Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of common shares outstanding as of ~~August~~May 1, ~~2017: 5,115,981.~~2018: 5,048,758.

June 30, 2017

December 31,
2016

(Thousands of dollars, except share and per share data)

(Unaudited)

ASSETS

Cash and cash equivalents

$
28,002

$
30,737

Accounts receivable, less allowances of $3,221 ($3,210 in 2016)

79,686

63,415

Inventories - net

75,498

74,484

Prepaids

4,040

3,353

Prepaid taxes

5,945

8,682

Other current assets

2,345

8,436

TOTAL CURRENT ASSETS

195,516

189,107

Property, plant and equipment - net

107,234

105,104

Intangibles - net

10,468

10,475

Goodwill

16,478

15,769

Deferred income taxes

10,897

10,208

Other assets

10,978

10,274

TOTAL ASSETS

$
351,571

$
340,937

LIABILITIES AND SHAREHOLDERS’ EQUITY

Trade accounts payable

$
24,145

$
21,978

Notes payable to banks

1,379

1,315

Current portion of long-term debt

1,448

1,448

Accrued compensation and amounts withheld from employees

12,355

10,040

Accrued expenses and other liabilities

13,660

12,331

Accrued profit-sharing and other benefits

4,000

6,251

Dividends payable

1,055

1,037

Income taxes payable

1,038

1,055

TOTAL CURRENT LIABILITIES

59,080

55,455

Long-term debt, less current portion

36,570

42,943

Unfunded pension obligation

10,298

10,423

Deferred income taxes

2,201

2,078

Other noncurrent liabilities

6,825

6,495

SHAREHOLDERS’ EQUITY

Shareholders’ equity:

Common shares - $2 par value per share, 15,000,000 shares authorized, 5,115,981 and
   5,117,753 issued and outstanding, at June 30, 2017 and December 31, 2016,
   respectively

12,514

12,508

Common shares issued to rabbi trust, 297,840 and 297,281 shares at June 30, 2017
   and December 31, 2016, respectively

(12,089
)

(12,054
)
Deferred compensation liability

12,089

12,054

Paid-in capital

25,916

24,629

Retained earnings

306,979

303,415

Treasury shares, at cost, 1,140,816 and 1,136,443 shares at June 30, 2017 and
   December 31, 2016, respectively

(59,880
)

(59,640
)
Accumulated other comprehensive loss

(48,932
)

(57,369
)
TOTAL SHAREHOLDERS’ EQUITY

236,597

223,543

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

$
351,571

$
340,937

Three Months Ended June 30

Six Months Ended June 30

2017

2016

2017

2016

(Thousands of dollars, except per share data)

Net sales

$
97,512

$
83,220

$
182,081

$
161,903

Cost of products sold

67,839

56,414

127,743

110,807

GROSS PROFIT

29,673

26,806

54,338

51,096

Costs and expenses

Selling

8,626

8,183

16,910

15,814

General and administrative

10,772

10,962

21,101

21,049

Research and engineering

3,612

3,609

7,301

7,347

Other operating (income) expense - net

369

(27
)

474

(880
)

23,379

22,727

45,786

43,330

OPERATING INCOME

6,294

4,079

8,552

7,766

Other income (expense)

Interest income

160

68

264

143

Interest expense

(277
)

(166
)

(577
)

(324
)
Other income - net

81

(208
)

137

(156
)

(36
)

(306
)

(176
)

(337
)
INCOME BEFORE INCOME TAXES

6,258

3,773

8,376

7,429

Income taxes

2,102

1,018

2,702

2,016

NET INCOME

$
4,156

$
2,755

$
5,674

$
5,413

BASIC EARNINGS PER SHARE

Net income

$
0.81

$
0.53

$
1.11

$
1.04

DILUTED EARNINGS PER SHARE

Net income

$
0.81

$
0.53

$
1.11

$
1.04

Cash dividends declared per share

$
0.20

$
0.20

$
0.40

$
0.40

Weighted-average number of shares outstanding - basic

5,116

5,186

5,117

5,198

Weighted-average number of shares outstanding - diluted

5,127

5,208

5,132

5,218

Six Months Ended June 30

2017

2016

(Thousands of dollars)

OPERATING ACTIVITIES

Net income

$
5,674

$
5,413

Adjustments to reconcile net income to net cash provided by (used in) operations:

Depreciation and amortization

5,873

5,602

Provision for accounts receivable allowances

777

132

Provision for inventory reserves

722

864

Deferred income taxes

(790
)

(815
)
Share-based compensation expense

1,140

506

Gain on sale of property and equipment

(13
)

(11
)
Other - net

276

415

Changes in operating assets and liabilities

Accounts receivable

(15,284
)

116

Inventories

539

(1,585
)
Trade accounts payable and accrued liabilities

2,035

887

Income taxes - net

2,714

(1,695
)
Other - net

(1,644
)

207

NET CASH PROVIDED BY OPERATING ACTIVITIES

2,019

10,036

INVESTING ACTIVITIES

Capital expenditures

(4,554
)

(19,677
)
Proceeds from the sale of property and equipment

1

61

Restricted cash and maturity (purchase) of fixed-term deposits - net

6,923

(1,314
)
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES

2,370

(20,930
)
FINANCING ACTIVITIES

Increase in notes payable to banks

2

337

Proceeds from the issuance of long-term debt

25,038

43,132

Payments of long-term debt

(31,471
)

(28,862
)
Dividends paid

(2,092
)

(2,102
)
Excess tax expenses from share-based awards

0

8

Proceeds from issuance of common shares

0

110

Purchase of common shares for treasury

(238
)

(2,032
)
Purchase of common shares for treasury from related parties

(2
)

(33
)
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES

(8,763
)

10,558

Effects of exchange rate changes on cash and cash equivalents

1,639

(1,914
)
Net decrease in cash and cash equivalents

(2,735
)

(2,250
)
Cash and cash equivalents at beginning of year

30,737

30,393

CASH AND CASH EQUIVALENTS AT END OF PERIOD

$
28,002

$
28,143

	March 31, 2018			December 31, 2017
(Thousands of dollars, except share and per share data)	(Unaudited)
ASSETS
Cash and cash equivalents	$	45,488		$	44,358
Accounts receivable, less allowances of $3,302 ($3,325 in 2017)		77,421			73,972
Inventories - net		83,342			77,886
Prepaids		5,274			3,434
Prepaid taxes		3,658			5,266
Other current assets		2,592			2,214
TOTAL CURRENT ASSETS		217,775			207,130
Property, plant and equipment - net		109,836			108,598
Intangibles - net		9,818			10,020
Goodwill		16,622			16,544
Deferred income taxes		7,908			7,774
Other assets		14,002			9,719
TOTAL ASSETS	$	375,961		$	359,785
LIABILITIES AND SHAREHOLDERS’ EQUITY
Trade accounts payable	$	27,653		$	25,141
Notes payable to banks		1,835			864
Current portion of long-term debt		1,448			1,448
Accrued compensation and amounts withheld from employees		11,653			11,461
Accrued expenses and other liabilities		13,329			14,686
Accrued profit-sharing and other benefits		2,718			6,284
Dividends payable		1,058			1,046
Income taxes payable		1,898			1,903
TOTAL CURRENT LIABILITIES		61,592			62,833
Long-term debt, less current portion		43,793			34,598
Unfunded pension obligation		10,583			10,664
Deferred income taxes		2,046			2,090
Other noncurrent liabilities		10,926			11,063
SHAREHOLDERS’ EQUITY
Shareholders’ equity:
Common shares - $2 par value per share, 15,000,000 shares authorized, 5,048,758 and 5,038,207 issued and outstanding, at March 31, 2018 and December 31, 2017, respectively		12,635			12,593
Common shares issued to rabbi trust, 289,138 and 289,026 shares at March 31, 2018 and December 31, 2017, respectively		(11,849	)		(11,834	)
Deferred compensation liability		11,849			11,834
Paid-in capital		30,576			29,734
Retained earnings		316,275			311,765
Treasury shares, at cost, 1,268,976 and 1,258,069 shares at March 31, 2018 and December 31, 2017, respectively		(68,948	)		(68,115	)
Accumulated other comprehensive loss		(43,517	)		(47,440	)
TOTAL SHAREHOLDERS’ EQUITY		247,021			238,537
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	375,961		$	359,785

	Three Months Ended March 31
	2018			2017
(Thousands of dollars, except per share data)
Net sales	$	98,139		$	84,569
Cost of products sold		66,621			59,904
GROSS PROFIT		31,518			24,665
Costs and expenses
Selling		8,861			8,284
General and administrative		10,916			10,329
Research and engineering		3,661			3,690
Other operating expense - net		335			104
		23,773			22,407
OPERATING INCOME		7,745			2,258
Other income (expense)
Interest income		95			104
Interest expense		(280	)		(299	)
Other income - net		69			55
		(116	)		(140	)
INCOME BEFORE INCOME TAXES		7,629			2,118
Income taxes		2,101			600
NET INCOME	$	5,528		$	1,518
BASIC EARNINGS PER SHARE
Net income	$	1.10		$	0.30
DILUTED EARNINGS PER SHARE
Net income	$	1.09		$	0.30
Cash dividends declared per share	$	0.20		$	0.20
Weighted-average number of shares outstanding - basic		5,046			5,118
Weighted-average number of shares outstanding - diluted		5,064			5,130

	Three Months Ended March 31
	2018			2017
(Thousands of dollars)
OPERATING ACTIVITIES
Net income	$	5,528		$	1,518
Adjustments to reconcile net income to net cash provided by (used in) operations:
Depreciation and amortization		3,265			2,972
Provision for accounts receivable allowances		201			287
Provision for inventory reserves		869			457
Deferred income taxes		(154	)		(289	)
Share-based compensation expense		731			561
Gain on sale of property and equipment		(31	)		(7	)
Other - net		183			193
Changes in operating assets and liabilities
Accounts receivable		(2,635	)		(6,144	)
Inventories		(4,818	)		(1,517	)
Trade accounts payable and accrued liabilities		(3,112	)		(210	)
Income taxes - net		1,733			1,997
Other - net		(2,787	)		(1,387	)
NET CASH USED IN OPERATING ACTIVITIES		(1,027	)		(1,569	)
INVESTING ACTIVITIES
Capital expenditures		(2,699	)		(2,217	)
Proceeds from the sale of property and equipment		0			17
Purchase of marketable securities		(4,308	)		0
Fixed-term deposits	0				2,469
NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES		(7,007	)		269
FINANCING ACTIVITIES
Increase (decrease) in notes payable to banks		936			(695	)
Proceeds from the issuance of long-term debt		20,303			15,463
Payments of long-term debt		(11,112	)		(13,155	)
Dividends paid		(1,008	)		(1,037	)
Purchase of common shares for treasury		(110	)		0
Purchase of common shares for treasury from related parties		(723	)		(107	)
NET CASH PROVIDED BY FINANCING ACTIVITIES		8,286			469
Effects of exchange rate changes on cash, cash equivalents and restricted cash		939			1,046
Net increase in cash, cash equivalents and restricted cash		1,191			215
Cash, cash equivalents and restricted cash at beginning of year⁽¹⁾		45,579			32,540
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD⁽¹⁾	$	46,770		$	32,755

The accompanying unaudited consolidated financial statements of Preformed Line Products Company and subsidiaries (the “Company” or “PLPC”) have been prepared in accordance with United States of America (U.S.) generally accepted accounting principles (GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X.

The preparation of these consolidated financial statements requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and the accompanying notes. Actual results could differ from these estimates. In the opinion of management, these consolidated financial statements contain all estimates and adjustments, consisting of normal recurring accruals, required to fairly present the financial position, results of operations, and cash flows for the interim periods. Operating results for the three ~~and six~~ months ended ~~June 30, 2017~~March 31, 2018 are not necessarily indicative of the results to be expected for the full-year ending December 31, ~~2017.~~2018.

The Consolidated Balance Sheet at December 31, ~~2016~~2017 has been derived from the audited consolidated financial statements but does not include all of the information and notes required by U.S. GAAP for complete financial statements. For further information, refer to the consolidated financial statements and notes to consolidated financial statements included in the Company’s ~~2016~~2017 Annual Report on Form 10-K filed on March ~~10, 2017~~9, 2018 with the Securities and Exchange Commission.

Net sales include products and shipping and handling charges, net of estimates for product returns. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products. All revenue is recognized when the Company satisfies the performance obligations under the contract and control of the product is transferred to the customer, primarily based on shipping terms. Revenue for shipping and handling charges are recognized at the time the products are shipped to, delivered to or picked up by the customer. The Company estimates product returns based on historical return rates.

Cost of inventories for certain material is determined using the last-in-first-out (LIFO) method and totaled approximately ~~$27.0~~$24.3 million at ~~June 30, 2017~~March 31, 2018 and ~~$28.6~~$25.1 million at December 31, ~~2016.~~2017. An actual valuation of inventories under the LIFO method can be made only at the end of the year based on the inventory levels and costs at that time. Accordingly, interim LIFO calculations are based on management’s estimates of expected year-end inventory levels and costs. Because these estimates are subject to change and may be different than the actual inventory levels and costs at the end of the year, interim results are subject to the final year-end LIFO inventory valuation. During ~~both~~ the three ~~and six-month periods~~months ended ~~June 30,~~March 31, 2018 and 2017, the net change in LIFO inventories resulted in a less than $.1 million benefit and a less than $.1 million expense, respectively, to Income before income taxes. During the three and six months ended June 30, 2016, the net change in LIFO inventories resulted in a $.5$.2 million and $.1 million ~~benefit~~of expense to Income before income taxes, respectively.

