PREFORMED LINE PRODUCTS CO - 10-K Annual Report

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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, 2002

Commission file number 0-31164

Preformed Line Products Company
(Exact Name of Registrant as Specified in Its Charter)

Ohio 34-0676895
- ------------------------------------------------------------------ ---------------------------------------
(State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification No.)

660 Beta Drive
Mayfield Village, Ohio 44143
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(Address of Principal Executive Office) (Zip Code)

(440) 461-5200
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(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: (None)

Securities registered pursuant to Section 12(g) of the Act:

COMMON SHARES, $2 PAR VALUE PER SHARE
(Title of class)

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. _X_

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). Yes ____ No _X__

The aggregate market value of voting and non-voting common shares held by
non-affiliates of the registrant as of June 28, 2002 was $36,987,400, based on
the closing price of such common shares, as reported on the NASDAQ National
Market System. As of March 17, 2003, there were 5,772,710 common shares of the
Company ($2 par value) outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Definitive Proxy Statement for the Annual Meeting of
Shareholders to be held April 28, 2003 are incorporated by reference into Part
III Items 10, 11, 12, and 13.

TABLE OF CONTENTS

PAGE
PART I.

Item 1. Business ............................................................................. 3

Item 2. Properties............................................................................ 10

Item 3. Legal Proceedings .................................................................... 12

Item 4. Submission of Matters to a Vote of Security Holders................................... 12

PART II.

Item 5. Market for Registrant's Common Stock and Related Stockholder Matters .................. 13

Item 6. Selected Financial Data ............................................................... 14

Item 7. Management Discussion and Analysis of Financial Condition and Results
of Operations........................................................................ 14

Item 7A. Quantitative and Qualitative Disclosures............................................... 22

Item 8. Financial Statements and Supplementary Data............................................ 23

Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure................................................................. 42

PART III.

Item 10. Directors and Executive Officers of the Registrant .................................... 42

Item 11. Executive Compensation ................................................................ 42

Item 12. Security Ownership of Certain Beneficial Owners and Management ........................ 43

Item 13. Certain Relationships and Related Transactions ........................................ 43

Item 14. Controls and Procedures ............................................................... 43

PART IV.

Item 15. Exhibits, Financial Statements Schedules and Reports on Form 8-K ...................... 43

SIGNATURES .................................................................................................... 45

CERTIFICATIONS ................................................................................................ 46

Schedule II - Valuation and Qualifying Accounts ............................................................... 48

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FORWARD-LOOKING STATEMENTS

This Form 10-K and other documents we file with the Securities and
Exchange Commission contain forward-looking statements regarding the Company's
and management's beliefs and expectations. As a general matter, forward-looking
statements are those focused upon future plans, objectives or performance (as
opposed to historical items) and include statements of anticipated events or
trends and expectations and beliefs relating to matters not historical in
nature. Such forward-looking statements are subject to uncertainties and factors
relating to the Company's operations and business environment, all of which are
difficult to predict and many of which are beyond the Company's control. Such
uncertainties and factors could cause the Company's actual results to differ
materially from those matters expressed in or implied by such forward-looking
statements.

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

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

- The effect on the Company's business resulting from economic
uncertainty within Asia-Pacific and Latin American regions;

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

- The Company's success at continuing to develop proprietary
technology to meet or exceed new industry performance standards and
individual customer expectations;

- The rate of progress in continuing to reduce costs and in modifying
the Company's cost structure to maintain and enhance the Company's
competitiveness;

- 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 for inside plant;

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

- The potential impact of consolidation and deregulation 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 compliance;

- The Company's ability to continue to compete with larger companies
who have acquired a substantial number of the Company's former
competitors;

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- The Company's ability to compete in the domestic data communications
market;

- The Company's ability to recover sales in the telecommunication
markets;

- The Company's ability to have continued success in emerging markets
such as China;

- The Company's ability to internally develop new products; and

- Other factors disclosed previously and from time to time in the
Company's filings with the Securities and Exchange Commission. These
filings can be found on the Securities and Exchange Commission's
website at www.sec.gov.

PART I

ITEM 1. BUSINESS

BACKGROUND

Preformed Line Products Company ("the Company") is an international
designer and manufacturer of products and systems employed in the construction
and maintenance of overhead and underground networks for the energy,
communications, cable (TV) provider, information (data communication) and other
similar industries. The Company's primary products support, protect, connect,
terminate and secure cables and wires. The Company also manufactures a line of
products serving the voice and data transmission markets. The Company's goal is
to continue to achieve profitable growth as a leader in the innovation,
development, manufacture and marketing of technically advanced products and
services related to energy, communications and cable systems and to take
advantage of this leadership position to sell additional quality products in
familiar markets.

The Company serves a worldwide market through strategically located
domestic and international manufacturing facilities. Each of the Company's
domestic manufacturing facilities and many of the Company's foreign
manufacturing facilities are International Standards Organization ("ISO") 9001
certified. The ISO 9001 certification is an internationally recognized quality
standard for manufacturing and assists the Company in marketing its products in
certain markets. The Company's customers include public and private energy
utilities and communication companies, cable operators, financial institutions,
governmental agencies, original equipment manufacturers, contractors and
subcontractors, distributors and value-added resellers. The Company is not
dependent on a single customer or a few customers. No single customer accounts
for more than ten percent of the Company's consolidated revenues.

The Company's products include:

- Formed Wire and Related Hardware Products

- Protective Closures

- Data Communication Interconnection Devices

Formed Wire Products are used in the energy, communications and cable
industries to support, protect, terminate and secure both power conductor and
communication cables and to control cable dynamics (e.g., vibration). These
products are based on the principle of forming a variety of stiff wire materials
into a helical (spiral) shape. Advantages of using the Company's helical formed
wire products are that they are economical, and dependable and easy to use. The
Company introduced formed wire products to the power industry over 50 years ago
and such products enjoy an almost universal acceptance in the Company's markets.
Formed wire and related hardware products are approximately 47%, 44%, and 50% of
the Company's revenues in 2000, 2001 and 2002, respectively.

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Protective Closures, including splice cases, are used to protect copper
cable or fiber optic cable from moisture, environmental hazards and other
potential contaminants. Protective closures are approximately 29%, 34% and 28%
of the Company's revenues in 2000, 2001 and 2002, respectively.

Data Communication Interconnection Devices are products used in
high-speed data systems to connect electronic equipment. Data communication
interconnection devices are approximately 24%, 22% and 22% of the Company's
revenues in 2000, 2001 and 2002, respectively.

CORPORATE HISTORY

The Company was incorporated in Ohio in 1947 to manufacture and sell
helically shaped "armor rods," which are sets of stiff helically shaped wires
applied on an electrical conductor at the point where it is suspended or held.
Thomas F. Peterson, the Company's founder, developed and patented a unique
method to manufacture and apply these armor rods to protect electrical
conductors on overhead power lines. Over a period of years Peterson and the
Company developed, tested, patented, manufactured and marketed a variety of
helically shaped products for use by the electrical and telephone industries.
Although all of the Peterson patents have now expired, those patents served as
the nucleus for licensing the Company's formed wire products abroad.

The success of the Company's formed wire products in the United States
led to expansion abroad. The first international license agreement was
established in the mid-1950s in Canada. In the late 1950s the Company's products
were being sold through joint ventures and licensees in Canada, England,
Germany, Spain and Australia. Additionally, the Company began export operations
and promoted products into other selected offshore markets. The Company
continued its expansion program, bought out most of the original licensees, and,
by the mid-1990s, had complete ownership of operations in Australia, Brazil,
Canada, Great Britain, South Africa and Spain and held a minority interest in
two joint ventures in Japan.

Recognizing the need for a stronger presence in the fast growing Asian
market, in 1996 the Company also formed a joint venture in China and, in 2000,
became sole owner of this venture. All of the Company's international
subsidiaries operate as independent business units with the necessary
infrastructure (manufacturing, engineering, marketing and general management) to
support local business activities. Each is staffed with local personnel at all
levels to ensure that the Company is well versed in local business practices,
cultural constraints, technical requirements and the intricacies of local client
relationships.

In 1968, the Company expanded into the underground telecommunications
field by acquisition of the Smith Company located in California. The Smith
Company had a patented line of buried closures and pressurized splice cases.
These closures and splice cases protect copper cable openings from environmental
damage and degradation. The Company continued to build on expertise acquired
through the acquisition of the Smith Company and in 1995 introduced the highly
successful Coyote closure line of products. Since 1995 nine domestic and three
foreign patents have been granted to the Company on the Coyote closure. None of
the Coyote patents have expired. The earliest Coyote patent was filed in April
1995 and will not expire until April 2015.

In 2001, the Company introduced its new Armadillo closure, a plastic
pressurized underground, buried and aerial splice case for copper voice, data
and video cables. This new product is an alternative to the Company's stainless
steel splice case, which for over 30 years has set an industry standard for
waterproof, re-enterable underground and buried closures and aerial
applications.

In 1993, the Company purchased the assets of Superior Modular Products
Company. Located in Asheville, North Carolina, Superior Modular Products is a
technical leader in the development and manufacture of high-speed
interconnection devices for voice, data and video applications. This acquisition
was the catalyst to expand the Company's range of communication products to
components for structuring cabling systems used inside a customer's premises.

In 2000, the Company acquired Rack Technologies Pty., Limited,
headquartered in Sydney, Australia. Rack Technologies is a specialist
manufacturer of rack system enclosures for the communications, electronics and
securities industries. This acquisition complements and broadens the Company's
existing line of data communication products used inside a customer's premises.

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The Company's corporate headquarters is located at 660 Beta Drive,
Mayfield Village, Ohio 44143. Telephone number (440) 461-5200.

BUSINESS

The demand for the Company's products comes primarily from new
customers, maintenance and repair construction for the energy industry,
communication and data communication customers. Over the past several years a
significant portion of the Company's growth has been generated by customers of
the Company's power transmission and fiber optic products. Maintenance
construction by the Company's customers use many of the Company's products,
including formed wire products, to revitalize the aging outside plant
infrastructure. Many of the Company's products are used on a proactive basis by
the Company's customers to reduce and prevent lost revenue. A single
malfunctioning line could cause the loss of thousands of dollars per hour for a
power or communication customer. A malfunctioning fiber cable could also result
in substantial revenue loss. Repair construction by the Company's customers
generally occurs in the case of emergency or natural disasters, such as
hurricanes, tornadoes, earthquakes, floods or ice storms. Under these
circumstances, the Company provides 24-hour service to get the repair products
to customers as quickly as possible.

The Company has adapted the formed wire products' helical technology
for use in a wide variety of fiber optic cable applications that have special
requirements. The Company's formed wire products are uniquely qualified for
these applications due to the gentle gripping over a greater length of the fiber
cable. This is an advantage over traditional pole line hardware clamps that
compress the cable to the point of possible fatigue and optical signal
deterioration.

The Company's protective closures and splice cases are used to protect
cable from moisture, environmental hazards and other potential contaminants. The
Company's splice case is an easily re-enterable closure that allows utility
maintenance workers access to the cable splice closure to repair or add
communications services. Over the years, the Company has made many significant
improvements in the splice case that have greatly increased its versatility and
application in the market place. The Company also designs and markets custom
splice cases to satisfy specific customer requirements. This has allowed the
Company to remain a strong partner with several primary customers and has earned
the Company the reputation as a responsive and reliable supplier.

In the early 1980s, fiber optic cable was first deployed in the outside
plant environment. Through fiber optic technologies, a much greater amount of
both voice and data communication can be transmitted reliably. In addition, this
technology solved the cable congestion problem that the large count copper cable
was causing in underground, buried and aerial applications. The Company
developed and adapted copper closures for use in the emerging fiber optic world.
In the late 1980s, the Company developed a series of splice cases designed
specifically for fiber application. In the mid-1990s, the Company developed its
plastic Coyote closure. The Coyote closure is an example of the Company
developing a new line of proprietary products to meet the changing needs of its
customers.

The Company also designs and manufactures data communication
interconnect devices and enclosures for data communications networks, offering a
comprehensive line of copper and fiber optic cross-connect systems. The product
line offers a comprehensive network system within a building or premise.

JOINT VENTURES AND LICENSE AGREEMENTS

The Company is currently a minority partner in two joint ventures in
Japan, holding a 49% ownership interest in Japan PLP Co. LTD. and a 24%
ownership interest in Toshin Denko Kabushiki Kaisha. Neither of these joint
ventures is believed to be significant to the Company's overall business. The
Company receives royalties under fifteen separate license agreements. The
Company does not believe that its business is materially dependent on any one
license agreement.

MARKETS

The Company markets its products to the energy, communications, cable
provider and information (data communication) industries. While rapid changes in
technology have blurred the distinctions between telephone,

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cable, and data communication, the energy industry is clearly separate. The
Company's role in the energy industry is to supply formed wire products and
related hardware used with the electrical conductors, cables and wires that
transfer power from the generating facility to the ultimate user of that power.
Formed wire products are used to support, protect, terminate and secure both
power conductor and communication cables and to control cable dynamics.

Electric Utilities - Transmission. The electric transmission grid is
the interconnected network of high voltage aluminum conductors used to transport
large blocks of electric power from generating facilities to distribution
networks. Currently, there are three major power grids in the United States: the
Eastern Interconnect, the Western Interconnect and the Texas Interconnect.
Virtually all electrical energy utilities are connected with at least one other
utility by one of these major grids. The Company believes that the transmission
grid has been neglected throughout much of the United States for more than a
decade. Additionally, because of deregulation, many electric utilities have
turned this responsibility over to Independent System Operators (ISOs), who have
also been slow to add transmission lines. With demand for power now exceeding
supply in some areas, the need for the movement of bulk power from the
energy-rich states to the energy-deficient areas means that new transmission
lines will likely be built and many existing lines will likely be refurbished.
In addition, consolidations are also driving the demand for new transmission
lines, because merged utilities need to tie their systems together. The Company
believes that this will generate growth for the Company's products in this
market over at least the next several years. In addition, construction of
international transmission grids is occurring in many regions of the world.
However, consolidation in the markets the Company services may also have an
adverse impact on the Company's revenues.

Electric Utilities - Distribution. The distribution market includes
those utilities that distribute power from a substation where voltage is reduced
to levels appropriate for the consumer. Unlike the transmission market in this
era of deregulation, distribution is still handled primarily by local electric
utilities. These utilities are motivated to reduce cost in order to maintain and
enhance their profitability. The Company believes that its growth in the
distribution market will be achieved primarily as a result of incremental gains
in market share driven by emphasizing the Company's quality products and service
over price. Internationally, in the developing regions there is increasing
political pressure to extend the availability of electricity to additional
populations.

Communication and Cable. The communications and cable industries have
seen a major reduction in new and maintenance related construction both
domestically and worldwide over the past 18 months. Major developments,
including the Internet and other high-speed data communications technologies,
ongoing convergence between the cable and communications industries, and demand
for enhanced communications services, have led to a changing regulatory and
competitive environment in many markets throughout the world. The deployment of
new metro networks and improvements to existing networks for advanced
applications has also stopped or been put on hold for the foreseeable future.

