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Item 2. Management’s Discussion and Analysis

2025-05-02 compared with 2024-10-31 · 87 added, 177 removed, 131 unchanged (67% of the section changed)

18 unchanged sentences

The business components within each segment are managed to maximize the results of the entire operating segment and the Company rather than the results of any individual business component of the segment.

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 nine months ended September 30, 2024 and 2023.

We evaluate segment performance and allocate resources based on several factors primarily based on gross sales and income before income taxes.

The following discussion describes our results of operations for the three months ended March 31, 2025 and 2024.

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 $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 third quarter or nine months ended September 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.

Net sales of $148.5 million increased $7.6 million for the three months ended March 31, 2025 year-over-year, mainly due to an increase in energy and communication sales for the quarter.

While inflationary pressures have subsided, recently enacted tariffs or other trade matters may give rise to further inflationary pressures, which may require further price adjustments to maintain profit margin, and any price increases may have a negative effect on demand.

While our significant domestic manufacturing footprint provides a competitive advantage in the current high tariff environment, raw materials imports, particularly steel and aluminum, will be most impacted.

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 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:

PLPC's foreign currency exchange gains or (losses) were primarily related to translating into U.S.

dollars its foreign currency denominated loans, trade receivables and payables from its foreign subsidiaries at the March 31, 2025 exchange rates.

The fluctuations of foreign currencies during the three months ended March 31, 2025 and March 31, 2024 had an unfavorable impact on net sales of $4.4 million and favorable impact of $0.7 million, respectively.

The effect of currency translation had an unfavorable impact of $0.2 million and a de minimis impact on net income during the three months ended March 31, 2025 and 2024, respectively.

On a reportable segment basis, the impact of foreign currency translation on net sales and net income for the three months ended March 31, 2025, was as follows:

Foreign Currency Translation Impact

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

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

Net Sales Net Income

(Thousands of dollars) 2025 2024 2025 2024

The Americas $ (3,204) $ 805 $ (206) $ 33

2 unchanged sentences

Total $ (4,395) $ 749 $ (223) $ (1)

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.

While uncertainty remains in the global economy due to tariffs and trade matters, we believe our business portfolio, including our significant U.S.

manufacturing footprint 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.

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

Period cost containment continues to be a priority for the Company in 2025, and we continue to monitor and control discretionary spending where necessary.

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

As of March 31, 2025, our liquidity remains strong with our bank debt to equity percentage at 8.0 %.

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

RESULTS OF OPERATIONS

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 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 March 31, 2025 and 2024.

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

Three Months Ended September 30,

Three Months Ended March 31,

(Thousands of dollars) 2025 2024

4 unchanged sentences

OPERATING INCOME 13,130 8.8 11,559 8.2 1,571

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

Other income, net 541 0.4 299 0.2 242

INCOME BEFORE INCOME TAXES 13,671 9.2 11,858 8.4 1,813

1 unchanged sentence

NET INCOME 11,553 7.8 9,603 6.8 1,950

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

Net income attributable to noncontrolling interests (36) 0.0 (7) 0.0 (29)

NET INCOME ATTRIBUTABLE TO PREFORMED LINE PRODUCTS COMPANY SHAREHOLDERS $ 11,517 7.8 % $ 9,596 6.8 % $ 1,921

In 2024, net sales were $147.0 million, a decrease of $13.5 million, or 8%, compared to 2023.

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

Three Months Ended September 30,

In 2025, net sales were $148.5 million, an increase of $7.6 million, or 5%, compared to 2024.

Excluding the effect of currency translation, net sales increased 9% as summarized in the following table:

Three Months Ended March 31,

(Thousands of dollars) 2025 2024 Change Change

4 unchanged sentences

Consolidated $ 148,541 $ 140,904 $ 7,637 $ (4,395) $ 12,032 9 %

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 increase in PLP-USA net sales of $3.3 million, or 5%, was primarily due to higher volumes in communications sales.

International net sales for the three months ended March 31, 2025 were unfavorably affected by $4.4 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 $19.9 million decreased $1.3 million, or 6%, primarily due to lower volumes in energy product sales.

The Americas net sales of $22.3 million increased $7.1 million, or 39%, primarily due to higher volumes in energy product sales, partially offset by lower communications sales.

EMEA net sales of $30.0 million increased $1.8 million, or 6%, 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.

Asia-Pacific net sales of $22.3 million decreased $0.1 million, or 1%, primarily due to lower volumes in energy product sales.

Gross profit.

Gross profit of $45.8 million for 2024 decreased $8.4 million, or 15%, compared to 2023.

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

Three Months Ended September 30,

Gross profit of $48.7 million for 2025 increased $4.5 million, or 10%, compared to 2024.

Excluding the effect of currency translation, gross profit increased $5.9 million, or 13%, as summarized in the following table:

Three Months Ended March 31,

(Thousands of dollars) 2025 2024 Change Change

4 unchanged sentences

Consolidated $ 48,671 $ 44,131 $ 4,540 $ (1,315) $ 5,855 13 %

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 September 30, 2024 was unfavorably impacted by $0.4 million when local currencies were translated to U.S.

