PLPC 10-Q Quarterly Report Sept. 30, 2010

PREFORMED LINE PRODUCTS CO

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10-Q 1 c07802e10vq.htm FORM 10-Q Form 10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2010

Commission file number: 0-31164

Preformed Line Products Company

(Exact Name of Registrant as Specified in Its Charter)


Ohio		34-0676895

(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

660 Beta Drive
Mayfield Village, Ohio		44143

(Address of Principal Executive Office)		(Zip Code)

(440) 461-5200

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (S232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange act.


Large accelerated filer o	Accelerated filer þ	Non-accelerated filer o	Smaller reporting company o
		(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

The number of common shares outstanding as of November 1, 2010: 5,221,030.

Table of Contents


	Page
Part I — Financial Information

Item 1. Financial Statements		3

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		16

Item 3. Quantitative and Qualitative Disclosures About Market Risk		27

Item 4. Controls and Procedures		27

Part II — Other Information

Item 1. Legal Proceedings		28

Item 1A. Risk Factors		28

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		28

Item 3. Defaults Upon Senior Securities		29

Item 4. (Removed and Reserved)		29

Item 5. Other Information		29

Item 6. Exhibits		29

SIGNATURES		32

Exhibit 2.1
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
Exhibit 32.2

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

PREFORMED LINE PRODUCTS COMPANY
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)


	September 30			December 31
Thousands of dollars, except share and per share data	2010			2009

ASSETS
Cash and cash equivalents	$	22,337		$	24,097
Accounts receivable, less allowances of $1,280 ($995 in 2009)		63,437			49,245
Inventories — net		67,869			56,036
Deferred income taxes		3,557			3,256
Prepaids		3,477			3,214
Prepaid taxes		3,927			1,049
Other current assets		1,490			2,062

TOTAL CURRENT ASSETS		166,094			138,959

Property and equipment — net		73,228			67,766
Patents and other intangibles — net		12,848			8,087
Goodwill		12,056			6,925
Deferred income taxes		5,661			4,358
Other assets		9,118			9,277

TOTAL ASSETS	$	279,005		$	235,372


LIABILITIES AND SHAREHOLDERS’ EQUITY
Notes payable to banks	$	831		$	3,181
Current portion of long-term debt		1,253			1,330
Trade accounts payable		24,684			18,764
Accrued compensation and amounts withheld from employees		12,910			8,345
Accrued expenses and other liabilities		10,275			8,375
Accrued profit-sharing and other benefits		3,947			3,890
Dividends payable		1,085			1,076
Income taxes payable and deferred income taxes		3,949			1,379

TOTAL CURRENT LIABILITIES		58,934			46,340

Long-term debt, less current portion		14,456			3,099
Unfunded pension obligation		9,464			8,678
Income taxes payable, noncurrent		1,672			1,898
Deferred income taxes		2,748			1,515
Other noncurrent liabilities		3,061			3,021

SHAREHOLDERS’ EQUITY
PLPC Shareholders’ equity:
Common stock — $2 par value per share, 15,000,000 shares authorized, 5,220,847 and 5,248,298 issued and outstanding, net of 587,286 and 551,059 treasury shares at par, respectively		10,442			10,497
Paid in capital		7,774			5,885
Retained earnings		179,140			165,953
Accumulated other comprehensive loss		(8,051	)		(11,369	)

TOTAL PLPC SHAREHOLDERS’ EQUITY		189,305			170,966

Noncontrolling interest		(635	)		(145	)

TOTAL SHAREHOLDERS’ EQUITY		188,670			170,821


TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	279,005		$	235,372

See notes to consolidated financial statements (unaudited).

PREFORMED LINE PRODUCTS COMPANY
STATEMENTS OF CONSOLIDATED INCOME
(UNAUDITED)


	Three month periods ended September 30						Nine month periods ended September 30
	2010			2009			2010			2009
	(Thousands, except per share data)

Net sales	$	93,942		$	69,132		$	244,987		$	187,394
Cost of products sold		62,271			44,518			165,836			124,352

GROSS PROFIT		31,671			24,614			79,151			63,042

Costs and expenses
Selling		7,678			5,750			21,218			16,640
General and administrative		9,856			8,609			29,000			23,032
Research and engineering		2,915			2,411			8,474			6,631
Other operating expense (income)		(1,735	)		(337	)		(745	)		(359	)


		18,714			16,433			57,947			45,944


OPERATING INCOME		12,957			8,181			21,204			17,098

Other income (expense)
Interest income		84			95			261			307
Interest expense		(162	)		(153	)		(458	)		(369	)
Other income		1,005			326			1,765			983

		927			268			1,568			921


INCOME BEFORE INCOME TAXES		13,884			8,449			22,772			18,019

Income taxes		4,002			2,190			5,760			5,501


NET INCOME		9,882			6,259			17,012			12,518

Net income (loss) attributable to noncontrolling interest, net of tax		3			(61	)		(95	)		(108	)


NET INCOME ATTRIBUTABLE TO PLPC	$	9,879		$	6,320		$	17,107		$	12,626


BASIC EARNINGS PER SHARE
Net income attributable to PLPC common shareholders	$	1.89		$	1.21		$	3.26		$	2.41


DILUTED EARNINGS PER SHARE
Net income attributable to PLPC common shareholders	$	1.83		$	1.19		$	3.17		$	2.38


Cash dividends declared per share	$	0.20		$	0.20		$	0.60		$	0.60


Weighted-average number of shares outstanding — basic		5,238			5,235			5,248			5,231


Weighted-average number of shares outstanding — diluted		5,390			5,316			5,396			5,309

See notes to consolidated financial statements (unaudited).

PREFORMED LINE PRODUCTS COMPANY
STATEMENTS OF CONSOLIDATED CASH FLOWS
(UNAUDITED)


	Nine month periods ended September 30
	2010			2009
	(Thousands of dollars)
OPERATING ACTIVITIES
Net income	$	17,012		$	12,518

Adjustments to reconcile net income to net cash provided by operations:
Depreciation and amortization		6,483			5,162
Provision for accounts receivable allowances		568			410
Provision for inventory reserves		905			1,316
Deferred income taxes		(66	)		1,683
Share-based compensation expense		2,161			1,425
Excess tax benefits from share-based awards		—			(75	)
Net investment in life insurance		(38	)		(361	)
Other — net		(410	)		15
Changes in operating assets and liabilities:
Accounts receivable		(12,305	)		(7,171	)
Inventories		(5,333	)		4,268
Trade accounts payables and accrued liabilities		10,000			3,629
Income taxes payable		(171	)		(140	)
Other — net		(1,271	)		(618	)

NET CASH PROVIDED BY OPERATING ACTIVITIES		17,535			22,061

INVESTING ACTIVITIES
Capital expenditures		(9,088	)		(6,699	)
Business acquisitions, net of cash acquired		(14,343	)		(433	)
Proceeds from the sale of discontinued operations		—			750
Proceeds from the sale of property and equipment		661			168

NET CASH USED IN INVESTING ACTIVITIES		(22,770	)		(6,214	)

FINANCING ACTIVITIES
Increase in notes payable to banks		10,200			140
Proceeds from the issuance of long-term debt		172			1,174
Payments of long-term debt		(2,324	)		(375	)
Dividends paid		(3,259	)		(3,198	)
Excess tax benefits from share-based awards		—			75
Proceeds from issuance of common shares		89			191
Purchase of common shares for treasury		(1,081	)		(165	)

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES		3,797			(2,158	)

Effects of exchange rate changes on cash and cash equivalents		(322	)		1,962


Net increase (decrease) in cash and cash equivalents		(1,760	)		15,651

Cash and cash equivalents at beginning of year		24,097			19,869


CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	22,337		$	35,520

See notes to consolidated financial statements (unaudited).

PREFORMED LINE PRODUCTS COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

In thousands, except share and per share data, unless specifically noted

NOTE A — BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements of Preformed Line Products Company and subsidiaries (the “Company” or “PLPC”) have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X.

The preparation of these consolidated financial statements requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the accompanying notes. Actual results could differ from these estimates. However, in the opinion of management, these consolidated financial statements contain all estimates and adjustments, consisting of normal recurring accruals, required to fairly present the financial position, results of operations, and cash flows for the interim periods. Operating results for the three and nine month periods ended September 30, 2010 are not necessarily indicative of the results to be expected for the year ending December 31, 2010.

The consolidated balance sheet at December 31, 2009 has been derived from the audited consolidated financial statements, but does not include all of the information and notes required by U.S. generally accepted accounting principles for complete financial statements. For further information, refer to the consolidated financial statements and notes to consolidated financial statements included in the Company’s 2009 Annual Report on Form 10-K filed on March 15, 2010 with the Securities and Exchange Commission.

NOTE B — OTHER FINANCIAL STATEMENT INFORMATION

Inventories — net

Inventories


	September 30			December 31
	2010			2009

Finished products	$	34,626		$	26,161
Work-in-process		4,810			3,473
Raw materials		37,418			34,788

		76,854			64,422
Excess of current cost over LIFO cost		(5,330	)		(4,463	)
Noncurrent portion of inventory		(3,655	)		(3,923	)


	$	67,869		$	56,036

Noncurrent inventory is included in other assets on the consolidated balance sheets and is principally comprised of raw materials.

