##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K
 Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the fiscal year ended December 31, 2008
 Commission file number 0-31164
 Preformed Line Products Company
  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)
 
  Title of each class
    
    Name of each exchange on which registeredCommon Shares, $2 par value per share
    
    NASDAQ
  o þ
 o þ
 þ o
 o
  Large accelerated filer o
Accelerated filer þ
Non-accelerated filer o(Do not check if a smaller reporting company)
Smaller reporting company o o þ




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##### 



Table of Contents
 PagePart I.Item 1.
    
    Business
    
    
    4Item 1A.
    
    Risk Factors
    
    
    12Item 1B.
    
    Unresolved Staff Comments
    
    
    14Item 2.
    
    Properties
    
    
    14Item 3.
    
    Legal Proceedings
    
    
    16Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    16Part II.Item 5.
    
    Market for Registrants Common Equity, Related Shareholder Matters
and Issuer Purchases of Equity Securities
    
    
    17Item 6.
    
    Selected Financial Data
    
    
    19Item 7.
    
    Managements Discussion and Analysis of Financial Condition and Results
of Operations
    
    
    19Item 7A.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    33Item 8.
    
    Financial Statements and Supplementary Data
    
    
    34Item 9.
    
    Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
    
    
    63Item 9A.
    
    Controls and Procedures
    
    
    63Item 9B.
    
    Other Information
    
    
    65Part III.Item 10.
    
    Directors, and Executive Officers and Corporate Governance
    
    
    65Item 11.
    
    Executive Compensation
    
    
    65Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters
    
    
    66Item 13.
    
    Certain Relationships, Related Transactions, and Director Independence
    
    
    66Item 14.
    
    Principal Accounting Fees and Services
    
    
    66Part IV.Item 15.
    
    Exhibits and Financial Statements Schedules
    
    
    66SIGNATURES
    
    
    68Schedule II  Valuation and Qualifying Accounts
    
    
    69EX-21EX-23.1EX-23.2EX-31.1EX-31.2EX-32.1EX-32.2
  2




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Forward-Looking Statements
   
    
    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 implementing price increases to offset rising material costs;
    
    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;
 3




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
    
    The potential impact of the depressed housing market on the Companys ongoing
profitability and future growth opportunities;
    
    Those factors described under the heading Risk Factors on page 12.
 
 Part I
 
 Item 1. Business
 Background
    
    
    Formed Wire and Related Hardware Products
    
    Protective Closures
    
    Data Communication Cabinets
    
    Plastic Products
    
    Other Products
 Formed Wire Products and Related Hardware Products
 Protective Closures
 4




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Data Communication Cabinets
 Plastic Products
 Other Products
 Corporate History
   â
    5




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Business
     6




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Markets
  Electric Utilities  Transmission.
 Electric Utilities  Distribution
 Renewable Energy
 7




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Communication and Cable.
    Data Communication.
 Special Industries.
 International Operations
  8




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Sales and Marketing
  Research and Development
    Patents and Trademarks
  9




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Competition
  
    
    The Company has a strong and stable workforce. This consistent and continuous
knowledge base has afforded the Company the ability to provide superior service to the
Companys customers and representatives.
    
    The Companys Research and Engineering Center in Mayfield Village, Ohio and Research
and Engineering departments subsidiary locations maintain a strong technical support
function to develop unique solutions to customer problems.
    
    The Company is vertically integrated both in manufacturing and distribution and is
continually upgrading equipment and processes.
    
    The Company is sensitive to the marketplace and provides an extra measure of service
in cases of emergency, storm damage and other rush situations. This high level of
customer service and customer responsiveness is a hallmark of the Company.
    
    The Companys 14 manufacturing locations ensure close support and proximity to
customers worldwide.
   10




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Sources and Availability of Raw Materials
      Backlog Orders
  Seasonality
  11




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Environmental
   Employees
  Available Information
   
 Item 1A. Risk Factors
 Due to the Companys dependency on the energy, telecommunication and renewable energy industries,
the Company is susceptible to negative trends relating to those industries that could adversely
affect the Companys operating results.
  12




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The Companys business will suffer if the Company fails to develop and successfully introduce new
and enhanced products that meet the changing needs of the Companys customers.
  The intense competition in the Companys markets, particularly telecommunication, may lead to a
reduction in sales and profits.
  The introduction of products embodying new technologies or the emergence of new industry standards
can render existing products or products under development obsolete or unmarketable.
  Price increases of raw materials could result in lower earnings.
  The Companys international operations subject the Company to additional business risks.
  13




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The Company may not be able to successfully integrate businesses that it may acquire in the future.
  The Company may have interruptions in its businesses due to the uncertainty of the global economy,
specifically the potential impact of bankruptcy among the Companys suppliers and inability of
available funding for the Companys customers.
  
 Item 1B. Unresolved Staff Comments
  
 Item 2. Properties
  14




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Location
    
    Use
    
    Owned/Leased
    
    Square Feet
    
    Reportable Segment1. Mayfield Village, Ohio
    
    Corporate Headquarters
Research and Engineering (R&E)
Center
    
    Owned
    
    
    62,000
    
    
    PLP-USA2. Rogers, Arkansas
    
    Manufacturing
Warehouse
Office
    
    Owned
    
    
    310,000
    
    
    PLP-USA3. Albemarle, North Carolina
    
    Manufacturing
Warehouse
Office
    
    Owned
    
    
    261,000
    
    
    PLP-USA4. Sydney, Australia
    
    Manufacturing
R&E
Warehouse
Office
    
    Owned
    
    
    123,000
    
    
    Australia5. São Paulo, Brazil
    
    Manufacturing
R&E
Warehouse
Office
    
    Owned
    
    
    148,500
    
    
    Brazil6. Cambridge, Ontario, Canada
    
    Manufacturing
Warehouse
Office
    
    Owned
    
    
    73,300
    
    
    Canada7. Andover, Hampshire, England
    
    Manufacturing
R&E
Warehouse
Office
    
    Building Owned;
Land Leased
    
    
    89,400
    
    
    All Other8. Queretaro, Mexico
    
    Manufacturing
Warehouse
Office
    
    Owned
    
    
    52,900
    
    
    All Other9. Beijing, China
    
    Manufacturing
Warehouse
Office
    
    Building Owned;
Land Leased
    
    
    123,300
    
    
    All Other10. Pietermaritzburg, South
Africa
    
    Manufacturing
R&E
Warehouse
Office
    
    Owned
    
    
    73,100
    
    
    South Africa11. Sevilla, Spain
    
    Manufacturing
R&E
Warehouse
Office
    
    Owned
    
    
    63,300
    
    
    All Other12. Bangkok, Thailand
    
    Manufacturing
Warehouse
Office
    
    Owned
    
    
    60,000
    
    
    All Other13. Albuquerque, New Mexico
    
    Manufacturing
Warehouse
Office
    
    Leased
    
    
    25,100
    
    
    All Other14. Bielsko-Biala, Poland
    
    Manufacturing
Warehouse
Office
    
    Buildings Owned;
Land Leased
    
    
    174,400
    
    
    Poland
 15




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Item 3. Legal Proceedings
  
 Item 4. Submission of Matters to a Vote of Security Holders
  Executive Officers of the Registrant
  Name
    
    Age
    
    PositionRobert G. Ruhlman
    
    
    52
    
    
    Chairman, President and Chief Executive OfficerEric R. Graef
    
    
    56
    
    
    Chief Financial Officer and Vice President  FinanceWilliam H. Haag
    
    
    45
    
    
    Vice President  International OperationsJ. Cecil Curlee Jr.
    
    
    52
    
    
    Vice President  Human ResourcesDennis F. McKenna
    
    
    42
    
    
    Vice President  Marketing and Business DevelopmentDavid C. Sunkle
    
    
    50
    
    
    Vice President  Research and Engineering and ManufacturingCaroline S.
Vaccariello
    
    
    42
    
    
    General Counsel and Corporate Secretary
         16




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Part II
 
 Item 5. Market for Registrants Common Equity, Related Shareholder Matters and Issuer Purchases of
Equity Securities
 )
  Year ended December 312008
    
    2007Quarter
    
    High
    
    Low
    
    Dividend
    
    High
    
    Low
    
    DividendFirst
    
    $
    59.96
    
    
    $
    42.95
    
    
    $
    0.20
    
    
    $
    36.67
    
    
    $
    33.40
    
    
    $
    0.20Second
    
    
    53.88
    
    
    
    40.31
    
    
    
    0.20
    
    
    
    54.32
    
    
    
    36.11
    
    
    
    0.20Third
    
    
    65.50
    
    
    
    37.66
    
    
    
    0.20
    
    
    
    58.26
    
    
    
    42.82
    
    
    
    0.20Fourth
    
    
    56.97
    
    
    
    31.82
    
    
    
    0.20
    
    
    
    61.08
    
    
    
    49.04
    
    
    
    0.20
 Equity Compensation Plan Information
 Number of securitiesWeighted-average
    
    remaining available forNumber of securities to
    
    exercise price of
    
    future issuance under equitybe issued upon exercise
    
    outstanding
    
    compensation plansof outstanding options,
    
    options, warrants
    
    (excluding securitiesPlan Category
    
    warrants and rights (a)
    
    and rights
    
    reflected in column (a)Equity compensation
plans approved by
security holders
    
    
    43,637
    
    
    $
    54.24
    
    
    
    356,363Equity compensation
plans not approved
by security holders
    
    
    107,092
    
    
    $
    27.83
    
    
    
    9,000Total
    
    
    150,729
    
    
    
    
    
    
    
    365,363
 Performance Graph
  17




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COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN
AMONG PREFORMED LINE PRODUCTS CO.,
NASDAQ MARKET INDEX AND HEMSCOTT GROUP INDEX
 
 
 COMPANY / INDEX / MARKET
    
    
    2003
    
    
    2004
    
    
    2005
    
    
    2006
    
    
    2007
    
    
    2008PREFORMED LINE
PRODUCTS CO
    
    
    
    100.00
    
    
    
    
    96.82
    
    
    
    
    145.90
    
    
    
    
    123.06
    
    
    
    
    212.96
    
    
    
    
    166.33HEMSCOTT GROUP INDEX
    
    
    
    100.00
    
    
    
    
    111.02
    
    
    
    
    133.61
    
    
    
    
    178.83
    
    
    
    
    247.12
    
    
    
    
    128.38NASDAQ MARKET INDEX
    
    
    
    100.00
    
    
    
    
    108.41
    
    
    
    
    110.79
    
    
    
    
    122.16
    
    
    
    
    134.29
    
    
    
    
    79.25
 Purchases of Equity Securities
 Total Number of
    
    Maximum Number ofShares Purchased as
    
    Shares that may yetPart of Publicly
    
    be Purchased underTotal Number of
    
    Average Price Paid
    
    Announced Plans or
    
    the Plans orPeriod (2008)
    
    Shares Purchased
    
    per Share
    
    Programs
    
    ProgramsOctober
    
    
    
    
    
    
    
    
    
    
    185,748
    
    
    
    14,252November
    
    
    
    
    
    
    
    
    
    
    185,748
    
    
    
    14,252December
    
    
    
    
    
    
    
    
    
    
    185,748
    
    
    
    14,252Total
    
    
    
