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 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 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

(Unaudited)

(In thousands)

September 30,
2012

December 31,
2011

Assets

Cash and cash equivalents

$

43,535

$

42,979

Short-term investments

190,333

159,347

Accounts receivable, net

102,693

76,130

Other receivables

8,260

9,743

Inventory

107,183

87,800

Prepaid expenses

4,354

3,119

Deferred tax assets, net

12,729

12,125

Total Current Assets

469,087

391,243

Property, plant and equipment, net

81,905

75,295

Deferred tax assets, net

6,843

8,345

Goodwill

3,492

3,492

Other assets

13,825

7,131

Long-term investments

327,106

332,008

Total Assets

$

902,258

$

817,514

Liabilities and Stockholders' Equity

Accounts payable

$

52,285

$

29,404

Unearned revenue

31,672

9,965

Accrued expenses

10,310

5,876

Accrued wages and benefits

16,894

13,518

Income tax payable, net

4,186

3,169

Total Current Liabilities

115,347

61,932

Non-current unearned revenue

19,085

4,874

Other non-current liabilities

15,882

12,077

Bonds payable

46,500

46,500

Total Liabilities

196,814

125,383

Stockholders' Equity

705,444

692,131

Total Liabilities and Stockholders' Equity

$

902,258

$

817,514

Consolidated Statements of Income

(Unaudited)

(In thousands, except per share data)

Three Months Ended

Nine Months Ended

September 30,

September 30,

2012

2011

2012

2011

Sales

$

162,125

$

192,194

$

480,858

$

541,943

Cost of sales

82,153

82,718

231,598

226,845

Gross Profit

79,972

109,476

249,260

315,098

Selling, general and administrative expenses

34,114

31,475

103,130

91,925

Research and development expenses

35,582

26,894

92,835

75,150

Operating Income

10,276

51,107

53,295

148,023

Interest and dividend income

1,864

2,037

5,651

5,829

Interest expense

(587

)

(599

)

(1,756

)

(1,795

)

Net realized investment gain

2,530

2,982

7,353

9,121

Other income (expense), net

(368

)

(155

)

265

(397

)

Gain on bargain purchase of a business

-

-

1,753

-

Income before provision for income taxes

13,715

55,372

66,561

160,781

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 - basic

63,066

64,023

63,495

64,300

Weighted average shares outstanding - diluted (1)

63,304

64,961

64,139

65,697

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

(Unaudited)

(In thousands)

Three Months Ended

Nine Months Ended

September 30,

September 30,

2012

2011

2012

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

154

(5,468

)

1,855

(11,259

)

Reclassification adjustments for amounts included in net income

343

(287

)

164

(682

)

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

(Unaudited)

(In thousands)

Nine Months Ended

September 30,

2012

2011

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 amortization

10,366

8,435

Amortization of net premium on available-for-sale investments

6,343

4,697

Net realized gain on long-term investments

(7,352

)

(9,121