Property and equipment — net

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


	September 30		December 31
	2010		2009

Land and improvements	$	7,387	$	7,188
Buildings and improvements		53,949		51,297
Machinery and equipment		114,413		104,179
Construction in progress		4,649		6,068

		180,398		168,732
Less accumulated depreciation		107,170		100,966

	$	73,228	$	67,766

Comprehensive income (loss)

The components of comprehensive income (loss) for the three and nine month periods ended September 30 are as follows:


	PLPC				Noncontrolling interest						Total
	Three month period				Three month period						Three month period
	ended September 30				ended September 30						ended September 30
	2010		2009		2010			2009			2010		2009

Net income (loss)	$	9,879	$	6,320	$	3		$	(61	)	$	9,882	$	6,259
Other comprehensive income:
Foreign currency translation adjustments		7,496		4,773		(77	)		(2	)		7,419		4,771
Recognized net actuarial loss, net of tax		44		99		—			—			44		99

Total other comprehensive income		7,540		4,872		(77	)		(2	)		7,463		4,870


Comprehensive income (loss)	$	17,419	$	11,192	$	(74	)	$	(63	)	$	17,345	$	11,129


	PLPC				Noncontrolling interest						Total
	Nine month period				Nine month period						Nine month period
	ended September 30				ended September 30						ended September 30
	2010		2009		2010			2009			2010		2009

Net income (loss)	$	17,107	$	12,626	$	(95	)	$	(108	)	$	17,012	$	12,518
Other comprehensive income:
Foreign currency translation adjustments		3,186		10,696		(52	)		4			3,134		10,700
Recognized net actuarial loss, net of tax		132		266		—			—			132		266

Total other comprehensive income		3,318		10,962		(52	)		4			3,266		10,966


Comprehensive income (loss)	$	20,425	$	23,588	$	(147	)	$	(104	)	$	20,278	$	23,484

Legal proceedings

From time to time, the Company may be subject to litigation incidental to its business. The Company is not a party to any pending legal proceedings that the Company believes would, individually or in the aggregate, have a material adverse effect on its financial condition, results of operations, or cash flows.

NOTE C — PENSION PLANS

PLP-USA hourly employees of the Company who meet specific requirements as to age and service are covered by a defined benefit pension plan. The Company uses a December 31 measurement date for this plan. Net periodic benefit cost for this plan included the following components:


	Three month period ended September 30						Nine month period ended September 30
	2010			2009			2010			2009
Service cost	$	203		$	250		$	610		$	681
Interest cost		298			312			896			896
Expected return on plan assets		(240	)		(203	)		(720	)		(569	)
Recognized net actuarial loss		70			158			210			422

Net periodic benefit cost	$	331		$	517		$	996		$	1,430

During the nine month period ended September 30, 2010, no contributions have been made to the plan. The Company presently anticipates making no contributions to fund the plan in 2010.

NOTE D — COMPUTATION OF EARNINGS PER SHARE

Basic earnings per share were computed by dividing net income attributable to PLPC common shareholders by the weighted-average number of common shares outstanding for each respective period. Diluted earnings per share were calculated by dividing net income attributable to PLPC common shareholders by the weighted-average of all potentially dilutive common shares that were outstanding during the periods presented.

The calculation of basic and diluted earnings per share for the three and nine month periods ended September 30, 2010 and 2009 were as follows:


	For the three month period ended September 30				For the nine month period ended September 30
	2010		2009		2010		2009

Numerator
Amount attributable to PLPC shareholders
Net income attributable to PLPC	$	9,879	$	6,320	$	17,107	$	12,626


Denominator
Determination of shares
Weighted average common shares outstanding		5,238		5,235		5,248		5,231
Dilutive effect — share-based awards		152		81		148		78

Diluted weighted average common shares outstanding		5,390		5,316		5,396		5,309


Earnings per common share attributable to PLPC shareholders
Basic	$	1.89	$	1.21	$	3.26	$	2.41


Diluted	$	1.83	$	1.19	$	3.17	$	2.38

For the three and nine month periods ended September 30, 2010, 41,500 and 32,500 stock options were excluded from the calculation of diluted earnings per share due to the average market price being lower than the exercise price, and as such the stock options are anti-dilutive. For the three and nine month periods ended September 30, 2009, 13,000 stock options were excluded from the calculation of diluted earnings per share due to the average market price being lower than the exercise price, and as such the stock options are anti-dilutive.

NOTE E — GOODWILL AND OTHER INTANGIBLES

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


	September 30, 2010					December 31, 2009
	Gross Carrying		Accumulated			Gross Carrying		Accumulated
	Amount		Amortization			Amount		Amortization

Finite-lived intangible assets
Patents	$	4,828	$	(3,447	)	$	4,827	$	(3,213	)
Land use rights		1,363		(73	)		1,365		(55	)
Tradename		937		(107	)		311		—
Customer backlog		480		(251	)		—		—
Technology		1,712		(15	)		—		—
Customer relationships		8,309		(888	)		5,372		(520	)

	$	17,629	$	(4,781	)	$	11,875	$	(3,788	)

Indefinite-lived intangible assets
Goodwill	$	12,056				$	6,925

The Company performs its annual impairment test for goodwill utilizing a discounted cash flow methodology, market comparables, and an overall market capitalization reasonableness test in computing fair value by reporting unit. The Company then compares the fair value of the reporting unit with its carrying value to assess if goodwill has been impaired. Based on the assumptions as to growth, discount rates and the weighting used for each respective valuation methodology, results of the valuations could be significantly changed. However, the Company believes that the methodologies and weightings used are reasonable and result in appropriate fair values of the reporting units.

The Company performed its annual impairment test for goodwill as of January 1, 2010, and determined that no adjustment to the carrying value was required. The additions of tradename, customer backlog, technology and customer relationships were related to the acquisition of Electropar Limited (Electropar) (see Note L — Business Combinations for further details). The aggregate amortization expense for other intangibles with finite lives for the three and nine month periods ended September 30, 2010 was $.5 million and $1 million, respectively. The aggregate amortization expense for other intangibles with finite lives for the three and nine month periods ended September 30, 2009 was $.1 million and $.4 million, respectively. Amortization expense is estimated to be $1.4 million for 2010, $1.2 million for 2011, $1.1 million for 2012 and 2013 and $1 million for 2014. The weighted average remaining amortization period is approximately 19.4 years.

The Company’s only intangible asset with an indefinite life is goodwill. The addition to goodwill is related to the acquisition of Electropar (see Note L — Business Combinations for further details). The changes in the carrying amount of goodwill, by segment, for the nine month period ended September 30, 2010, are as follows:


	Australia		South Africa		Poland			All Other		Total

Balance at January 1, 2010	$	2,243	$	52	$	1,161		$	3,469	$	6,925
Additions		—		—		—			4,843		4,843
Currency translation		193		3		(14	)		106		288

Balance at September 30, 2010	$	2,436	$	55	$	1,147		$	8,418	$	12,056

NOTE F — SHARE-BASED COMPENSATION

The 1999 Stock Option Plan

The 1999 Stock Option Plan (the Plan) permits the grant of 300,000 options to buy common shares of the Company to certain employees at not less than fair market value of the shares on the date of grant. At September 30, 2010 there were no shares remaining to be issued under the Plan. Options issued to date under the Plan vest 50% after one year following the date of the grant, 75% after two years, and 100% after three years and expire from five to ten years from the date of grant. Shares issued as a result of stock option exercises will be funded with the issuance of new shares.

There were no options granted during the nine month periods ended September 30, 2010 and 2009.

Activity in the Plan for the nine month period ended September 30, 2010 was as follows:


						Weighted
				Weighted		Average
				Average		Remaining		Aggregate
	Number			Exercise Price		Contractual		Intrinsic
	of Shares			per Share		Term (Years)		Value

Outstanding at January 1, 2010		85,502		$	33.29
Granted		—			—
Exercised		(4,696	)	$	15.13
Forfeited		—			—

Outstanding (vested and expected to vest) at September 30, 2010		80,806		$	34.34		5.5	$	402

Exercisable at September 30, 2010		69,056		$	32.94		4.9	$	402

The total intrinsic value of stock options exercised during the nine month periods ended September 30, 2010 and 2009 was $.1 million and $.4 million. Cash received for the exercise of stock options during 2010 was $.1 million. There were no excess tax benefits from stock based awards for the nine month period ended September 30, 2010.

For the three and nine month periods ended September 30, 2010 and 2009, the Company recorded compensation expense related to the stock options currently vesting, reducing income before taxes and net income by less than $.1 million for all periods. The total compensation cost related to nonvested awards not yet recognized at September 30, 2010 is expected to be a combined total of $.1 million over a weighted average period of 1.7 years.

Long Term Incentive Plan of 2008

Under the Preformed Line Products Company Long Term Incentive Plan of 2008 (the “LTIP Plan”), certain employees, officers, and directors will be eligible to receive awards of options and restricted shares. The purpose of this LTIP Plan is to give the Company and its subsidiaries a competitive advantage in attracting, retaining, and motivating officers, employees, and directors and to provide an incentive to those individuals to increase shareholder value through long-term incentives directly linked to the Company’s performance. The total number of Company common shares reserved for awards under the LTIP Plan is 400,000. Of the 400,000 common shares, 300,000 common shares have been reserved for restricted share awards and 100,000 common shares have been reserved for share options. The LTIP Plan expires on April 17, 2018.

Restricted Share Awards

For all of the participants except the CEO, a portion of the restricted share award is subject to time-based cliff vesting and a portion is subject to vesting based upon the Company’s performance over a three year period. All of the CEO’s restricted shares are subject to vesting based upon the Company’s performance over a three year period.

The restricted shares are offered at no cost to the employees; however, the participant must remain employed with the Company until the restrictions on the restricted shares lapse. The fair value of a restricted share award is based on the market price of a common share on the grant date. The Company currently estimates that no awards will be forfeited. Dividends declared in 2009 and thereafter will be accrued in cash dividends. In 2008, dividends were reinvested in additional restricted shares, and held subject to the same vesting requirements as the underlying restricted shares.

