ADTRAN, Inc. Reports Results for the First Quarter 2013 and Declares Quarterly Cash Dividend

ADTRAN, Inc. Reports Results for the First Quarter 2013 and Declares Quarterly Cash Dividend

HUNTSVILLE, Ala.--(BUSINESS WIRE)-- ADTRAN, Inc. (NASDAQ:ADTN) reported results for the first quarter 2013. For the quarter, sales were $143,013,000 compared to $134,735,000 for the first quarter of 2012. Net income was $7,890,000 for the quarter compared to $12,960,000 for the first quarter of 2012. Earnings per share, assuming dilution, were $0.13 for the quarter compared to $0.20 for the first quarter of 2012. Non-GAAP earnings per share for the quarter were $0.17 compared to $0.25 for the first quarter of 2012. 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, "Operating results for the quarter came in as expected with our domestic carrier business continuing to solidify and our overall revenue positively impacted by sequential growth internationally and in our Enterprise business. We believe our company is well positioned for an improving spending environment in our markets and strategic investments by our carrier customers."


The Company also announced that its Board of Directors declared a cash dividend for the first quarter of 2013. The quarterly cash dividend is $0.09 per common share to be paid to holders of record at the close of business on April 25, 2013. The ex-dividend date is April 23, 2013 and the payment date is May 9, 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 first quarter conference call will be held Wednesday, April 10, 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 http://www.adtran.comor http://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 http://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 http://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, 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)

March 31,
2013

December 31,
2012

Assets

Cash and cash equivalents

$

58,640

$

68,457

Short-term investments

189,236

160,481

Accounts receivable, net

82,102

81,194

Other receivables

16,164

16,253

Inventory

95,767

102,583

Prepaid expenses

4,419

4,148

Deferred tax assets, net

12,972

13,055

Total Current Assets

459,300

446,171

Property, plant and equipment, net

77,781

80,246

Deferred tax assets, net

10,680

10,261

Goodwill

3,492

3,492

Other assets

12,599

13,482

Long-term investments

310,484

332,729

Total Assets

$

874,336

$

886,381

Liabilities and Stockholders' Equity

Accounts payable

$

48,933

$

42,173

Unearned revenue

33,563

38,051

Accrued expenses

11,117

10,309

Accrued wages and benefits

16,479

15,022

Income tax payable, net

1,585

1,211

Total Current Liabilities

111,677

106,766

Non-current unearned revenue

24,990

23,803

Other non-current liabilities

18,541

17,406

Bonds payable

46,000

46,000

Total Liabilities

201,208

193,975

Stockholders' Equity

673,128

692,406

Total Liabilities and Stockholders' Equity

$

874,336

$

886,381

Consolidated Statements of Income
(Unaudited)
(In thousands, except per share data)

Three Months Ended

March 31,

2013

2012

Sales

$

143,013

$

134,735

Cost of sales

73,336

60,648

Gross Profit

69,677

74,087

Selling, general and administrative expenses

30,603

33,111

Research and development expenses

32,511

24,795

Operating Income

6,563

16,181

Interest and dividend income

1,768

1,861

Interest expense

(581

)

(588

)

Net realized investment gain

3,645

2,467

Other income (expense), net

(1,672

)

141

Income before provision for income taxes

9,723

20,062

Provision for income taxes

(1,833

)

(7,102

)

Net Income

$

7,890

$

12,960

Weighted average shares outstanding - basic

61,847

63,809

Weighted average shares outstanding - diluted (1)

62,030

64,849

Earnings per common share - basic

$

0.13

$

0.20

Earnings per common share - diluted (1)

$

0.13

$

0.20

(1) Assumes exercise of dilutive stock options calculated under the treasury stock method.

Consolidated Statements of Comprehensive Income
(Unaudited)
(In thousands)

Three Months Ended

March 31,

2013

2012

Net Income

$

7,890

$

12,960

Other Comprehensive Income (Loss), net of tax:

Unrealized gains (losses) on available-for-sale securities

(1,644

)

6,757

Foreign currency translation

323

153

Other Comprehensive Income (Loss), net of tax

(1,321

)

6,910

Comprehensive Income, net of tax

$

6,569

$

19,870

Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)

Three Months Ended

March 31,

2013

2012

Cash flows from operating activities:

Net income

$

7,890

$

12,960

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

3,663

3,095

Amortization of net premium on available-for-sale investments

1,754

2,171

Net realized gain on long-term investments

(3,645

)

(2,467

)

Net (gain) loss on disposal of property, plant and equipment

17

(214

)

Stock-based compensation expense

2,232

2,221

Deferred income taxes

715

(2,030

)

Tax benefit from stock option exercises

-

1,492

Excess tax benefits from stock-based compensation arrangements

-

(1,153

)

Change in operating assets and liabilities:

Accounts receivable, net

(1,306

)

1,334

Other receivables

(224

)

1,706

Inventory

6,540

(8,005

)

Prepaid expenses and other assets

(217

)

(710

)

Accounts payable

7,262

1,831

Accrued expenses and other liabilities

1,188

5,287

Income tax payable, net

379

7,017

Net cash provided by operating activities

26,248

24,535

Cash flows from investing activities:

Purchases of property, plant and equipment

(735

)

(4,086

)

Proceeds from disposals of property, plant and equipment

-

266

Proceeds from sales and maturities of available-for-sale investments

118,133

69,364

Purchases of available-for-sale investments

(125,411

)

(95,646

)

Net cash used in investing activities

(8,013

)

(30,102

)

Cash flows from financing activities:

Proceeds from stock option exercises

55

3,560

Purchases of treasury stock

(22,546

)

-

Dividend payments

(5,586

)

(5,739

)

Excess tax benefits from stock-based compensation arrangements

-

1,153

Net cash used in financing activities

(28,077

)

(1,026

)

Net decrease in cash and cash equivalents

(9,842

)

(6,593

)

Effect of exchange rate changes

25

153

Cash and cash equivalents, beginning of period

68,457

42,979

Cash and cash equivalents, end of period

$

58,640

$

36,539

Supplemental Information
Acquisition Related Expenses, Amortizations and Adjustments
(Unaudited)
(In thousands)

On August 4, 2011, we closed on the acquisition of Bluesocket, Inc. and on May 4, 2012, we closed on the acquisition of the Nokia Siemens Networks Broadband Access business (NSN BBA). Acquisition related expenses, amortizations and adjustments for the three months ended March 31, 2013 and 2012 for both transactions are as follows:

Three Months Ended

March 31,

2013

2012

Bluesocket, Inc. acquisition

Amortization of acquired intangible assets and other purchase accounting adjustments

$

293

$

484

NSN BBA acquisition

Amortization of acquired intangible assets

294

-

Amortization of other purchase accounting adjustments

410

-

Acquisition related professional fees, travel and other expenses

154

1,580

Subtotal

858

1,580

Total acquisition related expenses, amortizations and adjustments

1,151

2,064

Tax effect

(380

)

(803

)