  18




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Item 6. Selected Financial Data
 2008
    
    2007
    
    2006
    
    2005
    
    2004(Thousands of dollars, except per share data)Net Sales and IncomeNet sales
    
    $
    269,742
    
    
    $
    233,289
    
    
    $
    196,910
    
    
    $
    186,232
    
    
    $
    165,515Operating income
    
    
    23,988
    
    
    
    21,133
    
    
    
    16,359
    
    
    
    16,673
    
    
    
    15,211Income before income taxes, equity in net income
of joint ventures, minority interests and
discontinued operations
    
    
    24,760
    
    
    
    21,321
    
    
    
    17,180
    
    
    
    17,288
    
    
    
    15,333Income from continuing operations
    
    
    16,754
    
    
    
    13,766
    
    
    
    11,827
    
    
    
    11,170
    
    
    
    14,014Net income
    
    
    17,623
    
    
    
    14,159
    
    
    
    12,103
    
    
    
    12,030
    
    
    
    13,094Per Share AmountsIncome from continuing operations  basic
    
    $
    3.17
    
    
    $
    2.57
    
    
    $
    2.11
    
    
    $
    1.95
    
    
    $
    2.44Net income  basic
    
    
    3.34
    
    
    
    2.64
    
    
    
    2.16
    
    
    
    2.10
    
    
    
    2.28Income from continuing operations  diluted
    
    
    3.14
    
    
    
    2.54
    
    
    
    2.09
    
    
    
    1.93
    
    
    
    2.42Net income  diluted
    
    
    3.30
    
    
    
    2.61
    
    
    
    2.14
    
    
    
    2.08
    
    
    
    2.26Dividends declared
    
    
    0.80
    
    
    
    0.80
    
    
    
    0.80
    
    
    
    0.80
    
    
    
    0.80Shareholders equity
    
    
    26.08
    
    
    
    27.82
    
    
    
    24.47
    
    
    
    23.32
    
    
    
    22.51Other Financial InformationCurrent assets
    
    $
    112,670
    
    
    $
    123,450
    
    
    $
    100,374
    
    
    $
    110,304
    
    
    $
    101,537Total assets
    
    
    190,875
    
    
    
    203,866
    
    
    
    170,852
    
    
    
    168,458
    
    
    
    158,742Current liabilities
    
    
    35,248
    
    
    
    42,349
    
    
    
    32,372
    
    
    
    33,900
    
    
    
    27,251Long-term debt (including current portion)
    
    
    3,147
    
    
    
    4,959
    
    
    
    4,361
    
    
    
    4,928
    
    
    
    3,634Capital leases
    
    
    112
    
    
    
    373
    
    
    
    478
    
    
    
    305
    
    
    
    574Shareholders equity
    
    
    136,265
    
    
    
    149,721
    
    
    
    131,148
    
    
    
    133,715
    
    
    
    128,464
  
 Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
    19




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Market overview
      Discontinued Operations
  20




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Preface
   2008 Results of Operations compared to 2007
 Net Sales
 Year ended December 31,Changedue tocurrency
    
    
    
    
    
    
    %conversion
    
    
    Net
    
    
    Netthousands of dollars
    
    2008
    
    
    2007
    
    
    Change
    
    
    rate changes
    
    
    change
    
    
    changeNet salesPLP-USA
    
    $
    111,721
    
    
    $
    103,173
    
    
    $
    8,548
    
    
    $
    
    
    
    $
    8,548
    
    
    
    8
    %Australia
    
    
    27,244
    
    
    
    29,855
    
    
    
    (2,611
    )
    
    
    878
    
    
    
    (3,489
    )
    
    
    (12
    )Brazil
    
    
    30,279
    
    
    
    26,236
    
    
    
    4,043
    
    
    
    2,684
    
    
    
    1,359
    
    
    
    5South Africa
    
    
    9,535
    
    
    
    8,049
    
    
    
    1,486
    
    
    
    (1,676
    )
    
    
    3,162
    
    
    
    39Canada
    
    
    9,952
    
    
    
    10,620
    
    
    
    (668
    )
    
    
    153
    
    
    
    (821
    )
    
    
    (8
    )Poland
    
    
    20,602
    
    
    
    5,202
    
    
    
    15,400
    
    
    
    
    
    
    
    15,400
    
    
    NMAll Other
    
    
    60,409
    
    
    
    50,154
    
    
    
    10,255
    
    
    
    1,420
    
    
    
    8,835
    
    
    
    18Consolidated
    
    $
    269,742
    
    
    $
    233,289
    
    
    $
    36,453
    
    
    $
    3,459
    
    
    $
    32,994
    
    
    
    14
    %
 
 NM  not meaningful  21




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Gross Profit.
 Year ended December 31,Changedue tocurrency
    
    
    
    
    
    
    %conversion
    
    
    Net
    
    
    Netthousands of dollars
    
    2008
    
    
    2007
    
    
    Change
    
    
    rate changes
    
    
    change
    
    
    changeGross profitPLP-USA
    
    $
    35,973
    
    
    $
    33,680
    
    
    $
    2,293
    
    
    $
    
    
    
    $
    2,293
    
    
    
    7
    %Australia
    
    
    8,534
    
    
    
    9,911
    
    
    
    (1,377
    )
    
    
    207
    
    
    
    (1,584
    )
    
    
    (16
    )Brazil
    
    
    8,193
    
    
    
    8,048
    
    
    
    145
    
    
    
    473
    
    
    
    (328
    )
    
    
    (4
    )South Africa
    
    
    4,271
    
    
    
    3,258
    
    
    
    1,013
    
    
    
    (668
    )
    
    
    1,681
    
    
    
    52Canada
    
    
    4,331
    
    
    
    4,812
    
    
    
    (481
    )
    
    
    64
    
    
    
    (545
    )
    
    
    (11
    )Poland
    
    
    5,471
    
    
    
    828
    
    
    
    4,643
    
    
    
    
    
    
    
    4,643
    
    
    NMAll Other
    
    
    20,494
    
    
    
    17,364
    
    
    
    3,130
    
    
    
    327
    
    
    
    2,803
    
    
    
    16Consolidated
    
    $
    87,267
    
    
    $
    77,901
    
    
    $
    9,366
    
    
    $
    403
    
    
    $
    8,963
    
    
    
    12
    %
 
 NM  not meaningful  Cost and expenses.
 22




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Year ended December 31,Changedue tocurrency
    
    
    
    
    
    
    %conversion
    
    
    Net
    
    
    Netthousands of dollars
    
    2008
    
    
    2007
    
    
    Change
    
    
    rate changes
    
    
    change
    
    
    changeCosts and expensesPLP-USA
    
    $
    33,633
    
    
    $
    31,787
    
    
    $
    1,846
    
    
    $
    
    
    
    $
    1,846
    
    
    
    6
    %Australia
    
    
    6,591
    
    
    
    5,819
    
    
    
    772
    
    
    
    125
    
    
    
    647
    
    
    
    11Brazil
    
    
    5,789
    
    
    
    4,735
    
    
    
    1,054
    
    
    
    339
    
    
    
    715
    
    
    
    15South Africa
    
    
    1,235
    
    
    
    1,270
    
    
    
    (35
    )
    
    
    (210
    )
    
    
    175
    
    
    
    14Canada
    
    
    1,659
    
    
    
    1,586
    
    
    
    73
    
    
    
    (12
    )
    
    
    85
    
    
    
    5Poland
    
    
    2,775
    
    
    
    854
    
    
    
    1,921
    
    
    
    
    
    
    
    1,921
    
    
    NMAll Other
    
    
    11,597
    
    
    
    10,717
    
    
    
    880
    
    
    
    296
    
    
    
    584
    
    
    
    5Consolidated
    
    $
    63,279
    
    
    $
    56,768
    
    
    $
    6,511
    
    
    $
    538
    
    
    $
    5,973
    
    
    
    11
    %
 
 NM  not meaningful  Operating income
 Other income.
 23




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Income taxes.
 Income from continuing operations
 Year ended December 31,Changedue tocurrency
    
    
    
    
    
    
    %conversion
    
    
    Net
    
    
    Netthousands of dollars
    
    2008
    
    
    2007
    
    
    Change
    
    
    rate changes
    
    
    change
    
    
    changeIncome from continuing operationsPLP-USA
    
    $
    4,877
    
    
    $
    4,018
    
    
    $
    859
    
    
    $
    
    
    
    $
    859
    
    
    
    21
    %Australia
    
    
    501
    
    
    
    1,736
    
    
    
    (1,235
    )
    
    
    (23
    )
    
    
    (1,212
    )
    
    
    (70
    )Brazil
    
    
    1,336
    
    
    
    2,286
    
    
    
    (950
    )
    
    
    63
    
    
    
    (1,013
    )
    
    
    (44
    )South Africa
    
    
    1,980
    
    
    
    1,185
    
    
    
    795
    
    
    
    (306
    )
    
    
    1,101
    
    
    
    93Canada
    
    
    1,537
    
    
    
    1,811
    
    
    
    (274
    )
    
    
    61
    
    
    
    (335
    )
    
    
    (18
    )Poland
    
    
    1,726
    
    
    
    (61
    )
    
    
    1,787
    
    
    
    
    
    
    
    1,787
    
    
    NMAll Other
    
    
    4,797
    
    
    
    2,791
    
    
    
    2,006
    
    
    
    (20
    )
    
    
    2,026
    
    
    
    73Consolidated
    
    $
    16,754
    
    
    $
    13,766
    
    
    $
    2,988
    
    
    $
    (225
    )
    
    $
    3,213
    
    
    
    23
    %
 
 NM  not meaningful  2007 Results of Operations compared to 2006
 Net Sales.
 24




---



##### Table of Contents



Year ended December 31,Changedue tocurrency
    
    
    
    
    
    
    %conversion
    
    
    Net
    
    
    Netthousands of dollars
    
    2007
    
    
    2006
    
    
    Change
    
    
    rate changes
    
    
    change
    
    
    changeNet salesPLP-USA
    
    $
    103,173
    
    
    $
    91,412
    
    
    $
    11,761
    
    
    $
    
    
    
    $
    11,761
    
    
    
    13
    %Australia
    
    
    29,855
    
    
    
    25,867
    
    
    
    3,988
    
    
    
    3,093
    
    
    
    895
    
    
    
    3Brazil
    
    
    26,236
    
    
    
    20,990
    
    
    
    5,246
    
    
    
    2,887
    
    
    
    2,359
    
    
    
    11South Africa
    
    
    8,049
    
    
    
    8,244
    
    
    
    (195
    )
    
    
    (244
    )
    
    
    49
    
    
    
    1Canada
    
    
    10,620
    
    
    
    9,824
    
    
    
    796
    
    
    
    618
    
    
    
    178
    
    
    
    2Poland
    
    
    5,202
    
    
    
    
    
    
    
    5,202
    
    
    
    
    
    
    
    5,202
    
    
    
    100All Other
    
    
    50,154
    
    
    
    40,573
    
    
    
    9,581
    
    
    
    2,982
    
    
    
    6,599
    
    
    
    16Consolidated
    
    $
    233,289
    
    
    $
    196,910
    
    
    $
    36,379
    
    
    $
    9,336
    
    
    $
    27,043
    
    
    
