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What changed in PREFORMED LINE PRODUCTS CO's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of PREFORMED LINE PRODUCTS CO's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+125 added−125 removedSource: 10-K (2025-03-13) vs 10-K (2024-03-08)

Top changes in PREFORMED LINE PRODUCTS CO's 2024 10-K

125 paragraphs added · 125 removed · 105 edited across 6 sections

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAs a result of these factors, the Company’s operating results and financial condition could be adversely affected. 10 The Company’s international operations subject the Company to additional business risks that may have a material adverse effect on the Company’s business, operating results and financial condition.
Biggest changeThe Company’s international operations subject the Company to additional business risks that may have a material adverse effect on the Company’s business, operating results and financial condition. International sales account for a substantial portion of the Company’s net sales (55%, 48%, and 47% in 2024, 2023 and 2022, respectively).
The trend toward consolidation of the energy, telecommunications and data communication industries may require the Company to quickly adapt to rapidly changing market conditions and customer requirements. In addition, as the Company expands its offerings in new areas, its success with these products and services will depend on its ability to offer quality, reliability and other competitive advantages.
The trend toward consolidation of the energy, telecommunications and data communication industries may require the Company to quickly adapt to rapidly changing market conditions and customer requirements. In addition, as the Company expands its offerings in new areas, its success with these products 11 and services will depend on its ability to offer quality, reliability and other competitive advantages.
For example, extensive environmental regulations related to air and water quality, the discharge of pollutants, climate change, the handling of toxic waste and 13 the handling and transport of products and components classified as hazardous impact its daily operations. Various employment and labor laws and regulations govern the Company’s relationships with its employees throughout the world and affect operating costs.
For example, extensive environmental regulations related to air and water quality, the discharge of pollutants, climate change, the handling of toxic waste and the handling and transport of products and components classified as hazardous impact its daily operations. Various employment and labor laws and regulations govern the Company’s relationships with its employees throughout the world and affect operating costs.
At any given time, the Company may also be subject to litigation or claims related to its products, suppliers, customers, employees, shareholders, distributors, sales representatives, intellectual property or acquisitions, among other things, the disposition of which may have an adverse effect upon the Company’s business, financial condition, or results of operation.
At any given time, the Company may also be subject to litigation or claims related to its products, suppliers, customers, employees, shareholders, distributors, sales representatives, intellectual property or acquisitions, among other things, the disposition of 13 which may have an adverse effect upon the Company’s business, financial condition, or results of operation.
The amount of capital spending and, therefore, the Company’s sales and profitability are affected by a variety of factors, including general economic conditions, access by customers to financing, government regulation, demand for energy and cable services, energy prices, technological factors and the ability of our customers to utilize available inventory.
The amount of capital spending and, therefore, the Company’s sales and profitability are affected by a variety of factors, including 9 general economic conditions, access by customers to financing, government regulation, demand for energy and cable services, energy prices, technological factors and the ability of our customers to utilize available inventory.
In the ordinary course of business, the Company relies on information technology networks and 12 systems, some of which are managed by third parties, to process, transmit and store electronic information, and to manage or support a variety of business processes and activities.
In the ordinary course of business, the Company relies on information technology networks and systems, some of which are managed by third parties, to process, transmit and store electronic information, and to manage or support a variety of business processes and activities.
The duration and scope of 11 the any future viral outbreak or health pandemic cannot be predicted, and therefore, any anticipated negative financial impact to the Company’s operating results cannot be reasonably estimated.
The duration and scope of the any future viral outbreak or health pandemic cannot be predicted, and therefore, any anticipated negative financial impact to the Company’s operating results cannot be reasonably estimated.
For example, the Company is subject to antitrust and tax requirements, anti-boycott regulations, import/export/customs regulations and other international trade regulations, the USA Patriot Act and the Foreign Corrupt Practices Act. Any new regulatory or trade initiatives could impact the Company’s operations in certain countries.
For example, the Company is subject to antitrust and tax requirements, anti-boycott regulations, import/export/customs regulations and other international trade regulations, the USA Patriot Act and the Foreign Corrupt Practices Act. Any new regulatory or trade initiatives, including tariffs, could impact the Company’s operations in certain countries.
Over the past few years, the Company has experienced temporary inflationary pressures that have impacted its profit margins, primarily due to raw materials increases (specifically, plastic resins, aluminum, petroleum and sand (grit)), coupled with increased freight costs.
Over the past few years, the Company has experienced temporary inflationary pressures that have impacted its profit margins, primarily due to raw materials increases (specifically, plastic resins, steel, aluminum, petroleum and sand (grit)), coupled with increased freight costs and tariffs.
The Company operates 26 manufacturing facilities domestically and internationally to strategically serve its worldwide markets. Equipment failures, operational interruptions, natural disasters and other unanticipated disruptions may decrease our ability to manufacture our products in a timely manner at our anticipated cost.
The Company operates 25 manufacturing facilities domestically and internationally to strategically serve its worldwide markets. Equipment failures, operational interruptions, natural disasters and other unanticipated disruptions may decrease our ability to manufacture our products in a timely manner at our anticipated cost.
It is difficult to predict what impact, if any, changes in federal policy, including environmental and tax policies, will have on our industry, the economy as a whole, consumer confidence and spending. As a result, the nature, timing and impact on our business of potential changes to the current legal and regulatory frameworks are uncertain.
Further, it is difficult to predict what impact, if any, changes in federal policy, including environmental, immigration, trade and tax policies, will have on our industry, the economy as a whole, consumer confidence and spending. As a result, the nature, timing and impact on our business of potential changes to the current legal and regulatory frameworks are uncertain.
Item 1A. Ri sk Factors The Company’s business, operating results, financial condition and cash flows may be affected by a number of factors including, but not limited to those discussed below. Any of these factors could cause the Company’s actual results to vary materially from recent results or future anticipated results.
Item 1A. Risk Factors The Company’s business, operating results, financial condition and cash flows may be affected by a number of factors including, but not limited to those discussed below. Any of these factors could cause the Company’s actual results to vary materially from recent results or future anticipated results.
Third parties may challenge, invalidate, circumvent, infringe or misappropriate the Company’s intellectual property, or such intellectual property may not be sufficient to permit the Company to take advantage of current market trends or otherwise to provide competitive advantages, which could result in costly redesign efforts, discontinuance of certain product offerings or other competitive harm.
Third parties have challenged and in the future may challenge, invalidate, circumvent, infringe or misappropriate the Company’s intellectual property, or such intellectual property may not be sufficient to permit the Company to take advantage of current market trends or otherwise to provide competitive advantages, which could result in costly redesign efforts, discontinuance of certain product offerings or other competitive harm.
COVID-19 has disrupted and any future viral outbreak or health pandemic could disrupt the global supply chain, which could have a material adverse effect on the Company’s ability to secure raw materials and supplies and could result in increased costs and the loss of sales and customers.
As with the disruption experienced with the COVID-19 pandemic, any future viral outbreak or health pandemic could disrupt the global supply chain, which could have a material adverse effect on the Company’s ability to secure raw materials and supplies and could result in increased costs and the loss of sales and customers.
The Company employs information technology systems to support its business. Security breaches and other disruptions to the Company’s information technology infrastructure could interfere with the Company’s operations and compromise information belonging to the Company and its customers, suppliers and employees, exposing the Company to liability which could adversely impact the Company’s business and reputation.
Security breaches and other disruptions to the Company’s information technology infrastructure have interfered and, in the future, could interfere with the Company’s operations and could also compromise information belonging to the Company and its customers, suppliers and employees, exposing the Company to liability which could adversely impact the Company’s business and reputation.