Noncurrent inventory is included in Other assets on the Consolidated Balance Sheets.

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

In the course of business, the Company is subject to a variety of claims and lawsuits, including, but not limited to, litigation relating to employment, workers’ compensation, products liability, environmental and intellectual property. The ultimate outcomes of these matters are not predictable with certainty. The Company has liability insurance to cover many of these claims.

The Company and its subsidiaries Helix Uniformed Ltd. (“Helix”) and Preformed Line Products (Canada) Limited (“PLPC Canada”), were each named, jointly and severally, with each of SNC-Lavalin ATP, Inc. (“SNC ATP”), HD Supply Canada Inc., by its trade names HD Supply Power Solutions and HD Supply Utilities (“HD Supply”), and Anixter Power Solutions Canada Inc. (the corporate successor to HD Supply, “Anixter” and, together with the Company, PLPC Canada, Helix, SNC ATP and HD Supply, the “Defendants”) in a complaint filed by Altalink, L.P. (the “Plaintiff”) in the Court of Queen’s Bench of Alberta in Alberta, Canada in November 2016 (the “Complaint”).

The Complaint states that Plaintiff engaged SNC ATP to design, engineer, procure and construct numerous power distribution and transmission facilities in Alberta (the “Projects”) and that through SNC ATP and HD Supply (now Anixter), spacer dampers manufactured by Helix were procured and installed in the Projects. The Complaint alleges that the spacer dampers have and may continue to become loose, open and detach from the conductors, resulting in damage and potential injury and a failure to perform the intended function of providing spacing and damping to the Project. The Plaintiffs are seeking an estimated ~~$56~~$56.0 million in damages jointly and severally from the Defendants, representing the costs of monitoring and replacing the spacer dampers and remediating property damage, due to alleged defects in the design and construction of, and supply of materials for, the Projects by SNC ATP and HD Supply/Anixter and in the design of the spacer dampers by Helix.

The ~~lawsuit is in its very early stages, but the~~ Company believes the claims against it are without merit and intends to vigorously defend against such claims. However, the Company is unable to predict the outcome of this case and, if determined adversely to the Company, it could have a material effect on the Company’s financial results.

The Company is not a party to any other pending legal proceedings that the Company believes would, individually or in the aggregate, have a material adverse effect on its financial condition, results of operations or cash flows.

The Company uses a December 31 measurement date for the Preformed Line Products Company Employees’ Retirement Plan (the “Plan”). Net periodic pension cost for this plan included the following components:

No contributions were made to the Plan during the ~~six~~three months ended ~~June 30, 2017.~~March 31, 2018. The Company ~~does not anticipate~~anticipates contributing $.5 million of additional funding to the Plan ~~in 2017.~~during the second quarter of 2018.

The following tables set forth the total changes in AOCI by component, net of tax:

Three Months Ended June 30, 2017

Three Months Ended June 30, 2016

Defined benefit
pension plan
activity

Currency
Translation
Adjustment

Total

Defined benefit
pension plan
activity

Currency
Translation
Adjustment

Total

Balance at April 1

$
(5,802
)

$
(46,023
)

$
(51,825
)

$
(6,158
)

$
(44,049
)

$
(50,207
)
Other comprehensive income (loss) before
reclassifications:

Gain (loss) on foreign currency translation adjustment

0

2,810

2,810

0

(1,855
)

(1,855
)
Amounts reclassified from AOCI:

Amortization of defined benefit pension actuarial
gain (a)

83

0

83

76

0

76

Net current period other comprehensive income (loss)

83

2,810

2,893

76

(1,855
)

(1,779
)
Balance at June 30

$
(5,719
)

$
(43,213
)

$
(48,932
)

$
(6,082
)

$
(45,904
)

$
(51,986
)

Six Months Ended June 30, 2017

Six Months Ended June 30, 2016

Defined benefit
pension plan
activity

Currency
Translation
Adjustment

Total

Defined benefit
pension plan
activity

Currency
Translation
Adjustment

Total

Balance at January 1

$
(5,874
)

$
(51,495
)

$
(57,369
)

$
(6,235
)

$
(47,916
)

$
(54,151
)
Other comprehensive income before reclassifications:

Gain on foreign currency translation
adjustment

0

8,282

8,282

0

2,012

2,012

Amounts reclassified from AOCI:

Amortization of defined benefit pension actuarial
loss (a)

155

0

155

153

0

153

Net current period other comprehensive income

155

8,282

8,437

153

2,012

2,165

Balance at June 30

$
(5,719
)

$
(43,213
)

$
(48,932
)

$
(6,082
)

$
(45,904
)

$
(51,986
)

	Three Months Ended March 31, 2018									Three Months Ended March 31, 2017
	Defined benefit pension plan activity			Currency Translation Adjustment			Total			Defined benefit pension plan activity			Currency Translation Adjustment			Total
Balance at January 1	$	(6,014	)	$	(41,425	)	$	(47,439	)	$	(5,874	)	$	(51,495	)	$	(57,369	)
Other comprehensive income before reclassifications:
Gain on foreign currency translation adjustment		0			3,831			3,831			0			5,472			5,472
Amounts reclassified from AOCI:
Amortization of defined benefit pension actuarial gain (a)		91			0			91			72			0			72
Net current period other comprehensive income		91			3,831			3,922			72			5,472			5,544
Balance at March 31	$	(5,923	)	$	(37,594	)	$	(43,517	)	$	(5,802	)	$	(46,023	)	$	(51,825	)

Basic earnings per share were computed by dividing Net income by the weighted-average number of common shares outstanding for each respective period. Diluted earnings per share were calculated by dividing Net income by the weighted-average of all potentially dilutive common stock that was outstanding during the periods presented.

The calculation of basic and diluted earnings per share for the three ~~and six~~ months ended ~~June 30,~~March 31, 2018 and 2017 ~~and 2016~~ was as follows:

	Three Months Ended June 30				Six Months Ended June 30				Three Months Ended March 31
	2017		2016		2017		2016		2018		2017
Numerator
Net income	$	4,156	$	2,755	$	5,674	$	5,413	$	5,528	$	1,518
Denominator
Determination of shares
Weighted-average common shares outstanding		5,116		5,186		5,117		5,198		5,046		5,118
Dilutive effect - share-based awards		11		22		15		20		18		12
Diluted weighted-average common shares outstanding		5,127		5,208		5,132		5,218		5,064		5,130
Earnings per common share
Basic	$	0.81	$	0.53	$	1.11	$	1.04	$	1.10	$	0.30
Diluted	$	0.81	$	0.53	$	1.11	$	1.04	$	1.09	$	0.30

For the three months ended March 31, 2018 and ~~six-month periods ended June 30,~~ 2017, ~~48,498~~12,000 and ~~47,679~~33,350 stock options, respectively, were excluded from the calculation of diluted earnings per share as the effect would have been anti-dilutive. For the three and six-month periods ended June 30, 2016, 60,350 and 61,800, respectively, stock options were excluded from the calculation of diluted earnings per share as the effect would have been anti-dilutive.

The Company’s finite and indefinite-lived intangible assets consist of the following:

	June 30, 2017					December 31, 2016					March 31, 2018					December 31, 2017
	Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization
Finite-lived intangible assets
Patents	$	4,817	$	(4,810	)	$	4,816	$	(4,799	)	$	4,806	$	(4,802	)	$	4,806	$	(4,791	)
Land use rights		1,070		(190	)		1,070		(180	)		1,246		(203	)		1,199		(201	)
Trademarks		1,781		(1,116	)		1,725		(1,039	)		1,778		(1,205	)		1,770		(1,166	)
Technology		3,190		(1,114	)		3,057		(1,031	)		3,174		(1,270	)		3,149		(1,215	)
Customer relationships		12,425		(5,585	)		12,073		(5,217	)		12,371		(6,077	)		12,350		(5,881	)
	$	23,283	$	(12,815	)	$	22,741	$	(12,266	)	$	23,375	$	(13,557	)	$	23,274	$	(13,254	)
Indefinite-lived intangible assets
Goodwill	$	16,478				$	15,769				$	16,622				$	16,544

~~The aggregate amortization expense for other intangibles with finite lives for the three and six months ended June 30, 2017 was $.3 million and $.5 million, respectively.~~ The aggregate amortization expense for other intangibles with finite lives for each of the three ~~and six~~ months ended ~~June 30, 2016~~March 31, 2018 and 2017 was ~~$.2 million and $.5 million, respectively.~~$.3 million. Amortization expense is estimated to be ~~$.5~~$.8 million for the remaining period of ~~2017,~~2018, $1.0 million ~~annually~~ for ~~2018 and~~ 2019 and $.9 million for ~~both~~ 2020, 2021 and ~~2021.~~2022. The weighted-average remaining amortization period is approximately ~~16.6~~16.8 years. The weighted-average remaining amortization period by intangible asset class is as follows: patents, ~~8.5~~7.8 years; land use rights, ~~57.5~~58.6 years; trademarks, ~~9.4~~9.0 years; technology, ~~14.4~~13.6 years; and customer relationships, ~~12.7~~12.1 years.

The Company’s measurement date for its annual impairment test for goodwill is October 1st of each year. The Company performs its annual impairment test for goodwill utilizing a discounted cash flow methodology, market comparables, and an overall market capitalization reasonableness test in computing fair value by reporting unit. The Company then compares the fair value of the reporting unit with its carrying value to assess if goodwill has been impaired. Based on the assumptions as to growth, discount rates and the weighting used for each respective valuation methodology, results of the valuations could be significantly different. However, the Company believes that the methodologies and weightings used are reasonable and result in appropriate fair values of the reporting units. The Company’s valuation method uses Level 3 inputs under the fair value hierarchy.

The Company’s only intangible asset with an indefinite life is goodwill. The changes in the carrying amount of goodwill, by segment, for the ~~six~~three months ended ~~June 30, 2017~~March 31, 2018 are as follows:

USA

The Americas

EMEA

Asia-Pacific

Total

Balance at January 1, 2017

$
3,078

$
4,017

$
1,287

$
7,387

$
15,769

Currency translation

0

155

137

417

709

Balance at June 30, 2017

$
3,078

$
4,172

$
1,424

$
7,804

$
16,478

	USA		The Americas			EMEA		Asia-Pacific		Total
Balance at January 1, 2018	$	3,078	$	4,292		$	1,495	$	7,679	$	16,544
Currency translation		0		(79	)		67		90		78
Balance at March 31, 2018	$	3,078	$	4,213		$	1,562	$	7,769	$	16,622

Activity in the Company’s 1999 Stock Option Plan for the ~~six~~three months ended ~~June 30, 2017~~March 31, 2018 was as follows:

	Number of Shares		Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value		Number of Shares		Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value (000's)
Outstanding at January 1, 2017		5,550	$	48.35
Outstanding at January 1, 2018										750	$	39.10
Granted		0	$	0.00						0	$	0.00
Exercised	0		$	0.00					0		$	0.00
Forfeited		0	$	0.00						0	$	0.00
Outstanding (exercisable and vested) at June 30, 2017		5,550	$	48.35		1.3	$	11
Outstanding (exercisable and vested) at March 31, 2018										750	$	39.10		1.5	$	19

There were no stock options exercised during either of the ~~six~~three months ended ~~June 30, 2017~~March 31, 2018 or ~~2016.~~ 2017.

As all stock options from the 1999 Stock Option Plan are fully vested, the Company recorded no compensation expense related to stock options for the ~~six~~three months ended ~~June 30, 2017~~March 31, 2018 and ~~2016.~~2017.

The Company maintains an equity award program to give the Company a competitive advantage in attracting, retaining, and motivating officers, employees and directors and to provide an incentive to those individuals to increase shareholder value through long-term incentives directly linked to the Company’s performance. Under the Preformed Line Products Company Long Term Incentive Plan of 2008 (the “LTIP”), certain employees, officers, and directors were eligible to receive awards of options, restricted shares and restricted share units (RSUs). The total number of Company common shares reserved for awards under the LTIP was 900,000, of which 800,000 common shares were reserved for RSUs and 100,000 common shares have been reserved for share options. The LTIP was terminated and replaced with the Preformed Line Products Company 2016 Incentive Plan (the “Incentive Plan”) in May 2016 upon approval by the Company’s Shareholders at the 2016 Annual Meeting of Shareholders on May 10, 2016. No further awards will be made under the LTIP and previously granted awards remain outstanding in accordance with their terms. Under the Incentive Plan, certain employees, officers, and directors will be eligible to receive awards of options, restricted shares and RSUs. The total number of Company common shares reserved for awards under the Incentive Plan is 1,000,000 of which 900,000 common shares have been reserved for restricted share awards and 100,000 common shares have been reserved for share options. The Incentive Plan expires on May 10, 2026.

