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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the fiscal quarter ended March 31, 2024

or

☐ Transition Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

for the Transition Period From ________To _______

Commission file number 0-31164

Preformed Line Products Company

(Exact name of registrant as specified in its charter)

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)

(440) 461‑5200
(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class | Trading Symbol(s) | Name of each exchange on which registered
Common Shares, $2 par value per share | PLPC | NASDAQ

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 every Interactive Data File required to be submitted 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 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.

Large accelerated filer | ☐ |  | Accelerated filer | ☒
Non-accelerated filer | ☐ |  | Smaller Reporting Company | ☐
Emerging Growth Company | ☐ |  |  |

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 shares outstanding as of April 19, 2024: 4,918,036.

Table of Contents

|  |  |  | Page
Part I – Financial Information |  |
Item 1. |  | Financial Statements |  | 3
Item 2. |  | Management’s Discussion and Analysis of Financial Condition and Results of Operations |  | 17
Item 3. |  | Quantitative and Qualitative Disclosures About Market Risk |  | 22
Item 4. |  | Controls and Procedures |  | 23
Part II – Other Information |  |
Item 1. |  | Legal Proceedings |  | 23
Item 1A. |  | Risk Factors |  | 23
Item 2. |  | Unregistered Sales of Equity Securities and Use of Proceeds |  | 23
Item 3. |  | Defaults Upon Senior Securities |  | 23
Item 4. |  | Mine Safety Disclosures |  | 23
Item 5. |  | Other Information |  | 23
Item 6. |  | Exhibits |  | 24
SIGNATURES |  | 25

2

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

PREFORMED LINE PRODUCTS COMPANY

CONSOLIDATED BALANCE SHEETS

|  | March 31, 2024 |  |  | December 31, 2023 |
(Thousands of dollars, except share and per share data) |  | (Unaudited) |  |  |  |
ASSETS |  |  |  |  |  |
Cash, cash equivalents and restricted cash |  | $ | 45,859 |  |  | $ | 53,607 |
Accounts receivable, net |  |  | 111,527 |  |  |  | 106,892 |
Inventories, net |  |  | 141,508 |  |  |  | 148,814 |
Prepaid expenses |  |  | 8,314 |  |  |  | 8,246 |
Other current assets |  |  | 7,053 |  |  |  | 7,256 |
TOTAL CURRENT ASSETS |  |  | 314,261 |  |  |  | 324,815 |
Property, plant and equipment, net |  |  | 203,242 |  |  |  | 207,892 |
Operating lease, right-of-use assets |  |  | 11,021 |  |  |  | 11,671 |
Goodwill |  |  | 28,603 |  |  |  | 29,497 |
Other intangible assets, net |  |  | 11,868 |  |  |  | 12,981 |
Deferred income taxes |  |  | 7,379 |  |  |  | 7,109 |
Other assets |  |  | 9,735 |  |  |  | 9,186 |
TOTAL ASSETS |  | $ | 586,109 |  |  | $ | 603,151 |
LIABILITIES AND SHAREHOLDERS' EQUITY |  |  |  |  |  |
Trade accounts payable |  | $ | 41,748 |  |  | $ | 37,788 |
Notes payable to banks |  |  | 1,487 |  |  |  | 6,968 |
Operating lease liabilities, current |  |  | 1,532 |  |  |  | 1,671 |
Current portion of long-term debt |  |  | 7,078 |  |  |  | 6,486 |
Accrued compensation and other benefits |  |  | 23,348 |  |  |  | 28,018 |
Accrued expenses and other liabilities |  |  | 20,961 |  |  |  | 27,414 |
Dividends payable |  |  | 1,189 |  |  |  | 1,300 |
Income taxes payable |  |  | 2,361 |  |  |  | 1,672 |
TOTAL CURRENT LIABILITIES |  |  | 99,704 |  |  |  | 111,317 |
Long-term debt, less current portion |  |  | 47,928 |  |  |  | 48,796 |
Operating lease liabilities, noncurrent |  |  | 7,391 |  |  |  | 7,892 |
Deferred income taxes |  |  | 3,414 |  |  |  | 3,536 |
Other noncurrent liabilities |  |  | 14,304 |  |  |  | 15,454 |
SHAREHOLDERS' EQUITY |  |  |  |  |  |
Common shares – $2 par value per share, 15,000,000 shares authorized, 4,918,036 and 4,908,413 issued and outstanding, at March 31, 2024 and December 31, 2023 |  |  | 13,711 |  |  |  | 13,607 |
Common shares issued to rabbi trust, 238,641 and 243,118 shares at March 31, 2024 and December 31, 2023, respectively |  |  | (10,214 | ) |  |  | (10,183 | )
Deferred compensation liability |  |  | 10,214 |  |  |  | 10,183 |
Paid-in capital |  |  | 61,408 |  |  |  | 60,958 |
Retained earnings |  |  | 528,733 |  |  |  | 520,154 |
Treasury shares, at cost, 1,937,150 and 1,894,419 shares at March 31, 2024 and December 31, 2024, respectively |  |  | (123,701 | ) |  |  | (118,249 | )
Accumulated other comprehensive loss |  |  | (66,782 | ) |  |  | (60,306 | )
TOTAL PREFORMED LINE PRODUCTS COMPANY SHAREHOLDERS' EQUITY |  |  | 413,369 |  |  |  | 416,164 |
Noncontrolling interest |  |  | (1 | ) |  |  | (8 | )
TOTAL SHAREHOLDERS' EQUITY |  |  | 413,368 |  |  |  | 416,156 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |  | $ | 586,109 |  |  | $ | 603,151 |

See notes to consolidated financial statements (unaudited).

3

PREFORMED LINE PRODUCTS COMPANY

STATEMENTS OF CONSOLIDATED INCOME

(UNAUDITED)

| Three Months Ended March 31, |
| 2024 |  |  | 2023 |
(Thousands of dollars, except share and per share data) |  |  |  |  |
Net sales | $ | 140,904 |  |  | $ | 181,824 |
Cost of products sold |  | 96,773 |  |  |  | 115,541 |
GROSS PROFIT |  | 44,131 |  |  |  | 66,283 |
Costs and expenses |  |  |  |  |
Selling |  | 11,900 |  |  |  | 12,388 |
General and administrative |  | 16,608 |  |  |  | 18,609 |
Research and engineering |  | 5,431 |  |  |  | 5,193 |
Other operating (income) expense, net |  | (1,367 | ) |  |  | 1,112 |
|  | 32,572 |  |  |  | 37,302 |
OPERATING INCOME |  | 11,559 |  |  |  | 28,981 |
Other income (expense) |  |  |  |  |
Interest income |  | 972 |  |  |  | 304 |
Interest expense |  | (708 | ) |  |  | (1,066 | )
Other income, net |  | 35 |  |  |  | 40 |
|  | 299 |  |  |  | (722 | )
INCOME BEFORE INCOME TAXES |  | 11,858 |  |  |  | 28,259 |
Income tax expense |  | 2,255 |  |  |  | 6,840 |
NET INCOME | $ | 9,603 |  |  | $ | 21,419 |
Net income attributable to noncontrolling interests |  | (7 | ) |  |  | (21 | )
NET INCOME ATTRIBUTABLE TO PREFORMED LINE PRODUCTS COMPANY SHAREHOLDERS | $ | 9,596 |  |  | $ | 21,398 |
AVERAGE NUMBER OF SHARES OF COMMON STOCK OUTSTANDING: |  |  |  |  |
Basic |  | 4,915 |  |  |  | 4,937 |
Diluted |  | 4,944 |  |  |  | 4,997 |
EARNINGS PER SHARE OF COMMON STOCK ATTRIBUTABLE TO PREFORMED LINE PRODUCTS COMPANY SHAREHOLDERS: |  |  |  |  |
Basic | $ | 1.95 |  |  | $ | 4.33 |
Diluted | $ | 1.94 |  |  | $ | 4.28 |

See notes to consolidated financial statements (unaudited).

4

PREFORMED LINE PRODUCTS COMPANY

STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME

(UNAUDITED)

|  | Three Months Ended March 31, |
|  | 2024 |  |  | 2023 |
(Thousands of dollars) |  |  |  |  |  |
Net income |  | $ | 9,603 |  |  | $ | 21,419 |
Other comprehensive (loss) income, net of tax: |  |  |  |  |  |
Foreign currency translation adjustment |  |  | (6,565 | ) |  |  | 3,922 |
Recognized net actuarial gain |  |  | 89 |  |  |  | 89 |
Other comprehensive (loss) income, net of tax |  |  | (6,476 | ) |  |  | 4,011 |
Comprehensive income attributable to noncontrolling interests |  |  | (7 | ) |  |  | (21 | )
COMPREHENSIVE INCOME ATTRIBUTABLE TO PREFORMED LINE PRODUCTS COMPANY SHAREHOLDERS |  | $ | 3,120 |  |  | $ | 25,409 |

See notes to consolidated financial statements (unaudited).