In addition, a higher level of floating rate debt would increase the exposure to changes in interest rates. As of December 31, 2023, the Company’s total debt, including notes payable, was $62.3 million and the unused availability under its credit facility (the "Facility") was $55.7 million.
In addition, a higher level of floating rate debt would increase the exposure to changes in interest rates. As of December 31, 2024, the Company’s total debt, including notes payable, was $28.6 million and the unused availability under its credit facility (the "Facility") was $82.8 million.
Unresolve d Staff Comments The Company does not have any unresolved staff comments. 14
Unresolved Staff Comments The Company does not have any unresolved staff comments.
Any events that compromise the Company’s systems or failures to comply with applicable privacy laws could result in legal claims or proceedings, liability or penalties under privacy laws, disruption in operations, and damage to the Company’s reputation, which could adversely affect the Company’s business.
Any events that compromise the Company’s systems or any failures to comply with applicable privacy laws could result in legal claims or proceedings, liability or penalties under privacy laws, disruption in operations, and damage to the Company’s reputation, which could adversely affect the Company’s business. 12 The Company depends on maintaining a skilled workforce, and any interruption in the workforce could negatively impact the Company’s operating results and financial condition.
The Company is also subject to foreign currency volatility, which could materially impact the Company’s operating results, including the impact of hyper-inflationary conditions in certain economies, particularly where exchange controls limit or eliminate the Company’s ability to convert from local currency.
Failure to comply with any such legal requirements could subject the Company to monetary liabilities and other sanctions, which could harm its business, results of operations and financial condition. 10 The Company is also subject to foreign currency volatility, which could materially impact the Company’s operating results, including the impact of hyper-inflationary conditions in certain economies, particularly where exchange controls limit or eliminate the Company’s ability to convert from local currency.
The Company depends on maintaining a skilled workforce, and any interruption in the workforce could negatively impact the Company’s operating results and financial condition. The Company’s ability to sustain and grow its business requires a commitment to hire, retain and develop a highly skilled and diverse management team and workforce.
The Company’s ability to sustain and grow its business requires a commitment to hire, retain and develop a highly skilled and diverse management team and workforce.
In limited circumstances, the Company relies on sole source suppliers for certain materials and may face challenges or delays in establishing an alternative source.
In limited circumstances, the Company relies on sole source suppliers for certain materials and may face challenges or delays in establishing an alternative source. As a result of these factors, the Company’s operating results and financial condition could be adversely affected.
The interest rate is defined as BSBY 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 BSBY spread becomes 1.500%. The amendment also allowed the Company to change its rate from BSBY to the Secured Overnight Financing Rate (“SOFR”) at the Company’s discretion.
The interest rate for the Facility 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%. The Facility agreement also contains, among other provisions, requirements for maintaining levels of net worth and profitability.
These covenants may restrict the Company’s operations and prevent it from pursuing opportunities that would otherwise be in the Company’s best interest for long-term growth. Natural disasters, severe weather, climate change concerns, public health concerns, epidemics or pandemics could have a material adverse effect on the Company’s business, operating results and financial condition.
Natural disasters, severe weather, climate change concerns, public health concerns, epidemics or pandemics could have a material adverse effect on the Company’s business, operating results and financial condition.
Removed
International sales account for a substantial portion of the Company’s net sales (48%, 47%, and 50% in 2023, 2022 and 2021, respectively).
Added
These covenants may restrict the Company’s operations and prevent it from pursuing opportunities that would otherwise be in the Company’s best interest for long-term growth. The Facility is currently scheduled to expire on March 2, 2026.
Removed
Failure to comply with any such legal requirements could subject the Company to monetary liabilities and other sanctions, which could harm its business, results of operations and financial condition.
Added
Our ability to make scheduled payments on our debt obligations or enter into a new or extended credit facility depends upon our financial condition and operating performance, which is subject to prevailing economic and competitive conditions and to financial, business and other factors, many of which are beyond our control.
Removed
On March 2, 2022, the Company amended the Facility to change the index used to determine the interest rate from LIBOR to the Bloomberg Short Term Bank Yield Index (“BSBY”).
Added
If we are unable to timely make such payments, establish an extended term for our repayment obligations or establish a new credit facility for future borrowing, our financial condition, operations, liquidity and business prospects would be adversely affected.
Removed
On August 31, 2022, the Company amended the Facility and elected to change its rate from BSBY to SOFR, with all other terms remaining the same. The Facility agreement also contains, among other provisions, requirements for maintaining levels of net worth and profitability.
Added
The Company employs information technology systems to support its business.
Removed
Worldwide economic conditions have been significantly impacted by COVID-19 since 2020. Although the Federal Public Health Emergency Declaration issued in response to COVID-19 was lifted on May 11, 2023, the lingering effects of the COVID-19 pandemic could continue to have an adverse effect on the Company’s operations and businesses.
Added
The Trump administration has called for significant changes to U.S. trade, healthcare, immigration and government regulatory policy and has begun implementing policy changes at a rapid pace. Changes to U.S. policy implemented by the U.S.
Added
Congress, the Trump administration or any new administration have impacted among other things, the U.S. and global economy, international trade relations, unemployment, immigration, healthcare, taxation, the U.S. regulatory environment, inflation and other areas.
Added
Until we know what policy changes are made, whether those policy changes are challenged and subsequently upheld by the court system and how those changes impact our business and the business of our competitors over the long term, we will not know if, overall, we will benefit from them or be negatively affected by them.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe Director of Global Information Systems reports to the CFO and coordinates with the IT resources across all subsidiary operations to discuss risk management initiatives, testing and training, recent trends and technological developments, and periodic reviews of third-party providers.
Biggest changeThe Director of Global Information Systems reported to the CFO and coordinated with the IT resources across all subsidiary operations to discuss risk management initiatives, testing and training, recent trends and technological developments, and periodic reviews of third-party providers. In October 2024, the Director of Global Information Systems left the Company to pursue other opportunities.
Further, as of part of the Company’s overall information security program, the Company conducts a security awareness program, which includes training that reinforces the Company’s security management policies, standards, and practices, as well as the expectation that employees comply with these policies, standards and practices.
Further, as of part of the Company’s overall information security program, the Company conducts a security awareness program, which includes training that reinforces the Company’s security management policies, standards, and practices, as well as the 14 expectation that employees comply with these policies, standards and practices.
Item 1C. Cybersecurity Cybersecurity Risk Management and Strategy The Company has implemented information security programs to, among other actions, assess, identify and manage material risks from cybersecurity threats. These programs include periodic risk assessments, firmwide testing initiatives, periodic phishing tests and annual audits.
Item 1C. Cybersecurity Cybersecurity Risk Management and Strategy The Company has implemented information security programs to, among other actions, assess, identify and manage material risks from cybersecurity threats. These programs include periodic risk assessments, company-wide testing initiatives, periodic phishing tests and annual audits.
The Director of Global Information Systems has had oversight responsibilities for PLP’s information systems and cyber security for 15 years. He attends regular education programs regarding enterprise cybersecurity and supporting technologies.
Through October 2024, the Director of Global Information Systems had oversight responsibilities for PLP’s information systems and cyber security, a role he held for 15 years. He attended regular education programs regarding enterprise cybersecurity and supporting technologies.
Added
During the interim period before a replacement was appointed, the CFO provided more active oversight to address the Director of Global Information System's responsibilities, including reporting to the Audit Committee.
