EX-99.1 2 d179722dex991.htm EX-99.1 EX-99.1

EXHIBIT 99.1

ADTRAN, Inc.

REPORTS RESULTS for the FIRST QUARTER 2016

and DECLARES QUARTERLY CASH DIVIDEND

HUNTSVILLE, AL.—April 12, 2016—ADTRAN, Inc. (NASDAQ:ADTN) reported results for the first quarter 2016. For the quarter, sales were $142,204,000 compared to $142,835,000 for the first quarter of 2015. Net income was $5,014,000 compared to $3,317,000 for the first quarter of 2015. Earnings per share, assuming dilution, were $0.10 compared to $0.06 for the first quarter of 2015. Non-GAAP earnings per share were $0.14 compared to $0.10 for the first quarter of 2015. 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, “ADTRAN delivered a solid performance this quarter resulting in earnings coming in ahead of initial expectations. Compared to the same period last year, Q1 domestic revenue was up over 39% with increases in both our products and services businesses. Improved gross margins and lower operating expenses helped us increase operating income over 181% versus Q1 of 2015. Longer term, we expect further improvement in the carrier environment as customers accelerate investments in upgrading their network infrastructure to meet customer demand.”

The Company also announced that its Board of Directors declared a cash dividend for the first quarter of 2016. The quarterly cash dividend is $0.09 per common share to be paid to holders of record at the close of business on April 28, 2016. The ex-dividend date is April 26, 2016 and the payment date is May 12, 2016.

As was previously announced, ADTRAN has changed it financial reporting segments as of the quarter ended March 31, 2016. The Company will now report its financial performance based on two new reportable segments – Network Solutions and Services & Support. ADTRAN will post supplemental information regarding revenues by operating segment and category under its new and former reporting structure for the fiscal quarter ended March 31, 2016, and recast financial segment information for the four quarters and full year for fiscal years 2014 and 2015, as if reported under the new operating reporting structure, on the Investor Relations page of its website at www.adtran.com.

The Company confirmed that its first quarter conference call will be held Wednesday, April 13, 2016 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 www.adtran.com or 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 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 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, 2015. These risks and uncertainties could cause actual results to differ materially from those in the forward-looking statements included in this press release.

 

CONTACT:

Roger Shannon

Senior Vice President & CFO

256-963-8775

  

INVESTOR SERVICES/ASSISTANCE:

Gayle Ellis

Investor Services

256-963-8220

 

1


Condensed Consolidated Balance Sheet

(Unaudited)

(In thousands)

 

     March 31,
2016
     December 31,
2015
 

Assets

     

Cash and cash equivalents

   $ 91,609       $ 84,550   

Short-term investments

     29,303         34,396   

Accounts receivable, net

     67,492         71,917   

Other receivables

     9,199         19,321   

Inventory

     92,107         91,533   

Prepaid expenses and other current assets

     13,096         10,145   

Deferred tax assets, net

     17,967         18,924   
  

 

 

    

 

 

 

Total Current Assets

     320,773         330,786   

Property, plant and equipment, net

     73,511         73,233   

Deferred tax assets, net

     18,878         18,091   

Goodwill

     3,492         3,492   

Other assets

     9,157         9,276   

Long-term investments

     195,683         198,026   
  

 

 

    

 

 

 

Total Assets

   $ 621,494       $ 632,904   
  

 

 

    

 

 

 

Liabilities and Stockholders’ Equity

     

Accounts payable

   $ 42,635       $ 48,668   

Unearned revenue

     18,683         16,615   

Accrued expenses

     13,513         12,108   

Accrued wages and benefits

     11,064         12,857   

Income tax payable, net

     2,739         2,395   
  

 

 

    

 

 

 

Total Current Liabilities

     88,634         92,643   

Non-current unearned revenue

     7,288         7,965   

Other non-current liabilities

     25,283         24,236   

Bonds payable

     27,900         27,900   
  

 

 

    

 

 

 

Total Liabilities

     149,105         152,744   

Stockholders’ Equity

     472,389         480,160   
  

 

 

    

 

 

 

Total Liabilities and Stockholders’ Equity

   $ 621,494       $ 632,904   
  

 

 

    

 

 

 

 

2


Consolidated Statements of Income

(Unaudited)

(In thousands, except per share data)

 

     Three Months Ended  
     March 31,  
     2016     2015  

Sales

    

Products

   $ 123,883      $ 129,505   

Services

     18,321        13,330   
  

 

 

   

 

 

 

Total sales

     142,204        142,835   

Cost of sales

    

Products

     64,073        71,560   

Services

     12,337        5,712   
  

 

 

   

 

 

 

Total cost of sales

     76,410        77,272   

Gross Profit

     65,794        65,563   

Selling, general and administrative expenses

     30,785        31,064   

Research and development expenses

     29,488        32,536   
  

 

 

   

 

 

 

