Exhibit 99.1
For immediate release October 31, 2007 | Eric R. Graef Preformed Line Products (440) 473-9249 |
PREFORMED LINE PRODUCTS ANNOUNCES FINANCIAL RESULTS FOR THE
THIRD QUARTER AND FIRST NINE MONTHS OF 2007
THIRD QUARTER AND FIRST NINE MONTHS OF 2007
• | Net income increased 41% for the third quarter and 31% for the first nine months | ||
• | Net sales increased 17% for the quarter and 13% for the first nine months, including the impact of acquisitions | ||
• | Earnings per diluted share increased 49% for the quarter and 39% for the first nine months |
Mayfield Village, Ohio, October 31, 2007 —Preformed Line Products Company (Nasdaq: PLPC)today reported financial results for the third quarter and the first nine months of 2007.
Net income for the quarter ended September 30, 2007 was $5,664,000, or $1.04 per diluted share, compared to $4,009,000, or $.70 per diluted share, for the comparable period in 2006. Net sales in the third quarter 2007 were $66,099,000, a 17% increase from last year’s $56,439,000.
Net income for the nine months ended September 30, 2007 was $13,198,000, or $2.44 per diluted share, compared to the prior year’s $10,059,000, or $1.75 per diluted share. Net sales increased 13% over 2006, to $186,383,000 for the first nine months of 2007 compared to $165,172,000 in 2006.
Rob Ruhlman, Chairman and Chief Executive Officer, said, “The favorable currency impact on sales was $2.8 million for the quarter and $5.9 million for the nine months while the impact on net income was less than $300,000 for both the quarter and year. Acquisitions included in the current year results accounted for increases in sales of $3.8 million for the quarter and $5.3 million year-to-date. The acquisitions improved net income $366,000 for the quarter and $200,000 for the year. Our record third quarter earnings per share of $1.04 represented another achievement for the Company reflecting improvements in efficiency and the positive impact of our ongoing cost containment efforts.”
PAGE 2 / PLP ANNOUNCES THIRD QUARTER RESULTS
Founded in 1947, Preformed Line Products is an international designer and manufacturer of products and systems employed in the construction and maintenance of overhead and underground networks for energy, communications and broadband network companies.
Preformed’s world headquarters are in Cleveland, Ohio, and the Company operates four domestic manufacturing centers located in Rogers, Arkansas, Albuquerque, New Mexico, Albemarle, North Carolina, and Asheville, North Carolina. The Company serves its worldwide market through international operations in Australia, Brazil, Canada, China, England, Mexico, New Zealand, Poland, South Africa, Spain and Thailand.
This news release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 regarding the Company, including those statements regarding the Company’s and management’s beliefs and expectations concerning the Company’s future performance or anticipated financial results, among others. Except for historical information, the matters discussed in this release are forward-looking statements that involve risks and uncertainties which may cause results to differ materially from those set forth in those statements. Among other things, factors that could cause actual results to differ materially from those expressed in such forward-looking statements include the strength of the economy and demand for the Company’s products, increases in raw material prices, the Company’s ability to identify, complete and integrate acquisitions for profitable growth, and other factors described under the heading “Forward-Looking Statements” in the Company’s Form 10-K filed with the SEC on March 15, 2007. The Form 10-K and the Company’s other filings with the SEC can be found on the SEC’s website at http://www.sec.gov. The Company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.