Added
The vacancy was filled on February 3, 2025 and the new Director of Global Information Systems joined the Company with over 30 years of professional IT experience where he held Director and Chief Information Officer roles at large global companies and provided technology consulting and cybersecurity services to companies across various industries.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. P roperties Our corporate headquarters is located in Mayfield Village, Ohio, and, at December 31, 2023, the Company maintained 26 manufacturing plants. We also maintain various sales, research and engineering, administrative offices and distribution centers throughout the world. None of these manufacturing plants, administrative offices or distribution centers are individually material to our operations.
Biggest changeItem 2. Properties Our corporate headquarters is located in Mayfield Village, Ohio, and, at December 31, 2024, the Company maintained 25 manufacturing plants. We also maintain various sales, research and engineering, administrative offices and distribution centers throughout the world. None of these manufacturing plants, administrative offices or distribution centers are individually material to our operations.
We believe that our properties have been adequately maintained, are in good condition generally and are suitable and adequate for our business as presently conducted. The extent to which we utilize our properties varies by property and from time to time and aligns with manufacturing needs. Most of our manufacturing facilities remain capable of handling volume increases. 15 Item 3.
We believe that our properties have been adequately maintained, are in good condition generally and are suitable and adequate for our business as presently conducted. The extent to which we utilize our properties varies by property and from time to time and aligns with manufacturing needs. Most of our manufacturing facilities remain capable of handling volume increases. Item 3.
The facilities are situated in three states within the United States and in 19 other countries. We own the majority of our manufacturing plants, and our leased properties consist of manufacturing plants, research and engineering, sales, administrative offices and distribution centers.
The facilities are situated in 3 states within the United States and in 19 other countries. We own the majority of our manufacturing plants, and our leased properties consist of manufacturing plants, research and engineering, sales, administrative offices and distribution centers.
Legal Proceedings Information regarding the Company’s current legal proceedings is presented in Note 4 of the Notes to the Consolidated Financial Statements. Item 4. Mine Saf ety Disclosures Not applicable
Legal Proceedings Information regarding the Company’s current legal proceedings is presented in Note 4 of the Notes to the Consolidated Financial Statements. Item 4. Mine Safety Disclosures Not applicable.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeYear Ended December 31, 2023 2022 Quarter High Low Dividend High Low Dividend First $ 128.04 $ 79.29 $ 0.20 $ 65.14 $ 55.27 $ 0.20 Second 172.40 119.62 0.20 64.99 58.40 0.20 Third 182.06 151.00 0.20 84.70 59.55 0.20 Fourth 162.36 110.28 0.20 94.34 71.80 0.20 While the Company expects to continue to pay dividends of a comparable amount in the near term, the declaration and payment of future dividends will be made at the discretion of the Company’s Board of Directors in light of the current needs of the Company.
Biggest changeYear Ended December 31, 2024 2023 Quarter High Low Dividend High Low Dividend First $ 138.00 $ 120.23 $ 0.20 $ 128.04 $ 79.29 $ 0.20 Second 135.33 120.42 0.20 172.40 119.62 0.20 Third 137.87 112.94 0.20 182.06 151.00 0.20 Fourth 143.56 121.10 0.20 162.36 110.28 0.20 While the Company expects to continue to pay dividends of a comparable amount in the near term, the declaration and payment of future dividends will be made at the discretion of the Company’s Board of Directors in light of the needs of the Company.
The following graph compares the cumulative total return to holders of PLP's common shares against the cumulative total return of the NASDAQ Composite Index and the Hemscott Industry Group 627 (Industrial Electrical Equipment) (the “Peer Group Index”) for the five-year period ended December 31, 2023.
The following graph compares the cumulative total return to holders of PLP's common shares against the cumulative total return of the NASDAQ Composite Index and the Hemscott Industry Group 627 (Industrial Electrical Equipment) (the “Peer Group Index”) for the five-year period ended December 31, 2024.
Item 5. Market for Registrant’s Common Equity, Related Sha reholder Matters and Issuer Purchases of Equity Securities Market and dividend information The Company’s common shares are traded on NASDAQ under the trading symbol “PLPC”.
Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities Market and dividend information The Company’s common shares are traded on NASDAQ under the trading symbol “PLPC”.
Therefore, there can be no assurance that the Company will continue to make such dividend payments in the future. Number of common shareholders As of February 23, 2024, the Company had approximately 6,582 shareholders of record. Performance Graph Historical share price performance should not be relied upon as an indication of future share price performance.
Therefore, there can be no assurance that the Company will continue to make such dividend payments in the future. Number of common shareholders As of February 19, 2025, the Company had approximately 5,988 shareholders of record. Performance Graph Historical share price performance should not be relied upon as an indication of future share price performance.
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 October — $ — — 37,048 November 3,150 $ 134.18 3,150 246,850 December — $ — — 246,850 Total 3,150 18 Item 6. [Reserved]
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 October — $ — — 181,757 November 2,260 $ 131.43 2,260 179,497 December — $ — — 179,497 Total 2,260 Item 6. [Reserved]
The comparison of the cumulative total returns for each investment assumes that $100 was invested in PLP's common shares and the respective indices on December 31, 2018 through December 31, 2023 and assumes the reinvestment of dividends. 17 2018 2019 2020 2021 2022 2023 PREFORMED LINE PRODUCTS CO 100.00 112.84 129.90 124.25 161.44 261.18 NASDAQ MARKET INDEX 100.00 136.69 198.10 242.03 163.28 236.17 PEER GROUP INDEX 100.00 131.46 170.83 189.17 162.66 202.93 Repurchases of Equity Securities 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 comparison of the cumulative total returns for each investment assumes that $100 was invested in PLP's common shares and the respective indices on December 31, 2019 through December 31, 2024 and assumes the reinvestment of dividends. 17 2019 2020 2021 2022 2023 2024 PREFORMED LINE PRODUCTS CO 100.00 115.12 110.12 143.07 231.46 222.39 NASDAQ MARKET INDEX 100.00 144.92 177.06 119.45 172.77 223.87 PEER GROUP INDEX 100.00 117.89 140.53 119.39 153.64 163.08 Repurchases of Equity Securities 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.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeExcluding the effect of currency translation, net sales increased 5.1% as summarized in the following table: Year Ended December 31, Change Change (Thousands of dollars) Due to Excluding Currency Currency % 2023 2022 Change Translation Translation Change Net sales PLP-USA $ 345,613 $ 340,288 $ 5,325 $ — $ 5,325 1.6 % The Americas 86,059 85,200 859 1,771 (912 ) (1.1 ) EMEA 135,080 122,657 12,423 1,696 10,727 8.7 Asia-Pacific 102,927 88,876 14,051 (3,042 ) 17,093 19.2 Consolidated $ 669,679 $ 637,021 $ 32,658 $ 425 $ 32,233 5.1 % The increase in PLP-USA net sales of $5.3 million, or 1.6%, was primarily due to a volume increase in energy product sales, combined with previously enacted price increases, partially offset by lower volume in communication sales, particularly in the second half of the year as a result of customer inventory destocking.
Biggest changeExcluding the effect of currency translation, net sales decreased 11% as summarized in the following table: Year Ended December 31, (Thousands of dollars) 2024 2023 Change Change Due to Currency Translation Change Excluding Currency Translation % Change Net sales PLP-USA $ 266,704 $ 345,613 $ (78,909) $ — $ (78,909) (23) % The Americas 90,280 86,059 4,221 (5,005) 9,226 11 EMEA 128,241 135,080 (6,839) 1,738 (8,577) (6) Asia-Pacific 108,489 102,927 5,562 (903) 6,465 6 Consolidated $ 593,714 $ 669,679 $ (75,965) $ (4,170) $ (71,795) (11) % The decrease in PLP-USA net sales of $78.9 million, or 23%, was primarily due to lower volumes in communications and energy product sales due to customer destocking efforts.