Operating Income

     5,521        1,963   

Interest and dividend income

     855        933   

Interest expense

     (145     (148

Net realized investment gain

     1,728        3,115   

Other income (expense), net

     119        (353
  

 

 

   

 

 

 

Income before provision for income taxes

     8,078        5,510   

Provision for income taxes

     (3,064     (2,193
  

 

 

   

 

 

 

Net Income

   $ 5,014      $ 3,317   
  

 

 

   

 

 

 

Weighted average shares outstanding - basic

     49,220        53,399   

Weighted average shares outstanding - diluted (1)

     49,389        53,634   

Earnings per common share - basic

   $ 0.10      $ 0.06   

Earnings per common share - diluted (1)

   $ 0.10      $ 0.06   

 

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

 

3


Consolidated Statements of Comprehensive Income

(Unaudited)

(In thousands)

 

     Three Months Ended  
     March 31,  
     2016     2015  

Net Income

   $ 5,014      $ 3,317   
  

 

 

   

 

 

 

Other Comprehensive Income (Loss), net of tax:

    

Unrealized losses on available-for-sale securities

     (255     (503

Defined benefit plan adjustments

     45        68   

Foreign currency translation

     1,228        (3,318
  

 

 

   

 

 

 

Other Comprehensive Income (Loss), net of tax

     1,018        (3,753
  

 

 

   

 

 

 

Comprehensive Income (Loss), net of tax

   $ 6,032      $ (436
  

 

 

   

 

 

 

 

4


Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

 

     Three Months Ended  
     March 31,  
     2016     2015  

Cash flows from operating activities:

    

Net income

   $ 5,014      $ 3,317   

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

    

Depreciation and amortization

     3,347        3,728   

Amortization of net premium on available-for-sale investments

     220        910   

Net realized gain on long-term investments

     (1,728     (3,115

Net loss on disposal of property, plant and equipment

     3        8   

Stock-based compensation expense

     1,558        1,639   

Deferred income taxes

     435        (692

Tax benefit from stock option exercises

     —          8   

Excess tax benefits from stock-based compensation arrangements

     —          (9

Change in operating assets and liabilities:

    

Accounts receivable, net

     4,752        (4,571

Other receivables

     10,200        511   

Inventory

     163        (7,261

Prepaid expenses and other assets

     (3,083     (736

Accounts payable

     (6,520     20,084   

Accrued expenses and other liabilities

     902        (282

Income tax payable, net

     413        (524
  

 

 

   

 

 

 

Net cash provided by operating activities

     15,676        13,015   
  

 

 

   

 

 

 

Cash flows from investing activities:

    

Purchases of property, plant and equipment

     (3,166     (2,442

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

     60,586        58,075   

Purchases of available-for-sale investments

     (52,053     (44,584
  

 

 

   

 

 

 

Net cash provided by investing activities

     5,367        11,049   
  

 

 

   

 

 

 

Cash flows from financing activities:

    

Proceeds from stock option exercises

     247        280   

Purchases of treasury stock

     (11,003     (3,035

Dividend payments

     (4,453     (4,811

Excess tax benefits from stock-based compensation arrangements

     —          9   
  

 

 

   

 

 

 

Net cash used in financing activities

     (15,209     (7,557
  

 

 

   

 

 

 

Net increase in cash and cash equivalents

     5,834        16,507   

Effect of exchange rate changes

     1,225        (2,937

Cash and cash equivalents, beginning of period

     84,550        73,439   
  

 

 

   

 

 

 

Cash and cash equivalents, end of period

   $ 91,609      $ 87,009   
  

 

 

   

 

 

 

Supplemental disclosure of non-cash investing activities

    

Purchases of property, plant and equipment included in accounts payable

   $ 485      $ 784   

 

5


Supplemental Information

Stock-based Compensation Expense

(Unaudited)

(In thousands)

 

     Three Months Ended  
     March 31,  
     2016     2015  

Stock-based compensation expense included in cost of sales

   $ 91      $ 90   
  

 

 

   

 

 

 

Selling, general and administrative expense

     810        691   

Research and development expense

     657        858   
  

 

 

   

 

 

 

Stock-based compensation expense included in operating expenses

     1,467        1,549   
  

 

 

   

 

 

 

Total stock-based compensation expense

     1,558        1,639   

Tax benefit for expense associated with non-qualified options

     (212     (180
  

 

 

   

 

 

 

Total stock-based compensation expense, net of tax

   $ 1,346      $ 1,459   
  

 

 

   

 

 

 

 

6


Reconciliation of GAAP net income per share, diluted, to

Non-GAAP net income per share, diluted

(Unaudited)

 

    

Three Months Ended

March 31,

 
     2016      2015  

GAAP earnings per common share – diluted

   $ 0.10       $ 0.06   

Amortization of acquired intangible assets

     0.01         0.01   

Stock-based compensation expense

     0.03         0.03   
  

 

 

    

 

 

 

Non-GAAP earnings per common share – diluted

   $ 0.14       $ 0.10   
  

 

 

    

 

 

 

 

7