A summary of the restricted share awards for the nine month period ended September 30, 2010 is as follows:


	Restricted Share Awards
	Performance				Total		Weighted Average
	and Service		Service		Restricted		Grant-Date
	Required		Required		Awards		Fair Value
Nonvested as of January 1, 2010		115,346		12,475		127,821	$	38.28
Granted		66,973		7,303		74,276		35.75
Vested		—		—		—		—
Forfeited		—		—		—		—

Nonvested as of September 30, 2010		182,319		19,778		202,097	$	37.35

For time-based restricted shares the Company recognizes stock-based compensation expense on a straight-line basis over the requisite service period of the award in general and administrative expense in the accompanying statement of consolidated income. Compensation expense related to the time-based restricted shares for the three month periods ended September 30, 2010 and 2009 was $.1 million and less than $.1 million, respectively. Compensation expense related to the time-based restricted shares for the nine month periods ended September 30, 2010 and 2009 was $.2 million and $.1 million, respectively. As of September 30, 2010, there was $.4 million of total unrecognized compensation cost related to time-based restricted share awards that is expected to be recognized over the weighted-average remaining period of approximately 1.25 years.

For the performance-based awards, the number of restricted shares in which the participants will vest depends on the Company’s level of performance measured by growth in pretax income and sales over a requisite performance period. Depending on the extent to which the performance criterions are satisfied under the LTIP Plan, the participants are eligible to earn common shares over the vesting period. Performance-based compensation expense for the three month periods ended September 30, 2010 and 2009 was $.6 million and $.7 million, respectively. Performance-based compensation expense for the nine month periods ended September 30, 2010 and 2009 was $1.8 million and $1.1 million, respectively. As of September 30, 2010, the remaining performance-based restricted share awards compensation expense of $3.1 million is expected to be recognized over a period of approximately .8 years.

In the event of a Change in Control, vesting of the restricted shares will be accelerated and all restrictions will lapse. Unvested performance-based awards are based on a maximum potential payout. Actual shares awarded at the end of the performance period may be less than the maximum potential payout level depending on achievement of performance-based award objectives.

To satisfy the vesting of its restricted share awards, the Company has reserved new shares from its authorized but unissued shares. Any additional granted awards will also be issued from the Company’s authorized but unissued shares. Under the LTIP Plan, there are 97,903 common shares currently available for additional restricted share grants.

Share Option Awards

The LTIP plan permits the grant of 100,000 share options to buy common shares of the Company to certain employees at not less than fair market value of the shares on the date of grant. At September 30, 2010 there were 89,000 shares remaining available for issuance as options under the LTIP Plan. Options issued to date under the Plan vest 50% after one year following the date of the grant, 75% after two years, and 100% after three years and expire from five to ten years from the date of grant. Shares issued as a result of stock option exercises will be funded with the issuance of new shares.

The Company has elected to use the simplified method of calculating the expected term of the stock options and historical volatility to compute fair value under the Black-Scholes option-pricing model. The risk free rate for periods within the contractual life of the option is based on the U.S. zero coupon Treasury yield in effect at the time of grant. Forfeitures have been estimated to be zero.

There were no options granted for the nine month periods ended September 30, 2010 and 2009. Outstanding shares at January 1, 2010 and September 30, 2010 were 11,000 with a weighted average exercise price per share of $38.76. As of September 30, 2010 the weighted average remaining contractual term was 9.3 years and aggregate intrinsic value was zero. There were no exercisable shares at September 30, 2010.

There were no share options exercised under the LTIP Plan during the nine month period ended September 30, 2010. There were no excess tax benefits from stock based awards for the nine month period ended September 30, 2010.

For the three month periods ended September 30, 2010 and 2009, the Company recorded compensation expense related to the share options currently vesting, reducing income before taxes and net income by less than $.1 million and zero, respectively. For the nine month periods ended September 30, 2010 and 2009, the Company recorded compensation expense related to the share options currently vesting, reducing income before taxes and net income by less than $.1 million and zero, respectively. The total compensation cost related to nonvested awards not yet recognized at September 30, 2010 is expected to be $.1 million over a weighted average period of approximately 2.1 years.

NOTE G — FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES

The carrying value of the Company’s current financial instruments, which include cash and cash equivalents, accounts receivable, accounts payable, notes payable, and short-term debt, approximates its fair value because of the short-term maturity of these instruments. At September 30, 2010, the fair value of the Company’s long-term debt was estimated using discounted cash flows analysis, based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements which are considered to be level two inputs. There have been no transfers in or out of level two for the nine month period ended September 30, 2010. Based on the analysis performed, the fair value and the carrying value of the Company’s long-term debt are as follows:


	September 30, 2010				December 31, 2009
	Fair Value		Carrying Value		Fair Value		Carrying Value

Long-term debt and related current maturities	$	15,329	$	15,709	$	4,617	$	4,429

As a result of being a global company, the Company’s earnings, cash flows and financial position are exposed to foreign currency risk. The Company’s primary objective for holding derivative financial instruments is to manage foreign currency risks. The Company accounts for derivative instruments and hedging activities as either assets or liabilities in the consolidated balance sheet and carry these instruments at fair value. The Company does not enter into any trading or speculative positions with regard to derivative instruments.

During June 2010, the Company entered into a forward foreign exchange contract to reduce its exposure to foreign currency rate changes related to the purchase price of Electropar which closed on July 31, 2010. The forward foreign currency contract had an exercise value of $12.9 million which matured on July 28, 2010. The realized gain recognized at maturity was $1.2 million, which the Company has recorded in the other income (expense) line on the statement of consolidated income.

As part of the Purchase Agreement to acquire Electropar, the Company may be required to make an additional earn-out consideration payment up to NZ$2 million or $1.5 million US dollar based on Electropar achieving a financial performance target (Earnings Before Interest, Taxes, Depreciation and Amortization) over the next 12 months commencing after the acquisition date. The fair value of the contingent consideration arrangement is determined by estimating the expected (probability-weighted) earn-out payment discounted to present value and is considered a level three input. Based upon the initial evaluation of the range of outcomes for this contingent consideration, the Company has accrued $.4 million for the additional earn-out consideration payment as of the acquisition date in the Accrued expenses and other liabilities line on the consolidated balance sheet, and as part of the purchase price. Since the acquisition date, the range of outcomes and the assumptions used to develop the estimates of the accrual have not changed, and the amount accrued in the consolidated balance sheet has immaterially increased due to an increase in the net present value of the liability due to the passage of time.

NOTE H — RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS

In June 2009, the FASB updated guidance included in FASB ASC 810-10, related to the consolidation of variable interest entities. This guidance will require ongoing reassessments of whether an enterprise is the primary beneficiary of a variable interest entity. In addition, this updated guidance amends the quantitative approach for determining the primary beneficiary of a variable interest entity. ASC 810-10 amends certain guidance for determining whether an entity is a variable interest entity and adds additional reconsideration events for determining whether an entity is a variable interest entity. Further, this guidance requires enhanced disclosures that will provide users of financial statements with more transparent information about an enterprise’s involvement in a variable interest entity. This updated guidance is effective as of the beginning of the first annual reporting period and interim reporting periods that begin after November 15, 2009. The adoption of this guidance did not have an impact on the Company’s financial statements or disclosures.

In January 2010, the FASB issued ASU 2010-06, Fair Value Measurements and Disclosures (Topic 820). This Update provides amendments to Subtopic 820-10 and related guidance within U.S. GAAP to require disclosure of the transfers in and out of Levels 1 and 2 and a schedule for Level 3 that separately identifies purchases, sales, issuances and settlements and requires more detailed disclosures regarding valuation techniques and inputs. The Company adopted this new standard effective January 1, 2010 and it had no impact on the Company’s financial statements or disclosures.

NOTE I — RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

Changes to accounting principles generally accepted in the United States of America (U.S. GAAP) are established by the Financial Accounting Standards Board (FASB) in the form of accounting standards updates (ASU’s) to the FASB’s Accounting Standards Codification.

The Company considers the applicability and impact of all ASU’s. ASU’s not listed below were assessed and determined to be either not applicable or have minimal impact on our consolidated financial position and results of operations.

In October 2009, the FASB issued Accounting Standards Update No. 2009-13, Revenue Recognition (Topic 605): Multiple-Deliverable Revenue Arrangements — a consensus of the FASB Emerging Issues Task Force (ASU 2009-13). ASU 2009-13 addresses the accounting for sales arrangements that include multiple products or services by revising the criteria for when deliverables may be accounted for separately rather than as a combined unit. Specifically, this guidance establishes a selling price hierarchy for determining the selling price of a deliverable, which is necessary to separately account for each product or service. This hierarchy provides more options for establishing selling price than existing guidance. ASU 2009-13 is required to be applied prospectively to new or materially modified revenue arrangements in fiscal years beginning on or after June 15, 2010. Early adoption is permitted. The Company is currently evaluating the effect the adoption of ASU 2009-13 will have on our financial position, results of operations, cash flows, and related disclosures; however no effect is expected.

NOTE J — SEGMENT INFORMATION

The following tables present a summary of the Company’s reportable segments for the three and nine month periods ended September 30, 2010 and 2009. Financial results for the PLP-USA segment include the elimination of all segments’ intercompany profit in inventory.