For the regular annual grants, a portion of the RSUs is subject to time-based cliff vesting and a portion is subject to vesting based upon the Company’s performance over a set period for all participants except the CEO. All of the CEO’s regular annual RSUs are subject to vesting based upon the Company’s performance over a set-year period.

The RSUs are offered at no cost to the employees. The fair value of RSUs is based on the market price of a common share on the grant date and the shares are restricted until they vest. The portion of the RSU’s granted to The Company’s former Chief Financial Officer in 2015, 2016 and 2017 that had not yet vested as of his retirement date of May 31, 2017 were forfeited. The Company currently estimates that no other performance-based and time-based RSUs will be forfeited during 2017. Dividends declared are accrued in cash.

A summary of the RSUs outstanding under the LTIP for the ~~six~~three months ended ~~June 30, 2017~~March 31, 2018 is as follows:

	Restricted Share Units											Restricted Share Units
	Performance and Service Required ⁽¹⁾			Service Required			Total Restricted Share Units			Weighted-Average Grant-Date Fair Value		Performance and Service Required ⁽¹⁾			Service Required		Total Restricted Share Units			Weighted-Average Grant-Date Fair Value
Nonvested as of January 1, 2017		130,168			15,974			146,142		$	38.46
Nonvested as of January 1, 2018													200,572			18,214		218,786		$	52.68
Granted		80,247			10,560			90,807			54.60		63,122			8,155		71,277			73.86
Vested		0			0			0			0.00		(19,277	)		0		(19,277	)		45.85
Forfeited		(9,843	)		(2,461	)		(12,304	)		46.86		(30,793	)		0		(30,793	)		45.85
Nonvested as of June 30, 2017		200,572			24,073			224,645		$	44.53
Nonvested as of March 31, 2018													213,624			26,369		239,993		$	53.89

For time-based RSUs, the Company recognizes stock-based compensation expense on a straight-line basis over the requisite service period of the award in General and administrative expense in the accompanying Statements of Consolidated Income. Compensation expense related to the time-based RSUs for ~~the~~both three-month ~~and six-month~~ periods ended ~~June 30,~~March 31, 2018 and 2017 was $.1 ~~million and $.2 million, respectively. Compensation expense related to the time-based RSU’s for the three and six months ended June 30, 2016 was $.1 million and $.2 million, respectively.~~million. As of ~~June 30, 2017,~~March 31, 2018, there was ~~$.6~~$1.0 million of total unrecognized compensation cost related to time-based RSUs that is expected to be recognized over the weighted-average remaining period of approximately ~~2.1~~2.3 years.

For the performance-based RSUs, the number of RSUs in which the participants will vest depends on the Company’s level of performance measured by growth in either operating or pre-tax income and sales growth over a requisite performance period. Depending on the extent to which the performance criterions are satisfied under the LTIP and the Incentive Plan, the participants are eligible to earn common shares over the vesting period. RSU’s forfeited in 2018 are those from the 2015 grants for which pre-tax income and sales growth performance were not achieved. Performance-based compensation expense for the three ~~and six~~ months ended ~~June 30,~~March 31, 2018 and 2017 was ~~$.4~~$.7 million and ~~$.9 million, respectively. Performance-based compensation expense for the three and six months ended June 30, 2016 was $.1 million and $.3~~$.4 million, respectively. As of ~~June 30, 2017,~~March 31, 2018, the remaining ~~performance-based RSUs~~ compensation expense of ~~$3.1~~$5.4 million for outstanding performance-based RSU’s is expected to be recognized over a period of approximately 2.1 years.

In the event of a Change in Control (as defined in the ~~LTIP)~~LTIP and the Incentive Plan), vesting of the RSUs will be accelerated and all restrictions will lapse. Unvested performance-based awards ~~are based~~will vest on a target potential payout. ~~Actual shares awarded at the end of the performance period may be less than the target potential payout level depending on achievement of performance-based award objectives.~~

To satisfy the vesting of its RSU awards, the Company has reserved new shares from its authorized but unissued shares. Any additional awards granted will also be issued from the Company’s authorized but unissued shares.

The LTIP permitted and now the Incentive Plan permits the grant of 100,000 options to buy common shares of the Company to certain employees at not less than fair market value of the shares on the date of grant. Options issued to date under the LTIP and the Incentive Plan vest 50% after one year following the date of the grant, 75% after two years, and 100% after three years, and expire from five to ten years from the date of grant. Shares issued as a result of stock option exercises will be funded with the issuance of new shares.

The Company utilizes the Black-Scholes option pricing model for estimating fair values of options. The Black-Scholes model requires assumptions regarding the volatility of the Company’s stock, the expected life of the stock award and the Company’s dividend yield. The Company utilizes historical data in determining these assumptions. The risk-free rate for periods within the contractual life of the option is based on the U.S. zero coupon Treasury yield in effect at the time of grant.

There were ~~5,000 options granted for the six months ended June 30, 2017 and~~ no options granted for either of the ~~six months~~three-month periods ended ~~June 30, 2016.~~March 31, 2018 and 2017.

Stock option activity under the Company’s LTIP for ~~six~~three months ended ~~June 30, 2017~~March 31, 2018 was as follows:

	Number of Shares		Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value		Number of Shares		Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value (000's)
Outstanding at January 1, 2017		52,750	$	54.54
Outstanding at January 1, 2018										29,250	$	56.84
Granted		5,000	$	48.00						0	$	0.00
Exercised	0		$	0.00					0		$	0.00
Forfeited	0		$	0.00					0		$	0.00
Outstanding (vested and expected to vest) at June 30, 2017		57,750	$	53.98		7.0	$	20
Exercisable at June 30, 2017		42,875	$	56.55		6.5	$	15
Outstanding (vested and expected to vest) at March 31, 2018										29,250	$	56.84		6.9	$	320
Exercisable at March 31, 2018										21,625	$	60.69		6.2	$	174

There were no stock options exercised during the ~~six~~three months ended ~~June 30,~~March 31, 2018 or 2017, ~~or 2016.~~respectively.

For both ~~the three and six-month~~three-month periods ended ~~June 30,~~March 31, 2018 and 2017, the Company recorded compensation expense related to the stock options currently vested of less than $.1 million. ~~For the three and six months ended June 30, 2016, the Company recorded compensation expense related to the stock options currently vested of less than $.1 million and $.1 million, respectively.~~ The total compensation cost related to nonvested awards not yet recognized at ~~June 30, 2017~~March 31, 2018 is expected to be less than $.1 million over a weighted-average period of approximately ~~2.0~~1.7 years.

The Company maintains a trust, commonly referred to as a rabbi trust, in connection with the Company’s deferred compensation plan. This plan allows for two deferrals. First, Directors make elective deferrals of Director fees payable and held in the rabbi trust. The deferred compensation plan allows the Directors to elect to receive Director fees in common shares of the Company at a later date instead of fees paid each quarter in cash. Second, this plan allows certain Company employees to defer restricted shares or RSUs for future distribution in the form of common shares. Assets of the rabbi trust are consolidated, and the value of the Company’s common shares held in the rabbi trust is classified in Shareholders’ equity and generally accounted for in a manner similar to treasury stock. The Company recognizes the original amount of the deferred compensation (fair value of the deferred stock award at the date of grant) as the basis for recognition in common shares issued to the rabbi trust. Changes in the fair value of amounts owed to certain employees or Directors are not recognized as the Company’s deferred compensation plan does not permit diversification and must be settled by the delivery of a fixed number of the Company’s common shares. As of ~~June 30, 2017, 297,840~~March 31, 2018, 289,138 shares have been deferred and are being held in the rabbi trust.

The ~~carrying~~Company measures and records certain assets and liabilities at fair value. A fair value hierarchy is used for those assets and liabilities measured at fair value that distinguishes between assumptions based on market data, (observable inputs), and the Company’s assumptions (unobservable inputs). The hierarchy consists of the following three levels:

The following table summarizes the Company’s ~~current~~assets and liabilities, recorded and measured at fair value, in the consolidated balance sheets as of March 31, 2018 (there were no financial instruments ~~which include cash and cash equivalents, accounts receivable, accounts payable, notes payable, and short-term debt, approximates its~~measured at fair value ~~because~~at December 31, 2017):

During the quarter ended March 31, 2018, the Company invested $4.3 million in marketable securities, principally equity-based mutual funds, to mitigate the risk associated with the investment returns on the Company’s Supplemental Profit Sharing Plan discussed below. These marketable securities are comprised of available-for-sale securities and are reported at fair value within Other assets on the ~~short-term maturity~~Company’s consolidated balance sheet as of ~~these instruments. At June 30, 2017,~~March 31, 2018. Changes in the fair value of the securities are recognized within Other income, net within the consolidated statements of income, and were not material for the period ended March 31, 2018.

The Company has a non-qualified Supplemental Profit Sharing Plan for its executives. The liability for this unfunded Supplemental Profit Sharing Plan was $4.7 million and $4.8 million at March 31, 2018 and December 31, 2017, respectively, and is recorded within Other noncurrent liabilities on the Company’s ~~long-term debt was estimated using discounted cash flow analysis~~consolidated balance sheets. During January 2018, the Company amended the Supplemental Profit Sharing Plan to allow the participants the ability to hypothetically invest their proportionate award into various investment options, which primarily includes mutual funds. The company then credits earnings, gains and losses to the participants’ deferred compensation account balances based on the ~~Company’s current incremental borrowing rates for similar types of borrowing arrangements which are considered to be Level 2 inputs. There have been no transfers in or out of Level 2 for~~investments selected by the ~~six months ended June 30, 2017. Based on~~participants. The Company measures the ~~analysis performed, the carrying~~fair value of the ~~Company’s long-term debt approximates fair value at June 30, 2017 and December 31, 2016.~~Supplemental Profit Sharing Plan liability using the market values of the participants’ underlying investment accounts.

In March ~~2016,~~2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ~~“ASU 2016-09”~~(“ASU”) 2018-05, “Income Taxes (Topic 740), ~~“Compensation - Stock Compensation (Topic 718): Improvements~~Amendments to ~~Employee Share-Based Payment Accounting.~~SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118.” The ASU ~~2016-09 amends several aspects~~adds various Securities and Exchange Commission (“SEC”) paragraphs pursuant to the issuance of the December 2017 SEC Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”), which was effective immediately. The SEC issued SAB 118 to address concerns about reporting entities’ ability to timely comply with the accounting ~~for share-based payment transactions including~~requirements to recognize all of the effects of the Tax Cuts and Jobs Act (“the Tax Act”) in the period of enactment. SAB 118 allows disclosure that timely determination of some or all of the income tax ~~consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. The Company adopted ASU 2016-09 effective January 1, 2017.~~

ASU 2016-09 requires prospective recognition of excess tax benefits and deficiencies resulting from stock-based compensation awards vesting and exercises to be recognized as a discrete income tax adjustment in the income statement. Previously, these amounts were recognized in Paid in capital. The Company had $0 excess tax benefit recorded during the six months ended June 30, 2017. In addition, ASU 2016-09 requires excess tax benefits and deficiencies to be prospectively excludedeffects from the ~~assumed future proceeds in~~Tax Act are incomplete by the ~~calculation~~due date of ~~diluted shares, resulting in an insignificant increase in diluted weighted average number of shares outstanding for~~ the ~~six months ended June 30, 2017~~financial statements and, ~~an immaterial impact on earnings per share.~~

ASU 2016-09 requires that excess tax benefits from share-based compensation awards be reported as operating activities in the Statements of Consolidated Cash Flows. Previously, this activity was included in financing activities on the Statements of Consolidated Cash Flows. As permitted, the Company has electedif possible, to ~~apply this change prospectively.~~

~~ASU 2016-09 requires that employee taxes paid when an employer withholds shares for tax withholding purposes be reported as financing activities in the Statements of Consolidated Cash Flows on~~provide a ~~retrospective basis. Previously, this activity was included in financing activities and, therefore, this resulted in no impact to the Statements of Consolidated Cash Flows.~~

reasonable estimate. The Company has ~~elected to account~~accounted for ~~forfeitures as they occur to estimate~~ the ~~number~~tax effects of ~~stock-based awards expected to vest as permitted by ASU 2016-09.~~

~~In July 2015,~~ the ~~FASB issued Accounting Standards Update 2015-11, “Inventory (Topic 330): Simplifying~~Tax Act under the ~~Measurement~~guidance of ~~Inventory.”~~SAB 118 on a provisional basis. The amendments in this Update more closely align the measurement of inventory in GAAP with the measurement of inventory in International Financial Reporting Standards (IFRS). The Company adopted ASU 2015-11 effective January 1, 2017. Under ASU 2015-11, an entity should measure inventory within the scope of this Update at the lower of cost and net realizable value. Net realizable valueCompany’s accounting for certain income tax effects is ~~defined as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Subsequent measurement is unchanged~~incomplete, but reasonable estimates for ~~inventory measured using LIFO or the retail inventory method. The amendments in this Update are effective for fiscal years beginning after December 15, 2016 including interim periods within~~ those ~~fiscal years. The amendments in this Update~~effects have been ~~applied prospectively~~determined and ~~did not have an effect on~~provisional amounts were recorded in the Company’s consolidated financial ~~statements for the three and six months ended June 30, 2017.~~

~~NOTE J – NEW ACCOUNTING STANDARDS TO BE ADOPTED~~statements. For additional details regarding SAB 118, refer to Note M “Income Taxes.”

