Preformed Line Products(US:PLPC)2023-03-03 21:43Financial Performance - Record net sales revenue of $637.0 million for the year ended December 31, 2022, an increase of $119.6 million or 23.1% compared to 2021 [114][120]. - Operating income increased to $69.4 million, representing a margin of 10.9%, up from 9.2% in 2021 [120]. - In 2022, net sales reached $637.0 million, an increase of $119.6 million, or 23%, compared to 2021, with a 28% increase excluding currency translation effects [121]. - Gross profit for 2022 was $215.2 million, up $48.9 million, or 29%, compared to 2021, with a 33% increase when excluding currency translation [122]. - Costs and expenses totaled $145.8 million for 2022, an increase of $27.1 million, or 23%, compared to 2021, with a 28% increase excluding currency translation [123]. - Net income for 2022 was $54.4 million, compared to $35.7 million in 2021, reflecting an increase of $18.7 million, or 52.3% [127]. - PLP-USA's net income increased by $20.3 million, or 83.1%, to $44.7 million in 2022, driven by higher operating income [127]. Sales and Market Performance - The Americas net sales increased by $16.8 million, or 24%, primarily due to contributions from the 2022 Maxxweld and Delta acquisitions [121]. - EMEA net sales rose by $41.9 million, or 44%, mainly due to volume increases in communication product sales [121]. - Asia-Pacific net sales increased by $2.4 million, or 3%, despite flat volume due to COVID-19 mitigation strategies [121]. Costs and Expenses - The impact of inflation on raw materials and transportation costs increased cost of sales by approximately $23.2 million for the year ended December 31, 2022 [114]. - Costs and expenses totaled $145.8 million for 2022, an increase of $27.1 million, or 23%, compared to 2021, with a 28% increase excluding currency translation [123]. Debt and Liquidity - A consolidated increase in debt of $30.0 million as of December 31, 2022, primarily for capital expenditures and business acquisitions [117]. - The company has a bank debt to equity percentage of 25.0%, indicating strong liquidity [114]. - As of December 31, 2022, the company's total debt was $89.5 million, with a bank debt to equity percentage of 25.0% [132]. - The current ratio improved from 2.6 to 1 in 2021 to 2.8 to 1 in 2022 [132]. Cash Flow - Net cash provided by operating activities decreased to $26.2 million in 2022 from $33.6 million in 2021, primarily due to increased working capital funding [137]. - Cash used in investing activities increased to $46.8 million in 2022, up by $28.5 million compared to 2021, driven by higher capital expenditures and business acquisitions [138]. - Net cash provided by financing activities was $22.5 million in 2022, a turnaround from a cash use of $23.2 million in 2021, mainly due to proceeds from long-term debt [139]. - The company expects future operating cash flows to cover debt repayments, capital expenditures, and dividends for the next 12 months and beyond [135]. Strategic Initiatives - The company plans to invest in operational capacity and warehouse space to enhance service for U.S. customers in 2023 [114]. - The company is focused on strategic mergers and acquisitions, new product development, and market expansion [114]. - The company expects growth in communications business from low deployment areas of fixed line and wireless telecommunications services [111]. Tax and Inventory - The effective tax rate for 2022 was 26.2%, slightly lower than 26.9% in 2021, influenced by varying tax rates in foreign jurisdictions [125]. - The allowance for credit losses represented approximately 3.8% of trade receivables at December 31, 2022, compared to 3.0% in 2021 [145]. - The reserve for excess and obsolete inventory was 6.3% of gross inventory for the year ended December 31, 2022, down from 6.6% in 2021 [146]. Interest Rates and Financial Obligations - A 100 basis point increase in interest rates would have resulted in an increase in interest expense of approximately $0.6 million for the year ended December 31, 2022 [158]. - The discount rate used to determine the future benefit obligation was 5.55% at December 31, 2022, compared to 2.92% at December 31, 2021 [160]. Impairments - The company recorded a goodwill impairment charge of $6.5 million in the Asia-Pacific segment due to COVID-19 related project postponements [118].