	Three month period ended September 30					Nine month period ended September 30
	2010		2009			2010			2009
Net sales
PLP-USA	$	31,656	$	27,007		$	88,803		$	81,706
Australia		13,659		7,207			37,837			19,149
Brazil		10,942		9,132			27,206			20,014
South Africa		3,107		3,284			8,887			7,431
Canada		3,282		2,885			8,896			8,440
Poland		3,975		3,053			11,378			8,748
All Other		27,321		16,564			61,980			41,906

Total net sales	$	93,942	$	69,132		$	244,987		$	187,394


Intersegment sales
PLP-USA	$	2,605	$	1,504		$	5,932		$	4,579
Australia		49		19			257			53
Brazil		508		804			1,590			1,774
South Africa		43		191			273			395
Canada		187		97			581			213
Poland		160		182			471			926
All Other		6,749		2,824			17,858			8,054

Total intersegment sales	$	10,301	$	5,621		$	26,962		$	15,994


Income taxes
PLP-USA	$	1,800	$	589		$	1,332		$	2,728
Australia		334		56			931			105
Brazil		383		477			308			566
South Africa		302		215			740			451
Canada		299		238			669			660
Poland		51		62			200			200
All Other		833		553			1,580			791

Total income taxes	$	4,002	$	2,190		$	5,760		$	5,501


Net income
PLP-USA	$	2,961	$	2,557		$	3,766		$	4,807
Australia		933		136			1,951			248
Brazil		662		764			1,829			909
South Africa		399		153			1,524			764
Canada		672		526			1,497			1,464
Poland		173		183			729			731
All Other		4,082		1,940			5,716			3,595

Total net income		9,882		6,259			17,012			12,518
Income (loss) attributable to noncontrolling interest, net of tax		3		(61	)		(95	)		(108	)

Net income attributable to PLPC	$	9,879	$	6,320		$	17,107		$	12,626


	September 30		December 31
	2010		2009

Assets
PLP-USA	$	70,153	$	65,266
Australia		40,398		31,269
Brazil		28,601		25,194
South Africa		9,023		7,081
Canada		10,390		9,006
Poland		14,819		14,777
All Other		105,247		82,330

		278,631		234,923
Corporate assets		374		449

Total assets	$	279,005	$	235,372

NOTE K — INCOME TAXES

The Company’s effective tax rate was 29% and 26% for the three month periods ended September 30, 2010 and 2009, respectively, and 25% and 31% for the nine month periods ended September 30, 2010 and 2009, respectively. The lower effective tax rate for the three month period ended September 30, 2010 compared to the statutory tax rate of 34% is primarily due to the favorable benefit from foreign earnings in jurisdictions with lower tax rates than the U.S. statutory tax rate and the recognition of previously unrecognized tax benefits resulting from expiration of statutes of limitations. The effective tax rate for the nine month period ended September 30, 2010 is lower than the statutory federal rate of 34% primarily due to the favorable benefit from foreign earnings in jurisdictions with lower tax rates than the U.S. statutory tax rate, a favorable foreign tax incentive for technological innovation, and the decrease of unrecognized tax benefits primarily due to settlements with tax authorities.

The Company provides valuation allowances against deferred tax assets when it is more likely than not that some portion, or all of its deferred tax assets will not be realized. The Company reversed $.4 million of valuation allowance related to foreign tax credit carryforwards as it is expected to be more likely than not that they will be realized.

As of September 30, 2010, the Company had gross unrecognized tax benefits of approximately $1.1 million. Under the provisions of ASC 740 Income Taxes, the Company recognized previously unrecognized tax benefits of $.1 million primarily due to the expiration of statutes of limitations. The Company recognized less than $.1 million of additional unrecognized tax benefit for the three month period ended September 30, 2010.

NOTE L — BUSINESS ACQUISITION

On May 15, 2010, the Company purchased Electropar Limited, a New Zealand corporation. Electropar designs, manufactures and markets pole line and substation hardware for the global electrical utility industry. Electropar is based in New Zealand with a subsidiary operation in Australia. The Company believes the acquisition of Electropar will strengthen its position in the power distribution, transmission and substation hardware markets and will expand its presence in the Asia-Pacific region.

The acquisition of Electropar closed on July 31, 2010. Pursuant to the Purchase Agreement, the Company acquired all of the outstanding equity of Electropar for NZ$20.3 million or $14.8 million U.S. dollars, net of a customary post-closing working capital adjustment of $.2 million. In addition, the Company may be required to make an additional earn-out consideration payment up to NZ$2 million or $1.5 million U.S. dollars based on Electropar achieving a financial performance target (Earnings Before Interest, Taxes, Depreciation and Amortization) over the next 12 months commencing after the acquisition date. The fair value of the contingent consideration arrangement is determined by estimating the expected (probability-weighted) earn-out payment discounted to present value. Based upon the initial evaluation of the range of outcomes for this contingent consideration, the Company has accrued $.4 million for the additional earn-out consideration payment as of the acquisition date in the Accrued expenses and other liabilities line on the consolidated balance sheet, and as part of the purchase price. Since the acquisition date, the range of outcomes and the assumptions used to develop the estimates of the accrual have not changed, and the amount accrued in the consolidated balance sheet has immaterially increased due to an increase in the net present value of the liability due to the passage of time. In addition, the Purchase Agreement includes customary representations, warranties, covenants and indemnification provisions.

The acquisition was accounted for as a business purchase pursuant to ASC 805, Business Combinations (ASC 805). As required by ASC 805-20, the Company allocated the purchase price to assets and liabilities based on their estimated value at the acquisition date. The following table summarizes the fair values of the assets acquired and liabilities assumed on July 31, 2010 related to the acquisition of Electropar:


	July 31, 2010
Cash and cash equivalents	$	431
Tangible and other assets		8,764
Amortizable intangible assets:
Customer relationships		2,617
Trade name		602
Technology		1,682
Backlog		471
Goodwill		4,843

Total assets acquired		19,410


Liabilities assumed		(4,659	)

Total	$	14,751

The amortizable intangible assets include customer relationships, trade names and technology having useful lives of 15 years, 10 years, and 20 years, respectively and will be amortized over the straight-line method. The customer backlog has a useful life of nine months and will be amortized based on its contribution to earnings. The aggregate amortization expense for these intangible assets since the acquisition date was $.3 million.

Approximately $4.8 million has been allocated to goodwill, representing the excess of the purchase price over the fair value of the net tangible and intangible assets acquired and liabilities assumed. Goodwill for Electropar, which is not deductible for tax purposes, resulted primarily from the expected synergies, and the Company’s expectations that it will expand many of its products into the New Zealand market.

Operating results of the acquired business have been included in the Company’s statements of consolidated income from the acquisition date forward. From the acquisition date through September 30, 2010, operating results were net sales of $3.1 million and net loss of $.1 million. The net loss is primarily attributable to writing up finished goods at the acquisition date to fair market value and thus recognizing minimal profit upon sale.

Acquisition related costs related to Electropar were $.4 million for the nine month period ended September 30, 2010. These costs were for legal, accounting, valuation, other professional services, and travel related costs. These costs were included in General and administrative costs in the Company’s statement of consolidated income.

Electropar will be reported as part of the Company’s All Other segment.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

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 also provide solar hardware systems and mounting hardware for a variety of solar power applications. Our goal is to continue to achieve profitable growth as a leader in the 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.

The reportable segments are PLP-USA, Australia, Brazil, South Africa, Canada, Poland, and All Other. Our PLP-USA segment is comprised of our U.S. operations primarily supporting our domestic energy and telecommunications products. The Australia segment is comprised of all of our operations in Australia supporting energy, telecommunications, data communications and solar products. Our Brazil segment is comprised of the manufacturing and sales operation from that location which met at least one of the criteria of a reportable segment. Our final three segments are South Africa, Poland and Canada, which are comprised of a manufacturing and sales operation, and have been included as segments to comply with reporting segments for 75% of consolidated sales. Our remaining operations, Mexico, Great Britain, Spain, China, Asia, DPW, Netherlands, and New Zealand are included in the All Other segment as none of these operations meet, or the future estimated results are not expected to meet the criteria for a reportable segment.

RECENT DEVELOPMENTS / ACQUISITIONS

On May 15, 2010, we purchased Electropar Limited, a New Zealand corporation.

Electropar Limited (Electropar) designs, manufactures and markets pole line and substation hardware for the global electrical utility industry. Electropar is based in New Zealand with a subsidiary operation in Australia. We believe that the acquisition of Electropar will strengthen our position in the power distribution, transmission and substation hardware markets and will expand our presence in the Asia-Pacific region.

The acquisition of Electropar closed on July 31, 2010. Pursuant to the Purchase Agreement, PLPC acquired all of the outstanding equity of Electropar for NZ$20.3 million or $14.8 million U.S. dollars$, net of a customary post-closing working capital adjustment of $.2 million. The Purchase Agreement includes customary representations, warranties, covenants and indemnification provisions. In addition, we may be required to make an additional earn-out consideration payment up to NZ$2 million or $1.5 million U.S. dollars$ based on Electropar achieving a financial performance target (Earnings Before Interest, Taxes, Depreciation and Amortization) over the next 12 months commencing after the acquisition date. The fair value of the contingent consideration arrangement is determined by estimating the expected (probability-weighted) earn-out payment discounted to present value. Based upon our initial evaluation of the range of outcomes for this contingent consideration, we have accrued $.4 million for the additional earn-out consideration payment as of the acquisition date, and as part of the purchase price.

On December 18, 2009, PLPC and Tyco Electronics Group S.A. (Tyco Electronics) completed a Stock and Asset Purchase Agreement, pursuant to which, we acquired from Tyco Electronics its Dulmison business for $16 million and the assumption of certain liabilities. The acquisition of Dulmison strengthened our position in the power distribution and transmission hardware market and expanded our presence in the Asia-Pacific region. As a result of the acquisition, we added operations in Indonesia and Malaysia and strengthened our existing positions in Australia, Thailand, Mexico and the United States.

We apply the purchase method of accounting to our acquisitions pursuant to ASC 805, Business Combinations. Under this method, we allocate the cost of business acquisitions to the assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition, commonly referred to as the purchase price allocation. As part of the purchase price allocations for our business acquisitions, identifiable intangible assets are recognized as assets apart from goodwill if they arise from contractual or other legal rights, or if they are capable of being separated or divided from the acquired business and sold, transferred, licensed, rented, or exchanged. The purchase price is allocated to the underlying tangible and intangible assets acquired and liabilities assumed based on their respective fair market values, with any excess recorded as goodwill. We determine the fair values of such assets and liabilities, generally in consultation with third-party valuation advisors. Such fair value assessments require significant judgments and estimates such as projected cash flows, discount rates, royalty rates and remaining useful lives that can differ materially from actual results.

The current accounting standards require us to record inventories at their respective fair values as of the acquisition date. To estimate the fair values of inventories acquired, we estimated the approximate selling price of these inventories and then subtracted the necessary expenses to sell and support the sale of these inventories. Specifically, the estimated selling price of the inventory was estimated by “grossing up” the inventories book values by an expected gross profit margin. We then only subtract certain operating expenses that would be incurred to dispose of the inventory items.