PLP-USA gross profit of $26.8 million increased by $2.1 million, or 9%, compared to the same period in 2024, primarily due to higher sales volumes and favorable product mix.

International gross profit for the period ended March 31, 2025 was unfavorably impacted by $1.3 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 $0.7 million, or 9%, which was primarily the result of lower sales volume.

The Americas gross profit increased $3.1 million, or 63%, which was primarily the result of higher sales volume and enhanced fixed cost leverage.

EMEA gross profit increased $0.6 million, or 8%, 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.

Asia-Pacific gross profit decreased $0.1 million, or 1%, which was primarily driven by lower sales volumes and unfavorable product mix.

Costs and expenses.

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.

Costs and expenses of $35.5 million for the three months ended March 31, 2025 increased $3.0 million, or 9%, when compared to 2024.

Excluding the effect of currency translation, costs and expenses increased $3.8 million, or 12%, 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 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 $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 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 September 30,

(Thousands of dollars) 2024 2023 Change Change

Net income (loss)

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.

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)

OPERATING INCOME 33,244 7.8 77,208 14.7 (43,964)

Other income (expense), net 205 0.0 (1,832) (0.3) 2,037

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

NET INCOME ATTRIBUTABLE TO PREFORMED LINE PRODUCTS COMPANY SHAREHOLDERS $ 26,642 6.2 % $ 57,000 10.9 % $ (30,358)

In 2024, net sales were $426.6 million, a decrease of $97.5 million, or 19%, compared to 2023.

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

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

Gross profit.

Gross profit of $134.2 million for 2024 decreased $52.6 million, or 28%, compared to 2023.

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

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 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 $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:

Nine Months Ended September 30,

Three Months Ended March 31,

(Thousands of dollars) 2025 2024 Change Change

Translation Change

Translation %

Change Due to Intercompany Transactions Change Excluding

and Intercompany Transactions

Costs and expenses

4 unchanged sentences

Consolidated $ 35,541 $ 32,572 $ 2,969 $ (863) $ — $ 3,832 12 %

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 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 $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 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.

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 nine months ended September 30, 2024.

Excluding intercompany transactions, PLP-USA costs and expenses increased $0.8 million, or 4% year-over-year primarily due to higher selling costs and personnel costs.

International costs and expenses for the three months ended March 31, 2025 were favorably impacted by $0.9 million when local currencies were translated to U.S.

dollars and unfavorably impacted by intercompany transactions with PLP-USA.

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

The Americas costs and expenses of $5.5 million increased $0.4 million primarily due to increased selling costs.

EMEA costs and expenses of $7.4 million increased by $0.9 million primarily due to increased selling, general, and administrative costs.

Asia-Pacific costs and expenses of $5.5 million increased $1.8 million primarily due to a gain on the sale of capital assets in the first quarter of 2024 that did not recur.

Other Income, net.

Other income, net of $0.5 million for the three months ended March 31, 2025 was favorable by $0.2 million when compared to Other income, net for the three months ended March 31, 2024 of $0.3 million.

The favorable movement was due to lower interest expense from reduced debt balances and a government incentive received in the first quarter of 2025 related to our new facility in China, offset by lower interest income for the three months ended March 31, 2025.

Income taxes.

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:

Nine Months Ended September 30,

Income taxes for the three months ended March 31, 2025 and 2024 were $2.1 million and $2.3 million based on pre-tax income of $13.7 million and $11.9 million, respectively.

The tax rate for the three months ended March 31, 2025 and 2024 was 16% and 19%, respectively.

The effective tax rate for the three months ended March 31, 2025 was lower than the effective tax rate for the same period in 2024 mainly due to the favorable impact from the increase in excess tax benefits on share-based compensation, the decrease of nondeductible compensation, and a 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 March 31, 2025 was $11.5 million, compared to $9.6 million for 2024.

Excluding the effect of currency translation, net income increased $2.0 million as summarized in the following table.

The increase in net income was due to increases in operating income described above as well as lower interest expense and lower tax expense:

Three Months Ended March 31,

(Thousands of dollars) 2025 2024 Change Change

Translation Change

Translation %

Net income (loss)

11 unchanged sentences

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

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”).

During the first three months of 2025, we used cash of $11.0 million for capital expenditures.

We ended the first three months of 2025 with $54.8 million of cash, cash equivalents and restricted cash (collectively, “Cash”).

Our Cash is held in various locations throughout the world.

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

At March 31, 2025, 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 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%.

Total debt, including notes payable, at March 31, 2025 was $34.9 million.

The Company maintains a credit facility (the "Facility") with a capacity of $90.0 million.

On March 14, 2025, the Company amended the Facility to extend the maturity date from March 2, 2026 to June 30, 2028.

In addition, the amendment increased the amount of unsecured borrowings that the Company is permitted to incur outside of the Facility from $40.0 million to $60.0 million and included APRESA – PLP Spain, S.A.

as an additional borrower

At March 31, 2025, our unused availability under the Facility was $82.5 million and our bank debt to equity percentage was 8.0%.