Cable operators, local communications operators and power utilities are
building, rebuilding or upgrading signal delivery networks in developing
countries. These networks are designed to deliver video and voice transmissions
and provide Internet connectivity to individual residences and businesses.
Operators deploy a variety of network technologies and architectures, to carry
broadband and narrowband signals. These architectures are constructed of
electronic hardware connected via coaxial cables, copper wires or optic fibers.
The Company manufactures closures that these industries use when they require
connections or splice housings in a secure, protective closure and cable
management connectivity systems.

As critical components of the outdoor infrastructure, closures provide
protection against weather and vandalism and permit ready access to devices for
technicians who maintain and manage the system. Cable operators and local
telephone network operators place great reliance on manufacturers of protective
closures because any material damage to the signal delivery networks is likely
to disrupt communications services. In addition to closures, the Company
supplies the communication and cable industry with its formed wire products to
hold, support, protect and terminate the copper wires and cables and the fiber
optic cables used by that industry to transfer voice or data signals.

The industry is finding new technological methods to increase the usage
of copper-based plant through high-speed digital subscriber lines (DSLs). The
primary driver of this increase is the Internet and data-related communications.
The Company has been actively pursuing the development of products for the
communication

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operating companies, the Inter-Exchange Carriers (IXCs), and the
Competitive Local Exchange Carriers (CLECs), as well as cable operator
companies.

Data Communication. The data communication market is being driven by
the continual demand for increased bandwidth. Growing Internet Service Providers
(ISPs), construction in Wide Area Networks (WANs) and demand for data
communication in the workplace are all key elements to the increased demand for
the connecting devices made by the Company. This market will increasingly be
focused on the systems that provide the highest speed and highest quality
signal, such as fiber optic and copper networks. The Company's connecting
devices are sold to a number of categories of customers including (i) original
equipment manufacturers (OEMs), which use the Company's "patch panels" to make
their electronic components, (ii) ISPs, (iii) large companies and organizations
which have their own LAN (local area network) for data communication, and (iv)
national and international distributors of electronic products for use in the
above markets.

Other Markets. The Company's formed wire products can also be used in
other industries which require a method of securing or terminating cables,
including the metal building and tower and antenna industries, the arborist
industry, and various applications within the marine systems industry. Products
other than formed wire products are also marketed to other industries. For
example, the Company's urethane capabilities allow it to market products to the
light rail industry. The Company continues to explore new and innovative uses of
its manufacturing capabilities; however, these markets remain a small portion of
overall consolidated sales.

FOREIGN OPERATIONS

Except for geography, the foreign business segment of the Company is
essentially the same as its domestic business. It manufactures in its foreign
plants the same types of products as are sold domestically, it sells to the same
types of customers and faces the same types of competition (and in some cases
the same competitors). Sources of supply of raw materials are not significantly
different internationally. See Note K to the Consolidated Financial Statements
for information relating to certain foreign and domestic financial data of the
Company.

While a number of the Company's foreign plants are in developed
countries, the Company believes it has strong market opportunities in developing
countries, in particular, China, where the need for the transmission and
distribution of electrical power is significant. The Company is now serving the
Far East market, other than China and Japan, primarily from Australia. In
addition, as the need arises, the Company is prepared to establish new
manufacturing facilities abroad. For example, in January 2001 the Company moved
its Mexican manufacturing operations from a leased facility in Mexico City,
Mexico to a newly constructed facility in Queretaro, Mexico.

SALES AND MARKETING

Nationally and internationally, the Company markets its products
through a direct sales force and manufacturer's representatives. The latter are
independent organizations that represent the Company as well as other
complementary product lines. These organizations are paid a commission based on
the sales amount. The direct sales force is employed by the Company and works
with the manufacturer's representatives as well as key direct accounts and
distributors, who also buy and resell the Company's products.

RESEARCH AND DEVELOPMENT

The Company is committed to providing technical leadership through
scientific research and product development in order to continue to expand the
Company's position as a supplier to the communications and power industries.
Research is conducted on a continuous basis using internal experience in
conjunction with outside professional expertise to develop state-of-the-art
materials for all of the Company's products that capitalize on cost-efficiency
while offering exacting mechanical performance that meets or exceeds industry
standards. The Company's research and development activities have resulted in
numerous patents being issued to the Company (see "Patents" below).

Early in its history the Company recognized the need to understand the
performance of its products and the needs of its customers. To that end, the
Company developed its own Research and Engineering Center in Cleveland, Ohio.
Using the Research and Engineering Center, engineers and technicians could
simulate a wide range of

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external conditions encountered by the Company's products to ensure
quality, durability and performance. The work performed in the Research and
Engineering Center included advanced studies and experimentation with various
forms of vibration. This work has contributed significantly to the collective
knowledge base of the industries the Company serves and is the subject matter of
many papers and seminars presented to these industries. The Company also
developed the industry's first mobile testing laboratory, the Dynalab, to
monitor the phenomena affecting overhead conductor, wire and cable, allowing the
Company's sales representatives to work directly with customers in the field for
training, problem identification and problem solving.

In 1979, the Company relocated and expanded its Research and
Engineering Center as a 29,000-square-foot addition to its World Headquarters in
Mayfield Village, Ohio. The Company believes that this facility is one of the
most sophisticated in the world in its specialized field. The expanded Research
and Engineering Center also has an advanced prototyping technology machine
on-site to develop models of new designs where intricate part details are
studied prior to the construction of expensive production tooling. Today, the
Company's reputation for vibration testing, tensile testing, fiber optic cable
testing, environmental testing, field vibration monitoring and third-party
contract testing is a major asset. In addition to testing, the work done at the
Company's Research and Development Center continues to fuel product development
efforts. For example, the Company estimates that approximately 15% to 20% of
2002 revenues were attributed to products developed by the Company in the past
five years. In addition, the Company's position in the industry is further
reinforced by its long-standing leadership role in many key international
technical organizations including IEEE (Institute of Electrical and Electronics
Engineers), CIGRE (Counsiel Internationale des Grands Reseaux Electriques a
Haute Tension), and IEC (International Electromechanical Commission). These
organizations are charged with the responsibility of establishing industrywide
specifications and performance criteria. See Note A to the Consolidated
Financial Statements for information relating to the Company's research and
development expenses in 2000, 2001 and 2002.

PATENTS

The Company applies for patents in the United States and other
countries, as appropriate, to protect its significant patentable developments.
As of December 31, 2002, the Company had in force 57 U.S. patents and 20 foreign
patents in 16 countries and had pending 15 U.S. patent applications and 12
foreign applications. While such domestic and foreign patents expire from time
to time, the Company continues to apply for and obtain patent protection on a
regular basis. Patents held by the Company in the aggregate are of material
importance in the operation of the Company's business. The Company, however,
does not believe that any single patent, or group of related patents, is
essential to the Company's business as a whole or to any of its businesses.
Additionally, the Company owns and uses a substantial body of proprietary
information and numerous trademarks. The Company relies on nondisclosure
agreements to protect trade secrets and other proprietary data and technology.
As of December 31, 2002, the Company had obtained U.S. registration on 34
trademarks and one trademark application remained pending. Foreign registrations
amounted to 142 registrations in 37 countries, with 21 pending foreign
registrations.

Since June 8, 1995, United States patents have been issued for terms of
20 years beginning with the date of filing of the patent application. Prior to
that time, a U.S. patent had a term 17 years from the date of its issuance.
Patents issued by foreign countries generally expire 20 years after filing. U.S.
and foreign patents are not renewable after expiration of their initial term.
U.S. and foreign trademarks are generally speaking perpetual, renewable in
10-year increments upon a showing of continued use. To the knowledge of
management the Company has not been subject to any significant allegation or
charges of infringement of intellectual property rights by any organization.

In the normal course of business, the Company from time to time makes
and receives inquiries with regard to possible patent and trademark
infringement. The extent of such inquiries from third parties has been limited
to verbal remarks to Company representatives at industry trade shows. The
Company believes that it is unlikely that the outcome of these inquiries will
have a material adverse effect on the Company's financial position.

COMPETITION

All of the markets that the Company serves are highly competitive. In
each market the principal methods of competition are price, performance, and
service. The Company believes, however, that several factors (described below)
provide the Company with a competitive advantage.

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- 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 Cleveland, Ohio and
departments of 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, continually upgrading equipment and increasing
warehouse space.

- 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 has become a hallmark of the Company.

- The Company's 15 manufacturing locations ensure close support and
proximity to customers worldwide.

Domestically, there are two competitors for formed wire products.
Although it has other competitors in many of the countries where it has plants,
the Company has leveraged its expertise and is very strong in the global market.
The Company believes that it is the world's largest manufacturer of formed wire
products. However, the Company's formed wire products compete against other pole
line hardware products manufactured by other companies.

Minnesota Manufacturing and Mining Company ("3M") is the primary
domestic competitor of the Company for pressurized copper closures. The Company
believes that 3M's market share for pressurized closures exceeds that of the
Company. Based on its experience in the industry, the Company believes its
market share exceeds 30%. Internationally, with the exception of Canada, the
Company is just beginning to enter the closure market. The fiber optic closure
market is one of the most competitive product areas for the Company, with the
Company competing against, among others, Tyco International Ltd. and 3M. There
are a number of primary competitors and several smaller niche competitors that
compete at all levels in the marketplace. The Company believes that it is one of
four leading suppliers of fiber optic closures.

The Company's data communication competitors range from assemblers of
low cost, low quality components, to well-established multinational
corporations. The Company's competitive strength is its technological leadership
and worldwide presence. Additionally, the Company provides product to its
licensees and other companies on a privately branded basis. Patented technology
developed by the Company is currently licensed to many of its largest
competitors. Low-cost Asian competitors, however, keep pressure on prices and
will continue to do so.

SOURCES AND AVAILABILITY OF RAW MATERIALS

The principal raw materials used by the Company are galvanized wire,
stainless steel, aluminized steel wire, aluminum re-draw rod, plastic
(polyethylene and PVC) resins, glass-filled plastic compounds, neoprene rubbers
and aluminum ingots. The Company also uses certain other materials such as
fasteners, packaging materials and communications cable. The Company believes
that it has adequate sources of supply for the raw materials used in its
manufacturing processes and it regularly attempts to develop and maintain
sources of supply in order to extend availability and encourage competitive
pricing of these products.

Most plastic resins are purchased under annual contracts to stabilize
costs and improve delivery performance and are available from a number of
reliable suppliers. Aluminized steel wire and aluminum re-draw rod are purchased
in standard stock diameters and coils under annual contracts available from a
number of reliable suppliers. Rolled stainless steel is purchased under annual
contracts. Glass-filled plastic compound is purchased under an annual blanket
contract with GE Polymerland. The Company has substantially completed the final

9

qualification for alternatives to the glass-filled plastic compound purchased
from GE Polymerland in order to improve the Company's cost control efforts.

The Company also relies on certain other manufacturers to supply
products that complement the Company's product lines, such as aluminum and
ferrous castings, fiber optic cable and connectors, circuit boards and various
metal racks and cabinets. The Company believes there are multiple sources of
supply for these products.

There have been no shortages in materials that have had a material
adverse effect on the business, and none are expected.

BACKLOG ORDERS

The Company's backlog is not material. The Company's order backlog
generally represents two to four weeks of sales. All customer orders entered are
firm at the time of entry. Substantially all orders are shipped within a two to
four week period unless the customer requests an alternative date.

SEASONALITY

The Company markets products that are used by utility maintenance and
construction crews worldwide. The products are marketed through distributors and
directly to end users, who maintain stock to ensure adequate supply for their
customers and construction crews. As a result, the Company does not have wide
variation in sales from quarter to quarter.

ENVIRONMENTAL

The Company is subject to extensive and changing federal, state, and
local environmental laws, including laws and regulations that (i) relate to air
and water quality, (ii) impose limitations on the discharge of pollutants into
the environment, (iii) establish standards for the treatment, storage and
disposal of toxic and hazardous waste, and (iv) require proper storage,
handling, packaging, labeling, and transporting of products and components
classified as hazardous materials. Stringent fines and penalties may be imposed
for noncompliance with these environmental laws. In addition, environmental laws
could impose liability for costs associated with investigating and remediating
contamination at the Company's facilities or at third-party facilities at which
the Company has arranged for the disposal treatment of hazardous materials.

Although no assurances can be given, the Company believes it is in
compliance in all material respects with all applicable environmental laws and
the Company is not aware of any noncompliance or obligation to investigate or
remediate contamination that could reasonably be expected to result in a
material liability. The Company does not expect to make any material capital
expenditure during 2003 for environmental control facilities. The environmental
laws continue to be amended and revised to impose stricter obligations, and
compliance with future additional environmental requirements could necessitate
capital outlays. However, the Company does not believe that these expenditures
should ultimately result in a material adverse effect on its financial position
or results of operations. The Company cannot predict the precise effect such
future requirements, if enacted, would have on the Company, although the Company
believes that such regulations would be enacted over time and would affect the
industry as a whole.

EMPLOYEES

At December 31, 2002, the Company and its consolidated subsidiaries had
1,344 employees. Approximately 52% of the Company's employees are located in the
United States.

ITEM 2. PROPERTIES

The Company currently owns or leases 16 facilities, which together
contain approximately 1.4 million square feet of manufacturing, warehouse,
research and development, sales and office space worldwide. Most of the
Company's international facilities contain space for offices, research and
engineering (R&E), warehousing and

10

manufacturing with manufacturing using a majority of the space. The
following table provides information regarding the Company's facilities:

LOCATION USE OWNED/LEASED SQUARE FEET
-------- --- ------------ -----------

1. Mayfield Village, Ohio Corporate Headquarters Owned 62,000
Research and Engineering
Center

2. Rogers, Arkansas Manufacturing Owned 310,000
Warehouse
Office

3. Charlotte, North Carolina Manufacturing Leased 9,000

4. Albemarle, North Carolina Manufacturing Owned 261,000
Warehouse
Office

5. Asheville, North Carolina Manufacturing Owned 46,300
R&E
Warehouse
Office

6. Sydney, Australia Manufacturing Leased 17,200
R&E
Warehouse
Office

7. Sydney, Australia Manufacturing Owned 90,950
R&E
Warehouse
Office

8. Sao Paulo, Brazil Manufacturing Owned 146,250
R&E
Warehouse
Office

9. Cambridge, Ontario, Canada Manufacturing Owned 70,450
Warehouse
Office

10. Andover, Hampshire, England Manufacturing Owned 88,770
R&E
Warehouse
Office

11. Queretaro, Mexico Manufacturing Owned 50,000
Warehouse
Office

12. Pietermaritzburg, South Africa Manufacturing Owned 74,200
R&E
Warehouse
Office

11

13. Sevilla, Spain Manufacturing Owned 74,000
R&E
Warehouse
Office

14. Beijing, China Manufacturing Owned 37,700
Warehouse
Office

15. Lower Huff, New Zealand Manufacturing Leased 10,350
Warehouse
Office

16. Glenrothes Fife, Scotland Manufacturing Leased 30,000
Warehouse
Office

ITEM 3. LEGAL PROCEEDINGS

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

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matter was submitted to a vote of the security holders of the
Registrant during the quarter ended December 31, 2002.