    14
    %
  Gross profit.
 Year ended December 31,Changedue tocurrency
    
    
    
    
    
    
    %conversion
    
    
    Net
    
    
    Netthousands of dollars
    
    2007
    
    
    2006
    
    
    Change
    
    
    rate changes
    
    
    change
    
    
    changeGross profitPLP-USA
    
    $
    33,680
    
    
    $
    27,914
    
    
    $
    5,766
    
    
    $
    
    
    
    $
    5,766
    
    
    
    21
    %Australia
    
    
    9,911
    
    
    
    8,349
    
    
    
    1,562
    
    
    
    1,031
    
    
    
    531
    
    
    
    6Brazil
    
    
    8,048
    
    
    
    6,020
    
    
    
    2,028
    
    
    
    856
    
    
    
    1,172
    
    
    
    19South Africa
    
    
    3,258
    
    
    
    3,515
    
    
    
    (257
    )
    
    
    (140
    )
    
    
    (117
    )
    
    
    (3
    )Canada
    
    
    4,812
    
    
    
    4,330
    
    
    
    482
    
    
    
    301
    
    
    
    181
    
    
    
    4Poland
    
    
    828
    
    
    
    
    
    
    
    828
    
    
    
    
    
    
    
    828
    
    
    
    100All Other
    
    
    17,364
    
    
    
    14,597
    
    
    
    2,767
    
    
    
    1,027
    
    
    
    1,740
    
    
    
    12Consolidated
    
    $
    77,901
    
    
    $
    64,725
    
    
    $
    13,176
    
    
    $
    3,075
    
    
    $
    10,101
    
    
    
    16
    %
  25




---



##### Table of Contents



Costs and expenses.
 Year ended December 31,Changedue tocurrency
    
    
    
    
    
    
    %conversion
    
    
    Net
    
    
    Netthousands of dollars
    
    2007
    
    
    2006
    
    
    Change
    
    
    rate changes
    
    
    change
    
    
    changeCosts and expensesPLP-USA
    
    $
    31,787
    
    
    $
    27,436
    
    
    $
    4,311
    
    
    $
    
    
    
    $
    4,351
    
    
    
    16
    %Australia
    
    
    5,819
    
    
    
    4,891
    
    
    
    928
    
    
    
    605
    
    
    
    323
    
    
    
    7Brazil
    
    
    4,735
    
    
    
    4,508
    
    
    
    227
    
    
    
    505
    
    
    
    (278
    )
    
    
    (6
    )South Africa
    
    
    1,270
    
    
    
    1,357
    
    
    
    (87
    )
    
    
    (44
    )
    
    
    (43
    )
    
    
    (3
    )Canada
    
    
    1,586
    
    
    
    1,428
    
    
    
    158
    
    
    
    81
    
    
    
    77
    
    
    
    5Poland
    
    
    854
    
    
    
    
    
    
    
    854
    
    
    
    
    
    
    
    854
    
    
    
    100All Other
    
    
    10,717
    
    
    
    8,746
    
    
    
    1,971
    
    
    
    675
    
    
    
    1,296
    
    
    
    15Consolidated
    
    $
    56,768
    
    
    $
    48,366
    
    
    $
    8,362
    
    
    $
    1,822
    
    
    $
    6,580
    
    
    
    14
    %
  Operating income.
 26




---



##### Table of Contents



Other income.
 Income taxes.
 Income from continuing operations.
 Year ended December 31,Changedue tocurrency
    
    
    
    
    
    
    %conversion
    
    
    Net
    
    
    Netthousands of dollars
    
    2007
    
    
    2006
    
    
    Change
    
    
    rate changes
    
    
    change
    
    
    changeIncome from continuing operationsPLP-USA
    
    $
    4,018
    
    
    $
    3,920
    
    
    $
    98
    
    
    $
    
    
    
    $
    98
    
    
    
    3
    %Australia
    
    
    1,736
    
    
    
    1,389
    
    
    
    347
    
    
    
    181
    
    
    
    166
    
    
    
    12Brazil
    
    
    2,286
    
    
    
    924
    
    
    
    1,362
    
    
    
    243
    
    
    
    1,119
    
    
    
    121South Africa
    
    
    1,185
    
    
    
    1,319
    
    
    
    (134
    )
    
    
    (64
    )
    
    
    (70
    )
    
    
    (5
    )Canada
    
    
    1,811
    
    
    
    1,693
    
    
    
    118
    
    
    
    59
    
    
    
    59
    
    
    
    3Poland
    
    
    (61
    )
    
    
    
    
    
    
    (61
    )
    
    
    
    
    
    
    (61
    )
    
    
    NMAll Other
    
    
    2,791
    
    
    
    2,582
    
    
    
    209
    
    
    
    76
    
    
    
    133
    
    
    
    5Consolidated
    
    $
    13,766
    
    
    $
    11,827
    
    
    $
    1,939
    
    
    $
    495
    
    
    $
    1,444
    
    
    
    12
    %NM  not meaningful
  27




---



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Working Capital, Liquidity and Capital Resources
        28




---



##### Table of Contents



Payments Due by PeriodLess than 1
    
    
    
    
    
    
    
    
    
    After 5Contractual Obligations
    
    Total
    
    year
    
    1-3 years
    
    4-5 years
    
    yearsThousands of dollarsNotes payable to bank (A)
    
    $
    3,175
    
    
    $
    3,175
    
    
    $
    
    
    
    $
    
    
    
    $
    Long-term debt (B)
    
    
    3,531
    
    
    
    632
    
    
    
    1,969
    
    
    
    930
    
    
    
    Capital leases
    
    
    112
    
    
    
    64
    
    
    
    31
    
    
    
    17
    
    
    
    Operating leases
    
    
    12,109
    
    
    
    1,275
    
    
    
    1,910
    
    
    
    449
    
    
    
    8,475Purchase commitments
    
    
    1,964
    
    
    
    1,964
    
    
    
    
    
    
    
    
    
    
    
    Pension contribution and other
retirement plans (C)
    
    
    1,300
    
    
    
    1,300
    
    
    
    
    
    
    
    
    
    
    
    Income taxes payable, non-current (D)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 Amount of Commitment Expiration by PeriodLess than 1
    
    
    
    
    
    
    
    
    
    After 5Other Commercial Commitments
    
    Total
    
    year
    
    1-3 years
    
    4-5 years
    
    yearsThousands of dollarsLetters of credit
    
    $
    8,972
    
    
    $
    8,412
    
    
    $
    501
    
    
    $
    59
    
    
    $
    Guarantees
    
    
    312
    
    
    
    257
    
    
    
    55
    
    
    
    
    
    
    
    
 
 (A)
    
    Interest on short-term debt is included in the table at an interest rate of 5.18% in effect at
December 31, 2008.(B)
    
    Interest on long-term debt is included in the table at interest rates from 3.0% to 7.11% based
on the variable interest rates in effect at December 31, 2008.(C)
    
    Amount represents the expected contribution to the Companys defined benefit pension plan in
2009. Future expected amounts have not been disclosed as such amounts are subject to change based
on performance of the assets in the plan as well as the discount rate used to determine the
obligation. At December 31, 2008, the Companys unfunded contractual obligation was $11.3 million.
The Companys Supplemental Profit Sharing Plan accrued liability at December 31, 2008 was $1.3
million. Future expected amounts have not been disclosed as the Company is unable to estimate the
years in which benefit payments may occur.(D)
    
    As of December 31, 2008, there were $1.2 million of tax liabilities, including interest,
related to unrecognized tax benefits. Because of the high degree of uncertainty regarding the
timing of future cash outflows associated with these liabilities, if any, the Company is unable to
estimate the years in which cash settlement may occur with the respective tax authorities. Critical Accounting Policies and Estimates
  29




---



##### Table of Contents



Allowance for Doubtful Accounts
  Reserve for credit memos
        30




---



##### Table of Contents



31




---



##### Table of Contents



Recently Issued Accounting Pronouncements
  
    
    How investment decisions are made, including factors necessary to understanding
investment policies and strategies
    
    The major categories of plan assets
    
    The inputs and valuation techniques used to measure the fair value of plan assets
    
    The effect of fair value measurements using significant unobservable inputs (Level 3
measurements in Statement 157 on changes in plan assets for the period)
    
    Significant concentrations of risk within plan assets
   32




---



##### Table of Contents



Item 7A. Quantitative and Qualitative Disclosures About Market Risk
    33




---



##### Table of Contents



Item 8. Financial Statements and Supplementary Data
  
     
 34




---



##### Table of Contents



/s/ Deloitte & Touche LLP
 
  35




---



##### Table of Contents



PREFORMED LINE PRODUCTS COMPANY
CONSOLIDATED BALANCE SHEETS
 December 312008
    
    
    2007(Thousands of dollars, exceptshare and per share data)ASSETSCash and cash equivalents
    
    $
    19,869
    
    
    $
    23,392Accounts receivable, less allowances of $972 ($1,199 in 2007)
    
    
    36,899
    
    
    
    37,002Inventories  net
    
    
    48,412
    
    
    
    43,788Deferred income taxes
    
    
    2,786
    
    
    
    2,982Prepaids and other
    
    
    4,704
    
    
    
    4,098Current assets of discontinued operations
    
    
    
    
    
    
    12,188TOTAL CURRENT ASSETS
    
    
    112,670
    
    
    
    123,450Property and equipment  net
    
    
    55,940
    
    
    
    58,506Patents and other intangibles  net
    
    
    3,858
    
    
    
    5,637Goodwill
    
    
    5,520
    
    
    
    3,928Deferred income taxes
    
    
    6,943
    
    
    
    3,744Other assets
    
    
    5,944
    
    
    
    8,601TOTAL ASSETS
    
    $
    190,875
    
    
    $
    203,866LIABILITIES AND SHAREHOLDERS EQUITYNotes payable to banks
    
    $
    3,101
    
    
    $
    4,076Current portion of long-term debt
    
    
    494
    
    
    
    1,949Trade accounts payable
    
    
    14,632
    
    
    
    15,178Accrued compensation and amounts withheld from employees
    
    
    6,606
    
    
    
    6,995Accrued expenses and other liabilities
    
    
    4,574
    
    
    
    6,829Accrued profit-sharing and other benefits
    
    
    3,687
    
    
    
    3,577Dividends payable
    
    
    1,054
    
    
    
    1,076Income taxes payable
    
    
    1,100
    
    
    
    772Current liabilities of discontinued operations
    
    
    
    
    
    
    1,897TOTAL CURRENT LIABILITIES
    
    
    35,248
    
    
    
    42,349Long-term debt, less current portion
    
    
    2,653
    
    
    
    3,010Unfunded pension obligation
    
    
    11,303
    
    
    
    2,787Income taxes payable, noncurrent
    
    
    1,405
    
    
    
    1,837Deferred income taxes
    
    
    725
    
    
    
    1,486Other noncurrent liabilities
    
    
    2,540
    
    
    
    1,772Minority interests
    
    
    736
    
    
    
    904SHAREHOLDERS EQUITYCommon stock  $2 par value per share, 15,000,000 shares
authorized,
5,223,830 and 5,380,956 issued and outstanding, net of
551,059
and 378,333 treasury shares at par, respectively
    
