The reportable segments are PLP-USA, Australia, Brazil, South Africa, Canada, Poland, and All Other. Our PLP-USA segment is comprised of our U.S. operations primarily supporting our domestic energy and telecommunications products. The Australia segment is comprised of all of our operations in Australia supporting energy, telecommunications, data communications and solar products. Our Canada and Poland segments are comprised of the manufacturing and sales operations from those locations which meet at least one of the criteria of a reportable segment. Our final two segments are Brazil and South Africa, which are comprised of a manufacturing and sales operation, and have been included as segments to comply with reporting segments for 75% of consolidated sales. Our remaining operations are included in All Other as none of these operations meet the criteria for a reportable segment and individually represent less that 10% for each of our combined net sales, net income and assets.
DISCONTINUED OPERATION
Our consolidated financial statements were impacted by the divestiture of Superior Modular Products (SMP) on May 30, 2008. We sold our SMP subsidiary for $11.7 million a $.8 million gain, net of tax, on the sale of the business, which includes expenses incurred related to the divestiture of SMP, and a holdback of $1.5 million, which has been received as of March 31, 2009. We do not have any significant continuing involvement in the operations of SMP after the closing of the sale. For tax purposes, the sale of SMP generated a capital loss, which was not deductible except for amounts used to offset capital gains in the current year and from a preceding year. A full valuation allowance was provided against the deferred tax asset on the remaining portion of the capital loss carryover. The operating results of SMP are presented in our consolidated statements of operations as discontinued operations, net of tax, and all periods presented have been reclassified. For the three month period ended March 31, 2008, income from discontinued operations was $.1 million, or $.02 per diluted share. Preface
Our net sales for the three month period ended March 31, 2009 decreased $1.2 million, or 2%, and gross profit decreased $.4 million, or 2%, compared to the three month period ended March 31, 2008. Our net sales decrease was driven by a 14% decrease in total foreign net sales primarily as a result of the effect on the change in currency offset by a 12% increase in the U.S. net sales. The unfavorable effect on the change in the translation rate of local currencies to U.S. dollars compared to 2008 resulted in an $8.1 million decrease in net sales. Gross profit decreased $.4 million primarily due to the decrease in net sales. Costs and expenses remained flat as foreign costs and expenses decreased $1 million, partially offset by an increase in U.S. costs and expenses of $.9 million. As a result, income from continuing operations, net of tax of $2.7 million, decreased $.1 million, compared to the three month period ended March 31, 2008.

THREE MONTH PERIOD ENDED MARCH 31, 2009 COMPARED TO THREE MONTH PERIOD ENDED
MARCH 31, 2008
Net Sales. For the three month period ended March 31, 2009, net sales were
$58.7 million, a decrease of $1.2 million, or 2%, from the three month period
ended March 31, 2008 as summarized in the following table:

                                               Three month period ended March 31
                                                                 Change            Change
                                                                 due to          excluding
                                                                currency          currency          %
thousands of dollars     2009         2008        Change       translation      translation      change

Net sales
PLP-USA                $ 28,671     $ 25,007     $  3,664     $           -     $      3,664          15 %
Australia                 5,682        6,905       (1,223 )          (2,097 )            874          13
Brazil                    5,192        6,055         (863 )          (1,758 )            895          15
South Africa              1,854        1,601          253              (520 )            773          48
Canada                    2,355        2,366          (11 )            (561 )            550          23
Poland                    2,958        3,935         (977 )          (1,354 )            377          10
All Other                11,982       13,996       (2,014 )          (1,760 )           (254 )        (2 )

Consolidated           $ 58,694     $ 59,865     $ (1,171 )   $      (8,050 )   $      6,879          11 %