EXECUTIVE OFFICERS OF THE REGISTRANT

Name Age Position
- ----------------------- ------- ------------------------------------------------

Jon R. Ruhlman 75 Chairman of the Company
Robert G. Ruhlman 46 President and Chief Executive Officer
R. Jon Barnes 50 Vice President - Marketing and Sales
Eric R. Graef 50 Vice President - Finance and Treasurer
William H. Haag 39 Vice President - International Operations
Robert C. Hazenfield 49 Vice President - Research and Engineering
J. Cecil Curlee Jr. 46 Vice President - Human Resources

The following sets forth the name and recent business experience for
each person who is an executive officer of the Company at March 1, 2003.

Jon R. Ruhlman has been the Chairman of the Company since 1975. He
served as Chief Executive Officer from 1975 until July 2000. Jon R. Ruhlman
joined the Company in 1954 as an engineer in the Company's Research and
Engineering Center. He has served as a Director of the Company since 1956.

Robert G. Ruhlman became Chief Executive Officer in July 2000. He had
served as President since 1995 (a position he continues to hold) and Chief
Operating Officer from 1995 until July 2000. Robert G. Ruhlman joined the
Company in 1979 as an engineer in the Company's former Marine Products Division.
He served as Vice President, Corporate Planning from 1989 until becoming
Executive Vice President in 1992. He has served as a Director of the Company
since 1992.

12

R. Jon Barnes was elected Vice President--Marketing and Sales in
January 1998.

Eric R. Graef was elected Vice President--Finance and Treasurer in
December 1999. Prior to that time, Mr. Graef was employed by The Lubrizol
Corporation, a $1.7 billion specialty chemical manufacturer, in various
financial positions from 1986 until rejoining the Company in December 1999. Mr.
Graef was previously employed by the Company from 1978 through 1986.

William H. Haag was elected Vice President--International Operations in
April 1999. From January 1997 until January 1999 he was Regional Operations
Manager and from January 1999 until April 1999 he was director of International
Regional Operations.

Robert C. Hazenfield has served as Vice President--Research and
Engineering since April 1998. He served as Director of Research and Engineering
from January 1998 until April 1998.

J. Cecil Curlee Jr. was hired in 1982 in the position of Personnel
Manager at the Albemarle, North Carolina facility. He was promoted to Director
of Employee Relations in September 2002 and was elected Vice President, Human
Resources in January 2003.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON SHARES AND RELATED SHAREHOLDER MATTERS

The Company's Common Shares are traded on NASDAQ under the trading
symbol "PLPC". As of March 17, 2003, the Company had approximately 223
shareholders of record. The following table sets forth for the periods indicated
(i) the high and low closing sale prices per share of the Company's Common
Shares as reported by the NASDAQ and the over-the-counter market (OTC) under the
symbol "PLIN" and (ii) the amount per share of cash dividends paid by the
Company. The Company's Common Shares began trading on the NASDAQ on September
18, 2001. The OTC Common Share price history below is based on the high and low
selling price as quoted by McDonald Investments, Inc. a market maker for the
Company's Common Shares. The quotations do not reflect adjustments for retail
markups, markdowns or commissions and may not necessarily reflect actual
transactions.

While the Company expects to continue to pay dividends of a comparable
amount in the near term, the declaration and payment of future dividends will be
made at the discretion of the Company's Board of Directors in light of then
current needs of the Company. Therefore, there can be no assurance that the
Company will continue to make such dividend payments in the future.

Years Ended
-------------------------------------------------------------------------------
December 31, 2002 December 31, 2001
--------------------------------------- ------------------------------------
Quarter High Low Dividend High Low Dividend
- ---------------------------------------------------------------------------------------------------

First $ 20.25 $ 18.25 $ 0.20 $ 17.25 $ 13.00 $ 0.15
Second 20.45 18.15 0.20 22.00 13.88 0.20
Third 20.23 16.80 0.20 21.00 17.00 0.20
Fourth 19.70 15.65 0.20 19.50 14.50 0.20

EQUITY COMPENSATION PLAN INFORMATION

The information required by Item 201(d) of Regulation S-K is set forth
in Note G to the Notes to Consolidated Financial Statements.

13

ITEM 6. SELECTED FINANCIAL DATA

Year ended December 31
------------------------------------------------------------------------
2002 2001 2000 1999 1998
------------------------------------------------------------------------
Thousands of dollars, except per share data

Net Sales and Income
Net sales $ 169,842 $ 196,365 $ 207,332 $ 195,245 $ 216,244
Operating income (loss) (426) 7,571 18,805 14,155 27,952
Income (loss) before income taxes (579) 7,432 17,135 14,729 28,464
Net income (loss) (1,140) 5,176 11,051 10,201 19,006

Per Share Amounts*
Net income (loss) - basic and diluted $ (0.20) $ 0.90 $ 1.91 $ 1.71 $ 3.10
Dividends declared 0.80 0.75 0.60 0.60 0.58
Shareholders' equity 19.76 20.98 21.47 20.45 19.91

Other Financial Information
Current assets $ 78,522 $ 83,230 $ 87,783 $ 84,531 $ 84,250
Total assets 144,784 161,190 170,611 159,664 157,717
Current liabilities 23,954 37,638 26,244 24,790 24,002
Long-term debt 5,847 2,341 20,160 14,507 11,110
Shareholders' equity 114,096 120,780 123,856 119,194 121,776

* Reflects adjustment for two-for-one stock split effected in the form of a 100%
stock dividend on June 10, 1998.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

BUSINESS ENVIRONMENT

The evolving regulatory environment in the energy and communication
sectors over the last several years has forced the incumbent energy and
communications service providers to share their networks with competitors. The
effect of this policy has been twofold. It has discouraged start-up businesses
from building their own networks, instead allowing them to piggyback on
incumbent networks at low costs. Meanwhile, incumbents bear the full burden of
the cost of maintaining the networks that they are forced to share in the face
of increased competition. The result has severely limited the amount of capital
these companies invest in both new construction and maintaining the existing
infrastructure.

The regional Bell telephone companies (Bells) are the Company's primary
customers in the telecommunications market. The recent Federal Communications
Commission (FCC) ruling dictated that these Bells must continue leasing their
lines to rivals such as WorldCom and AT&T Corp. The Bells claim that the lease
rates are below their cost of providing service. Consequently, the incentive for
the Bells to increase capital investment is minimized. However, the FCC eased
the old regulation requiring the Bells to share their high-speed lines with
their competitors. This increases the possibility that the Bells will become
more aggressive in providing broadband equipment and lines to homes.

One of the major communication market sectors that was hit the hardest
was the fiber optic infrastructure. During the late 1990s, a tremendous amount
of fiber optic construction was driven by the assumption that capacity was
required to manage an Internet economy with endless potential for growth. But by
2001, it became apparent that such expectations were exaggerated, and dot-com
era optimism gave way to the realization that there was a major overbuild in the
fiber optic infrastructure. The boom in construction resulted in significant
fiber capacity that was not being fully utilized. Current estimates show it may
be years before this excess capacity is absorbed and additional construction
projects get under way.

A worldwide telecom recession, added competition from the burgeoning
cell-phone industry, overblown expectations and optimism from the dot-com era, a
glut of fiber optic infrastructure and the irregularities in business practices
of certain communications companies contributed to the contraction of this
market over the last several years.

14

Many of the Company's customers in the energy and communications
markets contend with very high debt burdens, which have resulted in numerous
bankruptcies, employee reductions and shrinking capital budgets.

OVERVIEW

The Company's 2002 results continued to deteriorate as a result of the
foregoing and, in particular, the lack of capital spending in the energy, fiber
optic cable, and telecommunications markets during 2002. Net sales and the
resulting gross profit decreased 14% from the previous year. Sales in the Asia
Pacific markets increased while sales in the North and South American
marketplace decreased. Domestic sales accounted for approximately 66% of the
decrease in consolidated sales as the communications markets (fiber optic and
data communication) continued to contract. Latin American sales accounted for
approximately 33% of the decrease as a result of the present governmental
climate and the softness of their currency compared to the U.S. dollar. Changes
in translation rates accounted for a $1.9 million reduction in sales.

During the third quarter of 2002, the Company recorded pre-tax
abandonment charges of $4.7 million related to its European data communications
operations. This entails winding down a manufacturing operation, closing five
sales offices, terminating leases and reducing personnel by approximately 130.
This action was taken as a result of the continuing decline in the global
telecommunication and data communication markets and after failing to reach
agreement on an acceptable selling price on product supplied to a significant
foreign customer. Approximately $3.3 million of the charge is related to asset
write-downs, of which $2.1 million of inventory write-offs were recorded in Cost
of products sold and $1.2 million of write-offs related to receivables were
included in Costs and expenses on the Statements of Consolidated Operations. The
remaining $1.4 million of the charge, included in Cost of products sold and
Costs and expenses, relates to cash outlays for employee severance cost, cost of
exiting leased facilities, the termination of other contractual obligations and
transitional costs. Approximately $.5 million of the latter category of expenses
was expended as of December 31, 2002, and the remaining cash outlays are
anticipated to be completed by June 30, 2003. Other unusual charges recorded
during the year included a $1.6 million asset impairment charge in accordance
with Statement of Financial Accounting Standards (SFAS) No.142, Goodwill and
Other Intangible Assets, a charge of $.8 million to expense premiums paid in
excess of cash surrender value on life insurance policies and a charge of $.5
million related to the cumulative translation adjustment for the abandoned
operation. These unusual charges, which the Company believes to be one-time
charges, reduced pretax income by $7.6 million and resulted in a reported loss
of $1.1 million or $.20 per share in 2002.

During the third quarter of 2001, the Company recorded realignment
charges related to its data communication business that resulted in a pre-tax
charge of $3.1 million. These charges related to abandoning a three-year effort
to enter the domestic market for local area network hubs and media converters
and re-evaluation of the strategy for penetrating the Asia-Pacific market with
its data communication products. The pre-tax charge of $3.1 million consisted
of: $2.0 million of inventory write-offs (included in Cost of products sold);
$.7 million write-down of assets (included in Costs and expenses); and $.4
million in severance payments, lease cancellations and related expenses
(included in Costs and expenses).

The following table sets forth the Company's summarized results of
operations for 2002 and 2001, deducting the unusual charges and realignment
charges to arrive at amounts that are comparable. See Notes I and J in the Notes
to Consolidated Financial Statements for a detailed discussion of these charges.
These comparable results will be used to discuss 2002 results of operations
compared to 2001. The Company believes this presentation provides greater
clarity of the impact of the unusual charges on reported results by caption,
allowing for a more thorough discussion of the remaining fluctuations in the
results of operations by the Company's domestic and foreign segments.

15

Year ended December,
--------------------------------------------------------------------------------------------
2002 2001
------------------------------------------- -------------------------------------------
Thousands of dollars, except per share data

Business
Reported Unusual Comparable Reported Realignment Comparable
Results Charges Results Results Charges Results

NET SALES AND INCOME (LOSS)
Net sales $ 169,842 - $ 169,842 $ 196,365 - $ 196,365
Gross profit 50,669 2,580 53,249 59,099 1,988 61,087

Costs and expenses
Selling 21,870 714 21,156 24,924 287 24,637
General and administrative 22,346 1,534 20,812 20,815 170 20,645
Research and engineering 5,604 - 5,604 6,236 17 6,219
Other operating (income) expense 1,020 1,171 (151) 1,568 659 909
Asset impairment 1,621 1,621 - - - -
----------- ------------- ------------ ----------- ------------- ------------
52,461 5,040 47,421 53,543 1,133 52,410

Royalty income - net 1,366 - 1,366 2,015 - 2,015
----------- ------------- ------------ ----------- ------------- ------------

Operating income (loss) (426) 7,620 7,194 7,571 3,121 10,692

Other expense (153) - (153) (139) - (139)
----------- ------------- ------------ ----------- ------------- ------------

Income (loss) before income tax (579) 7,620 7,041 7,432 3,121 10,553

Income tax 561 1,957 2,518 2,256 1,092 3,348
----------- ------------- ------------ ----------- ------------- ------------

Net income (loss) (1,140) 5,663 4,523 5,176 2,029 7,205
=========== ============= ============ =========== ============= ============

PER SHARE AMOUNTS, BASIC AND DILUTED
Net income (loss) $ (0.20) $ 0.98 $ 0.78 $ 0.90 $ 0.35 $ 1.25

2002 RESULTS OF OPERATIONS COMPARED TO 2001

In 2002 consolidated net sales were $169.8 million, a decrease of $26.5
million, or 14%, from 2001.

Domestic net sales of $95.8 million decreased $17.4 million, or 15%,
due primarily to the continued softness in the data communication market and the
collapse of the fiber optic cable market. Lower sales volume accounted for the
majority of this decrease. The Company does not anticipate a significant
favorable change from the present conditions in the data communication, fiber
optic cable and related communication markets in the near term. Although the
current market has contracted significantly, the Company believes that it has
been able to maintain its market position by maintaining its existing customers
while cultivating new ones. The Company believes that eventually the pent-up
requirement to repair, replace and upgrade the current domestic infrastructure
in the energy and communication markets, together with the construction
initiatives to connect homes and businesses to the fiber optic cable in order to
recover initial investments made in the fiber infrastructure, will lead to an
expansion in the fiber optic, telecommunication, and energy markets served by
the Company. The Company is developing several new products and modifying
existing products in order to take advantage of the anticipated communication
market expansion. However, no assurance can be given as to when the anticipated
demand will materialize or that it will materialize at all.

16

Foreign net sales of $74 million decreased $9.1 million, or 11%,
compared to last year. A decrease in sales in Latin American countries as a
result of governmental reductions of capital expenditures for the improvement
and expansion of communication and energy grids accounted for 75% of the
decrease in foreign sales. The weakening of certain Latin American currencies
against the U.S. dollar accounted for 21% of the decrease in foreign sales.
These sales decreases, coupled with $2.9 million lower foreign data
communication sales, were partially offset by sales increases in the Asia
Pacific and Western European regions. No individual foreign country accounted
for 10% or more of the Company's consolidated net sales. Presently, the Latin
American economic and political environment continues to be of concern and the
Company has taken initiatives to reduce its cost structure in that region until
the market recovers. As a result of the depressed Latin American market and the
abandonment of the European data communications operations in 2002, the
Company's 2003 foreign sales are anticipated to decline by approximately 10%.

Gross profit of $53.2 million for 2002 declined $7.8 million, or 13%,
compared to 2001. This decrease is primarily the result of lower sales. Domestic
gross profit decreased $3.5 million and foreign gross profit decreased $4.3
million compared to the previous year. Improvements in domestic manufacturing
efficiencies and cost containment initiatives slightly improved the 2002 gross
profit as a percent of sales.

Costs and expenses of $47.4 million decreased $5 million, or 10%, from
2001.

