EX-99.1 2 a4997120ex99_1.txt EXHIBIT 99.1 EXHIBIT 99.1 ADTRAN, Inc. Reports Third Quarter 2005 Results and Declares Quarterly Cash Dividend HUNTSVILLE, Ala.--(BUSINESS WIRE)--Oct. 17, 2005--ADTRAN, Inc. (NASDAQ:ADTN) reported results for the third quarter ended September 30, 2005. Sales were $149,170,000 for the quarter, up 25% compared to $118,873,000 for the second quarter of 2005, and up 29% compared to $115,251,000 for the third quarter of 2004. Net income was $33,015,000 for the quarter compared to $20,719,000 for the second quarter of 2005 and $18,751,000 for the third quarter of 2004. Earnings per share, assuming dilution, were $0.42 for the quarter, up 56% compared to $0.27 for the second quarter of 2005, and up 83% compared to $0.23 for the third quarter of 2004. Gross margin improved to 59.9% for the quarter compared to 57.6% for the third quarter of 2004. The increase in gross margin is principally the result of continuing improvements in manufacturing efficiencies and product cost reductions. Net cash provided by operating activities totaled $43 million for the quarter. Unrestricted cash and marketable securities totaled $345 million, at September 30, 2005. ADTRAN Chief Executive Officer Tom Stanton stated, "For the quarter, we experienced strong and broad based revenue growth across both Carrier Network and Enterprise Network divisions. Revenues were strong both domestically and internationally. Our results benefited from a significant revenue increase in primary growth areas, particularly with DSLAM and Optical Access Products, accompanied by a strong revenue increase in traditional product areas. We believe these results reflect continuing momentum and share gains in the markets we serve." The Company also issued revised guidance for the year 2005. Revenue for the year is expected to range from $512 million to $516 million. Earnings per share, assuming dilution, are expected to range from $1.26 to $1.28. The Company also announced that its Board of Directors declared a cash dividend for the third quarter of 2005. The quarterly cash dividend is $0.09 per common share to be paid to holders of record at the close of business on November 4, 2005. The ex-dividend date is November 2, 2005 and the payment date is November 17, 2005. The Company also confirmed that its third quarter conference call will be held Tuesday, October 18 at 9:30 a.m. Central Time. This conference call will be webcast 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 one of the world's most successful network access equipment suppliers, with a 17-year history of profitability and a portfolio of more than 1,300 solutions for use in the last mile of today's telecommunications networks. Widely deployed by both carriers and enterprises, 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 domestic service provider and many international ones, as well as by thousands of public, private and government organizations worldwide. 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, 2004. Such 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, 2005 ----------------- Assets Cash & cash equivalents $70,585 Short-term investments 180,758 Accounts receivable (net) 71,554 Other receivables 7,260 Inventory (net) 53,629 Prepaid expenses and other current assets 9,482 ----------------- Total current assets $393,268 Equipment (net) $21,140 Land 4,263 Building & land improvements (net) 61,129 Other assets 1,346 Long-term investments 148,620 ----------------- Total long-term assets $236,498 Total assets $629,766 ================= Liabilities and stockholders' equity Accounts payable $36,224 Accrued wages and benefits 8,176 Accrued income taxes 11,126 Accrued liabilities 7,612 ----------------- Total current liabilities $63,138 Deferred tax liabilities $3,978 Other non-current liabilities 5,161 Long-term debt 50,000 ----------------- Total long-term liabilities $59,139 Total liabilities $122,277 Stockholders' equity $507,489 ----------------- Total liabilities and stockholders' equity $629,766 ================= Condensed Statements of Income (1) For the quarters ending 9/30/05 and 9/30/04 (In thousands, except per share data) Unaudited Third Quarter 2005 2004 --------- --------- Sales $149,170 $115,251 Cost of Sales 59,856 48,869 --------- --------- Gross Profit 89,314 66,382 Selling, general and administrative expenses 25,011 21,765 Research and development expenses 15,087 18,859 --------- --------- Profit from operations 49,216 25,758 Interest expense (693) (644) Other income (primarily interest) 3,107 2,137 --------- --------- Income before provision for income taxes 51,630 27,251 Provision for income taxes (18,615) (8,500) --------- --------- Net income $33,015 $18,751 ========= ========= Weighted average shares Basic 75,710 77,778 Diluted (2) 78,213 80,437 Earnings per common share Basic $0.44 $0.24 Diluted (2) $0.42 $0.23 (1) Certain reclassifications have been made to the 2004 Income Statement in order to conform with the 2005 presentation. These reclassifications had no effect on previously reported net income. (2) Assumes exercise of dilutive stock options calculated under the treasury stock method. Condensed Statements of Income (1) For the periods ending 9/30/05 and 9/30/04 (In thousands, except per share data) Unaudited Nine Months Ended 2005 2004 --------- --------- Sales $372,620 $349,892 Cost of Sales 153,532 149,100 --------- --------- Gross Profit 219,088 200,792 Selling, general and administrative expenses 72,257 67,150 Research and development expenses 47,797 49,572 --------- --------- Profit from operations 99,034 84,070 Interest expense (1,901) (1,932) Other income (primarily interest) 8,950 7,033 --------- --------- Income before provision for income taxes 106,083 89,171 Provision for income taxes (37,129) (28,624) --------- --------- Net income $68,954 $60,547 ========= ========= Weighted average shares Basic 75,602 78,858 Diluted (2) 77,675 81,828 Earnings per common share Basic $0.91 $0.77 Diluted (2) $0.89 $0.74 (1) Certain reclassifications have been made to the 2004 Income Statement in order to conform with the 2005 presentation. These reclassifications had no effect on previously reported net income. (2) Assumes exercise of dilutive stock options calculated under the treasury stock method. CONTACT: ADTRAN, Inc. Jim Matthews, 256-963-8775 or Investor Services/Assistance: Cathy Bartels, 256-963-8220