The increase in PLP-USA net sales of $3.7 million, or 15%, was primarily due to sales volume increase of $2.7 million and a price/ mix increase of $2 million related to our energy sales, and an increase in our exports sales of $.6 million primarily due to product sales mix, partially offset by a sales volume decrease of $2 million in our communication sales. We anticipate a flat to slight increase in sales for the remainder of 2009, although we believe PLP-USA sales for the year may be negatively affected by a continued declining economy and depressed housing market. International net sales for the three month period ended March 31, 2009 were unfavorably affected by $8.1 million when converted to U.S. dollars, as a result of a stronger U.S. dollar to certain foreign currencies. Excluding the effect of currency translation, Australia net sales increased $.9 million, or 13%, primarily as a result of higher volume/ mix in energy sales compared to 2008. Excluding the effect of currency translation, Brazil net sales increased $.9 million, or 15%, primarily as a result of increased volume in energy and telecommunication sales. Excluding the effect of currency translation, South Africa net sales increased $.8 million, or 48%, primarily as a result of increased volume in energy sales. Excluding the effect of currency translation, Canada net sales increased $.6 million, or 23%, due to higher sales volume in their markets. Excluding the effect of currency translation, Poland net sales increased $.4 million primarily due to an increase in sales volume. Excluding the effect of currency translation, All Other net sales decreased $.3 million, or 2%, due to a decrease in volume. We continue to see competitive pricing pressures globally as well as a decline in the global economy which will continue to negatively affect sales and profitability in 2009.
Gross profit. Gross profit of $18.6 million for the three month period ended March 31, 2009 decreased $.4 million, or 2%, compared to the three month period ended March 31, 2008 as summarized in the following table:

                                               Three month period ended March 31
                                                                 Change            Change
                                                                 due to          excluding
                                                                currency          currency          %
thousands of dollars     2009         2008        Change       translation      translation       change

Gross profit
PLP-USA                $  9,320     $  8,100     $  1,220     $           -     $      1,220           15 %
Australia                 1,553        2,030         (477 )            (568 )             91            4
Brazil                    1,437        1,484          (47 )            (481 )            434           29
South Africa                743          730           13              (209 )            222           30
Canada                      967        1,010          (43 )            (231 )            188           19
Poland                      941          934            7              (444 )            451           48
All Other                 3,617        4,717       (1,100 )            (601 )           (499 )        (11 )

Consolidated           $ 18,578     $ 19,005     $   (427 )   $      (2,534 )   $      2,107           11 %

PLP-USA gross profit of $9.3 million for the three month period ended March 31, 2009 increased $1.2 million, or 15%, compared to the three month period ended March 31, 2008. PLP-USA gross profit increased primarily due to higher net sales. Excluding the effect of currency translation, the Australia gross profit increase of $.1 million was a result of $.3 million from higher net sales partially offset by higher material costs of $.2 million. Excluding the effect of currency translation, the Brazil gross profit increased $.4 million primarily due to a $.3 million increase in net sales coupled with an improvement in manufacturing efficiencies of $.2 million partially offset by an increase in material costs of $.1 million. Excluding the effect of currency translation, South Africa gross profit increased $.2 million due to $.3 million from an increase in net sales and a $.1 million improvement in manufacturing efficiencies partially offset by higher material costs of $.2 million. Excluding the effect of currency translation, Canada gross profit increased $.2 million primarily due to increased net sales. Excluding the effect of currency translation, Poland gross profit increase of $.5 million was the result of $.2 million from higher net sales, lower material costs of $.4 million partially offset by increased manufacturing costs of $.1 million. Excluding the effect of currency translation, All Other gross profit decreased $.5 million due to higher material costs of $.3 million coupled with an increase in manufacturing costs of $.2 million.
Cost and expenses. Cost and expenses for the three month period ended March 31, 2009 decreased $.1 million, or less than 1%, compared to the three month period ended March 31, 2008 as summarized in the following table:

                                               Three month period ended March 31
                                                                Change            Change
                                                                due to          excluding
                                                               currency          currency          %
thousands of dollars     2009         2008       Change       translation      translation       change
Costs and expenses
PLP-USA                $  8,632     $  7,733     $   899     $           -     $        899           12 %
Australia                 1,233        1,564        (331 )            (452 )            121            8
Brazil                    1,236        1,270         (34 )            (413 )            379           30
South Africa                274          231          43               (76 )            119           52
Canada                      393          447         (54 )             (93 )             39            9
Poland                      411          652        (241 )            (175 )            (66 )        (10 )
All Other                 2,587        2,932        (345 )            (432 )             87            3

Consolidated           $ 14,766     $ 14,829     $   (63 )   $      (1,641 )   $      1,578           11 %

PLP-USA costs and expenses increased $.9 million primarily due to an increase in personnel related costs of $.5 million, consulting expense of $.2 million, commissions related to higher sales of $.3 million and decrease in the cash surrender value of life insurance policies of $.5 million partially offset by a decreases in travel, audit, tax compliance and advertising expenses of $.6 million. Excluding the effect of currency translation, Australia costs and expenses increased $.1 million primarily due to higher personnel related costs due to the BlueSky Energy Pty Ltd acquisition on May 21, 2008. Excluding the effect of currency translation, Brazil costs and expenses increased $.4 million primarily due to personnel related costs. Excluding the effect of currency translation, South Africa's costs and expenses increased $.1 million primarily due to personnel related costs. Excluding the effect of currency translation, Canada costs and expenses remained relatively flat compared to 2008. Excluding the effect of currency translation, Poland's costs and expenses decreased $.1 million primarily due to personnel related costs. Excluding the effect of currency translation, All Other costs and expenses increased $.1 million primarily due to personnel related costs.
Operating income. Operating income of $3.8 million for the three month period ended March 31, 2009 decreased $.4 million, or 9%, compared to the three month period ended March 31, 2008 primarily due to the $.4 million decrease in gross profit partially offset by the decrease in costs and expenses. PLP-USA operating income increased $.2 million primarily as a result of the $1.2 million increase in gross profit partially offset by a $.9 million increase in costs and expenses. Australia operating income decreased $.1 million as a result of the $.5 million decrease in gross profit partially offset by a $.3 million decrease in costs and expenses and intercompany royalty expense of $.1 million. Brazil operating income decreased $.1 million primarily as a result of the $.1 million decrease in gross profit. South Africa and Canada operating income remained relatively unchanged compared to the three month period ended March 31, 2008. Poland operating income increased $.2 million primarily as a result of an increase in gross profit. All Other operating income decreased $.7 million primarily as a result of the $1.1 million decrease in gross profit partially offset by the $.3 million decrease in cost and expenses.

Other income. Other income for the three month period ended March 31, 2009 of $.5 million increased $.4 million compared to the three month period ended March 31, 2008. The increase in other income is primarily related to the discovery of natural gas at our corporate headquarters property in Mayfield Village, Ohio. Production of the natural gas well commenced in May 2008. Income taxes. Income taxes for the three month period ended March 31, 2009 of $1.6 million increased by $.2 million compared, to the same period in 2008. The effective tax rate for the three month period ended March 31, 2009 was 37% compared to 33% in the three month period ended March 31, 2008. The effective tax rate for 2009 is greater than the statutory federal rate of 34% primarily due to the losses in foreign jurisdictions providing no current tax benefits, the effect of permanent nondeductible expenses in the U.S., partially offset by the favorable benefit from foreign earnings in jurisdictions with lower tax rates.
Income from continuing operations, net of tax. As a result of the preceding items, income from continuing operations, net of tax for the three month period ended March 31, 2009 was $2.7 million, compared to income from continuing operations , net of tax of $2.8 million, for the three month period ended March 31, 2008 as summarized in the following table:

                                                    Three month period ended March 31
                                                                     Change             Change
                                                                     due to            excluding
                                                                    currency           currency            %
thousands of dollars       2009         2008         Change        translation        translation        change

