Exhibit 99.1
For immediate release October 31, 2006 | Eric R. Graef Preformed Line Products (440) 473-9249 |
PREFORMED LINE PRODUCTS ANNOUNCES FINANCIAL RESULTS FOR THE
THIRD QUARTER AND FIRST NINE MONTHS OF 2006
THIRD QUARTER AND FIRST NINE MONTHS OF 2006
Mayfield Village, Ohio, October 31, 2006 —Preformed Line Products Company (Nasdaq: PLPC)today reported financial results for the third quarter and the first nine months of 2006.
Net income for the quarter ended September 30, 2006 was $3,999,000, or $.70 per diluted share, compared to $4,179,000, or $.72 per diluted share, for the comparable period in 2005. Net sales in the third quarter 2006 were $56,439,000, a 1% increase from last year’s $55,614,000.
Net income for the nine months ended September 30, 2006 was $10,028,000, or $1.75 per diluted share, compared to the prior year’s $11,103,000, or $1.92 per diluted share. Net sales increased 4% over 2005, to $165,172,000 for the first nine months of 2006 compared to $159,078,000 in 2005.
Rob Ruhlman, Chairman and Chief Executive Officer, said, “Our sales increase continues to be driven by our strong international operations. Foreign currency had a favorable impact on sales of $.6 million for the quarter and $1.9 million for the first nine months. Domestic sales were lower in the third quarter than the previous year, primarily because last year included $3 million of hurricane related sales. Our year to date domestic sales have also been negatively affected by decreased spending on the construction and maintenance of copper communications networks by the telcos. Our margins are being negatively impacted by the higher cost of raw material and rising energy costs. However we are beginning to see the positive effect of price increases implemented at the beginning of the quarter. The increase in our costs and expenses reflect our continuing investment in our people, particularly in the research and technology side of the business.”
PAGE 2 / PLP ANNOUNCES THIRD 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.
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 15, 2006. 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 INCOME
(Unaudited)
STATEMENTS OF CONSOLIDATED INCOME
(Unaudited)
Three month periods | Nine month periods | |||||||||||||||
In thousands, except per share data | ended September 30, | ended September 30, | ||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
Net sales | $ | 56,439 | $ | 55,614 | $ | 165,172 | $ | 159,078 | ||||||||
Cost of products sold | 37,677 | 36,355 | 111,493 | 105,775 | ||||||||||||
GROSS PROFIT | 18,762 | 19,259 | 53,679 | 53,303 | ||||||||||||
Costs and expenses | ||||||||||||||||
Selling | 5,475 | 5,608 | 16,872 | 16,182 | ||||||||||||
General and administrative | 5,695 | 5,985 | 17,393 | 16,464 | ||||||||||||
Research and engineering | 1,928 | 1,565 | 5,807 | 4,635 | ||||||||||||
Other operating expenses — net | 136 | 112 | 318 | 42 | ||||||||||||
13,234 | 13,270 | 40,390 | 37,323 | |||||||||||||
Royalty income — net | 287 | 576 | 1,004 | 1,113 | ||||||||||||
OPERATING INCOME | 5,815 | 6,565 | 14,293 | 17,093 | ||||||||||||
Other income (expense) | ||||||||||||||||
Interest income | 389 | 263 | 1,144 | 717 | ||||||||||||
Interest expense | (164 | ) | (93 | ) | (399 | ) | (273 | ) | ||||||||
Other expense — net | (19 | ) | (27 | ) | (53 | ) | (81 | ) | ||||||||
206 | 143 | 692 | 363 | |||||||||||||
INCOME BEFORE INCOME TAXES | 6,021 | 6,708 | 14,985 | 17,456 | ||||||||||||
Income taxes | 2,022 | 2,529 | 4,957 | 6,353 | ||||||||||||
NET INCOME | $ | 3,999 | $ | 4,179 | $ | 10,028 | $ | 11,103 | ||||||||
Net income per share — basic | $ | 0.71 | $ | 0.73 | $ | 1.76 | $ | 1.94 | ||||||||
Net income per share — diluted | $ | 0.70 | $ | 0.72 | $ | 1.75 | $ | 1.92 | ||||||||
Cash dividends declared per share | $ | 0.20 | $ | 0.20 | $ | 0.60 | $ | 0.60 | ||||||||
Weighted average number of shares outstanding — basic | 5,638 | 5,724 | 5,696 | 5,723 | ||||||||||||
Weighted average number of shares outstanding — diluted | 5,688 | 5,793 | 5,746 | 5,781 | ||||||||||||
PREFORMED LINE PRODUCTS COMPANY
CONSOLIDATED BALANCE SHEETS
(Unaudited)
CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 30, | December 31, | |||||||
Thousands of dollars, except share data | 2006 | 2005 | ||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | 26,026 | $ | 39,592 | ||||
Accounts receivable, less allowances of $976 ($789 in 2005) | 36,389 | 26,481 | ||||||
Inventories-net | 39,316 | 37,618 | ||||||
Deferred income taxes | 4,430 | 3,870 | ||||||
Prepaids and other | 3,153 | 2,832 | ||||||
TOTAL CURRENT ASSETS | 109,314 | 110,393 | ||||||
Property and equipment — net | 52,567 | 48,804 | ||||||
Deferred income taxes | 2,410 | 2,060 | ||||||
Goodwill — net | 2,073 | 2,018 | ||||||
Patents and other intangibles — net | 2,628 | 2,871 | ||||||
Other assets | 2,476 | 2,401 | ||||||
TOTAL ASSETS | $ | 171,468 | $ | 168,547 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Notes payable to banks | $ | 2,645 | $ | 1,156 | ||||
Current portion of long-term debt | 3,404 | 4,806 | ||||||
Trade accounts payable | 12,840 | 10,878 | ||||||
Accrued compensation and amounts withheld from employees | 6,568 | 5,161 | ||||||
Accrued expenses and other liabilities | 5,284 | 6,406 | ||||||
Accrued profit-sharing and pension contributions | 4,385 | 4,290 | ||||||
Dividends payable | 1,072 | 1,147 | ||||||
Income taxes | 2,849 | 881 | ||||||
Deferred income taxes | 11 | — | ||||||
TOTAL CURRENT LIABILITIES | 39,058 | 34,725 | ||||||
Long-term debt, less current portion | 1,836 | 122 | ||||||
Deferred income taxes | 385 | 157 | ||||||
SHAREHOLDERS’ EQUITY | ||||||||
Common shares — $2 par value, 15,000,000 shares authorized, 5,360,259 and 5,734,797 outstanding, net of 365,311 and 511,159 treasury shares at par, respectively | 10,721 | 11,470 | ||||||
Paid in capital | 1,515 | 1,237 | ||||||
Retained earnings | 130,774 | 135,481 | ||||||
Accumulated other comprehensive loss | (12,821 | ) | (14,645 | ) | ||||
TOTAL SHAREHOLDERS’ EQUITY | 130,189 | 133,543 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 171,468 | $ | 168,547 | ||||