The current accounting standards, as previously noted, requires us to report the fair values of acquired tangible and intangible assets at the acquisition date fair value. In relation to our two most recent acquisition previously noted, inventories were written up $1.6 million and the acquired intangible assets (consisting of customer relationships, trade names, technology, and customer backlog) were initially valued at $10 million. As of the nine months ended September 30, 2010, our operating income of $21.2 million was decreased by $1 million for the sales of inventories that have been marked-up to fair value coupled with $.6 million of intangible amortization expense. The fourth quarter 2010’s operating results will be impacted by an estimated $.6 million related to sales of inventories that have been marked up to fair value and intangible amortization expense. Also, our 2011 operating results will be impacted by more than $1 million as the result of writing off the fair value mark-up of inventories and intangible amortization expense.

Operating results were also impacted by acquisition related costs of $.4 million for the nine month period ended September 30, 2010. These costs were for legal, accounting, valuation, other professional services and travel related costs. These costs were included in general and administrative costs in our statement of consolidated income.

Preface

Our net sales for the three month period ended September 30, 2010 increased $24.8 million, or 36%, and gross profit increased $7.1 million, or 29%, compared to the three month period ended September 30, 2009. Our net sales increase was caused by a 44% increase in foreign net sales in addition to a 26% increase in U.S. net sales. Our financial results are subject to fluctuation results in the exchange rates of foreign currencies in relation to the U.S. dollar. Of the 36% increase in net sales, 3% was from the favorable effect on the change in the translation rate of local currencies as a result of the strengthening of the U.S. dollar to certain foreign currencies compared to 2009. Excluding the effect of currency translation, costs and expenses increased $2.2 million, or 13%, as foreign costs and expenses contributed 8% of the increase and U.S. costs and expenses contributed the other 5%. As a result of the preceding, excluding the effect of currency translation, net income increased $3.3 million compared to 2009.

Our net sales for the nine month period ended September 30, 2010 increased $57.6 million, or 31%, and gross profit increased $16.1 million, or 26%, compared to the nine month period ended September 30, 2009. Our net sales increase was caused by a 45% increase in total foreign net sales coupled with a 15% increase in U.S. net sales. Our financial results are subject to fluctuations in the exchange rates of foreign currencies in relation to the U.S. dollar. Of the 31% increase in net sales, 7% was from the favorable effect on the change in the translation rate of local currencies as a result of the strengthening of the U.S. dollar to certain foreign currencies compared to 2009. Excluding the effect of currency translation, gross profit increased 19% compared to 2009. Excluding the effect of currency translation, cost and expenses increased $9.6 million, or 21%, as U.S. and foreign costs and expenses increased 10% and 11%, respectively. As a result of the preceding, excluding the effect of currency translation, net income increased $3.7 million compared to 2009.

Despite the depressed global economic environment, we are seeing an improvement in our global marketplace and our financial condition continues to remain strong. We continue to generate cash flows from operations, have proactively managed working capital and have controlled capital spending. We currently have a debt to equity ratio of 9% and can borrow needed funds at an attractive interest rate under our credit facility. While current worldwide conditions necessitate that we concentrate our efforts on maintaining our financial strength, we believe there are many available opportunities for growth. We will pursue these opportunities as appropriate in the current environment in order to improve our competitive position in the future.

Our consolidated financial statements are prepared in conformity with accounting principles generally accepted in the U.S. (GAAP) Our discussions of the financial results include non-GAAP measures (primarily the impact of foreign currency) to provide additional information concerning our financial results and provide information that is useful to the assessment of our performance and operating trends.

THREE MONTH PERIOD ENDED SEPTEMBER 30, 2010 COMPARED TO THREE MONTH PERIOD ENDED SEPTEMBER 30, 2009

The following table sets forth a summary of the Company’s consolidated income statements for the three month period ended September 30, 2010 and September 30, 2009. The Company’s past operating results are not necessarily indicative of future operating results.


	Three month period ended September 30,
Thousands of dollars	2010			2009			Change		% Change
Net sales	$	93,942		$	69,132		$	24,810		36	%
Cost of products sold		62,271			44,518			17,753		40	%

Gross profit		31,671			24,614			7,057		29	%

Gross profit as percentage of net sales		34	%		36	%

Costs and expenses		18,714			16,433			2,281		14	%
Costs and expenses as percentage of net sales		20	%		24	%


Operating income		12,957			8,181			4,776		58	%

Other income (expense)		927			268			659		246	%

Income before income taxes		13,884			8,449			5,435		64	%
Income before income taxes as percentage of net sales		15	%		12	%

Income taxes		4,002			2,190			1,812		83	%

Net income	$	9,882		$	6,259		$	3,623		58	%

Net Sales. For the three month period ended September 30, 2010, net sales were $93.9 million, an increase of $24.8 million, or 36%, from the three month period ended September 30, 2009. Excluding the effect of currency translation, net sales increased 33% as summarized in the following table:


	Three month period ended September 30
								Change			Change
								due to			excluding
								currency			currency			%
thousands of dollars	2010		2009		Change			translation			tranlation			change
Net sales
PLP-USA	$	31,656	$	27,007	$	4,649		$	—		$	4,649			17	%
Australia		13,659		7,207		6,452			1,060			5,392			75
Brazil		10,942		9,132		1,810			778			1,032			11
South Africa		3,107		3,284		(177	)		184			(361	)		(11	)
Canada		3,282		2,885		397			172			225			8
Poland		3,975		3,053		922			(236	)		1,158			38
All Other		27,321		16,564		10,757			(279	)		11,036			67

Consolidated	$	93,942	$	69,132	$	24,810		$	1,679		$	23,131			33	%

The increase in PLP-USA net sales of $4.6 million, or 17%, was primarily due to sales volume increases of $2.6 million and sales mix increases of $2.1 million. International net sales for the three month period ended September 30, 2010, were favorably affected by $1.7 million when converted to U.S. dollars, as a result of the U.S. dollar compared to certain stronger foreign currencies. The following discussions of international net sales exclude the effect of currency translation. Australia net sales increased $5.4 million, or 75%, as a result of higher sales volume of $3.6 million primarily related to the Dulmison acquisition in December 2009 coupled with a $1 million increase in sales related to BlueSky and higher energy sales volume. Brazil net sales increased $1 million, or 11%, primarily as a result of higher sales volume. South Africa net sales decreased $.4 million, or 11%, as a result of a large contract realized in the third quarter 2009 coupled with lower energy sales due to South Africa’s third quarter 2009 net sales at close to a record high. Canada net sales increased $.2 million, or 8%, primarily due to higher sales in their domestic markets. Poland net sales increased $1.2 million, or 38%, due primarily to an increase in sales volume as a result of an improvement in Poland’s overall economy. All Other net sales increased $11 million, or 67%, due to an overall increase in sales volume coupled with an estimated $7 million in net sales realized through the Dulmison acquisition in December 2009 and our latest acquisition of Electropar reported in All Other.

Gross profit. Gross profit of $31.7 million for the three month period ended September 30, 2010 increased $7.1 million, or 29%, compared to the three month period ended September 30, 2009. Excluding the effect of currency translation, gross profit increased 26% as summarized in the following table:


	Three month period ended September 30
							Change			Change
							due to			excluding
							currency			currency			%
thousands of dollars	2010		2009		Change		translation			translation			change
Gross profit
PLP-USA	$	11,500	$	10,241	$	1,259	$	—		$	1,259			12	%
Australia		4,041		2,236		1,805		320			1,485			66
Brazil		3,136		2,940		196		232			(36	)		(1	)
South Africa		1,309		951		358		77			281			30
Canada		1,569		1,293		276		83			193			15
Poland		1,015		901		114		(60	)		174			19
All Other		9,101		6,052		3,049		(58	)		3,107			51

Consolidated	$	31,671	$	24,614	$	7,057	$	594		$	6,463			26	%

PLP-USA gross profit of $11.5 million increased $1.3 million compared to 2009. PLP-USA gross profit increased $1.8 million due to higher sales partially offset by an increase in material costs. International gross profit for the three month period ended September 30, 2010 was favorably impacted by $.6 million when local currencies were translated to U.S. dollars compared to 2009. The following discussion of international gross profit excludes the effect of currency translation. The Australia gross profit increase of $1.5 million was the result of $1.7 million from higher net sales and a $.6 million improvement in manufacturing efficiencies partially offset by higher material costs. Brazil’s gross profit remained relatively unchanged primarily due to an increase in sales volume of $.3 million offset by lower product margins. The South Africa gross profit increase of $.3 million was a result of an increase in overall product margins of $.4 million due primarily to better product mix compared to 2009, partially offset by $.1 million from lower net sales. Canada’s gross profit increase of $.2 million was the result of an improvement in product margins primarily due to a one-time project in 2009 carried a lower product margin than Canada’s traditional product line. Poland’s gross profit increase of $.2 million was the result of $.6 million from higher sales volume coupled with an improvement in manufacturing efficiencies of $.6 million partially offset by an increase in material costs of $1 million. The increase in All Other gross profit of $3.1 million was the result of our legacy subsidiaries located in our All Other reportable segment contributing 36% of the gross profit increase while our new locations acquired as part of the Dulmison acquisition in December 2009 and the Electropar acquisition contributed the other 64% of the improvement in gross profit. The $1.1 million improvement in gross profit related to our legacy subsidiaries located in All Other increased $1.4 million due to higher net sales partially offset by a decrease in overall product margins.