5

PREFORMED LINE PRODUCTS COMPANY

STATEMENTS OF CONSOLIDATED CASH FLOWS

(UNAUDITED)

|  | Three Months Ended March 31, |
|  | 2024 |  |  | 2023 |
(Thousands of dollars) |  |  |
OPERATING ACTIVITIES |  |  |  |  |  |
Net income |  | $ | 9,603 |  |  | $ | 21,419 |
Adjustments to reconcile net income to net cash provided by (used in) operations: |  |  |  |  |  |
Depreciation and amortization |  |  | 5,414 |  |  |  | 4,275 |
Deferred income taxes |  |  | (386 | ) |  |  | (1,530 | )
Share-based compensation expense |  |  | 383 |  |  |  | 1,066 |
(Gain) loss on sale of property and equipment |  |  | (1,843 | ) |  |  | 16 |
Other, net |  |  | 1,230 |  |  |  | 1,942 |
Changes in operating assets and liabilities |  |  | (8,648 | ) |  |  | (1,758 | )
NET CASH PROVIDED BY OPERATING ACTIVITIES |  |  | 5,753 |  |  |  | 25,430 |
INVESTING ACTIVITIES |  |  |  |  |  |
Capital expenditures |  |  | (3,918 | ) |  |  | (8,351 | )
Proceeds from the sale of property and equipment |  |  | 3,237 |  |  |  | 124 |
Acquisition of businesses, net of cash |  |  | - |  |  |  | (14,068 | )
NET CASH USED IN INVESTING ACTIVITIES |  |  | (681 | ) |  |  | (22,295 | )
FINANCING ACTIVITIES |  |  |  |  |  |
Payments of notes payable to banks |  |  | (5,307 | ) |  |  | (4,524 | )
Proceeds from long-term debt |  |  | 33,232 |  |  |  | 50,389 |
Payments of long-term debt |  |  | (33,069 | ) |  |  | (50,633 | )
Dividends paid |  |  | (1,130 | ) |  |  | (1,154 | )
Proceeds from issuance of common shares |  |  | 60 |  |  |  | 355 |
Purchase of common shares for treasury |  |  | - |  |  |  | (116 | )
Purchase of common shares for treasury from related parties |  |  | (5,452 | ) |  |  | (3,624 | )
NET CASH USED IN FINANCING ACTIVITIES |  |  | (11,666 | ) |  |  | (9,307 | )
Effects of exchange rate changes on cash, cash equivalents and restricted cash |  |  | (1,154 | ) |  |  | 724 |
Net decrease in cash, cash equivalents and restricted cash |  |  | (7,748 | ) |  |  | (5,448 | )
Cash, cash equivalents and restricted cash at beginning of year |  |  | 53,607 |  |  |  | 37,239 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD |  | $ | 45,859 |  |  | $ | 31,791 |

See notes to consolidated financial statements (unaudited).

6

PREFORMED LINE PRODUCTS COMPANY

STATEMENTS OF CONSOLIDATED SHAREHOLDERS' EQUITY

|  |  |  |  |  |  |  |  |  |  |  |  | Accumulated Other Comprehensive Income (Loss) |  |  |  |  |  |  |
| Common Shares |  | Common Shares Issued to Rabbi Trust |  | Deferred Compensation Liability |  | Paid in Capital |  | Retained Earnings |  | Treasury Shares |  | Cumulative Translation Adjustment |  | Unrecognized Pension Benefit Cost |  | Total Preformed Line Products Company Equity |  | Noncontrolling Interests |  | Total Equity |
| (In thousands, except share and per share data) |  |  |  |  |
Balance at December 31, 2023 | $ | 13,607 |  | $ | (10,183 | ) | $ | 10,183 |  | $ | 60,958 |  | $ | 520,154 |  | $ | (118,249 | ) | $ | (55,828 | ) | $ | (4,478 | ) | $ | 416,164 |  | $ | (8 | ) | $ | 416,156 |
Net income |  |  |  |  |  |  |  |  |  | 9,596 |  |  |  |  |  |  |  |  | 9,596 |  |  | 7 |  |  | 9,603 |
Foreign currency translation adjustment |  |  |  |  |  |  |  |  |  |  |  |  |  | (6,565 | ) |  |  |  | (6,565 | ) |  |  |  | (6,565 | )
Pension adjustment, net of tax |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 89 |  |  | 89 |  |  |  |  | 89 |
Total comprehensive income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 3,120 |  |  | 7 |  |  | 3,127 |
Share-based compensation |  |  |  |  |  |  |  | 383 |  |  |  |  |  |  |  |  |  |  | 383 |  |  |  |  | 383 |
Purchase of 42,731 common shares |  |  |  |  |  |  |  |  |  |  |  | (5,452 | ) |  |  |  |  |  | (5,452 | ) |  |  |  | (5,452 | )
Issuance of 52,354 common shares |  | 104 |  |  |  |  |  |  | 67 |  |  |  |  |  |  |  |  |  |  | 171 |  |  |  |  | 171 |
Common shares distributed from rabbi trust of 4,477, net |  |  |  | (31 | ) |  | 31 |  |  |  |  |  |  |  |  |  |  |  |  | — |  |  |  |  | — |
Cash dividends declared – $0.20 per share |  |  |  |  |  |  |  |  |  | (1,017 | ) |  |  |  |  |  |  |  | (1,017 | ) |  |  |  | (1,017 | )
Balance at March 31, 2024 | $ | 13,711 |  | $ | (10,214 | ) | $ | 10,214 |  | $ | 61,408 |  | $ | 528,733 |  | $ | (123,701 | ) | $ | (62,393 | ) | $ | (4,389 | ) | $ | 413,369 |  | $ | (1 | ) | $ | 413,368 |
|  |  |  |  |  |  |  |  |  |  |  |  | Accumulated Other Comprehensive Income (Loss) |  |  |  |  |  |  |
| Common Shares |  | Common Shares Issued to Rabbi Trust |  | Deferred Compensation Liability |  | Paid in Capital |  | Retained Earnings |  | Treasury Shares |  | Cumulative Translation Adjustment |  | Unrecognized Pension Benefit Cost |  | Total Preformed Line Products Company Equity |  | Noncontrolling Interests |  | Total Equity |
| (In thousands, except share and per share data) |  |  |  |  |
Balance at December 31, 2022 | $ | 13,351 |  | $ | (10,261 | ) | $ | 10,261 |  | $ | 53,646 |  | $ | 460,930 |  | $ | (99,303 | ) | $ | (65,495 | ) | $ | (4,492 | ) | $ | 358,637 |  | $ | (13 | ) | $ | 358,624 |
Net income |  |  |  |  |  |  |  |  |  | 21,398 |  |  |  |  |  |  |  |  | 21,398 |  |  | 21 |  |  | 21,419 |
Foreign currency translation adjustment |  |  |  |  |  |  |  |  |  |  |  |  |  | 3,922 |  |  |  |  | 3,922 |  |  |  |  | 3,922 |
Pension adjustment, net of tax |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 89 |  |  | 89 |  |  |  |  | 89 |
Total comprehensive income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 25,409 |  |  | 21 |  |  | 25,430 |
Share-based compensation |  |  |  |  |  |  |  | 1,066 |  |  |  |  |  |  |  |  |  |  | 1,066 |  |  |  |  | 1,066 |
Purchase of 41,573 common shares |  |  |  |  |  |  |  |  |  |  |  | (3,740 | ) |  |  |  |  |  | (3,740 | ) |  |  |  | (3,740 | )
Issuance of 72,477 common shares |  | 140 |  |  |  |  |  |  | 244 |  |  |  |  |  |  |  |  |  |  | 384 |  |  |  |  | 384 |
Common shares distributed from rabbi trust of 3,541, net |  |  |  | 185 |  |  | (185 | ) |  |  |  |  |  |  |  |  |  |  |  | — |  |  |  |  | — |
Cash dividends declared – $0.20 per share |  |  |  |  |  |  |  |  |  | (1,050 | ) |  |  |  |  |  |  |  | (1,050 | ) |  |  |  | (1,050 | )
Balance at March 31, 2023 | $ | 13,491 |  | $ | (10,076 | ) | $ | 10,076 |  | $ | 54,956 |  | $ | 481,278 |  | $ | (103,043 | ) | $ | (61,573 | ) | $ | (4,403 | ) | $ | 380,706 |  | $ | 8 |  | $ | 380,714 |

See notes to consolidated financial statements (unaudited).