The MD&A is provided as a supplement to, and should be read in conjunction with, our audited 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.
The MD&A is provided as a supplement to, and should be read in conjunction with, our audited consolidated financial statements and related notes included elsewhere in this report. 18 OVERVIEW Preformed Line Products Company (the “Company”, “PLPC”, “we”, “us”, or “our”) was incorporated in Ohio in 1947.
Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products. All revenue is recognized when the Company satisfies the performance obligations under the contract and control of the product is transferred to the customer, primarily based on shipping terms.
Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products. All revenue is recognized when the 24 Company satisfies the performance obligations under the contract and control of the product is transferred to the customer, primarily based on shipping terms.
In addition, an increase in the expected long-term return on plan assets would decrease the net periodic pension cost, while a decrease in expected long-term return on plan assets would increase the net periodic pension cost. 25
In addition, an increase in the expected long-term return on plan assets would decrease the net periodic pension cost, while a decrease in expected long-term return on plan assets would increase the net periodic pension cost.
We believe that we are well positioned to supply the needs of the world’s diverse energy and communication markets as a result of our focused portfolio, strategic operational footprint, including expansion from recent acquisitions and product designs and technologies. 19 PREFACE The following discussion describes our results of operations for the years ended December 31, 2023, 2022 and 2021.
We believe that we are well positioned to supply the needs of the world’s diverse energy and communication markets as a result of our focused portfolio and strategic operational footprint, including expansion from recent acquisitions and product designs and technologies. PREFACE The following discussion describes our results of operations for the years ended December 31, 2024, 2023 and 2022.
PLP’s foreign currency exchange gains or (losses) were primarily related to translating into U.S. dollars its foreign currency denominated loans, trade receivables and payables from its foreign subsidiaries at the December 2023 year-end exchange rates.
PLP’s foreign currency exchange gains or (losses) were primarily related to translating into U.S. dollars its foreign currency denominated loans, trade receivables and payables from its foreign subsidiaries at the December 2024 year-end exchange rates.
The segment managers responsible for each region report directly to the Company’s Chief Executive Officer, who is the chief operating decision maker, and are accountable for the financial results and performance of their entire segment for which they are responsible.
The 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 following table sets forth a summary of the Company’s Statements of Consolidated Income and the percentage of net sales for the years ended December 31, 2023 and 2022.
The following table sets forth a summary of the Company’s Statements of Consolidated Income and the percentage of net sales for the years ended December 31, 2024 and 2023.
We believe that our leadership position in these and other markets and the ability to deliver reliable products quickly will position us for continued growth as transmission grids and communication networks are enhanced, upgraded and extended. Our international business is mainly concentrated in the energy and communications markets.
We believe that our leadership position in the domestic energy and communications markets and the ability to deliver reliable products quickly will position us for continued growth as transmission grids and communication networks are enhanced, upgraded and extended. Our international business is also mainly concentrated in the energy and communications markets.
At December 31, 2023, the Company was in compliance with these covenants. Our Asia-Pacific segment had $0.2 million in restricted cash for both years ended December 31, 2023 and 2022. The restricted cash was used to secure bank debt and is included in Cash, cash equivalents and restricted cash on the balance sheet.
At December 31, 2024, the Company was in compliance with these covenants. Our Asia-Pacific segment had $0.1 million and $0.2 million in restricted cash for the years ended December 31, 2024 and 2023. The restricted cash was used to secure bank debt and is included in Cash, cash equivalents and restricted cash on the balance sheet.
The fluctuations of foreign currencies during the years ended December 31, 2023 and December 31, 2022 had a favorable impact on net sales of $0.4 million and an unfavorable impact of $24.2 million, respectively.
The fluctuations of foreign currencies during the years ended December 31, 2024 and December 31, 2023 had an unfavorable impact on net sales of $4.2 million and a favorable impact of $0.4 million, respectively.
The 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.
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 gross sales and income before income taxes.
A consolidated decrease in debt of $27.3 million as of December 31, 2023 was primarily a result of improved cash conversion and less funding needs for capital expenditures and business acquisitions. See Note 7 "Debt and Credit Arrangements" in the Notes to Consolidated Financial Statements for more information related to our debt position.
A consolidated decrease in debt of $33.7 million as of December 31, 2024 was primarily a result of improved cash conversion and less funding needs for capital expenditures and business acquisitions. See Note 7 "Debt and Credit Arrangements" in the Notes to Consolidated Financial Statements for more information related to our debt position.
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. In 2023, we used cash of $35.3 million for capital expenditures.
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. In 2024, we used cash of $14.7 million for capital expenditures.
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.
If inflationary pressures persist or new tariffs are sustained, 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.
International net sales for the year ended December 31, 2023 were favorably affected by $0.4 million when local currencies were converted to U.S. dollars. The following discussion of changes in net sales excludes the effect of currency translation.
International net sales for the year ended December 31, 2024 were unfavorably affected by $4.2 million when local currencies were converted to U.S. dollars. The following discussion of changes in net sales excludes the effect of currency translation.
The 2024 expected long-term return on plan assets of 6.25% reflects the plan’s historical returns and represents our best estimate of the likely future returns on the plan’s asset mix. We believe the assumptions used in recording obligations under the plans are reasonable based on prior experience, market conditions and the advice of plan actuaries.
The 2025 expected long-term return on plan assets o f 4.75% reflects the plan’s historical returns and represents our best estimate of the likely future returns on the plan’s asset mix. We believe the assumptions used in recording obligations under the plans are reasonable based on prior experience, market conditions and the advice of plan actuaries.
At December 31, 2023, we had $53.6 million of cash, cash equivalents and restricted cash (collectively “Cash”). Our Cash is held in various locations throughout the world. At December 31, 2023, the majority of our cash is held outside the U.S.
At December 31, 2024, we had $57.2 million of cash, cash equivalents and restricted cash (collectively “Cash”). Our Cash is held in various locations throughout the world. At December 31, 2024, the majority of our cash is held outside the U.S.
Income taxes for the years ended December 31, 2023 and 2022 were $19.0 million and $19.3 million, respectively, based on pre-tax income of $82.3 million and $73.7 million, respectively. The effective tax rate for the years ended December 31, 2023 and 2022 was 23.1% and 26.2%, respectively.
Income taxes for the years ended December 31, 2024 and 2023 were $13.7 million and $19.0 million based on pre-tax income of $50.8 million and $82.3 million, respectively. The effective tax rate for the years ended December 31, 2024 and 2023 was 26.9% and 23.1%, respectively.
At December 31, 2023, and December 31, 2022, $13.3 million and $26.1 million was outstanding, of which $11.4 million and $19.1 million were classified as current, respectively. These facilities support commitments made in the ordinary course of business.
At December 31, 2024, and December 31, 2023, $8.8 million and $13.3 million were outstanding, of which $8.2 million and $11.4 million were classified as current, respectively. These facilities support commitments made in the ordinary course of business.
The effect of currency translation had a unfavorable impact on net income in the year ended December 31, 2023 of $0.2 million and a favorable impact of $0.3 million in the year ended December 31, 2022.
The effect of currency translation had an unfavorable impact on net income in the year ended December 31, 2024 of $0.7 million and an unfavorable impact of $0.2 million in the year ended December 31, 2023.
Total debt, including notes payable, at December 31, 2023 was $62.3 million. At December 31, 2023, our unused availability under our credit facility (the "Facility") was $55.7 million and our bank debt to equity percentage was 15.0%. The Facility contains, among other provisions, requirements for maintaining levels of net worth and profitability.
