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

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

HUNTSVILLE, Ala.--(BUSINESS WIRE)-- ADTRAN, Inc. (NASDAQ:ADTN) reported results for the third quarter 2012. For the quarter, sales were $162,125,000 compared to $192,194,000 for the third quarter of 2011. Net income was $9,272,000 for the quarter compared to $36,213,000 for the third quarter of 2011. Earnings per share, assuming dilution, were $0.15 for the quarter compared to $0.56 for the third quarter of 2011. Non-GAAP earnings per share for the quarter were $0.20 compared to $0.61 for the third 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, "This quarter's performance came in line with our revised expectations. Although current market conditions limit near term visibility, we are confident that our market share position and globalization efforts will lead to significantly better performance in the future."

The Company also announced that its Board of Directors declared a cash dividend for the third 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 October 25, 2012. The ex-dividend date is October 23, 2012 and the payment date is November 8, 2012.

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

The Company confirmed that its third quarter conference call will be held Wednesday, October 10, 2012 at 9:30 a.m. Central Time. This conference call will be web cast live through To listen, simply visit the Investor Relations site at or 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 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 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

For more information, contact the company at 800 9ADTRAN (800 923-8726) or via email at On the Web, visit

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 our quarterly report on Form 10-Q for the quarter ended June 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


(In thousands)

   September 30,
   December 31,


Cash and cash equivalents$43,535$42,979
Short-term investments190,333159,347
Accounts receivable, net102,69376,130
Other receivables8,2609,743
Prepaid expenses4,3543,119
Deferred tax assets, net 12,729 12,125

Total Current Assets


Property, plant and equipment, net81,90575,295
Deferred tax assets, net6,8438,345
Other assets13,8257,131
Long-term investments 327,106 332,008

Total Assets


Liabilities and Stockholders' Equity

Accounts payable$52,285$29,404
Unearned revenue31,6729,965
Accrued expenses10,3105,876
Accrued wages and benefits16,89413,518
Income tax payable, net 4,186 3,169

Total Current Liabilities

Non-current unearned revenue19,0854,874
Other non-current liabilities15,88212,077
Bonds payable 46,500 46,500

Total Liabilities

Stockholders' Equity 705,444 692,131

Total Liabilities and Stockholders' Equity


Consolidated Statements of Income
(In thousands, except per share data)
   Three Months Ended  Nine Months Ended
September 30,September 30,
2012   20112012   2011
Cost of sales 82,153  82,718  231,598  226,845 
Gross Profit79,972109,476249,260315,098
Selling, general and administrative expenses34,11431,475103,13091,925
Research and development expenses 35,582  26,894  92,835  75,150 
Operating Income10,27651,10753,295148,023
Interest and dividend income1,8642,0375,6515,829
Interest expense(587)(599)(1,756)(1,795)
Net realized investment gain2,5302,9827,3539,121
Other income (expense), net(368)(155)265(397)
Gain on bargain purchase of a business -  -  1,753  - 
Income before provision for income taxes13,71555,37266,561160,781
Provision for income taxes (4,443) (19,159) (23,259) (53,367)
Net Income$9,272 $36,213 $43,302 $107,414 
Weighted average shares outstanding - basic63,06664,02363,49564,300
Weighted average shares outstanding - diluted (1)63,30464,96164,13965,697
Earnings per common share - basic$0.15$0.57$0.68$1.67
Earnings per common share - diluted (1)$0.15$0.56$0.68$1.63
(1) Assumes exercise of dilutive stock options calculated under the treasury stock method.

Consolidated Statements of Comprehensive Income
(In thousands)
   Three Months Ended   Nine Months Ended
September 30,September 30,
2012   20112012   2011
Net Income


9,272$36,213 $43,302$107,414 
Other Comprehensive Income (Loss), net of tax:

Net change in unrealized gains (losses) on marketable securities


Reclassification adjustments for amounts included in net income

Foreign currency translation 134 (1,487) 191 (1,031)
Other Comprehensive Income (Loss), net of tax 631 (7,242) 2,210 (12,972)
Comprehensive Income, net of tax$9,903$28,971 $45,512$94,442 

Consolidated Statements of Cash Flows
(In thousands)
   Nine Months Ended
September 30,


Cash flows from operating activities:
Net income$43,302$107,414
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization10,3668,435
Amortization of net premium on available-for-sale investments6,3434,697
Net realized gain on long-term investments(7,352)(9,121
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