 30, 2024 were unfavorably affected by $1.1 million when local currencies were converted to U.S.

Three Months Ended September 30,

(Thousands of dollars) 2024 2023 Change Change

PLP-USA $ 65,554 $ 81,727 $ (16,173) $ — $ (16,173) (20) %

The Americas 19,852 22,790 (2,938) (1,668) (1,270) (6) %

EMEA 32,937 28,798 4,139 576 3,563 12 %

Asia-Pacific 28,630 27,124 1,506 283 1,223 5 %

Consolidated $ 146,973 $ 160,438 $ (13,465) $ (809) $ (12,657) (8) %

The decrease in PLP-USA net sales of $16.2 million, or 20%, was primarily due to lower volumes in communications and energy product sales.

International net sales for the three months ended September 30, 2024 were unfavorably affected by $0.8 million when local currencies were converted to U.S.

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

The Americas net sales of $21.8 million increased $0.7 million, or 3%, primarily due to higher volumes

in energy product sales.

EMEA net sales of $32.0 million decreased $5.3 million, or 14%, primarily due to lower volume in communications sales.

Asia-Pacific net sales of $25.0 million decreased $0.4 million, or 1%, primarily due to lower volumes in special industries.

The Americas net sales of $19.9 million decreased $1.3 million, or 6%, primarily due to lower volumes in energy product sales.

EMEA net sales of $32.9 million increased $3.6 million, or 12%, primarily due to higher volume in energy product sales.

Asia-Pacific net sales of $28.6 million increased $1.2 million, or 5%, primarily due to higher volumes in energy product sales.

Gross profit.

1 unchanged sentence

Excluding the effect of currency translation, gross profit decreased $8.0 million, or 15%, as summarized in the following table:

Three Months Ended June 30,

(Thousands of dollars)

Three Months Ended September 30,

(Thousands of dollars) 2024 2023 Change Change

PLP-USA $ 21,383 $ 30,672 $ (9,289) $ — $ (9,289) (30) %

The Americas 6,770 8,053 (1,283) (591) (692) (9) %

EMEA 9,327 7,434 1,893 127 1,766 24 %

Asia-Pacific 8,298 7,977 321 83 238 3 %

Consolidated $ 45,778 $ 54,137 $ (8,359) $ (381) $ (7,977) (15) %

PLP-USA gross profit of $21.4 million decreased by $9.3 million, or 30%, compared to the same period in 2023, primarily due to lower sales volumes and unfavorable product mix.

International gross profit for the period ended June 30, 2024 was unfavorably impacted by $0.3 million when local currencies were translated to U.S.

International gross profit for the period ended September 30, 2024 was unfavorably impacted by $0.4 million when local currencies were translated to U.S.

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

The Americas gross profit decreased $1.4 million, or 17%, which was primarily the result of unfavorable product mix and higher manufacturing costs.

EMEA gross profit decreased $0.2 million, or 2%, primarily due to lower sales volumes, partially offset by a reduction in warranty expense.

The Americas gross profit decreased $0.7 million, or 9%, which was primarily the result of lower sales volume.

EMEA gross profit increased $1.8 million, or 24%, primarily due to higher sales volumes and favorable product mix.

Asia-Pacific gross profit increased $0.2 million, or 3%, which was primarily driven by favorable product mix.

Costs and expenses.

Costs and expenses of $33.0 million for the three months ended June 30, 2024 decreased $5.2 million, or 14%, when compared to 2023.

Excluding the effect of currency translation, costs and expenses decreased $4.9 million, or 13%, as summarized in the following table:

Three Months Ended June 30,

(Thousands of dollars)

Costs and expenses of $35.4 million for the three months ended September 30, 2024 increased $1.3 million, or 4%, when compared to 2023.

Excluding the effect of currency translation, costs and expenses increased $1.6 million, or 5%, as summarized in the following table:

Three Months Ended September 30,

(Thousands of dollars) 2024 2023 Change Change

Costs and expenses

PLP-USA $ 17,358 $ 19,205 $ (1,847) $ — $ (1,847) (10) %

The Americas 4,980 5,873 (893) (442) (451) (8) %

EMEA 7,224 5,742 1,482 115 1,367 24 %

Asia-Pacific 5,824 3,238 2,586 69 2,517 78 %

Consolidated $ 35,386 $ 34,058 $ 1,328 $ (258) $ 1,586 5 %

PLP-USA costs and expenses of $17.4 million decreased $1.8 million, or 10% year-over-year.

PLP-USA’s decrease was primarily attributable to lower selling costs and lower personnel and professional services costs, primarily as a result of cost containment efforts.