Total debt, including notes payable, at December 31, 2024 was $28.6 million. At December 31, 2024, our unused availability under our credit facility (the "Facility") was $82.8 million and our bank debt to equity percentage was 6.8%. The Facility contains, 23 among other provisions, requirements for maintaining levels of net worth and profitability.
As of December 31, 2023, the Company had total outstanding letters of credit of $1.0 million. 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.
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.
A $1.7 million, or 2.0%, net increase resulting from earnings in jurisdictions with higher tax rates than the U.S. federal statutory rate where such earnings are permanently reinvested. 2022 1. A $2.1 million, or 2.9%, net increase resulting from a valuation allowance recorded in certain international jurisdictions. 2.
A $1.8 million, or 2.2%, net increase resulting from earnings in various U.S States. 4. A $1.7 million, or 2.0%, net increase resulting from earnings in jurisdictions with higher tax rates than the U.S. federal statutory rate where such earnings are permanently reinvested. Net income.
As a result of the preceding items, net income for the year ended December 31, 2023 was $63.3 million, compared to $54.4 million for 2022. Excluding the effect of currency translation, net income increased $9.2 million as summarized in the following table.
As a result of the preceding items, net income for the year ended December 31, 2024 was $37.1 million, compared to $63.3 million for 2023. Excluding the effect of currency translation, net income decreased $25.5 million as summarized in the following table.
Other expense, net of $(1.8) million for the year ended December 31, 2023 was unfavorable by $(6.1) million when compared to Other income, net for the year ended December 31, 2022 of $4.3 million.
Other income, net as of the year ended December 31, 2024 was favorable by $1.8 million when compared to Other expense, net for the year ended December 31, 2024 of $1.8 million.
See Note 8 in the Notes to Consolidated Financial Statements for more information. As of December 31, 2023, the Company had total outstanding guarantees of $14.1 million. Additionally, certain domestic and foreign customers require the Company to issue letters of credit or performance bonds as a condition of placing an order.
Additionally, certain domestic and foreign customers require the Company to issue letters of credit or performance bonds as a condition of placing an order. As of December 31, 2024, the Company had total outstanding letters of credit of $1.3 million.
We identify inventory items that have had no usage or are in excess of the usages over the historical 12 to 24 months. A management team with representatives from marketing, manufacturing, engineering and finance reviews these inventory items, determines the disposition of the inventory and assesses the net realizable value based on their knowledge of the product and market conditions.
A management team with representatives from marketing, manufacturing, engineering and finance reviews these inventory items, determines the disposition of the inventory and assesses the net realizable value based on their knowledge of the product and market conditions.
We record estimated allowances for uncollectible accounts receivable based upon the number of days the accounts are past due, the current business environment, and specific information such as bankruptcy or liquidity issues of customers.
We record estimated allowances for uncollectible accounts receivable based upon the number of days the accounts are past due, the current business environment, and specific information such as bankruptcy or liquidity issues of customers. If the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required.
On a reportable segment basis, the impact of foreign currency translation on net sales and net income for the years ended December 31, 2023 and 2022, respectively, was as follows: Foreign Currency Translation Impact Net Sales Net Income (Loss) (Thousands of dollars) 2023 2022 2023 2022 The Americas $ 1,771 $ (2,306 ) $ 166 $ 330 EMEA 1,696 (15,189 ) (101 ) (686 ) Asia-Pacific (3,042 ) (6,662 ) (278 ) 686 Total $ 425 $ (24,157 ) $ (213 ) $ 330 As shown in our strong financial results, we believe our business portfolio and our financial position are sound and strategically well-positioned.
On a reportable segment basis, the impact of foreign currency translation on net sales and net income for the years ended December 31, 2024 and 2023, respectively, was as follows: Foreign Currency Translation Impact Net Sales Net Income (Thousands of dollars) 2024 2023 2024 2023 The Americas $ (5,005) $ 1,771 $ (803) $ 166 EMEA 1,738 1,696 128 (101) Asia-Pacific (903) (3,042) (52) (278) Total $ (4,170) $ 425 $ (727) $ (213) Although customer destocking efforts in the PLP-USA communications and energy markets have impacted our 2024 results, we believe our business portfolio and our financial position are sound and strategically well-positioned.
Likewise, should we determine that we would not be able to realize all or part of our net deferred tax assets in the future, an adjustment to the valuation allowance would be charged to expense in the period such determination was made.
Likewise, should we determine that we would not be able to realize all or part of our net deferred tax assets in the future, an adjustment to the valuation allowance would be charged to expense in the period such determination was made. 25 Pension Obligations We record obligations and expenses related to a pension benefit plan based on actuarial valuations, which include key assumptions on discount rates, expected returns on plan assets and compensation increases.
A $3.0 million, or 3.6%, net increase resulting from the inclusion of Global Intangible Low-Taxed Income. 3. A $1.8 million, or 2.2%, net increase resulting from earnings in various U.S. States. 4.
A $1.2 million, or 2.3%, net increase resulting from the inclusion of Global Intangible Low-Taxed Income. 2023 1. A $3.7 million, or 4.5%, net decrease resulting from generation of foreign tax credits. 2. A $3.0 million, or 3.6%, net increase resulting from the inclusion of Global Intangible Low-Taxed Income. 3.
More recently, increasing commodity prices, inflation, rising interest rates, transportation costs, and foreign currency fluctuations have led to a challenging operating environment.
More recently, increasing commodity prices, inflation, tariffs, rising interest rates, transportation costs, and foreign currency fluctuations have led to a challenging operating environment. While these factors generally moderated in 2024, they may continue to provide inherent uncertainty going forward.
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. 23 Sources and Uses of Cash Net Cash provided by operating activities for the years ended December 31, 2023 and 2022 was $107.7 million and $26.2 million, respectively.
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.
The Company’s past operating results are not necessarily indicative of future operating results. 20 Year Ended December 31, (Thousands of dollars) 2023 2022 Change Net sales $ 669,679 100.0 % $ 637,021 100.0 % $ 32,658 Cost of products sold 434,831 64.9 421,841 66.2 12,990 GROSS PROFIT 234,848 35.1 215,180 33.8 19,668 Costs and expenses 150,694 22.5 145,819 22.9 4,875 OPERATING INCOME 84,154 12.6 69,361 10.9 14,793 Other (expense) income, net (1,810 ) (0.3 ) 4,343 0.7 (6,153 ) INCOME BEFORE INCOME TAXES 82,344 12.3 73,704 11.6 8,640 Income taxes 19,007 2.8 19,305 3.0 (298 ) NET INCOME 63,337 9.5 54,399 8.5 8,938 Net income attributable to noncontrolling interests (5 ) (0.0 ) (4 ) (0.0 ) (1 ) NET INCOME ATTRIBUTABLE TO PREFORMED LINE PRODUCTS COMPANY SHAREHOLDERS $ 63,332 9.5 % $ 54,395 8.5 % $ 8,937 2023 RESULTS OF OPERATIONS COMPARED TO 2022 Net sales.