PREFORMED LINE PRODUCTS COMPANY
STATEMENTS OF CONSOLIDATED INCOME
(UNAUDITED)
STATEMENTS OF CONSOLIDATED INCOME
(UNAUDITED)
In thousands, except per share data | Three month periods ended | Nine month periods ended | ||||||||||||||
September 30, | September 30, | |||||||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||||||
Net sales | $ | 66,099 | $ | 56,439 | $ | 186,383 | $ | 165,172 | ||||||||
Cost of products sold | 43,316 | 37,677 | 123,631 | 111,493 | ||||||||||||
GROSS PROFIT | 22,783 | 18,762 | 62,752 | 53,679 | ||||||||||||
Costs and expenses | ||||||||||||||||
Selling | 6,208 | 5,475 | 18,789 | 16,872 | ||||||||||||
General and administrative | 6,736 | 5,680 | 19,101 | 17,347 | ||||||||||||
Research and engineering | 2,026 | 1,928 | 6,029 | 5,807 | ||||||||||||
Other operating expenses (income) — net | (169 | ) | 136 | 121 | 318 | |||||||||||
14,801 | 13,219 | 44,040 | 40,344 | |||||||||||||
Royalty income — net | 345 | 287 | 1,487 | 1,004 | ||||||||||||
OPERATING INCOME | 8,327 | 5,830 | 20,199 | 14,339 | ||||||||||||
Other income (expense) | ||||||||||||||||
Interest income | 279 | 389 | 853 | 1,144 | ||||||||||||
Interest expense | (140 | ) | (164 | ) | (437 | ) | (399 | ) | ||||||||
Other expense — net | (9 | ) | (19 | ) | (22 | ) | (53 | ) | ||||||||
130 | 206 | 394 | 692 | |||||||||||||
INCOME BEFORE INCOME TAXES AND MINORITY INTEREST | 8,457 | 6,036 | 20,593 | 15,031 | ||||||||||||
Income taxes | 2,769 | 2,027 | 7,371 | 4,972 | ||||||||||||
INCOME BEFORE MINORITY INTEREST | 5,688 | 4,009 | 13,222 | 10,059 | ||||||||||||
Minority interest | 24 | — | 24 | — | ||||||||||||
NET INCOME | $ | 5,664 | $ | 4,009 | $ | 13,198 | $ | 10,059 | ||||||||
Net income per share — basic | $ | 1.05 | $ | 0.71 | $ | 2.46 | $ | 1.77 | ||||||||
Net income per share — diluted | $ | 1.04 | $ | 0.70 | $ | 2.44 | $ | 1.75 | ||||||||
Cash dividends declared per share | $ | 0.20 | $ | 0.20 | $ | 0.60 | $ | 0.60 | ||||||||
Weighted average number of shares outstanding — basic | 5,379 | 5,638 | 5,369 | 5,696 | ||||||||||||
Weighted average number of shares outstanding — diluted | 5,437 | 5,688 | 5,418 | 5,746 | ||||||||||||
In 2007 we adopted FASB Staff Position No. AUG AIR — 1 retrospectively. Consequently for the three month period and nine month period ended September 30, 2006 net income increased by $10 and $31, respectively.
PREFORMED LINE PRODUCTS COMPANY
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
September 30, | December 31, | |||||||
Thousands of dollars, except share data | 2007 | 2006 | ||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | 20,574 | $ | 29,949 | ||||
Accounts receivable, less allowances of $1,853 ($1,209 in 2006) | 43,768 | 30,029 | ||||||
Inventories — net | 53,435 | 40,415 | ||||||
Prepaids and other | 8,562 | 5,032 | ||||||
TOTAL CURRENT ASSETS | 126,339 | 105,425 | ||||||
Property and equipment — net | 60,451 | 52,810 | ||||||
Deferred income taxes | 3,795 | 5,145 | ||||||
Goodwill — net | 6,128 | 2,166 | ||||||
Patents and other intangibles — net | 2,716 | 2,546 | ||||||
Other assets | 2,837 | 2,760 | ||||||
TOTAL ASSETS | $ | 202,266 | $ | 170,852 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Notes payable to banks | $ | 4,322 | $ | 3,738 | ||||
Current portion of long-term debt | 1,434 | 2,157 | ||||||
Trade accounts payable | 17,073 | 11,606 | ||||||
Accrued compensation and amounts withheld from employees | 7,992 | 5,556 | ||||||
Accrued expenses and other liabilities | 12,672 | 10,022 | ||||||
TOTAL CURRENT LIABILITIES | 43,493 | 33,079 | ||||||
Long-term debt, less current portion | 3,523 | 2,204 | ||||||
Other non-current liabilities and deferred income taxes | 7,953 | 4,421 | ||||||
Minority interest | 961 | — | ||||||
SHAREHOLDERS’ EQUITY | ||||||||
Common shares — $2 par value, 15,000,000 shares authorized, 5,378,456 and 5,360,259 outstanding, net of 373,333 and 365,311 treasury shares at par, respectively | 10,757 | 10,721 | ||||||
Paid in capital | 2,429 | 1,562 | ||||||
Retained earnings | 140,716 | 131,949 | ||||||
Accumulated other comprehensive loss | (7,566 | ) | (13,084 | ) | ||||
TOTAL SHAREHOLDERS’ EQUITY | 146,336 | 131,148 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 202,266 | $ | 170,852 | ||||
In 2007 we adopted FASB Staff Position No. AUG AIR — 1 retrospectively. Consequently at December 31, 2006 retained earnings increased by $215, accrued expenses decreased by $326 and deferred income taxes decreased $111.