Domestic costs and expenses decreased $3.2 million from 2001 to $31
million. Selling expense was $13.4 million, a decrease of $2.2 million primarily
as a result of a $.4 million reduction in commissions on lower sales, a $1
million decrease related to a reduction in employment levels and a $.6 million
reduction in advertising and sales promotion. General and administrative expense
increased $.7 million to $13.5 million compared to $12.8 million in 2001. This
increase was due to an increase in bad debt expense of $1.0 million offset by
decreased professional fees of $.3 million relating to registering the Company's
common shares with the Securities and Exchange Commission during 2001. The
increase in bad debt expense was attributable to several telecommunication
customers declaring bankruptcy during 2002. Research and Engineering expense of
$4.3 million represents a decrease of $.4 million from 2001 principally as a
result of employee reductions. Other operating income of $.2 million improved
$1.3 million from 2001, primarily as a result of lower goodwill and intangible
asset amortization of $1.1 million, as a result of the adoption of SFAS No. 142.

Foreign costs and expenses decreased to $16.4 million or $1.8 million,
when compared to 2001. The stronger dollar favorably impacted costs and expenses
by $.5 million when foreign costs in local currency were translated to U.S.
dollars. Excluding the currency impact, foreign selling expense of $7.7 million
decreased $1.3 million. Lower commissions as a result of lower sales accounted
for approximately one-half of this decrease. General and administrative expenses
of $7.3 million decreased $.5 million due to employment reductions and other
costs reduction efforts. Other operating expense increased $.5 million primarily
as a result of the gain on disposal of assets being reduced by $.3 million when
compared to 2001.

Royalty income for the year ended December 31, 2002 of $1.4 million is
$.7 million lower than 2001 as a result of the decline in the domestic data
communication market.

Operating income of $7.2 million for the year ended December 31, 2002
decreased $3.5 million, or 33%, compared to the previous year. This decrease was
primarily a result of the $7.8 million decrease in gross profit, the decrease in
royalty income of $.7 million offset by the $5 million reduction in costs and
expenses. Domestic operating income decreased $1.1 million to $3 million in 2002
as a result of $3.5 million lower gross profit and the $.8 million reduction in
royalty income partially offset by the $3.2 million reduction in domestic costs
and expenses. Foreign operating income of $4.2 million decreased $2.4 million
compared to the previous year primarily due to the $4.3 million decrease in
gross profit partially offset by the $1.8 million reduction in costs and
expenses. The Company's foreign operating income includes $2.6 million in income
from China partially offset by operating losses of $1.4 million in Latin America
and $.6 million in the European data communications operations. The operating
income attributable to China included the positive effect of a tax holiday (see
Note F in the Notes to Consolidated Financial Statements), which will not be in
effect to the same degree in 2003 and future years, and two major projects.
There can be no assurance that the Company will sell products for similar
projects during 2003.

17

Other expense for the year ended December 31, 2002 of $.2 million
remained relatively unchanged from 2001 because a $.7 million reduction in
interest expense resulting from lower debt was offset by a $.4 million decrease
in interest income primarily due to interest received in 2001 on a one-time
state tax refund and a $.4 million reduction in foreign joint venture equity
income.

Income tax for the year ended December 31, 2002 of $2.5 million was $.8
million lower than the prior year. The effective tax rate increased to 36% in
2002 from 32% in 2001 primarily as a result of receiving dividends of $1.6
million from foreign equity investments, which are excluded from book income.
Excluding the tax effect of this item, the effective rate would have been 29%.
The Company has a tax holiday in China which grants an effective tax rate of 0%
for the first two profit making years after utilizing any tax loss carryforwards
and a 50% tax reduction for the succeeding three years which begins with 2003.
The aggregate tax and per share favorable effect of this holiday was $.8 million
or $.13 per share in 2002 and $.5 million or $.08 per share in 2001. The tax
rate in China will increase from 0% in 2002 to 15% in 2003 resulting in an
anticipated increase in income taxes of approximately $.3 million on sales
comparable to 2002. See Note F in the Notes to Consolidated Financial Statements
for further discussion of the differences between the overall statutory tax rate
and the effective rate.

As a result of the above, net income for the year ended December 31,
2002 was $4.5 million which represents a decrease of $2.7 million, or 38%,
compared to comparable results in 2001.

2001 RESULTS OF OPERATIONS COMPARED TO 2000

In 2001, consolidated net sales were $196.4 million, a decrease of $11
million, or 5%, from 2000. Domestic net sales decreased $12.5 million, or 10%,
primarily as a result of a decrease in volume. The volume decrease was
attributable to softness in the domestic market for both the Company's data
communication and formed wire products. Although the Company cannot quantify the
amount, it believes the events of September 11th exacerbated an already slowing
North American economy. The Company's 2001 fourth quarter revenues of $44.3
million were 10% below those of the fourth quarter 2000 and the third quarter of
2001. Foreign net sales increased $1.5 million, or 2%, primarily as a result of
higher volumes. The stronger dollar in 2001 had a negative impact of $8.4
million when foreign sales were converted from native currency to U.S. dollars.
Excluding the impact of foreign currency, foreign sales would have increased by
12% and consolidated sales would have decreased by only 1%.

Gross profit declined $4.4 million, or 7%, in 2001 compared to 2000.
This decrease was primarily attributable to lower sales, including the impact of
the stronger dollar.

Costs and expenses of $53.5 million increased $6.6 million, or 14%,
over 2000. Expenses related to the introduction of the Company's data
communication products to foreign markets accounted for approximately 57% of
this increase while approximately 17% of the increase was the result of the
business realignment charge. The rest of the increase was due to general
increases including expenses associated with moving a plant in Mexico and fees
associated with registering the Company's common shares with the Securities and
Exchange Commission and listing the Company's common shares on the NASDAQ.

Royalty income of $2 million decreased $.2 million from 2000 as a
result of higher foreign data communication royalty expense.

Operating income of $7.6 million is a decrease of $11.2 million, or
60%, from 2000. This decrease was the result of the $4.4 million decrease in
gross profit, the increase in costs and expenses of $6.6 million and the $.2
million decrease in royalty income.

Expense of $.1 million included in other income (expense) was a $1.5
million improvement compared to 2000. This improvement is primarily attributable
to an increase in earnings of foreign joint ventures of $.5 million, a reduction
of interest expense of $.2 million, due to lower interest rates, and the
non-recurrence of the $.9 million adjustment in 2000 of accumulated amortization
pertaining to the Company's investment in qualified affordable housing project
limited partnerships.

18

In 2001, income before income taxes decreased $9.7 million, or 57%,
compared to 2000 as a result of the $11.2 million decrease in operating income
offset by the reduction in other expense of $1.5 million.

The effective tax rate in 2001 was 30.4% compared to 35.5% in 2000. The
difference in the effective rate is primarily due to the increased profitability
of our low tax jurisdiction subsidiaries in 2001. See Note F in the Notes to
Consolidated Financial Statements for further discussion of the differences
between the statutory tax rate and the effective tax rate.

Overall, net income for 2001 of $5.2 million decreased $5.9 million, or
53%, compared to 2000. Earnings per share were $.90 for 2001 compared to $1.91
in 2000. Earnings per share for 2001 would have been $1.25 if the realignment
charge was excluded.

WORKING CAPITAL, LIQUIDITY AND CAPITAL RESOURCES

Net cash provided by operating activities was $18.6 million for 2002
despite a $1.1 million net loss. This was primarily a result of non-cash charges
of $12.8 million included in the determination of the loss and $1.6 million in
dividends received from non-consolidated affiliates that are excluded from book
income in accordance with equity accounting. Additionally, working capital was
reduced by $5.3 million.

Net cash used in investing activities was $3.5 million in 2002. During
2002, the Company sold the land and building of its former Birmingham foundry.
This sale accounted for the majority of the amount included in proceeds from the
sale of property and equipment. At December 31, 2002, the Company had open
uncompleted purchase commitments for inventory and capital equipment of $.7
million. The Company is continually analyzing potential acquisition candidates
and business alternatives but has no commitments that would materially impact
the operations of the business. In addition, the Company has announced that it
is pursuing strategic alternatives with respect to its domestic data
communication operations.

Cash used in financing activities was $12.2 million in 2002. This
consisted primarily of a reduction in debt of $7.9 million and dividend payments
of $4.6 million.

The Company has commitments under operating leases primarily for office
and manufacturing space, transportation equipment and computer equipment. See
Note E in the Notes to Consolidated Financial Statements for further discussion
on the future minimal rental commitment under these leasing arrangements. One
such lease is for the Company's aircraft with a lease commitment through April
2012. Under the terms, the Company maintains the risk for the residual value in
excess of the market value for the aircraft. At the present time, the Company
believes its risks, if any, to be immaterial because the estimated market value
of the aircraft approximates its residual value.

The Company has evaluated its long-term borrowing requirements and
completed amending its main credit facility. The bank approved the renewal of
the credit facility and the Company's Board of Directors approved the new
amendment during 2002. The Company's amendment to its primary revolving credit
agreement matures December 31, 2005. The new amendment replaces the $40 million
revolving credit agreement that would have expired on December 31, 2002 with a
$20 million commitment. Interest rates under the amended revolving credit
agreement are at the money market rate plus 1%. The effective interest rate at
December 31, 2002 was 2.31%. The amended revolving credit agreement contains
among other provisions, requirements for maintaining levels of working capital,
net worth, and profitability. At December 31, 2002, the Company was not in
compliance with a covenant related to interest expense coverage as a result of
incurring a loss for the year. The Company has received a waiver from the bank
related to the non-compliance. See Note D in the Notes to Consolidated Financial
Statements for a more complete discussion of the Company's debt and credit
arrangements. The Company's financial position remains strong and its current
ratio at December 31, 2002 was 3.3:1 compared to 2.2:1 at December 31, 2001. At
December 31, 2002, the Company's unused balance under its main credit facility
was $15.5 million and its debt to equity percentage was 7%.

Although the Company believes its existing credit facilities,
internally generated funds and ability to obtain additional financing will be
sufficient to meet the Company's growth and operating needs for the next 12
months there are inherent risks related to each of these sources. Funds
generated from continuing operations are contingent

19

upon the general economy remaining flat or improving and the recovery of
the energy and telecommunication market sectors in particular.

Contractual obligations are summarized in the following table:

Payments Due by Period
---------------------------------------------------------------------
Less than
Contractual Obligations Total 1 year 1-3 years 4-5 years After 5 years
-------------------------- ------------ -------------- --------- ---------- -------------
In thousands

Long-Tem Debt $ 7,523 $ 1,676 $ 5,077 $ 770 -
Operating Leases 16,822 942 1,593 1,428 $ 12,859
Purchase Commitments 668 220 448 - -

NEW ACCOUNTING PRONOUNCEMENTS

In June 2001, the Financial Accounting Standards Board (FASB) issued
SFAS No. 142, Goodwill and Other Intangible Assets, effective for fiscal years
beginning after December 15, 2001. Under the new rules, goodwill and intangible
assets deemed to have indefinite lives are no longer amortized but are subject
to annual impairment tests. Other intangibles continue to be amortized over
their useful lives and will be assessed for impairment under SFAS No. 144,
Accounting for the Impairment or Disposal of Long-Lived Assets.

The Company has adopted SFAS No. 142 as of January 1, 2002.
Consequently, the Company discontinued the amortization of goodwill during 2002.
Under this Statement, goodwill will be tested annually for impairment or if
events or changes in circumstances indicate that the goodwill of a reporting
unit might be impaired. The Company does not have any intangibles with
indefinite lives except for goodwill. During the fourth quarter of 2002, the
Company performed an interim goodwill impairment test pursuant to SFAS No. 142.
The test was performed on one of the Company's domestic reporting units. To
estimate the fair value of the reporting unit, management made estimates and
judgements about future cash flows based on assumptions consistent with the
Company's long-range plans. In addition, the Company used information obtained
through market mechanisms to ascertain the fair value of its reporting unit.
Based on the results of this analysis, it was determined that the goodwill of
this reporting unit was fully impaired, and accordingly the Company recorded an
asset impairment charge of $1.6 million.

In July 2002, the FASB issued SFAS No. 146, Accounting for Costs
Associated with Exit or Disposal Activities, effective for exit or disposal
activities initiated after December 31, 2002. This Statement nullifies Emerging
Issues Task Force (EITF) Issue No. 94-3, "Liability Recognition for Certain
Employee Termination Benefits and Other Costs to Exit an Activity (including
Certain Costs Incurred in a Restructuring)." This Statement requires that a
liability for a cost associated with an exit or disposal activity be recognized
when the liability is incurred. Under Issue No. 94-3, a liability for exit costs
was recognized at the date of the entity's commitment to an exit plan. This
Statement also establishes that fair value is the objective for initial
measurement of the liability. The Company does not expect the adoption of this
Statement to have a material impact on its financial statements and results of
operations.

During November 2002, the FASB issued Interpretation No. 45,
Guarantor's Accounting and Disclosure Requirements for Guarantees, including
Indirect Guarantees of Indebtedness of Others (FIN 45). FIN 45 requires certain
guarantees to be recorded at fair value. The initial recognition and measurement
provisions of FIN 45 are applicable, on a prospective basis, to guarantees
issued or modified after December 31, 2002. FIN 45 also requires a guarantor to
make new disclosures regarding guarantees. The disclosure requirements are
effective for financial statements ending after December 15, 2002, and the
Company has disclosed all such guarantees (see Note B to the Notes to
Consolidated Financial Statements). The Company has adopted the applicable
disclosure provisions of FIN 45 as of December 31, 2002, and does not believe
that the adoption of the initial recognition and measurements provisions will
have a significant effect on the financial statements.

In December 2002, the FASB issued SFAS No. 148, Accounting for
Stock-Based Compensation - Transition and Disclosure- an amendment of FAS 123,
Accounting for Stock-Based Compensation, effective for

20

financial statements for fiscal years ending after December 15, 2002. This
Statement amends SFAS No. 123, and provides alternative methods of transition
for a voluntary change to the fair value based method of accounting for
stock-based employee compensation. This Statement also amends SFAS No. 123 and
requires disclosure about the effects on reported net income with respect to the
stock-based employee compensation. Lastly, this Statement amends APB Opinion No.
28, and requires disclosure about the effects of stock-based employee
compensation in interim financial information. See Note G in the Notes to
Consolidated Financial Statements for further details.

During January 2003, the FASB issued Interpretation No. 46,
Consolidation of Variable Interest Entities an interpretation of ARB No. 51,
Consolidated Financial Statements (FIN 46). FIN 46 clarifies the accounting for
certain entities in which equity investors do not have the characteristics of a
controlling financial interest or do not have sufficient equity at risk for the
entity to finance its activities without additional subordinated financial
support from other parties. The Company has adopted the applicable disclosure
provisions of FIN 46 in the financial statements and does not believe the
adoption of the remaining provisions will have a significant effect on the
financial statements.

CRITICAL ACCOUNTING POLICIES

The Company's discussion and analysis of its financial condition and
results of operations are based upon the consolidated financial statements,
which have been prepared in accordance with accounting principles generally
accepted in the United States. The preparation of these consolidated financial
statements requires the Company to make estimates and judgments that affect the
reported amount of assets and liabilities, revenues and expenses and related
disclosure of contingent assets and liabilities at the date of the consolidated
financial statements. Actual results may differ from these estimates under
different assumptions or conditions.