In March 2017, the FASB issued ASU 2017-07, “Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost,” which requires that an employer report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. The guidance is effective for fiscal years beginning after December 15, 2017. Early adoption is permitted for any entity in any interim or annual period. If an entity early adopts the amendment in an interim period, any adjustments should be reflectedCompany adopted ASU 2017-07 as of the beginning of the fiscal year that includes that interim period as well as the nature and reason for the change in accounting principle. The Company is currently evaluating what impact, if any, its adoption will have to the presentation of the Company’s consolidated financial statements.

In January 2017, the FASB issued ASU 2017-04, “Simplifying the Test for Goodwill Impairment,” to eliminate Step 2 from the goodwill impairment test in order to simplify the subsequent measurement of goodwill. The guidance is effective for fiscal years beginning after December 15, 2019. Early application is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, ~~2017. Adoption of this guidance is~~2018. The adoption did not ~~expected to~~ have a material impact on the Company’s ~~Consolidated Financial Statements.~~ consolidated financial statements.

In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash.” The amendments in this Update require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. ~~This~~The Company adopted ASU is effective for annual reporting periods beginning after December 15, 2017, including interim periods within the annual reporting period. Early adoption is permitted for any entity in any interim or annual period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected2016-18 as of ~~the beginning of the fiscal year that includes that interim period. The amendments in this Update should be applied~~January 1, 2018 using a retrospective transition method to each period presented. Cash, cash equivalents and restricted cash balance on the Company’s consolidated cash flow includes $1.3 million and $1.2 million of restricted cash as of March 31, 2018 and December 31, 2017, respectively. Restricted cash is included in Other assets on the Company’s balance sheet in each period presented. The ~~Company is currently evaluating what~~adoption of ASU 2016-18 did not have a material impact ~~if any, its adoption will have to the presentation of~~on the Company’s consolidated financial statements. Refer to Note O “Debt Arrangements” for additional details regarding the Company’s restricted cash.

In October 2016, the FASB issued ASU 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory.” ASU 2016-16 modifies the recognition of income tax expense resulting from intra-entity transfers of assets other than inventory. Pursuant to this amendment, entities should recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. This amendment eliminates the exception for an intra-entity transfer of assets other

than inventory. ~~This~~The Company adopted ASU 2016-16 as of January 1, 2018 with no material impact on the Company’s consolidated financial statements.

In January 2016, the FASB issued ASU 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities”, which changes how companies recognize, measure, present and make disclosures about certain financial assets and financial liabilities. Under this guidance, entities have to measure certain equity investments, including available-for-sale securities, at fair value and recognize any changes in fair value in net income. ASU 2016-01 is effective for financial statements issued for fiscal years beginning after 15 December 2017, and interim periods therein. The Company adopted ASU 2016-01 effective January 1, 2018. As discussed in Note I, the Company purchased $4.3 million of available-for-sale marketable securities during the quarter ended March 31, 2018. The Company recognized less than $0.1 million of gains related to the change in the fair value of the marketable securities within Other income, net on the Company’s consolidated statements of income. Refer to Note I “Fair Value of Financial Assets and Liabilities” for additional details regarding the Company’s marketable securities.

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),” or ASU 2014-09. ASU 2014-09 requires an entity to recognize revenue in a matter that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, the amendment provides five steps that an entity should apply when recognizing revenue. The amendment also specifies the accounting of some costs to obtain or fulfill a contract with a customer and expands the disclosure requirements around contracts with customers. In August 2015, the FASB issued ASU No. 2015-14 deferring the effective date of the amendment to annual reporting periods beginning after December 15, 2017, including interim periods therein.

The Company developed and executed on an implementation plan in order to adopt the new guidance on January 1, 2018. The Company established a cross-functional implementation team to analyze the impact of the standard on revenue contracts, which included scoping its revenue streams and reviewing contracts in order to compare historical accounting policies and practices to the new revenue standards. In addition, the Company implemented changes to processes and controls to meet the standard’s reporting and disclosure requirements. The Company adopted ASU 2014-09 as of January 1, 2018 using the modified retrospective transition method applied to contracts that were not yet completed at that date. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be presented based on the Company’s historic accounting policy. The cumulative impact of adopting ASU 2014-09 as of January 1, 2018 did not have a material impact on the Company’s consolidated financial statements. Further, the Company does not expect the impact of the adoption of ASU 2014-09 to be material to its consolidated financial statements on an ongoing basis. Refer to Note B “Revenue” for additional details regarding the Company’s revenue recognition policy.

In February 2018, the FASB issued ASU 2018-02, “Income Statement (Topic 220), Reporting Comprehensive Income: Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.” The FASB issued the update to provide amended guidance to allow a reclassification from Accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Act. Additionally, under the new guidance an entity will be required to provide certain disclosures regarding stranded tax effects. The guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those years, and the ~~annual reporting period.~~guidance may be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal income tax rate in the Tax Act is recognized. Early adoption is permitted for any entity in any interim or annual period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period.permitted. The Company is currently ~~evaluating what impact,~~assessing the effect, if any, ~~its adoption~~that the ASU will have ~~to the presentation of~~on the Company’s consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” The amendments in this Update require the recognition of assets and liabilities arising from lease transactions on the balance sheet and the disclosure of key information about leasing arrangements. Accordingly, a lessee will recognize a lease asset for its right to use the underlying asset and a lease liability for the corresponding lease obligation. Both the asset and liability will initially be measured at the present value of the future minimum lease payments over the lease term. Subsequent measurement, including the presentation of expenses and cash flows, will depend on the classification of the lease as either a finance or an operating lease. Initial costs directly attributable to negotiating and arranging the lease will be included in the asset. For leases with a term of 12 months or less, a lessee can make an accounting policy election by class of underlying asset to not recognize an asset and corresponding liability. Lessees will also be required to provide additional qualitative and quantitative disclosures regarding the amount, timing and uncertainty of cash flows arising from leases. These disclosures are intended to supplement the amounts recorded in the financial statements and provide additional information about the nature of an organization’s leasing activities. The amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating what impact ~~if any,~~ its adoption will have to the presentation of the Company’s consolidated financial statements.

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” or ASU 2014-09. ASU 2014-09 requires an entity to recognize revenue in a matter that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, the amendment provides five steps that an entity should apply when recognizing revenue. The amendment also specifies the accounting of some costs to obtain or fulfill a contract with a customer and expands the disclosure requirements around contracts with customers. An entity can either adopt this amendment retrospectively to each prior reporting period presented or retrospectively with cumulative effect of initially applying the update recognized at the date of initial application. In August 2015, the FASB issued ASU No. 2015-14 deferring the effective date of the amendment to annual reporting periods beginning after December 15, 2017, including interim periods therein. Although early adoption is permitted, the Company plans to adopt the new guidance effective January 1, 2018 and has developed an implementation plan. The Company’s analysis is ongoing with respect to whether certain contracts will be recognized over time or at a point in time while identifying changes to our processes and controls to meet the standard’s reporting and disclosure requirements. The Company will continue to update the assessment of the impact of ASU 2014-09 and related updates to the Company’s consolidated financial statements and will disclose material impacts, if any.

The following tables present a summary of the Company’s reportable segments for the three ~~and six~~ months ended ~~June 30, 2017~~March 31, 2018 and ~~2016.~~2017. Financial results for the PLP-USA segment include the elimination of all segments’ intercompany profit in inventory.

	Three Months Ended June 30					Six Months Ended June 30					Three Months Ended March 31
	2017		2016			2017		2016			2018		2017
Net sales
PLP-USA	$	38,087	$	34,183		$	72,949	$	68,830		$	39,443	$	34,861
The Americas		16,827		14,515			33,396		26,969			19,546		16,570
EMEA		17,578		14,660			31,430		28,578			15,081		13,852
Asia-Pacific		25,020		19,862			44,306		37,526			24,069		19,286
Total net sales	$	97,512	$	83,220		$	182,081	$	161,903		$	98,139	$	84,569
Intersegment sales
PLP-USA	$	3,012	$	1,965		$	6,019	$	4,178		$	2,183	$	3,007
The Americas		1,467		1,274			2,708		2,566			1,968		1,241
EMEA		285		257			600		656			334		315
Asia-Pacific		2,485		2,311			4,536		4,059			1,710		2,051
Total intersegment sales	$	7,249	$	5,807		$	13,863	$	11,459		$	6,195	$	6,614
Income taxes
PLP-USA	$	463	$	126		$	41	$	106		$	374	$	(422	)
The Americas		804		694			1,515		1,240			1,388		711
EMEA		375		674			578		1,180			237		203
Asia-Pacific		460		(476	)		568		(510	)		102		108
Total income taxes	$	2,102	$	1,018		$	2,702	$	2,016		$	2,101	$	600
Net income (loss)
PLP-USA	$	949	$	(37	)	$	317	$	(157	)	$	1,714	$	(632	)
The Americas		1,789		1,107			3,574		2,188			3,143		1,785
EMEA		669		1,933			1,288		3,632			363		619
Asia-Pacific		749		(248	)		495		(250	)		308		(254	)
Total net income	$	4,156	$	2,755		$	5,674	$	5,413		$	5,528	$	1,518

On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act makes broad and complex changes to the U.S. tax code including but not limited to (1) requiring a one-time transition tax (“Transition Tax”) on certain unrepatriated earnings at December 31, 2017 of foreign subsidiaries that is payable over eight years; (2) reduction of the U.S. federal statutory rate from 35% to 21% effective January 1, 2018; (3) the creation of the base erosion anti-abuse tax (BEAT), a new minimum tax; (4) a general elimination of U.S. federal income taxes on dividends from foreign subsidiaries; (5) a new provision, Global Intangible Low-Taxed Income (“GILTI”), which ends deferral of taxation on a significant portion of foreign earnings; (6) a new limitation on deductible interest expense; (7) the repeal of the domestic production activity deduction; (8) more restrictive limitations on the deductibility of certain executive compensation; (9) a deduction for Foreign Derived Intangible Income (“FDII”), an incentive for the development of intangibles in the U.S.; and (9) additional limitations on the use of foreign tax credits to reduce the U.S. income tax liability.

ASC 740, Income taxes, requires a company to record the effects of a tax law change in the period of enactment. The SEC staff issued Standard Accounting Bulletin 118 (“SAB 118”), which provides guidance on accounting for the tax effects of the Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting under ASC 740. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the

Tax Act for which the accounting under ASC 740 is complete. To the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate to be included in the financial statements. If a company cannot determine a provisional estimate to be included in the financial statements, it should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the Tax Act.

As a result of the application of SAB 118, the Company recorded provisional amounts related to the reduction of its deferred tax assets and liabilities resulting from the tax rate reduction from 35% to 21% and for the Transition Tax at December 31, 2017. The Company has not made any material changes to these provisional amounts during the period ending March 31, 2018. However, the Company is continuing to gather additional information to more precisely compute the impact of these law changes.

The Company’s effective tax rate was ~~34% and 27%~~28% for the three months ended ~~June 30,~~March 31, 2018 and 2017, ~~and 2016, respectively, and 32% and 27%~~respectively. The higher effective tax rate for the ~~six~~three months ended ~~June 30, 2017 and 2016, respectively.~~March 31, 2018 compared to the U.S. federal statutory rate of 21% was primarily due to increased earnings in jurisdictions with higher tax rates than the U.S. federal statutory rate, an increase in U.S. permanent items primarily related to the Tax Act including GILTI, the repeal of the domestic production activity deduction, limitations on the deductibility of certain executive compensation, limitations on the use of foreign tax credits to reduce the U.S. income tax liability, partially offset by the FDII deduction. The lower effective tax rate for the three ~~and six~~ months ended ~~June 30,~~March 31, 2017 compared to the U.S. federal statutory ~~tax~~ rate for the same period in 2018 of 35% was primarily due to an increase in earnings in jurisdictions with lower tax rates than the U.S. federal statutory ~~tax~~ rate where such earnings are permanently reinvested. The higher tax rate for the three and six months ended June 30, 2017 compared with the same periods for 2016 was primarily due to the release of valuation allowances in 2016 primarily attributable to operating losses in certain foreign jurisdictions.

As described in Note I, effective January 1, 2017, the Company adopted the new guidance (ASU 2016-09) and will record excess tax benefits or tax deficiencies from stock-based compensation in the Statements of Consolidated Income within the provision for income taxes rather than in the Consolidated Balance Sheets within Paid-in capital.

The Company provides valuation allowances against deferred tax assets when it is more likely than not that some portion or all of its deferred tax assets will not be realized. No significant changes to the valuation ~~allowance~~allowances were reflected for the period ended ~~June 30, 2017.~~March 31, 2018.

During the period ended ~~June 30, 2017,~~March 31, 2018, the Company did not record any unrecognized tax benefits and as of ~~June 30, 2017,~~March 31, 2018, the Company ~~has~~had no unrecognized tax benefits. The Company does not anticipate any significant changes to its gross unrecognized tax benefits within the next twelve months.

