Preformed Line Products Company

10/29/2026 | Press release | Distributed by Public on 10/29/2026 10:43

Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)

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, string hardware, connectors, insulators, fiber optic and copper splice closures, solar hardware mounting applications, and electric vehicle charging station foundations. We also provide aerial drone inspection services for utility assets including transmission and distribution power lines, substations, and generation facilities. We are respected around the world for quality, dependability and market-leading customer service. Our goal is to continue to achieve profitable growth as a leader in the research, innovation, development, manufacture, and marketing of technically advanced products and services related to energy, communications and cable systems and to take advantage of this leadership position to sell additional quality products in familiar markets. We have sales and manufacturing operations in 20 different countries.
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 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 gross sales and income before income taxes.
PREFACE
The following discussion describes our results of operations for the three and nine months ended September 30, 2026 and 2025. 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 $209.5 million increased $31.4 million for the three months ended September 30, 2026 year-over-year and net sales of $598.5 million increased $102.2 million for the nine months ended September 30, 2026 year-over-year, mainly due to an increase in energy and, to a lesser extent, communications sales, led by PLP-USA. While the nine months ended September 30, 2026 sales amounts are the highest in the Company's history, tariffs, especially Section 232 tariffs, and geopolitical developments continue to present headwinds related to raw material imports, commodity prices and freight costs, impacting essential inputs like steel, aluminum and plastic resins. While we continue to manage trade matters and commodity prices proactively, further tariff increases or geopolitical events may give rise to inflationary pressures, which may require further price adjustments to maintain profit margin, and any price increases may have a negative effect on demand. Please see Note 5 of the Notes to the Consolidated Financial Statements for further considerations on tariffs and refund process as a result of the February 2026 Supreme Court ruling.
Our financial statements are subject to fluctuations in the exchange rates of foreign currencies in relation to the U.S. dollar. The fluctuations of foreign currencies during the three and nine months ended September 30, 2026 had a favorable impact on net sales of $3.1 million and $16.2 million, respectively. The fluctuations on foreign currencies had a favorable impact of $0.4 million and $1.0 million on net income for the three- and nine-months ended September 30, 2026, respectively. The fluctuations of foreign currencies during the three and nine months ended September 30, 2025 had a favorable impact on net sales of $1.9 million and unfavorable impact of $3.0 million, respectively. The fluctuations on foreign currencies had a favorable impact on net income of $0.3 million for the three months ended September 30, 2025 and a de minimis impact on net income for the nine months ended September 30, 2025. On a reportable segment basis, the impact of foreign currency translation on net sales and net income for the three- and nine- months ended September 30, 2026, was as follows:
Foreign Currency Translation Impact
Three Months Ended September 30, 2026 Nine Months Ended September 30, 2026
(Thousands of dollars) Net Sales Net Income Net Sales Net Income
The Americas $ 1,649 $ 166 $ 6,624 $ 474
EMEA 145 80 4,937 269
Asia-Pacific 1,275 120 4,672 276
Total $ 3,069 $ 366 $ 16,233 $ 1,019
While uncertainty remains in the global economy due to trade matters and geopolitical instability, we believe our business portfolio, which is focused on key megatrends impacting both the power and telecommunications markets, as well as our significant U.S. manufacturing footprint, and 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, including tariff impacts, increase sales volume and deliver value to our customers. We closely monitor developments in trade policy and geopolitical instability and actively evaluate strategies to mitigate the impact of tariffs or supply chain constraints, including sourcing alternatives, where needed. 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 September 30, 2026, our liquidity remains strong with our bank debt to equity percentage at 10.9%. We can borrow needed funds at a competitive interest rate under the 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 September 30, 2026 and 2025. The Company's past operating results are not necessarily indicative of future operating results.