Income from continuing
operations
PLP-USA                   $ 1,156      $   878      $    278      $           -      $         278            32 %
Australia                      50           88           (38 )              (16 )              (22 )         (25 )
Brazil                         94          120           (26 )              (32 )                6             5
South Africa                  307          323           (16 )              (88 )               72            22
Canada                        322          301            21                (77 )               98            33
Poland                        425          200           225               (210 )              435           218
All Other                     363          924          (561 )             (124 )             (437 )         (47 )

Consolidated              $ 2,717      $ 2,834      $   (117 )    $        (547 )    $         430            15 %

PLP-USA income from continuing operations, net of tax increased $.3 million primarily as a result of the $.2 million increase in operating income coupled with an increase in other income of $.4 million, partially offset by an increase in income tax expense. Australia, Brazil and South Africa income from continuing operations, net of tax decreased due to a decrease in operating income compared to 2008. Canada income from continuing operations, net of tax remained relatively flat compared to 2008. Poland income from continuing operations, net of tax increased $.2 million primarily as a result of a $.2 million increase in operating income compared to 2008. All Other income from continuing operations, net of tax decreased $.6 million primarily as a result of the $.7 million decrease in operating income partially offset by a decrease in income tax expense.
APPLICATION OF CRITICAL ACCOUNTING POLICIES AND ESTIMATES Our critical accounting policies are consistent with the information set forth in Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, included in our Form 10-K for the year ended December 31, 2008 and are, therefore, not presented herein.
WORKING CAPITAL, LIQUIDITY AND CAPITAL RESOURCES Cash increased $.9 million for the three month period ended March 31, 2009. Net cash provided by operating activities was $3.6 million primarily because of net income, depreciation, an increase in trade payables and accrued liabilities partially offset by an increase in accounts receivable. The major investing and financing uses of cash were $2.2 million in capital expenditures, $1.1 million in dividend payments, and $.2 million in net debt repayments offset by cash proceeds of $.8 million related to the sale of SMP.

Net cash used in investing activities of $1.4 million represents a decrease of $2.2 million when compared to the cash used for investing activities in the three month period ended March 31, 2008. In May 2008, we sold the SMP operations and received the remaining $.8 million in escrow during the first quarter of 2009. Capital expenditures decreased $1.5 million in the three month period ended March 31, 2009 when compared to the same period in 2008 due mostly to a solar installation project at our Spain subsidiary, additional machinery investment at our Poland subsidiary, and a building expansion at our China subsidiary all during 2008.
Cash used in financing activities was $.8 million compared to $2 million in the three month period ended March 31, 2008. This decrease was primarily a result of $.2 million in net debt borrowings in 2009 compared to $.8 million in net debt repayments in 2008.
Our current ratio was 3.1 to 1 at March 31, 2009 and 3.2 to 1 at December 31, 2008. At March 31, 2009, our unused balance under our main credit facility was $20 million and our bank debt to equity percentage was 5%. Our main revolving credit agreement contains, among other provisions, requirements for maintaining levels of working capital, net worth, and profitability. At March 31, 2009, we were in compliance with these covenants. We believe our future operating cash flows will be more than sufficient to cover debt repayments, other contractual obligations, capital expenditures and dividends. In addition, we believe our existing cash of $20.8 million, together with our untapped borrowing capacity, provides substantial financial resources. If we were to incur significant additional indebtedness, we expect to be able to meet liquidity needs under our credit facilities. We do not believe we would increase our debt to a level that would have a material adverse impact upon results of operations or financial condition.
RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS In March 2008, the FASB issued SFAS No. 161, "Disclosures about Derivative Instruments and Hedging Activities" (SFAS 161). SFAS 161 requires companies with derivative instruments to disclose information on how derivative instruments and related hedged items are accounted for under SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities, and how derivative instruments and related hedged items affect a Company's financial position, financial performance and cash flows." SFAS 161 was effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. The adoption of SFAS 161 did not have a material impact on our financial condition, results of operations, or cash flows.
In December 2007, the FASB issued SFAS No. 160, "Noncontrolling Interests in Consolidated Financial Statements an amendment of ARB No. 51" (SFAS 160). This standard amends ARB No. 51 to establish accounting and reporting for the noncontrolling interest in a subsidiary and for deconsolidation of a subsidiary. It also amends certain of ARB No. 51's consolidation procedures for consistency with the requirements of SFAS No. 141R, "Business Combinations." This standard became effective on January 1, 2009. As SFAS 160 is applied prospectively to future business combinations, the only impact to us is the retroactive presentation and disclosure requirements for all periods presented on our consolidated financial statements of noncontrolling interests.
In December 2007, the FASB issued SFAS No. 141R, "Business Combinations" (SFAS 141R). SFAS 141R revises the principles and requirements for how the acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, any noncontrolling interest in the acquiree and the goodwill acquired in a business combination or gain from a bargain purchase. SFAS 141R also revises the principles and requirements for how the acquirer determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. This pronouncement became effective as of January 1, 2009. The adoption of this statement will only impact our consolidated financial statements to the extent we enter into a business acquisition in the future. In April 2008, the FASB issued FAS 142-3, "Determination of the Useful Life of Intangible Assets" (FSP 142-3). FSP 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under SFAS No. 142, "Goodwill and Other Intangible Assets" (SFAS 142). The intent of FSP 142-3 is to improve the consistency between the useful life of a recognized intangible asset under SFAS 142 and the period of expected cash flows used to measure the fair value of the asset under SFAS 141R and other U.S. generally accepted accounting principles. FSP 142-3 applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning after December 15, 2008. The adoption of this statement will only impact our consolidated financial statements to the extent we enter into a business acquisition in the future.