International costs and expenses for the three months ended June 30, 2024 were unfavorably impacted by $0.3 million when local currencies were translated to U.S.

PLP-USA’s decrease was primarily attributable to lower selling costs and lower personnel costs, primarily as a result of cost containment efforts.

International costs and expenses for the three months ended September 30, 2024 were favorably impacted by $0.3 million when local currencies were translated to U.S.

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

The Americas costs and expenses of $4.6 million decreased $0.3 million primarily due to lower selling, general, and administrative costs.

EMEA costs and expenses of $5.4 million decreased by $1.4 million primarily due to elevated past-due receivable collections which reduced bad debt expenses.

Asia-Pacific costs and expenses of $6.0 million increased $0.3 million due to the impact of foreign currency remeasurement.

Other expense, net.

Other expense, net of $0.1 million for the three months ended June 30, 2024 was favorable by $0.5 million when compared to Other expense, net for the three months ended June 30, 2023 of $0.6 million.

The favorable movement was due to lower interest expense from reduced debt balances and higher interest income earned on cash balances in certain international jurisdictions for the three months ended June 30, 2024.

The Americas costs and expenses of $5.0 million decreased $0.5 million primarily due to a one-time legal settlement in the third quarter of 2023.

EMEA costs and expenses of $7.2 million increased by $1.4 million primarily due to increased selling, general, and administrative costs and the impact of foreign currency remeasurement.

Asia-Pacific costs and expenses of $5.8 million increased $2.5 million primarily due to a one-time gain of $2.5 million on the sale of capital assets in the third quarter of 2023.

Other income (expense), net.

Other income, net for the three months ended September 30, 2024 was favorable by $0.5 million when compared to Other expense, net for the three months ended September 30, 2023 of $0.5 million.

The favorable movement was due to lower interest expense from reduced debt balances and higher interest income earned on cash balances in certain international jurisdictions.

Income taxes.

Income taxes for the three months ended June 30, 2024 and 2023 were $1.8 million and $7.1 million based on pre-tax income of $11.2 million and $27.5 million, respectively.

The tax rate for the three months ended June 30, 2024 and 2023 was 16% and 26%, respectively.

The effective tax rate for the three months ended June 30, 2024 was lower than the effective tax rate for the same period in 2023 mainly due to discrete benefits recorded as a result of amending prior year federal tax returns.

As a result of the preceding items, net income for the three months ended June 30, 2024 was $9.4 million, compared to $20.5 million for 2023.

Excluding the effect of currency translation, net income decreased $11.1 million as summarized in the following

Income taxes for the three months ended September 30, 2024 and 2023 were $2.7 million and $4.4 million based on pre-tax income of $10.4 million and $19.6 million, respectively.

The tax rate for the three months ended September 30, 2024 and 2023 was 26% and 23%, respectively.

The effective tax rate for the three months ended September 30, 2024 was higher than the effective tax rate for the same period in 2023 mainly 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.

As a result of the preceding items, net income for the three months ended September 30, 2024 was $7.7 million, compared to $15.1 million for 2023.

Excluding the effect of currency translation, net income decreased $7.3 million as summarized in the following table.

The decrease in net income was due to decreases in operating income described above, partially offset by lower interest expense and lower tax expense:

Three Months Ended June 30,

(Thousands of dollars)

Three Months Ended September 30,

(Thousands of dollars) 2024 2023 Change Change

Net income (loss)

SIX MONTHS ENDED JUNE 30, 2024 COMPARED TO SIX MONTHS ENDED JUNE 30, 2023

The following table sets forth a summary of the Company’s Statements of Consolidated Income and the percentage of net sales for the six months ended June 30, 2024 and 2023.

PLP-USA $ 3,059 $ 9,080 $ (6,021) $ — $ (6,021) (66) %

The Americas 1,574 1,411 163 (131) 294 21 %

EMEA 1,337 1,137 200 (6) 206 18 %

Asia-Pacific 1,710 3,502 (1,792) 9 (1,801) (51) %

Consolidated $ 7,680 $ 15,130 $ (7,450) $ (128) $ (7,322) (48) %

NINE MONTHS ENDED SEPTEMBER 30, 2024 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30, 2023

The following table sets forth a summary of the Company’s Statements of Consolidated Income and the percentage of net sales for the nine months ended September 30, 2024 and 2023.

The Company’s past operating results are not necessarily indicative of future operating results.