Three Months Ended September 30,
(Thousands of dollars) 2026 2025 Change
Net sales $ 209,501 100.0 % $ 178,087 100.0 % $ 31,414
Cost of products sold 139,499 66.6 125,238 70.3 14,261
GROSS PROFIT 70,002 33.4 52,849 29.7 17,153
Costs and expenses 45,105 21.5 39,717 22.3 5,388
OPERATING INCOME 24,897 11.9 13,132 7.4 11,765
Other income (expense), net 659 0.3 (10,776) (6.1) 11,435
INCOME BEFORE INCOME TAXES 25,556 12.2 2,356 1.3 23,200
Income tax expense (benefit) 7,540 3.6 (263) (0.1) 7,803
NET INCOME 18,016 8.6 2,619 1.5 15,397
Net loss attributable to noncontrolling interests 20 0.0 7 0.0 13
NET INCOME ATTRIBUTABLE TO PREFORMED LINE PRODUCTS COMPANY SHAREHOLDERS $ 18,036 8.6 % $ 2,626 1.5 % $ 15,410
Net sales. In 2026, net sales were $209.5 million, an increase of $31.4 million, or 18%, compared to 2025. Excluding the effect of currency translation, net sales increased 16% as summarized in the following table:
Three Months Ended September 30,
(Thousands of dollars) 2026 2025 Change
Change
Due to
Currency
Translation
Change
Excluding
Currency
Translation
%
Change
Net sales
PLP-USA $ 102,704 $ 80,817 $ 21,887 $ - $ 21,887 27 %
The Americas 33,003 29,332 3,671 1,649 2,022 7 %
EMEA 37,650 38,073 (423) 145 (568) (1) %
Asia-Pacific 36,144 29,865 6,279 1,275 5,004 17 %
Consolidated $ 209,501 $ 178,087 $ 31,414 $ 3,069 $ 28,345 16 %
The increase in PLP-USA net sales of $21.9 million, or 27%, was primarily due to higher volumes in energy sales and, to a lesser extent, communications sales. International net sales for the three months ended September 30, 2026 were favorably affected by $3.1 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 $33.0 million increased $2.0 million, or 7%, primarily due to higher volumes in energy sales mainly due to the acquisition of Delta Star in May 2026 and higher communications volumes. EMEA net sales of $37.7 million decreased $0.6 million primarily due to lower volumes in communications sales. Asia-Pacific net sales of $36.1 million increased $5.0 million, or 17%, primarily due to higher volumes in energy sales.
Gross profit. Gross profit of $70.0 million for 2026 increased $17.2 million, or 32%, compared to 2025. Excluding the effect of currency translation, gross profit increased $16.2 million, or 31%, as summarized in the following table:
Three Months Ended September 30,
(Thousands of dollars) 2026 2025 Change
Change
Due to
Currency
Translation
Change
Excluding
Currency
Translation
%
Change
Gross profit
PLP-USA $ 37,280 $ 23,674 $ 13,606 $ - $ 13,606 57 %
The Americas 10,363 9,063 1,300 539 761 8 %
EMEA 12,449 12,410 39 108 (69) (1) %
Asia-Pacific 9,910 7,702 2,208 323 1,885 24 %
Consolidated $ 70,002 $ 52,849 $ 17,153 $ 970 $ 16,183 31 %
PLP-USA gross profit of $37.3 million increased by $13.6 million, or 57%, compared to the same period in 2025, primarily due to higher sales volumes, favorable product mix and the benefit of price increases enacted in 2025 and 2026, partially offset by increased material and manufacturing costs. International gross profit for the period ended September 30, 2026 was favorably impacted by $1.0 million when local currencies were translated to U.S. dollars. The following discussion of gross profit changes excludes the effects of currency translation. The Americas gross profit increased $0.8 million, or 8%, which was primarily the result of higher sales volume driven by the acquisition of Delta Star in May 2026. EMEA gross profit had a decrease of $0.1 million due to an increase in material costs. Asia-Pacific gross profit increased $1.9 million, or 24%, which was primarily driven by higher sales volume and favorable product mix.
Costs and expenses. Costs and expenses of $45.1 million for the three months ended September 30, 2026 increased $5.4 million, or 14%, when compared to 2025. Excluding the effect of currency translation and intercompany transactions, costs and expenses increased $5.0 million, or 13%, as summarized in the following table:
Three Months Ended September 30,
(Thousands of dollars) 2026 2025 Change
Change
Due to
Currency
Translation
Change Due to Intercompany Transactions
Change Excluding
Currency
and Intercompany Transactions
%
Change
Costs and expenses
PLP-USA $ 24,092 $ 16,264 $ 7,828 $ - $ 2,673 $ 5,155 32 %
The Americas 7,151 7,474 (323) 305 (920) 292 4 %
EMEA 7,372 8,272 (900) (31) (522) (347) (4) %
Asia-Pacific 6,490 7,707 (1,217) 125 (1,231) (111) (1) %
Consolidated $ 45,105 $ 39,717 $ 5,388 $ 399 $ - $ 4,989 13 %
Excluding intercompany transactions, PLP-USA costs and expenses increased $5.2 million, or 32% year-over-year, primarily due to increased selling and personnel costs, supporting strategic market growth initiatives in core product offerings in both energy and communications. International costs and expenses for the three months ended September 30, 2026 were unfavorably impacted when local currencies were translated to U.S. dollars and favorably impacted by intercompany transactions with PLP-USA. The following discussion of costs and expenses excludes the effect of currency translation and intercompany transactions. The Americas costs and expenses of $7.2 million increased $0.3 million primarily due to increases in personnel costs, offset by the impact of foreign currency remeasurement. EMEA costs and expenses of $7.4 million decreased by $0.3 million primarily due to decreases in personnel and selling costs. Asia-Pacific costs and expenses of $6.5 million decreased $0.1 million primarily due to foreign currency remeasurement, offset by increases in personnel costs.