    
    10,448
    
    
    
    10,762Paid in capital
    
    
    3,704
    
    
    
    2,720Retained earnings
    
    
    146,624
    
    
    
    140,339Accumulated other comprehensive loss
    
    
    (24,511
    )
    
    
    (4,100
    )TOTAL SHAREHOLDERS EQUITY
    
    
    136,265
    
    
    
    149,721TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    $
    190,875
    
    
    $
    203,866
 See notes to consolidated financial statements.
 36




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##### Table of Contents



PREFORMED LINE PRODUCTS COMPANY
STATEMENTS OF CONSOLIDATED INCOME
 Year ended December 312008
    
    
    2007
    
    
    2006(Thousands of dollars, except share and per share data)Net sales
    
    $
    269,742
    
    
    $
    233,289
    
    
    $
    196,910Cost of products sold
    
    
    182,475
    
    
    
    155,388
    
    
    
    132,185GROSS PROFIT
    
    
    87,267
    
    
    
    77,901
    
    
    
    64,725Costs and expensesSelling
    
    
    23,555
    
    
    
    22,623
    
    
    
    19,134General and administrative
    
    
    30,014
    
    
    
    26,416
    
    
    
    22,200Research and engineering
    
    
    8,870
    
    
    
    7,192
    
    
    
    6,646Other operating expenses  net
    
    
    840
    
    
    
    338
    
    
    
    386Goodwill impairment
    
    
    
    
    
    
    199
    
    
    
    63,279
    
    
    
    56,768
    
    
    
    48,366OPERATING INCOME
    
    
    23,988
    
    
    
    21,133
    
    
    
    16,359Other income (expense)Interest income
    
    
    846
    
    
    
    1,088
    
    
    
    1,456Interest expense
    
    
    (544
    )
    
    
    (595
    )
    
    
    (564
    )Other income (expense)
    
    
    470
    
    
    
    (305
    )
    
    
    (71
    )772
    
    
    
    188
    
    
    
    821INCOME BEFORE INCOME TAXES, MINORITY
INTERESTS AND DISCONTINUED OPERATIONS
    
    
    24,760
    
    
    
    21,321
    
    
    
    17,180Income taxes
    
    
    7,718
    
    
    
    7,501
    
    
    
    5,353INCOME BEFORE MINORITY INTERESTS
AND DISCONTINUED OPERATIONS
    
    
    17,042
    
    
    
    13,820
    
    
    
    11,827Minority interests, net of tax
    
    
    (288
    )
    
    
    (54
    )
    
    
    INCOME FROM CONTINUING
OPERATIONS
    
    
    16,754
    
    
    
    13,766
    
    
    
    11,827Income from discontinued operations, net of tax
    
    
    869
    
    
    
    393
    
    
    
    276NET INCOME
    
    $
    17,623
    
    
    $
    14,159
    
    
    $
    12,103Income per share from continuing operations  basic
    
    $
    3.17
    
    
    $
    2.57
    
    
    $
    2.11Income per share from discontinued operations  basic
    
    $
    0.17
    
    
    $
    0.07
    
    
    $
    0.05Total net income per share  basic
    
    $
    3.34
    
    
    $
    2.64
    
    
    $
    2.16Income per share from continuing operations  diluted
    
    $
    3.14
    
    
    $
    2.54
    
    
    $
    2.09Income per share from discontinued operations  diluted
    
    $
    0.16
    
    
    $
    0.07
    
    
    $
    0.05Total net income per share  diluted
    
    $
    3.30
    
    
    $
    2.61
    
    
    $
    2.14Cash dividends declared per share
    
    $
    0.80
    
    
    $
    0.80
    
    
    $
    0.80Weighted-average number of shares outstanding  basic
    
    
    5,279
    
    
    
    5,372
    
    
    
    5,611Weighted-average number of shares outstanding  diluted
    
    
    5,339
    
    
    
    5,416
    
    
    
    5,660
 See notes to consolidated financial statements.
 37




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##### Table of Contents



PREFORMED LINE PRODUCTS COMPANY
STATEMENTS OF CONSOLIDATED CASH FLOWS
 Year ended December 312008
    
    
    2007
    
    
    2006(Thousands of dollars)OPERATING ACTIVITIESNet income
    
    $
    17,623
    
    
    $
    14,159
    
    
    $
    12,103Less: income from discontinued operations
    
    
    869
    
    
    
    393
    
    
    
    276Income from continuing operations
    
    
    16,754
    
    
    
    13,766
    
    
    
    11,827Adjustments to reconcile net income to net cash provided by operations:Depreciation and amortization
    
    
    8,549
    
    
    
    7,414
    
    
    
    6,740Provision for accounts receivable allowances
    
    
    586
    
    
    
    938
    
    
    
    995Provision for inventory reserves
    
    
    1,161
    
    
    
    22
    
    
    
    1,917Deferred income taxes
    
    
    (845
    )
    
    
    (326
    )
    
    
    (905
    )Share-based compensation expense
    
    
    507
    
    
    
    237
    
    
    
    240Excess tax benefits from share-based awards
    
    
    (56
    )
    
    
    (253
    )
    
    
    Goodwill impairment
    
    
    
    
    
    
    199
    
    
    
    Net investment in life insurance
    
    
    50
    
    
    
    (18
    )
    
    
    (95
    )Minority interest
    
    
    288
    
    
    
    54
    
    
    
    Other  net
    
    
    (41
    )
    
    
    69
    
    
    
    (121
    )Changes in operating assets and liabilities:Accounts receivable
    
    
    (4,603
    )
    
    
    (4,871
    )
    
    
    (3,903
    )Inventories
    
    
    (9,499
    )
    
    
    (4,972
    )
    
    
    (3,133
    )Trade accounts payables
and accrued liabilities
    
    
    5,663
    
    
    
    3,100
    
    
    
    (414
    )Income taxes payable
    
    
    (2,251
    )
    
    
    (551
    )
    
    
    1,161Other  net
    
    
    1,048
    
    
    
    114
    
    
    
    (418
    )NET CASH PROVIDED BY OPERATING ACTIVITIES
    
    
    17,311
    
    
    
    14,922
    
    
    
    13,891INVESTING ACTIVITIESCapital expenditures
    
    
    (10,011
    )
    
    
    (9,231
    )
    
    
    (9,497
    )Business acquisitions, net of cash acquired
    
    
    (3,839
    )
    
    
    (8,438
    )
    
    
    Proceeds from the sale of discontinued operations
    
    
    11,105
    
    
    
    
    
    
    
    Proceeds from the sale of property and equipment
    
    
    333
    
    
    
    548
    
    
    
    469Payments on life insurance
    
    
    
    
    
    
    (149
    )
    
    
    (149
    )NET CASH USED IN INVESTING ACTIVITIES
    
    
    (2,412
    )
    
    
    (17,270
    )
    
    
    (9,177
    )FINANCING ACTIVITIESIncrease (decrease) in notes payable to banks
    
    
    (486
    )
    
    
    (528
    )
    
    
    2,300Proceeds from the issuance of long-term debt
    
    
    6,984
    
    
    
    1,379
    
    
    
    3,059Payments of long-term debt
    
    
    (8,363
    )
    
    
    (1,456
    )
    
    
    (3,986
    )Dividends paid
    
    
    (4,247
    )
    
    
    (4,295
    )
    
    
    (4,508
    )Excess tax benefits from share-based awards
    
    
    56
    
    
    
    253
    
    
    
    Proceeds from issuance of common shares
    
    
    452
    
    
    
    735
    
    
    
    102Purchase of common shares for treasury
    
    
    (7,457
    )
    
    
    (651
    )
    
    
    (12,140
    )NET CASH USED IN FINANCING ACTIVITIES
    
    
    (13,061
    )
    
    
    (4,563
    )
    
    
    (15,173
    )Effects of exchange rate changes on cash and cash equivalents
    
    
    (4,551
    )
    
    
    1,014
    
    
    
    651Net decrease in cash and cash equivalents
    
    
    (2,713
    )
    
    
    (5,897
    )
    
    
    (9,808
    )NET CASH (USED IN) PROVIDED BY DISCONTINUED OPERATIONSOperating cash flows
    
    
    958
    
    
    
    (252
    )
    
    
    866Investing cash flows
    
    
    (1,768
    )
    
    
    (408
    )
    
    
    (701
    )NET CASH (USED IN) PROVIDED BY DISCONTINUED OPERATIONS
    
    
    (810
    )
    
    
    (660
    )
    
    
    165Cash and cash equivalents at beginning of year
    
    
    23,392
    
    
    
    29,949
    
    
    
    39,592CASH AND CASH EQUIVALENTS AT END OF YEAR
    
    $
    19,869
    
    
    $
    23,392
    
    
    $
    29,949
 See notes to consolidated financial statements.
 38




---



##### Table of Contents



PREFORMED LINE PRODUCTS COMPANY
STATEMENTS OF CONSOLIDATED SHAREHOLDERS EQUITY
 Accumulated OtherComprehensive Income (Loss)Additional
    
    
    
    
    
    
    Cumulative
    
    
    UnrecognizedPaid in
    
    
    Retained
    
    
    Translation
    
    
    Pension BenefitCommon Shares
    
    
    Capital
    
    
    Earnings
    
    
    Adjustment
    
    
    Cost
    
    
    Total(In thousands, except share and per share data)Balance at January 1, 2006
    
    $
    11,470
    
    
    $
    1,237
    
    
    $
    135,653
    
    
    $
    (13,925
    )
    
    $
    (720
    )
    
    $
    133,715Net income
    
    
    
    
    
    
    
    
    
    
    12,103
    
    
    
    
    
    
    
    
    
    
    
    12,103Foreign currency translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,167
    
    
    
    
    
    
    
    3,167Minimum pension liability  net
of tax benefit of $441
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    720
    
    
    
    720Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,990Cumulative effect adjustment to initially
apply SFAS 158, net of tax
benefit of $1,355
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,326
    )
    
    
    (2,326
    )Share-based compensation
    
    
    
    
    
    
    240
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    240Purchase of 383,202 common shares
    
    
    (766
    )
    
    
    
    
    
    
    (11,374
    )
    
    
    
    
    
    
    
    
    
    
    (12,140
    )Issuance of 8,664 common shares
    
    
    17
    
    
    
    85
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    102Cash dividends declared  $.80 per share
    
    
    
    
    
    
    
    
    
    
    (4,433
    )
    
    
    
    
    
    
    
    
    
    
    (4,433
    )Balance at December 31, 2006
    
    
    10,721
    
    
    
    1,562
    
    
    
    131,949
    
    
    
    (10,758
    )
    
    
    (2,326
    )
    
    
    131,148Net income
    
    
    
    
    
    
    
    
    
    
    14,159
    
    
    
    
    
    
    
    
    
    
    
    14,159Foreign currency translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,910
    
    
    
    
    
    
    
    7,910Recognized net actuarial loss net
of tax provision of $39
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    66
    
    
    
    66Gain on unfunded pension
obligations net of tax provision of $597
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,008
    
    
    
    1,008Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    23,143Cumulative effect adjustment to initially
apply FIN 48
    
    
    
    
    
    
    
    
    
    
    (845
    )
    
    
    
    
    