Critical accounting policies are defined as those that are reflective
of significant judgment and uncertainties, and potentially may result in
materially different outcomes under different assumptions and conditions. The
Company believes that the critical accounting policies are limited to those that
are described below.

Allowance for Doubtful Accounts
The Company maintains an allowance for doubtful accounts for estimated
losses resulting from the inability of its customers to make required payments.
The Company records estimated allowances for uncollectible accounts receivable
based upon the number of days the accounts are past due, the current business
environment, and specific information such as bankruptcy or liquidity issues of
customers. If the financial condition of the Company's customers were to
deteriorate, resulting in an impairment of their ability to make payments,
additional allowances may be required. During 2002 the Company recorded
additional allowances for doubtful accounts of $3.3 million and at December 31,
2002 the allowance represents 13% of its trade receivables, compared to 3% at
December 31, 2001.

Sales Returns and Allowances
The Company records a provision for estimated sales returns and
allowances on product and service related sales in the same period as the
related revenues are recorded. These estimates are based on historical sales
returns and other known factors, such as open authorized returns. At December
31, 2002 and 2001, these provisions accounted for less than .2% of consolidated
net sales. If future returns do not reflect the historical data the Company uses
to calculate these estimates, additional allowances or reversals of established
allowances may be required.

Excess and Obsolescence Reserves
The Company has provided an allowance for excess inventory and
obsolescence based on estimates of future demand, which is subject to change.
Additionally, discrete provisions are made when facts and circumstances indicate
that particular inventories will not be utilized. At December 31, 2002 the
allowance for excess inventory and obsolescence was 13% of gross inventories,
compared to 6% at December 31, 2001. If actual market conditions are different
than those projected by management, additional inventory write-downs or
reversals of existing reserves may be necessary.

Investments
The Company accounts for investments in two joint ventures in Japan
under the equity method of accounting. The Company records an investment
impairment charge when it believes that an investment has

21

experienced a decline in value that is other than temporary. Future adverse
changes in market conditions or poor operating results of underlying investments
could result in losses or an inability to recover the carrying value of the
investments that may not be reflected in the investment's current carrying
value, thereby possibly requiring an impairment charge in the future.

Impairment of Long-Lived Assets
The Company records impairment losses on long-lived assets used in
operations when events and circumstances indicate that the assets might be
impaired and the undiscounted cash flows estimated to be generated by those
assets are less than the carrying value of those items. The Company's cash flows
are based on historical results adjusted to reflect the best estimate of future
market and operating conditions. The net carrying value of assets not
recoverable is then reduced to fair value. The estimates of fair value represent
the best estimate based on industry trends and reference to market rates and
transactions.

Goodwill
In adopting SFAS No. 142, the Company performed its initial annual
impairment tests for goodwill and intangibles with indefinite lives utilizing a
discounted cash flow methodology, market comparables, and an overall market
capitalization reasonableness test in computing fair value by reporting unit.
The Company engaged a third party to evaluate the model used in the fair value
calculations. The Company then compared the fair value of the reporting unit
with its carrying value to assess if goodwill and other indefinite live
intangibles have been impaired. Based on the assumptions as to growth, discount
rates and the weighting used for each respective valuation methodology, results
of the valuations could be significantly changed. However, the Company believes
that the methodologies and weightings used are reasonable and result in
appropriate fair values of the reporting units.

The Company performs interim impairment tests if trigger events or
changes in circumstances indicate the carrying amount may not be recoverable.
During the fourth quarter 2002, it became evident that the market valuation of
one such domestic reporting unit had decreased, such that it was highly probable
that the related goodwill would not be recoverable. Therefore, at December 31,
2002, the Company has recorded a goodwill impairment charge of $1.6 million.

Warranty Reserves
The Company establishes a warranty reserve when a known measurable
potential exposure exists. In addition, such reserves are adjusted for
management's best estimate of warranty obligations based on current and
historical trends. Should actual product failures and related costs to correct
such product failures differ from management's estimates, revisions to the
estimated warranty liability would be required. At December 31, 2002 and 2001,
the Company's warranty reserve was less than $.2 million.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company operates manufacturing facilities and offices around the
world and uses fixed and floating rate debt to finance the Company's global
operations. As a result, the Company is subject to business risks inherent in
non-U.S. activities, including political and economic uncertainty, import and
export limitations and market risk related to changes in interest rates and
foreign currency exchange rates. The Company believes the political and economic
risks related to the Company's foreign operations are mitigated due to the
stability of the countries in which the Company's largest foreign operations are
located. Although the Company does not regularly enter into derivative financial
instruments, it has two foreign currency forward exchange contracts outstanding
at December 31, 2002 whose fair value and carrying value are immaterial. The
Company does not hold derivatives for trading purposes.

The Company is exposed to market risk, including changes in interest
rates. The Company is subject to interest rate risk on its variable rate
revolving credit facilities, which consisted of borrowings of $8.8 million at
December 31, 2002. A 100 basis point increase in the interest rate would have
resulted in an increase in interest expense of approximately $.1 million for the
year ended December 31, 2002.

The Company's primary currency rate exposures are related to foreign
denominated debt, intercompany debt and cash and short-term investments. A
hypothetical 10% change in currency rates would have a favorable/unfavorable
impact on fair values of $2.7 million and on income before tax of $.06 million.

22

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

REPORT OF INDEPENDENT ACCOUNTANTS

To the Shareholders and Board of Directors of
Preformed Line Products Company:

In our opinion, the consolidated financial statements listed in the index
appearing under Item 15(a) on page 43 present fairly, in all material respects,
the financial position of Preformed Line Products Company and its subsidiaries
at December 31, 2002 and 2001, and the results of their operations and their
cash flows for each of the two years in the period ended December 31, 2002 in
conformity with accounting principles generally accepted in the United States of
America. In addition, in our opinion, the financial statement schedule listed in
the index appearing under Item 15(a) on page 43 presents fairly, in all material
respects, the information set forth therein when read in conjunction with the
related consolidated financial statements. These financial statements and
financial statement schedule are the responsibility of the Company's management;
our responsibility is to express an opinion on these financial statements and
financial statement schedule based on our audits. We conducted our audits of
these statements in accordance with auditing standards generally accepted in the
United States of America, which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion. The financial statements of
the Company as of December 31, 2000 were audited by other independent
accountants whose report dated February 12, 2001 expressed an unqualified
opinion on those financial statements.

As discussed in Note A to the consolidated financial statements, effective
January 1, 2002, the Company changed its method of accounting for goodwill and
other intangible assets to comply with the provisions of Financial Accounting
Standard No. 142, "Goodwill and Other Intangible Assets."

PricewaterhouseCoopers LLP

Cleveland, Ohio
February 13, 2003

23

REPORT OF INDEPENDENT ACCOUNTANTS

Shareholders and Board of Directors
Preformed Line Products Company

We have audited the accompanying consolidated statements of income,
shareholders' equity and cash flows of Preformed Line Products Company and
subsidiaries for the year ended December 31, 2000. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated results of operations,
shareholders' equity and cash flows of Preformed Line Products Company and
subsidiaries for the year ended December 31, 2000, in conformity with accounting
principles generally accepted in the United States.

Ernst & Young LLP
Cleveland, Ohio
February 12, 2001

24

PREFORMED LINE PRODUCTS COMPANY
CONSOLIDATED BALANCE SHEETS

December 31
2002 2001
------------- -------------
(Thousands of dollars, except
share data)

ASSETS
Cash and cash equivalents $ 11,629 $ 8,409
Accounts receivable, less allowance of $3,770 ($813 in 2001) 24,763 29,251
Inventories-net 33,750 38,637
Deferred income taxes - short-term 5,276 3,206
Prepaids and other 3,104 3,727
------------- -------------
TOTAL CURRENT ASSETS 78,522 83,230

Property and equipment - net 48,569 54,206
Investments in foreign joint ventures 8,087 9,976
Deferred income taxes - long-term 863 1,435
Goodwill, patents and other intangibles - net 5,596 7,410
Other 3,147 4,933
------------- -------------

TOTAL ASSETS $ 144,784 $ 161,190
============= =============

LIABILITIES AND SHAREHOLDERS' EQUITY

Notes payable to banks $ 1,246 1,201
Trade accounts payable 7,844 $ 9,560
Accrued compensation and amounts withheld from employees 3,269 3,585
Accrued expenses and other liabilities 4,251 3,890
Accrued profit-sharing and pension contributions 4,176 4,130
Dividends payable 1,155 1,151
Income taxes 337 923
Current portion of long-term debt 1,676 13,198
------------- -------------
TOTAL CURRENT LIABILITIES 23,954 37,638

Long-term debt, less current portion 5,847 2,341
Deferred income taxes - long-term 161 431
Minimum pension liability 726 -

SHAREHOLDERS' EQUITY
Common stock - $2 par value, 15,000,000 shares authorized,
5,772,710 and 5,757,030 issued and outstanding, net of 389,188
and 398,618 treasury shares at par, respectively. 11,545 11,514
Paid in capital 82 -
Retained earnings 123,124 128,721
Other comprehensive loss (20,655) (19,455)
------------- -------------
TOTAL SHAREHOLDERS' EQUITY 114,096 120,780
------------- -------------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 144,784 $ 161,190
============= =============

See notes to consolidated financial statements.

25

PREFORMED LINE PRODUCTS COMPANY
STATEMENTS OF CONSOLIDATED OPERATIONS

Year ended December 31
---------------------------------------
2002 2001 2000
---------- ---------- ----------
(Thousnds, except per share data)

Net sales $ 169,842 $ 196,365 $ 207,332
Cost of products sold 119,173 137,266 143,800
---------- ---------- ----------
GROSS PROFIT 50,669 59,099 63,532

Costs and expenses
Selling 21,870 24,924 20,118
General and administrative 22,346 20,815 20,335
Research and engineering 5,604 6,236 5,709
Other operating expenses - net 1,020 1,568 744
Asset impairment 1,621 - -
---------- ---------- ----------
52,461 53,543 46,906

Royalty income - net 1,366 2,015 2,179
---------- ---------- ----------

OPERATING INCOME (LOSS) (426) 7,571 18,805

Other income (expense)
Equity in net income of foreign joint ventures 447 803 335
Interest income 287 685 682
Interest expense (687) (1,427) (1,608)
Other expense (200) (200) (1,079)
---------- ---------- ----------
(153) (139) (1,670)
---------- ---------- ----------

INCOME (LOSS) BEFORE INCOME TAXES (579) 7,432 17,135

Income taxes 561 2,256 6,084
---------- ---------- ----------

NET INCOME (LOSS) $ (1,140) $ 5,176 $ 11,051
========== ========== ==========

Net income (loss) per share - basic and diluted $ (0.20) $ 0.90 $ 1.91
========== ========== ==========

Cash dividends declared per share $ 0.80 $ 0.75 $ 0.60
========== ========== ==========

Average number of shares outstanding - basic and diluted 5,766 5,755 5,790
========== ========== ==========

See notes to consolidated financial statements.

26

PREFORMED LINE PRODUCTS COMPANY
STATEMENTS OF CONSOLIDATED SHAREHOLDERS' EQUITY

Accumulated
Additional Other
Common Paid in Retained Comprehensive
Shares Capital Earnings Income (Loss) Total
----------- -------------- -------------- ------------------- ------------
(Thousands of dollars, except share and per share data)

Balance at January 1, 2000 $ 11,659 $ 121,223 $ (13,688) $ 119,194
Net income 11,051 11,051
Foreign currency translation adjustment (1,986) (1,986)
------------
Total comprehensive income 9,065
Purchase of 61,222 common shares (123) (812) (935)
Cash dividends declared - $.60 per share (3,468) (3,468)
----------- ------------ ------------ ------------------ ------------
Balance at December 31, 2000 11,536 - 127,994 (15,674) 123,856

Net income 5,176 5,176
Foreign currency translation adjustment (3,781) (3,781)
------------
Total comprehensive income 1,395
Purchase of 11,056 common shares (22) (133) (155)
Cash dividends declared - $.75 per share (4,316) (4,316)
----------- ------------ ------------ ------------------ ------------
Balance at December 31, 2001 11,514 - 128,721 (19,455) 120,780

Net income (loss) (1,140) (1,140)
Foreign currency translation adjustment (1,218) (1,218)
Cumulative translation adjustment for
liquidation of a foreign entity 490 490
Minimum pension liability - net of taxes of $254 (472) (472)
------------
Total comprehensive income (loss) (2,340)
Issuance of 15,680 common shares 31 $ 82 158 271
Cash dividends declared - $.80 per share (4,615) (4,615)
----------- ------------ ------------ ------------------ ------------
Balance at December 31, 2002 $ 11,545 $ 82 $ 123,124 $ (20,655) $ 114,096
=========== ============ ============ ================== ============

See notes to consolidated financial statements.

27

PREFORMED LINE PRODUCTS COMPANY
STATEMENTS OF CONSOLIDATED CASH FLOWS

Year ended December 31
-----------------------------------------
2002 2001 2000
------------ ------------ ------------
(Thousands of dollars)

OPERATING ACTIVITIES
Net income (loss) $ (1,140) $ 5,176 $ 11,051
Adjustments to reconcile net income (loss) to net cash (used in) provided by operations
Depreciation and amortization 9,018 10,320 11,411
Asset impairment 1,621 - -
Noncash abandonment/realignment charges 3,301 2,668 -
Deferred income taxes (2,124) (263) (838)
Cash surrender value of life insurance 821 - -
Cumulative translation adjustment 490 - -
Earnings of joint ventures (447) (803) (335)
Other - net 111 (6) 44
Dividends received from joint ventures 1,628 185 438
Changes in operating assets and liabilities
Receivables 3,910 1,588 (1,870)
Inventories 2,402 3,023 561
Trade payables and accruals (2,083) 297 2,681
Income taxes 53 (2,946) 304
Other - net 1,020 (2,059) 57
------------ ------------ ------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 18,581 17,180 23,504

INVESTING ACTIVITIES
Capital expenditures (4,706) (6,196) (14,388)
Business acquisitions (39) (1,058) (5,724)
Proceeds from the sale of property and equipment 1,284 757 1,887
------------ ------------ ------------
NET CASH USED IN INVESTING ACTIVITIES (3,461) (6,497) (18,225)

FINANCING ACTIVITIES
Increase (decrease) in notes payable to banks 39 (503) (1,285)
Proceeds from the issuance of long-term debt 14,588 17,673 24,443
Payments of long-term debt (22,480) (22,651) (20,140)
Dividends paid (4,615) (4,030) (3,479)
Issuance (purchase) of common shares 271 (155) (935)
------------ ------------ ------------
NET CASH USED IN FINANCING ACTIVITIES (12,197) (9,666) (1,396)

Effects of exchange rate changes on cash and cash equivalents 297 (2,078) (1,320)
------------ ------------ ------------

Increase (decrease) in cash and cash equivalents 3,220 (1,061) 2,563

Cash and cash equivalents at beginning of year 8,409 9,470 6,907
------------ ------------ ------------

CASH AND CASH EQUIVALENTS AT END OF YEAR $ 11,629 $ 8,409 $ 9,470
============ ============ ============

See notes to consolidated financial statements.