Other Income (Expense), net. Other income, net of $0.7 million for the three months ended September 30, 2026 was favorable by $11.5 million when compared to $10.8 million of Other expense, net for the three months ended September 30, 2025. The favorable movement was mainly due to the $11.7 million pension termination charge recorded in Q3 2025.
Income taxes. Income taxes for the three months ended September 30, 2026 and 2025 were $7.5 million and $(0.3) million based on pre-tax income of $25.6 million and $2.4 million, respectively. The tax rate for the three months ended September 30, 2026 and 2025 was 30% and (11)%, respectively. The higher effective tax rate for the three months ended September 30, 2026 compared to the three months ended September 30, 2025 was a result of the tax benefit recorded at Q3 2025 due to the release of amounts in Other Comprehensive Income attributed to the Company's pension termination as well as an increase in non-deductible officers' compensation and stock option expense recognized in the quarter.
Net income. As a result of the preceding items, net income for the three months ended September 30, 2026 was $18.0 million, compared to $2.6 million for 2025. Excluding the effect of currency translation, net income increased $15.0 million as summarized in the following table. The increase in net income was due to increases in operating income and other income as described above.
Three Months Ended September 30,
(Thousands of dollars) 2026 2025 Change
Change
Due to
Currency
Translation
Change
Excluding
Currency
Translation
%
Change
(a)
Net income (loss)
PLP-USA $ 9,079 $ (1,684) $ 10,763 $ - $ 10,763 NM
The Americas 2,813 1,455 1,358 166 1,192 82 %
EMEA 3,898 2,987 911 80 831 28 %
Asia-Pacific 2,246 (132) 2,378 120 2,258 NM
Consolidated $ 18,036 $ 2,626 $ 15,410 $ 366 $ 15,044 NM
(a)NM = Not meaningful; percentage change is not considered meaningful to investors due to the nature or magnitude of the underlying amounts.
NINE MONTHS ENDED SEPTEMBER 30, 2026 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30, 2025
The following table sets forth a summary of the Company's Statements of Consolidated Income and the percentage of net sales for the nine months ended September 30, 2026 and 2025. The Company's past operating results are not necessarily indicative of future operating results.
Nine Months Ended September 30,
(Thousands of dollars) 2026 2025
Change
Net sales $ 598,460 100.0 % $ 496,229 100.0 % $ 102,231
Cost of products sold 400,226 66.9 339,310 68.4 60,916
GROSS PROFIT 198,234 33.1 156,919 31.6 41,315
Costs and expenses 131,719 22.0 113,533 22.9 18,186
OPERATING INCOME 66,515 11.1 43,386 8.7 23,129
Other income (expense), net 1,817 0.3 (10,053) (2.0) 11,870
INCOME BEFORE INCOME TAXES 68,332 11.4 33,333 6.7 34,999
Income tax expense 18,259 3.1 6,461 1.3 11,798
NET INCOME 50,073 8.4 26,872 5.4 23,201
Net income attributable to noncontrolling interests (5) (0.0) (24) (0.0) 19
NET INCOME ATTRIBUTABLE TO PREFORMED LINE PRODUCTS COMPANY SHAREHOLDERS $ 50,068 8.4 % $ 26,848 5.4 % $ 23,220
Net sales. In 2026, net sales were $598.5 million, an increase of $102.2 million, or 21%, compared to 2025. Excluding the effect of currency translation, net sales increased 17% as summarized in the following table:
Nine Months Ended September 30,
(Thousands of dollars) 2026 2025 Change Change
Due to
Currency
Translation 		Change
Excluding
Currency
Translation 		%
Change
Net sales
PLP-USA $ 300,321 $ 234,113 $ 66,208 $ - $ 66,208 28 %
The Americas 92,047 80,118 11,929 6,624 5,305 7 %
EMEA 112,616 99,977 12,639 4,937 7,702 8 %
Asia-Pacific 93,476 82,021 11,455 4,672 6,783 8 %
Consolidated $ 598,460 $ 496,229 $ 102,231 $ 16,233 $ 85,998 17 %
The increase in PLP-USA net sales of $66.2 million, or 28%, was primarily due to higher volumes in energy sales and, to a lesser extent, communications sales. International net sales for the nine months ended September 30, 2026 were favorably affected by $16.2 million when local currencies were converted to U.S. dollars. The following discussion of changes in net sales excludes the effect of currency translation. The Americas net sales of $92.0 million increased $5.3 million, or 7%, primarily due to an increase in communications sales due to the acquisition of JAP Telecom in May 2025 and, to a lesser extent, an increase in energy sales primarily related to the acquisition of Delta Star in May 2026. EMEA net sales of $112.6 million increased $7.7 million, or 8% primarily due to higher volumes in energy product sales. Asia-Pacific net sales of $93.5 million increased $6.8 million, or 8%, primarily due to volume increases in energy product and special industries sales.
