PREFORMED LINE PRODUCTS CO

Previous wording

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 provide helical solutions, connectors, fiber optic and copper splice closures, solar hardware mounting applications, and electric vehicle charging station foundations. We also provide aerial drone inspection services for utility assets including transmission and distribution power lines, substations, and generation facilities. We are 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 sales and manufacturing operations in 20 different countries.

Current wording

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 provide helical solutions, string hardware, connectors, insulators, fiber optic and copper splice closures, solar hardware mounting applications, and electric vehicle charging station foundations. We also provide aerial drone inspection services for utility assets including transmission and distribution power lines, substations, and generation facilities. We are 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 sales and manufacturing operations in 20 different countries.

Previous wording

Our business continues to be concentrated in the energy and communications markets. During the past several years, industry consolidation continued as distributor and service provider integrations occurred in our major markets. There has also been a historical lack of commitment by developed countries to upgrade and strengthen their electrical grids and communication networks despite the growing need. More recently, increasing commodity prices, inflation, tariffs, rising interest rates, transportation costs, and foreign currency fluctuations have led to a challenging operating environment. While these factors generally moderated in 2024, they may continue to provide inherent uncertainty going forward. The increasing need for power generation and efficient communication systems has highlighted the need for bolstering grid reliability, strengthening grid resilience to climate events, upgrading aging infrastructure, enhancing communication networks and transitioning to new sources of energy. Our focused portfolio is well-positioned to respond to these priorities.

Current wording

Our business continues to be concentrated in the energy and communications markets. We sit at the intersection of various economic and social megatrends impacting our markets, both domestically and internationally. The digitalization and electrification megatrends, which are increasing the need for power generation, have highlighted the need for bolstering grid reliability, strengthening grid resilience, and upgrading aging infrastructure. The continuing need for high-speed and efficient communication systems has led to further investment in network build-outs. Our focused portfolio is well-positioned to respond to these trends and priorities. While our markets remain robust, increasing commodity prices, inflation, tariffs, rising interest rates, transportation costs, and foreign currency fluctuations have led to a challenging operating environment. Although some of these pressures have shown periods of moderation, they may continue to provide inherent uncertainty going forward.

Previous wording

We believe that our leadership position in the domestic energy and communications markets and the ability to deliver reliable products quickly will position us for continued growth as transmission grids and communication networks are enhanced, upgraded and extended.

Current wording

We believe that our leadership position in the domestic energy and communications markets and the ability to deliver reliable products quickly will position us for continued growth as transmission grids, distribution lines, and substation projects, as well as communication networks, are enhanced, upgraded and extended.

Previous wording

Our international business is also mainly concentrated in the energy and communications markets. Historically, our international sales were primarily related to the medium voltage distribution segment of the energy market but have grown through acquisition and new product development to include a significant contribution from the transmission and telecommunications markets.

Current wording

Our international business is also mainly concentrated in the energy and communications markets. Historically, our international sales were primarily related to the medium voltage distribution segment of the energy market but have grown through acquisition and new product development to include a significant contribution from the transmission, substation and telecommunications markets.

Previous wording

We believe that we are well positioned to supply the needs of the world’s diverse energy and communication markets as a result of our focused portfolio and strategic operational footprint, including expansion from recent acquisitions and product designs and technologies.

Current wording

We believe that we are well positioned to supply the needs of the world’s diverse energy and communication markets as a result of our focused portfolio and strategic operational footprint, including expansion from recent acquisitions, investment in new manufacturing facilities and product designs and technologies.

Previous wording

Our financial statements are subject to fluctuations in the exchange rates of foreign currencies in relation to the U.S. dollar. PLP’s foreign currency exchange gains or (losses) were primarily related to translating into U.S. dollars its foreign currency denominated loans, trade receivables and payables from its foreign subsidiaries at the December 2024 year-end exchange rates. The fluctuations of foreign currencies during the years ended December 31, 2024 and December 31, 2023 had an unfavorable impact on net sales of $4.2 million and a favorable impact of $0.4 million, respectively. The effect of currency translation had an unfavorable impact on net income in the year ended December 31, 2024 of $0.7 million and an unfavorable impact of $0.2 million in the year ended December 31, 2023. On a reportable segment basis, the impact of foreign currency translation on net sales and net income for the years ended December 31, 2024 and 2023, respectively, was as follows:

Current wording

Our financial statements are subject to fluctuations in the exchange rates of foreign currencies in relation to the U.S. dollar. The fluctuations of foreign currencies during the years ended December 31, 2025 and December 31, 2024 had a favorable impact on net sales of $1.4 million and an unfavorable impact of $4.2 million, respectively. The effect of currency translation had a favorable impact on net income in the year ended December 31, 2025 of $0.1 million and an unfavorable impact of $0.7 million in the year ended December 31, 2024. On a reportable segment basis, the impact of foreign currency translation on net sales and net income for the years ended December 31, 2025 and 2024, respectively, was as follows:

Previous wording

Net sales. In 2024, net sales were $593.7 million, a decrease of $76.0 million, or 11%, compared to 2023. Excluding the effect of currency translation, net sales decreased 11% as summarized in the following table:

Current wording

Net sales. In 2025, net sales were $669.3 million, an increase of $75.6 million, or 13%, compared to 2024. Excluding the effect of currency translation, net sales increased 13% as summarized in the following table:

Previous wording

The decrease in PLP-USA net sales of $78.9 million, or 23%, was primarily due to lower volumes in communications and energy product sales due to customer destocking efforts. International net sales for the year ended December 31, 2024 were unfavorably affected by $4.2 million when local currencies were converted to U.S. dollars. The following discussion of changes in net sales excludes the effect of currency translation. The Americas net sales of $90.3 million increased $9.2 million, or 11%, primarily due to higher volumes in energy product sales, partially offset by lower communication sales. EMEA net sales of $128.2 million decreased $8.6 million, or 6%, primarily due to lower volume in communications sales, partially offset by increased volumes in energy product sales. Asia-Pacific net sales of $108.5 million increased $6.5 million, or 6%, primarily due to volume increases in energy product sales.

Current wording

The increase in PLP-USA net sales of $45.9 million, or 17%, was primarily due to higher volumes in communications and energy product sales. International net sales for the year ended December 31, 2025 were favorably affected by $1.4 million when local currencies were converted to U.S. dollars. The following discussion of changes in net sales excludes the effect of currency translation. The Americas net sales of $108.8 million increased $22.0 million, or 24%, primarily due to an increase in energy product sales and an increase in communications sales due to the acquisition of JAP Telecom in May 2025. EMEA net sales of $133.1 million decreased $0.8 million, or 1%, primarily due to lower volume in communications sales, partially offset by increased volumes in energy product sales. Asia-Pacific net sales of $114.8 million increased $7.1 million, or 7%, primarily due to volume increases in energy product sales and special industry sales.

Previous wording

Gross Profit. Gross profit of $189.8 million for 2024 decreased $45.0 million, or 19%, compared to 2023. Excluding the effect of currency translation, gross profit decreased $43.5 million, or 19%, as summarized in the following table:

Current wording

Gross Profit. Gross profit of $208.5 million for 2025 increased $18.7 million, or 10%, compared to 2024. Excluding the effect of currency translation, gross profit increased $18.6 million, or 10%, as summarized in the following table:

Previous wording

PLP-USA gross profit of $93.0 million decreased by $46.0 million, or 33%, compared to the same period in 2023, primarily due to lower sales volumes and unfavorable product mix. International gross profit for the period ended December 31, 2024 was unfavorably impacted by $1.6 million when local currencies were translated to U.S. dollars. The following discussion of gross profit changes excludes the effects of currency translation. The Americas gross profit increased $0.4 million, or 1%, which was primarily the result of higher sales volumes, offset by increased depreciation expense and freight costs. EMEA gross profit decreased nominally, which was primarily driven by decreased sales volumes offset by favorable product mix and favorable resolution of a warranty claim. Asia-Pacific gross profit increased $2.2 million, or 7%, which was primarily driven by favorable product mix.

Current wording

PLP-USA gross profit of $105.9 million increased by $12.9 million, or 14%, compared to the same period in 2024, primarily due to higher sales volumes and favorable product mix benefited by price increases enacted in 2025, partially offset by higher tariff and manufacturing costs, including LIFO valuation costs. International gross profit for the period ended December 31, 2025 was favorably impacted by $0.2 million when local currencies were translated to U.S. dollars. The following discussion of gross profit changes excludes the effects of currency translation. The Americas gross profit increased $4.3 million, or 15%, which was primarily the result of higher sales volumes, offset by unfavorable product mix. EMEA gross profit increased $0.9 million, or 3%, due to favorable product mix. Asia-Pacific gross profit increased $0.5 million, or 1%, which was primarily driven by higher sales volume, partially offset by higher inventory reserves.