28

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(TABLES IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE DATA)

NOTE A SIGNIFICANT ACCOUNTING POLICIES

Reclassification

Certain amounts in the prior years' financial statements have been
reclassified to conform to the presentation of 2002.

Consolidation

The consolidated financial statements include the accounts of the
Company and its subsidiaries where ownership is greater than 50%. All
intercompany accounts and transactions have been eliminated upon consolidation.

Investments in Joint Ventures

Investments in joint ventures, where the Company owns at least 20% but
less than 50%, are accounted for by the equity method. The Company is currently
a minority partner in two joint ventures in Japan, holding a 49% ownership
interest in Japan PLP Co. LTD. and a 24% ownership interest in Toshin Denko
Kabushiki Kaisha. Dividends received from joint ventures totaled $1.6 million in
2002, $.2 million in 2001 and $.4 million in 2000.

Cash Equivalents

Cash equivalents are stated at fair value and consist of highly liquid
investments with remaining maturities of three months or less at the time of
acquisition.

Inventories

Inventories are carried at the lower of cost or market.

Fair Value of Financial Instruments

The Company's financial instruments include cash and cash equivalents,
accounts receivable, accounts payable, notes payable and debt. The carrying
amount of all financial instruments approximates fair value.

Property, Plant, and Equipment and Depreciation

Property, plant, and equipment is recorded at cost. Depreciation for
the majority of the Company's assets is computed using accelerated methods over
the estimated useful lives. The estimated useful lives used are: land
improvements, ten years; buildings, forty years; and machinery and equipment,
three to ten years; with the exception of personal computers which, are
depreciated over three years using the straight line method.

Long-Lived Assets

The Company records impairment losses on long-lived assets used in
operations when events and circumstances indicate that the assets might be
impaired and the undiscounted cash flows estimated to be generated by those
assets are less than the carrying value of those items. The Company's cash flows
are based on historical results adjusted to reflect the best estimate of future
market and operating conditions. The net carrying value of assets not
recoverable is then reduced to fair value. The estimates of fair value represent
the best estimate based on industry trends and reference to market rates and
transactions.

29

Goodwill and Other Intangibles

Goodwill and intangible assets deemed to have indefinite lives are not
amortized but are subject to annual impairment tests. Patents and other
intangible assets with definite lives represent primarily the value assigned to
patents acquired with purchased businesses and are amortized using the
straight-line method over their useful lives. Goodwill and other long-lived
assets are reviewed for impairment whenever events or changes in circumstances
indicate the carrying amount may not be recoverable. Events or circumstances
that would result in an impairment review primarily include operations reporting
losses or a significant change in the use of an asset. Impairment charges are
recognized pursuant to SFAS No. 142, Goodwill and Other Intangible Assets.

Research and Development

Research and engineering costs are expensed as incurred. Company
sponsored costs for research and development of new products were $2.9 million
in 2002, $2.7 million in 2001 and $2.3 million in 2000.

Foreign Currency Translation

Asset and liability accounts are translated into U.S. dollars using
exchange rates in effect at the date of the consolidated balance sheet; revenues
and expenses are translated at weighted average exchange rates in effect during
the period. Transaction gains and losses arising from exchange rate changes on
transactions denominated in a currency other than the functional currency are
included in income and expense as incurred. Such transactions have not been
material. Unrealized translation adjustments are recorded as accumulated foreign
currency translation adjustments in shareholders' equity. Upon sale or upon
substantially complete liquidation of an investment in a foreign entity, the
cumulative translation adjustment for that entity is removed from accumulated
foreign currency translation adjustment in shareholders' equity and reclassified
to earnings.

Use of Estimates

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and the accompanying notes. Actual results could differ from these
estimates.

Sales Recognition

Sales are recognized when products are shipped and title and risk of
loss has passed to unaffiliated customers. Shipping and handling costs billed to
customers are included in net sales while shipping and handling costs not billed
to customers are included in cost of products sold.

Acquisitions

In April 2000, the Company acquired assets and assumed certain
liabilities of Rack Technologies Pty. Limited whose results of operations are
included in the consolidated financial statements from the date of acquisition.
Rack Technologies Pty. Limited has two foreign locations and one domestic
location. The Company accounted for this acquisition using the purchase method.
The initial cash payment for this acquisition was $5.3 million. Under the terms
of the acquisition agreement, the Company was obligated to make additional
payments based on the acquired company's profitability of ongoing operations for
the years ending 2000 and 2001. The Company made a payment of $.8 million in
2001 for the year 2000, and an immaterial payment in 2002. The payments were
recorded as goodwill.

In addition, during April 2000, the Company acquired the remaining 20
percent minority interest in its subsidiary in China for $.4 million. This
subsidiary's net sales and the Company's total investment in this subsidiary
were not material for 2000, 2001 and 2002.

In December 2001, the Company acquired the remaining 2.4 percent
minority interest in its subsidiary in Mexico for $.1 million. This subsidiary's
net sales and the Company's total investment in this subsidiary are not material
for 2000, 2001 and 2002.

30

Derivative Financial Instruments

In January 2001, the Company adopted SFAS No. 133, Accounting for
Derivative Instruments and Hedging Activity. SFAS No. 133 requires that an
entity recognize all derivatives as either assets or liabilities in the balance
sheet and measure those instruments at fair value. Although the Company does not
regularly enter into derivative financial instruments, it has two foreign
currency forward exchange contracts outstanding at December 31, 2002, whose fair
value and carrying value are immaterial. The Company does not hold derivatives
for trading purposes.

New Accounting Pronouncements

In June 2001, the Financial Accounting Standards Board (FASB) issued
SFAS No. 142, Goodwill and Other Intangible Assets, effective for fiscal years
beginning after December 15, 2001. Under the new rules, goodwill and intangible
assets deemed to have indefinite lives are no longer amortized but will be
subject to annual impairment tests. Other intangibles continue to be amortized
over their useful lives and will be assessed for impairment under SFAS No. 144,
Accounting for the Impairment or Disposal of Long-Lived Assets.

The Company has adopted SFAS No. 142 as of January 1, 2002.
Consequently, the Company has discontinued the amortization of goodwill during
2002. Under this Statement, goodwill will be tested annually for impairment or
if events or changes in circumstances indicate that the goodwill of a reporting
unit might be impaired. The aggregate amortization expense for other intangibles
with definite lives for the year ended December 31, 2002 was $.4 million, $1.6
million in 2001 and $1.9 million in 2000. Amortization expense is estimated to
be $.4 million annually for 2003, 2004 and 2005 and $.3 million for 2006 and
2007. The Company does not have any intangibles with indefinite lives except for
goodwill. During the fourth quarter of 2002, the Company performed an interim
goodwill impairment test pursuant to SFAS No. 142. The test was performed on one
of the Company's domestic reporting units. To estimate the fair value of the
reporting unit, management made estimates and judgements about future cash flows
based on assumptions consistent with the Company's long-range plans. In
addition, the Company used information obtained through market mechanisms to
ascertain the fair value of its reporting unit. Based on the results of this
analysis, it was determined that the goodwill of this reporting unit was fully
impaired, and accordingly the Company recorded an asset impairment charge of
$1.6 million.

The following table sets forth the carrying value and accumulated
amortization of goodwill and intangibles by segment at December 31, 2002. The
second table includes the changes of net goodwill by segment for the year ended
December 31, 2002. The last table includes a reconciliation of reported net
income to adjusted net income after goodwill amortization for the years ending
December 31, 2002 and 2001.

As of December 31, 2002
--------------------------------------------------------

Domestic Foreign Total
------------- ------------ -------------

Amortized intangible assets
Gross carrying amount - patents and other intangibles $ 7,409 $ 158 $ 7,567
Accumulated amortization - patents and other intangibles (3,465) (107) (3,572)
------------- ------------ -------------
Total 3,944 51 3,995
------------- ------------ -------------

Unamortized intangible assets
Gross carrying amount - goodwill $ 9,047 $ 919 $ 9,966
Accumulated amortization - goodwill (6,778) 34 (6,744)
Asset Impairment (1,621) - (1,621)
------------- ------------ -------------
Total 648 953 1,601
------------- ------------ -------------

Total amortized and unamortized intangible assets $ 4,592 $ 1,004 $ 5,596
============= ============ =============

31

Goodwill
----------------------------------------------------------------------------------------
December 31, 2001 Activity and Earnouts Impairments December 31, 2002

Domestic $ 2,269 - $ (1,621) $ 648
Foreign 788 165 - 953
--------------------- ---------------------- ---------------- ---------------------
Total $ 3,057 $ 165 $ (1,621) $ 1,601
===================== ====================== ================ =====================

Reconciliation of reported net income (loss) to adjusted net income.

Year ended December 31,
---------------------------------
2002 2001
---------------- ---------------

Reported net income (loss) $ (1,140) $ 5,176
Add back: Goodwill amortization, after income tax - 694
---------------- ---------------
Adjusted net income (loss) $ (1,140) $ 5,870
================ ===============

Basic earnings per share:
Reported net income (loss) $ (0.20) $ 0.90
Goodwill amortization, after income tax - 0.12
---------------- ---------------
Adjusted net income (loss) $ (0.20) $ 1.02
================ ===============

Diluted earnings per share:
Reported net income (loss) $ (0.20) $ 0.90
Goodwill amortization, after income tax - 0.12
---------------- ---------------
Adjusted net income (loss) $ (0.20) $ 1.02
================ ===============

In July 2002, the FASB issued SFAS No. 146, Accounting for Costs
Associated with Exit or Disposal Activities, effective for exit or disposal
activities initiated after December 31, 2002. This Statement nullifies Emerging
Issues Task Force (EITF) Issue No. 94-3, "Liability Recognition for Certain
Employee Termination Benefits and Other Costs to Exit an Activity (including
Certain Costs Incurred in a Restructuring)." This Statement requires that a
liability for a cost associated with an exit or disposal activity be recognized
when the liability is incurred. Under Issue No. 94-3, a liability for exit costs
was recognized at the date of the entity's commitment to an exit plan. This
Statement also establishes that fair value is the objective for initial
measurement of the liability. The Company does not expect the adoption of this
Statement to have a material impact on its financial statements and results of
operations.

During November 2002, the FASB issued Interpretation No. 45,
Guarantor's Accounting and Disclosure Requirements for Guarantees, including
Indirect Guarantees of Indebtedness of Others (FIN 45). FIN 45 requires certain
guarantees to be recorded at fair value. The initial recognition and measurement
provisions of FIN 45 are applicable, on a prospective basis, to guarantees
issued or modified after December 31, 2002. FIN 45 also requires a guarantor to
make new disclosures regarding guarantees. The disclosure requirements are
effective for financial statements ending after December 15, 2002, and the
Company has disclosed all such guarantees (see Note B to the Notes to
Consolidated Financial Statements). The Company has adopted the applicable
disclosure provisions of FIN 45 as of December 31, 2002, and does not believe
that the adoption of the initial recognition and measurements provisions will
have a significant effect on the financial statements.

In December 2002, the FASB issued SFAS No. 148, Accounting for
Stock-Based Compensation - Transition and Disclosure- an amendment of FAS 123,
Accounting for Stock-Based Compensation, effective for financial statements for
fiscal years ending after December 15, 2002. This Statement amends SFAS No. 123,
and provides alternative methods of transition for a voluntary change to the
fair value based method of accounting for stock-based employee compensation.
This Statement also amends SFAS No. 123 and requires disclosure about the
effects on reported net income with respect to the stock-based employee
compensation. Lastly, this Statement

32

amends APB Opinion No. 28, and requires disclosure about the effects of
stock-based employee compensation in interim financial information. See Note G
in the Notes to Consolidated Financial Statements for further details.

During January 2003, the FASB issued Interpretation No. 46,
Consolidation of Variable Interest Entities an interpretation of ARB No. 51,
Consolidated Financial Statements (FIN 46). FIN 46 clarifies the accounting for
certain entities in which equity investors do not have the characteristics of a
controlling financial interest or do not have sufficient equity at risk for the
entity to finance its activities without additional subordinated financial
support from other parties. The Company has adopted the applicable disclosure
provisions of FIN 46 in the financial statements and does not believe the
adoption of the remaining provisions will have a significant effect on the
financial statements.

NOTE B SUPPLEMENTAL INFORMATION

December 31,
----------------------------
2002 2001
------------ -----------

INVENTORIES
Finished products $ 16,473 $ 19,525
Work-in-process 1,249 1,022
Raw materials 17,568 19,730
------------ -----------
35,290 40,277
Excess of current cost over LIFO cost (1,540) (1,640)
------------ -----------
$ 33,750 $ 38,637
============ ===========

The Company uses the last-in, first-out (LIFO) method of determining
cost for the majority (approximately $12.2 million in 2002 and $13.8 million in
2001) of its material portion of inventories in the United States. All other
inventories are determined by the FIFO method.

December 31,
---------------------------
2002 2001
----------- -----------

PROPERTY AND EQUIPMENT - AT COST
Land and improvements $ 6,328 $ 6,510
Buildings and improvements 34,442 37,011
Machinery and equipment 81,396 76,108
Construction in progress 1,419 3,571
----------- -----------
123,585 123,200
Less accumulated depreciation 75,016 68,994
----------- -----------
$ 48,569 $ 54,206
=========== ===========

Depreciation of property and equipment was $8.4 million in 2002, $8.5
million in 2001 and $8.4 million in 2000.

GUARANTEES

The Company establishes a warranty reserve when a known measurable
exposure exists. Such reserves are adjusted for management's best estimate of
warranty obligations based on current and historical trends. The change in the
carrying amount of warranty reserves for the year ended December 31, 2002 is as
follows:

Balance at December 31, 2001 $ 147
Additions charged to costs 142
Deductions (147)
--------------
Balance at December 31, 2002 $ 142
==============

33

NOTE C PENSION PLANS

Domestic hourly employees of the Company and certain employees of
foreign subsidiaries who meet specific requirements as to age and service are
covered by defined benefit pension plans. Net periodic benefit costs and
obligations of the Company's foreign plans are not material. Net periodic
benefit cost for the Company's domestic plan included the following components
for the year ended December 31:

2002 2001 2000
------- ------- -------

Service cost $ 470 $ 470 $ 487
Interest cost 564 544 530
Expected return on plan assets (490) (568) (569)
Amortization of the unrecognized transition asset 13 13 13
------- ------- -------
Net periodic benefit cost $ 557 $ 459 $ 461
======= ======= =======

The following tables set forth benefit obligations, assets and the
accrued benefit cost of the Company's domestic defined benefit plan at December
31:

2002 2001
---------- ----------

Projected benefit obligation at beginning of the year $ 8,263 $ 8,036
Service cost 470 470
Interest cost 564 544
Actuarial (gain) loss 428 (636)
Benefits paid (191) (151)
---------- ----------
Projected benefit obligation at end of year $ 9,534 $ 8,263
========== ==========

Fair value of plan assets at beginning of the year $ 7,345 $ 7,500
Actual return on plan assets (833) (539)
Employer contributions 73 535
Benefits paid (191) (151)
---------- ----------
Fair value of plan assets at end of the year $ 6,394 $ 7,345
========== ==========

Benefit obligations in excess of plan assets $ (3,140) $ (918)
Unrecognized net loss 2,610 859
Unamortized transition asset - 13
Minimum pension liability (726) -
---------- ----------
Accrued benefit cost $ (1,256) $ (46)
========== ==========

In determining the projected benefit obligation, the assumed discount
rate was 6.75% for 2002 and 7.25% for 2001, the rate of increase in future
compensation levels was 3.5% in 2002 and 2001 and the expected long-term rate of
return on plan assets was 7.5% in 2002 and 2001. The Company's policy is to fund
amounts deductible for federal income tax purposes. Expense for defined
contribution plans was $2.7 million in 2002, $2.6 million in 2001 and $2.5
million in 2000. The Company recorded an additional minimum liability of $.7
million, $.5 million net of tax benefit, in Shareholders' equity by a charge to
other comprehensive income.