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

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.

At March 31, 2025, the Company was in compliance with these covenants.

Our Asia-Pacific segment had $0.1 million in restricted cash for the periods ended March 31, 2025 and December 31, 2024, 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.

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

The term of the loan is 120 months at a fixed interest rate of 2.744%.

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

Of the $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.

As of March 31, 2025, $12.1 million was

outstanding on this debt facility, of which $2.1 million was classified as current.

The aircraft has been pledged as collateral against the loan.

We expect that our major source of funding for 2025 and beyond will be our operating cash flows, our existing Cash as well as our Facility agreement.

6 unchanged sentences

Sources and Uses of Cash

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 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.

Net cash provided by operating activities for the three months ended March 31, 2025 was $5.7 million compared to $5.8 million in the comparable prior year three-month period.

The $0.1 million decrease was primarily a result of changes in operating assets and liabilities offset by an increase in net income.

Net cash used in investing activities for the three months ended March 31, 2025 was $9.7 million compared to $0.7 million in the comparable prior year three-month period.

The $9.0 million change was primarily a result of an increase in capital expenditures during the current period, primarily related to the acquisition of new land and a building in Spain.

Net cash used in financing activities for the three months ended March 31, 2025 was less than $0.1 million compared to $11.7 million in the comparable prior year three-month period.

The $11.7 million change was primarily the result of a reduction in long-term debt.

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 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.

At March 31, 2025, we had $1.8 million of current operating lease liabilities and $6.5 million of noncurrent operating lease liabilities.

Total liabilities related to finance lease obligations were less than $0.6 million at March 31, 2025.

As of March 31, 2025, the Company had total outstanding guarantees of $14.2 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 September 30, 2024, the Company had total outstanding letters of credit of $1.0 million.

As of March 31, 2025, the Company had total outstanding letters of credit of $1.2 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 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.

At March 31, 2025, and December 31, 2024, $15.3 million and $8.8 million was outstanding, of which $7.2 million and $8.2 million were classified as current, respectively.

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

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The following factors, among others, could affect the Company’s future performance and cause the Company’s actual results to differ materially from those expressed or implied by forward-looking statements made in this report:

• The overall demand for cable anchoring and control hardware for electrical transmission and distribution lines on a worldwide basis, which has a slow growth rate in mature markets such as the United States, Canada, Australia and Western Europe and may grow slowly or experience prolonged delay in developing regions despite expanding power needs;

• The potential impact of global economic conditions, including the impact of inflation and rising interest rates, on the Company’s ongoing profitability and future growth opportunities in the Company’s core markets in the U.S.

• The overall demand for cable anchoring and control hardware for electrical transmission and distribution lines on a worldwide basis, which has a slow growth rate in mature markets such as the United States (“U.S.”), Canada, Australia and Western Europe and may grow slowly or experience prolonged delay in developing regions despite expanding power needs;

• The potential impact of global economic conditions, including the impact of inflation, recently enacted tariffs, and rising interest rates, on the Company’s ongoing profitability and future growth opportunities in the Company’s core markets in the U.S.

and other foreign countries, which may experience continued or further instability due to political and economic conditions, social unrest, acts of war, military conflict (including the ongoing Russian-Ukrainian and Israeli-Palestinian conflicts), international hostilities or the perception that hostilities may be imminent, terrorism, changes in diplomatic and trade relationships and public health concerns (including viral outbreaks such as COVID-19);

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• The extent to which the Company is successful at expanding the Company’s product line or production facilities into new areas or implementing efficiency measures at existing facilities;

• The effects of fluctuation in currency exchange rates upon the Company’s foreign subsidiaries’ operations and reported results from international operations, together with non-currency risks of investing in and conducting significant operations in foreign countries, including those relating to political, social, economic and regulatory factors;

• The Company’s ability to identify, complete, obtain funding for and integrate acquisitions for profitable growth;

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• The relative degree of competitive and customer price pressure on the Company’s products;

• The cost, availability and quality of raw materials required for the manufacture of products and any tariffs that may be associated with the purchase of these products.

The Company’s supply chain could face disruptions and constraints from inflationary pressures and ongoing wars and military conflicts, which could have a material, adverse effect on the ability to secure raw materials and supplies;

• The cost, availability and quality of raw materials required for the manufacture of products and any tariffs that may be associated with the purchase of these products or components of these products.

The Company’s supply chain could face disruptions and constraints from such tariffs, inflationary pressures and ongoing wars and military conflicts, which could have a material, adverse effect on the ability to secure raw materials and supplies;

• Strikes, labor disruptions and other fluctuations in labor costs;

• Changes in significant government regulations affecting environmental or other compliance or litigation matters;

• Changes and uncertainty in significant government regulations, including those affecting environmental compliance or regulatory or third-party litigation matters;

• Security breaches or other disruptions to the Company’s information technology structure;

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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 2. Management’s Discussion and Analysis