Six Months Ended June 30,

(Thousands of dollars)

Nine Months Ended September 30, 2024

(Thousands of dollars) 2024 2023 Change

Net sales $ 426,597 100.0 % $ 524,076 100.0 % $ (97,479)

Cost of products sold 292,415 68.5 337,328 64.4 (44,913)

GROSS PROFIT 134,182 31.5 186,748 35.6 (52,566)

Costs and expenses 100,938 23.7 109,540 20.9 (8,602)

2 unchanged sentences

INCOME BEFORE INCOME TAXES 33,449 7.8 75,376 14.4 (41,927)

Income taxes 6,783 1.6 18,348 3.5 (11,565)

NET INCOME 26,666 6.3 57,028 10.9 (30,362)

Net income attributable to noncontrolling interests (24) 0.0 (28) 0.0 4

2 unchanged sentences

Excluding the effect of currency translation, net sales decreased 18% as summarized in the following table:

Six Months Ended June 30,

(Thousands of dollars)

The decrease in PLP-USA net sales of $63.5 million, or 33%, was primarily due to lower volumes and unfavorable product mix in communications sales and energy product sales.

International net sales for the six months ended June 30, 2024 were unfavorably affected by $0.3 million when local currencies were converted to U.S.

Nine Months Ended September 30,

(Thousands of dollars) 2024 2023 Change Change

Translation Change

Translation %

PLP-USA $ 196,191 $ 275,882 $ (79,691) $ — $ (79,691) (29) %

The Americas 60,026 66,852 (6,826) (1,283) (5,543) (8) %

EMEA 93,630 105,138 (11,508) 1,422 (12,930) (12) %

Asia-Pacific 76,750 76,205 545 (1,266) 1,811 2 %

Consolidated $ 426,597 $ 524,076 $ (97,479) $ (1,127) $ (96,353) (18) %

The decrease in PLP-USA net sales of $79.7 million, or 29%, was primarily due to lower volumes in communications and energy product sales.

International net sales for the nine months ended September 30, 2024 were unfavorably affected by $1.1 million when local currencies were converted to U.S.

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

The Americas net sales of $40.2 million decreased $4.3 million, or 10%, primarily due to lower volumes in communications sales, partially offset by increased volumes in energy product sales.

The Americas net sales of $60.0 million decreased $5.5 million, or 8%, primarily due to lower volumes in communications sales and energy product sales.

EMEA net sales of $93.6 million decreased $12.9 million, or 12%, primarily due to lower volume in communications sales, partially offset by increased volumes in energy product sales.

Asia-Pacific net sales of $48.1 million increased $0.6 million, or 1%, primarily due to volume increases in energy product and special industries sales.

Asia-Pacific net sales of $76.8 million increased $1.8 million, or 2%, primarily due to volume increases in energy product sales and special industries sales.

Gross profit.

1 unchanged sentence

Excluding the effect of currency translation, gross profit decreased $52.1 million, or 28%, as summarized in the following table:

Six Months Ended June 30,

(Thousands of dollars)

PLP-USA gross profit of $45.4 million decreased by $37.9 million, or 45%, compared to the same period in 2023, primarily due to lower sales volumes and unfavorable product mix.

International gross profit for the period ended June 30, 2024 was unfavorably impacted by $0.1 million when local currencies were translated to U.S.

Nine Months Ended September 30,

(Thousands of dollars) 2024 2023 Change Change

Translation Change

Translation %

PLP-USA $ 66,821 $ 114,012 $ (47,191) $ — $ (47,191) (41) %

The Americas 18,448 24,239 (5,791) (466) (5,325) (22) %

EMEA 27,009 26,199 810 336 474 2 %

Asia-Pacific 21,904 22,298 (394) (331) (63) — %

Consolidated $ 134,182 $ 186,748 $ (52,566) $ (461) $ (52,105) (28) %

PLP-USA gross profit of $66.8 million decreased by $47.2 million, or 41%, compared to the same period in 2023, primarily due to lower sales volumes and unfavorable product mix, partially offset by cost containment measures.

International gross profit for the period ended September 30, 2024 was unfavorably impacted by $0.5 million when local currencies were translated to U.S.

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

The Americas gross profit decreased $5.3 million, or 22%, which was primarily the result of lower sales volumes.

EMEA gross profit decreased $1.3 million, or 7%, primarily due to lower sales volumes, partially offset by favorable resolution of a warranty claim.

Asia-Pacific gross profit decreased $0.3 million, or 2%, which was primarily driven by higher manufacturing costs, partially offset by favorable product mix.

EMEA gross profit increased $0.5 million, or 2%, primarily due to a favorable resolution of a warranty claim and lower freight costs, offset by an increase in labor costs.

