PREFORMED LINE PRODUCTS COPLPC
PREFORMED LINE PRODUCTS CO Debt Disclosure
Note 7 - Debt and Credit Arrangements
| December 31, | |||||||||||
| 2024 | 2023 | ||||||||||
| Short-term debt | |||||||||||
| Notes payable to banks | |||||||||||
Thailand Bhat denominated at 4.15% | $ | 2,599 | $ | 2,262 | |||||||
France Euro denominated at 6.37% | — | 2,774 | |||||||||
China Yuan Renminbi denominated at 4.50% | — | 1,314 | |||||||||
China Yuan Renminbi denominated at 3.05% | 685 | — | |||||||||
China Yuan Renminbi denominated at 3.05% | 412 | — | |||||||||
Vietnam Dong denominated at 7.30% | — | 18 | |||||||||
Indonesia U.S. Dollar denominated at 5.86% | 4,086 | — | |||||||||
Indonesia U.S. Dollar denominated at 6.82% | — | 600 | |||||||||
| Current portion of long-term debt | |||||||||||
U.S. Dollar denominated at 2.74% | 2,050 | 2,050 | |||||||||
Czech Republic Koruna denominated at 3.00% | 42 | 21 | |||||||||
Indonesia U.S. Dollar denominated at 3.50% | — | 4,267 | |||||||||
Brazil Real denominated at 8.30% | 200 | — | |||||||||
Czech Republic Koruna denominated at 3.69% | 86 | 94 | |||||||||
Czech Republic Koruna denominated at 1.60% | 52 | 54 | |||||||||
| Total short-term debt | 10,212 | 13,454 | |||||||||
| Long-term debt, including current portion | |||||||||||
U.S. Dollar denominated at 5.76%, due 2026 | — | 22,653 | |||||||||
U.S. Dollar denominated at 2.74%, due 2031 | 12,642 | 14,692 | |||||||||
Brazil Real denominated at 8.30% due 2025 | 200 | 1,000 | |||||||||
Poland Zloty denominated at 6.97% due 2026 | 4,390 | 7,691 | |||||||||
Australian Dollar denominated at 4.06%, due 2026 | — | — | |||||||||
Austria Euro denominated at 4.58% due 2026 | 990 | 1,387 | |||||||||
Indonesia U.S. Dollar denominated at 3.50% due 2024 | — | 4,267 | |||||||||
New Zealand Dollar denominated at 6.73% due 2026 | 1,779 | 2,538 | |||||||||
Czech Republic Koruna denominated at 2.76% due 2030 | 80 | — | |||||||||
Czech Republic Koruna denominated at 3.00% due 2025 | 42 | 191 | |||||||||
Czech Republic Koruna denominated at 3.69% due 2031 | 560 | 703 | |||||||||
Czech Republic Koruna denominated at 1.60% due 2026 | 104 | 160 | |||||||||
| Total long-term debt | 20,787 | 55,282 | |||||||||
| Less current portion | (2,430) | (6,486) | |||||||||
| Total long-term debt, less current portion | 18,357 | 48,796 | |||||||||
| Total debt | $ | 28,569 | $ | 62,250 | |||||||
The Company maintains a credit facility (the "Facility") with a capacity of $90.0 million that expires March 2, 2026. The Company expects to extend the maturity date of the Facility over the coming year. The interest rate for U.S. borrowing is defined as the Secured Overnight Financing Rate (“SOFR”) plus 1.125% unless the Company’s funded debt to Earnings before Interest, Taxes and Depreciation ratio exceeds 2.25 to 1, at which point the SOFR spread becomes 1.500%. At December 31, 2024, the Company had utilized $7.2 million with $82.8 million available on the Facility. There were no long-term outstanding letters on the Facility as of December 31, 2024. Our bank debt to equity percentage was 6.8%. The Facility contains, among other provisions, requirements for maintaining levels of net worth and profitability. At December 31, 2024, the Company was in compliance with these covenants.
On January 19, 2021, the Company received funding for a term loan from PNC Equipment Finance, LLC in the principal amount of $20.5 million for the full amount of the purchase price for a new corporate aircraft. The term of the loan is 120 months at a
fixed interest rate of 2.74%. The loan is payable in 119 equal monthly installments, which commenced on March 1, 2021 with a final payment of any outstanding principal and accrued interest due and payable on the final monthly payment date. Of the $12.6 million outstanding on this debt facility at December 31, 2024, $2.1 million was classified as current. The aircraft has been pledged as collateral against the loan.
The Company has other borrowing facilities at certain of its foreign subsidiaries, which consist of overdraft lines, working capital credit lines, and facilities for the issuance of letters of credit and short-term borrowing needs. At December 31, 2024, and December 31, 2023, $8.8 million and $13.3 million were outstanding, of which $8.2 million and $11.4 million were classified as current, respectively. These facilities support commitments made in the ordinary course of business.
The Company’s Asia-Pacific segment had $0.1 million and $0.2 million in restricted cash used to secure bank guarantees as of December 31, 2024, and 2023, respectively. The restricted cash is shown on the Company’s Consolidated Balance Sheets in Cash, cash equivalents and restricted cash.
Aggregate maturities of long-term debt during the next five years are as follows: $2.3 million for 2025, $9.3 million for 2026, $2.1 for 2027, $2.1 million for 2028, $2.1 million for 2029, and $2.9 million thereafter.
Interest paid was $2.2 million in 2024, $3.8 million in 2023, and $3.1 million in 2022.
In March of 2025, the Company entered into €8.0 million or $7.7 million of additional term debt arrangements with maturity dates ranging from to six years and interest rates ranging from 2.50% to 2.65%.
Guarantees and Letters of Credit
The Company has provided financial guarantees for uncompleted work and financial commitments. The terms of these guarantees vary with end dates ranging from the current year through the completion of such transactions. The guarantees would typically be triggered in the event of non-performance. As of December 31, 2024, the Company had total outstanding guarantees of $11.3 million. Additionally, certain domestic and foreign customers require the Company to issue letters of credit or performance bonds as a condition of placing an order. As of December 31, 2024, the Company had total outstanding letters of credit of $1.3 million.
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About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.