Costs and expenses . Costs and expenses for the three month period ended September 30, 2010 increased $2.3 million, or 14%, compared to the three month period ended September 30, 2009. Excluding the effect of currency translation, costs and expenses increased 13% as summarized in the following table:


	Three month period ended September 30
							Change			Change
							due to			excluding
							currency			currency		%
thousands of dollars	2010		2009		Change		translation			translation		change
Costs and expenses
PLP-USA	$	9,256	$	8,668	$	588	$	—		$	588		7	%
Australia		2,088		1,743		345		21			324		19
Brazil		1,980		1,594		386		131			255		16
South Africa		513		481		32		32			—		—
Canada		439		390		49		22			27		7
Poland		784		658		126		(46	)		172		26
All Other		3,654		2,899		755		(53	)		808		28

Consolidated	$	18,714	$	16,433	$	2,281	$	107		$	2,174		13	%

PLP-USA costs and expenses increased $.6 million due primarily to an increase in commissions of $.3 million on increased sales, an increase in employee related costs of $.3 million, consulting expenses of $.2 million, travel expenses of $.2 million, and a favorable change in the cash surrender value of life insurance policies of $.3 million in 2009, partially offset by a decrease in acquisition related costs of $.2 million and a decrease of $.5 million due to higher repairs and maintenance in 2009. International costs and expenses for the three month period ended September 30, 2010 were unfavorably impacted by $.1 million when local currencies were translated to U.S. dollars compared to 2009. The following discussions of international costs and expenses exclude the effect of currency translation. Australia costs and expenses increased $.3 million primarily due to an increase in personnel related costs and the addition of new employees related to the Dulmison acquisition in December 2009 coupled with higher consulting and travel expenses. Brazil’s costs and expenses increase of $.3 million related to an increase in personnel related costs due to the addition of new employees and a new labor contract coupled with an increase in sales commissions, and lower bad debt expense in 2009 due to the collection on customer accounts previously considered uncollectible. South Africa costs and expenses remained relatively unchanged compared to 2009. Canada and Poland costs and expenses both increased primarily due to an increase in personnel related costs. All Other costs and expenses of $3.7 million increased $.8 million primarily due to $1.4 million of additional costs and expenses related to the Dulmison acquisition in December 2009 and Electropar acquisition in July 2010. Additionally, our legacy locations located in All Other increased $.8 million primarily due to employee related costs coupled with an increase in higher commissions, professional services, and travel. The increases in All Other costs and expense were partially offset by a $1.4 million gain on currency translation when converting balances from foreign currencies into U.S. dollars.

Other income. Other income for the three month period ended September 30, 2010 of $.9 million was $.7 million higher compared to 2009. Other income increased $.8 million primarily due to a gain recognized as a result of revaluing our forward foreign exchange contract to fair value on July 28, 2010. This forward foreign exchange contract was entered into on June 7, 2010 to reduce our exposure to foreign currency rate changes related to the purchase price of Electropar, which closed on July 31, 2010.

Income taxes . Income taxes for the three month period ended September 30, 2010 of $4 million was $1.8 million higher than in 2009. The effective tax rate for the three month period ended September 30, 2010 was 29% compared to 26% in 2009. The effective tax rate for the three month period ended September 30, 2010 is lower than the statutory federal rate of 34% primarily due to increased foreign earnings in jurisdictions with lower tax rates than the U.S. statutory tax rate and the recognition of previously unrecognized tax benefits resulting from the expiration of statutes of limitations.

Net income . As a result of the preceding items, net income for the three month period ended September 30, 2010 was $9.9 million, compared to $6.3 million for the three month period ended September 30, 2009. Excluding the effect of currency translation, net income increased $3.3 million as summarized in the following table:


	Three month period ended September 30
								Change			Change
								due to			excluding
								currency			currency			%
thousands of dollars	2010		2009		Change			translation			translation			change
Net income
PLP-USA	$	2,961	$	2,557	$	404		$	—		$	404			16	%
Australia		933		136		797			214			583			429
Brazil		662		764		(102	)		68			(170	)		(22	)
South Africa		399		153		246			23			223			146
Canada		672		526		146			35			111			21
Poland		173		183		(10	)		(11	)		1			1
All Other		4,082		1,940		2,142			22			2,120			109

Consolidated	$	9,882	$	6,259	$	3,623		$	351		$	3,272			52	%

PLP-USA net income increased $.4 million as a result of an increase in operating income of $.9 million coupled with an increase in other income of $.7 million partially offset by an increase in income taxes of $1.2 million. The following discussion of international net income excludes the effect of currency translation. Australia net income increased $.6 million due primarily to the increase in operating income of $.8 million partially offset by an increase in income taxes. Brazil net income decreased $.2 million primarily as a result of a decrease in operating income of $.3 million partially offset by a decrease in income taxes. South Africa net income increased $.2 million primarily as a result of the increase in operating income of $.3 million partially offset by an increase in income taxes. Canada net income increased $.1 million primarily as a result of the increase in operating income of $.2 million partially offset by an increase in income taxes. Poland net income remained relatively unchanged compared to 2009. All Other net income increased $2.1 million primarily as a result of the $.9 million increase in operating income coupled with a gain on currency translation when converting balances from foreign currencies into U.S. dollars partially offset by an increase in income taxes.

NINE MONTH PERIOD ENDED SEPTEMBER 30, 2010 COMPARED TO NINE MONTH PERIOD ENDED SEPTEMBER 30, 2009

The following table sets forth a summary of the Company’s consolidated income statements for the nine month period ended September 30, 2010 and September 30, 2009. The Company’s past operating results are not necessarily indicative of future operating results.


	Nine month period ended September 30,
Thousands of dollars	2010			2009			Change		% Change
Net sales	$	244,987		$	187,394		$	57,593		31	%
Cost of products sold		165,836			124,352			41,484		33	%

Gross profit		79,151			63,042			16,109		26	%

Gross profit as percentage of net sales		32	%		34	%

Costs and expenses		57,947			45,944			12,003		26	%
Costs and expenses as percentage of net sales		24	%		25	%


Operating income		21,204			17,098			4,106		24	%

Other income (expense)		1,568			921			647		70	%

Income before income taxes		22,772			18,019			4,753		26	%
Income before income taxes as percentage of net sales		9	%		10	%

Income taxes		5,760			5,501			259		5	%

Net income	$	17,012		$	12,518		$	4,494		36	%

Net Sales . For the nine month period ended September 30, 2010, net sales were $245 million, an increase of $57.6 million, or 31%, compared to the nine month period ended September 30, 2009. Excluding the effect of currency translation, net sales increased 24% as summarized in the following table:


	Nine month period ended September 30
							Change		Change
							due to		excluding
							currency		currency			%
thousands of dollars	2010		2009		Change		translation		tranlation			change
Net sales
PLP-USA	$	88,803	$	81,706	$	7,097	$	—	$	7,097			9	%
Australia		37,837		19,149		18,688		5,894		12,794			67
Brazil		27,206		20,014		7,192		3,736		3,456			17
South Africa		8,887		7,431		1,456		1,196		260			3
Canada		8,896		8,440		456		957		(501	)		(6	)
Poland		11,378		8,748		2,630		516		2,114			24
All Other		61,980		41,906		20,074		4		20,070			48

Consolidated	$	244,987	$	187,394	$	57,593	$	12,303	$	45,290			24	%

The increase in PLP-USA net sales of $7.1 million, or 9%, was primarily due to sales volume increases of $4.1 million and sales mix increases of $5.1 million partially offset by lower average sales prices when compared to 2009. International net sales for the nine month period ended September 30, 2010 were favorably affected by $12.3 million when converted to U.S. dollars, as a result of the U.S. dollar compared to certain stronger foreign currencies. The following discussions of international net sales exclude the effect of currency translation. Australia net sales increased $12.8 million, or 67%, as a result of higher sales volume of which $9.9 million related to the acquisition entered into in December 2009, $1.6 million increase in net sales related to BlueSky Energy Ltd, and an overall increase in sales volume in their markets. Brazil net sales increased $3.5 million, or 17%, as a result of higher energy sales volume in their markets. South Africa net sales increased $.3 million, or 3%, primarily as a result of increased volume in energy sales. Canada net sales decreased $.5 million, or 6%, due to slightly lower sales volume in their markets coupled with a one-time sales project which was recognized in the second quarter 2009. Poland net sales increased $2.1 million, or 24%, due primarily to an increase in sales volume in their domestic markets due to the strengthening of Poland’s economy. All Other net sales increased $20.1 million, or 48%, due to an increase in sales volume in several of our markets included in All Other coupled with an estimated $8.6 million in net sales realized through the acquisition entered into in December 2009 reported in All Other and $3.1 million in net sales realized through our latest acquisition of Electropar in July 2010.

Gross profit. Gross profit of $79.2 million for the nine month period ended September 30, 2010 increased $16.1 million, or 26%, compared to the nine month period ended September 30, 2009. Excluding the effect of currency translation, gross profit increased 19% as summarized in the following table:


	Nine month period ended September 30
								Change		Change
								due to		excluding
								currency		currency			%
thousands of dollars	2010		2009		Change			translation		translation			change
Gross profit
PLP-USA	$	27,821	$	28,369	$	(548	)	$	—	$	(548	)		(2	)%
Australia		12,134		5,483		6,651			1,961		4,690			86
Brazil		7,589		5,679		1,910			1,021		889			16
South Africa		4,054		2,595		1,459			546		913			35
Canada		4,010		3,695		315			423		(108	)		(3	)
Poland		3,229		2,642		587			151		436			17
All Other		20,314		14,579		5,735			69		5,666			39

Consolidated	$	79,151	$	63,042	$	16,109		$	4,171	$	11,938			19	%

PLP-USA gross profit of $27.8 million decreased $.5 million compared to 2009. PLP-USA gross profit decreased primarily due to higher material costs. International gross profit for the nine month period ended September 30, 2010 was favorably impacted by $4.2 million when local currencies were translated to U.S. dollars. The following discussion of international gross profit excludes the effect of currency translation. The Australia gross profit increase of $4.7 million was the result of $3.6 million from higher net sales coupled with lower manufacturing costs of $2.1 million, partially offset by an increase in material costs. Brazil’s gross profit increase of $.9 million was primarily the result of $.9 million from higher net sales with overall product margins remaining constant compared to 2009. The South Africa gross profit increase of $.9 million was the result of $.8 million from an improvement in product margins coupled with $.1 million from higher sales volume. Canada’s gross profit decrease of $.1 million was due to a decrease in sales volume. Poland’s gross profit increase of $.4 million was a result of $.6 million from higher sales volume coupled with an improvement in manufacturing efficiencies partially offset by a $.6 million increase in material costs. All Other gross profit improved $5.7 million compared to 2009. Approximately half of the improvement in gross profit related to our new locations acquired in the December 2009 acquisition. Another 40% of the improvement related to our PLP Legacy locations located in All Other. The increase in PLP’s legacy locations in our All Other segment was the result of $2.5 million from higher net sales partially offset by lower product margins. The remaining 10% of the improvement in gross profit was realized through our acquisition of Electropar in July 2010.

