ADTRAN, Inc. Reports Results for the First Quarter 2013 and Declares Quarterly Cash Dividend Business Wire HUNTSVILLE, Ala. -- April 9, 2013 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.com or 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 firstname.lastname@example.org. 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, December 31, 2013 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 30,603 33,111 expenses 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 - 61,847 63,809 basic Weighted average shares outstanding - 62,030 64,849 diluted ^(1) 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 (1,644 ) 6,757 securities 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 1,754 2,171 available-for-sale investments Net realized gain on long-term investments (3,645 ) (2,467 ) Net (gain) loss on disposal of property, 17 (214 ) plant and equipment 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 - (1,153 ) compensation arrangements 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 - 266 and equipment Proceeds from sales and maturities of 118,133 69,364 available-for-sale investments 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 - 1,153 compensation arrangements 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 68,457 42,979 period 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 $ 293 $ 484 purchase accounting adjustments NSN BBA acquisition Amortization of acquired intangible assets 294 - Amortization of other purchase accounting adjustments 410 - Acquisition related professional fees, travel and 154 1,580 other expenses Subtotal 858 1,580 Total acquisition related expenses, amortizations and 1,151 2,064 adjustments Tax effect (380 ) (803 ) Total acquisition related expenses, amortizations and $ 771 $ 1,261 adjustments, net of tax The acquisition related expenses, amortizations and adjustments above were recorded in the following Consolidated Statements of Income categories for the three months ended March 31, 2013 and 2012: Three Months Ended March 31, 2013 2012 Revenue (adjustments to deferred revenue recognized in $ 262 $ 146 the period) Cost of goods sold 87 137 Subtotal 349 283 Selling, general and administrative expenses 161 1,561 Research and development expenses 641 220 Subtotal 802 1,781 Total acquisition related expenses, amortizations and 1,151 2,064 adjustments Tax effect (380 ) (803 ) Total acquisition related expenses, amortizations and $ 771 $ 1,261 adjustments, net of tax Supplemental Information Stock-based Compensation Expense (Unaudited) (In thousands) Three Months Ended March 31, 2013 2012 Stock-based compensation expense included in cost of $ 106 $ 101 sales Selling, general and administrative expense 1,063 1,051 Research and development expense 1,063 1,069 Stock-based compensation expense included in operating 2,126 2,120 expenses Total stock-based compensation expense 2,232 2,221 Tax benefit for expense associated with non-qualified (307 ) (301 ) options Total stock-based compensation expense, net of tax $ 1,925 $ 1,920 Reconciliation of GAAP net income per share, diluted, to Non-GAAP net income per share, diluted (Unaudited) Three Months Ended March 31, 2013 2012 GAAP earnings per common share – diluted $ 0.13 $ 0.20 Acquisition related expenses, amortizations and 0.01 0.02 adjustments Stock-based compensation expense 0.03 0.03 Non-GAAP earnings per common share – diluted $ 0.17 $ 0.25 Contact: ADTRAN, Inc. Jim Matthews, 256-963-8775 Senior Vice President/CFO or Investor Services/Assistance: Gayle Ellis, 256-963-8220
ADTRAN, Inc. Reports Results for the First Quarter 2013 and Declares Quarterly Cash Dividend
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