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

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 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,  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
 
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