    
    
    
    
    
    (845
    )Share-based compensation
    
    
    
    
    
    
    237
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    237Excess tax benefits from stock based awards
    
    
    
    
    
    
    253
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    253Purchase of 13,022 common shares
    
    
    (26
    )
    
    
    
    
    
    
    (625
    )

    
    
    
    
    
    
    
    
    
    
    (651
    )Issuance of 33,719 common shares
    
    
    67
    
    
    
    668
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    735Cash dividends declared  $.80 per share
    
    
    
    
    
    
    
    
    
    
    (4,299
    )
    
    
    
    
    
    
    
    
    
    
    (4,299
    )Balance at December 31, 2007
    
    
    10,762
    
    
    
    2,720
    
    
    
    140,339
    
    
    
    (2,848
    )
    
    
    (1,252
    )
    
    
    149,721Net income
    
    
    
    
    
    
    
    
    
    
    17,623
    
    
    
    
    
    
    
    
    
    
    
    17,623Foreign currency translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (15,419
    )
    
    
    
    
    
    
    (15,419
    )Recognized net actuarial loss net
of tax provision of $23
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    39
    
    
    
    39Loss on unfunded pension
obligations net of tax benefit of $2,942
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,031
    )
    
    
    (5,031
    )Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,788
    )Share-based compensation
    
    
    
    
    
    
    507
    
    
    
    (18
    )
    
    
    
    
    
    
    
    
    
    
    489Excess tax benefits from stock based awards
    
    
    
    
    
    
    56
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    56Purchase of 172,726 common shares
    
    
    (345
    )
    
    
    
    
    
    
    (7,112
    )
    
    
    
    
    
    
    
    
    
    
    (7,457
    )Issuance of 15,600 common shares
    
    
    31
    
    
    
    421
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    452Cash dividends declared  $.80 per share
    
    
    
    
    
    
    
    
    
    
    (4,208
    )
    
    
    
    
    
    
    
    
    
    
    (4,208
    )Balance at December 31, 2008
    
    $
    10,448
    
    
    $
    3,704
    
    
    $
    146,624
    
    
    $
    (18,267
    )
    
    $
    (6,244
    )
    
    $
    136,265
 See notes to consolidated financial statements.
 39




---



##### Table of Contents



PREFORMED LINE PRODUCTS COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tables in thousands of dollars, except share and per share data, unless specifically noted)
 Note A  Significant Accounting Policies
 Nature of Operations
  Consolidation
  Minority Interests
  Cash and Cash Equivalents
  Receivable Allowances
  Inventories
  40




---



##### Table of Contents



Fair Value of Financial Instruments
  Property, Plant and Equipment and Depreciation
  Long-Lived Assets
  Goodwill and Other Intangibles
  Sales Recognition
  41




---



##### Table of Contents



Research and Development
  Advertising
  Foreign Currency Translation
  Use of Estimates
  Derivative Financial Instruments
  Reclassifications
  Recently Issued Accounting Pronouncements
  42




---



##### Table of Contents




    
    How investment decisions are made, including factors necessary to understanding
investment policies and strategies
    
    The major categories of plan assets
    
    The inputs and valuation techniques used to measure the fair value of plan assets
    
    The effect of fair value measurements using significant unobservable inputs (Level 3
measurements in Statement 157 on changes in plan assets for the period)
    
    Significant concentrations of risk within plan assets
        43




---



##### Table of Contents



Note B  Other Financial Statement Information
 Inventories  net
 December 312008
    
    
    2007Finished products
    
    $
    21,829
    
    
    $
    20,417Work-in-process
    
    
    2,382
    
    
    
    2,363Raw materials
    
    
    32,231
    
    
    
    29,86056,442
    
    
    
    52,640Excess of current cost over LIFO cost
    
    
    (5,122
    )
    
    
    (3,733
    )Noncurrent portion of inventory
    
    
    (2,908
    )
    
    
    (5,119
    )$
    48,412
    
    
    $
    43,788
   Property and equipment  net
  December 312008
    
    
    2007Land and improvements
    
    $
    5,490
    
    
    $
    6,223Buildings and improvements
    
    
    47,048
    
    
    
    44,537Machinery and equipment
    
    
    91,097
    
    
    
    91,376Construction in progress
    
    
    2,133
    
    
    
    6,053145,768
    
    
    
    148,189Less accumulated depreciation
    
    
    89,828
    
    
    
    89,683$
    55,940
    
    
    $
    58,506
  Legal proceedings
  Note C  Pension Plans
  44




---



##### Table of Contents



2008
    
    
    2007
    
    
    2006Service cost
    
    $
    704
    
    
    $
    708
    
    
    $
    793Interest cost
    
    
    1,063
    
    
    
    938
    
    
    
    901Expected return on plan assets
    
    
    (998
    )
    
    
    (938
    )
    
    
    (872
    )Recognized net actuarial loss
    
    
    63
    
    
    
    105
    
    
    
    214Net periodic pension cost
    
    $
    832
    
    
    $
    813
    
    
    $
    1,036
  2008
    
    
    2007Projected benefit obligation at beginning of the
year
    
    $
    15,952
    
    
    $
    16,410Service cost
    
    
    704
    
    
    
    708Interest cost
    
    
    1,063
    
    
    
    938Actuarial loss (gain)
    
    
    3,241
    
    
    
    (1,718
    )Benefits paid
    
    
    (409
    )
    
    
    (386
    )Projected benefit obligation at end of year
    
    $
    20,551
    
    
    $
    15,952Fair value of plan assets at beginning of the
year
    
    $
    13,165
    
    
    $
    12,428Actual (loss) return on plan assets
    
    
    (3,735
    )
    
    
    845Employer contributions
    
    
    227
    
    
    
    278Benefits paid
    
    
    (409
    )
    
    
    (386
    )Fair value of plan assets at end of the year
    
    $
    9,248
    
    
    $
    13,165Unfunded pension obligation
    
    $
    (11,303
    )
    
    $
    (2,787
    )
  45




---



##### Table of Contents



2008
    
    
    2007Balance at January 1
    
    $
    (1,233
    )
    
    $
    (2,326
    )Reclassification adjustments:Pretax amortized net actuarial loss
    
    
    62
    
    
    
    105Tax provision
    
    
    (23
    )
    
    
    (39
    )39
    
    
    
    66Adjustment to recognize (loss) gain
on unfunded pension obligations:Pretax (loss) gain on plan assets
    
    
    (7,973
    )
    
    
    1,625Tax (provision) benefit
    
    
    2,942
    
    
    
    (598
    )(5,031
    )
    
    
    1,027Balance at December 31
    
    $
    (6,225
    )
    
    $
    (1,233
    )
   2008
    
    2007Accumulated benefit obligation
    
    $
    16,101
    
    
    $
    12,837Fair market value of assets
    
    
    9,248
    
    
    
    13,165
  2008
    
    2007Discount rate
    
    
    5.75
    %
    
    
    6.50
    %Rate of compensation increase
    
    
    3.50
    
    
    
    3.50
  2008
    
    2007
    
    2006Discount rate
    
    
    6.50
    %
    
    
    6.00
    %
    
    
    5.75
    %Rate of compensation increase
    
    
    3.50
    
    
    
    3.50
    
    
    
    3.50Expected long-term return on plan assets
    
    
    8.00
    
    
    
    8.00
    
    
    
    8.00
   46




---



##### Table of Contents



Plan assetsat December 31Asset category
    
    2008
    
    2007Equity securities
    
    
    58
    %
    
    
    66
    %Debt securities
    
    
    40
    
    
    
    31Cash and equivalents
    
    
    2
    
    
    
    3100
    %
    
    
    100
    %
   Range
    
    TargetEquities
    
    
    30-80
    %
    
    
    60
    %Fixed Income
    
    
    20-70
    %
    
    
    40
    %Cash Equivalents
    
    
    0-10
    %
    Year
    
    Pension Benefits2009
    
    $
    4532010
    
    
    4802011
    
    
    5162012
    
    
    5692013
    
    
    6392014-2018
    
    
    4,436
   47




---



##### Table of Contents



Note D  Debt and Credit Arrangements
 December 312008
    
    
    2007Short-term debtSecured NotesThailand Baht denominated (Baht106,400) at 5.18% in 2008 (4.50% in 2007)
    
    $
    3,101
    
    
    $
    3,826USD denominated at 8.00%
    
    
    
    
    
    
    250Current portion of long-term debt
    
    
    494
    
    
    
    1,949Total short-term debt
    
    
    3,595
    
    
    
    6,025Long-term debtAustralian dollar denominated term loans (A$1,667),
at 5.83% to 7.11% (5.83% to 6.54% in 2007), due 2009 and 2013, secured
by land and building
    
    
    1,152
    
    
    
    3,127Chinese Rmb denominated term loan (RMB10,000) at 6.48% due 2012,
secured by letter of credit
    
    
    1,467
    
    
    
    1,371Thailand Baht denominated capital loan (Baht1,055) at 3.75% to 3.95%
due 2010, secured by capital equipment
    
    
    9
    
    
    
    19Australian dollar denominated capital loan (A$405) at 6.80%
(6.80% in 2007), due 2009, secured by capital equipment
    
    
    33
    
    
    
    204Polish Zloty denominated loans (PLN834) at 3.00% to 6.31% (3.00 to 6.47%
in 2007) due 2011,
secured by building, capital equipment and commercial note
    
    
    284
    
    
    
    238Polish Zloty denominated loans (PLN593) at 6.31% due 2011,
secured by corporate guarantee
    
    
    202
    
    
    
    Total long-term debt
    
    
    3,147
    
    
    
    4,959Less current portion
    
    
    (494
    )
    
    
    (1,949
    )Total long-term debt, less current portion
    
    
    2,653
    
    
    
    3,010Total debt
    
    $
    6,248
    
    
    $
    9,035
    Note E  Leases
  48




---



##### Table of Contents



Note F  Income Taxes
  2008
    
    
    2007
    
    
    2006United States
    
    $
    8,311
    
    
    $
    6,627
    
    
    $
    5,371Foreign
    
    
    16,449
    
    
    
    14,694
    
    
    
    11,809$
    24,760
    
    
    $
    21,321
    
    
    $
    17,180
  2008
    
    
    2007
    
    
    2006Continuing operations
    
    $
    7,718
    
    
    $
    7,501
    
    
    $
    5,353Discontinued operations
    
    
    67
    
    
    
    255
    
    
    
    185$
    7,785
    
    
    $
    7,756
    
    
    $
    5,538
  2008
    
    
    2007
    
    
    2006Current / NoncurrentFederal
    
    $
    2,473
    
    
    $
    2,665
    
    
    $
    1,445Foreign
    
    
    5,679
    
    
    
    4,787
    
    
    
    4,592State and local
    
    
    411
    
    
    
    375
    
    
    
    2218,563
    
    
    
    7,827
    
    
    
    6,258DeferredFederal
    
    
    (380
    )
    
    
    (785
    )
    
    
    (513
    )Foreign
    
    
    (494
    )
    
    
    569
    
    
    
    (365
    )State and local
    
    
    29
    
    
    
    (110
    )
    
    
    (27
    )(845
    )
    
    
    (326
    )
    
