NOTE A – BASIS OF PRESENTATION

The accompanying unaudited financial statements of Preformed Line Products Company (“the Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, theseHowever, the Company‘s independent registered public accounting firm has not completed its timely review of our interim financial statements included in this Form 10-Q, as required by Rule 10-01(d) of Regulation S-X. These consolidated financial statements do not include all of the information and notes required by accounting principles generally accepted in the United States of America for complete financial statements. Certain amounts in the prior year financial statements have been adjusted for the retrospective application of Financial Accounting Standards Board (FASB) Staff Position AUG AIR – 1, “Accounting for Planned Major Maintenance Activities,” and the beginning of the year retained earnings has been reduced for the cumulative effect of adopting FASB Interpretation (FIN) No. 48, “Accounting for Uncertainty in Income Taxes” (see Note H). The preparation of these consolidated financial statements requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the accompanying notes. Actual results could differ from these estimates. However, in the opinion of management, these consolidated financial statements contain all estimates and adjustments required to fairly present the financial position, results of operations, and cash flows for the interim periods. Operating results for the three-month period ended March 31, 20062007 are not necessarily indicative of the results to be expected for the year ending December 31, 2006.2007.

The consolidated balance sheet at December 31, 20052006 has been derived from the audited consolidated financial statements, but does not include all of the information and notes required by accounting principles generally accepted in the United States of America for complete financial statements. For further information, refer to the consolidated financial statements and notes to consolidated financial statements included in the Company’s Form 10-K for 20052006 filed with the Securities and Exchange Commission.

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

The first quarterly contribution was made on April 17, 200613, 2007 in the amount of $.3$.1 million. The Company presently anticipates contributing an additional $.8$.2 million to fund its pension plan in 20062007 for a total of $1.1$.3 million.

withinThere were 15,000 options granted during the contractual life ofthree months ended March 31, 2007. There were no options granted during the option is based onthree months ended March 31, 2006. The fair value for the U.S zero coupon Treasury yieldstock options granted in effect2007 was estimated at the timedate of grant. Forfeitures have been estimated to be zero.grant using the Black-Scholes option-pricing model with the following weighted average assumptions:

Activity in the Company’s stock option plan for the three-month periodsthree months ended March 31, 20062007 was as follows:

EXECUTIVE SUMMARY

Our net sales for the quarter ended March 31, 20062007 increased 4%7% and gross profit decreased 1%increased 15% compared to the same period in 2005.2006. Net sales increased as a result of increased foreigndomestic sales coupled with the favorable impact of the conversion of local currencies to U.S. dollars partially offset by a decrease in sales intowithin our domestic communication market.South American and European markets. Gross profit decreased slightlyincreased as a result of rising material and transportationincreased sales while manufacturing fixed costs offsetting the increase in sales.remained relatively unchanged. The lowerincreased gross profit coupled with anpartially offset by a 3% increase in costs and expenses resulted in a decreasean increase in net income of 23%49%, or thirteen cents$.26 per diluted share, when compared to the same period in 2005.2006.

For the three months ended March 31, 2006,2007, net sales were $52.6$56.5 million, an increase of $1.9$3.9 million, or 4%7%, from the same period in 2005.2006. Domestic net sales decreased $1.6increased $4.1 million, or 5%15%. The decreaseincrease in domestic net sales was due primarily to volume decreases in the communications market partially offset by a 21% increase in sales increases in the domestic energy markets. We anticipate the domestic energy market to show

continued strength for the remainder of 2007 as long as the general economy remains strong for the remainder of 2006. Despite ourstrong. Our first quarter net sales in the domestic telecommunications market increased 7% while our net sales in the data communications market not being at levels anticipated, wedecreased 13%. We expect continued growthan increase in demand for our communication products for the remainder of 2007 as a result of increasing investments by cable television companies to defend their market share as well as the investment by communication companies in Fiber-to-the-Premises (FTTP) installations in 2006 but

and a $.3 million increase in legal, audit and travel expenses. Researchresearch and engineering expenses of $1.3 million remained relatively unchanged from the same period in 2006. Other operating expense increased $.2 million primarily as a result of increased testingan adjustment to the carrying value of new FTTP and closure products and personnel costs. Other operating expense decreased $.1 million.certain insurance policies.

Foreign costcosts and expenses of $4.9$5.1 million for the three months ended March 31, 20062007 increased $.5$.1 million, or 12%3%, compared to the same period in 2005. Foreign selling expense2006. Net of the unfavorable impact on foreign cost and expenses when foreign costs in local currencies were translated into U.S. dollars, foreign costs and expenses remained relatively unchanged from the same period in 2005. General and administrative expense increased $.4 million primarily related to an increase in personnel costs.

In November 2004,September 2006, the Financial Accounting Standards Board (FASB)FASB issued Statement of Financial AccountingAccount Standards (SFAS) No. 151, “Inventory Costs,157, “Fair Value Measurements.” to clarify the accounting for abnormal amounts of idle facility expense, freight, handling costs and wasted material. This standard requires that such items be recognized as current-period charges. Thedefines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. This standard also establishesdoes not require new fair value measurements; however the conceptapplication of “normal capacity”this standard may change current practice for an entity. This standard is effective for financial statements issued for fiscal years beginning after November 15, 2007 and requires the allocation of fixed production overhead to inventory based on the normal capacity of the production facilities. Any unallocated overhead must be recognized as an expense in the period incurred.interim periods within those fiscal periods. The Company adoptedis evaluating the impact this standard effective January 1, 2006, and the impact was immaterialwill have on its consolidated financial statements.