Gross profit. Gross profit of $198.2 million for 2026 increased $41.3 million, or 26%, compared to 2025. Excluding the effect of currency translation, gross profit increased $36.5 million, or 23%, as summarized in the following table:
Nine Months Ended September 30,
(Thousands of dollars) 2026 2025 Change Change
Due to
Currency
Translation 		Change
Excluding
Currency
Translation 		%
Change
Gross profit
PLP-USA $ 109,048 $ 78,575 $ 30,473 $ - $ 30,473 39 %
The Americas 28,037 24,573 3,464 2,057 1,407 6 %
EMEA 35,095 30,798 4,297 1,575 2,722 9 %
Asia-Pacific 26,054 22,973 3,081 1,172 1,909 8 %
Consolidated $ 198,234 $ 156,919 $ 41,315 $ 4,804 $ 36,511 23 %
PLP-USA gross profit of $109.0 million increased by $30.5 million, or 39%, compared to the same period in 2025, primarily due to higher sales volumes and fixed cost leverage, in addition to the benefit of price increases enacted in 2025 and 2026, partially offset by material and manufacturing costs. International gross profit for the period ended September 30, 2026 was favorably impacted by $4.8
million when local currencies were translated to U.S. dollars. The following discussion of gross profit changes excludes the effects of currency translation. The Americas gross profit increased $1.4 million, or 6%, which was primarily the result of higher sales volumes. EMEA gross profit increased $2.7 million, or 9%, primarily due to higher sales volume and favorable product mix. Asia-Pacific gross profit increased $1.9 million, primarily from higher sales volume, offset by unfavorable product mix.
Costs and expenses. Costs and expenses of $131.7 million for the nine months ended September 30, 2026 increased $18.2 million, or 16%, when compared to 2025. Excluding the effect of currency translation and intercompany transactions, costs and expenses increased $15.1 million, or 13%, as summarized in the following table:
Nine Months Ended September 30,
(Thousands of dollars) 2026 2025 Change Change
Due to
Currency
Translation 		Change Due to Intercompany Transactions
Change Excluding
Currency
and Intercompany Transactions
%
Change
Costs and expenses
PLP-USA $ 68,980 $ 50,832 $ 18,148 $ - $ 5,473 $ 12,675 25 %
The Americas 20,210 19,697 513 1,359 (2,593) 1,747 9 %
EMEA 23,821 23,572 249 1,013 (1,490) 726 3 %
Asia-Pacific 18,708 19,432 (724) 678 (1,390) (12) - %
Consolidated $ 131,719 $ 113,533 $ 18,186 $ 3,050 $ - $ 15,136 13 %
Excluding intercompany transactions, PLP-USA costs and expenses of $69.0 million increased $12.7 million, or 25% year-over-year. PLP-USA's increase was primarily attributable to higher personnel and selling costs. International costs and expenses for the nine months ended September 30, 2026 were unfavorably impacted by $3.1 million when local currencies were translated to U.S. dollars and favorably impacted by intercompany transactions with PLP-USA. The following discussion of costs and expenses excludes the effect of currency translation and intercompany transactions. The Americas costs and expenses of $20.2 million increased $1.7 million primarily due to an increase in personnel and selling costs. EMEA costs and expenses of $23.8 million increased by $0.7 million primarily due to higher personnel and facility costs. Asia-Pacific costs and expenses of $18.7 million had a de minimis change.