34

NOTE D DEBT AND CREDIT ARRANGEMENTS

December 31
--------------------------
2002 2001
---------- -----------

SHORT-TERM DEBT
Secured Notes
Chinese Rmb denominated at 5% $ 1,208 -

Unsecured short-term debt
US $ denominated at 2.87% - $ 1,170
Other short-term debt at 3.8 to 4.8% 38 31
Current portion of long-term debt 1,676 13,198
--------- ----------
Total short-term debt 2,922 14,399
--------- ----------
LONG-TERM DEBT
Revolving credit agreement 4,500 11,000
Australian dollar denominated term loans (A$3,000 and A$7,000),
at 6.15 to 6.38% currently, due annually 2003-2007 2,408 2,227
Brazilian Reais denominated term loan (R$2,100) at 11.8%,
due 2003 599 1,262
Other loans in various denominations, due 2003-2004 16 1,050
--------- ----------
Total long-term debt 7,523 15,539
Less current portion (1,676) (13,198)
--------- ----------
5,847 2,341
--------- ----------
Total debt $ 8,769 $ 16,740
========= ==========

During 2002, the Company completed an amendment to its primary
revolving credit agreement that matures December 31, 2005. The new amendment
replaces the $40 million revolving credit agreement that would have expired on
December 31, 2002 with a $20 million commitment. Interest rates under the
amended revolving credit agreement are at the money market rate plus 1%. The
effective interest rate at December 31, 2002 was 2.31%. At December 31, 2001,
the Company had $11 million outstanding under the prior revolving credit
agreement which was classified as short-term. As a result of positive cash flow
from operations, the Company has lowered its outstanding debt under the revolver
at December 31, 2002 to $4.5 million, which is classified as long-term. The
amended revolving credit agreement contains, among other provisions,
requirements for maintaining levels of working capital, net worth, and
profitability. At December 31, 2002 the Company was not in compliance with a
covenant related to interest expense coverage as a result of incurring a loss
for the year. The Company has received a waiver from the bank related to the
non-compliance.

Aggregate maturities of long-term debt during the next five years are
as follows: 2003, $1.7 million; 2004, $.2 million; 2005, $4.9 million; 2006, $.4
million and 2007, $.4 million.

Interest paid was $.6 million in 2002, $1.3 million in 2001 and $1.6
million in 2000.

NOTE E LEASES

The Company has commitments under operating leases primarily for office
and manufacturing space, transportation equipment and computer equipment. Rental
expense was $1.3 million in 2002, $1.4 million in 2001 and $1.3 million in 2000.
Future minimum rental commitments having non-cancelable terms exceeding one year
are $.9 million in 2003, $.8 million in 2004, $.8 million in 2005, $.7 million
in 2006, $.7 million in 2007 and an aggregate $12.9 million thereafter.

35

NOTE F INCOME TAXES

The provision for income taxes is based upon income before tax for
financial reporting purposes. Deferred tax assets and liabilities are recognized
for the expected future tax consequences of temporary differences between the
tax bases of assets and liabilities and their carrying value for financial
statement purposes. In estimating future tax consequences, the Company considers
anticipated future events, except changes in tax laws or rates, which are
recognized when enacted.

The components of income tax expense are as follows:

2002 2001 2000
---------- ------------ ----------

Current
Federal $ 1,070 $ 716 $ 2,753
Foreign 1,317 1,458 3,662
State and local 298 345 507
---------- ------------ ----------
2,685 2,519 6,922
---------- ------------ ----------
Deferred
Federal (1,713) (511) (575)
Foreign (428) 324 (178)
State and local 17 (76) (85)
---------- ------------ ----------
(2,124) (263) (838)
---------- ------------ ----------
$ 561 $ 2,256 $ 6,084
========== ============ ==========

The differences between the provision for income taxes at the U.S.
statutory rate and the tax shown in the Statements of Consolidated Operations
are summarized as follows:

2002 2001 2000
--------- ----------- ----------

Tax at statutory rate of 35% $ (202) $ 2,603 $ 5,996
State and local taxes, net of federal benefit 315 175 274
Non-deductible expenses 402 344 604
Non-U.S. tax rate variances net of foreign tax credits (101) (962) (890)
Valuation allowance 227 - -
Other, net (80) 96 100
--------- ----------- ----------
$ 561 $ 2,256 $ 6,084
========= =========== ==========

36

The tax effects of temporary differences that give rise to significant portions
of the Company's deferred tax assets (liabilities) at December 31 are as
follows:

2002 2001
---------- -----------

Deferred tax assets
Accrued compensation benefits $ 691 $ 696
Depreciation and other basis differences 1,701 1,717
Inventory obsolescence 1,612 770
Allowance for doubtful accounts 1,387 284
Benefit plans reserves 896 657
Closure reserves 379 -
NOL carryforwards 316 95
Other accrued expenses 736 517
---------- -----------
Gross deferred tax assets 7,718 4,736
Valuation allowance (506) (95)
---------- -----------
Net deferred tax assets 7,212 4,641
---------- -----------

Deferred tax liabilities
Depreciation and other basis differences (899) (431)
Inventory (290) (382)
Other (45) (228)
---------- -----------
Net deferred tax liabilities (1,234) (1,041)
---------- -----------
Net deferred tax assets $ 5,978 $ 3,600
========== ===========

2002 2001
---------- -----------

Change in net deferred tax asset
Provision for deferred tax $ (2,124) $ (263)
Items of other comprehensive loss (254) -

---------- -----------
Total change in net deferred tax $ (2,378) $ (263)
========== ===========

A deferred tax valuation allowance has been established for a portion
of the foreign tax credit carryforwards and certain net state deferred tax
assets due to the uncertainty of realizing future benefits from these temporary
items.

The Company has not provided for U.S. income taxes or foreign
withholding taxes on undistributed earnings of foreign subsidiaries which are
considered to be indefinitely reinvested in operations outside the U.S. The
amount of such earnings was approximately $49 million at December 31, 2002. If
distributed, the earnings would be subject to withholding taxes but would be
substantially free of U.S. income taxes.

In accordance with the applicable tax laws in China, the Company is
entitled to a preferential tax rate of 0% for the first two profit making years
after utilization of any tax loss carryforwards, which may be carried forward
for five years; and a 50% tax reduction for the succeeding three years beginning
in 2003. The favorable aggregate tax and per share effect was $751,000, or $.13
per share, for 2002, $488,000, or $.08 per share, for 2001, and $0 for 2000.

Income taxes paid, net of refunds, were $2.2 million in 2002, $4.7
million in 2001 and $6.2 million in 2000.

37

NOTE G STOCK OPTIONS

The 1999 Stock Option Plan (Plan) permits the grant of 300,000 options
to buy common shares of the Company to certain employees at not less than fair
market value of the shares on the date of grant. At December 31, 2002, there
were 138,000 shares remaining available for issuance under the Plan. Options
issued to date under the Plan vest 50% after one year following the date of the
grant, 75% after two years, 100% after three years and expire from five to ten
years from the date of grant.

2000 2001 2002
------------------------ ---------------------------- -------------------------
Weighted Weighted Weighted
Average Average Average
Exercise Exercise Exercise
Shares Price Shares Price Shares Price

Outstanding at January 1, - - 155,000 $15.32 157,000 $15.32
Granted 155,000 $15.32 2,000 15.00 5,000 18.75
Exercised - - - - 6,250 15.13
Forfeited - - - - 6,250 15.13
------- ------- -------
Outstanding at December 31, 155,000 15.32 157,000 15.32 149,500 15.45
======= ======= =======

Options Outstanding Options Exercisable
----------------------------------------------- ---------------------------
Weighted Weighted Weighted
Number Average Average Number Average
Range of Exercise Outstanding at Remaining Exercise Exercisable Exercise
Prices 12/31/02 Life Price at 12/31/02 Price

$15.13 - $16.64 142,500 6.4 years $15.34 106,250 $15.34
15.00 2,000 8.3 years 15.00 1,000 15.00
18.75 5,000 9.3 years 18.75 - -
------- --------
149,500 6.5 years 15.45 107,250 15.34
======= ========

As permitted under SFAS No. 123, Accounting for Stock-Based
Compensation, the Company applies the intrinsic value based method prescribed in
APB Opinion No. 25, Accounting for Stock Issued to Employees, to account for
stock options granted to employees to purchase common shares. Under this method,
compensation expense is measured as the excess, if any, of the market price at
the date of grant over the exercise price of the options. No compensation
expense has been recorded.

SFAS 123 requires pro forma disclosure of the effect on net income and
earnings per share when applying the fair value method of valuing stock-based
compensation. If the fair value method to measure compensation cost for the
Company's stock compensation plan had been used, the Company's net income would
have been reduced by $.04 million in 2001 ($.01 per share) and $.5 million in
2000 ($.09 per share). The impact on 2002 was immaterial. For purposes of this
pro forma disclosure, the estimated fair value of the options is amortized
ratably over the vesting period.

38

Year ended December 31,
-------------------------------------------
2002 2001 2000
------------ ------------ ------------

Net income (loss), as reported $ (1,140) $ 5,176 $ 11,051
Deduct:
Total stock -based employee compensation
expense determined under fair value based
method for all awards net of related taxes 6 41 491
------------ ------------ ------------
Pro forma net income (loss) $ (1,146) $ 5,135 $ 10,560
============ ============ ============
Earnings per share:
Basic - as reported $ (0.20) $ 0.90 $ 1.91
============ ============ ============
Basic - pro forma $ (0.20) $ 0.89 $ 1.82
============ ============ ============

Diluted - as reported $ (0.20) $ 0.90 $ 1.91
============ ============ ============
Diluted - pro forma $ (0.20) $ 0.89 $ 1.82
============ ============ ============

Disclosures under the fair value method are estimated using the
Black-Scholes option-pricing model with the following assumptions:

2002 2001 2000
------------ ------------- ------------

Risk-free interest rate 4.60% 5.50% 5.88%
Dividend yield 4.22% 3.74% 3.97%
Expected life 10 years 10 years 5 years
Expected volatility 21.1% 29.5% 25.6%

NOTE H COMPUTATION OF EARNINGS PER SHARE

2002 2001 2000
---------- --------- ----------

Numerator
Net income (loss) $ (1,140) $ 5,176 $ 11,051
========== ========= ==========
Denominator
Determination of shares
Weighted average common shares outstanding 5,766 5,755 5,790
Dilutive effect - employee stock options - - -
---------- --------- ----------
Diluted weighted average common shares outstanding 5,766 5,755 5,790
========== ========= ==========
Earnings per common share
Basic $ (0.20) $ 0.90 $ 1.91
Diluted $ (0.20) $ 0.90 $ 1.91

Due to the net loss from operations for the year ended December 31,
2002, 149,500 of stock options were excluded from the calculation of earnings
per share, as the result would have been anti-dilutive. For the years ended
December 31, 2001 and 2000, 157,000 and 155,000 of stock options were excluded
from the calculation of earnings per share due to the market price being lower
than the exercise price, and the result would have been anti-dilutive.

NOTE I BUSINESS ABANDONMENT AND REALIGNMENT CHARGES

Business Abandonment Charges

During the third quarter of 2002, the Company recorded a charge to
write-off certain assets and to record severance payments related to closing its
data communications operations in Europe. This entails winding down a

39

manufacturing operation, closing five sales offices, terminating leases and
reducing personnel by approximately 130. This action was taken as a result of
the continuing decline in the global telecommunication and data communication
markets and after failing to reach agreement on an acceptable selling price on
product supplied to a significant foreign customer. The Company incurred a
pre-tax charge of $4.7 million for these activities. Approximately $3.3 million
of the charge is related to asset write-downs, of which $2.1 million of
inventory write-offs were recorded in Cost of products sold and $1.2 million of
write-offs related to receivables was included in Costs and expenses on the
Statements of Consolidated Operations. The remaining of $1.4 million of the
charge, included in Cost of products sold and Costs and expenses, relates to
cash outlays for employee severance cost, cost of exiting leased facilities, the
termination of other contractual obligations and transitional costs.
Approximately $.5 million of the latter category of expenses was expended as of
December 31, 2002, and the remaining cash outlays are anticipated to be
completed by June 30, 2003.

SFAS No. 52, Foreign Currency Translation, provides for the transfer to
earnings of all or part of the relevant portion of the foreign currency
component of equity upon "substantially complete liquidation" of an investment
in a foreign subsidiary. At December 31, 2002, a significant portion of the
Company's European data communication operations noted above have already been
liquidated, all manufacturing has ceased, long-lived assets were transferred and
the remaining working capital is in the process of being liquidated.
Accordingly, the Company recorded a $.5 million currency translation charge to
earnings that was previously recorded as the cumulative translation adjustment
in shareholders' equity.

Business Realignment Charge

During the third quarter of 2001, the Company recorded business
realignment charges to write-off assets and to record severance payments related
to its data communications product line. These charges included abandoning a
three-year effort to expand into the market for local area network hubs and
media converters and reevaluation of the strategy for penetrating the
Asia-Pacific market with its data communication products. The Company incurred a
pre-tax charge of $3.1 million for these activities. Approximately $2.7 million
of the pre-tax charge was to reduce working capital and long-lived assets. The
remaining $.5 million was for cash outlays related to severance, earned
vacation, costs of exiting leased office space and other contractual
obligations. All cash outlays were completed by December 31, 2001.

NOTE J UNUSUAL CHARGES

During the year, the Company changed its split dollar life insurance
program on certain key directors by replacing existing policies and increasing
coverage by $13 million. These new policies resulted in a cash surrender value
(CSV) lower than cumulative premiums paid on the policies primarily as a result
of penalties in the event of an early termination of the policy. As a result,
pursuant to Financial Technical Bulletin 85-4, Accounting for Purchases of Life
Insurance, the Company recorded a charge of $.8 million in 2002. These expenses
will not be realized unless the Company decides to cancel the policies. The
Company intends to hold these policies for the life of the insured individuals
and therefore does not expect to realize any loss.

