Exhibit 99.1
For immediate release | Eric R. Graef | |||
February 23, 2006 | Preformed Line Products | |||
(440) 473-9249 |
PREFORMED LINE PRODUCTS ANNOUNCES FINANCIAL RESULTS
FOR THE 2005 FOURTH QUARTER AND FULL YEAR
FOR THE 2005 FOURTH QUARTER AND FULL YEAR
Mayfield Village, Ohio, February 23, 2006 —Preformed Line Products Company (Nasdaq: PLPC)today reported financial results for the fourth quarter and the full year ended December 31, 2005.
Net income for the fourth quarter ended December 31, 2005 was $883,000, or $.15 per diluted share, compared to $3,806,000, or $.66 per diluted share, for the comparable period in 2004. The 2004 results included a $1,073,000, or $.19 per diluted share, tax benefit as discussed below. Sales for the 2005 fourth quarter were $46,726,000 compared to sales of $48,633,000 in the fourth quarter of 2004.
Net income for the year ended December 31, 2005 was $11,986,000, or $2.07 per diluted share, compared to net income of $13,037,000, or $2.25 per diluted share, for 2004. Included in 2004 was a net gain on the sale of a Japanese joint venture of $1,659,000, or $.29 per diluted share and a one-time $1,073,000 tax benefit, or $.19 per diluted share from the American Jobs Creation Act of 2004. Excluding the net gain on the sale of the Japanese joint venture in 2004 and the tax benefit from the American Jobs Creation Act, 2005 net income increased 16% or $.29 per diluted share.
Sales increased 12% to $205,804,000 for the full year 2005 compared with $183,112,000 for 2004. The sales increase was due primarily to volume increases. Currency had a favorable impact of $4.9 million on sales.
Rob Ruhlman, Chairman and Chief Executive Officer said, “We delivered record sales in the energy and telecommunications market in 2005 in both our domestic and foreign markets. This was accompanied by a strong cash flow. Operating income increased 13% on the 12% sales increase despite rising costs of raw materials and energy and $1.1 million incremental external costs incurred to comply with Sarbanes-Oxley. The fourth quarter results in 2004 were exceptional; our fourth quarter 2005 results were more typical of years prior to 2004. I am optimistic about our outlook for 2006. We are building on the momentum established throughout 2005 and demand for our products remains strong although partially dependent upon our customers continuing their strategy of building fiber-to-the-premise.”
PAGE 2 / PLP ANNOUNCES FOURTH QUARTER RESULTS
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 three domestic manufacturing centers located in Rogers, Arkansas, Albemarle, North Carolina, and Asheville, North Carolina. The Company serves its worldwide market through international operations in Australia, Brazil, Canada, China, England, Mexico, New Zealand, South Africa, Spain and Thailand.
Net income and earnings per share adjusted for the non-recurring sale of the Japanese joint venture and the favorable tax benefit of the American Jobs Creation Act of 2004 are non-GAAP financial measures. The Company believes that both net income and earnings per share as adjusted for exclusion of the net gain on the sale of the Japanese joint venture and the tax benefit of the American Jobs Creation Act assists management and investors in their analysis of the Company’s financial performance when comparing 2004 and 2005 results to each other and prior periods.