    
    (905
    )$
    7,718
    
    
    $
    7,501
    
    
    $
    5,353
 49




---



##### Table of Contents



2008
    
    
    2007
    
    
    2006Statutory Federal Tax Rate
    
    
    34
    %
    
    
    34
    %
    
    
    34
    %Federal tax at statutory rate
    
    $
    8,419
    
    
    $
    7,249
    
    
    $
    5,841State and local taxes, net of federal benefit
    
    
    233
    
    
    
    185
    
    
    
    164Non-deductible expenses
    
    
    269
    
    
    
    99
    
    
    
    43Foreign earnings and related tax credits
    
    
    40
    
    
    
    77
    
    
    
    47Non-U.S. tax rate variances
    
    
    (992
    )
    
    
    (340
    )
    
    
    (132
    )Valuation allowance
    
    
    140
    
    
    
    265
    
    
    
    (489
    )Tax credits
    
    
    (65
    )
    
    
    (137
    )
    
    
    (168
    )Other, net
    
    
    (326
    )
    
    
    103
    
    
    
    47$
    7,718
    
    
    $
    7,501
    
    
    $
    5,353
  2008
    
    
    2007Deferred tax assets:Accrued compensation and benefits
    
    $
    973
    
    
    $
    1,115Inventory valuation reserves
    
    
    1,355
    
    
    
    1,367Allowance for doubtful accounts
    
    
    50
    
    
    
    176Benefit plan reserves
    
    
    4,828
    
    
    
    1,077Foreign tax credits
    
    
    4,193
    
    
    
    3,988Capital tax loss carryforwards
    
    
    2,152
    
    
    
    NOL carryforwards
    
    
    547
    
    
    
    332Other accrued expenses
    
    
    1,607
    
    
    
    1,615Undistributed foreign earnings
    
    
    
    
    
    
    1Unrecognized tax benefits
    
    
    119
    
    
    
    173Gross deferred tax assets
    
    
    15,824
    
    
    
    9,844Valuation allowance
    
    
    (4,152
    )
    
    
    (1,860
    )Net deferred tax assets
    
    
    11,672
    
    
    
    7,984Deferred tax liabilities:Depreciation and other basis differences
    
    
    (2,079
    )
    
    
    (1,730
    )Undistributed foreign earnings
    
    
    (39
    )
    
    
    Inventory
    
    
    (31
    )
    
    
    (83
    )Prepaid expenses
    
    
    (70
    )
    
    
    (67
    )Intangibles
    
    
    (401
    )
    
    
    (845
    )Other
    
    
    (48
    )
    
    
    (19
    )Deferred tax liabilities
    
    
    (2,668
    )
    
    
    (2,744
    )Net deferred tax assets
    
    $
    9,004
    
    
    $
    5,240
 50




---



##### Table of Contents



2008
    
    
    2007Change in net deferred tax assets:Deferred income tax benefit
    
    $
    845
    
    
    $
    326Items of other comprehensive income (loss)
    
    
    2,919
    
    
    
    (636
    )Unrecognized tax benefits at implementation
    
    
    
    
    
    
    134Deferred tax balances of acquired companies
    
    
    
    
    
    
    (1,023
    )Total change in net deferred tax assets
    
    $
    3,764
    
    
    $
    (1,199
    )
       51




---



##### Table of Contents



2008
    
    
    2007Balance at January 1
    
    $
    1,585
    
    
    $
    1,819Additions for tax positions of current year
    
    
    161
    
    
    
    224Additions for tax positions of prior years
    
    
    290
    
    
    
    Reductions for tax positions of prior years
    
    
    (282
    )
    
    
    (121
    )Expiration of statutes of limitations
    
    
    (578
    )
    
    
    (337
    )Balance at December 31
    
    $
    1,176
    
    
    $
    1,585
  Note G  Share-Based Compensation
 The 1999 Stock Option Plan
    2008
    
    2007Risk-free interest rate
    
    
    4.2
    %
    
    
    4.3
    %Dividend yield
    
    
    2.8
    %
    
    
    2.9
    %Expected life (years)
    
    
    6
    
    
    
    6Expected volatility
    
    
    34.4
    %
    
    
    37.9
    %
  52




---



##### Table of Contents



WeightedWeighted
    
    AverageAverage
    
    Remaining
    
    AggregateNumber of
    
    Exercise Price
    
    Contractual
    
    IntrinsicShares
    
    per Share
    
    Term (Years)
    
    ValueOutstanding at January 1, 2008
    
    
    110,942
    
    
    $
    25.25Granted
    
    
    13,000
    
    
    $
    51.62Exercised
    
    
    (15,600
    )
    
    $
    28.96Forfeited
    
    
    (1,250
    )
    
    $
    32.24Outstanding (vested and expected
to vest) at December 31, 2008
    
    
    107,092
    
    
    $
    27.83
    
    
    
    5.2
    
    
    $
    2,023Exercisable at December 31, 2008
    
    
    86,592
    
    
    $
    23.59
    
    
    
    4.2
    
    
    $
    1,944
    Long Term Incentive Plan of 2008
    53




---



##### Table of Contents



Note H  Computation of Earnings Per Share
  54




---



##### Table of Contents



2008
    
    
    2007
    
    
    2006NumeratorIncome from continuing operations
    
    $
    16,754
    
    
    $
    13,766
    
    
    $
    11,827Income from discontinued operations
    
    
    869
    
    
    
    393
    
    
    
    276Net income
    
    $
    17,623
    
    
    $
    14,159
    
    
    $
    12,103DenominatorDetermination of sharesWeighted-average common shares outstanding
    
    
    5,279
    
    
    
    5,372
    
    
    
    5,611Dilutive effect  stock-based awards
    
    
    60
    
    
    
    44
    
    
    
    49Diluted weighted-average common shares outstanding
    
    
    5,339
    
    
    
    5,416
    
    
    
    5,660Earnings per common shareBasicIncome from continuing operations
    
    $
    3.17
    
    
    $
    2.57
    
    
    $
    2.11Income from discontinued operations
    
    $
    0.17
    
    
    $
    0.07
    
    
    $
    0.05Total net income
    
    $
    3.34
    
    
    $
    2.64
    
    
    $
    2.16DilutedIncome from continuing operations
    
    $
    3.14
    
    
    $
    2.54
    
    
    $
    2.09Income from discontinued operations
    
    $
    0.16
    
    
    $
    0.07
    
    
    $
    0.05Total net income
    
    $
    3.30
    
    
    $
    2.61
    
    
    $
    2.14
  Note I  Goodwill and Other Intangibles
  December 31, 2008
    
    
    December 31, 2007Gross Carrying
    
    
    Accumulated
    
    
    Gross Carrying
    
    
    AccumulatedAmount
    
    
    Amortization
    
    
    Amount
    
    
    AmortizationFinite-lived intangible assetsPatents
    
    $
    4,807
    
    
    $
    (2,901
    )
    
    $
    4,812
    
    
    $
    (2,585
    )Land use rights
    
    
    1,350
    
    
    
    (32
    )
    
    
    1,259
    
    
    
    (8
    )Customer relationships
    
    
    1,003
    
    
    
    (369
    )
    
    
    985
    
    
    
    (154
    )$
    7,160
    
    
    $
    (3,302
    )
    
    $
    7,056
    
    
    $
    (2,747
    )Indefinite-lived intangible assetsTrademarks
    
    $
    
    
    
    
    
    
    
    $
    1,328Goodwill
    
    
    5,520
    
    
    
    
    
    
    
    3,928$
    5,520
    
    
    
    
    
    
    $
    5,256
  55




---



##### Table of Contents



Australia
    
    
    South Africa
    
    
    Poland
    
    
    All Other
    
    
    TotalBalance at January 1, 2007
    
    $
    1,600
    
    
    $
    55
    
    
    $
    
    
    
    $
    511
    
    
    $
    2,166Impairment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (199
    )
    
    
    (199
    )Additions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,723
    
    
    
    1,723Curency translation
    
    
    182
    
    
    
    2
    
    
    
    
    
    
    
    54
    
    
    
    238Balance at December 31, 2007
    
    
    1,782
    
    
    
    57
    
    
    
    
    
    
    
    2,089
    
    
    
    3,928Additions
    
    
    462
    
    
    
    
    
    
    
    1,370
    
    
    
    489
    
    
    
    2,321Curency translation
    
    
    (509
    )
    
    

    (16

    )
    
    
    (230
    )
    
    
    26
    
    
    
    (729
    )Balance at December 31, 2008
    
    $
    1,735
    
    
    $
    41
    
    
    $
    1,140
    
    
    $
    2,604
    
    
    $
    5,520
 Note J  Fair Value of Financial Assets and Liabilities
    56




---



##### Table of Contents



Note K  Segment Information
     57




---



##### Table of Contents



Year ended December 312008
    
    
    2007
    
    
    2006Net salesPLP-USA
    
    $
    111,721
    
    
    $
    103,173
    
    
    $
    91,412Australia
    
    
    27,244
    
    
    
    29,855
    
    
    
    25,867Brazil
    
    
    30,279
    
    
    
    26,236
    
    
    
    20,990South Africa
    
    
    9,535
    
    
    
    8,049
    
    
    
    8,244Canada
    
    
    9,952
    
    
    
    10,620
    
    
    
    9,824Poland
    
    
    20,602
    
    
    
    5,202
    
    
    
    All Other
    
    
    60,409
    
    
    
    50,154
    
    
    
    40,573Total net sales
    
    $
    269,742
    
    
    $
    233,289
    
    
    $
    196,910Intersegment salesPLP-USA
    
    $
    7,668
    
    
    $
    5,424
    
    
    $
    5,196Australia
    
    
    62
    
    
    
    137
    
    
    
    288Brazil
    
    
    1,828
    
    
    
    1,977
    
    
    
    1,126South Africa
    
    
    854
    
    
    
    888
    
    
    
    417Canada
    
    
    422
    
    
    
    117
    
    
    
    355Poland
    
    
    411
    
    
    
    34
    
    
    
    All Other
    
    
    10,645
    
    
    
    9,849
    
    
    
    5,777Total intersegment sales
    
    $
    21,890
    
    
    $
    18,426
    
    
    $
    13,159Interest incomePLP-USA
    
    $
    115
    
    
    $
    551
    
    
    $
    889Australia
    
    
    109
    
    
    
    21
    
    
    
    18Brazil
    
    
    79
    
    
    
    106
    
    
    
    215South Africa
    
    
    129
    
    
    
    91
    
    
    
    51Canada
    
    
    101
    
    
    
    95
    
    
    
    172Poland
    
    
    17
    
    
    
    13
    
    
    
    All Other
    
    
    296
    
    
    
    211
    
    
    
    111Total interest income
    
    $
    846
    
    
    $
    1,088
    
    
    $
    1,456Interest expensePLP-USA
    
    $
    (39
    )
    
    $
    (38
    )
    
    $
    (31
    )Australia
    
    
    (159
    )
    
    
    (234
    )
    
    
    (311
    )Brazil
    
    
    (28
    )
    
    
    (21
    )
    
    
    (5
    )South Africa
    
    
    (1
    )
    
    
    
    
    
    
    (9
    )Canada
    
    
    
    
    
    
    
    
    
    
    Poland
    
    
    (70
    )
    