The Company’s past operating results are not necessarily indicative of future operating results. 20 Year Ended December 31, (Thousands of dollars) 2024 2023 Change Net sales $ 593,714 100.0 % $ 669,679 100.0 % $ (75,965) Cost of products sold 403,903 68.0 434,831 64.9 (30,928) GROSS PROFIT 189,811 32.0 234,848 35.1 (45,037) Costs and expenses 139,054 23.4 150,694 22.5 (11,640) OPERATING INCOME 50,757 8.5 84,154 12.6 (33,397) Other income (expense), net 13 0.0 (1,810) (0.3) 1,823 INCOME BEFORE INCOME TAXES 50,770 8.6 82,344 12.3 (31,574) Income taxes 13,659 2.3 19,007 2.8 (5,348) NET INCOME 37,111 6.3 63,337 9.5 (26,226) Net income attributable to noncontrolling interests (17) (0.0) (5) (0.0) (12) NET INCOME ATTRIBUTABLE TO PREFORMED LINE PRODUCTS COMPANY SHAREHOLDERS $ 37,094 6.2 % $ 63,332 9.5 % $ (26,238) 2024 RESULTS OF OPERATIONS COMPARED TO 2023 Net sales.
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.
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.
A $2.0 million, or 2.7%, net increase resulting from a goodwill impairment charge as discussed in Note 12 of the Notes to the Consolidated Financial Statements. 3. A $1.8 million, or 2.4%, net decrease resulting from earnings in jurisdictions with lower tax rates than the U.S. federal statutory rate where such earnings are permanently reinvested. 22 Net income.
A $1.6 million, or 3.2%, net increase resulting from earnings in jurisdictions with higher tax rates than the U.S. federal statutory rate where such earnings are permanently reinvested. 3. A $1.6 million, or 3.2%, net decrease resulting from generation of foreign tax credits. 4. A $1.2 million, or 2.4%, net decrease resulting from other stock compensation. 5.
Year Ended December 31, Change Change (Thousands of dollars) Due to Excluding Currency Currency % 2023 2022 Change Translation Translation Change Net income PLP-USA $ 45,392 $ 44,657 $ 735 $ — $ 735 1.6 % The Americas 5,755 11,420 (5,665 ) 166 (5,831 ) (51.1 ) EMEA 5,796 1,915 3,881 (101 ) 3,982 207.9 Asia-Pacific 6,389 (3,597 ) 9,986 (278 ) 10,264 (285.3 ) Consolidated $ 63,332 $ 54,395 $ 8,937 $ (213 ) $ 9,150 16.8 % 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, fund additional investments, including acquisitions, and make dividend payments to shareholders.
Year Ended December 31, (Thousands of dollars) 2024 2023 Change Change Due to Currency Translation Change Excluding Currency Translation % Change Net income (loss) PLP-USA $ 13,940 $ 45,392 $ (31,452) $ — $ (31,452) (69) % The Americas 8,951 5,755 3,196 (803) 3,999 69 EMEA 7,762 5,796 1,966 128 1,838 32 Asia-Pacific 6,441 6,389 52 (52) 104 2 Consolidated $ 37,094 $ 63,332 $ (26,238) $ (727) $ (25,511) (40) % 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, fund additional investments, including acquisitions, and make dividend payments to shareholders.
Our consolidated financial statements are prepared in conformity with U.S. generally accepted accounting principles ("GAAP"). Our discussions of the financial results include non-GAAP measures (e.g., foreign currency impact) to provide additional information concerning our financial results and provide information that we believe is useful to the readers of our financial statements in the assessment of our performance and operating trends.
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. 19 Net sales of $593.7 million for the year ended December 31, 2024 decreased $76.0 million year-over-year, mainly due to the continued inventory destocking occurring primarily in the U.S. markets.
Our liquidity remains strong and we currently have a bank debt to equity percentage of 15.0%. We can borrow needed funds at a competitive interest rate under our credit facility.
Period cost containment has been a priority for the Company in 2024, shown through a reduction in costs and expenses of approximately 8%. Our liquidity remains strong with our bank debt to equity percentage at 6.8%. We can borrow needed funds at a competitive interest rate under our credit facility.
The discount rate of 5.34% at December 31, 2023 reflects an analysis of yield curves as of the end of the year and the schedule of expected cash needs of the plan.
These actuarial assumptions are reviewed annually and modified as appropriate. The effect of modifications is generally recorded or amortized over future periods. The discount rate of 5.77% at December 31, 2024 reflects an analysis of yield curves as of the end of the year and the schedule of expected cash needs of the plan.
The impact on International gross profit for the year ended December 31, 2023, when local currencies were translated to U.S. dollars was de minimis. The following discussion of gross profit changes excludes the effects of currency translation. The Americas gross profit 21 decreased $2.2 million, or 7.0%, which was primarily due to higher manufacturing and depreciation costs.
International gross profit for the period ended December 31, 2024 was unfavorably impacted by $1.6 million when local currencies were translated to U.S. dollars. The following discussion of gross profit changes excludes the effects of currency translation.
Excluding the effect of currency translation, costs and expenses increased $4.6 million, or 3.1%, as summarized in the following table: Year Ended December 31, Change Change (Thousands of dollars) Due to Excluding Currency Currency % 2023 2022 Change Translation Translation Change Costs and expenses PLP-USA $ 79,289 $ 73,941 $ 5,348 $ — $ 5,348 7.2 % The Americas 22,724 16,816 5,908 490 5,418 32.2 EMEA 28,193 25,884 2,309 397 1,912 7.4 Asia-Pacific 20,488 29,178 (8,690 ) (591 ) (8,099 ) (27.8 ) Consolidated $ 150,694 $ 145,819 $ 4,875 $ 296 $ 4,579 3.1 % PLP-USA costs and expenses of $79.3 million increased $5.3 million, or 7.2% year-over-year.
Excluding the effect of currency translation, costs and expenses decreased $10.9 million, or 7%, as summarized in the following table: Year Ended December 31, (Thousands of dollars) 2024 2023 Change Change Due to Currency Translation Change Excluding Currency Translation % Change Costs and expenses PLP-USA $ 72,593 $ 79,289 $ (6,696) $ — $ (6,696) (8) % The Americas 18,655 22,724 (4,069) (799) (3,270) (14) EMEA 26,090 28,193 (2,103) 257 (2,360) (8) Asia-Pacific 21,716 20,488 1,228 (158) 1,386 7 Consolidated $ 139,054 $ 150,694 $ (11,640) $ (700) $ (10,940) (7) % PLP-USA costs and expenses of $72.6 million decreased $6.7 million, or 8% year-over-year.
PLP-USA’s increase was primarily attributable to increased salary-related, insurance and depreciation costs, partially offset by lower professional services costs. PLP’s costs and expenses for the year ended December 31, 2023 were unfavorably impacted by $0.3 million when local currencies were translated to U.S. dollars. The following discussions of costs and expenses exclude the effect of currency translation.
PLP-USA’s decrease was primarily attributable to lower selling costs and lower personnel and professional services costs, primarily as a result of cost containment efforts. International costs and expenses for the year ended December 31, 2024 had a favorable impact by $0.7 million when local currencies were translated to U.S. dollars.
It is also affected by discrete items that may occur in any given period but are not consistent from year to year. The following items had the most significant impact on the difference between our statutory U.S. federal income tax rate of 21.0%: 2023 1. A $3.7 million, or 4.5%, net decrease resulting from generation of foreign tax credits. 2.
The following items had the most significant impact on the difference between our statutory U.S. federal income tax rate of 21.0%: 22 2024 1. A $2.0 million, or 4.0%, net increase resulting from Non-deductible officers' compensation. 2.
Costs related to shipping and freight have similarly fallen from their 2022 peak. The decreases in these underlying costs along with the impacts of our previous price increases have benefited gross margins.
Decreases in these underlying costs along with the impacts of our previous price increases benefited gross margins in 2023 and have not meaningfully impacted the results during the twelve months ending December 31, 2024.