In June 2008, the FASB issued FSP No. Emerging Issues Task Force (EITF) 03-6-1, "Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities" (FSP EITF 03-6-1). FSP EITF 03-6-1 provides that unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of earnings per share pursuant to the two-class method in SFAS No. 128, "Earnings per Share." We adopted FSP EITF 03-6-1 as of January 1, 2009. The adoption of FSP EITF 03-6-1 did not have an impact on our consolidated financial statements.
In April 2009, the FASB issued FSP 141R-1, "Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies" (FSP 141R-1). FSP 141R-1 amends and clarifies SFAS 141R to require that an acquirer recognize at fair value, at the acquisition date, an asset acquired or a liability assumed in a business combination that arises from a contingency if the acquisition-date fair value of that asset or liability can be determined during the measurement period. If the acquisition-date fair value of such an asset acquired or liability assumed cannot be determined, the acquirer should apply the provisions of SFAS 5, "Accounting for Contingencies," to determine whether the contingency should be recognized at the acquisition date or after it. FSP 141R-1 is effective for assets or liabilities arising from contingencies in business combinations for which the acquisition date is after the beginning of the first annual reporting period beginning after December 15, 2008. Accordingly, we adopted FSP 141R-1 at the same time as SFAS 141R. The adoption of this statement will only impact our consolidated financial statements to the extent we enter into a business acquisition in the future.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS In April 2009, the FASB issued FSP No. 107-1 and APB 28-1, "Interim Disclosures about Fair Value of Financial Instruments" (FSP FAS 107-1 and APB 28-1), which amends FASB Statement No. 107, "Disclosures about Fair Value of Financial Instruments" and APB Opinion No. 28, "Interim Financial Reporting," to require disclosures about the fair value of financial instruments for interim reporting periods. FSP FAS 107-1 and APB 28-1 will be effective for interim reporting periods ending after June 15, 2009. We believe the adoption of this staff position will not have a material impact on our financial position or results of operation.
In April 2009, the FASB issued FSP No. 157-4, "Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly" (FSP FAS 157-4), which provides additional guidance in accordance with FAS 157, when the volume and level of activity for the asset or liability has significantly decreased. . . .