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ADTRAN Chief Executive Officer Tom Stanton stated, "In the third quarter, our growth categories continued to perform well, achieving 20% year over year growth and posting another record revenue level. Broadband Access revenues grew 29% as we saw increasing acceptance of our Carrier Ethernet and Broadband services platforms. Optical Access revenues showed impressive strength growing 20% as carriers increased investment in wireless bandwidth upgrades. Internetworking revenues continued to expand as our success in this area continued to reflect the broad-based support we are seeing in our carrier distribution and value added reseller channels. Two of these areas set record revenue levels and our growth areas in total achieved a new high."
The Company also reported that stock-based compensation expense for the third quarter of 2009 reduced diluted earnings per share by $0.02 compared to $0.03 for the third quarter of 2008.
The Company also announced that its Board of Directors declared a cash dividend for the third quarter of 2009. The quarterly cash dividend is $0.09 per common share to be paid to holders of record at the close of business on October 29, 2009. The ex-dividend date is October 27, 2009 and the payment date is November 12, 2009.
The Company also confirmed that its third quarter conference call will be held Wednesday, October 14, 2009 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://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://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, with a portfolio of more than 1,700 solutions for use in the last mile of today's telecommunications networks. Widely deployed by carriers and enterprises alike, ADTRAN solutions enable voice, data, video, and Internet communications across copper, fiber, and wireless network infrastructures. ADTRAN solutions are currently in use by every major U.S. service provider and many global ones, as well as by thousands of public, private and governmental organizations worldwide.
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, 2008 and Form 10-Q for the quarter ended June 30, 2009. These risks and uncertainties could cause actual results to differ materially from those in the forward-looking statements included in this press release.
Condensed Balance Sheet
Unaudited
(In thousands)
September 30, December 31,
2009 2008
Assets
Cash and cash equivalents $ 25,236 $ 41,909
Short-term investments 169,480 96,277
Accounts receivable, net 65,324 52,749
Other receivables 4,143 2,896
Inventory, net 44,696 47,406
Prepaid expenses 2,924 2,974
Deferred tax assets, net 8,498 8,653
Total current assets 320,301 252,864
Property, plant, and equipment, net 74,792 75,487
Deferred tax assets, net - 3,920
Other assets 1,533 103
Long-term investments 158,865 141,241
Total assets $ 555,491 $ 473,615
Liabilities and Stockholders' Equity
Accounts payable $ 26,133 $ 20,313
Unearned revenue 6,122 6,141
Accrued expenses 4,874 3,536
Accrued wages and benefits 9,416 9,868
Income tax payable, net 4,032 266
Total current liabilities 50,577 40,124
Deferred tax liabilities, net 1,272 -
Other non-current liabilities 11,405 9,422
Bonds payable 48,250 48,250
Total liabilities 111,504 97,796
Stockholders' equity 443,987 375,819
Total liabilities and stockholders' equity $ 555,491 $ 473,615
Consolidated Statements of Income
(In thousands, except per share data)
Unaudited
Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
Sales $ 128,062 $ 137,195 $ 359,954 $ 388,263
Cost of Sales 53,605 55,512 146,347 156,946
Gross Profit 74,457 81,683 213,607 231,317
Selling, general and administrative expenses 25,001 26,317 73,583 77,573
Research and development expenses 20,497 21,688 62,029 61,456
Operating income 28,959 33,678 77,995 92,288
Interest and dividend income 1,798 2,187 5,273 6,689
Interest expense (613 ) (626 ) (1,825 ) (1,905 )
Net realized investment gain (loss) 760 (47 ) (1,443 ) (151 )
Other income, net 107 243 72 709
Income before provision for income taxes 31,011 35,435 80,072 97,630
Provision for income taxes (9,428 ) (13,024 ) (24,466 ) (35,758 )
Net Income $ 21,583 $ 22,411 $ 55,606 $ 61,872
Weighted average shares outstanding
Basic 62,762 63,096 62,417 63,975
Diluted(1) 63,870 64,101 63,258 64,961
Earnings per common share
Basic $ 0.34 $ 0.36 $ 0.89 $ 0.97
Diluted(1) $ 0.34 $ 0.35 $ 0.88 $ 0.95
(1) Assumes exercise of dilutive stock options calculated under the
treasury stock method.
Supplemental Information
Stock Based Compensation Expense
(In thousands)
Three months ended Nine months ended
September 30, September 30,
2009 2008 2009 2008
Stock-based compensation expense included in cost of sales $ 66 $ 79 $ 196 $ 237
Selling, general and administrative expense 658 912 2,160 2,755
Research and development expense 860 1,011 2,639 3,009
Stock-based compensation expense included in operating expenses 1,518 1,923 4,799 5,764
Total stock-based compensation expense 1,584 2,002 4,995 6,001
Tax benefit for expense associated with non-qualified options (157 ) (196 ) (453 ) (600 )
Total stock-based compensation expense, net of tax $ 1,427 $ 1,806 $ 4,542 $ 5,401
Consolidated Statements of Cash Flow
Unaudited
(In thousands)
Nine Months Ended
September 30,
2009 2008
Cash flows from operating activities:
Net income $ 55,606 $ 61,872
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 7,521 7,387
Amortization of net premium of available-for-sale investments 2,626 1,482
Net realized loss on long-term investments 1,443 151
Gain (loss) on disposal of property, plant, and equipment (32 ) 62
Stock-based compensation expense 4,995 6,001
Deferred income taxes (1,119 ) (587 )
Tax benefit from stock option exercises 1,416 1,023
Excess tax benefit from stock-based compensation arrangements (906 ) (637 )
Change in operating assets and liabilities:
Accounts receivable, net (12,402 ) 11,453
Other receivables (1,241 ) 298
Inventory 2,710 226
Prepaid expenses and other assets 90 (817 )
Accounts payable 5,792 2,404
Accrued expenses and other liabilities 2,495 970
Income tax payable, net 3,766 1,076
Net cash provided by operating activities 72,760 92,364
Cash flows from investing activities:
Purchases of property, plant, and equipment (6,710 ) (6,982 )
Proceeds from sales and maturities of available-for-sale investments 140,047 212,840
Purchases of available-for-sale investments (217,669 ) (199,249 )
Acquisition of business (1,370 ) -
Net cash provided by (used in) investing activities (85,702 ) 6,609
Cash flows from financing activities:
Proceeds from exercises of stock options 12,673 3,520
Purchases of treasury stock (2,780 ) (57,923 )
Dividend payments (16,830 ) (17,290 )
Payments on long-term debt - (250 )
Excess tax benefits from stock-based compensation arrangements 906 637
Net cash used in financing activities (6,031 ) (71,306 )
Net increase (decrease) in cash and cash equivalents (18,973 ) 27,667
Effect of exchange rate changes 2,300 (843 )
Cash and cash equivalents, beginning of period 41,909 13,941
Cash and cash equivalents, end of period $ 25,236 $ 40,765
SOURCE: ADTRAN, Inc.
ADTRAN, Inc. Jim Matthews, 256-963-8775 Senior Vice President/CFO or INVESTOR SERVICES/ASSISTANCE: Gayle Ellis, 256-963-8220
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