7

PREFORMED LINE PRODUCTS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(Tables in thousands of dollars, except share and per share data, unless specifically noted)

Note 1 – Significant Accounting Policies

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 ("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. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. This Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes included in our Form 10-K for the year ended December 31, 2023 filed on March 8, 2024 with the Securities and Exchange Commission. The interim period results are not necessarily indicative of the results to be expected for the full year. Management has evaluated subsequent events through the date this Form 10-Q was filed with the Securities and Exchange Commission.

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 months ended March 31, 2024 are not necessarily indicative of the results to be expected for the full-year ending December 31, 2024.

Noncontrolling interests a re presented in the Company’s consolidated financial statements as if parent company investors (controlling interests) and other minority investors (noncontrolling interests) in partially-owned subsidiaries have similar economic interests in a single entity. As a result, investments in noncontrolling interests are reported as equity in the Company’s consolidated financial statements. Additionally, the Company’s consolidated financial statements include 100% of a controlled subsidiary’s earnings, rather than only its share. Transactions between the parent company and noncontrolling interests are reported in equity as transactions between stockholders, provided that these transactions do not create a change in control.

Certain prior year amounts have been reclassified to conform to the current year presentation.

Recently Adopted or Issued Accounting Pronouncements

In November 2023, the FASB issued Accounting Standards Update ("ASU") No. 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.” This ASU enhances reportable segment disclosures on both an annual and interim basis primarily in regards to the disclosure of significant segment expenses that are regularly provided to the chief operating decision maker (CODM) and included within the reported measure(s) of segment profit or loss. In addition, the ASU requires disclosure, by segment, of other items included in the reported measure(s) of segment profit or loss, including qualitative information describing the composition, nature and type of each item. The ASU also expands disclosure requirements related to the CODM, including how the reported measure(s) of segment profit or loss are used to assess segment performance and allocate resources, the method used to allocate overhead for significant segment expenses and others. Lastly, all current required annual segment reporting disclosures under Topic 280 are now effective for interim periods. The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is evaluating the impact of adopting this ASU.

In December 2023, the FASB issued Accounting Standards Update No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” This ASU enhances income tax disclosures by providing information to better assess how an entity's operations, related tax risks, tax planning and operational opportunities affect its tax rate and prospects for future cash flows. This ASU requires additional disclosures to the annual effective tax rate reconciliation including specific categories and further disaggregated reconciling items that meet the quantitative threshold. Additionally, the ASU requires disclosures relating to income tax expense and payments made to federal, state, local and foreign jurisdictions. This ASU is effective for fiscal years and interim periods beginning after December 15, 2024. The Company is evaluating the impact of adopting this ASU.

Note 2 – Revenue

Revenue Recognition

Sales are recognized when obligations under the terms of the contract are satisfied and control of promised goods or services have transferred to our customers. Control is transferred when the customer has the ability to direct the use of and obtain benefits from the

8

goods or services and is primarily based on shipping terms. Sales are measured as the amount of consideration the Company expects to receive in exchange for transferring products.

Disaggregated Revenue

The Company’s revenues by segment and product type are as follows:

|  | Three Months Ended March 31, 2024 |
Product Type |  | PLP-USA |  | The Americas |  | EMEA |  | Asia-Pacific |  | Consolidated |
Energy |  |  | 67 | % |  | 74 | % |  | 70 | % |  | 76 | % |  | 70 | %
Communications |  |  | 28 | % |  | 25 | % |  | 24 | % |  | 3 | % |  | 23 | %
Special Industries |  |  | 5 | % |  | 1 | % |  | 6 | % |  | 21 | % |  | 7 | %
Total |  |  | 100 | % |  | 100 | % |  | 100 | % |  | 100 | % |  | 100 | %

|  | Three Months Ended March 31, 2023 |
Product Type |  | PLP-USA |  | The Americas |  | EMEA |  | Asia-Pacific |  | Consolidated |
Energy |  |  | 59 | % |  | 63 | % |  | 36 | % |  | 74 | % |  | 56 | %
Communications |  |  | 37 | % |  | 35 | % |  | 61 | % |  | 2 | % |  | 38 | %
Special Industries |  |  | 4 | % |  | 2 | % |  | 3 | % |  | 24 | % |  | 6 | %
Total |  |  | 100 | % |  | 100 | % |  | 100 | % |  | 100 | % |  | 100 | %

Credit Losses for Receivables

The Company maintains an allowance for credit losses for estimated losses resulting from the inability of its customers to make required payments. The Company uses a current expected credit loss model in order to immediately recognize an estimate of credit losses that are expected to occur over the life of the financial instruments, mainly trade receivables. Additionally, the allowance is based upon identified delinquent accounts, customer payment patterns and other analyses of historical data trends. Receivable balances are written off against an allowance for credit losses after a final determination has been made. The change in the allowance for credit losses includes expense and net write-offs, which are identified in the following table:

|  | Three Months Ended March 31, |
|  | 2024 |  |  | 2023 |
Allowance for credit losses, beginning of period |  | $ | 8,260 |  |  | $ | 5,021 |
Additions charged to costs and expenses |  |  | 66 |  |  |  | 752 |
Write-offs |  |  | (6 | ) |  |  | (3 | )
Foreign exchange and other |  |  | (131 | ) |  |  | 37 |
Allowance for credit losses, end of period |  | $ | 8,189 |  |  | $ | 5,807 |

Note 3 – Inventories, Net

Inventories, net

Inventory is carried at lower of cost or net realizable value. The components of inventory are as follows:

|  |  | March 31, 2024 |  |  | December 31, 2023 |
Raw materials |  |  | $ | 93,392 |  |  | $ | 98,708 |
Work-in-process |  |  |  | 13,874 |  |  |  | 14,397 |
Finished products |  |  |  | 44,958 |  |  |  | 46,250 |
Inventories, net of excess and obsolete inventory reserve |  |  |  | 152,224 |  |  |  | 159,355 |
Excess of current cost over LIFO cost |  |  |  | (10,716 | ) |  |  | (10,541 | )
Inventories at LIFO cost |  |  | $ | 141,508 |  |  | $ | 148,814 |

Costs for inventories of certain material, mainly in the U.S., are determined using the Last-In First-Out ("LIFO") method and totaled approximately $55.3 million at March 31, 2024 and $60.1 million at December 31, 2023. 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 the three-month periods ended March 31, 2024 and 202 3, the net change in LIFO inventories resulted in expense of $0.2 million and $0.5 million, respectively, to Cost of products sold. Th e Company’s reserves for slow moving and obsolete inventory was $17.8 million at March 31, 2024 and $17.6 million at December 31, 2023.

9

Note 4 – Property and Equipment, Net

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

|  |  | March 31, 2024 |  |  | December 31, 2023 |
Land and improvements |  |  | $ | 20,840 |  |  | $ | 21,374 |
Buildings and improvements |  |  |  | 125,828 |  |  |  | 129,369 |
Machinery, equipment and aircraft |  |  |  | 240,671 |  |  |  | 238,868 |
Construction in progress |  |  |  | 20,725 |  |  |  | 22,619 |
Property, plant and equipment, gross |  |  |  | 408,064 |  |  |  | 412,230 |
Less accumulated depreciation |  |  |  | (204,822 | ) |  |  | (204,338 | )
Property, plant and equipment, net |  |  | $ | 203,242 |  |  | $ | 207,892 |

Note 5 – Contingent Liabilities

The Company can be party to a variety of pending legal proceedings and claims arising in the normal course of business, including, but not limited to, litigation relating to employment, workers’ compensation, product liability, environmental and intellectual property. The Company has liability insurance to cover many of these claims.

Although the outcomes of these matters are not predictable with certainty, the Company records a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. In the event the Company determines that a loss is not probable, but is reasonably possible, and the likelihood to develop what the Company believes to be a reasonable range of potential loss exists, the Company will include disclosure related to such matters. To the extent that there is a reasonable possibility the losses could exceed amounts already accrued, the Company will adjust the accrual in the period in which the determination is made, disclose an estimate of the additional loss or range of loss and if the amount of such adjustment cannot be reasonably estimated, disclose that an estimate cannot be made.

In November 2016, 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 stated that the 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 alleged 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 Plaintiff was seeking an estimated $56.0 million Canadian dollars 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.

On September 26, 2023, the Defendants and the Plaintiff entered into a settlement agreement which dismissed the action against all Defendants with prejudice. Net of insurance, the total settlement amount paid by the Company in the fourth quarter of 2023 was $4.3 million Canadian dollars ($3.2 million US dollars). The settlement reflects the Company’s desire to eliminate the burden, expense, distraction and further uncertainties of litigation, and settlement does not constitute an admission of liability, wrongdoing or fault by the Company and its subsidiaries.