Prior to the Tax Act, the Company considered the majority of the earnings in its non-U.S. subsidiaries to be permanently reinvested and, accordingly, did not record any associated deferred income taxes on such earnings. Since the Tax Act includes the Transition Tax, these previously unremitted earnings for which no U.S. deferred tax liability had been accrued have now been subject to U.S. tax. Notwithstanding the U.S. taxation of these amounts, we intend to continue to invest most or all of these earnings, as well as our capital in these subsidiaries, for an indefinite period of time, outside of the U.S. and do not expect to incur any significant, additional taxes related to such amounts.

The Company records an accrual for estimated warranty costs to Costs of products sold in the Statements of Consolidated Income. These amounts are recorded in Accrued expenses and other liabilities in the Consolidated Balance Sheets. The Company records and accounts for its warranty reserve based on specific claim incidents. Should the Company become aware of a specific potential warranty claim for which liability is probable and reasonably estimable, a specific charge is recorded and accounted for accordingly. Adjustments are made quarterly to the accruals as claim information changes.

The Company previously reconfigured one of its operations within its Asia Pacific segment by reducing its workforce and manufacturing facilities while outsourcing production predominantly to its locations with lower cost operations. This was done in response to a slowdown in economic activity in the region as well as continued downward market pressure on prices. These actions reduced go-forward infrastructure and manufacturing costs. No expense was recognized in the six months ended June 30, 2017 and expense of $.1 million was recognized in the six months ended June 30, 2016 for these restructuring activities. The restructuring liability remaining at June 30, 2017 of $.5 million was recorded in Accrued expenses.

~~A summary of the accruals recorded as a result of the restructuring is as follows:~~

Lease

Termination

Severance

Costs

Other

Total

December 31, 2016 Balance

Asia-Pacific

$
0

$
478

$
0

$
478

Total

0

478

0

478

Charges

��

Asia-Pacific

0

0

0

0

Total

0

0

0

0

Payments and other adjustments

Asia-Pacific

0

(30
)

22

(8
)
Total

0

(30
)

22

(8
)
June 30, 2017 Balance

Asia-Pacific

0

448

22

470

Total

$
0

$
448

$
22

$
470

	Three Months Ended March 31
	2018			2017
Beginning of period balance	$	1,076		$	1,058
Additions charged to income		8			27
Warranty usage		(16	)		(103	)
Currency translation		4			31
End of period balance	$	1,072		$	1,013

~~At June 27, 2016,~~On March 13, 2018, the Company ~~borrowed $14.5~~extended the term on its $65 million at a fixed rate of 2.71%, due July 1, 2026 to finance the purchase of a Company aircraft. The loan is secured by the newly purchased aircraft. On August 22, 2016, the Company increased its borrowing capacity under the credit facility from ~~$50 million to $65 million and extended the term~~June 30, 2019 to June 30, ~~2019.~~2021. All other terms remain the same, including the interest rate at LIBOR plus 1.125% unless its funded debt to Earnings before Interest, Taxes and Depreciation ratio exceeds 2.25 to 1, then the LIBOR spread becomes 1.500%. In ~~2016,~~the first quarter of 2018, the Company’s ~~Australian~~Polish subsidiary borrowed ~~$1.5~~$1.0 million ~~Australian~~U.S. dollars at a rate of ~~1.125~~1.125% plus the ~~Australian Bank Bill Swap Bid~~Warsaw Interbank Offer Rate with a term expiring June 30, ~~2019.~~2021. At ~~June 30, 2017,~~March 31, 2018, the interest rates on the ~~Australian~~U.S. and Polish line of credit agreement ~~was 2.755%.~~were 3.008% and 2.765%, respectively. Under the credit facility, at ~~June 30, 2017,~~March 31, 2018, the Company had utilized ~~$24.9~~$32.9 million with ~~$40.1~~$32.1 million available under the line of credit, net of long-term outstanding letters of credit. The line of credit agreement contains, among other provisions, requirements for maintaining levels of net worth and profitability. At ~~June 30, 2017,~~March 31, 2018, the Company was in compliance with these covenants.

On March 31, 2018 and December 31, 2017, the Company’s Asia Pacific segment had $1.3 million and $1.2 million, respectively, in restricted cash used to secure bank debt. The restricted cash is shown on the balance sheet in Other assets.

On ~~January 3, 2017,~~February 6, 2018, the Company purchased ~~1,834~~7,877 shares of the Company from current Officers and a retired Officer at a price per share of ~~$58.58,~~$80.20, which was calculated from a 30-day average of market price in connection with the vesting of equity awards. The Audit Committee of the Board of Directors approved this transaction.

On ~~May 9, 2017,~~March 15, 2018, the Company purchased ~~2,500~~1,430 shares of the Company from ana current Officer at a price per share of ~~$52.05,~~$63.63, which was calculated from a 30-day average of market price in connection with the vesting of equity awards. The Audit Committee of the Board of Directors approved this transaction.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OFOF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is intended to help the readers of our consolidated financial statements better understand our results of operations, financial condition and present business environment. The MD&A is provided as a supplement to, and should be read in conjunction with, our unaudited consolidated financial statements and related notes included elsewhere in this report.

Preformed Line Products Company (the “Company”, “PLPC”, “we”, “us”, or “our”) was incorporated in Ohio in 1947. We are an international designer and manufacturer of products and systems employed in the construction and maintenance of overhead and underground networks for the energy, telecommunication, cable operators, information (data communication), and other similar industries. Our primary products support, protect, connect, terminate, and secure cables and wires. We also provide solar hardware systems, mounting hardware for a variety of solar power applications, and fiber optic and copper splice closures. PLPC is respected around the world for quality, dependability and market-leading customer service. Our goal is to continue to achieve profitable growth as a leader in the research, innovation, development, manufacture, and marketing of technically advanced products and services related to energy, communications and cable systems and to take advantage of this leadership position to sell additional quality products in familiar markets. We have 27 sales and manufacturing operations in 18 different countries.

We report our segments in four geographic regions: PLP-USA (including corporate), The Americas (includes operations in North and South America without PLP-USA), EMEA (Europe, Middle East & Africa) and Asia-Pacific in accordance with accounting standards codified in Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 280, Segment Reporting. Each segment distributes a full range of our primary products. Our PLP-USA segment is comprised of our U.S. operations manufacturing our traditional products primarily supporting our domestic energy, telecommunications and solar products. Our other three segments, The Americas, EMEA and Asia-Pacific, support our energy, telecommunications, data communication and solar products in each respective geographical region.

The segment managers responsible for each region report directly to the Company’s Chief Executive Officer, who is the chief operating decision maker, and are accountable for the financial results and performance of their entire segment for which they are responsible. The business components within each segment are managed to maximize the results of the entire operating segment and Company rather than the results of any individual business component of the segment.

We evaluate segment performance and allocate resources based on several factors primarily based on sales and net income.

Our consolidated financial statements are prepared in conformity with U.S. generally accepted accounting principles (GAAP). Our discussions of the financial results include non-GAAP measures (e.g., foreign currency impact) to provide additional information concerning our financial results and provide information that we believe is useful to the readers of our consolidated financial statements in the assessment of our performance and operating trends.

Our consolidated financial statements are subject to fluctuations in the exchange rates of foreign currencies in relation to the U.S. dollar. As foreign currencies strengthen against the U.S. dollar, our sales and costs increase as the foreign currency-denominated financial statements translate into more U.S. dollars. In total, foreign currencies strengthened against the U.S. dollar in the ~~second~~first quarter ~~and first six months~~ of ~~2017 in contrast to the foreign currencies weakening during the comparable periods in 2016.~~2018. The

fluctuations of foreign currencies during the three months ended ~~June 30, 2017~~March 31, 2018 had a ~~less than a $.1~~$2.7 million favorable effect on sales ~~and a $1.4 million favorable effect on the six months ended June 30, 2017~~ compared to the same ~~periods~~period in ~~2016.~~2017. On a reportable segment basis, the impact of foreign currency on net sales and net income for the three ~~and six~~ months ended ~~June 30, 2017~~March 31, 2018 was as follows:

The operating results for the three months ended ~~June 30, 2017~~March 31, 2018 are compared to the same period in ~~2016.~~2017. Net sales for the three months ended ~~June 30, 2017~~March 31, 2018 of ~~$97.5~~$98.1 million increased ~~$14.3~~$13.6 million, or ~~17%~~16%, compared to ~~2016.~~2017. As a percentage of net sales, gross profit ~~decreased~~increased to ~~30.4%~~32.1% in ~~2017~~2018 from ~~32.2%~~29.2% in ~~2016.~~2017. Gross profit for the three months ended ~~June 30, 2017~~March 31, 2018 of ~~$29.7~~$31.5 million increased ~~$2.9~~$6.9 million, or 27.8%, compared to ~~2016.~~2017. Gross profit increased ~~$3.0~~$6.2 million, or ~~11%~~25.2%, compared to ~~2016, including a minimal~~2017, excluding the favorable impact from currency translation. Costs and expenses of ~~$23.4~~$23.8 million increased ~~$.7~~$1.4 million compared to ~~2016 with no~~2017, including an unfavorable impact from currency ~~translation.~~translation of $.7 million. Operating income for the three months ended ~~June 30, 2017~~March 31, 2018 was ~~$6.3~~$7.7 million, an increase of ~~$2.2~~$5.5 million compared to ~~2016.~~2017. Net income for the three months ended ~~June 30, 2017~~March 31, 2018 of ~~$4.2~~$5.5 million increased ~~$1.4~~$4.0 million compared to the ~~net income in 2016.~~three months ended March 31, 2017. The effect of currency translation had immaterial ~~unfavorable~~favorable impacts on both operating income and net income of ~~less than~~ $.1 million.

The operating results for the six months ended June 30, 2017 are compared to the same period in 2016. Net sales for the six months ended June 30, 2017 of $182.1 million increased $20.2 million, or 12%, compared to 2016. Excluding the favorable effect of currency translation, sales for the six months ended June 30, 2017 increased $18.8 million. As a percentage of net sales, gross profit decreased to 29.8% in 2017 from 31.6% in 2016. Gross profit for the six months ended June 30, 2017 of $54.3 million increased $3.2 million compared to 2016 with no measurable impact from currency translation. Costs and expenses of $45.8 million increased $2.5 million compared to 2016 with an unfavorable impact from currency translation of $.2 million. Operating income for the six months ended June 30, 2017 was $8.6 million, an increase of $.8 million compared to 2016. Net income for the six months ended June 30, 2017 of $5.7 million was an increase of $.3 million compared to the net income in 2016. The effect of currency translation had immaterial unfavorable impact on both operating income and net income of less than $.1 million.

The following table reflects the impact of foreign currency fluctuations on operating income for the three ~~and six~~ months ended ~~June 30, 2017~~March 31, 2018 and ~~2016:~~2017:

Despite the ~~uncertainty~~constant changes in the current global economy, we believe our business fundamentals and our financial position are sound and that we are strategically well-positioned. We remain focused on assessing our business structure, global facilities and overall capacity in conjunction with the requirements of local manufacturing in the markets that we serve. If necessary, we will modify redundant processes and utilize our global manufacturing network to manage costs, increase sales volumes and deliver value to our customers. We have continued to invest in the business to improve efficiency, develop new products, increase our capacity and become an even stronger supplier to our customers. We currently have a bank debt to equity ratio of ~~16.7%~~19.1% and can borrow needed funds at a competitive interest rate under our credit facility.

THREE MONTHS ENDED ~~JUNE 30, 2017~~MARCH 31, 2018 COMPARED TO THREE MONTHS ENDED ~~JUNE 30, 2016~~MARCH 31, 2017

The following table sets forth a summary of the Company’s Statements of Consolidated Income and the percentage of net sales for the three months ended ~~June 30, 2017~~March 31, 2018 and ~~2016.~~2017. The Company’s past operating results are not necessarily indicative of future operating results.