Previous wording

Costs and expenses. Costs and expenses of $139.1 million for the year ended December 31, 2024 decreased $11.6 million, or 8%, when compared to 2023. Excluding the effect of currency translation, costs and expenses decreased $10.9 million, or 7%, as summarized in the following table:

Current wording

Costs and expenses. Costs and expenses of $153.4 million for the year ended December 31, 2025 increased $14.4 million, or 10%, when compared to 2024. Excluding the effect of currency translation, costs and expenses increased $13.8 million, or 10%, as summarized in the following table:

Previous wording

PLP-USA costs and expenses of $72.6 million decreased $6.7 million, or 8% year-over-year. PLP-USA’s decrease was primarily attributable to lower selling costs and lower personnel and professional services costs, primarily as a result of cost containment efforts. International costs and expenses for the year ended December 31, 2024 had a favorable impact by $0.7 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 $18.7 million decreased $3.3 million primarily due to a legal settlement in the third quarter of 2023 and the impact of foreign currency remeasurement. EMEA costs and expenses of $26.1 million decreased by $2.4 million primarily due to lower personnel costs and bad debt expenses. Asia-Pacific costs and expenses of $21.7 million increased $1.4 million primarily due to the net impact of the sale of capital assets year over year and foreign currency remeasurement.

Current wording

PLP-USA costs and expenses of $69.9 million increased $6.2 million, or 9% year-over-year. PLP-USA’s increase was primarily attributable to personnel costs supporting strategic market growth in core product offerings in both energy and communications, primarily for sales, sales support and engineering resources, as well as higher selling and professional service costs. International costs and expenses for the year ended December 31, 2025 had a unfavorable impact by $0.6 million when local currencies were translated to U.S. dollars and was unfavorably impacted by intercompany transactions with PLP-USA. The following discussion of costs and expenses excludes the effect of currency translation and intercompany transactions. The Americas costs and expenses of $25.6 million increased $4.0 million primarily due to the acquisition of JAP Telecom in May 2025, an increase in personnel costs and the impact of foreign currency remeasurement. EMEA costs and expenses of $32.0 million increased by $2.8 million primarily due to higher personnel and facility costs and a recovery of bad debt in the second quarter of 2024 that did not recur. Asia-Pacific costs and expenses of $25.9 million increased $0.8 million primarily due to a gain on the sale of capital assets in the first quarter of 2024 that did not recur, offset by a recovery of bad debt.

Previous wording

Income taxes. Income taxes for the years ended December 31, 2024 and 2023 were $13.7 million and $19.0 million based on pre-tax income of $50.8 million and $82.3 million, respectively. The effective tax rate for the years ended December 31, 2024 and 2023 was 26.9% and 23.1%, respectively. Our effective tax rate increased primarily due to the limitations on the deductibility of compensation and the unfavorable impact from the mix of income earned in jurisdictions with a higher tax rate than the U.S. This was partially offset by a favorable impact from increase in excess tax benefit on share-based compensation. The following items had the most significant impact on the difference between our statutory U.S. federal income tax rate of 21.0%:

Current wording

Income taxes. Income taxes for the years ended December 31, 2025 and 2024 were $10.3 million and $13.7 million based on pre-tax income of $45.6 million and $50.8 million, respectively. The effective tax rate for the years ended December 31, 2025 and 2024 was 22.6% and 26.9%, respectively. The decrease in the effective tax rate from 2024 to 2025 was primarily due to the impact of the U.S. Plan termination and a reduction in the unfavorable impact from the mix of income earned in jurisdictions with a higher tax rate than the U.S. This was partially offset by an unfavorable impact from the decrease in certain tax credits. The following items had the most significant impact on the difference between our statutory U.S. federal income tax rate of 21.0%:

Previous wording

A $1.7 million, or 2.0%, net increase resulting from earnings in jurisdictions with higher tax rates than the U.S. federal statutory rate where such earnings are permanently reinvested.