The Dulmison acquisition which closed in December 2009 and the recent Electropar acquisition were accounted for pursuant to the current business combination standards. In accordance with the standard, we recorded, as of their respective acquisition dates, the acquired inventories at their respective fair values. Through September 2010, we have sold and therefore recognized $1 million of the inventories fair market value adjustment in Cost of products sold.

Costs and expenses . Cost and expenses for the nine month period ended September 30, 2010 increased $12 million, or 26%, compared to the nine month period ended September 30, 2009. Excluding the effect of currency translation, costs and expenses increased 21% as summarized in the following table:


	Nine month period ended September 30
							Change		Change
							due to		excluding
							currency		currency		%
thousands of dollars	2010		2009		Change		translation		translation		change
Costs and expenses
PLP-USA	$	29,024	$	25,053	$	3,971	$	—	$	3,971		16	%
Australia		6,963		4,269		2,694		1,145		1,549		36
Brazil		5,208		4,047		1,161		741		420		10
South Africa		1,510		1,172		338		181		157		13
Canada		1,416		1,171		245		159		86		7
Poland		2,254		1,719		535		98		437		25
All Other		11,569		8,513		3,056		97		2,959		35

Consolidated	$	57,944	$	45,944	$	12,000	$	2,421	$	9,579		21	%

PLP-USA costs and expenses increased $4 million primarily due to an increase in commissions of $.4 million, an increase in employee related costs of $1.4 million, consulting expenses of $.5 million, travel expenses of $.3 million, higher business acquisition/integration costs of $.5 million, a favorable change in the cash surrender value of life insurance policies of $.3 million in 2009, lower contract testing income of $.1 million and lower gains on foreign currency translations of $.4 million. International costs and expenses for the nine month period ended September 30, 2010 were unfavorably impacted by $2.4 million when local currencies were translated to U.S. dollars compared to 2009. The following discussions of international costs and expenses exclude the effect of currency translation. Australia costs and expenses increased $1.5 million primarily due to an increase in personnel related costs, the addition of new employees related to the acquisition entered into in December 2009 and higher IT and consulting expenses. Brazil cost and expenses increased $.4 million primarily due to higher personnel related costs related to additional employees and a new labor contract. South Africa cost and expenses increased $.2 million primarily due to higher personnel related costs, higher administrative expenses due to an increase in bad debt expense, and higher building maintenance costs. Canada cost and expenses increased less than $.1 million due to higher personnel related costs coupled with an increase in depreciation expense. Poland cost and expenses increase of $.4 million increased more than $.2 million due to higher personnel related costs coupled with higher commission expense. All Other costs and expenses increased $3 million primarily due to $2.8 million from the Dulmison acquisition in late December 2009 and the Electropar acquisition in July 2010. Also contributing $1.1 million to the costs and expenses increase was our legacy locations located in our All Other reportable segment. The increase in our legacy locations costs and expenses was primarily due to personnel related costs coupled with higher depreciation expense, research and engineering costs, and higher commission expense. These increases in costs and expenses were partially offset by a $.9 million gain on currency translation when converting balances from foreign currencies into U.S. dollars.

Overall, costs and expenses for the nine month period ended September 30, 2010 were $.6 million higher due to the aggregate amortization expense of intangible assets acquired in our Dulmison and Electropar business combinations.

Other income. Other income for the nine month period ended September 30, 2010 of $1.6 million increased $.6 million compared to 2009. Other income increased primarily due to a $1.2 million gain recognized as a result of revaluing our forward foreign exchange contract to fair value. This forward foreign exchange contract was entered into on June 7, 2010 to reduce our exposure to foreign currency rate changes related to the purchase price of Electropar, which closed on July 31, 2010. The increase in Other income was partially offset by an increase in interest expense at several of our foreign and domestic locations coupled with a $.3 million increase in non-operational expenses related to our foreign jurisdictions.

Income taxes . Income taxes for the nine month period ended September 30, 2010 of $5.8 million was $.3 million higher than the same period in 2009. The effective tax rate for the nine month periods ended September 30, 2010 and 2009 was 25% and 31%, respectively. The effective tax rate for the nine month period ended September 30, 2010 is lower than the statutory federal rate of 34% primarily due to the favorable benefit from foreign earnings in jurisdictions with lower tax rates than the U.S. statutory tax rate, a favorable foreign tax incentive for technological innovation, and the decrease of unrecognized tax benefits primarily due to settlements with tax authorities.

Net income . As a result of the preceding items, net income for the nine month period ended September 30, 2010 was $17 million, compared to net income of $12.5 million for the nine month period ended September 30, 2009. Excluding the effect of currency translation, net income increased $3.7 million as summarized in the following table:


	Nine month period ended September 30
								Change			Change
								due to			excluding
								currency			currency			%
thousands of dollars	2010		2009		Change			translation			translation			change
Net income
PLP-USA	$	3,766	$	4,807	$	(1,041	)	$	—		$	(1,041	)		(22	)%
Australia		1,951		248		1,703			322			1,381			557
Brazil		1,829		909		920			194			726			80
South Africa		1,524		764		760			205			555			73
Canada		1,497		1,464		33			150			(117	)		(8	)
Poland		729		731		(2	)		39			(41	)		(6	)
All Other		5,716		3,595		2,121			(115	)		2,236			62

Consolidated	$	17,012	$	12,518	$	4,494		$	795		$	3,699			30	%

PLP-USA net income decreased $1 million as a result of a $3.5 million decrease in operating income partially offset by a decrease in income taxes of $1.4 million and an increase in other income. The following discussion of international net income excludes the effect of currency translation. Australia net income increased $1.4 million due primarily to the increase in operating income of $2.3 million partially offset by increases in income taxes of $.7 million and an increase in other expenses. Brazil net income increased $.7 million primarily as a result of the increase in operating income of $.4 million coupled with a decrease in income taxes of $.3 million due to certain technological tax incentives received. South Africa net income increased $.6 million primarily as a result of the increase in operating income of $.8 million partially offset by an increase in income taxes. Canada net income decreased $.1 million primarily as a result of the decrease in operating income of $.2 million partially offset by a decrease in income taxes. Poland net income remained relatively unchanged compared to 2009. All Other net income increased $2.2 million primarily as a result of the $3.1 million increase in operating income partially offset by an increase in income taxes of $.8 million and an increase in other expenses.

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, 2009 and are, therefore, not presented herein.

WORKING CAPITAL, LIQUIDITY AND CAPITAL RESOURCES

Cash decreased $1.8 million for the nine month period ended September 30, 2010. Net cash provided by operating activities was $17.5 million primarily because of net income, non-cash adjustments, and an increase in trade payables partially offset by an increase in accounts receivables, inventories and all other current assets/liabilities. The major investing and financing uses of cash were $14.3 million in business acquisitions, $9.1 million in capital expenditures, $3.3 million in dividend payments, $1.1 million to repurchase common shares and payment of long term debt of $2.3 million offset by cash proceeds of $.7 million related to the sale of property, plant and equipment, and proceeds from debt borrowings of $10.3 million. Additionally, changes in cash due to exchange rate changes reduced cash by $.3 million.

Net cash used in investing activities of $22.8 million represents an increase of $16.6 million when compared to the cash used by investing activities in the nine month period ended September 30, 2009. During 2009, we received the remaining $.8 million from escrow related to the May 30, 2008 sale of the SMP operations and paid an earnout of $.4 million to the sellers of Direct Power and Water Company, originally purchased in March 2007. On July 31, 2010, the Company acquired all of the outstanding equity of Electropar for $14.3 million, net of cash received and working capital adjustments. Capital expenditures increased $2.4 million in the nine month period ended September 30, 2010 when compared to 2009 due mostly to our facilities expansion in Mexico, investment in solar panels at our Canadian operation and a software system implementation at our Spanish operation.

Cash provided by financing activities for the nine month period ended September 30, 2010 was $3.8 million when compared to the cash used by financing activities in the nine month period ended September 30, 2009 of $2.2 million. This change was primarily a result of $8 million in net debt borrowings in 2010 partially offset by cash used to repurchase shares of $1.1 million compared to $.9 million in net debt borrowings in 2009.

Our current ratio was 2.8 to 1 at September 30, 2010 and 3 to 1 at December 31, 2009. At September 30, 2010, our unused balance under our main credit facility was $16.7 million and our bank debt to equity percentage was 9%. Our main revolving credit agreement contains, among other provisions, requirements for maintaining levels of working capital, net worth, and profitability. At September 30, 2010, we were in compliance with these covenants. We believe existing cash of $22.3 million together with our future operating cash flows will be more than sufficient to cover debt repayments, other contractual obligations, capital expenditures and dividends. In addition, we believe our existing cash of $22.3 million, together with our untapped borrowing capacity, provides substantial financial resources. If we were to incur significant additional indebtedness, we expect to be able to meet liquidity needs under our credit facilities. 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.

RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS

In June 2009, the FASB updated guidance included in FASB ASC 810-10, related to the consolidation of variable interest entities. This guidance will require ongoing reassessments of whether an enterprise is the primary beneficiary of a variable interest entity. In addition, this updated guidance amends the quantitative approach for determining the primary beneficiary of a variable interest entity. ASC 810-10 amends certain guidance for determining whether an entity is a variable interest entity and adds additional reconsideration events for determining whether an entity is a variable interest entity. Further, this guidance requires enhanced disclosures that will provide users of financial statements with more transparent information about an enterprise’s involvement in a variable interest entity. This updated guidance is effective as of the beginning of the first annual reporting period and interim reporting periods that begin after November 15, 2009. The adoption of this guidance did not have an impact on our consolidated financial statements or disclosures.

In January 2010, the FASB issued ASU 2010-06, Fair Value Measurements and Disclosures (Topic 820). This Update provides amendments to Subtopic 820-10 and related guidance within U.S. GAAP to require disclosure of the transfers in and out of Levels 1 and 2 and a schedule for Level 3 that separately identifies purchases, sales, issuances and settlements and requires more detailed disclosures regarding valuation techniques and inputs. We adopted this new standard effective January 1, 2010 and it had no impact on our consolidated financial statements or disclosures.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

We consider the applicability and impact of all ASU’s. ASU’s not listed below were assessed and determined to be either not applicable or have minimal impact on our consolidated financial position and results of operations.

In October 2009, the FASB issued Accounting Standards Update No. 2009-13, Revenue Recognition (Topic 605): Multiple-Deliverable Revenue Arrangements — a consensus of the FASB Emerging Issues Task Force (ASU 2009-13). ASU 2009-13 addresses the accounting for sales arrangements that include multiple products or services by revising the criteria for when deliverables may be accounted for separately rather than as a combined unit. Specifically, this guidance establishes a selling price hierarchy for determining the selling price of a deliverable, which is necessary to separately account for each product or service. This hierarchy provides more options for establishing selling price than existing guidance. ASU 2009-13 is required to be applied prospectively to new or materially modified revenue arrangements in fiscal years beginning on or after June 15, 2010. Early adoption is permitted. We are currently evaluating the effect the adoption of ASU 2009-13 will have on our financial position, results of operations, cash flows, and related disclosures; however no effect is expected.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company operates manufacturing facilities and offices around the world and uses fixed and floating rate debt to finance the Company’s global operations. As a result, the Company is subject to business risks inherent in non-U.S. activities, including political and economic uncertainty, import and export limitations and market risk related to changes in interest rates and foreign currency exchange rates. The Company believes the political and economic risks related to the Company’s international operations are mitigated due to the stability of the countries in which the Company’s largest international operations are located.

As of September 30, 2010, the Company had two immaterial foreign currency forward exchange contracts outstanding. The Company does not hold derivatives for trading purposes.

The Company is exposed to market risk, including changes in interest rates. The Company is subject to interest rate risk on its variable rate revolving credit facilities and term notes, which consisted of borrowings of $16.5 million at September 30, 2010. A 100 basis point increase in the interest rate would have resulted in an increase in interest expense of approximately $.1 million for the nine month period ended September 30, 2010.

The Company’s primary currency rate exposures are related to foreign denominated debt, intercompany debt, forward exchange contracts, foreign denominated receivables 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 $4 million and on income before tax of $1.1 million.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Company’s Principal Executive Officer and Principal Financial Officer have concluded that the Company’s disclosure controls and procedures as defined in Rule 13a-15(e) or Rule 15d-15(e) of the Securities Exchange Act of 1934, as amended, were effective as of September 30, 2010.

Changes in Internal Control over Financial Reporting

There have not been any changes in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f)) during the quarter ended September 30, 2010 that materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.

PART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company is subject to various legal proceedings and claims that arise in the ordinary course of business. In the opinion of management, the amount of any ultimate liability with respect to these actions will not materially affect our financial condition, results of operations or cash flows.

ITEM 1A. RISK FACTORS

There were no material changes from the risk factors previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009 filed with the Securities and Exchange Commission on March 15, 2010.

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

On February 15, 2007, the Board of Directors authorized a plan to repurchase up to 200,000 shares of Preformed Line Products Company. On August 4, 2010, the Company announced the Board of Directors authorized a plan to repurchase up to 250,000 of Preformed Line Products common shares, in addition to the 11,252 common shares authorized for repurchase under the 2007 plan. The repurchase plans do not have expiration dates. The following table includes repurchases for the three month period ended September 30, 2010.

2007 Plan

Total Number of

Total

Shares Purchased as

Maximum Number of

Number of

Average

Part of Publicly

Shares that may yet be

Price Paid

Announced Plans or

Purchased under the

Period (2010)

Purchased

per Share

Programs

Plans or Programs

July

—

188,748

11,252

August

11,252

32.43

200,000

—

September

—

200,000

—

Total

11,252

2010 Plan

Company Purchases of Equity Securities

Total Number of

Total

Shares Purchased as

Maximum Number of

Number of

Average

Part of Publicly

Shares that may yet be

Price Paid

Announced Plans

Purchased under the

Period (2010)

Purchased

per Share

or Programs

Plans or Programs

July

—

250,000

August

21,435

32.43

21,435

228,565

September

—

21,435

228,565

Total

21,435

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. (Removed and Reserved)

None.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS


	2.1			Agreement for sale and purchase of shares in Electropar Limited, dated May 15, 2010, by and among the Company and Tony Lachlan Wallace, Grant Lachlan Wallace and Helen Amelia Wallace; Grant Lachlan Wallace, Tony Lachlan Wallace and Alison Kay Wallace; and Cameron Lachlan Wallace, Grant Lachlan Wallace and Tony Lachlan Wallace (the agreement does not include the schedules and other attachments. Copies will be provided to the SEC upon request), filed herewith.

	31.1			Certifications of the Principal Executive Officer, Robert G. Ruhlman, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.

	31.2			Certifications of the Principal Financial Officer, Eric R. Graef, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.

	32.1			Certification of the Principal Executive Officer, Robert G. Ruhlman, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, furnished.

	32.2			Certification of the Principal Accounting Officer, Eric R. Graef, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, furnished.

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 Securities and Exchange Commission (“SEC”) contain forward-looking statements regarding the Company’s and management’s beliefs and expectations. 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. Such forward-looking statements are subject to uncertainties and factors relating to the Company’s operations and business environment, all of which are difficult to predict and many of which are beyond the Company’s control. Such uncertainties and factors could cause the Company’s actual results to differ materially from those matters expressed in or implied by such forward-looking statements.

The following factors, among others, could affect the Company’s future performance and cause the Company’s actual results to differ materially from those expressed or implied by forward-looking statements made in this report:

•

The overall demand for cable anchoring and control hardware for electrical transmission and distribution lines on a worldwide basis, which has a slow growth rate in mature markets such as the United States (U.S.), Canada, and Western Europe;

•

The ability of our customers to raise funds needed to build the facilities their customers require;

•

Technological developments that affect longer-term trends for communication lines such as wireless communication;

•

The decreasing demands 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 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 in expanding the Company’s product line into new areas;

•

The Company’s ability to identify, complete and integrate acquisitions for profitable growth;

•

The potential impact of consolidation, deregulation and bankruptcy among the Company’s suppliers, competitors and customers;

•

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;

•

The effects of fluctuation in currency exchange rates upon the Company’s reported results from international operations, together with non-currency risks of investing in and conducting significant operations in foreign countries, including those relating to political, social, economic and regulatory factors;

•

Changes in significant government regulations affecting environmental compliances;

•

The telecommunication market’s continued deployment of Fiber-to-the-Premises;

•

The Company’s ability to obtain funding for future acquisitions;

•

The potential impact of the depressed housing market on the Company’s ongoing profitability and future growth opportunities;

•

The continued support by Federal, State, Local and Foreign Governments in incentive programs for promoting renewable energy deployment;

•

Those factors described under the heading “Risk Factors” on page 13 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2009 filed on March 15, 2010.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


November 5, 2010	/s/ Robert G. Ruhlman
	Robert G. Ruhlman
	Chairman, President and Chief Executive Officer (Principal Executive Officer)

November 5, 2010	/s/ Eric R. Graef
	Eric R. Graef
	Chief Financial Officer and Vice President — Finance (Principal Accounting Officer)

EXHIBIT INDEX


	2.1			Agreement for sale and purchase of shares in Electropar Limited, dated May 15, 2010, by and among the Company and Tony Lachlan Wallace, Grant Lachlan Wallace and Helen Amelia Wallace; Grant Lachlan Wallace, Tony Lachlan Wallace and Alison Kay Wallace; and Cameron Lachlan Wallace, Grant Lachlan Wallace and Tony Lachlan Wallace (the agreement does not include the schedules and other attachments. Copies will be provided to the SEC upon request), filed herewith.

	31.1			Certifications of the Principal Executive Officer, Robert G. Ruhlman, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.

	31.2			Certifications of the Principal Financial Officer, Eric R. Graef, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.

	32.1			Certification of the Principal Executive Officer, Robert G. Ruhlman, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, furnished.

	32.2			Certification of the Principal Accounting Officer, Eric R. Graef, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, furnished.

TABLE OF CONTENTS

Part I Financial Information Item 1. Financial Statements Item 2. Management S Discussion and Analysis Of Financial Condition and Results Of Operations Item 3. Quantitative and Qualitative Disclosures About Market Risk Item 4. Controls and Procedures Part II Other Information Item 1. Legal Proceedings Item 1A. Risk Factors Item 2. Unregistered Sales Of Equity Securities and Use Of Proceeds Item 3. Defaults Upon Senior Securities Item 4. (removed and Reserved)Item 5. Other Information Item 6. Exhibits

Exhibits

Exhibit 2.1 Exhibit 31.1 Exhibit 31.2 Exhibit 32.1 Exhibit 32.2

PLPC 10-Q Quarter ended Sept. 30, 2010

Exhibits