Asia-Pacific gross profit decreased $0.1 million, which was primarily driven by favorable product mix.

Costs and expenses.

Costs and expenses of $65.6 million for the six months ended June 30, 2024 decreased $9.9 million, or 13%, when compared to 2023.

Costs and expenses of $100.9 million for the nine months ended September 30, 2024 decreased $8.6 million, or 8%, when compared to 2023.

Excluding the effect of currency translation, costs and expenses decreased $8.4 million, or 8%, as summarized in the following table:

Six Months Ended June 30,

(Thousands of dollars)

Nine Months Ended September 30,

(Thousands of dollars) 2024 2023 Change Change

Translation Change

Translation %

Costs and expenses

PLP-USA $ 52,461 $ 59,570 $ (7,109) $ — $ (7,109) (12) %

The Americas 14,344 16,331 (1,987) (268) (1,719) (11) %

EMEA 18,742 19,255 (513) 214 (727) (4) %

Asia-Pacific 15,391 14,385 1,006 (196) 1,202 8 %

Consolidated $ 100,938 $ 109,540 $ (8,602) $ (250) $ (8,353) (8) %

PLP-USA costs and expenses of $52.5 million decreased $7.1 million, or 12% year-over-year.

PLP-USA’s decrease was primarily attributable to lower selling costs and lower personnel and professional services costs, primarily as a result of cost containment efforts.

International costs and expenses for the six months ended June 30, 2024 had a de minimis impact when local currencies were translated to U.S.

International costs and expenses for the nine months ended September 30, 2024 was unfavorably impacted by $0.3 million when local currencies were translated to U.S.

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

The Americas costs and expenses of $9.4 million decreased $1.3 million primarily due to lower sales and the impact of foreign currency remeasurement.

EMEA costs and expenses of $11.5 million decreased by $2.1 million primarily due to lower sales-related costs and bad debt expenses.

Asia-Pacific costs and expenses of $9.6 million decreased $1.3 million primarily due to a one-time gain on the sale of capital assets.

The Americas costs and expenses of $14.3 million decreased $1.7 million primarily due to a one-time legal settlement in the third quarter of 2023 and the impact of foreign currency remeasurement.

EMEA costs and expenses of $18.7 million decreased by $0.7 million primarily due to lower personnel costs and bad debt expenses.

Asia-Pacific costs and expenses of $15.4 million increased $1.2 million primarily due to the net impact of the sale of capital assets year over year and foreign currency remeasurement.

Other income (expense), net.

Other income, net of $0.2 million for the six months ended June 30, 2024 was favorable by $1.5 million when compared to Other expense, net for the six months ended June 30, 2023 of $1.3 million.

The favorable movement was due to higher interest income earned on cash balances in certain international jurisdictions and lower interest expense from reduced debt balances for the six months ended June 30, 2024.

Other income, net of $0.2 million for the nine months ended September 30, 2024 was favorable by $2.0 million when compared to Other expense, net for the nine months ended September 30, 2023 of $1.8 million.

Income taxes.

Income taxes for the six months ended June 30, 2024 and 2023 were $4.0 million and $13.9 million based on pre-tax income of $23.0 million and $55.8 million, respectively.

The tax rate for the six months ended June 30, 2024 and 2023 was 18% and 25%, respectively.

The effective tax rate for the six months ended June 30, 2024 was lower than the effective tax rate for the same period in 2023 mainly due to an increase in excess tax benefits on share-based compensation in relation to overall lower pre-tax book income as well as other discrete benefits recorded as a result of amending prior year federal tax returns.

As a result of the preceding items, net income for the six months ended June 30, 2024 was $19.0 million, compared to $41.9 million for 2023.

Excluding the effect of currency translation, net income decreased $22.9 million as summarized in the following

Income taxes for the nine months ended September 30, 2024 and 2023 were $6.8 million and $18.3 million based on pre-tax income of $33.4 million and $75.4 million, respectively.

The tax rate for the nine months ended September 30, 2024 and 2023 was 20% and 24%, respectively.

The effective tax rate for the nine months ended September 30, 2024 was lower than the effective tax rate for the same period in 2023 mainly 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.

As a result of the preceding items, net income for the nine months ended September 30, 2024 was $26.6 million, compared to $57.0 million for 2023.

Excluding the effect of currency translation, net income decreased $30.2 million as summarized

in the following table.