Current wording

A $1.6 million, or 3.5%, net increase resulting from an increase in withholding taxes and from earnings in jurisdictions with higher tax rates than the U.S. federal statutory rate where such earnings are permanently reinvested.

Previous wording

A $3.7 million, or 4.5%, net decrease resulting from generation of foreign tax credits.

Current wording

A $0.7 million, or 1.5%, net decrease resulting from the generation of foreign tax credits.

Previous wording

A $1.2 million, or 2.4%, net decrease resulting from other stock compensation.

Current wording

A $1.2 million, or 2.4%, net decrease resulting from excess tax benefits from RSUs.

Previous wording

Net income. As a result of the preceding items, net income for the year ended December 31, 2024 was $37.1 million, compared to $63.3 million for 2023. Excluding the effect of currency translation, net income decreased $25.5 million as summarized in the following table.

Current wording

Net income. As a result of the preceding items, net income for the year ended December 31, 2025 was $35.3 million, compared to $37.1 million for 2024. Excluding the effect of currency translation, net income decreased $1.9 million as summarized in the following table and was primarily due to the U.S. Plan termination charged recorded in 2025.

Previous wording

Our investments include expenditures required for equipment and facilities as well as expenditures in support of our strategic initiatives. In 2024, we used cash of $14.7 million for capital expenditures. At December 31, 2024, we had $57.2 million of cash, cash equivalents and restricted cash (collectively “Cash”). Our Cash is held in various locations throughout the world. At December 31, 2024, the majority of our cash is held outside the U.S.

Current wording

Our investments include expenditures required for equipment and facilities as well as expenditures in support of our strategic initiatives. In 2025, we used cash of $40.1 million for capital expenditures, of which $24.8 million relates to the construction of the new Poland facility and purchase of the new Spain facility. At December 31, 2025, we had $83.4 million of cash, cash equivalents and restricted cash (collectively “Cash”). Our Cash is held in various locations throughout the world. At December 31, 2025, the majority of our cash is held outside the U.S.

Previous wording

Total debt, including notes payable, at December 31, 2024 was $28.6 million. At December 31, 2024, our unused availability under our credit facility (the "Facility") was $82.8 million and our bank debt to equity percentage was 6.8%. The Facility contains, among other provisions, requirements for maintaining levels of net worth and profitability. At December 31, 2024, the Company was in compliance with these covenants.

Current wording

Total debt, including notes payable, at December 31, 2025 was $39.5 million. At December 31, 2025, our unused availability under our credit facility (the "Facility") was $52.0 million and our bank debt to equity percentage was 8.3%. The Facility contains, among other provisions, requirements for maintaining levels of net worth and profitability. At December 31, 2025, the Company was in compliance with these covenants.

Previous wording

Our Asia-Pacific segment had $0.1 million and $0.2 million in restricted cash for the years ended December 31, 2024 and 2023. The restricted cash was used to secure bank debt and is included in Cash, cash equivalents and restricted cash on the balance sheet.

Current wording

Our Asia-Pacific segment had $0.1 million in restricted cash for the years ended December 31, 2025 and 2024. The restricted cash was used to secure bank debt and is included in Cash, cash equivalents and restricted cash on the balance sheet.

Previous wording

On January 19, 2021, the Company received funding for a term loan from PNC Equipment Finance, LLC in the principal amount of $20.5 million for the full amount of the purchase price for a new corporate aircraft. At December 31, 2024, the outstanding balance on the term loan was $12.6 million, of which $2.1 million was classified as current. See Note 7 in the Notes to Consolidated Financial Statements for more information.

Current wording

On January 19, 2021, the Company received funding for a term loan from PNC Equipment Finance, LLC in the principal amount of $20.5 million for the full amount of the purchase price for a new corporate aircraft. At December 31, 2025, the outstanding balance on the term loan was $10.6 million, of which $2.1 million was classified as current. See Note 7 in the Notes to Consolidated Financial Statements for more information.

Previous wording

We expect that our major source of funding for 2025 and beyond will be our operating cash flows, our existing cash and cash equivalents as well as our Facility agreement. The Facility agreement has an expiration date of March 2, 2026. The Company expects to extend the maturity date of the Facility over the coming year. Except for current earnings in certain jurisdictions, our operating income 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 further 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.