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, increases in raw material prices, the Company’s ability to identify, complete and integrate acquisitions for profitable growth, and other factors described under the heading “Forward-Looking Statements” in the Company’s Form 10-K filed with the SEC on March 26, 2005. The Form 10-K and the Company’s other filings with the SEC can be found on the SEC’s website athttp://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
STATEMENTS OF CONSOLIDATED OPERATIONS
Quarter | Year | |||||||||||||||
ended December 31, | ended December 31, | |||||||||||||||
Thousands, except per share data | 2005 | 2004 | 2005 | 2004 | ||||||||||||
Net sales | $ | 46,726 | $ | 48,633 | $ | 205,804 | $ | 183,112 | ||||||||
Cost of products sold | 32,609 | 32,705 | 138,384 | 123,602 | ||||||||||||
GROSS PROFIT | 14,117 | 15,928 | 67,420 | 59,510 | ||||||||||||
Costs and expenses | ||||||||||||||||
Selling | 5,483 | 5,022 | 21,665 | 18,980 | ||||||||||||
General and administrative | 5,928 | 6,128 | 22,392 | 21,160 | ||||||||||||
Research and engineering | 2,065 | 1,343 | 6,700 | 5,666 | ||||||||||||
Other operating expenses (income) — net | 177 | (34 | ) | 219 | (234 | ) | ||||||||||
13,653 | 12,459 | 50,976 | 45,572 | |||||||||||||
Royalty income — net | 334 | 286 | 1,447 | 1,889 | ||||||||||||
OPERATING INCOME | 798 | 3,755 | 17,891 | 15,827 | ||||||||||||
Other income (expense) | ||||||||||||||||
Interest income | 386 | 231 | 1,103 | 696 | ||||||||||||
Interest expense | (106 | ) | (152 | ) | (379 | ) | (429 | ) | ||||||||
Other expense | (28 | ) | (36 | ) | (109 | ) | (145 | ) | ||||||||
252 | 43 | 615 | 122 | |||||||||||||
INCOME BEFORE INCOME TAXES AND EQUITY IN NET INCOME OF JOINT VENTURE | 1,050 | 3,798 | 18,506 | 15,949 | ||||||||||||
Income taxes (benefit) | 167 | (8 | ) | 6,520 | 5,268 | |||||||||||
NET INCOME BEFORE JOINT VENTURE | 883 | 3,806 | 11,986 | 10,681 | ||||||||||||
Equity in net income of joint venture | — | — | — | 2,356 | ||||||||||||
NET INCOME | $ | 883 | $ | 3,806 | $ | 11,986 | $ | 13,037 | ||||||||
Net income per share — basic | $ | 0.15 | $ | 0.66 | $ | 2.09 | $ | 2.27 | ||||||||
Net income per share — diluted | $ | 0.15 | $ | 0.66 | $ | 2.07 | $ | 2.25 | ||||||||
Cash dividends declared per share | $ | 0.20 | $ | 0.20 | $ | 0.80 | $ | 0.80 | ||||||||
Average number of shares outstanding — basic | 5,733 | 5,715 | 5,725 | 5,732 | ||||||||||||
Average number of shares outstanding — diluted | 5,797 | 5,779 | 5,783 | 5,789 | ||||||||||||
PREFORMED LINE PRODUCTS COMPANY
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS
December 31, | December 31, | |||||||
Thousands of dollars, except share data | 2005 | 2004 | ||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | 39,592 | $ | 29,744 | ||||
Accounts receivable, less allowances of $789 ($2,467 in 2004) | 26,481 | 29,217 | ||||||
Inventories-net | 37,618 | 36,264 | ||||||
Deferred income taxes | 3,870 | 3,727 | ||||||
Prepaids and other | 2,832 | 2,651 | ||||||
TOTAL CURRENT ASSETS | 110,393 | 101,603 | ||||||
Property and equipment — net | 48,804 | 48,169 | ||||||
Deferred income taxes | 2,060 | 1,213 | ||||||
Goodwill — net | 2,018 | 2,130 | ||||||
Patents and other intangibles — net | 2,871 | 3,247 | ||||||
Other assets | 2,401 | 2,446 | ||||||
TOTAL ASSETS | $ | 168,547 | $ | 158,808 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Notes payable to banks | $ | 1,156 | $ | 735 | ||||
Current portion of long-term debt | 4,806 | 1,272 | ||||||
Trade accounts payable | 10,878 | 11,111 | ||||||
Accrued compensation and amounts withheld from employees | 5,161 | 4,879 | ||||||
Accrued expenses and other liabilities | 6,406 | 4,368 | ||||||
Accrued profit-sharing and pension contributions | 4,290 | 3,639 | ||||||
Dividends payable | 1,147 | 1,141 | ||||||
Income taxes | 881 | 777 | ||||||
TOTAL CURRENT LIABILITIES | 34,725 | 27,922 | ||||||
Long-term debt, less current portion | 122 | 2,362 | ||||||
Deferred income taxes | 157 | 187 | ||||||
SHAREHOLDERS’ EQUITY | ||||||||
Common shares — $2 par value, 15,000,000 shares authorized, 5,734,797 and 5,706,713 outstanding, net of 511,159 and 491,159 treasury shares at par, respectively | 11,470 | 11,413 | ||||||
Paid in capital | 1,237 | 545 | ||||||
Retained earnings | 135,481 | 128,738 | ||||||
Accumulated other comprehensive loss | (14,645 | ) | (12,359 | ) | ||||
TOTAL SHAREHOLDERS’ EQUITY | 133,543 | 128,337 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 168,547 | $ | 158,808 | ||||