ADTRAN, Inc. Reports Results for the Fourth Quarter 2012 and Declares Quarterly Cash Dividend

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ADTRAN, Inc. Reports Results for the Fourth Quarter 2012 and Declares Quarterly Cash Dividend

HUNTSVILLE, Ala.--(BUSINESS WIRE)-- ADTRAN, Inc. (NAS: ADTN) reported results for the fourth quarter 2012. For the quarter, sales were $139,756,000 compared to $175,286,000 for the fourth quarter of 2011. Net income was $3,961,000 for the quarter compared to $31,163,000 for the fourth quarter of 2011. Earnings per share, assuming dilution, were $0.06 for the quarter compared to $0.48 for the fourth quarter of 2011. Non-GAAP earnings per share for the quarter were $0.11 compared to $0.54 for the fourth quarter of 2011. The reconciliation between GAAP earnings per share, diluted, and non-GAAP earnings per share, diluted, is in the table provided.

ADTRAN Chief Executive Officer Tom Stanton stated, "Our fourth quarter results came in largely as expected with both our carrier and enterprise divisions performing to forecast. Our focus remains on capitalizing on the significant network upgrades that lie ahead of us while maintaining tight cost control as we navigate through the current environment."


The Company also announced that its Board of Directors declared a cash dividend for the fourth quarter of 2012. The quarterly cash dividend is $0.09 per common share to be paid to holders of record at the close of business on February 7, 2013. The ex-dividend date is February 5, 2013 and the payment date is February 21, 2013.

Non-GAAP earnings per share exclude the effect of acquisition related expenses, amortizations and adjustments, and stock compensation expense.

The Company confirmed that its fourth quarter conference call will be held Wednesday, January 16, 2013 at 9:30 a.m. Central Time. This conference call will be web cast live through StreetEvents.com. To listen, simply visit the Investor Relations site at www.adtran.com or www.streetevents.com approximately 10 minutes prior to the start of the call and click on the conference call link provided.

An online replay of the conference call will be available for seven days at www.streetevents.com. In addition, an online replay of the conference call, as well as the text of the Company's earnings release, will be available on the Investor Relations site at www.adtran.com for at least 12 months following the call.

ADTRAN, Inc. is a leading global provider of networking and communications equipment. ADTRAN's products enable voice, data, video and Internet communications across a variety of network infrastructures. ADTRAN solutions are currently in use by service providers, private enterprises, government organizations, and millions of individual users worldwide. For more information, please visit www.adtran.com.

For more information, contact the company at 800 9ADTRAN (800 923-8726) or via email at info@adtran.com. On the Web, visit www.adtran.com.

This press release contains forward-looking statements which reflect management's best judgment based on factors currently known. However, these statements involve risks and uncertainties, including the successful development and market acceptance of new products, the degree of competition in the market for such products, the product and channel mix, component costs, manufacturing efficiencies, and other risks detailed in our annual report on Form 10-K for the year ended December 31, 2011 and on Form 10-Q for the quarter ended September 30, 2012. These risks and uncertainties could cause actual results to differ materially from those in the forward-looking statements included in this press release.

Condensed Consolidated Balance Sheet

(Unaudited)

(In thousands)

 
December 31,
2012
December 31,
2011
Assets
Cash and cash equivalents$68,457$42,979
Short-term investments160,481159,347
Accounts receivable, net81,19476,130
Other receivables16,2539,743
Inventory102,58387,800
Prepaid expenses4,1483,119
Deferred tax assets, net 13,055 12,125
Total Current Assets446,171391,243
 
Property, plant and equipment, net80,24675,295
Deferred tax assets, net10,2618,345
Goodwill3,4923,492
Other assets13,4827,131
Long-term investments 332,729 332,008
 
Total Assets$886,381$817,514
 
Liabilities and Stockholders' Equity
Accounts payable$42,173$29,404
Unearned revenue38,0519,965
Accrued expenses10,3095,876
Accrued wages and benefits15,02213,518
Income tax payable, net 1,211 3,169
Total Current Liabilities106,76661,932
 