	Three Months Ended June 30												Three Months Ended March 31
(Thousands of dollars)	2017					2016					Change		2018					2017					Change
Net sales	$	97,512		100.0	%	$	83,220		100.0	%	$	14,292	$	98,139		100.0	%	$	84,569		100.0	%	$	13,570
Cost of products sold		67,839		69.6			56,414		67.8			11,425		66,621		67.9			59,904		70.8			6,717
GROSS PROFIT		29,673		30.4			26,806		32.2			2,867		31,518		32.1			24,665		29.2			6,853
Costs and expenses		23,379		24.0			22,727		27.3			652		23,773		24.2			22,407		26.5			1,366
OPERATING INCOME		6,294		6.5			4,079		4.9			2,215		7,745		7.9			2,258		2.7			5,487
Other expense - net		(36	)	(0.0	)		(306	)	(0.4	)		270		(116	)	(0.1	)		(140	)	(0.2	)		24
INCOME BEFORE INCOME TAXES		6,258		6.4			3,773		4.5			2,485		7,629		7.8			2,118		2.5			5,511
Income taxes		2,102		2.2			1,018		1.2			1,084		2,101		2.1			600		0.7			1,501
NET INCOME	$	4,156		4.3	%	$	2,755		3.3	%	$	1,401	$	5,528		5.6	%	$	1,518		1.8	%	$	4,010

Net sales. Net sales were ~~$97.5~~$98.1 million for the three months ended ~~June 30, 2017,~~March 31, 2018, an increase of ~~$14.3~~$13.6 million, or ~~17%~~16%, from the three months ended ~~June 30, 2016~~March 31, 2017. Excluding the favorable effect of currency translation, net sales for the three months ended March 31, 2018 increased $10.9 million compared to the same period in 2017, or 13%, as summarized in the following table:

	Three Months Ended June 30														Three Months Ended March 31
(Thousands of dollars)	2017		2016		Change		Change Due to Currency Translation			Change Excluding Currency Translation		% change			2018		2017		Change		Change Due to Currency Translation			Change Excluding Currency Translation			% change
Net sales
PLP-USA	$	38,087	$	34,183	$	3,904	$	0		$	3,904		11	%	$	39,443	$	34,861	$	4,582	$	0		$	4,582			13	%
The Americas		16,827		14,515		2,312		(23	)		2,335		16			19,546		16,570		2,976		(304	)		3,280			20
EMEA		17,578		14,660		2,918		74			2,844		19			15,081		13,852		1,229		1,927			(698	)		(5	)
Asia-Pacific		25,020		19,862		5,158		38			5,120		26			24,069		19,286		4,783		1,084			3,699			19
Consolidated	$	97,512	$	83,220	$	14,292	$	89		$	14,203		17	%	$	98,139	$	84,569	$	13,570	$	2,707		$	10,863			13	%

The increase in PLP-USA net sales of ~~$3.9~~$4.6 million, or 6%13%, was primarily due to a volume increase in ~~transmission~~formed wire and ~~communication~~hardware related product sales ~~partially offset by a decrease in solar~~and protective closure product sales. International net sales for the three months ended ~~June 30, 2017~~March 31, 2018 were favorably affected by ~~less than $.1~~$2.7 million when local currencies were converted to U.S. dollars. The following discussion of net sales excludes the effect of currency translation. The Americas net sales of ~~$16.8~~$19.5 million increased ~~$2.3~~$3.3 million, or ~~16%~~20%, primarily due to a volume increase in ~~transmission~~formed wire and ~~communication~~hardware related product sales and protective closure product sales. EMEA net sales of ~~$17.6~~$15.1 million ~~increased $2.8~~decreased $.7 million, or ~~19%~~5%, primarily due to a volume ~~increase~~decrease in ~~telecommunications~~formed wire and hardware related product sales and ~~transmission projects~~protective closure product sales in the ~~region, partially offset by a decline in solar sales.~~region. In Asia-Pacific, net sales of ~~$25.0~~$24.1 million increased ~~$5.1~~$3.7 million, or ~~26%~~13%, compared to ~~2016~~2017 primarily due to a sales volume increase in ~~transmission~~formed wire and hardware related products.

Gross profit. Gross profit of ~~$29.7~~$31.5 million for the three months ended ~~June 30, 2017~~March 31, 2018 increased ~~$2.9~~$6.9 million, or ~~11%~~28%, compared to the three months ended ~~June 30, 2016,~~March 31, 2017. Excluding the favorable effect of currency translation, gross profit increased $6.2 million, or 25%, as summarized in the following table:

	Three Months Ended June 30																Three Months Ended March 31
(Thousands of dollars)	2017		2016		Change			Change Due to Currency Translation			Change Excluding Currency Translation			% change			2018		2017		Change		Change Due to Currency Translation			Change Excluding Currency Translation			% change
Gross profit
PLP-USA	$	12,533	$	11,736	$	797		$	0		$	797			7	%	$	13,486	$	9,939	$	3,547	$	0		$	3,547			36	%
The Americas		5,676		4,749		927			(97	)		1,024			22			7,943		5,762		2,181		(161	)		2,342			41
EMEA		4,752		5,812		(1,060	)		36			(1,096	)		(19	)		4,414		4,264		150		535			(385	)		(9	)
Asia-Pacific		6,712		4,509		2,203			(29	)		2,232			50			5,675		4,700		975		256			719			15
Consolidated	$	29,673	$	26,806	$	2,867		$	(90	)	$	2,957			11	%	$	31,518	$	24,665	$	6,853	$	630		$	6,223			25	%

PLP-USA gross profit of ~~$12.5~~$13.5 million increased ~~$.8~~$3.5 million compared to the same period in ~~2016.~~2017 as a result of higher sales volume combined with a product sales mix shift to higher margin products. International gross profit for the three months ended ~~June 30, 2017~~March 31, 2018 was ~~unfavorably~~favorably impacted by ~~$.1~~$.6 million when local currencies were translated to U.S. dollars. The following discussion of gross profit excludes the effects of currency translation. The Americas gross profit increase of ~~$1.0~~$2.3 million was primarily the result of the sales increase of ~~$2.3~~$3.3 million combined with product margin improvement in the region due to sales mix. ~~Although sales increased,~~ EMEA gross profit decreased ~~$1.1~~$.4 mainly as a result of a $.7 million ~~due to a shift~~decrease in ~~sales toward lower gross profit margin products.~~sales. Asia-Pacific gross profit increased ~~$2.2~~$.7 million mainly as a result of a ~~$5.1~~$3.7 million increase in sales ~~however, gross profit rate declined due to a shift~~ in ~~product sales mix~~conjunction with higher volumes in the region.

Costs and expenses. Costs and expenses of ~~$23.4~~$23.8 million for the three months ended ~~June 30, 2017~~March 31, 2018 increased $1.4 million, or 7%. Excluding the unfavorable effect of currency translation, costs and expenses increased $.7 million, or 3%, as summarized in the following table:

	Three Months Ended June 30																Three Months Ended March 31
(Thousands of dollars)	2017		2016		Change			Change Due to Currency Translation			Change Excluding Currency Translation			% change			2018		2017		Change		Change Due to Currency Translation			Change Excluding Currency Translation			% change
Costs and expenses
PLP-USA	$	10,877	$	11,193	$	(316	)	$	0		$	(316	)		(3	)%	$	11,168	$	10,718	$	450	$	0		$	450			4	%
The Americas		3,262		3,023		239			15			224			7			3,469		3,365		104		(84	)		188			6
EMEA		3,745		3,261		484			(27	)		511			16			3,855		3,480		375		499			(124	)		(4	)
Asia-Pacific		5,495		5,250		245			(13	)		258			5			5,283		4,844		439		262			177			4
Consolidated	$	23,379	$	22,727	$	652		$	(25	)	$	677			3	%	$	23,775	$	22,407	$	1,368	$	677		$	691			3	%

PLP-USA costs and expenses of ~~$10.9~~$11.2 million for the three months ended ~~June 30, 2017 decreased $.3~~March 31, 2018 increased $.5 million, or 3%4%, compared to ~~2016~~2017 mainly due to ~~a $1.0~~$.3 million ~~charge~~of higher personnel related ~~to the 2016 lease expiration~~expenses, which includes benefits, combined with $.1 million of ~~the Company aircraft that did not recur in 2017~~higher professional fees and ~~an increase in~~lower foreign currency exchange gains of ~~$.2 million, offset by higher employee related costs of $.6 million, which includes healthcare and benefits, and various other net operating expenses of~~ $.1 million. ~~The foreign~~Foreign currency exchange gains ~~were~~are primarily related to translating into U.S. dollars its foreign denominated loans, trade and royalty receivables from its foreign subsidiaries at the ~~June 30, 2017~~March 31, 2018 exchange rates. On a consolidated basis, costs and expenses for the three months ended ~~June 30, 2017~~March 31, 2018 were ~~minimally~~unfavorably impacted by $.7 million when local currencies were translated to U.S. dollars. The following discussion of costs and expenses excludes the effect of currency translation. The Americas costs and expenses of ~~$3.3~~$3.5 million increased $.2 million for the three months ended ~~June 30, 2017~~March 31, 2018 compared to the same period in ~~2016~~2017 primarily due to ~~a net loss on foreign currency exchange~~higher salary related expense of ~~$.4 million offset by $.1 million of lower bad debt expense and $.1 million of lower professional fees.~~$.2 million. EMEA costs and expenses of ~~$3.7~~$3.9 million decreased $.1 million mainly due to a decrease in personnel related expenses of $.1 million. Asia-Pacific costs and expenses of $5.3 million increased ~~$.5 million~~$.2 million. This increase was primarily due to aincreased net loss on foreign currency exchange of $.2 ~~million, increased personnel related costs of $.2 million and $.1 million of various other expense increases. Asia-Pacific costs and expenses of $5.5 million increased $.3~~ million. ~~This increase was primarily due to higher personnel related expenses.~~

Other income (expense). Other expense for ~~the three months~~both three-month periods ended ~~June 30,~~March 31, 2018 and 2017 ~~decreased $.3~~was $.1 million.

Income taxes. Income taxes for the three months ~~ended June 30,~~ending March 31, 2018 and 2017 ~~and 2016~~ were $2.1 million and ~~$1.0~~$.6 million, respectively, based on pre-tax income of ~~$6.3~~$7.6 million and ~~$3.8~~$2.1 million, respectively. The effective tax rate for ~~the three months ended June 30,~~both three-month periods ending March 31, 2018 and 2017 ~~and 2016~~ was ~~34% and 27%~~28%, ~~respectively,~~ compared to the U.S. federal statutory rate for the same periods of 21% and 35%. , respectively. While the effective tax rate for each period was comparable, the rate was determined by applying differing tax rules as a result of the Tax Act. See Note L of the financial statements for a further discussion of the impact of the Tax Act on the effective tax rate.

Our tax rate is affected by recurring items such as tax rates in foreign jurisdictions ~~which differ from the U.S., federal statutory income tax rate,~~ and the relative amount of income ~~earned~~we earn in those jurisdictions. It is also affected by discrete items that may occur in any given ~~period~~year but are not consistent from year to year. In addition to ~~the impact of~~ state and local income taxes, the following items had the most significant impact on the difference between our statutory U.S. federal income tax ~~rate~~rates of 21% and 35% for 2018 and 2017, respectively, and our effective tax rate:

Net income. As a result of the preceding items, net income for the three months ended ~~June 30, 2017~~March 31, 2018 was ~~$4.2~~$5.5 million, compared to ~~$2.8~~$1.5 million for the three months ended ~~June 30, 2016,~~March 31, 2017, an increase of ~~$1.4~~$4.0 million as summarized in the following table:

	Three Months Ended June 30																		Three Months Ended March 31
(Thousands of dollars)	2017		2016			Change			Change Due to Currency Translation			Change Excluding Currency Translation			% change				2018		2017			Change			Change Due to Currency Translation		Change Excluding Currency Translation			% change
Net income (loss)
PLP-USA	$	949	$	(37	)	$	986		$	0		$	986		NM			%	$	1,714	$	(632	)	$	2,346		$	0	$	2,346		NM			%
The Americas		1,789		1,107			682			(72	)		754			68				3,143		1,785			1,358			84		1,274			71
EMEA		669		1,933			(1,264	)		38			(1,302	)		(67	)			363		619			(256	)		20		(276	)		(45	)
Asia-Pacific		749		(248	)		997			(19	)		1,016		NM					308		(254	)		562			43		519		NM
Consolidated	$	4,156	$	2,755		$	1,401		$	(53	)	$	1,454			53		%	$	5,528	$	1,518		$	4,010		$	147	$	3,863		NM			%

~~PLP-USA~~PLP-USA’s net income for the three months ended March 31, 2018 increased ~~$1.0~~$2.3 million compared to ~~2016~~the same period in 2017 due to a ~~$1.1~~$3.1 million increase in operating income ~~and a decrease in other expense of $.3 million,~~that was partially offset by an increase in income taxes of ~~$.3 million and a net increase in net interest expense of $.1~~$.8 million. The following discussion of net income excludes the effect of currency translation. The Americas net income increased ~~$.8 million as a result of a $.8 million increase in operating income and higher interest income of $.1 million partially offset by higher income taxes of $.1 million. EMEA net income decreased~~ $1.3 million as a result of a decrease in operating income of $1.9 million, partially offset with a decrease in income taxes of $.4 million. Asia-Pacific net income increased $1.0 million as a result of a $1.9 million increase in operating income, offset by an increase in income tax expense of $.9 million.

The following table sets forth a summary of the Company’s Statements of Consolidated Income and the percentage of net sales for the six months ended June 30, 2017 and 2016. The Company’s past operating results are not necessarily indicative of future operating results.