    
    (25
    )
    
    
    All Other
    
    
    (247
    )
    
    
    (277
    )
    
    
    (208
    )Total interest expense
    
    $
    (544
    )
    
    $
    (595
    )
    
    $
    (564
    )
 58




---



##### Table of Contents



Year ended December 312008
    
    
    2007
    
    
    2006Income taxesPLP-USA
    
    $
    2,577
    
    
    $
    2,268
    
    
    $
    1,451Australia
    
    
    258
    
    
    
    825
    
    
    
    673Brazil
    
    
    862
    
    
    
    1,112
    
    
    
    576South Africa
    
    
    777
    
    
    
    542
    
    
    
    546Canada
    
    
    747
    
    
    
    991
    
    
    
    901Poland
    
    
    554
    
    
    
    (31
    )
    
    
    All Other
    
    
    1,943
    
    
    
    1,794
    
    
    
    1,206Total income taxes
    
    $
    7,718
    
    
    $
    7,501
    
    
    $
    5,353Income from continuing operationsPLP-USA
    
    $
    4,877
    
    
    $
    4,018
    
    
    $
    3,920Australia
    
    
    501
    
    
    
    1,736
    
    
    
    1,389Brazil
    
    
    1,336
    
    
    
    2,286
    
    
    
    924South Africa
    
    
    1,980
    
    
    
    1,185
    
    
    
    1,319Canada
    
    
    1,537
    
    
    
    1,811
    
    
    
    1,693Poland
    
    
    1,726
    
    
    
    (61
    )
    
    
    All Other
    
    
    4,797
    
    
    
    2,791
    
    
    
    2,582Total income from continuing operations
    
    $
    16,754
    
    
    $
    13,766
    
    
    $
    11,827Income from discontinued operations,
net of tax
    
    
    869
    
    
    
    393
    
    
    
    276Net income
    
    $
    17,623
    
    
    $
    14,159
    
    
    $
    12,103
 As of December 312008
    
    
    2007
    
    
    2006Expenditure for long-lived assetsPLP-USA
    
    $
    3,472
    
    
    $
    4,589
    
    
    $
    4,974Australia
    
    
    267
    
    
    
    693
    
    
    
    1,140Brazil
    
    
    1,672
    
    
    
    470
    
    
    
    311South Africa
    
    
    389
    
    
    
    141
    
    
    
    102Canada
    
    
    137
    
    
    
    74
    
    
    
    1Poland
    
    
    833
    
    
    
    649
    
    
    
    All Other
    
    
    3,241
    
    
    
    2,615
    
    
    
    2,969Total expenditures for long-lived assets
    
    $
    10,011
    
    
    $
    9,231
    
    
    $
    9,497Depreciation and amortizationPLP-USA
    
    $
    4,399
    
    
    $
    4,558
    
    
    $
    4,141Australia
    
    
    772
    
    
    
    749
    
    
    
    759Brazil
    
    
    638
    
    
    
    169
    
    
    
    565South Africa
    
    
    111
    
    
    
    117
    
    
    
    72Canada
    
    
    89
    
    
    
    93
    
    
    
    123Poland
    
    
    972
    
    
    
    286
    
    
    
    All Other
    
    
    1,568
    
    
    
    1,442
    
    
    
    1,080Total depreciation and amortization
    
    $
    8,549
    
    
    $
    7,414
    
    
    $
    6,740
 59




---



##### Table of Contents



As of December 312008
    
    
    2007Identifiable assetsPLP-USA
    
    $
    72,641
    
    
    $
    70,535Australia
    
    
    19,438
    
    
    
    25,122Brazil
    
    
    16,087
    
    
    
    18,022South Africa
    
    
    5,569
    
    
    
    4,901Canada
    
    
    8,545
    
    
    
    8,672Poland
    
    
    13,920
    
    
    
    13,238All Other
    
    
    54,675
    
    
    
    51,188Discontinued operations
    
    
    
    
    
    
    12,188Total identifiable assets
    
    $
    190,875
    
    
    $
    203,866Long-lived assetsPLP-USA
    
    $
    22,465
    
    
    $
    23,202Australia
    
    
    7,332
    
    
    
    9,864Brazil
    
    
    3,355
    
    
    
    3,540South Africa
    
    
    637
    
    
    
    548Canada
    
    
    1,627
    
    
    
    1,974Poland
    
    
    5,372
    
    
    
    5,036All Other
    
    
    15,152
    
    
    
    14,342Total long-lived assets
    
    $
    55,940
    
    
    $
    58,506
 Note L
 Related Party Transactions
      60




---



##### Table of Contents



Note M -Business Combinations
   Current assets
    
    $
    1,474Property and equipment
    
    
    289Goodwill
    
    
    1,756Other intangibles
    
    
    944Total assets acquired
    
    
    4,463Current liabilities
    
    
    (1,045
    )Deferred income taxes
    
    
    (418
    )Total liabilites assumed
    
    
    (1,463
    )Net assets acquired
    
    $
    3,000
    61




---



##### Table of Contents



Current assets
    
    $
    6,088Property and equipment
    
    
    5,341Goodwill
    
    
    1,196Other intangibles
    
    
    1,041Other assets
    
    
    437Total assets acquired
    
    
    14,103Current liabilities
    
    
    (2,744
    )Long term debt, less current portion
    
    
    (112
    )Other non-current liabilities and deferred taxes
    
    
    (1,585
    )Minority interest
    
    
    (850
    )Total liabilites assumed
    
    
    (5,291
    )Net assets acquired
    
    $
    8,812
     Note N  Discontinued Operations
   62




---



##### Table of Contents



2008
    
    
    2007
    
    
    2006Net Sales
    
    $
    8,308
    
    
    $
    21,318
    
    
    $
    20,027Income before income taxes
    
    
    180
    
    
    
    648
    
    
    
    461Provision for income taxes
    
    
    (67
    )
    
    
    (255
    )
    
    
    (185
    )Gain on sale, net of expenses
    
    
    756
    
    
    
    
    
    
    
    Income from discontinued operations
    
    $
    869
    
    
    $
    393
    
    
    $
    276
 Note O  Quarterly Financial Information (unaudited)
  Quarter endedMarch 31
    
    June 30
    
    September 30
    
    December 312008Net sales
    
    $
    59,865
    
    
    $
    75,362
    
    
    $
    73,952
    
    
    $
    60,563Gross profit
    
    
    19,005
    
    
    
    23,677
    
    
    
    25,463
    
    
    
    19,122Income before income taxes, minority interest and discontinued operations
    
    
    4,249
    
    
    
    7,329
    
    
    
    9,421
    
    
    
    3,761Income from continuing operations
    
    
    2,801
    
    
    
    4,869
    
    
    
    6,457
    
    
    
    2,627Income (loss) from discontinued operations
    
    
    149
    
    
    
    620
    
    
    
    (34
    )
    
    
    134Net income
    
    
    2,950
    
    
    
    5,489
    
    
    
    6,423
    
    
    
    2,761Income from continuing operations per share, basic
    
    
    0.52
    
    
    
    0.92
    
    
    
    1.24
    
    
    
    0.50Net income per share, basic
    
    
    0.55
    
    
    
    1.04
    
    
    
    1.23
    
    
    
    0.53Income from continuing operations per share, diluted
    
    
    0.52
    
    
    
    0.91
    
    
    
    1.23
    
    
    
    0.50Net income per share, diluted
    
    
    0.54
    
    
    
    1.03
    
    
    
    1.22
    
    
    
    0.522007Net sales
    
    $
    51,979
    
    
    $
    58,072
    
    
    $
    60,413
    
    
    $
    62,825Gross profit
    
    
    17,569
    
    
    
    19,714
    
    
    
    21,439
    
    
    
    19,180Income before income taxes, minority interest and discontinued operations
    
    
    4,951
    
    
    
    5,893
    
    
    
    8,183
    
    
    
    2,294Income from continuing operations
    
    
    3,285
    
    
    
    3,384
    
    
    
    5,496
    
    
    
    1,601Income (loss) from discontinued operations
    
    
    (133
    )
    
    
    180
    
    
    
    96
    
    
    
    250Net income
    
    
    3,152
    
    
    
    3,564
    
    
    
    5,592
    
    
    
    1,851Income from continuing operations per share, basic
    
    
    0.61
    
    
    
    0.63
    
    
    
    1.02
    
    
    
    0.30Net income per share, basic
    
    
    0.59
    
    
    
    0.67
    
    
    
    1.04
    
    
    
    0.34Income from continuing operations per share, diluted
    
    
    0.61
    
    
    
    0.63
    
    
    
    1.01
    
    
    
    0.29Net income per share, diluted
    
    
    0.58
    
    
    
    0.66
    
    
    
    1.03
    
    
    
    0.34
 
 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
  
 Item 9A. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
  63




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##### Table of Contents



Managements Report on Internal Control Over Financial Reporting
   Internal Control  Integrated Framework
  Changes in Internal Control Over Financial Reporting
 .
  Report of Independent Registered Public Accounting Firm
 
   64




---



##### Table of Contents



Item 9B. Other Information
  
 Part III
 
 Item 10. Directors, Executive Officers and Corporate Governance
  
 Item 11. Executive Compensation
  65




---



##### Table of Contents



Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
  
 Item 13. Certain Relationships , Related Transactions and Director Independence
  
 Item 14. Principal Accounting Fees and Services
  
 Part IV
 
 Item 15. Exhibits and Financial Statement Schedules
  Page
    
    Financial Statements36
    
    Consolidated Balance Sheets37
    
    Statements of Consolidated Income38
    
    Statements of Consolidated Cash Flows39
    
    Statements of Consolidated Shareholders Equity40
    
    Notes to Consolidated Financial StatementsPage
    
    Schedule69
    
    II  Valuation and Qualifying Accounts
  ExhibitNumber
    
    Exhibit3.1
    
    Amended and Restated Articles of Incorporation (incorporated by reference to the Companys
Registration Statement on Form 10).3.2
    
    Amended and Restated Code of Regulations of Preformed Line Products Company (incorporated by
reference to the Companys Registration Statement on Form 10).4
    
    Description of Specimen Share Certificate (incorporated by reference to the Companys
Registration Statement on Form 10).10.1
    
    Preformed Line Products Company 1999 Employee Stock Option Plan (incorporated by reference to
the Companys Registration Statement on Form 10).10.2
    
    Preformed Line Products Company Officers Bonus Plan (incorporated by reference to the
Companys 10-K filed for the year ended December 31, 2007).10.3
    
    Preformed Line Products Company Executive Life Insurance Plan  Summary (incorporated by
reference to the Companys Registration Statement on Form 10).10.4
    
    Preformed Line Products Company Supplemental Profit Sharing Plan (incorporated by reference
to the Companys Registration Statement on Form 10).
 66




---



##### Table of Contents



ExhibitNumber
    
    Exhibit10.5
    
    Revolving Credit Agreement between National City Bank and Preformed Line Products Company,
dated December 30, 1994 (incorporated by reference to the Companys Registration Statement on
Form 10).10.6
    
    Amendment to the Revolving Credit Agreement between National City Bank and Preformed Line
Products Company, dated October 31, 2002 (incorporated by reference to the Companys 10-K
filing for the year ended December 31, 2003).10.7
    