Other Income (Expense), net. Other income, net of $1.8 million for the nine months ended September 30, 2026 was favorable by $11.9 million when compared to Other expense, net for the nine months ended September 30, 2025 of $10.1 million. The favorable movement was mainly due to the $11.7 million pension termination charge recorded in Q3 2025.
Income taxes. Income taxes for the nine months ended September 30, 2026 and 2025 were $18.3 million and $6.5 million based on pre-tax income of $68.3 million and $33.3 million, respectively. The tax rate for the nine months ended September 30, 2026 and 2025 was 27% and 19%, respectively. The effective tax rate for the nine months ended September 30, 2026 was higher than the effective tax rate for the same period in 2025 mainly due to the tax benefit recorded at Q3 2025 from the release of amounts in Other Comprehensive Income attributed to the Company's pension termination and a valuation allowance recorded in Q1 2026 on deferred tax assets related to the Company's French subsidiary.
Net income. As a result of the preceding items, net income for the nine months ended September 30, 2026 was $50.1 million, compared to $26.8 million for 2025. Excluding the effect of currency translation, net income increased $22.2 million as summarized in the following table. The increase in net income was due to increases in operating income and other income as described above:
Nine Months Ended September 30,
(Thousands of dollars) 2026 2025 Change Change
Due to
Currency
Translation 		Change
Excluding
Currency
Translation 		%
Change
Net income (loss)
PLP-USA $ 31,454 $ 14,497 $ 16,957 $ - $ 16,957 117 %
The Americas 6,662 4,153 2,509 474 2,035 49 %
EMEA 6,777 5,542 1,235 269 966 17 %
Asia-Pacific 5,175 2,656 2,519 276 2,243 84 %
Consolidated $ 50,068 $ 26,848 $ 23,220 $ 1,019 $ 22,201 83 %
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, 2025 filed on March 5, 2026 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 nine months of 2026, we used cash of $43.7 million for capital expenditures, mainly related to new facilities in the EMEA region and Canada. We ended the first nine months of 2026 with $99.3 million of cash, cash equivalents and restricted cash (collectively, "Cash"). Our Cash is held in various locations throughout the world. At September 30, 2026, 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 September 30, 2026 was $55.9 million. The Company maintained a credit facility (the "Facility") with PNC Bank, National Association ("PNC") with a capacity of $60.0 million and a maturity date of June 30, 2028. The interest rate is defined as the Secured Overnight Financing Rate ("SOFR") plus 1.225% unless the Company's funded debt to Earnings before Interest, Taxes and Depreciation ratio exceeds 3.00 to 1, at which point the SOFR spread becomes 1.600%. At September 30, 2026, the Company had utilized $6.1 million with $53.9 million available on the Facility. There were no long-term outstanding letters of credit on the Facility as of September 30, 2026. Our bank debt to equity percentage was 10.9%. The Facility contains, among other provisions, requirements for maintaining levels of net worth and profitability. At September 30, 2026, 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. As of September 30, 2026, $9.1 million was outstanding on this debt facility, of which $2.1 million was classified as current. The aircraft has been pledged as collateral against the loan.
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 September 30, 2026 and December 31, 2025, $40.8 million and $20.9 million were outstanding, of which $6.5 million and $4.6 million were classified as current, respectively. Of the $40.8 million outstanding at September 30, 2026, $21.8 million is attributable to the Poland subsidiary, $6.6 million is attributable to the Spain subsidiary and $10.6 million is attributable to the Canada subsidiary. These facilities support commitments made in the ordinary course of business.
On July 16, 2025, PLP Poland (Belos) S.A. ("PLP Poland"), a subsidiary of the Company, entered into a non-revolving investment loan with Bank Polska Kasa Opieki Spółka Akcyjna ("Bank Pekao S.A") to finance the construction of a new manufacturing plant for an amount up to PLN100.3 million ($26.0 million) with a maturity date of January 31, 2035.
On June 30, 2026, PLP Poland amended its non-revolving investment loan agreement with Bank Pekao S.A. to defer the start of annual repayments from June 30, 2026 to January 31, 2027. Following the amendment, PLP Poland will make annual installments in the amounts of PLN9.0 million ($2.4 million) in 2027, PLN9.6 million ($2.5 million) in 2028, PLN9.8 million ($2.5 million) annually from 2029 through 2034, and PLN22.9 million ($6.1 million) in 2035.