Six Months Ended June 30

(Thousands of dollars)

2017

2016

Change

Net sales

$
182,081

100.0
%

$
161,903

100.0
%

$
20,178

Cost of products sold

127,743

70.2

110,807

68.4

16,936

GROSS PROFIT

54,338

29.8

51,096

31.6

3,242

Costs and expenses

45,786

25.1

43,330

26.8

2,456

OPERATING INCOME

8,552

4.7

7,766

4.8

786

Other income (expense)—net

(176
)

(0.1
)

(337
)

(0.2
)

161

INCOME BEFORE INCOME TAXES

8,376

4.6

7,429

4.6

947

Income taxes

2,702

1.5

2,016

1.2

686

NET INCOME

$
5,674

3.1
%

$
5,413

3.3
%

$
261

~~Net sales.~~ For the six months ended June 30, 2017, net sales were $182.1 million, an increase of $20.2 million, or 12%, from the six months ended June 30, 2016. Excluding the favorable effect of currency translation, net sales for the six months ended June 30, 2017 increased $18.7 million, or 12%, compared to the same period in 2016 as summarized in the following table:

Six Months Ended June 30

(Thousands of dollars)

2017

2016

Change

Change
Due to
Currency
Translation

Change
Excluding
Currency
Translation

%
change

Net sales

PLP-USA

$
72,949

$
68,830

$
4,119

$
0

$
4,119

6
%
The Americas

33,396

26,969

6,427

1,293

5,134

19

EMEA

31,430

28,578

2,852

(282
)

3,134

11

Asia-Pacific

44,306

37,526

6,780

426

6,354

17

Consolidated

$
182,081

$
161,903

$
20,178

$
1,437

$
18,741

12
%

The increase in PLP-USA net sales of $4.1 million, or 6%, was primarily due to a volume increase in transmission and communication sales, partially offset by a decrease in solar sales. International net sales for the six months ended June 30, 2017 were favorably affected by $1.4 million when local currencies were converted to U.S. dollars. The following discussion of net sales excludes the effect of currency translation. The Americas net sales of $33.4 million increased $5.1 million, or 19%, primarily due to a volume increase in transmission and communication sales. EMEA net sales of $31.4 million increased $3.1 million, or 11%, primarily due to a volume increase in telecommunications sales and transmission projects in the region, partially offset by a decline in solar sales. In Asia-Pacific, net sales of $44.3 million increased $6.4 million, or 17%, compared to 2016 primarily due to a sales volume increase in transmission products.

~~Gross profit.~~ Gross profit of $54.3 million for the six months ended June 30, 2017 increased $3.2 million, or 6%, compared to the six months ended June 30, 2016. Excluding the effect of currency translation, gross profit increased $3.1 million, or 6%, as summarized in the following table:

Six Months Ended June 30

(Thousands of dollars)

2017

2016

Change

Change
Due to
Currency
Translation

Change
Excluding
Currency
Translation

%
change

Gross profit

PLP-USA

$
22,471

$
21,674

$
797

$
0

$
797

4
%
The Americas

11,438

9,119

2,319

258

2,061

23

EMEA

9,018

11,246

(2,228
)

(156
)

(2,072
)

(18
)
Asia-Pacific

11,411

9,057

2,354

30

2,324

26

Consolidated

$
54,338

$
51,096

$
3,242

$
132

$
3,110

6
%

PLP-USA gross profit of $22.5 increased $.8 million in the six months ended June 30, 2017 compared to the same period in 2016. International gross profit for the six months ended June 30, 2017 was favorably impacted by $.1 million when local currencies were translated to U.S. dollars. The following discussion of gross profit excludes the effects of currency translation. The Americas gross profit increase of $2.1 million was primarily the result of the sales increase of $5.1 million combined with product margin improvement in the region due to sales mix. The EMEA gross profit decreased $2.1 million despite an increase in sales due to a shift in product sales mix to lower gross margin products. Asia-Pacific gross profit increased $2.3 million mainly as a result of a $6.4 million increase in sales primarily due to a shift to higher gross margin product sales mix in the region.

~~Costs and expenses.~~ Costs and expenses of $45.8 million for the six months ended June 30, 2017 increased $2.5 million, or 6%, compared to the six months ended June 30, 2016. Excluding the favorable effect of currency translation, costs and expenses increased $2.3, million or 5%, as summarized in the following table:

Six Months Ended June 30

(Thousands of dollars)

2017

2016

Change

Change
Due to
Currency
Translation

Change
Excluding
Currency
Translation

%
change

Costs and expenses

PLP-USA

$
21,600

$
21,155

$
445

$
0

$
445

2
%
The Americas

6,620

5,800

820

246

574

10

EMEA

7,228

6,538

690

(134
)

824

13

Asia-Pacific

10,338

9,837

501

70

431

4

Consolidated

$
45,786

$
43,330

$
2,456

$
182

$
2,274

5
%

PLP-USA costs and expenses of $21.6 million for the six months ended June 30, 2017 increased $.4 million, or 2%, compared to 2016 primarily as a result of increased personnel related expense of $1.0 million, which includes healthcare and benefits expense, and higher commission expense of $.5 million. There was no impact from foreign currency exchange gains/losses for the six months ended June 30, 2017 versus the prior year. Offsetting the higher expenses was a $1.0 million charge in 2016 related to the lease expiration of the Company aircraft and lower advertising expense of $.1 million. Costs and expenses for the six months ended June 30, 2017 were favorably impacted by $.2 million when local currencies were translated to U.S. dollars. Excluding the unfavorable impact of currency translation, costs and expenses increased $2.3 million. The following discussion of costs and expenses excludes the effect of currency translation. The Americas costs and expenses of $6.6 million increased $.6 million for the six months ended June 30, 2017 compared to the same period in 2016 primarily due to a net loss on foreign currency transactional exchange of $.9 million offset by $.2 million of lower bad debt expense and higher interest income of $.1 million. EMEA costs and expenses of $7.2 million increased $.8 million mainly due to increased personnel related costs of $.2 million, a net loss on foreign currency transactional exchange of $.2 million and other various net expense increases of $.2 million. Asia-Pacific costs and expenses of $10.3 million increased $.4 million. This increase was primarily due to higher personnel related expenses.

~~Other income (expense).~~ ~~Other expense for the six months ended June 30, 2017 decreased $.2 million compared to 2016.~~

~~Income taxes~~. Income taxes for the six months ended June 30, 2017 and 2016 were $2.7 million and $2.0 million, respectively, based on pretax income of $8.4 million and $7.4 million, respectively. The effective tax rate for the six months ended June 30, 2017 and 2016 was 32% and 27%, respectively, compared to the U.S. federal statutory rate of 35%. Our tax rate is affected by recurring items, such as tax rates in foreign jurisdictions, which differ from the U.S. federal statutory income tax rate, and the relative amount of income earned in those jurisdictions. It is also affected by discrete items that may occur in any given period but are not consistent from year to year. In addition to the impact of state and local income taxes, the following items had the most significant impact on the difference between our statutory U.S. federal income tax rate of 35% and our effective tax rate:

~~Net income.~~ As a result of the preceding items, net income for the six months ended June 30, 2017 was $5.7 million, compared to $5.4 million for the six months ended June 30, 2016. Excluding the effect of currency translation, net income increased $.3 million as summarized in the following table:

Six Months Ended June 30

(Thousands of dollars)

2017

2016

Change

Change
Due to
Currency
Translation

Change
Excluding
Currency
Translation

%
change

Net income

PLP-USA

$
317

$
(157
)

$
474

$
0

$
474

NM

The Americas

3,574

2,188

1,386

28

1,358

62

EMEA

1,288

3,632

(2,344
)

(42
)

(2,302
)

(63
)
Asia-Pacific

495

(250
)

745

(30
)

775

NM

Consolidated

$
5,674

$
5,413

$
261

$
(44
)

$
305

6
%

PLP-USA net income increased $.5 million compared to 2016 due to a $.4 million increase in operating income and a decrease in income taxes of $.1 million. International net income for the six months ended June 30, 2017 was minimally impacted when local currencies were converted to U.S. dollars. The following discussion of net income excludes the effect of currency translation. The Americas net income increased $1.4 million as a result of a $1.5 million increase in operating income, partially offset by ~~an increase in~~higher income taxes of ~~$.1~~$.8 million. EMEA net income decreased ~~$2.3~~$.3 million as a result of a $.3 million decrease in operating income ~~of $2.9 million offset~~combined with ~~a decrease in~~no year-over-year impact from income ~~taxes of $.6 million.~~tax expense. Asia-Pacific net income increased ~~$.8~~$.5 million as a result of a ~~$1.8~~$.5 million increase in operating income ~~offset~~ with ~~an increase in~~no year-over-year impact resulting from income tax ~~expense of $1.0 million~~.expense.

Our critical accounting policies are consistent with the information set forth in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, included in our Form 10-K for the year ended December 31, ~~2016~~2017 filed on March ~~10, 2017~~9, 2018 with the Securities and Exchange Commission and are, therefore, not presented herein. For more detail regarding the January 1, 2018 adoption of ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” refer to Note B “Revenue” and Note J “Recently Adopted Accounting Pronouncements.”

We measure liquidity on the basis of our ability to meet short-term and long-term operating needs, repay debt, fund additional investments, including acquisitions, and make dividend payments to shareholders. Significant factors affecting the management of liquidity are cash flows from operating activities, capital expenditures, cash dividends, business acquisitions and access to bank lines of credit.

Our investments include expenditures required for equipment and facilities as well as expenditures in support of our strategic initiatives. During the first ~~six~~three months of ~~2017,~~2018, we used cash of ~~$4.6~~$2.7 million for capital expenditures. We ended the first ~~six~~three months of ~~2017~~2018 with ~~$28.0~~$45.5 million of cash and cash equivalents. Our cash and cash equivalents are held in various locations throughout the world. At ~~June 30, 2017,~~March 31, 2018, the majority of our cash and cash equivalents were held outside the U.S. We expect most accumulated non-U.S. cash balances will remain outside of the U.S. and that we will meet U.S. liquidity needs through future cash flows, use of U.S. cash balances, external borrowings, or some combination of these sources. We complete comprehensive reviews of our significant customers and their creditworthiness by analyzing financial statements for customers where we have identified a measure of increased risk. We closely monitor payments and developments which may signal possible customer credit issues. We currently have not identified any potential material impact on our liquidity from customer credit issues.

Total debt at ~~June 30, 2017~~March 31, 2018 was ~~$39.4~~$47.1 million. At ~~June 30, 2017,~~March 31, 2018, our unused availability under our line of credit was ~~$40.1~~$32.1 million and our bank debt to equity percentage was ~~16.7%~~19.1%. On ~~August 22, 2016,~~March 13, 2018, we ~~increased~~extended the term on our ~~borrowing capacity under our~~$65 million credit facility from ~~$50 million to $65 million and extended the term~~June 30, 2019 to June 30, ~~2019.~~2021. All other terms remain the same, including the interest rate at LIBOR plus 1.125% unless our funded debt to Earnings before Interest, Taxes and Depreciation ratio exceeds 2.25 to 1, then the LIBOR spread becomes 1.500%. The line of credit agreement contains, among other provisions, requirements for maintaining levels

of net worth and funded debt-to-earnings before interest, taxes, depreciation and amortization along with an interest coverage ratio. On June 27, 2016, we entered into a promissory note with PNC Bank, NA, pursuant to which we borrowed $14.5 million at a fixed rate of 2.71%, due July 1, 2026, which was used to purchase a corporate aircraft to replace the expiring lease of the previous aircraft. The loan is secured by the aircraft. The net worth and profitability requirements are calculated based on the line of credit agreement. At ~~June 30, 2017~~March 31, 2018 and December 31, ~~2016,~~2017, we were in compliance with these covenants.

We expect that our major source of funding for ~~2017~~2018 and beyond will be our operating cash flows, our existing cash and cash equivalents as well as our line of credit agreement. We earn a significant amount of our operating income outside the United States, which, except for current earnings in certain jurisdictions, is deemed to be indefinitely reinvested in foreign jurisdictions. ~~We currently do not intend nor foresee a need to repatriate these funds.~~ We believe our future operating cash flows will be more than sufficient to cover debt repayments, other contractual obligations, capital expenditures and dividends for the next 12 months and thereafter for the foreseeable future. In addition, we believe our borrowing capacity provides substantial financial resources, if needed, to supplement funding of capital expenditures and/or acquisitions. We also believe that we can expand our borrowing capacity, if necessary; however, we do not believe we would increase our debt to a level that would have a material adverse impact upon results of operations or financial condition.

Cash ~~decreased $2.7~~increased $1.1 million for the ~~six~~three months ended ~~June 30, 2017.~~March 31, 2018. Net cash ~~provided by~~used in operating activities was ~~$2.0~~$1.0 million. The major investing and financing uses of cash were payments of long-term debt of ~~$31.5~~$11.1 million, ~~and~~purchase of marketable securities of $4.3 million, capital expenditures of ~~$4.6~~$2.7 million and dividends paid of $1.0 million, partially offset by net debt proceeds of ~~$25.0~~$20.3 million. Currency had a positive ~~$1.6~~$0.9 million impact on cash and cash equivalents when translating foreign denominated financial statements to U.S. dollars.

Net cash ~~provided by~~used in operating activities for the ~~six~~three months ended ~~June 30,~~March 31, 2018 and 2017 ~~and 2016~~ was ~~$2.0~~$1.0 million and ~~$10.0~~$1.6 million, respectively. The ~~$8.0~~$.6 million decrease was primarily a result of an increase in cash used for operating assets (net of operating liabilities) of ~~$9.6~~$4.4 million, offset by an increase in ~~non-cash transactions of $1.3 million and an increase in~~ net income of ~~$.3~~$4.0 million.