The Company is not a party to any 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 flow. As of March 31, 2024 and December 31, 2023, there were zero reserves for known global legal matters.

Note 6 – Pension Plans

The Company uses a December 31 measurement date for the Preformed Line Products Company Employees’ Retirement Plan (the “U.S. Plan”). Net periodic pension expense for the U.S. Plan for the three months ended March 31, 2024 and 2023, respectively, follows:

10

| Three Months Ended March 31, |
| 2024 |  |  | 2023 |
Interest cost | $ | 387 |  |  | $ | 392 |
Expected return on plan assets |  | (485 | ) |  |  | (501 | )
Recognized net actuarial loss |  | 117 |  |  |  | 117 |
Net periodic pension expense | $ | 19 |  |  | $ | 8 |

There were no contributions to the U.S. Plan during the three months ended March 31, 2024 and 2023. The Company is evaluating whether to make additional contributions to the U.S. Plan during 2024. In August 2023, the Board of Directors of the Company approved a resolution to terminate the U.S. Plan and preliminary administrative actions have been undertaken to proceed with the termination. Components of pension expense are included in Other income, net in the Consolidated Statements of Income.

Note 7 – Accumulated Other Comprehensive Income (“AOCI”)

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

|  | Three Months Ended March 31, 2024 |  |  | Three Months Ended March 31, 2023 |
|  |  |  |  | Cumulative |  |  |  |  |  |  |  |  | Cumulative |  |  |  |
|  | Unrecognized |  |  | Translation |  |  |  |  |  | Unrecognized |  |  | Translation |  |  |  |
|  | Benefit Cost |  |  | Adjustment |  |  | Total |  |  | Benefit Cost |  |  | Adjustment |  |  | Total |
Balance at January 1, |  | $ | (4,478 | ) |  | $ | (55,828 | ) |  | $ | (60,306 | ) |  | $ | (4,492 | ) |  | $ | (65,495 | ) |  | $ | (69,987 | )
Other comprehensive income before reclassifications: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Gain on foreign currency translation adjustment |  |  | — |  |  |  | (6,565 | ) |  |  | (6,565 | ) |  |  | — |  |  |  | 3,922 |  |  |  | 3,922 |
Amounts reclassified from AOCI: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Amortization of defined benefit pension actuarial gain (a) |  |  | 89 |  |  |  | — |  |  |  | 89 |  |  |  | 89 |  |  |  | — |  |  |  | 89 |
Net current period other comprehensive income (loss) |  |  | 89 |  |  |  | (6,565 | ) |  |  | (6,476 | ) |  |  | 89 |  |  |  | 3,922 |  |  |  | 4,011 |
Balance at March 31, |  | $ | (4,389 | ) |  | $ | (62,393 | ) |  | $ | (66,782 | ) |  | $ | (4,403 | ) |  | $ | (61,573 | ) |  | $ | (65,976 | )

(a)
This AOCI component is included in the computation of net periodic pension expense (income) as noted in Note 6 – Pension Plans.

Note 8 – Debt and Credit Arrangements

The Company maintains a credit facility (the "Facility") with a capacity of $90.0 million that expires March 2, 2026. The interest rate is defined as the Secured Overnight Financing Rate (“SOFR”) plus 1.125% unless the Company’s funded debt to Earnings before Interest, Taxes and Depreciation ratio exceeds 2.25 to 1, at which point the SOFR spread becomes 1.500%. At March 31, 2024, the Company had utilized $35.0 million with $55.0 million available on the Facility. There wer e no long-term outstanding letters of credit as of March 31, 2024. Our bank debt to equity percentage was 13.7%. The Facility contains, among other provisions, requirements for maintaining levels of net worth and profitability. At March 31, 2024, the Company was in compliance with these covenants.

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. The term of the loan is 120 months at a fixed interest rate of 2.744%. The loan is payable in 119 equal monthly installments, which commenced on March 1, 2021 with a final payment of any outstanding principal and accrued interest due and payable on the final monthly payment date. Of the $14.2 million outstanding on this debt facility at March 31, 2024, $2.1 million was classified as current. The loan is secured by the aircraft.

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 March 31, 2024, and December 31, 2 023, $7.3 million and $13.3 million was outstanding, of which $6.5 million and $11.4 million were classified as current, respectively. These facilities support commitments made in the ordinary course of business.

The Company's Asia-Pacific segment had $0.2 million in restricted cash used to secure bank debt at March 31, 2024 and December 31, 2023, respectively. The restricted cash is shown on the Company’s Consolidated Balance Sheets in Cash, cash equivalents and restricted cash.

Note 9 – Income Taxes

For the three months ended March 31, 2024 and 2023, the Company’s effective tax rate was 19% and 24%, respectively. The effective tax rate for the three months ended March 31, 2024 was lower than the effective tax rate for the same period in 2023 mainly due to an increase in excess tax benefits on share-based compensation in relation to overall lower pre-tax book income.

11

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. During the period ended March 31, 2024, the Company did no t record any additional valuation allowances in various jurisdictions on their deferred tax assets.

For the three-month periods ending March 31, 2024 and 2023, the Company did no t record any new uncertain tax positions.

Note 10 – Computation of Earnings Per Share

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 shares that were outstanding during the periods presented.

The calculation of basic and diluted earnings per share for the three months ended March 31, was as follows:

| Three Months Ended March 31, |
| 2024 |  |  | 2023 |
Numerator |  |  |  |  |
Net income | $ | 9,596 |  |  | $ | 21,398 |
Denominator |  |  |  |  |
Determination of shares (in thousands) |  |  |  |  |
Weighted-average common shares outstanding |  | 4,915 |  |  |  | 4,937 |
Dilutive effect – share-based awards |  | 29 |  |  |  | 60 |
Diluted weighted-average common shares outstanding |  | 4,944 |  |  |  | 4,997 |
Earnings per common share |  |  |  |  |
Basic | $ | 1.95 |  |  | $ | 4.33 |
Diluted | $ | 1.94 |  |  | $ | 4.28 |

For the three months ended March 31, 2024 and 2023, there were zero stock options which were excluded from the calculation of diluted earnings per share.

Note 11 – Goodwill and Other Intangibles

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

|  | March 31, 2024 |  |  | December 31, 2023 |
|  | Gross Carrying |  |  | Accumulated |  |  | Gross Carrying |  |  | Accumulated |
|  | Amount |  |  | Amortization |  |  | Amount |  |  | Amortization |
Finite-lived intangible assets |  |  |  |  |  |  |  |  |  |  |  |
Patents |  | $ | 4,806 |  |  | $ | (4,806 | ) |  | $ | 4,806 |  |  | $ | (4,806 | )
Land use rights |  |  | 655 |  |  |  | (118 | ) |  |  | 1,109 |  |  |  | (307 | )
Trademark |  |  | 1,969 |  |  |  | (1,690 | ) |  |  | 1,988 |  |  |  | (1,682 | )
Technology |  |  | 6,836 |  |  |  | (3,724 | ) |  |  | 7,104 |  |  |  | (3,738 | )
Customer relationships |  |  | 18,720 |  |  |  | (10,780 | ) |  |  | 19,240 |  |  |  | (10,733 | )
|  | $ | 32,986 |  |  | $ | (21,118 | ) |  | $ | 34,247 |  |  | $ | (21,266 | )
Indefinite-lived intangible assets |  |  |  |  |  |  |  |  |  |  |  |
Goodwill |  | $ | 28,603 |  |  |  |  |  | $ | 29,497 |  |  |  |

The Company’s measurement date for its annual impairment test for goodwill is October 1st of each year. The Company performs additional interim impairment assessments as circumstances warrant. There were no indicators of impairment noted for the period ending March 31, 2024.

12

The Company may use both quantitative and qualitative approaches when testing goodwill for impairment. For selected reporting units where the qualitative approach is utilized, a qualitative evaluation of events and circumstances impacting the reporting unit is performed to determine if it is more likely than not that the fair value of the reporting unit exceeds its carrying amount. If that determination is made, no further evaluation is necessary. Otherwise, the Company performs a quantitative impairment test on the reporting unit.

For the quantitative approach, the Company uses a combination of the income approach, which uses a discounted cash flow methodology, and the market approach, which uses comparable market multiples 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. The fair value estimates are subjective and sensitive to significant assumptions, such as revenue growth rates, operating margins, the weighted average cost of capital, and estimated market multiples, of which are affected by expectations of future market or economic conditions. The Company believes that the methodologies, significant assumptions, and weightings used are reasonable and result in appropriate fair values of the reporting units.