On January 19, 2021, the Company received funding for a term loan in the amount of $20.5 million to fund the purchase of a new corporate aircraft, which replaces the Company's previously-owned aircraft that was sold in December 2020.
On January 19, 2021, the Company received funding for a term loan from PNC Equipment Finance, LLC in the principal amount of $20.5 million for the full amount of the purchase price for a new corporate aircraft. At December 31, 2024, the outstanding balance on the term loan was $12.6 million, of which $2.1 million was classified as current.
These investments in our U.S. operations will allow us to further enhance the service we provide to our U.S. customers and reduce our lead times. Additionally, our continued commitment to manufacturing in the USA positions us well for Build America, Buy America requirements of the Broadband Equity, Access, and Deployment Program.
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. Our continued commitment to manufacturing in the U.S. positions us well for Build America, Buy America requirements of the Broadband Equity, Access, and Deployment Program.
EMEA net sales of $135.1 million increased $10.7 million, or 8.7%, primarily due to volume increases in energy product and communication sales in the region. Asia-Pacific net sales of $102.9 million increased $17.1 million, or 19.2%, primarily due to volume increases in energy product sales. Gross Profit.
Asia-Pacific net sales of $108.5 million increased $6.5 million, or 6%, primarily due to volume increases in energy product sales. Gross Profit. Gross profit of $189.8 million for 2024 decreased $45.0 million, or 19%, compared to 2023.
The $81.5 million increase was primarily a result of an increase in cash from working capital and an increase in net income. Net Cash used in investing activities of $44.8 million for the year ended December 31, 2023 represents a decrease of $2.0 million when compared to Cash used in investing activities for the year ended December 31, 2022.
Sources and Uses of Cash Net Cash provided by operating activities for the years ended December 31, 2024 and 2023 was $67.5 million and $107.6 million, respectively. The $40.1 million decrease was primarily a result of a decrease in net income and decrease in cash from working capital.
The Americas net sales of $86.1 million decreased $0.9 million, or 1.1%, primarily due to volume decreases within communications sales, partially offset by increases in energy product sales resulting from the contributions of the 2022 Delta acquisition.
The Americas net sales of $90.3 million increased $9.2 million, or 11%, primarily due to higher volumes in energy product sales, partially offset by lower communication sales. EMEA net sales of $128.2 million decreased $8.6 million, or 6%, primarily due to lower volume in communications sales, partially offset by increased volumes in energy product sales.
We expect that our major source of funding for 2023 and beyond will be our operating cash flows, our existing cash and cash equivalents 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.
See Note 7 in the Notes to Consolidated Financial Statements for more information. We expect that our major source of funding for 2025 and beyond will be our operating cash flows, our existing cash and cash equivalents as well as our Facility agreement. The Facility agreement has an expiration date of March 2, 2026.
In 2023, net sales were $669.7 million, an increase of $32.7 million, or 5.1%, compared to 2022.
In 2024, net sales were $593.7 million, a decrease of $76.0 million, or 11%, compared to 2023.
Net Cash used in financing activities for the year ended December 31, 2023 was $48.9 million compared to cash provided by financing activities of $22.5 million for the year ended December 31, 2022.
Net Cash used in financing activities for the years ended December 31, 2024 and 2023 was $47.8 million and $48.9 million, respectively. The year-over-year change was primarily the result of decreased share repurchases offset by increased net payments of long-term debt.
Excluding the effect of currency translation, gross profit increased $19.6 million, or 9.1%, as summarized in the following table: Year Ended December 31, Change Change (Thousands of dollars) Due to Excluding Currency Currency % 2023 2022 Change Translation Translation Change Gross profit PLP-USA $ 138,961 $ 129,169 $ 9,792 $ — $ 9,792 7.6 % The Americas 30,005 31,451 (1,446 ) 740 (2,186 ) (7.0 ) EMEA 36,372 29,405 6,967 264 6,703 22.8 Asia-Pacific 29,510 25,155 4,355 (973 ) 5,328 21.2 Consolidated $ 234,848 $ 215,180 $ 19,668 $ 31 $ 19,637 9.1 % PLP-USA gross profit of $139.0 million increased by $9.8 million, or 7.6%, compared to 2022, primarily due to increased sales volume combined with previously enacted price increases and lower material costs, partially offset by higher depreciation charges.
Excluding the effect of currency translation, gross profit decreased $43.5 million, or 19%, as summarized in the following table: 21 Year Ended December 31, (Thousands of dollars) 2024 2023 Change Change Due to Currency Translation Change Excluding Currency Translation % Change Gross profit PLP-USA $ 92,969 $ 138,961 $ (45,992) $ — $ (45,992) (33) % The Americas 28,608 30,005 (1,397) (1,807) 410 1 EMEA 36,796 36,372 424 462 (38) — Asia-Pacific 31,438 29,510 1,928 (224) 2,152 7 Consolidated $ 189,811 $ 234,848 $ (45,037) $ (1,569) $ (43,468) (19) % PLP-USA gross profit of $93.0 million decreased by $46.0 million, or 33%, compared to the same period in 2023, primarily due to lower sales volumes and unfavorable product mix.
Costs and expenses of $150.7 million for the year ended December 31, 2023 increased $4.9 million, or 3.3%, when compared to 2022.
Asia-Pacific gross profit increased $2.2 million, or 7%, which was primarily driven by favorable product mix. Costs and expenses. Costs and expenses of $139.1 million for the year ended December 31, 2024 decreased $11.6 million, or 8%, when compared to 2023.
If the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. 24 Excess and Obsolescence Reserves We provide excess and obsolescence reserves to state inventories at the lower of cost or estimated net realizable value.
Excess and Obsolescence Reserves We provide excess and obsolescence reserves to state inventories at the lower of cost or estimated net realizable value. We identify inventory items that have had no usage or are in excess of the usages over the historical 12 to 24 months.
The year-over-year change in cash was mainly due to payments of notes payable and long-term debt, as well as an increase in the repurchase of shares during the year. We have commitments under operating leases primarily for office and manufacturing space, transportation equipment, office and computer equipment and capital leases, primarily for equipment.
We have commitments under operating leases primarily for office and manufacturing space, transportation equipment, office and computer equipment and capital leases, primarily for equipment. See Note 8 in the Notes to Consolidated Financial Statements for more information. As of December 31, 2024, the Company had total outstanding guarantees of $11.3 million.
Overall customer demand remained strong, predominantly in the first half of the year and contributed to record net sales revenue of $669.7 million for the year ended December 31, 2023. During the twelve months ending December 31, 2023, the inflationary headwinds we experienced related to raw materials, specifically plastic resins, aluminum and sand (grit), have generally subsided.
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.
Removed
While these factors generally moderated in 2023, they may continue to provide inherent uncertainty going forward, the COVID-19 pandemic and other large scale environmental events have placed a renewed focus on key infrastructure priorities around the world, including bolstering grid reliability, strengthening grid resilience to climate events, upgrading aging infrastructure, enhancing communication networks and transitioning to renewable energy.
Added
The increasing need for power generation and efficient communication systems has highlighted the need for bolstering grid reliability, strengthening grid resilience to climate events, upgrading aging infrastructure, enhancing communication networks and transitioning to new sources of energy. Our focused portfolio is well-positioned to respond to these priorities.
Removed
Our focused portfolio is well-positioned to respond to these priorities. Strong domestic demand in 2023 drove record net sales, in our core energy and communications markets, primarily in the first half of the year.
Added
For additional discussion of our results of operations for the year ended December 31, 2022, see our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on March 3, 2023. Our consolidated financial statements are prepared in conformity with U.S. generally accepted accounting principles ("GAAP").