Non-current unearned revenue23,8034,874
Other non-current liabilities17,40612,077
Bonds payable 46,000 46,500
Total Liabilities193,975125,383
 
Stockholders' Equity 692,406 692,131
 
Total Liabilities and Stockholders' Equity$886,381$817,514

Consolidated Statements of Income

(Unaudited)

(In thousands, except per share data)

 
Three Months EndedTwelve Months Ended
December 31,December 31,
2012  2011 2012  2011 
 
Sales$139,756$175,286$620,614$717,229
Cost of sales 72,373  76,066  303,971  302,911 
 
Gross Profit67,38399,220316,643414,318
 
Selling, general and administrative expenses31,39332,954134,523124,879
Research and development expenses 33,116  25,151  125,951  100,301 
 
Operating Income2,87441,11556,169189,138
 
Interest and dividend income2,0061,8137,6577,642
Interest expense(591)(603)(2,347)(2,398)
Net realized investment gain2,1973,3339,55012,454
Other income (expense), net(82)(297)183(694)
Gain on bargain purchase of a business -  -  1,753  - 
 
Income before provision for income taxes6,40445,36172,965206,142
 
Provision for income taxes (2,443) (14,198) (25,702) (67,565)
 
Net Income$3,961 $31,163 $47,263 $138,577 
 
Weighted average shares outstanding - basic62,54263,68563,25964,145
Weighted average shares outstanding - diluted (1)62,69064,58663,77465,416
 
Earnings per common share - basic$0.06$0.49$0.75$2.16
Earnings per common share - diluted (1)$0.06$0.48$0.74$2.12
 
(1) Assumes exercise of dilutive stock options calculated under the treasury stock method.

Consolidated Statements of Comprehensive Income

(Unaudited)

(In thousands)

  
Three Months EndedTwelve Months Ended
December 31,December 31,
2012  2011 2012  2011 
 
Net Income$3,961 $31,163 $47,263 $138,577 
 
Other Comprehensive Income (Loss), net of tax:
 

Net change in unrealized gains (losses) on marketable securities

(2,042)(1,745)(187)(13,004)

Reclassification adjustments for amounts included in net income

(29)(6)135(688)
Defined benefit plan adjustments(1,952)-(1,952)-
Foreign currency translation (21) 877  170  (154)
 
Other Comprehensive Income (Loss), net of tax (4,044) (874) (1,834) (13,846)
 
Comprehensive Income (Loss), net of tax$(83)$30,289 $45,429 $124,731 

Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

 
Twelve Months Ended
December 31,
2012  2011 
Cash flows from operating activities:
Net income$47,263$138,577
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization14,07911,499
Amortization of net premium on available-for-sale investments8,2576,617
Net realized gain on long-term investments(9,550)(12,454)
Net (gain) loss on disposal of property, plant and equipment(214)6
Gain on bargain purchase of a business(1,753)-
Stock-based compensation expense9,2649,169
Deferred income taxes(3,785)575
Tax benefit from stock option exercises1,90510,525
Excess tax benefits from stock-based compensation arrangements(1,456)(9,373)
Change in operating assets and liabilities:
Accounts receivable, net(4,365)(4,939)
Other receivables2,977(5,781)
Income tax receivable, net-2,741
Inventory7,163(12,734)
Prepaid expenses and other assets(1,045)522
Accounts payable7,2656,178
Accrued expenses and other liabilities11,5836,309
Income tax payable, net (1,960) 3,169 
Net cash provided by operating activities85,628150,606
 
Cash flows from investing activities:
Purchases of property, plant and equipment(12,075)(11,912)
Proceeds from disposals of property, plant and equipment266-
Proceeds from sales and maturities of available-for-sale investments282,039466,243
Purchases of available-for-sale investments(282,740)(554,629)
Acquisition of business 7,496  (22,661)
Net cash used in investing activities(5,014)
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