The Company’s only intangible asset with an indefinite life is goodwill. The Company’s goodwill is not deductible for tax purposes. Changes in the carrying amount of goodwill by reporting unit are shown in the following table:

|  | PLP-USA |  |  | The Americas |  |  | EMEA |  |  | Asia-Pacific |  |  | Total |
Balance at January 1, 2024 |  | $ | 3,078 |  |  | $ | 10,582 |  |  | $ | 15,837 |  |  | $ | — |  |  | $ | 29,497 |
Currency translation |  |  | — |  |  |  | (290 | ) |  |  | (604 | ) |  |  | — |  |  |  | (894 | )
Balance at March 31, 2024 |  | $ | 3,078 |  |  | $ | 10,292 |  |  | $ | 15,233 |  |  | $ | — |  |  | $ | 28,603 |

Note 12 – Fair Value of Financial Assets and Liabilities

Fair value is measured based on an exit price, representing the amount that would be received to sell an asset or paid to satisfy a liability in an orderly transaction between market participants. The 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: (Level 1 Inputs) quoted market prices in active markets for identical assets or liabilities; (Level 2 Inputs) observable market-based inputs or unobservable inputs that are corroborated by market data; and (Level 3 Inputs) unobservable inputs that are not corroborated by market data.

The following table summarizes the Company’s assets and liabilities, recorded and measured at fair value, in the Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023:

13

Description |  | Balance as of March 31, 2024 |  |  | Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) |  |  | Significant Other Observable Inputs (Level 2) |  |  | Significant Unobservable Inputs (Level 3) |
Assets: |  |  |  |  |  |  |  |  |  |  |  |
Foreign currency forward contracts |  | $ | 141 |  |  | $ | — |  |  | $ | 141 |  |  | $ | — |
Total assets |  | $ | 141 |  |  | $ | — |  |  | $ | 141 |  |  | $ | — |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Foreign currency forward contracts |  | $ | 8 |  |  | $ | — |  |  | $ | 8 |  |  | $ | — |
Supplemental profit sharing plan |  |  | 9,123 |  |  |  | — |  |  |  | 9,123 |  |  |  | — |
Total liabilities |  | $ | 9,131 |  |  | $ | — |  |  | $ | 9,131 |  |  | $ | — |
Description |  | Balance as of December 31, 2023 |  |  | Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) |  |  | Significant Other Observable Inputs (Level 2) |  |  | Significant Unobservable Inputs (Level 3) |
Assets: |  |  |  |  |  |  |  |  |  |  |  |
Foreign currency forward contracts |  | $ | 158 |  |  | $ | — |  |  | $ | 158 |  |  | $ | — |
Total assets |  | $ | 158 |  |  | $ | — |  |  | $ | 158 |  |  | $ | — |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Foreign currency forward contracts |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Supplemental profit sharing plan |  |  | 8,222 |  |  |  | — |  |  |  | 8,222 |  |  |  | — |
Total liabilities |  | $ | 8,222 |  |  | $ | — |  |  | $ | 8,222 |  |  | $ | — |

The Company operates internationally and enters into intercompany transactions denominated in foreign currencies. Consequently, the Company is subject to market risk arising from exchange rate movements between the dates foreign currency transactions occur and the dates they are settled. The Company currently uses foreign currency forward contracts to reduce the risk related to some of these transactions. These contracts usually have maturities of 90 days or less and generally require an exchange of foreign currencies for U.S. dollars at maturity at rates stated in the contracts. These contracts are not designated as hedging instruments under U.S. GAAP. Accordingly, the changes in the fair value of the foreign currency forward contracts are recognized in each accounting period in Other operating expense, net on the Consolidated Statements of Income together with the transaction gain or loss from the related balance sheet position. For the three months ended March 31, 2024 and 2023, the Company recognized net losses of $0.2 million and $0.1 mi llion, respectively, on foreign currency forward contracts.

The Company has a non-q ualified supplemental profit sharing plan for its executives (the "Supplemental Profit Sharing Plan"). The liability for the unfunded Supplemental Profit Sharing Plan was $9.1 million at March 31, 2024 and $8.2 million at December 31, 2023. These amounts are recorded within Other noncurrent liabilities on the Company’s Consolidated Balance Sheets. The Supplemental Profit Sharing Plan allows participants the ability to hypothetically inve st their proportionate award into various investment options, which primarily includes mutual funds. The Company credits earnings, gains and losses to the participants’ deferred compensation account balances based on the investments selected by the participants. The Company measures the fair value of the Supplemental Profit Sharing Plan liability using the market values of the participants’ underlying investment accounts.

The carrying value of the Company’s current financial instruments, which include cash, cash equivalents and restricted cash, accounts receivable, accounts payable and short-term debt, approximates fair value because of the short-term maturity of these instruments.

At March 31, 2024 and December 31, 2023, the fair value of the Company’s long-term debt was estimated using discounted cash flows analyses, based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements that are considered to be Level 2 inputs. Based on the analysis performed, the fair value and the carrying value of the Company’s long-term debt are as follows:

|  | March 31, 2024 |  |  | December 31, 2023 |
|  | Fair Value |  |  | Carrying Value |  |  | Fair Value |  |  | Carrying Value |
Long-term debt and related current maturities |  | $ | 51,486 |  |  | $ | 55,006 |  |  | $ | 51,786 |  |  | $ | 55,282 |

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Note 13 – Segment Information

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated by the CODM, or decision making group, in deciding how to allocate resources to an individual segment and in assessing performance.

The following tables present a summary of the Company’s reportable operating segments for the three months ended March 31, 2024 and 2023. Financial results for the PLP-USA segment include the elimination of all segments’ intercompany profit in inventory.

|  |  | Three Months Ended March 31, |
|  |  | 2024 |  |  | 2023 |
Net sales |  |  |  |  |  |  |
PLP-USA |  |  | $ | 70,737 |  |  | $ | 97,177 |
The Americas |  |  |  | 18,358 |  |  |  | 22,568 |
EMEA |  |  |  | 28,654 |  |  |  | 39,034 |
Asia-Pacific |  |  |  | 23,155 |  |  |  | 23,045 |
Total net sales |  |  | $ | 140,904 |  |  | $ | 181,824 |
Intersegment sales |  |  |  |  |  |  |
PLP-USA |  |  | $ | 2,346 |  |  | $ | 11,962 |
The Americas |  |  |  | 2,467 |  |  |  | 4,213 |
EMEA |  |  |  | 1,374 |  |  |  | 1,533 |
Asia-Pacific |  |  |  | 3,764 |  |  |  | 7,009 |
Total intersegment sales |  |  | $ | 9,951 |  |  | $ | 24,717 |
Gross profit |  |  |  |  |  |  |
PLP-USA |  |  | $ | 24,696 |  |  | $ | 42,106 |
The Americas |  |  |  | 4,965 |  |  |  | 7,987 |
EMEA |  |  |  | 8,318 |  |  |  | 9,247 |
Asia-Pacific |  |  |  | 6,152 |  |  |  | 6,943 |
Total gross profit |  |  | $ | 44,131 |  |  | $ | 66,283 |
Net income attributable to Preformed Line Products Company shareholders |  |  |  |  |  |  |
PLP-USA |  |  | $ | 5,317 |  |  | $ | 16,796 |
The Americas |  |  |  | 897 |  |  |  | 1,889 |
EMEA |  |  |  | 1,579 |  |  |  | 1,661 |
Asia-Pacific |  |  |  | 1,803 |  |  |  | 1,052 |
Total net income attributable to Preformed Line Products Company shareholders |  |  | $ | 9,596 |  |  | $ | 21,398 |

Note 14 – Acquisitions of Businesses

Acquisition of Pilot Plastics

On February 1, 2023, the Company acquired substantially all of the assets of Pilot Plastics, headquartered in Akron, Ohio. Pilot Plastics is an injection molding manufacturer and the acquisition expanded the Company's injection molding capabilities and further enhanced the Company's domestic manufacturing footprint. The purchase price was approximatel y $13.8 million, net of cash as of the closing date. The purchase price is subject to a holdback of approximately $1.7 million. To fund the Pilot Plastics acquisition, the Company borrowed on the Facility.

The acquisition of Pilot Plastics is accounted for using the acquisition method of accounting, which requires the assets acquired and liabilities assumed to be recognized at their respective fair values on the acquisition date. The process of estimating the fair values of certain tangible assets, and assumed liabilities requires the use of judgment in determining the appropriate assumptions and estimates. During the measurement period, opening balance sheet adjustments were made to finalize the fair value estimates based on the final valuations received, which are summarized in the table below.