NOTE K BUSINESS SEGMENTS

The Company designs, manufactures and sells hardware employed in the
construction and maintenance of telecommunications, energy and other utility
networks. Principal products include cable anchoring and control hardware,
splice enclosures and devices which are sold primarily to customers in North and
South America, Europe and Asia.

The Company's segments are based on the way management makes operating
decisions and assesses performance. The Company's operating segments are
domestic and foreign operations. The accounting policies of the operating
segments are the same as those described in Note A. No individual foreign
country accounted for 10% or more of the Company's consolidated net sales or
assets for the years presented. It is not practical to present revenues by
product line by segments.

40

2002 2001 2000
------------ --------------- ------------

Net sales
Domestic $ 95,870 $ 113,308 $ 125,764
Foreign 73,972 83,057 81,568
------------ --------------- ------------
Total net sales $ 169,842 $ 196,365 $ 207,332
============ =============== ============
Intersegment sales
Domestic $ 2,084 $ 4,177 $ 4,996
Foreign 1,066 597 732
------------ --------------- ------------
Total intersegment sales $ 3,150 $ 4,774 $ 5,728
============ =============== ============
Operating income (loss)
Domestic - before realignment charge $ 2,498 $ 4,133 $ 8,535
Domestic - realignment charge - (2,601) -
Foreign - before abandonment/realignment charge 4,696 6,559 10,270
Foreign - abandonment/realignment charge (4,688) (520) -
Domestic - unusual charges (2,442) - -
Foreign - unusual charges (490) -
------------ --------------- ------------
(426) 7,571 18,805
Equity in net income of joint ventures 447 803 335
Interest income
Domestic - 254 58
Foreign 287 431 624
------------ --------------- ------------
287 685 682
Interest expense
Domestic (270) (953) (1,206)
Foreign (417) (474) (402)
------------ --------------- ------------
(687) (1,427) (1,608)
Other expense (200) (200) (1,079)
------------ --------------- ------------
Income before income taxes ($579) $ 7,432 $ 17,135
============ =============== ============

Identifiable assets
Domestic $ 74,388 $ 85,934 $ 97,905
Foreign 62,309 65,280 62,558
------------ --------------- ------------
136,697 151,214 160,463
Corporate 8,087 9,976 10,148
------------ --------------- ------------
Total assets $ 144,784 $ 161,190 $ 170,611
============ =============== ============

Long-lived assets
Domestic $ 47,302 $ 55,667 $ 59,852
Foreign 18,097 20,858 21,653
------------ --------------- ------------
$ 65,399 $ 76,525 $ 81,505
============ =============== ============
Expenditure for long-lived assets
Domestic $ 2,293 $ 3,666 $ 9,571
Foreign 2,413 2,530 4,817
------------ --------------- ------------
$ 4,706 $ 6,196 $ 14,388
============ =============== ============
Depreciation and amortization
Domestic $ 6,312 $ 7,905 $ 9,302
Foreign 2,706 2,415 2,109
------------ --------------- ------------
$ 9,018 $ 10,320 $ 11,411
============ =============== ============

Transfers between geographic areas are generally above cost and
consistent with rules and regulations of governing tax authorities. Corporate
assets are equity investments in joint ventures.

41

NOTE L QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

Three months ended
---------------------------------------------------------------
March 31 June 30 September 30 December 31
----------- ----------- -------------- --------------

2002
Net sales $ 44,008 $ 44,854 $ 41,587 $ 39,393
Gross profit 14,542 13,954 11,533 10,640
Income (loss) before income taxes 2,903 1,512 (2,445) (2,549)
Net income (loss) 2,001 1,037 (2,099) (2,079)
Net income (loss) per share, basic and diluted $0.35 $0.18 ($0.37) ($0.36)

2001
Net sales $ 50,073 $ 52,863 $ 49,127 $ 44,302
Gross profit 15,019 17,172 13,518 13,390
Income before income taxes 2,081 3,960 184 1,207
Net income 1,121 2,870 158 1,027
Net income per share, basic and diluted $ 0.19 $ 0.50 $ 0.03 $ 0.18

Third quarter 2002 includes a business abandonment charge of $3.3
million ($.57 per share). Fourth quarter of 2002 includes a $1.1 million ($.19
per share) asset impairment charge. Third quarter 2001 includes a business
realignment charge of $2.0 million ($.35 per share). See Note I in the Notes to
Consolidated Financial Statements for further discussion of these business
abandonment and realignment charges.

NOTE M RELATED PARTY TRANSACTIONS

The Company is a sponsor of Ruhlman Motorsports. Ruhlman Motorsports is
owned by Randall M. Ruhlman, a director of the Company, and by his wife. In
2000, 2001 and 2002, the Company paid $691,000, $658,000, and $658,000,
respectively, to Ruhlman Motorsports in sponsorship fees. In addition, in 2000,
2001 and 2002 the Company's Canadian subsidiary, Preformed Line Products
(Canada) Ltd., paid $80,000, $0, and $159,000, respectively, to Ruhlman
Motorsports in sponsorship fees. This sponsorship provides the Company with a
unique venue to entertain the Company's customers and to advertise on the race
car, which participates on the Trans-Am racing circuit. The Company believes
that its sponsorship contract with Ruhlman Motorsports is as favorable to the
Company as a similar contract with a similar independent third-party racing team
would be.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

None

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information required by this Item 10 is incorporated by reference
to the information under the captions "Election of Directors" and "Section 16(a)
Beneficial Ownership Compliance" in the Company's Proxy Statement dated March
28, 2003, for the Annual Meeting of Shareholders to be held April 28, 2002 (the
"Proxy Statement"). Information relative to executive officers of the Company is
contained in Part I of this Annual Report of Form 10-K.

ITEM 11. EXECUTIVE COMPENSATION

The information set forth under the caption "Executive Compensation" in
the Proxy Statement is incorporated herein by reference.

42

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Other than the information required by Item 201(d) of Regulation S-K
the information set forth under the caption "Security Ownership of Certain
Beneficial Owners and Management" in the Proxy Statement is incorporated herein
by reference. The information required by Item 201(d) of Regulation S-K is set
forth in Item 5 of this report.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information set forth under the captions "Certain Relationships and
Related Transactions" in the Proxy Statement is incorporated herein by
reference.

ITEM 14. CONTROLS AND PROCEDURES

An evaluation was performed within the last 90 days under the
supervision and with the participation of the Company's management, including
the CEO and CFO, of the effectiveness of the design and operation of the
Company's disclosure controls and procedures (as defined in Securities and
Exchange Act Rules 13a-14(c) and 15d-14(c)). Based on the evaluation, the
Company's management, including the CEO and CFO, concluded that the Company's
disclosure controls and procedures were effective as of December 31, 2002. There
have been no significant changes in the Company's internal controls or in other
factors that could significantly affect internal controls subsequent to the date
of management's evaluation.

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.

(a) Financial Statements and Schedule

PAGE FINANCIAL STATEMENTS
- ---- --------------------

25 Consolidated Balance Sheets as of December 31, 2001 and 2002
26 Statements of Consolidated Income as of December 31, 2000, 2001 and 2002
27 Statements of Consolidated Shareholders' Equity as of December 31, 2000, 2001 and 2002
28 Statements of Consolidated Cash Flows as of December 31, 2000, 2001 and 2002
29 Notes to Consolidated Financial Statements

PAGE SCHEDULE
- ---- --------

48 II - Valuation and Qualifying Accounts

(b) The following reports on form 8-K were filed during the quarter ended
December 31, 2002:

On November 7, 2002 the Company filed Form 8-K for Regulation FD
Disclosure.

(c) Exhibits

EXHIBIT
NUMBER EXHIBIT
- ------- -------

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).

43

10.1 Agreement between Ruhlman Motor Sports and Preformed Line Products Company dated March 10, 2003 regarding sponsorship of
racing car, filed herewith.
10.2 Agreement between Ruhlman Motor Sports and Preformed Line Products Company dated February 28, 2002 regarding sponsorship
of racing car (incorporated by reference to the Company's Form 10-K for the fiscal year ended December 31, 2001).
10.3 Employment Agreement between Kenneth W. Brownell, Jr. and Preformed Line Products Company dated December
3, 1998 (incorporated by reference to the Company's Registration Statement on Form 10).
10.4 Preformed Line Products Company 1999 Employee Stock Option Program (incorporated by reference to the
Company's Registration Statement on Form 10).
10.5 Preformed Line Products Company Officers Bonus Plan (incorporated by reference to the Company's
Registration Statement on Form 10).
10.6 Preformed Line Products Company Executive Life Insurance Plan - Summary (incorporated by reference to
the Company's Registration Statement on Form 10).
10.7 Preformed Line Products Company Supplemental Profit Sharing Plan (incorporated by reference to the
Company's Registration Statement on Form 10).
10.8 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).
10.9 Amendment to the Revolving Credit Agreement between National City Bank and Preformed Line Products Company,
dated October 31, 2002, filed herewith.
21 Subsidiaries of Preformed Line Products Company (incorporated by reference to the Company's
Registration Statement on Form 10).
23.1 Consent of PricewaterhouseCoopers LLP, Independent Accountants, filed herewith.
23.2 Consent of PricewaterhouseCoopers LLP, Independent Accountants, filed herewith.
23.3 Consent of Ernst & Young LLP, Independent Auditors, filed herewith.
99.1 Certification of the Principal Executive Officer, Robert G. Ruhlman, pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, filed herewith.
99.2 Certification of the Principal Executive Officer, Eric R. Graef, pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, filed herewith.

44

SIGNATURES

Pursuant to the requirements of Section 13 or 15(5) of the Securities
Exchange Act of 1934, the registrant has duly caused this registration statement
to be signed on its behalf by the undersigned, thereunto duly authorized.

PREFORMED LINE PRODUCTS COMPANY

March 18, 2003 / s / Robert G. Ruhlman
---------------------------------------------
Robert G. Ruhlman
President and Chief Executive Officer

March 18, 2003 /s/ Eric R. Graef
---------------------------------------------
Eric R. Graef
Vice President Finance and Treasurer

Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on behalf of
the registrant in the capacity and on the dates indicated.

March 18, 2003 /s/ Jon R. Ruhlman
---------------------------------------------
Jon R. Ruhlman
Chairman

March 18, 2003 /s/ Frank B. Carr
---------------------------------------------
Frank B. Carr
Director

March 18, 2003 /s/ John D. Drinko
---------------------------------------------
John D. Drinko
Director

March 18, 2003 /s/ Wilber C. Nordstom
---------------------------------------------
Wilber C. Nordstrom
Director

March 18, 2003 /s/ Barbara P. Ruhlman
---------------------------------------------
Barbara P. Ruhlman
Director

March 18, 2003 /s/ Randall M. Ruhlman
---------------------------------------------
Randall M. Ruhlman
Director

March 18, 2003 /s/ Robert G. Ruhlman
---------------------------------------------
Robert G. Ruhlman
Director

45

CERTIFICATIONS

I, Robert G. Ruhlman, President and Chief Executive Officer, certify that:

1. I have reviewed this annual report on Form 10-K of Preformed Line Products;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this annual report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this annual
report (the "Evaluation Date"); and

c) presented in this annual report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):

a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and

6. The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date: March 18, 2003

/s/ Robert G. Ruhlman
---------------------------------------------
Robert G. Ruhlman
President and Chief Executive Officer
(Principal Executive Officer)

46

I, Eric R. Graef, Vice President-Finance and Treasurer, certify that:

1. I have reviewed this annual report on Form 10-K of Preformed Line Products;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this annual report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this annual
report (the "Evaluation Date"); and

c) presented in this annual report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):

a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and

6. The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date: March 18, 2003

/s/ Eric R. Graef
---------------------------------------------
Eric R. Graef
Vice President - Finance and Treasurer
(Principal Accounting Officer)

47

PREFORMED LINE PRODUCTS COMPANY

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
Years ended December 31, 2002, December 31, 2001, and December 31, 2000
(In Thousands)

Balance at Additions charged Other
beginning to costs and additions or Balance at
For the year ended December 31, 2002: of period expenses Deductions deductions end of period
--------- -------- ---------- ---------- -------------

Allowance of doubtful accounts 813 3,339 (380) (2) 3,770
Inventory Reserve 2,390 3,536 (997) (104) 4,825
Product Return Reserve 160 125 - - 285
Accrued Product Warranty 147 142 (147) - 142

Balance at Additions charged Other
beginning to costs and additions or Balance at
For the year ended December 31, 2001: of period expenses Deductions deductions end of period
--------- -------- ---------- ---------- -------------

Allowance of doubtful accounts 910 447 (514) (30) 813
Inventory Reserve 2,470 1,119 (1,196) (3) 2,390
Product Return Reserve - 160 - - 160
Accrued Product Warranty 155 - (8) - 147

Balance at Additions charged Other
beginning to costs and additions or Balance at
For the year ended December 31, 2000: of period expenses Deductions deductions end of period
--------- -------- ---------- ---------- -------------

Allowance of doubtful accounts 505 503 (92) (6) 910
Inventory Reserve 1,203 1,695 (428) - 2,470
Product Return Reserve - - - - -
Accrued Product Warranty - 155 - - 155

48

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 Agreement between Ruhlman Motor Sports and Preformed Line Products Company dated March 10, 2003
regarding sponsorship of racing car, filed herewith.
10.2 Agreement between Ruhlman Motor Sports and Preformed Line Products Company dated February 28,
2002 regarding sponsorship of racing car (incorporated by reference to the Company's Form 10-K
for the fiscal year ended December 31, 2001).
10.3 Employment Agreement between Kenneth W. Brownell, Jr. and Preformed Line Products Company dated
December 3, 1998 (incorporated by reference to the Company's Registration Statement on Form 10).
10.4 Preformed Line Products Company 1999 Employee Stock Option Program (incorporated by reference
to the Company's Registration Statement on Form 10).
10.5 Preformed Line Products Company Officers Bonus Plan (incorporated by reference to the Company's
Registration Statement on Form 10).
10.6 Preformed Line Products Company Executive Life Insurance Plan - Summary (incorporated by
reference to the Company's Registration Statement on Form 10).
10.7 Preformed Line Products Company Supplemental Profit Sharing Plan (incorporated by reference to
the Company's Registration Statement on Form 10).
10.8 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).
10.9 Amendment to the Revolving Credit Agreement between National City Bank and Preformed Line
Products Company, dated October 31, 2002, filed herewith.
21 Subsidiaries of Preformed Line Products Company (incorporated by reference to the Company's
Registration Statement on Form 10).
23.1 Consent of PricewaterhouseCoopers LLP, Independent Accountants, filed herewith.
23.2 Consent of PricewaterhouseCoopers LLP, Independent Accountants, filed herewith.
23.3 Consent of Ernst & Young LLP, Independent Auditors, filed herewith.
99.1 Certification of the Principal Executive Officer, Robert G. Ruhlman, pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, filed herewith.
99.2 Certification of the Principal Executive Officer, Eric R. Graef, pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, filed herewith.

49