Net cash used in investing activities for the three months ended March 31, 2018 of $7.0 million represents an increase of $7.4 million when compared to cash provided by investing activities ~~for~~in the ~~six~~three months ended ~~June 30, 2017 of $2.4 million represents an increase of $23.3 million when compared to cash used for investing activities in the six months ended June 30, 2016.~~March 31, 2017. The ~~improvement is~~change was primarily related to ~~lower capital expenditures~~net cash used of ~~$15.1~~$4.3 million ~~which was predominantly~~ related to the ~~2016~~ purchase of ~~a corporate aircraft to replace the expiring lease of the previous aircraft, combined with~~marketable securities and a net increase in ~~restricted~~capital expenditures of $.5 million combined with a reduction in cash ~~and~~provided by fixed-term deposits of ~~$8.2~~$2.6 million.

Cash ~~used for~~provided by financing activities for the ~~six~~three months ended ~~June 30, 2017~~March 31, 2018 was ~~$8.8~~$8.3 million compared to ~~cash provided by financing activities of $10.6~~$.5 million for the ~~six~~three months ended ~~June 30, 2016.~~March 31, 2017. The ~~$19.4~~$7.8 million ~~decrease~~increase was primarily the result of ~~a decrease~~an increase in debt borrowings in ~~2017~~2018 compared to ~~2016~~2017 of ~~$18.4~~$6.5 million ~~higher~~and lower debt payments in the ~~six~~three months ended ~~June 30, 2017~~March 31, 2018 versus the prior year of ~~$2.6~~$2.1 million, partially offset by ~~a decrease in share repurchases~~$.7 million of ~~$1.8 million.~~stock repurchases.

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

This Form 10-Q and other documents we file with the Securities and Exchange Commission (“SEC”) 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:

ITEM 3. QUANTITATIVE AND ~~QUALITATIVE~~QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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 that the political and economic risks related to the Company’s international operations are mitigated due to the geographic diversity in which the Company’s international operations are located.

As of ~~June 30, 2017,~~March 31, 2018, the Company had no foreign currency forward exchange contracts outstanding. The Company does not hold derivatives for trading or speculative purposes.

The Company’s primary currency rate exposures are related to foreign denominated debt, intercompany debt, ~~forward exchange contracts,~~ foreign denominated receivables and payables and cash and short-term investments. A hypothetical 10% change in currency rates would have a favorable/unfavorable impact on fair values on such instruments of ~~$0.9~~$6.3 million and on income before taxes of ~~$.7~~$1.3 million.

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 ~~$26.2~~$33.7 million at ~~June 30, 2017.~~March 31, 2018. A 100 basis point increase in the interest rate would have resulted in an increase in interest expense of approximately ~~$.1~~$.5 million for the ~~six~~three months ended ~~June 30, 2017.~~March 31, 2018.

The Company’s Principal Executive Officer and Principal Accounting Officer have concluded that the Company’s disclosure controls and procedures as defined in Rule 13a-15(e) or Rule 15d-15(e) of the Securities Exchange Act of 1934, as amended, were effective as of ~~June 30, 2017.~~March 31, 2018.

On January 1, 2018, the Company adopted ASU 2014-09, “Revenue from Contracts with Customers (Topic 606).” For the adoption, the Company implemented changes to its revenue recognition process and control activities, including the development of new entity-wide policies, processes, controls, training and ongoing contract reviews to accommodate presentation and disclosure requirements. For more detail regarding the January 1, 2018 adoption of ASU No. 2014-09, refer to Note B “Revenue” and Note J “Recently Adopted Accounting Pronouncements.”

There ~~have not been any~~were no other changes in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f)) during the quarter ended ~~June 30, 2017~~March 31, 2018 that materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.

The Company and its subsidiaries, Helix Uniformed Ltd. (“Helix”) and Preformed Line Products (Canada) Limited (“PLPC Canada”), were each named, jointly and severally, with each of SNC-Lavalin ATP, Inc. (“SNC ATP”), HD Supply Canada Inc., by its trade names HD Supply Power Solutions and HD Supply Utilities (“HD Supply”), and Anixter Power Solutions Canada Inc. (the corporate successor to HD Supply, “Anixter” and, together with the Company, PLPC Canada, Helix, SNC ATP and HD Supply, the “Defendants”) in a complaint filed by Altalink, L.P. (the “Plaintiff”) in the Court of Queen’s Bench of Alberta in Alberta, Canada in November 2016 (the “Complaint”).

The ~~lawsuit is in its very early stages, but the~~ Company believes the claims against it are without merit and intends to vigorously defend against such claims. However, we are unable to predict the outcome of this case and, if determined adversely to the Company, it could have a material effect on the Company’s financial results.

There were no material changes from the risk factors previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2016~~2017 filed with the Securities and Exchange Commission on March ~~10, 2017.~~9, 2018.

On ~~February 3, 2016, the Company announced that~~December 13, 2017, the Board of Directors authorized a plan to repurchase up to an additional ~~214,620~~228,138 of Preformed Line Products Company common shares, resulting in a total of 250,000 shares available for repurchase with no expiration date. ~~There were 39 shares repurchased under~~The following table reflects repurchases for the ~~repurchase plan during the six~~three months ended ~~June 30, 2017:~~March 31, 2018:

Period (2017)

Total
Number of
Shares
Purchased

Average
Price Paid
per Share

Total Number of
Shares Purchased as
Part of Publicly
Announced Plans
or Programs

Maximum Number
of Shares that may
yet be Purchased
under the Plans or
Programs

April

0

$
0.00

108,346

141,654

May (1)

2,500

52.05

110,846

139,154

Jun

39

44.95

110,885

139,115

Total

2,539

Period (2018)	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Shares that may yet be Purchased under the Plans or Programs
January	0		$	0.00		—		250,000
February		7,877		80.20		7,877		242,123
March		3,030		66.47		10,907		239,093
Total		10,907

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.

Ohio		34-0676895
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

660 Beta Drive Mayfield Village, Ohio		44143
(Address of Principal Executive Office)		(Zip Code)

		Page

Part I - Financial Information

Item 1.	Financial Statements	3

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2826

Item 4.	Controls and Procedures	2926

Part II - Other Information

Item 1.	Legal Proceedings	3027

Item 1A.	Risk Factors	3027

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3027

Item 3.	Defaults Upon Senior Securities	3027

Item 4.	Mine Safety Disclosures	3027

Item 5.	Other Information	3128

Item 6.	Exhibits	3128

SIGNATURES		3229


	Three Months Ended March 31, 2018
Product Type	PLP-USA		The Americas		EMEA		Asia-Pacific		Consolidated
Formed wire and hardware related products		22,137		14,989		11,282		17,602	$	66,010
Protective closures		11,697		3,539		1,158		1,219		17,613
Plastic products		2,196		397		605		544		3,742
Other products		3,413		621		2,036		4,704		10,774
Total	$	39,443	$	19,546	$	15,081	$	24,069	$	98,139

	June 30, 2017			December 31, 2016			March 31, 2018			December 31, 2017
Raw materials	$	42,295		$	37,535		$	42,503		$	42,712
Work-in-process		9,957			9,057			11,111			9,609
Finished Goods		31,444			35,629			37,966			33,780
		83,696			82,221			91,580			86,101
Excess of current cost over LIFO cost		(2,823	)		(2,784	)		(3,228	)		(2,991	)
Noncurrent portion of inventory		(5,375	)		(4,953	)		(5,010	)		(5,224	)
	$	75,498		$	74,484		$	83,342		$	77,886

	Three Months Ended June 30, 2017									Three Months Ended June 30, 2016
	Defined benefit pension plan activity			Currency Translation Adjustment			Total			Defined benefit pension plan activity			Currency Translation Adjustment			Total
Balance at April 1	$	(5,802	)	$	(46,023	)	$	(51,825	)	$	(6,158	)	$	(44,049	)	$	(50,207	)
Other comprehensive income (loss) before reclassifications:
Gain (loss) on foreign currency translation adjustment		0			2,810			2,810			0			(1,855	)		(1,855	)
Amounts reclassified from AOCI:
Amortization of defined benefit pension actuarial gain (a)		83			0			83			76			0			76
Net current period other comprehensive income (loss)		83			2,810			2,893			76			(1,855	)		(1,779	)
Balance at June 30	$	(5,719	)	$	(43,213	)	$	(48,932	)	$	(6,082	)	$	(45,904	)	$	(51,986	)

	Six Months Ended June 30, 2017									Six Months Ended June 30, 2016
	Defined benefit pension plan activity			Currency Translation Adjustment			Total			Defined benefit pension plan activity			Currency Translation Adjustment			Total
Balance at January 1	$	(5,874	)	$	(51,495	)	$	(57,369	)	$	(6,235	)	$	(47,916	)	$	(54,151	)
Other comprehensive income before reclassifications:
Gain on foreign currency translation adjustment		0			8,282			8,282			0			2,012			2,012
Amounts reclassified from AOCI:
Amortization of defined benefit pension actuarial loss (a)		155			0			155			153			0			153
Net current period other comprehensive income		155			8,282			8,437			153			2,012			2,165
Balance at June 30	$	(5,719	)	$	(43,213	)	$	(48,932	)	$	(6,082	)	$	(45,904	)	$	(51,986	)

Description	Balance as of March 31, 2018		Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Marketable securities	$	4,308	$	4,308	$	0	$	0
Total Assets	$	4,308	$	4,308	$	0	$	0

Liabilities:
Supplemental profit sharing plan		4,266		0		4,266		0
Total Liabilities	$	4,266	$	0	$	4,266	$	0

			Lease
			Termination
	Severance		Costs			Other		Total
December 31, 2016 Balance
Asia-Pacific	$	0	$	478		$	0	$	478
Total		0		478			0		478
Charges									��
Asia-Pacific		0		0			0		0
Total		0		0			0		0
Payments and other adjustments
Asia-Pacific		0		(30	)		22		(8	)
Total		0		(30	)		22		(8	)
June 30, 2017 Balance
Asia-Pacific		0		448			22		470
Total	$	0	$	448		$	22	$	470

	Foreign Currency Translation Impact												Foreign Currency Translation Impact
	Net Sales						Net Income						Three Months Ended March 31, 2018
(Thousands of dollars)	Three Months			Six Months			Three Months			Six Months			Net Sales			Net Income
The Americas	$	(23	)	$	1,293		$	(72	)	$	28		$	(304	)	$	84
EMEA		74			(282	)		38			(42	)		1,927			20
Asia-Pacific		38			426			(19	)		(30	)		1,084			43
Total	$	89		$	1,437		$	(53	)	$	(44	)	$	2,707		$	147

Period (2017)	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Shares that may yet be Purchased under the Plans or Programs
April	0		$	0.00		108,346		141,654
May (1)		2,500		52.05		110,846		139,154
Jun		39		44.95		110,885		139,115
Total		2,539

10.1		Amended and Restated Line of Credit Note dated March 13, 2018 between the Company and PNC Bank, National Association, filed herewith.

10.2		Amendment No. 3 to Amended and Restated Line of Credit Note dated March 13, 2018 between the Company and PNC Bank, National Association, filed herewith.

31.1		Certifications of the Principal Executive Officer, Robert G. Ruhlman, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.

31.2		Certifications of the Principal Accounting Officer, Michael A. Weisbarth, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.

32.1		Certifications of the Principal Executive Officer, Robert G. Ruhlman, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, furnished.

32.2		Certifications of the Principal Accounting Officer, Michael A. Weisbarth, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, furnished.

101.INS		XBRL Instance Document.

101.SCH		XBRL Taxonomy Extension Schema Document.

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB		XBRL Taxonomy Extension Label Linkbase Document.

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document.

~~August~~May 4, ~~2017~~2018		/s/ Robert G. Ruhlman
		Robert G. Ruhlman
		Chairman, President and Chief Executive Officer
		(Principal Executive Officer)

~~August~~May 4, ~~2017~~2018		/s/ Michael A. Weisbarth
		Michael A. Weisbarth
		Vice President – Finance and Treasurer
		(Principal Accounting Officer)


~~31.1~~		~~Certifications of the Principal Executive Officer, Robert G. Ruhlman, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.~~

~~31.2~~		~~Certifications of the Principal Accounting Officer,~~ ~~Michael A. Weisbarth, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.~~

~~32.1~~		~~Certifications of the Principal Executive Officer, Robert G. Ruhlman, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, furnished.~~

~~32.2~~		~~Certifications of the Principal Accounting Officer,~~ ~~Michael A. Weisbarth, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, furnished.~~

~~101.INS~~		~~XBRL Instance Document.~~

~~101.SCH~~		~~XBRL Taxonomy Extension Schema Document.~~

~~101.CAL~~		~~XBRL Taxonomy Extension Calculation Linkbase Document.~~

~~101.DEF~~		~~XBRL Taxonomy Extension Definition Linkbase Document.~~

~~101.LAB~~		~~XBRL Taxonomy Extension Label Linkbase Document.~~

~~101.PRE~~		~~XBRL Taxonomy Extension Presentation Linkbase Document.~~

	June 30, 2017		December 31, 2016		March 31, 2018			December 31, 2017
Land and improvements	$	13,001	$	12,584	$	13,352		$	13,141
Buildings and improvements		74,800		72,662		76,823			75,941
Machinery, equipment and aircraft		165,205		158,078		172,213			166,999
Construction in progress		4,432		3,877		4,354			5,124
		257,438		247,201		266,742			261,205
Less accumulated depreciation		150,204		142,097		(156,906	)		(152,607	)
	$	107,234	$	105,104	$	109,836		$	108,598

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