15

|  | Final Allocation |
Accounts receivable |  | $ | 970 |
Inventory |  | 585 |
Property, plant and equipment and other assets |  |  | 13,628 |
Accounts payable |  |  | (1,299 | )
Other current liabilities |  |  | (71 | )
Total identifiable net assets |  |  | 13,813 |
Total consideration, net of cash received |  | $ | 13,813 |

Due to the consideration transferred equaling the fair value of the assets acquired, no residual goodwill was recognized.

All measurement period adjustments were completed within a year from the acquisition date, and such adjustments did not have a material impact on the Company's results of operations and financial position.

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Item 2. Management’s Discussion and Analysis of 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 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.

OVERVIEW

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.

We report our segments in four geographic regions: PLP-USA (including corporate), The Americas (includes operations in North and South America, excluding 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, solar framing products and inspection services. Our other three segments, The Americas, EMEA and Asia-Pacific, support our energy, telecommunications, data communication, solar and other products in each respective geographical region.

The segment managers responsible for each region report directly to the Company’s Executive Chairman, 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 the 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.

PREFACE

The following discussion describes our results of operations for the three months ended March 31, 2024 and 2023. Our consolidated financial statements are prepared in conformity with United States ("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 financial statements in the assessment of our performance and operating trends.

Net sales of $140.9 million decreased $40.9 million for the three months ended March 31, 2024 year-over-year. The inflationary headwinds we experienced in 2022 and early 2023 related to raw materials, specifically plastic resins, aluminum and sand (grit), have generally subsided. Costs related to shipping and freight have similarly fallen from their 2022 peak. While decreases in these underlying costs along with the impacts of our previous price increases benefited gross margins in 2023, they have not meaningfully impacted first quarter 2024 results. If inflationary pressures increase again, it may require further price adjustments to maintain profit margin, and any price increases may have a negative effect on demand.

Our financial statements are subject to fluctuations in the exchange rates of foreign currencies in relation to the U.S. dollar. PLPC’s foreign currency impacts were primarily related to translating into U.S. dollars its foreign currency denominated loans, trade receivables and royalty receivables from its foreign subsidiaries at the March 31, 2024 exchange rates. The fluctuations of foreign currencies during the three months ended March 31, 2024 had a favorable impact on net sales of $0.7 million and an unfavorable impact of $4.6 million during the three months ended March 31, 2023. The effect of currency translation had a de minimis impact on net income and an unfavorable impact of $0.2 million for the three months ended March 31, 2024 and 2023, respectively. On a reportable segment basis, the impact of foreign currency translation on net sales and net income for the three months ended March 31, 2024 and 2023, respectively, was as follows:

17

|  | Foreign Currency Translation Impact |
|  | Net Sales |  |  | Net Income (Loss) |
(Thousands of dollars) |  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
The Americas |  | $ | 805 |  |  | $ | (1,157 | ) |  | $ | 33 |  |  | $ | (64 | )
EMEA |  |  | 788 |  |  |  | (2,165 | ) |  |  | 39 |  |  |  | (91 | )
Asia-Pacific |  |  | (844 | ) |  |  | (1,273 | ) |  |  | (73 | ) |  |  | (62 | )
Total |  | $ | 749 |  |  | $ | (4,595 | ) |  | $ | (1 | ) |  | $ | (217 | )

Although we experienced market headwinds that have impacted our first quarter 2024 results, we believe our business portfolio and our financial position are sound and strategically well-positioned. We remain focused on assessing our global market opportunities and overall manufacturing capacity in conjunction with the requirements of local manufacturing in the markets that we serve. As necessary, we will modify redundant processes and further utilize our global manufacturing network to manage costs, increase sales volume and deliver value to our customers. Period cost containment has been a priority for the Company in 2024, shown through a reduction in costs and expenses of nearly 13%. We have continued to invest in the business to expand into new markets for the Company, evaluate strategic mergers and acquisitions, improve efficiency, develop new products and increase our capacity. As of March 31, 2024, our liquidity remains strong and our bank debt to equity percentage was 13.7%. We can borrow needed funds at a competitive interest rate under our credit facility.

RESULTS OF OPERATIONS

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 March 31, 2024 and 2023. The Company’s past operating results are not necessarily indicative of future operating results.

|  | Three Months Ended March 31, |
(Thousands of dollars) |  | 2024 |  |  |  | 2023 |  |  |  | Change |
Net sales |  | $ | 140,904 |  |  | 100.0 |  | % |  | $ | 181,824 |  |  | 100.0 |  | % |  | $ | (40,920 | )
Cost of products sold |  |  | 96,773 |  |  | 68.7 |  |  |  |  | 115,541 |  |  | 63.5 |  |  |  |  | (18,768 | )
GROSS PROFIT |  |  | 44,131 |  |  | 31.3 |  |  |  |  | 66,283 |  |  | 36.5 |  |  |  |  | (22,152 | )
Costs and expenses |  |  | 32,572 |  |  | 23.1 |  |  |  |  | 37,302 |  |  | 20.5 |  |  |  |  | (4,730 | )
OPERATING INCOME |  |  | 11,559 |  |  | 8.2 |  |  |  |  | 28,981 |  |  | 15.9 |  |  |  |  | (17,422 | )
Other income (expense), net |  |  | 299 |  |  | 0.2 |  |  |  |  | (722 | ) |  | (0.4 | ) |  |  |  | 1,021 |
INCOME BEFORE INCOME TAXES |  |  | 11,858 |  |  | 8.4 |  |  |  |  | 28,259 |  |  | 15.5 |  |  |  |  | (16,401 | )
Income taxes |  |  | 2,255 |  |  | 1.6 |  |  |  |  | 6,840 |  |  | 3.8 |  |  |  |  | (4,585 | )
NET INCOME |  |  | 9,603 |  |  | 6.8 |  |  |  |  | 21,419 |  |  | 11.8 |  |  |  |  | (11,816 | )
Net (income) attributable to noncontrolling interests |  |  | (7 | ) |  | (0.0 | ) |  |  |  | (21 | ) |  | (0.0 | ) |  |  |  | 14 |
NET INCOME ATTRIBUTABLE TO PREFORMED LINE PRODUCTS COMPANY SHAREHOLDERS |  | $ | 9,596 |  |  | 6.8 |  | % |  | $ | 21,398 |  |  | 11.8 |  | % |  | $ | (11,802 | )

Net sales. In 2024, net sales were $140.9 million, a decrease of $40.9 million, or 23%, compared to 2023. Excluding the effect of currency translation, net sales decreased 23% as summarized in the following table:

|  | Three Months Ended March 31, |  |
|  |  |  |  |  |  |  |  |  |  | Change |  |  | Change |  |  |  |  |
(Thousands of dollars) |  |  |  |  |  |  |  |  |  |  | Due to |  |  | Excluding |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  | Currency |  |  | Currency |  |  | % |  |
|  | 2024 |  |  | 2023 |  |  | Change |  |  | Translation |  |  | Translation |  |  | Change |  |
Net sales |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
PLP-USA |  | $ | 70,737 |  |  | $ | 97,177 |  |  | $ | (26,440 | ) |  | $ | — |  |  | $ | (26,440 | ) |  |  | (27 | ) | %
The Americas |  |  | 18,358 |  |  |  | 22,568 |  |  |  | (4,210 | ) |  |  | 805 |  |  |  | (5,015 | ) |  |  | (22 | ) |
EMEA |  |  | 28,654 |  |  |  | 39,034 |  |  |  | (10,380 | ) |  |  | 788 |  |  |  | (11,168 | ) |  |  | (29 | ) |
Asia-Pacific |  |  | 23,155 |  |  |  | 23,045 |  |  |  | 110 |  |  |  | (844 | ) |  |  | 954 |  |  |  | 4 |  |
Consolidated |  | $ | 140,904 |  |  | $ | 181,824 |  |  | $ | (40,920 | ) |  | $ | 749 |  |  | $ | (41,669 | ) |  |  | (23 | ) | %

The decrease in PLP-USA net sales of $26.4 million, or 27%, was primarily due to lower volumes and unfavorable product mix in communications sales and lower volumes in energy product sales. International net sales for the three months ended March 31, 2024 were favorably affected by $0.7 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 $18.4 million decreased $5.0 million, or 22%, primarily due to lower volumes in communications sales. EMEA net sales of $28.7 million decreased $11.2 million, or 29%, primarily due to

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lower volume predominately in communications sales and to a lesser extent energy products sales. Asia-Pacific net sales of $23.2 million increased $1.0 million, or 4%, primarily due to volume increases in energy product sales.

