Preformed Line Products Announces Financial Results For The Fourth Quarter And Full Year 2018
MAYFIELD VILLAGE, Ohio, March 8, 2019 /PRNewswire/ -- Preformed Line Products Company (NASDAQ: PLPC) today reported financial results for the fourth quarter and the full year 2018.
Net sales in the fourth quarter of 2018 were $105.4 million compared to $96.9 million in the fourth quarter of 2017. Net sales for 2018 were $420.9 million compared to $378.2 million in 2017. This represents a 9% increase for the fourth quarter and an 11% increase for the year.
The U.S. Tax Cuts and Jobs Act (the "Tax Act") enacted during December 2017 adversely impacted net income during the fourth quarter of 2017 and for the year as a result of a one-time estimated net tax expense of $5.8 million. The expense primarily related to taxes on the Company's unremitted foreign earnings and profits and re-measurement of the Company's deferred tax assets and liabilities. This negatively impacted earnings per diluted share by $1.11 for the fourth quarter of 2017, and $1.14 per diluted share for the year. In 2018, there was a $1.9 million reduction in the estimate, which favorably impacted earnings per diluted share by $.37 for the year.
Net income for the quarter ended December 31, 2018 was $5.3 million, or $1.02 per diluted share, compared to $.7 million, or $.14 per diluted share, for the comparable period in 2017, including the negative impacts from the Tax Act. Net income for the year ended December 31, 2018 was $26.6 million, or $5.21 per diluted share, compared to $12.7 million, or $2.47 per diluted share in 2017.
Rob Ruhlman, Chairman and Chief Executive Officer, said, "The fourth quarter completed a record year of domestic sales and four consecutive quarters of double-digit sales growth in local currencies across the Company. We recognize the competitive landscape continues to be challenging and world economic conditions uncertain, so we remain committed to expanding our technical expertise and high-quality product offering. We are confident that our unrivaled customer service will continue to drive top line expansion in the markets we serve."
Founded in 1947, Preformed Line Products is an international designer and manufacturer of products and systems employed in the construction and maintenance of overhead and underground networks for energy, communications and broadband network companies.
Preformed's world headquarters are in Cleveland, Ohio, and the Company operates two domestic manufacturing centers located in Rogers, Arkansas, and Albemarle, North Carolina. The Company serves its worldwide market through international operations in Argentina, Australia, Brazil, Canada, China, Colombia, England, France, Indonesia, Malaysia, Mexico, New Zealand, Poland, Russia, South Africa, Spain and Thailand.
This news release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 regarding the Company, including those statements regarding the Company's and management's beliefs and expectations concerning the Company's future performance or anticipated financial results, among others. Except for historical information, the matters discussed in this release are forward-looking statements that involve risks and uncertainties which may cause results to differ materially from those set forth in those statements. Among other things, factors that could cause actual results to differ materially from those expressed in such forward-looking statements include the strength of the economy and demand for the Company's products and the mix of products sold, 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 the Company's ability to continue to develop proprietary technology and maintain high quality products and customer service to meet or exceed new industry performance standards and individual customer expectations, and other factors described under the headings "Forward-Looking Statements" and "Risk Factors" in the Company's 2017 Annual Report on Form 10-K filed with the SEC on March 9, 2018 and subsequent filings with the SEC. The Annual Report on Form 10-K and the Company's other filings with the SEC can be found on the SEC's website at http://www.sec.gov. The Company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.
PREFORMED LINE PRODUCTS COMPANY
STATEMENTS OF CONSOLIDATED OPERATIONS
(In thousands, except per share data) Three Months Ended December 31 Twelve Months Ended December 31
2018 2017 2018 2017
Net sales $105,411 $96,892 $420,878 $378,212
Cost of products sold 73,392 66,137 288,647 259,584
GROSS PROFIT 32,019 30,755 132,231 118,628
Costs and expenses
Selling 9,061 8,180 36,358 34,048
General and administrative 11,539 11,017 45,398 43,160
Research and engineering 4,094 3,505 15,107 14,327
Other operating expense - net (516) 307 2,434 985
24,178 23,009 99,297 92,520
OPERATING INCOME 7,841 7,746 32,934 26,108
Other income (expense)
Interest income 146 104 486 430
Interest expense (298) (230) (1,290) (1,061)
Other income - net 190 71 458 329
38 (55) (346) (302)
INCOME BEFORE INCOME TAXES 7,879 7,691 32,588 25,806
Income taxes 2,615 6,989 6,007 13,152
NET INCOME $5,264 $702 $26,581 $12,654
BASIC EARNINGS PER SHARE
Net Income $1.05 $0.14 $5.28 $2.48
DILUTED EARNINGS PER SHARE
Net Income $1.02 $0.14 $5.21 $2.47
Cash dividends declared per share $0.20 $0.20 $0.80 $0.80
Weighted-average number of shares outstanding -
basic 5,012 5,070 5,032 5,102
Weighted-average number of shares outstanding -
diluted 5,173 5,195 5,107 5,133
PREFORMED LINE PRODUCTS COMPANY
CONSOLIDATED BALANCE SHEETS
December 31,
December 31,
(Thousands of dollars, except share and per share data) 2018 2017
ASSETS
Cash and cash equivalents $43,609 $44,358
Accounts receivable, less allowances of $3,178 ($3,325 in 2017) 73,139 73,972
Inventories - net 85,259 77,886
Prepaids 9,374 8,700
Other current assets 2,882 2,214
TOTAL CURRENT ASSETS 214,263 207,130
Property, plant and equipment - net 102,955 108,598
Other intangibles - net 8,458 10,020
Goodwill 15,621 16,544
Deferred income taxes 6,900 7,774
Other assets 10,600 9,719
TOTAL ASSETS $358,797 $359,785
LIABILITIES AND SHAREHOLDERS' EQUITY
Trade accounts payable $26,414 $25,141
Notes payable to banks 9,042 864
Current portion of long-term debt 1,448 1,448
Accrued compensation and amounts withheld from employees 11,153 11,461
Accrued expenses and other liabilities 21,430 23,919
TOTAL CURRENT LIABILITIES 69,487 62,833
Long-term debt, less current portion 24,960 34,598
Other noncurrent liabilities and deferred income taxes 14,980 23,817
SHAREHOLDERS' EQUITY
Shareholders' equity:
Common shares -$2 par value, 15,000,000 shares authorized, 5,020,410 and
5,038,207 issued and outstanding, as of December 31, 2018 and December 31,
2017 12,662 12,593
Common shares issued to rabbi trust, 269,630 and 298,026 shares at
December 31, 2018 and December 31, 2017, respectively (11,008) (11,834)
Deferred Compensation Liability 11,008 11,834
Paid-in capital 34,401 29,734
Retained earnings 334,170 311,765
Treasury shares, at cost, 1,310,387 and 1,258,069 shares at
December 31, 2018 and December 31, 2017, respectively (72,280) (68,115)
Accumulated other comprehensive loss (59,583) (47,440)
TOTAL SHAREHOLDERS' EQUITY 249,370 238,537
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $358,797 $359,785
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SOURCE Preformed Line Products Company
