Item 9A. Controls and Procedures
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, 2024.
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 Executive Chairman and Chief Financial Officer, assessed the effectiveness of the Company's internal control over financial reporting as of December 31, 2024. 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).
Based upon its assessment, management concluded that the Company’s internal control over financial reporting was effective as of December 31, 2024.
The effectiveness of the Company’s internal control over financial reporting as of December 31, 2024 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, 2024 that materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
60
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, 2024, 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, 2024, based on the COSO criteria.
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, 2024 and 2023, 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, 2024, and the related notes and financial statement schedule listed in the Index at Item 15(a) and our report dated March 13, 2025 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 13, 2025
61
Item 9B. Other Information
None .
Item 9C. Disclosure Regarding Foreign Jurisdictions that Require Inspections
None.
Part III
Item 10. Directors, Executive Officers 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,” “Corporate Governance – Board Committees and Meetings – Audit Committee” and “Compensation Policies and Risk – Insider Trading Policies and Procedures” in the Company’s Proxy Statement, for the Annual Meeting of Shareholders to be held May 13, 2025 (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. Executive Compensation
The information set forth under the caption “Directors and Executive Officers Compensation”, other than under the caption “Pay versus Performance”, “Compensation Policies and Risk”, and “Clawback Policy” in the Proxy Statement is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners 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 immediately below.
Repurchase of equity securities
There were no equity compensation plans not approved by security holders during the year ended December 31, 2024. The approved transactions for the year ended December 31, 2024 are as follows.
(a) (b) (c)
Number of
securities to be
issued upon
exercise of
outstanding
options, warrants
and rights Weighted-average
exercise price of
outstanding
options, warrants
and rights Number of securities
remaining available
for future issuance
under equity
compensation plans
(excluding securities
reflected in column a)
Plan Category (1) (1) (2)
Equity compensation plans approved by security holders 190,198 $ 79.33 366,635
(1) Of these shares, 163,773 were issued in the form of restricted stock units, which have no exercise price. Accordingly, such shares were not included in the weighted average exercise price. For further detail, refer to Note 10, “Share-Based Compensation.”
(2) Under the Incentive Plan, up to 900,000 of the 1,000,000 shares initially authorized may be issued in the form of restricted shares or units. See Note 10 in the Notes to Consolidated Financial Statements for information relating to the Incentive Plan.
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 Accounting Fees and Services
62
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 Financial Statement Schedules
(a) Report of Independent Registered Public Accounting Firm (PCAOB ID: 00 42 )
Financial Statements and Schedule
Page Financial Statements
29
Consolidated Balance Sheets
30
Statements of Consolidated Income
31
Statements of Consolidated Comprehensive Income
32
Statements of Consolidated Cash Flows
33
Statements of Consolidated Shareholders’ Equity
34
Notes to Consolidated Financial Statements
Page Schedule
67
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).
4.1 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 Compa ny ' s Registration Statement on Form 10). *
10.2 Preformed Line Products Company Executive Life Insurance Plan – Summary (incorporated by reference to the Company’s Registration Statement on Form 10).*
10.3 Preformed Line Products Company Supplemental Profit Sharing Plan (incorporated by reference to the Company’s Registration Statement on Form 10).*
10.4 Preformed Line Products Company 2016 Incentive Plan (incorporated by reference to the Company's 10-K filing for the year ended December 31, 2020 ).
10.5 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).*
10.6 Deferred Shares Plan (incorporated by reference to the Company’s 8-K current report filing dated August 21, 2008).
64
10.7 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).
10.8 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).
10.9 Preformed Line Products Company 2016 Incentive Plan (incorporated by reference to the Company's 10-K filing for the year ended December 31, 2020 ).
10.1 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 June 30, 2016).
10.11 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).
10.12 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) .
10.13 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 ).
10.14 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 ).
10.15 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).
10.16 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).
10.17 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).
10.18 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).
10.19 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).
10.20 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) .
10.21 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)
19 Preformed Line Products Compan y Insider Trading Policy as of February 13, 2 025 , filed herewit h .
65
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.
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.
97.1 Preformed Line Products Company Clawback Policy adopted on August 2, 202 3 (incorporated by reference to the Company's 10-K filed for the year ended December 31, 202 3 ) .
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.
SIGNATURES
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 13, 2025 /s/ Robert G. Ruhlman
Robert G. Ruhlman
Executive Chairman
(principal executive officer)
March 13, 2025 /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 13, 2025 /s/ Robert G. Ruhlman
Robert G. Ruhlman
Executive Chairman
March 13, 2025 /s/ Glenn E. Corlett
Glenn E. Corlett
Director
March 13, 2025 /s/ Matthew D. Frymier
Matthew D. Frymier
Director
March 13, 2025 /s/ Michael E. Gibbons
Michael E. Gibbons
Director
March 13, 2025 /s/ Steven Kestner
R. Steven Kestner
Director
March 13, 2025 /s/ Richard R. Gascoigne
Richard R. Gascoigne
Director
March 13, 2025 /s/ Ryan Ruhlman
J. Ryan Ruhlman
Director
March 13, 2025 /s/ Meagan A. R. Cross
Maegan A. R. Cross
Director
March 13, 2025 /s/ David C. Sunkle
David C. Sunkle
Director
66
PREFORMED LINE PRODUCTS COMPANY
SCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS
Year Ended December 31, 2024, 2023 and 2022
(Thousands of dollars)
For the year ended December 31, 2024: 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 $ 8,260 $ ( 750 ) $ ( 260 ) $ ( 292 ) $ 6,958
Reserve for credit memos 746 221 ( 396 ) ( 9 ) 562
Slow-moving and obsolete inventory reserves 17,579 5,447 ( 4,427 ) ( 877 ) 17,722
Accrued product warranty 1,278 288 ( 25 ) ( 82 ) 1,459
Foreign net operating loss tax carryforwards 1,940 785 ( 627 ) ( 131 ) 1,967
For the year ended December 31, 2023: 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 $ 5,021 $ 3,250 $ ( 218 ) $ 207 $ 8,260
Reserve for credit memos 579 476 ( 310 ) 1 746
Slow-moving and obsolete inventory reserves 10,835 9,950 ( 3,427 ) 221 17,579
Accrued product warranty 1,111 213 ( 70 ) 24 1,278
Foreign net operating loss tax carryforwards 2,722 367 ( 466 ) ( 683 ) 1,940
For the year ended December 31, 2022: 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 $ 3,091 $ 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
67