Gross profit. Gross profit of $44.1 million for 2024 decreased $22.2 million, or 33%, compared to 2023. Excluding the effect of currency translation, gross profit decreased $22.4 million, or 34%, as summarized in the following table:

|  | Three Months Ended March 31, |  |
|  |  |  |  |  |  |  |  |  |  | Change |  |  | Change |  |  |  |  |
(Thousands of dollars) |  |  |  |  |  |  |  |  |  |  | Due to |  |  | Excluding |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  | Currency |  |  | Currency |  |  | % |  |
|  | 2024 |  |  | 2023 |  |  | Change |  |  | Translation |  |  | Translation |  |  | Change |  |
Gross profit |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
PLP-USA |  | $ | 24,696 |  |  | $ | 42,106 |  |  | $ | (17,410 | ) |  | $ | — |  |  | $ | (17,410 | ) |  |  | (41 | ) | %
The Americas |  |  | 4,965 |  |  |  | 7,987 |  |  |  | (3,022 | ) |  |  | 253 |  |  |  | (3,275 | ) |  |  | (41 | ) |
EMEA |  |  | 8,318 |  |  |  | 9,247 |  |  |  | (929 | ) |  |  | 179 |  |  |  | (1,108 | ) |  |  | (12 | ) |
Asia-Pacific |  |  | 6,152 |  |  |  | 6,943 |  |  |  | (791 | ) |  |  | (209 | ) |  |  | (582 | ) |  |  | (8 | ) |
Consolidated |  | $ | 44,131 |  |  | $ | 66,283 |  |  | $ | (22,152 | ) |  | $ | 223 |  |  | $ | (22,375 | ) |  |  | (34 | ) | %

PLP-USA gross profit of $24.7 million decreased by $17.4 million, or 41%, compared to the same period in 2023, primarily due to lower sales volumes and unfavorable product mix. International gross profit for the period ended March 31, 2024 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 decreased $3.3 million, or 41%, which was primarily the result of lower sales volumes. EMEA gross profit decreased $1.1 million, or 12%, primarily due to lower sales volumes, partially offset by favorable resolution of a warranty claim. Asia-Pacific’s gross profit decreased $0.6 million, or 8%, which was primarily driven by higher manufacturing costs.

Costs and expenses. Costs and expenses of $32.6 million for the three months ended March 31, 2024 decreased $4.7 million, or 13%, when compared to 2023. Excluding the effect of currency translation, costs and expenses decreased $5.0 million, or 13%, as summarized in the following table:

|  | Three Months Ended March 31, |  |
|  |  |  |  |  |  |  |  |  |  | Change |  |  | Change |  |  |  |  |
(Thousands of dollars) |  |  |  |  |  |  |  |  |  |  | Due to |  |  | Excluding |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  | Currency |  |  | Currency |  |  | % |  |
|  | 2024 |  |  | 2023 |  |  | Change |  |  | Translation |  |  | Translation |  |  | Change |  |
Costs and expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
PLP-USA |  | $ | 18,164 |  |  | $ | 19,906 |  |  | $ | (1,742 | ) |  | $ | — |  |  | $ | (1,742 | ) |  |  | (9 | ) | %
The Americas |  |  | 4,721 |  |  |  | 5,457 |  |  |  | (736 | ) |  |  | 255 |  |  |  | (991 | ) |  |  | (18 | ) |
EMEA |  |  | 6,129 |  |  |  | 6,693 |  |  |  | (564 | ) |  |  | 118 |  |  |  | (682 | ) |  |  | (10 | ) |
Asia-Pacific |  |  | 3,558 |  |  |  | 5,246 |  |  |  | (1,688 | ) |  |  | (107 | ) |  |  | (1,581 | ) |  |  | (30 | ) |
Consolidated |  | $ | 32,572 |  |  | $ | 37,302 |  |  | $ | (4,730 | ) |  | $ | 266 |  |  | $ | (4,996 | ) |  |  | (13 | ) | %

PLP-USA costs and expenses of $18.2 million decreased $1.7 million, or 9% year-over-year. PLP-USA’s decrease was primarily attributable to lower sales, personnel and professional services costs. International costs and expenses for the three months ended March 31, 2024 were unfavorably impacted by $0.3 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 $4.7 million decreased $1.0 million primarily due to lower sales and personnel-related costs. EMEA costs and expenses of $6.2 million decreased by $0.7 million primarily due to lower sales-related and bad debt expenses. Asia-Pacific costs and expenses of $3.6 million decreased $1.6 million primarily due to a one-time gain on the sale of capital assets.

Other (expense) income, net. Other income, net of $0.3 million for the three months ended March 31, 2024 was favorable by $1.0 million when compared to Other expense, net for the three months ended March 31, 2023 of $0.7 million. The favorable movement was due to higher interest income earned on cash balances in certain international jurisdictions and lower interest expense from reduced debt balances for the three months ended March 31, 2024.

Income taxes. Income taxes for the three months ended March 31, 2024 and 2023 were $2.3 million and $6.8 million based on pre-tax income of $11.9 million and $28.3 million, respectively. The tax rate for the three months ended March 31, 2024 and 2023 was 19% and 24%, respectively. The effective tax rate for the three months ended March 31, 2024 was lower than the effective tax rate for the same period in 2023 mainly due to an increase in excess tax benefits on share-based compensation in relation to overall lower pre-tax book income.

Net income. As a result of the preceding items, net income for the three months ended March 31, 2024 was $9.6 million, compared to $21.4 million for 2023. Excluding the effect of currency translation, net income decreased $11.8 million as summarized in the following

19

table. The decrease in net income was due to decreases in operating income described above, partially offset by higher interest income, lower interest expense, and lower tax expense:

|  | Three Months Ended March 31, |  |
|  |  |  |  |  |  |  |  |  |  | Change |  |  | Change |  |  |  |  |
(Thousands of dollars) |  |  |  |  |  |  |  |  |  |  | Due to |  |  | Excluding |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  | Currency |  |  | Currency |  |  | % |  |
|  | 2024 |  |  | 2023 |  |  | Change |  |  | Translation |  |  | Translation |  |  | Change |  |
Net income (loss) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
PLP-USA |  | $ | 5,317 |  |  | $ | 16,796 |  |  | $ | (11,479 | ) |  | $ | — |  |  | $ | (11,479 | ) |  |  | (68 | ) | %
The Americas |  |  | 897 |  |  |  | 1,889 |  |  |  | (992 | ) |  |  | 33 |  |  |  | (1,025 | ) |  |  | (54 | ) |
EMEA |  |  | 1,579 |  |  |  | 1,661 |  |  |  | (82 | ) |  |  | 39 |  |  |  | (121 | ) |  |  | (7 | ) |
Asia-Pacific |  |  | 1,803 |  |  |  | 1,052 |  |  |  | 751 |  |  |  | (73 | ) |  |  | 824 |  |  |  | 78 |  |
Consolidated |  | $ | 9,596 |  |  | $ | 21,398 |  |  | $ | (11,802 | ) |  | $ | (1 | ) |  | $ | (11,801 | ) |  |  | (55 | ) | %

APPLICATION OF CRITICAL ACCOUNTING POLICIES AND ESTIMATES

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, 2023 filed on March 8, 2024 with the Securities and Exchange Commission and are, therefore, not presented herein.

WORKING CAPITAL, LIQUIDITY AND CAPITAL RESOURCES

Management Assessment of Liquidity

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 three months of 2024, we used cash of $3.9 million for capital expenditures. We ended the first three months of 2024 with $45.9 million of cash, cash equivalents and restricted cash (collectively, “Cash”). Our Cash is held in various locations throughout the world. At March 31, 2024, the majority of our Cash was 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 operating 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, including notes payable, at March 31, 2024 was $56.5 million. At March 31, 2024, our unused availability under our credit facility (the "Facility") was $55.0 million and our bank debt to equity percentage was 13.7%. The Facility contains, among other provisions, requirements for maintaining levels of net worth and profitability. At March 31, 2024, the Company was in compliance with these covenants.

Our Asia-Pacific segment had $0.2 million in restricted cash for both periods ended March 31, 2024 and December 31, 2023. The restricted cash was used to secure bank debt and is included in Cash, cash equivalents and restricted cash on the Consolidated Balance Sheets.

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. The term of the loan is 120 months at a fixed interest rate of 2.744%. The loan is payable in 119 equal monthly installments, which commenced on March 1, 2021 with a final payment of any outstanding principal and accrued interest due and payable on the final monthly payment date. Of the $14.2 million outstanding on this debt facility at March 31, 2024, $2.1 million was classified as current. The loan is secured by the aircraft.

We expect that our major source of funding for 2024 and beyond will be our operating cash flows, our existing Cash as well as our Facility agreement. 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.