In December 2004,February 2007, the FASB issued SFAS No. 153, “Exchanges of Nonmonetary Assets.159, “The Fair Value Option for Financial Assets and Financial Liabilities Including an Amendment to FASB No. 115.” This standard amended APB Opinionpermits entities to measure certain financial assets and liabilities at fair value. The fair value option established by this standard permits all entities to choose to measure eligible items at fair value at specified election dates. A business entity shall report unrealized gains and losses on items for which the fair values option has been elected at each subsequent reporting period. The fair value option election is irrevocable, unless a new election date occurs. SFAS No. 29,159 establishes presentation and disclosure requirements to help financial statement users understand the effect of the entity’s election on earnings, but does not eliminate disclosure requirements of other accounting standards. Assets and liabilities that are measured at fair value must be displayed on the face of the balance sheet. This standard is effective as of the beginning of the first fiscal year that begins after November 15, 2007. The Company is evaluating the impact this standard will have on its consolidated financial statements.

In June 2006, the FASB issued FASB Interpretation No. 48, “Accounting for Nonmonetary Transactions,” to eliminateUncertainty in Income taxes” an interpretation of FASB Statement No. 109, “Accounting for Income Taxes” (FIN 48). This interpretation prescribes a recognition threshold and measurement attribute for the exception from fair valuefinancial statement recognition and measurement for nonmonetary exchanges of similar productive assets. This standard replaces this exception with a general exception from fair value measurement for exchanges of nonmonetary assets that do not have commercial substance. A nonmonetary exchange has commercial substance if the future cash flows of the entity aretax position taken or expected to change significantly asbe taken in a resulttax return. Under FIN 48, the impact of an uncertain income tax position on the exchange.income tax return must be recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain tax position will not be recognized if it has less than a 50% likelihood of being sustained. This statementinterpretation also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. This interpretation is effective for all nonmonetary asset exchanges completed by the Company starting January 1, 2006. 2007.

The Company adopted this standard and it did not have an impactthe provisions of FIN 48 on its consolidated financial statements, asJanuary 1, 2007. As a result of the implementation of FIN 48, the Company recognized a $.8 million increase in the liability for unrecognized tax benefits which was accounted for as a reduction in retained earnings. The total amount of unrecognized tax benefits, including the accrual for interest and penalties, as of the date of adoption was $1.8 million, all of which would affect the effective tax rate if recognized.

In September 2006, the FASB issued FASB Staff Position AUG AIR-1, “Accounting for Planned Major Maintenance Activities.” This staff position amends certain provisions in the AICPA Industry Audit Guide, Audits of Airlines (Airline Guide), and APB No. 28, Interim Financial Reporting. This staff position prohibits the use of the accrue-in-advance method of accounting for planned major maintenance activities in annual and interim financial reporting periods. The Company adopted the direct expense method effective January 1, 2007, and has not engagedretrospectively applied this new accounting principle to prior periods.

The cumulative effect of the retrospective application of the new accounting principle to the carrying value of assets and liabilities and the offsetting adjustment to opening January 1, 2006 retained earnings was a decrease in nonmonetary exchangesdeferred tax assets of assets.$.1 million, a decrease in accrued liabilities of $.3 million and an increase in beginning retained earnings

The Company operates manufacturing facilities and offices around the world and uses fixed and floating rate debt to finance the Company’s global operations. As a result, the Company is subject to business risks inherent in non-U.S. activities, including political and economic uncertainty, import and export limitations, and market risk related to changes in interest rates and foreign currency exchange rates. The Company believes the political and economic risks related to the Company’s foreign operations are mitigated due to the stability of the countries in which the Company’s largest foreign operations are located.

The Company has no foreign currency forward exchange contracts outstanding at March 31, 2007. The Company does not hold derivatives for trading purposes.

The Company is exposed to market risk, including changes in interest rates. The Company is subject to interest rate risk on its variable rate revolving credit facilities and term notes, which consisted of borrowings of $6.4$8.7 million at March 31, 2006.2007. A 100 basis point increase in the interest rate would have resulted in an increase in interest expense of less than $.1 million for the three-month period ended March 31, 2006.2007.

The Company’s primary currency rate exposures are related to foreign denominated debt, intercompany debt, foreign exchange contracts, foreign denominated receivables, and cash and short-term investments. A hypothetical 10% change in currency rates would have a favorable/unfavorable impact on fair values of $1.5 million and on income before income taxes of less than $.1 million.

An evaluation was performed under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and Vice President of Finance, of the effectiveness of the Company’s disclosure controls and procedures (as defined in Securities and Exchange Act Rules 13a-15(e) and 15d-15(e)) as of March 31, 2006.2007. Based on the evaluation, the Company’s management, including the Chief Executive Officer and Vice President of Finance, concluded that the Company’s disclosure controls and procedures were effective as of March 31, 2006.2007.

There were no changes in the Company’s internal control over financial reporting during the quarter ended March 31, 20062007 that materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.

The Company is subject to various legal proceedings and claims that arise in the ordinary course of business. In the opinion of management, the amount of any ultimate liability with respect to these actions will not materially affect our

Cautionary Statement for “Safe Harbor” Purposes Under The Private Securities Litigation Reform Act of 1995

This Form 10-Q and other documents the Company files with the Securities and Exchange Commission contain forward-looking statements regarding the Company’s and management’s beliefs and expectations. As a general matter, forward-looking statements are those focused upon future plans, objectives or performance (as opposed to historical items) and include statements of anticipated events or trends and expectations and beliefs relating to matters not historical in nature. Such forward-looking statements are subject to uncertainties and factors relating to the Company’s operations and business environment, all of which are difficult to predict and many of which are beyond the Company’s control. Such uncertainties and factors could cause the Company’s actual results to differ materially from those matters expressed in or implied by such forward-looking statements.

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:

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.