The loan bears interest at the one month Warsaw Interbank Offered Rate ("WIBOR") plus 1.0% unless the Company does not meet the covenants as set forth in the Facility with PNC, at which point the WIBOR spread becomes 1.5%. The current manufacturing plant owned by PLP Poland, the plant under construction and all fixed assets within the plants are pledged as collateral against the loan. The loan also is guaranteed by the Company.
On July 28, 2026, in connection with the acquisition of a facility and related land in Canada (the "Property"), PLP Canada entered into a Term Loan Agreement (the "Term Loan") with Citibank N.A. providing for borrowings of CAD15.0 million ($10.6 million). The proceeds of the Term Loan were used to refinance a portion of the Company's cash investment in the acquisition of the Property.
The Term Loan bears interest at a variable rate equal to the Canadian Overnight Repo Rate Average ("CORRA") plus 1.25% per annum and matures on July 28, 2029. Principal payments are due in annual installments of CAD0.8 million ($0.5 million) in each of 2027 and 2028, with the remaining principal balance of CAD13.4 million ($9.6 million) due at maturity in 2029.
The Term Loan contains a negative covenant that restricts PLP Canada from pledging, mortgaging, or otherwise using the acquired property as collateral for any other indebtedness without the prior written consent of the lender. The Term Loan also contains, among other provisions, requirements for maintaining levels of net worth and profitability.
The Company's Asia-Pacific segment had $0.5 million and $0.1 million in restricted cash used to secure bank guarantees at September 30, 2026 and December 31, 2025, respectively. The restricted cash is shown on the Company's Consolidated Balance Sheets in Cash, cash equivalents and restricted cash.
We expect that our major source of funding for 2026 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.
Sources and Uses of Cash
Net cash provided by operating activities for the nine months ended September 30, 2026 was $68.1 million compared to $51.5 million in the comparable prior year nine-month period. The $16.6 million increase was primarily a result of the increase in net income, partially offset by the net unfavorable movement in non-cash items primarily from the pension termination charge recorded in Q3 2025.
Net cash used in investing activities for the nine months ended September 30, 2026 was $52.5 million compared to $33.2 million in the comparable prior year nine-month period. The $19.3 million change was primarily a result of the acquisition of Delta Star in May 2026, an increase in capital expenditures primarily related to the purchase of a building in Canada, as well as lower net proceeds from investments.
Net cash used in financing activities for the nine months ended September 30, 2026 was $0.4 million compared to $7.3 million in the comparable prior year nine-month period. The $6.9 million change was primarily the result of an increase in proceeds from long term debt and notes payable to banks, offset by an increase in common share repurchases.
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 September 30, 2026, we had $1.9 million of current operating lease liabilities and $6.6 million of noncurrent operating lease liabilities. Total liabilities related to finance lease obligations were approximately $0.5 million at September 30, 2026.
As of September 30, 2026, 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 September 30, 2026, the Company had total outstanding letters of credit of $3.0 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. At September 30, 2026, and December 31, 2025, $40.8 million and $20.9 million were outstanding, of which $6.5 million and $4.6 million were classified as current, respectively. Of the $40.8 million outstanding at September 30, 2026, $21.8 million is attributable to the Poland subsidiary, $6.6 million is attributable to the Spain subsidiary and $10.6 million is attributable to the Canada subsidiary. 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 as "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, historically, has a slow growth rate in mature markets such as the United States ("U.S."), Canada, Australia and Western Europe and may grow slowly or experience prolonged delay in developing regions despite expanding power needs;
•The impact of global economic conditions, including the impact of inflation, previously enacted or future tariffs and related economic uncertainty (including the outcome of legal challenges and refunds), 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 (such as the Russian-Ukrainian, Israeli-Palestinian and Iranian 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;
•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, trade 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 have been, and in the future may be, associated with the purchase of these products or components of these products. The Company's supply chain has faced and could continue to face disruptions and constraints from such tariffs, inflationary pressures and ongoing wars and military conflicts, which could have a material, adverse effect on the ability to secure raw materials and supplies and customer demand;
•Strikes, labor disruptions and other fluctuations in labor costs;
•Changes and uncertainty in significant government regulations and funding priorities, including those affecting environmental compliance or other regulatory matters, or third-party 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, 2025 which was filed on March 5, 2026.
Preformed Line Products Company published this content on October 29, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on October 29, 2026 at 16:43 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]