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Sources and Uses of Cash

Net cash provided by operating activities for the three months ended March 31, 2024 was $5.8 million compared to $25.4 million in the comparable prior year three-month period. The $19.6 million decrease was primarily a result of a decrease in net income and larger payables balances, which outpaced increases in current assets, primarily accounts receivable, inventory and prepaid expenses.

Net cash used in investing activities for the three months ended March 31, 2024 was $0.7 million compared to $22.3 million in the comparable prior year three-month period. The $21.6 million change was primarily a result of decreases in acquisition activity and capital expenditures during the current period.

Net cash used in financing activities for the three months ended March 31, 2024 was $11.7 million compared to $9.3 million in the comparable prior year three-month period. The $2.4 million change was primarily the result of an increase in payments on notes payable to banks and repurchases of Company shares.

We have commitments under operating leases primarily for office and manufacturing space, transportation equipment, office and computer equipment and finance leases primarily for equipment. At March 31, 2024, we had $1.5 million of current operating lease liabilities and $7.4 million of noncurrent operating lease liabilities. Total liabilities related to finance lease obligations were less than $0.4 million at March 31, 2024.

As of March 31, 2024, the Company had total outstanding guarantees of $13.6 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 March 31, 2024, the Company had total outstanding letters of credit of $0.9 million.

The Company has 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 March 31, 2024 and December 31, 2023, $7.3 million and $13.3 million was outstanding, of which $6.5 million and $11.4 million were classified as current, respectively. These facilities support commitments made in the ordinary course of business.

FORWARD LOOKING STATEMENTS

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 SEC contain forward-looking statements regarding the Company’s and management’s beliefs and expectations. Any forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. 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. Use of words such “anticipates,” “believes,” “may,” “should,” “will,” “would,” “could,” “plans,” “projects,” “expects,” “estimates,” “predicts,” “targets,” “forecasts,” “intends,” “contemplates,” and similar words may identify forward-looking statements. 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:

•
The overall demand for cable anchoring and control hardware for electrical transmission and distribution lines on a worldwide basis, which has a slow growth rate in mature markets such as the United States, Canada, Australia and Western Europe and may grow slowly or experience prolonged delay in developing regions despite expanding power needs;
•
The potential impact of global economic conditions, including the impact of inflation and rising interest rates, on the Company’s ongoing profitability and future growth opportunities in the Company’s core markets in the U.S. and other foreign countries, which may experience continued or further instability due to political and economic conditions, social unrest, acts of war, military conflict (including the ongoing Russian-Ukrainian and Israeli-Palestinian conflicts), international hostilities or the perception that hostilities may be imminent, terrorism, changes in diplomatic and trade relationships and public health concerns (including viral outbreaks such as COVID-19);
•
The ability of the Company’s customers to raise funds needed to build the infrastructure projects their customers require;
•
Technological developments that affect longer-term trends for communication lines, such as wireless communication;
•
The decreasing demand for product supporting copper-based infrastructure due to the introduction of products using new technologies or adoption of new industry standards;
•
The Company’s success at continuing to develop proprietary technology and maintaining high quality products and customer service to meet or exceed new industry performance standards and individual customer expectations;

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•
The Company’s success in strengthening and retaining relationships with the Company’s customers, growing sales at targeted accounts and expanding geographically;
•
The extent to which the Company is successful at expanding the Company’s product line or production facilities into new areas or implementing efficiency measures at existing facilities;
•
The effects of fluctuation in currency exchange rates upon the Company’s foreign subsidiaries’ operations and reported results from international operations, together with non-currency risks of investing in and conducting significant operations in foreign countries, including those relating to political, social, economic and regulatory factors;
•
The Company’s ability to identify, complete, obtain funding for and integrate acquisitions for profitable growth;
•
The potential impact of consolidation, deregulation and bankruptcy among the Company’s suppliers, competitors and customers and of any legal or regulatory claims;
•
The relative degree of competitive and customer price pressure on the Company’s products;
•
The cost, availability and quality of raw materials required for the manufacture of products and any tariffs that may be associated with the purchase of these products. The Company’s supply chain could face disruptions and constraints from inflationary pressures and ongoing wars and military conflicts, which could have a material, adverse effect on the ability to secure raw materials and supplies;
•
Strikes, labor disruptions and other fluctuations in labor costs;
•
Changes in significant government regulations affecting environmental compliance or other litigation matters;
•
Security breaches or other disruptions to the Company’s information technology structure;
•
The telecommunication market’s continued deployment of Fiber-to-the-Premises;
•
The impact of any failure to timely implement and maintain adequate financial, information technology and management processes and controls and procedures; and
•
Those factors described under the heading “Risk Factors” in Item 1A of Part I of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 which was filed on March 8, 2024.

ITEM 3. QUANTITATIVE AND 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.

Effective July 1, 2018, Argentina was designated as a highly inflationary economy as the projected three-year cumulative inflation rate exceeded 100%. As such, beginning July 1, 2018, the functional currency for the Company’s Argentina subsidiary became the U.S. dollar. Revenue from operations in Argentina represented less than 1% of total consolidated net sales for the three-month periods ended March 31, 2024 and 2023.

As of March 31, 2024, the Company had $0.1 million in assets related to foreign currency forward exchange contracts outstanding. The Company does not hold derivatives for trading purposes.

The Company’s primary currency rate exposures are related to foreign denominated debt, intercompany debt, foreign denominated receivables and payables and cash and short-term investments. A hypothetical 10% change in currency rates would have an impact on fair values on such instruments of $4.9 million and a $0.6 million impact on income before income taxes at March 31, 2024.

The Company is exposed to market risk, including changes in interest rates and foreign exchange rates since we conduct business in a variety of foreign currencies. The Company is subject to interest rate risk on its variable rate revolving credit facilities and term notes, which consisted of current and long-term borrowings of $35.1 million at March 31, 2024. A 100-basis point increase in the interest rate would have resulted in an increase in interest expense of approximately $0.1 million for the three months ended March 31, 2024.

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ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

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 March 31, 2024.

Changes in Internal Control over Financial Reporting

There were no changes in the Company’s internal control over financial reporting as defined in Rule 13a-15(f) and 15d-15(f) of the Securities and Exchange Act of 1934, as amended, during the three-month period ended March 31, 2024 that materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Information regarding the Company’s current legal proceedings is presented in Note 5 of the Notes to the Consolidated Financial Statements.

ITEM 1A. RISK FACTORS

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, 2023 filed with the SEC on March 8, 2024. In addition, the ongoing conflicts between Russia and Ukraine as well as Israel and Palestine could potentially exacerbate other risks discussed, any of which could have a material adverse effect on the Company. The situation continues to change, and additional impacts may arise that the Company is not aware of currently.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On November 1, 2023, the Board of Directors authorized a new plan to repurchase up to an additional 212,952 of Preformed Line Products Company common shares, resulting in a total of 250,000 shares available for repurchase with no expiration date. The following table reflects repurchases for the three-month period ended March 31, 2024.

Period |  | 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 |  |  | 4,614 |  |  |  | 130.50 |  |  |  | 4,614 |  |  |  | 242,236 |
February |  |  | 28,917 |  |  |  | 125.96 |  |  |  | 28,917 |  |  |  | 213,319 |
March |  |  | 9,200 |  |  |  | 131.90 |  |  |  | 9,200 |  |  |  | 204,119 |
Total |  |  | 42,731 |  |  |  |  |  |  |  |  |  |

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

None.

ITEM 5. OTHER INFORMATION

None.

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Item 6. Exhibits and Financial Statement Schedules

Exhibit Number |  | Exhibit
31.1 |  | Certification of the Principal Executive Officer, Robert G. Ruhlman, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.
31.2 |  | Certification of the Principal Accounting Officer, Andrew S. Klaus, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.
32.1 |  | Certification of the Principal Executive Officer, Robert G. Ruhlman, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, furnished.
32.2 |  | Certification of the Principal Accounting Officer, Andrew S. Klaus, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, furnished.
101.INS |  | Inline XBRL Instance Document.
101.SCH |  | Inline XBRL Taxonomy Extension Schema Document.
101.CAL |  | Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF |  | Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB |  | Inline XBRL Taxonomy Extension Label Linkbase Document.
104 |  | Cover Page Interactive Data File (embedded within the inline XBRL document)

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

|  | Preformed Line Products Company
May 2, 2024 |  | /s/ Robert G. Ruhlman
|  | Robert G. Ruhlman
|  | Executive Chairman
|  | (principal executive officer)
May 2, 2024 |  | /s/ Andrew S. Klaus
|  | Andrew S. Klaus
|  | Chief Financial Officer
|  | (principal financial and accounting officer)

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