The decrease in net income was due to decreases in operating income described above, partially offset by higher interest income, lower interest expense, and lower tax expense:

Six Months Ended June 30,

(Thousands of dollars)

Nine Months Ended September 30,

(Thousands of dollars) 2024 2023 Change Change

Translation Change

Translation %

Net income (loss)

PLP-USA $ 11,720 $ 40,761 $ (29,041) $ — $ (29,041) (71) %

The Americas 4,268 6,050 (1,782) (136) (1,646) (27) %

EMEA 5,893 4,675 1,218 69 1,149 25 %

Asia-Pacific 4,761 5,514 (753) (105) (648) (12) %

Consolidated $ 26,642 $ 57,000 $ (30,358) $ (172) $ (30,186) (53) %

APPLICATION OF CRITICAL ACCOUNTING POLICIES AND ESTIMATES

5 unchanged sentences

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

During the first six months of 2024, we used cash of $7.6 million for capital expenditures.

We ended the first six months of 2024 with $47.4 million of cash, cash equivalents and restricted cash (collectively, “Cash”).

During the first nine months of 2024, we used cash of $11.2 million for capital expenditures.

We ended the first nine months of 2024 with $47.5 million of cash, cash equivalents and restricted cash (collectively, “Cash”).

Our Cash is held in various locations throughout the world.

At June 30, 2024, the majority of our Cash was held outside the U.S.

At September 30, 2024, the majority of our Cash was held outside the U.S.

We expect most accumulated non-U.S.

6 unchanged sentences

We currently have not identified any potential material impact on our liquidity from customer credit issues.

Total debt, including notes payable, at June 30, 2024 was $38.6 million.

At June 30, 2024, our unused availability under our credit facility (the "Facility") was $73.6 million and our bank debt to equity percentage was 9.2%.

Total debt, including notes payable, at September 30, 2024 was $35.2 million.

At September 30, 2024, our unused availability under our credit facility (the "Facility") was $77.2 million and 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.

Our Asia-Pacific segment had $0.1 million and $0.2 million in restricted cash for the periods ended June 30, 2024 and December 31, 2023, respectively.

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

Our Asia-Pacific segment had $0.1 million and $0.2 million in restricted cash for the periods ended September 30, 2024 and December 31, 2023, respectively.

The restricted cash was used to secure bank guarantees and is included in Cash, cash equivalents and restricted cash on the Consolidated Balance Sheets.

2 unchanged sentences

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.

7 unchanged sentences

Sources and Uses of Cash

Net cash provided by operating activities for the six months ended June 30, 2024 was $34.0 million compared to $45.9 million in the comparable prior year six-month period.

The $11.9 million decrease was primarily a result of a decrease in net income and larger payables balances, which outpaced increases in current assets, primarily accounts receivable, inventory and prepaid expenses.

Net cash used in investing activities for the six months ended June 30, 2024 was $4.3 million compared to $29.1 million in the comparable prior year six-month period.

Net cash provided by operating activities for the nine months ended September 30, 2024 was $43.4 million compared to $88.4 million in the comparable prior year nine-month period.

The $45.0 million decrease was primarily a result of a decrease in net income and changes in operating assets and liabilities.

Net cash used in investing activities for the nine months ended September 30, 2024 was $7.7 million compared to $36.7 million in the comparable prior year nine-month period.

The $29.0 million change was primarily a result of decreases in acquisition activity and capital expenditures during the current period.

Net cash used in financing activities for the six months ended June 30, 2024 was $33.5 million compared to $11.7 million in the comparable prior year six-month period.

The $21.8 million change was primarily the result of increased net payments of long-term debt.

Net cash used in financing activities for the nine months ended September 30, 2024 was $40.8 million compared to $45.5 million in the comparable prior year nine-month period.

The $4.7 million change was primarily the result of increased net payments of long-term debt and decreased purchases of common shares from related parties.

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

At June 30, 2024, we had $1.6 million of current operating lease liabilities and $7.0 million of noncurrent operating lease liabilities.

Total liabilities related to finance lease obligations were less than $0.7 million at June 30, 2024.

As of June 30, 2024, the Company had total outstanding guarantees of $12.9 million.

At September 30, 2024, we had $1.6 million of current operating lease liabilities and $7.0 million of noncurrent operating lease liabilities.

Total liabilities related to finance lease obligations were less than $0.6 million at September 30, 2024.

As of September 30, 2024, the Company had total outstanding guarantees of $12.2 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 June 30, 2024, the Company had total outstanding letters of credit of $0.9 million.

As of September 30, 2024, the Company had total outstanding letters of credit of $1.0 million.

The Company has 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, 2023, $8.5 million and $13.3 million was 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 was 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.

30 unchanged sentences

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What changed 10-Q

Item 2. Management’s Discussion and Analysis