Exhibit 99.1
For immediate release | Eric R. Graef | |
April 23, 2007 | Preformed Line Products | |
(440) 473-9249 |
PREFORMED LINE PRODUCTS ANNOUNCES IMPROVED FINANCIAL RESULTS
FOR THE QUARTER ENDED MARCH 31, 2007
FOR THE QUARTER ENDED MARCH 31, 2007
• | Net income increased 49% for the first quarter on a 7% increase in net sales | ||
• | Earnings per diluted share increased 60% for the first three months |
Mayfield Village, Ohio, April 23, 2007 —Preformed Line Products Company (Nasdaq:PLPC)today reported financial results for the first quarter ended March 31, 2007.
Net income for the quarter ended March 31, 2007 increased 49% to $3,718,000, or $.69 per diluted share, compared to $2,499,000, or $.43 per diluted share, for the comparable period in 2006.
Sales for the quarter of $56,531,000 were 7% higher than sales of $52,635,000 in the first quarter of 2006.
Rob Ruhlman, Chairman and Chief Executive Officer, said, “We experienced improvements in
our major domestic markets during the quarter. Sales in our domestic core markets of power and telecommunications improved 21% in the first quarter of 2007 compared to 2006. Investment in new projects to upgrade the power grid by the electric utility companies was the major driver of this increase. We also benefited from increasing investment by cable companies to defend their market share as well as the investment by communication companies in running fiber to the premise. Foreign sales were down less than 1% from the previous year; however, currency had a 4% favorable impact on sales. I am pleased with the increase in net income of nearly 50% and am optimistic about the rest of the year.”
our major domestic markets during the quarter. Sales in our domestic core markets of power and telecommunications improved 21% in the first quarter of 2007 compared to 2006. Investment in new projects to upgrade the power grid by the electric utility companies was the major driver of this increase. We also benefited from increasing investment by cable companies to defend their market share as well as the investment by communication companies in running fiber to the premise. Foreign sales were down less than 1% from the previous year; however, currency had a 4% favorable impact on sales. I am pleased with the increase in net income of nearly 50% and am optimistic about the rest of the year.”
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 four domestic manufacturing centers located in Rogers, Arkansas, Albuquerque, New Mexico, 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, 2007. 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)
In thousands, except per share data | Three month periods ended March 31, | |||||||
2007 | 2006 | |||||||
Net sales | $ | 56,531 | $ | 52,635 | ||||
Cost of products sold | 37,623 | 36,164 | ||||||
GROSS PROFIT | 18,908 | 16,471 | ||||||
Costs and expenses | ||||||||
Selling | 5,963 | 5,767 | ||||||
General and administrative | 5,816 | 5,796 | ||||||
Research and engineering | 1,946 | 1,873 | ||||||
Other operating expenses — net | 186 | 61 | ||||||
13,911 | 13,497 | |||||||
Royalty income — net | 381 | 346 | ||||||
OPERATING INCOME | 5,378 | 3,320 | ||||||
Other income (expense) | ||||||||
Interest income | 305 | 402 | ||||||
Interest expense | (165 | ) | (102 | ) | ||||
Other expense — net | (6 | ) | (19 | ) | ||||
134 | 281 | |||||||
INCOME BEFORE INCOME TAXES | 5,512 | 3,601 | ||||||
Income taxes | 1,794 | 1,102 | ||||||
NET INCOME | $ | 3,718 | $ | 2,499 | ||||
Net income per share — basic | $ | 0.69 | $ | 0.44 | ||||
Net income per share — diluted | $ | 0.69 | $ | 0.43 | ||||
Cash dividends declared per share | $ | 0.20 | $ | 0.20 | ||||
Weighted average number of shares outstanding — basic | 5,360 | 5,731 | ||||||
Weighted average number of shares outstanding — diluted | 5,406 | 5,792 | ||||||
In 2007 we adopted FASB Staff Position No. AUG AIR — 1 retrospectively. Consequently for the three month period ended March 31, 2006 net income increased by $15.
PREFORMED LINE PRODUCTS COMPANY
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
March 31, | December 31, | |||||||
Thousands of dollars, except share data | 2007 | 2006 | ||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | 21,392 | $ | 29,949 | ||||
Accounts receivable, less allowances of $1,088 ($1,209 in 2006) | 38,336 | 30,029 | ||||||
Inventories — net | 44,183 | 40,415 | ||||||
Prepaids and other | 7,289 | 5,032 | ||||||
TOTAL CURRENT ASSETS | 111,200 | 105,425 | ||||||
Property and equipment — net | 54,016 | 52,810 | ||||||
Deferred income taxes | 3,914 | 5,145 | ||||||
Goodwill — net | 4,793 | 2,166 | ||||||
Patents and other intangibles — net | 2,465 | 2,546 | ||||||
Other assets | 2,653 | 2,760 | ||||||
TOTAL ASSETS | $ | 179,041 | $ | 170,852 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Notes payable to banks | $ | 4,816 | $ | 3,738 | ||||
Current portion of long-term debt | 2,168 | 2,157 | ||||||
Trade accounts payable | 14,865 | 11,606 | ||||||
Accrued compensation and amounts withheld from employees | 6,218 | 5,556 | ||||||
Accrued expenses and other liabilities | 8,459 | 10,022 | ||||||
TOTAL CURRENT LIABILITIES | 36,526 | 33,079 | ||||||
Long-term debt, less current portion | 1,740 | 2,204 | ||||||
Other non-current liabilities and deferred income taxes | 7,074 | 4,421 | ||||||
SHAREHOLDERS’ EQUITY | ||||||||
Common shares — $2 par value, 15,000,000 shares authorized, 5,358,437 and 5,360,259 outstanding, net of 367,333 and 365,311 treasury shares at par, respectively | 10,717 | 10,721 | ||||||
Paid in capital | 1,629 | 1,562 | ||||||
Retained earnings | 133,686 | 131,949 | ||||||
Accumulated other comprehensive loss | (12,331 | ) | (13,084 | ) | ||||
TOTAL SHAREHOLDERS’ EQUITY | 133,701 | 131,148 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 179,041 | $ | 170,852 | ||||
In 2007 we adopted FASB Staff Position No. AUG AIR — 1 retrospectively. Consequently at December 31, 2006 retained earnings increased by $215, accrued expenses decreased by $326 and deferred income taxes decreased $111.