    Preformed Line Products Company 1999 Employee Stock Option Plan Incentive Stock Option
agreement (incorporated by reference to the Companys 10-K filing for the year ended December
31, 2004).10.8
    
    Retirement Agreement between Robert C. Hazenfield and Preformed Line Products Company dated
December 19, 2005, (incorporated by reference to the Companys 10-K filing for the year ended
December 31, 2005).10.9
    
    Stock Purchase Agreement, dated March 22, 2007, by and among the Company and Claudia W.
Goodreau, Kevin M. Goodreau, Dora Ely Randall and Jeffrey J. Randall to acquire Direct Power
and Water Corporation (incorporated by reference to the Companys 10-Q filing for the quarter
ended March 31, 2007).10.10
    
    Conditional Share Purchase Agreement, dated April 22, 2007, by and among the Company and BBO
Spolka z o.o. to acquire a holding in Zaklady Wytworcze Sprzetu Sieciowego Belos SA
(incorporated by reference to the Companys 10-Q filing for the three-month and six-month
ended June 30, 2007).10.11
    
    Preformed Line Products Company Chief Executive Officer Bonus Plan (incorporated by
reference to the Companys 10-K filing for the year ended December 31, 2007).10.12
    
    Preformed Line Products Company Long Term Incentive Plan of 2008 (incorporated by reference
to the Companys 8-K current report filing dated May 1, 2008).10.13
    
    Deferred Shares Plan (incorporated by reference to the Companys 8-K current report filing
dated August 21, 2008).10.14
    
    Form of Restricted Shares Grant Agreement (incorporated by reference to the Companys 10-Q
filing for the quarter ended September 30, 2008).10.15
    
    Preformed Line Products Company Deferred Shares Plan (incorporated by reference to the
Companys 8-k current report filing dated August 21, 2008).10.16
    
    Agreement and Plan of Merger, dated May 30, 2008, by and among the Company and Optical Cable
Corporation to divest Superior Modular Company Inc. (incorporated by reference to the
Companys 8-K current report filing dated May 30, 2008).10.17
    
    Shares Purchase Agreement between the Company and Elizabeth Gibson Drinko as Trustee of the
John Deaver DrinkoTrust Agreement and individually (incorporated by reference to the Companys
8-K current report filing dated May 16, 2008).10.18
    
    Shares Purchase Agreement between the Company and Elizabeth Gribson Drinko as grantor and
beneficiary of the Elizabeth Gibson Drinko IRA Trust under agreement dated April 21, 2008 and
National City Bank, as Trustee of the IRA Trust (incorporated by reference to the Companys
8-K current report filing dated May 16, 2008).14.1
    
    Preformed Line Products Company Code of Conduct (incorporated by reference to the Companys
8-K current report filing dated August 6, 2007).21
    
    Subsidiaries of Preformed Line Products Company, filed herewith.23.1
    
    Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm, filed herewith.23.2
    
    Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm, 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.
 67




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##### Table of Contents



SIGNATURES
  Preformed Line Products CompanyMarch 13, 2009
    /s/ Robert G. RuhlmanRobert G. RuhlmanChairman, President and Chief Executive Officer
(principal executive officer)March 13, 2009
    /s/ Eric R. GraefEric R. GraefChief Financial Officer and Vice President Finance
(principal financial officer)  March 13, 2009
    /s/ Robert G. RuhlmanRobert G. RuhlmanChairman, President and Chief Executive OfficerMarch 13, 2009
    /s/ Barbara P. RuhlmanBarbara P. RuhlmanDirectorMarch 13, 2009
    /s/ Randall M. RuhlmanRandall M. RuhlmanDirectorMarch 13, 2009
    /s/ Glenn E. CorlettGlenn E. CorlettDirectorMarch 13, 2009
    /s/ Michael E. GibbonsMichael E. GibbonsDirectorMarch 13, 2009
    /s/ R. Steven KestnerR. Steven KestnerDirectorMarch 13, 2009
    /s/ Richard R. GascoigneRichard R. GascoigneDirector 68




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##### Table of Contents



PREFORMED LINE PRODUCTS COMPANY
 
 
 Additions chargedBalance at
    
    to costs and
    
    
    
    
    
    Other additions or
    
    Balance at end ofFor the year ended December 31, 2008:
    
    beginning of period
    
    expenses
    
    Deductions
    
    deductions (a)
    
    periodAllowance for doubtful accounts
    
    $
    733
    
    
    $
    114
    
    
    $
    (305
    )
    
    $
    (44
    )
    
    $
    498Reserve for credit memos
    
    
    466
    
    
    
    472
    
    
    
    (464
    )
    
    
    
    
    
    
    474Slow-moving and obsolete inventory reserves
    
    
    3,332
    
    
    
    1,161
    
    
    
    (1,322
    )
    
    
    (115
    )
    
    
    3,056Accrued product warranty
    
    
    104
    
    
    
    147
    
    
    
    (94
    )
    
    
    (28
    )
    
    
    129
 Additions chargedBalance at
    
    to costs and
    
    
    
    
    
    Other additions or
    
    Balance at end ofFor the year ended December 31, 2007:
    
    beginning of period
    
    expenses
    
    Deductions
    
    deductions
    
    periodAllowance for doubtful accounts
    
    $
    625
    
    
    $
    143
    
    
    $
    (172
    )
    
    $
    137
    
    
    $
    733Reserve for credit memos
    
    
    447
    
    
    
    795
    
    
    
    (776
    )
    
    
    
    
    
    
    466Slow-moving and obsolete inventory reserves
    
    
    3,843
    
    
    
    22
    
    
    
    (1,047
    )
    
    
    514
    
    
    
    3,332Accrued product warranty
    
    
    82
    
    
    
    41
    
    
    
    (124
    )
    
    
    105
    
    
    
    104
 Additions chargedBalance at
    
    to costs and
    
    
    
    
    
    Other additions or
    
    Balance at end ofFor the year ended December 31, 2006:
    
    beginning of period
    
    expenses
    
    Deductions
    
    deductions
    
    periodAllowance for doubtful accounts
    
    $
    384
    
    
    $
    253
    
    
    $
    (28
    )
    
    $
    16
    
    
    $
    625Reserve for credit memos
    
    
    173
    
    
    
    742
    
    
    
    (468
    )
    
    
    
    
    
    
    447Slow-moving and obsolete inventory reserves
    
    
    2,684
    
    
    
    1,917
    
    
    
    (834
    )
    
    
    76
    
    
    
    3,843Accrued product warranty
    
    
    10
    
    
    
    82
    
    
    
    (10
    )
    
    
    
    
    
    
    82
 
 (a)
    
    Other additions or deductions relate to translation adjustments. Included in 2007 are
opening balances for acquisitions for the following reserves; allowance for doubtful
accounts of $86 thousand, inventory reserves of $440 thousand and $97 thousand for accrued
product warranty.(b)
    
    All periods presented have been restated to exclude discontinued operations. 69




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##### Table of Contents



Exhibit Index
 3.1
    
    Amended and Restated Articles of Incorporation (incorporated by reference to the Companys
Registration Statement on Form 10).3.2
    
    Amended and Restated Code of Regulations of Preformed Line Products Company (incorporated by
reference to the Companys Registration Statement on Form 10).4
    
    Description of Specimen Stock Certificate (incorporated by reference to the Companys
Registration Statement on Form 10).10.1
    
    Preformed Line Products Company 1999 Employee Stock Option Plan (incorporated by reference to
the Companys Registration Statement on Form 10).10.2
    
    Preformed Line Products Company Officers Bonus Plan (incorporated by reference to the
Companys 10-K filing for the year ended December 31, 2007).10.3
    
    Preformed Line Products Company Executive Life Insurance Plan  Summary (incorporated by
reference to the Companys Registration Statement on Form 10).10.4
    
    Preformed Line Products Company Supplemental Profit Sharing Plan (incorporated by reference
to the Companys Registration Statement on Form 10).10.5
    
    Revolving Credit Agreement between National City Bank and Preformed Line Products Company,
dated December 30, 1994 (incorporated by reference to the Companys Registration Statement on
Form 10).10.6
    
    Amendment to the Revolving Credit Agreement between National City Bank and Preformed Line
Products Company, dated October 31, 2002 (incorporated by reference to the Companys 10-K
filing for the year ended December 31, 2003).10.7
    
    Preformed Line Products Company 1999 Employee Stock Option Plan Incentive Stock Option
Agreement (incorporated by reference to the Companys 10-K filing for the year ended December
31, 2004).10.8
    
    Retirement Agreement between Robert C. Hazenfield and Preformed Line Products Company dated
December 19, 2005 (incorporated by reference to the Companys 10-K filing for the year ended
December 31, 2005).10.9
    
    Stock Purchase Agreement, dated March 22, 2007, by and among the Company and Claudia W.
Goodreau, Kevin M. Goodreau, Dora Ely Randall and Jeffrey J. Randall to acquire Direct Power
and Water Corporation (incorporated by reference to the Companys 10-Q filing for the quarter
ended March 31, 2007).10.10
    
    Conditional Share Purchase Agreement, dated April 22, 2007, by and among the Company and BBO
Spolka z o.o. to acquire a holding in Zaklady Wytworcze Sprzetu Sieciowego Belos SA
(incorporated by reference to the Companys 10-Q filing for the three-month and six-month
ended June 30, 2007).10.11
    
    Preformed Line Products Company Chief Executive Officer Bonus Plan (incorporated by
reference to the Companys 10-K filing for the year ended December 31, 2007).10.12
    
    Preformed Line Products Company Long Term Incentive Plan of 2008 (incorporated by reference
to the Companys 8-K current report filing dated May 1, 2008).10.13
    
    Deferred Shares Plan (incorporated by reference to the Companys 8-K current report filing
dated August 21, 2008).10.14
    
    Form of Restricted Shares Grant Agreement (incorporated by reference to the Companys 10-Q
filing for the quarter ended September 30, 2008).10.15
    
    Preformed Line Products Company Deferred Shares Plan (incorporated by reference to the
Companys 8-k current report filing dated August 21, 2008).10.16
    
    Agreement and Plan of Merger, dated May 30, 2008, by and among the Company and Optical Cable
Corporation to divest Superior Modular Company Inc. (incorporated by reference to the
Companys 8-K current report filing dated May 30, 2008).10.17
    
    Shares Purchase Agreement between the Company and Elizabeth Gibson Drinko as Trustee of the
John Deaver DrinkoTrust Agreement and individually (incorporated by reference to the Companys
8-K current report filing dated May 16, 2008).10.18
    
    Shares Purchase Agreement between the Company and Elizabeth Gribson Drinko as grantor and
beneficiary of the Elizabeth Gibson Drinko IRA Trust under agreement dated April 21, 2008 and
National City Bank, as Trustee of the IRA Trust (incorporated by reference to the
Companys 8-K current report filing dated May 16, 2008).
 70




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##### Table of Contents



14.1
    
    Preformed Line Products Company Code of Conduct (incorporated by reference to the Companys
8-K current report filing dated August 6, 2007).21
    
    Subsidiaries of Preformed Line Products Company, filed herewith.23.1
    
    Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm, filed herewith.23.2
    
    Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm, 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.
 71