EX-99.1 3 e16050ex99_1.txt PRESS RELEASE Exhibit 99.1 Preformed Line Products Announces Financial Results for the 2003 Third Quarter and First Nine Months CLEVELAND, Oct. 29 /PRNewswire-FirstCall/ -- Preformed Line Products Company (Nasdaq: PLPC) today reported financial results for the third quarter and the first nine months of 2003. Net sales for the quarter ended September 30, 2003 were $39,473,000, a decrease of 5% from $41,587,000 for the three months ended September 30, 2002. The Company posted a net loss for the third quarter 2003 of $510,000, or $.09 per share, compared to a net loss of $2,099,000, or $.37 per share, in 2002. Included in the 2002 third quarter results was a non-recurring after-tax charge of $3,282,000 related to discontinuing its data communications operations in Europe. Excluding this one time charge, net income for the 2002 third quarter would have been $1,183,000, or $.20 per share. Subsequent to the end of the quarter the Company sold its 24% interest in a Japanese joint venture for $7,100,000 in cash. Although none of the proceeds are recognized in the third quarter 2003, tax expense of $1,327,000 ($.23 per share) is included in the third quarter results. The amount recorded represents the tax on the Company's portion of undistributed earnings of this joint venture. Recording this tax decreased net income from $817,000 in the third quarter to a loss of $510,000 and decreased net income of $2,734,000 for the nine months ended September 30, 2003 to $1,407,000. In the fourth quarter, a gain of $2,209,000 will be recognized as a result of this sale. Net sales for the nine months ended September 30, 2003 were $114,654,000, a decrease of 12% from the prior year's $130,449,000. Net income was $1,407,000, or $.24 per share, compared to $939,000, or $.16 per share, in the previous year. Excluding the one time charges in 2002, net income would have been $4,221,000, or $.73 per share. Rob Ruhlman, President and Chief Executive Officer, stated "The closing of our data communications operation in Europe last year accounted for 72% of the sales decrease for the year to date results. Our sales for the quarter actually increased 6% over last year when we exclude the impact of lost sales from the closing of this business. Increased sales will leverage the reduction in expenses we have initiated over the past two years. We are optimistic that the blackout that struck the northeastern United States this past August will have a positive impact on sales. While the need to address the rebuilding of the national power grid was pushed to the forefront, the timing of this massive undertaking remains uncertain. The recent sale of our Japanese joint venture will result in a gain in the fourth quarter of $2.2 million, but more importantly, generated cash after tax of $4.5 million." On Thursday, September 11, 2003, the Board of Directors declared a regular quarterly dividend in the amount of 20 cents per share on the Company's common shares, payable October 30, 2003 to shareholders of record October 1, 2003. Founded in 1947, Preformed Line Products is an international designer and manufacturer of products and systems employed in the construction and maintenance of overhead and underground networks for energy, communications and broadband network companies. Preformed's world headquarters are in Cleveland, Ohio, and the Company operates three domestic manufacturing centers, located in Rogers, Arkansas, Albemarle, North Carolina, and Asheville, North Carolina. The Company serves its worldwide market through international operations in Australia, Brazil, Canada, China, England, Japan, Mexico, New Zealand, Scotland, South Africa and Spain. 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 headings "Cautionary Statement With Respect to Forward-Looking Statements" and "Risk Factors" in the Company's Form 10K filed with the SEC on March 26, 2003. The Form 10K 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 FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002 Thousands of dollars, except Three months ended Nine months ended per share data September 30, September 30, 2003 2002 2003 2002 (Unaudited) (Unaudited) Net sales $39,473 $41,587 $114,654 $130,449 Cost of products sold 27,816 30,054 80,101 90,420 GROSS PROFIT 11,657 11,533 34,553 40,029 Costs and expenses Selling 4,356 6,131 12,686 17,446 General and administrative 4,342 6,726 14,606 17,002 Research and engineering 1,282 1,370 3,943 4,504 Other operating expenses (income) 91 (49) (240) 115 10,071 14,178 30,995 39,067 Royalty income - net 281 217 993 1,177 OPERATING INCOME (LOSS) 1,867 (2,428) 4,551 2,139 Other income (expense) Equity in net income (loss) of foreign joint ventures (59) 122 157 325 Interest income 96 73 278 193 Interest expense (94) (162) (332) (537) Other expense (40) (50) (121) (150) (97) (17) (18) (169) INCOME (LOSS) BEFORE INCOME TAXES 1,770 (2,445) 4,533 1,970 Income taxes (benefit) 2,280 (346) 3,126 1,031 NET INCOME (LOSS) $(510) $(2,099) $1,407 $939 Net income (loss) per share - basic and diluted $(0.09) $(0.37) $0.24 $0.16 Cash dividends declared per share $0.20 $0.20 $0.60 $0.60 Average number of shares outstanding - basic 5,784 5,769 5,779 5,764 Average number of shares outstanding - diluted 5,784 5,769 5,779 5,791 PREFORMED LINE PRODUCTS COMPANY CONSOLIDATED BALANCE SHEETS AS OF SEPTEMBER 30, 2003 AND DECEMBER 31, 2002 September 30, December 31, Thousands of dollars, except 2003 2002 share data (Unaudited) ASSETS Cash and cash equivalents $14,871 $11,629 Accounts receivable, less allowance of $3,381 ($3,770 in 2002) 27,185 24,763 Inventories - net 31,598 33,750 Deferred income taxes - short-term 3,436 5,276 Prepaids and other 4,223 3,104 TOTAL CURRENT ASSETS 81,313 78,522 Property and equipment - net 48,061 48,569 Investments in foreign joint ventures 8,302 8,087 Deferred income taxes - long-term 644 863 Goodwill, patents and other intangibles - net 5,511 5,596 Other 3,404 3,147 TOTAL ASSETS $147,235 $144,784 LIABILITIES AND SHAREHOLDERS' EQUITY Notes payable to banks $1,013 $1,246 Trade accounts payable 7,952 7,844 Accrued compensation and amounts withheld from employees 4,564 3,269 Accrued expenses and other liabilities 4,349 4,251 Accrued profit-sharing and pension contributions 3,668 4,176 Dividends payable 1,157 1,155 Income taxes 2,365 337 Current portion of long-term debt 3,636 1,676 TOTAL CURRENT LIABILITIES 28,704 23,954 Long-term debt, less current portion 253 5,847 Deferred income taxes - long-term 127 161 Minimum pension liability and other 854 726 SHAREHOLDERS' EQUITY Common shares - $2 par value, 15,000,000 shares authorized, 5,784,494 and 5,772,710 issued and outstanding, net of 377,404 and 389,188 treasury shares at par 11,569 11,545 Paid in capital 82 82 Retained earnings 121,209 123,124 Other comprehensive loss (15,563) (20,655) TOTAL SHAREHOLDERS' EQUITY 117,297 114,096 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $147,235 $144,784 SOURCE Preformed Line Products Company -0- 10/29/2003 /CONTACT: Eric R. Graef of Preformed Line Products, +1-440-473-9249/ /Web site: http://www.preformed.com / (PLPC) CO: Preformed Line Products Company ST: Ohio IN: MAC CPR SU: ERN ERP