Removed
For PLP-USA, our largest business segment, we saw a year-over-year benefit for the twelve-month period ended December 31, 2023 of $19.7 million related to the reduction in these costs. Given the uncertainties in the macro-economic environment, we cannot determine if these trends will continue.
Added
While PLP-USA sales results were down compared to the period ended December 31, 2023, our international segments had sales amounts comparable with prior year, showing our international footprint provides cyclical benefits. Our cash generation remains strong as evidenced through a significant reduction in debt levels.
Removed
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. The growth in PLP-USA net sales required additional investment within our PLP-USA facilities, both in the form of operational capacity as well as increased warehouse space.
Added
The Americas gross profit increased $0.4 million, or 1%, which was primarily the result of higher sales volumes, offset by increased depreciation expense and freight costs. EMEA gross profit decreased nominally, which was primarily driven by decreased sales volumes offset by favorable product mix and favorable resolution of a warranty claim.
Removed
Gross profit of $234.8 million for 2023 increased $19.7 million, or 9.1%, compared to 2022.
Added
The following discussion of costs and expenses excludes the effect of currency translation. The Americas costs and expenses of $18.7 million decreased $3.3 million primarily due to a legal settlement in the third quarter of 2023 and the impact of foreign currency remeasurement.
Removed
EMEA gross profit increased $6.7 million or 22.8%, primarily due to incremental margins on the increased sales volume. Asia-Pacific’s gross profit increased $5.3 million, or 21.2%, which was primarily driven by the incremental margins on the increased sales volume. Costs and expenses.
Added
EMEA costs and expenses of $26.1 million decreased by $2.4 million primarily due to lower personnel costs and bad debt expenses. Asia-Pacific costs and expenses of $21.7 million increased $1.4 million primarily due to the net impact of the sale of capital assets year over year and foreign currency remeasurement. Other (expense) income, net .
Removed
The Americas costs and expenses of $22.7 million increased $5.4 million primarily due to a one-time legal settlement, as disclosed in Note 4, higher personnel and sales-related expenses and the impact of the devaluation of the Argentina Peso. EMEA costs and expenses of $28.2 million increased by $1.9 million primarily due to an increase in salary-related and bad debt expenses.
Added
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 year ended December 31, 2024. Income taxes.
Removed
Asia-Pacific costs and expenses of $20.5 million decreased $8.1 million, primarily due to a one-time $6.5 million goodwill impairment charge recorded in 2022 that did not recur and a one-time $2.5 million gain on the sale of plant and equipment in 2023. Other (expense) income, net.
Added
Our effective tax rate increased primarily due to the limitations on the deductibility of compensation and the unfavorable impact from the mix of income earned in jurisdictions with a higher tax rate than the U.S. This was partially offset by a favorable impact from increase in excess tax benefit on share-based compensation.
Removed
The increase in expense was primarily due to a nonrecurring gain of $4.4 million that was recorded in March 2022 related to a settlement of a Company-owned life insurance policy and higher interest expense for the twelve-months ended December 31, 2023. Income taxes.
Added
The Company expects to extend the maturity date of the Facility over the coming year. Except for current earnings in certain jurisdictions, our operating income is deemed to be indefinitely reinvested in foreign jurisdictions. We currently do not intend nor foresee a need to repatriate these funds.
Removed
Our effective tax rate was affected by recurring items, such as tax rates in foreign jurisdictions, which differ from the U.S. federal statutory income tax rate, and the relative amount of income earned in those jurisdictions where such earnings are permanently reinvested.
Added
Net Cash used in investing activities for the years ended December 31, 2024 and 2023 was $12.4 million and $44.8 million, respectively. The $32.4 million decrease was primarily a result of decreases in acquisition activity and capital expenditures during the current period.
Removed
We sold our corporate aircraft in December of 2020, thereby eliminating the balance due on the previous loan which was secured by the corporate aircraft. The proceeds of the sale were used to pay off the debt associated with the former aircraft.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAs of December 31, 2023, the Company had $0.2 million in foreign currency forward exchange assets and no foreign currency forward exchange liabilities 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, forward exchange contracts, foreign denominated receivables and payables and cash and short-term investments.
Biggest changeAs of December 31, 2024, the Company had $0.1 million in foreign currency forward exchange assets and $0.1 million foreign currency forward exchange liabilities outstanding. The Company does not hold derivatives for trading purposes.
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 years ended December 31, 2023, 2022 and 2021.
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 years ended December 31, 2024, 2023 and 2022.
Included in the Company’s accounting for the defined benefit pension plan (“Plan”) are assumptions on future discount rates and the expected return on Plan assets. The Company considers current market conditions, including changes in interest rates and Plan asset investment returns.
Included in the Company’s accounting for the defined benefit pension plan (the "U.S. Plan") are assumptions on future discount rates and the expected return on Plan assets. The Company considers current market conditions, including changes in interest rates and Plan asset investment returns.
Item 7A. Quantitative and Qualitat ive 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.
Item 7A. 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.
In general, a pension liability increases as the discount rate decreases and decreases as the discount rate increases. The discount rate used to determine the future benefit obligation was 5.34% and 5.55% at December 31, 2023 and 2022, respectively. The discount rate is a significant factor in determining the amounts reported.
In general, a pension liability increases as the discount rate decreases and decreases as the discount rate increases. The discount rate used to determine the future benefit obligation was 5.77% and 5.34% at December 31, 2024 and 2023, respectively. The discount rate is a significant factor in determining the amounts reported.
The Company assumed an expected rate of return of 7.00% for the year ended December 31, 2023 and 6.50% for the year ended December 31, 2022. A 50 basis point change in the expected rate of return would have a $0.2 million effect on the Plan’s subsequent year’s net periodic pension cost. 26
The Company assumed an expected rate of return of 6.25% for the year ended December 31, 2024 and 7.00% for the year ended December 31, 2023. A 50 basis point change in the expected rate of return would have a $0.1 million effect on the Plan’s subsequent year’s net periodic pension cost. 26
A 50 basis point change in the discount rate of 5.34% used at December 31, 2023 would have a $1.9 million effect on the Plan’s projected benefit obligation. The Company developed the expected return on Plan assets by considering various factors which include targeted asset allocation percentages, historical returns, and expected future returns.
A 50 basis point change in the discount rate of 5.77% used at December 31, 2024 would have a $1.7 million change on the Plan’s projected benefit obligation. The Company developed the expected return on Plan assets by considering various factors which include targeted asset allocation percentages, historical returns, and expected future returns.
The Company is subject to interest rate risk on its variable rate revolving credit facilities and term notes, which consisted of long-term borrowings of $55.3 million at December 31, 2023. A 100 basis point increase in the interest rate would have resulted in an increase in interest expense of approximately $0.4 million for the year ended December 31, 2023.
The Company is subject to interest rate risk on its variable rate revolving credit facilities and term notes, which consisted of long-term borrowings of $7.2 million at December 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 year ended December 31, 2024.
A hypothetical 10% change in currency rates would have a favorable/unfavorable impact on fair values on such instruments of approximately $6.5 million and on income before tax of $2.3 million. The Company is exposed to market risk, including changes in interest rates.
A hypothetical 10% change in currency rates would have a favorable/unfavorable impact on income before tax of $3.0 million. The Company is exposed to market risk, including changes in interest rates.
Added
The Company's primary currency rate exposures are related to foreign denominated debt, intercompany debt, forward exchange contracts, foreign denominated receivables and payables and cash and short-term investments. A hypothetical 10% change in currency rates would have a favorable/unfavorable impact on fair values on such instruments of approximately $6.9 million.

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