Current wording

We expect that our major source of funding for 2026 and beyond will be our operating cash flows, our existing cash and cash equivalents as well as our Facility agreement. The Facility agreement has an expiration date of June 30, 2028. Except for current earnings in certain jurisdictions, our operating income 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 further 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.

Previous wording

Net Cash provided by operating activities for the years ended December 31, 2024 and 2023 was $67.5 million and $107.6 million, respectively. The $40.1 million decrease was primarily a result of a decrease in net income and decrease in cash from working capital.

Current wording

Net Cash provided by operating activities for the years ended December 31, 2025 and 2024 was $73.5 million and $67.5 million, respectively. The $6.0 million increase was primarily a result of the net favorable movement in non-cash items of $13.8 million, including the U.S. pension plan termination, offset by changes in operating assets and liabilities.

Previous wording

Net Cash used in financing activities for the years ended December 31, 2024 and 2023 was $47.8 million and $48.9 million, respectively. The year-over-year change was primarily the result of decreased share repurchases offset by increased net payments of long-term debt.

Current wording

Net Cash used in financing activities for the years ended December 31, 2025 and 2024 was $9.2 million and $47.8 million, respectively. The $38.6 million change was primarily the result of a reduction in net payments of long-term debt.

Previous wording

As of December 31, 2024, the Company had total outstanding guarantees of $11.3 million. Additionally, certain domestic and foreign customers require the Company to issue letters of credit or performance bonds as a condition of placing an order. As of December 31, 2024, the Company had total outstanding letters of credit of $1.3 million.

Current wording

As of December 31, 2025, the Company had total outstanding guarantees of $14.1 million. Additionally, certain domestic and foreign customers require the Company to issue letters of credit or performance bonds as a condition of placing an order. As of December 31, 2025, the Company had total outstanding letters of credit of $3.1 million.

Previous wording

The Company has other borrowing facilities at certain of its foreign subsidiaries, which consist of overdraft lines, working capital credit lines, and facilities for the issuance of letters of credit and short-term borrowing needs. At December 31, 2024, and December 31, 2023, $8.8 million and $13.3 million were outstanding, of which $8.2 million and $11.4 million were classified as current, respectively. These facilities support commitments made in the ordinary course of business.

Current wording

The Company has other borrowing facilities at certain of its foreign subsidiaries, which consist of overdraft lines, working capital credit lines, and facilities for the issuance of letters of credit and short-term borrowing needs. At December 31, 2025, and December 31, 2024, $20.9 million and $8.8 million were outstanding, of which $4.6 million and $8.2 million were classified as current, respectively. These facilities support commitments made in the ordinary course of business.

Previous wording

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.

Current wording

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.

Previous wording

We record obligations and expenses related to a pension benefit plan based on actuarial valuations, which include key assumptions on discount rates, expected returns on plan assets and compensation increases. These actuarial assumptions are reviewed annually and modified as appropriate. The effect of modifications is generally recorded or amortized over future periods. The discount rate of 5.77% at December 31, 2024 reflects an analysis of yield curves as of the end of the year and the schedule of expected cash needs of the plan. The 2025 expected long-term return on plan assets of 4.75% reflects the plan’s historical returns and represents our best estimate of the likely future returns on the plan’s asset mix. We believe the assumptions used in recording obligations under the plans are reasonable based on prior experience, market conditions and the advice of plan actuaries. However, an increase in the discount rate would decrease the plan obligations and the net periodic benefit cost, while a decrease in the discount rate would increase the plan obligations and the net periodic benefit cost. In addition, an increase in the expected long-term return on plan assets would decrease the net periodic pension cost, while a decrease in expected long-term return on plan assets would increase the net periodic pension cost.

Current wording

For the remaining international pension plans, we record obligations and expenses related to a pension benefit plan based on actuarial valuations, which include key assumptions on discount rates, expected returns on plan assets and compensation increases. These actuarial assumptions are reviewed annually and modified as appropriate. The effect of modifications is generally recorded or amortized over future periods. We believe the assumptions used in recording obligations under the plans are reasonable based on prior experience, market conditions and the advice of plan actuaries. However, an increase in the discount rate would decrease the plan obligations and the net periodic benefit cost, while a decrease in the discount rate would increase the plan obligations and the net periodic benefit cost. In addition, an increase in the expected long-term return on plan assets would decrease the net periodic pension cost, while a decrease in expected long-term return on plan assets would increase the net periodic pension cost.