My ADTRAN

ADTRAN

PRESS RELEASES





ADTRAN

PRESS RELEASES



ADTRAN, Inc. Reports Record Results for the First Quarter 2017 and Declares Quarterly Cash Dividend

HUNTSVILLE, Ala.--(BUSINESS WIRE)--Apr. 18, 2017-- ADTRAN, Inc. (NASDAQ:ADTN) reported results for the first quarter 2017. For the quarter, sales were $170.3 million compared to $142.2 million for the first quarter of 2016. Net income was $6.7 million compared to $5 million for the first quarter of 2016. Earnings per share, assuming dilution, were $0.14 compared to $0.10 for the first quarter of 2016. Non-GAAP earnings per share were $0.18 compared to $0.14 for the first quarter of 2016. The reconciliation between GAAP earnings per share, diluted, and non-GAAP earnings per share, diluted, is in the table provided.

ADTRAN Chairman and Chief Executive Officer Tom Stanton stated, “We started 2017 setting a company record for first quarter revenue, driven by increasing momentum in our ultra-broadband product sales and continuing strength in our services area. Most notably, we had very strong performances in our fiber to the premises and vectoring products in both our domestic and international markets. ADTRAN continues to be at the forefront of enabling internet service providers of all types to meet increasing customer demand and decrease their time to market for next generation services.”

The Company also announced that its Board of Directors declared a cash dividend for the first quarter of 2017. The quarterly cash dividend is $0.09 per common share to be paid to holders of record at the close of business on May 4, 2017. The ex-dividend date is May 2, 2017, and the payment date is May 18, 2017. The Company confirmed that its first quarter conference call will be held Wednesday, April 19, 2017, 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 This email address is being protected from spambots. You need JavaScript enabled to view it.. 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, 2016. These risks and uncertainties could cause actual results to differ materially from those in the forward-looking statements included in this press release.

CONTACT:
Investor Services/Assistance:
Gloria Brown, 256-963-8220
This email address is being protected from spambots. You need JavaScript enabled to view it.

Condensed Consolidated Balance Sheet

(Unaudited)

(In thousands)

March 31,
2017

December 31,
2016

Assets
Cash and cash equivalents $ 72,558 $ 79,895
Short-term investments 52,458 43,188
Accounts receivable, net 85,396 92,346
Other receivables 13,398 15,137
Income tax receivable, net 760
Inventory 112,774 105,117
Prepaid expenses and other current assets 17,816 16,459
Total Current Assets 354,400 352,902
Property, plant and equipment, net 83,514 84,469
Deferred tax assets, net 39,085 38,036
Goodwill 3,492 3,492
Other assets 12,274 12,234
Long-term investments 174,413 176,102
Total Assets $ 667,178 $ 667,235
Liabilities and Stockholders' Equity
Accounts payable $ 74,300 $ 77,342
Unearned revenue 16,969 16,326
Accrued expenses 15,035 12,434
Accrued wages and benefits 12,199 20,433
Income tax payable, net 3,126
Total Current Liabilities 121,629 126,535
Non-current unearned revenue 5,675 6,333
Other non-current liabilities 30,861 28,050
Bonds payable 26,800 26,800
Total Liabilities 184,965 187,718
Stockholders' Equity 482,213 479,517
Total Liabilities and Stockholders' Equity $ 667,178 $ 667,235

Consolidated Statements of Income

(Unaudited)

(In thousands, except per share data)

Three Months Ended
March 31,
2017 2016
Sales
Products $ 143,597 $ 123,883
Services 26,682 18,321
Total Sales 170,279 142,204
Cost of Sales
Products 76,659 64,073
Services 19,905 12,337
Total Cost of Sales 96,564 76,410
Gross Profit 73,715 65,794
Selling, general and administrative expenses 34,767 30,785
Research and development expenses 31,916 29,488
Operating Income 7,032 5,521
Interest and dividend income 933 855
Interest expense (141 ) (145 )
Net realized investment gain 470 1,728
Other income, net 51 119
Income before provision for income taxes 8,345 8,078
Provision for income taxes (1,694 ) (3,064 )
Net Income $ 6,651 $ 5,014
Weighted average shares outstanding - basic 48,430 49,220
Weighted average shares outstanding - diluted (1) 48,939 49,389
Earnings per common share - basic $ 0.14 $ 0.10
Earnings per common share - diluted (1) $ 0.14 $ 0.10
(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,
2017 2016
Net Income $ 6,651 $ 5,014
Other Comprehensive Income, net of tax:
Unrealized gains (losses) on available-for-sale securities 1,335 (255 )
Unrealized gains on cash flow hedges 79
Defined benefit plan adjustments 55 45
Foreign currency translation 1,242 1,228
Other Comprehensive Income, net of tax 2,711 1,018
Comprehensive Income, net of tax $ 9,362 $ 6,032

Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

Three Months Ended
March 31,
2017 2016
Cash flows from operating activities:
Net income $ 6,651 $ 5,014
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 4,323 3,347
Amortization of net premium on available-for-sale investments 124 220
Net realized gain on long-term investments (470 ) (1,728 )
Net (gain) loss on disposal of property, plant and equipment (16 ) 3
Stock-based compensation expense 1,883 1,558
Deferred income taxes (1,947 ) 435
Change in operating assets and liabilities:
Accounts receivable, net 7,247 4,752
Other receivables 1,884 10,200
Inventory (7,399 ) 163
Prepaid expenses and other assets (2,413 ) (3,083 )
Accounts payable (1,713 ) (6,520 )
Accrued expenses and other liabilities (3,166 ) 902
Income tax payable/receivable, net 4,049 413
Net cash provided by operating activities 9,037 15,676
Cash flows from investing activities:
Purchases of property, plant and equipment (3,872 ) (3,166 )
Proceeds from disposals of property, plant and equipment 16
Proceeds from sales and maturities of available-for-sale investments 24,471 60,586
Purchases of available-for-sale investments (29,517 ) (52,053 )
Net cash provided by (used in) investing activities (8,902 ) 5,367
Cash flows from financing activities:
Proceeds from stock option exercises 1,377 247
Purchases of treasury stock (5,559 ) (11,003 )
Dividend payments (4,369 ) (4,453 )
Net cash used in financing activities (8,551 ) (15,209 )
Net increase (decrease) in cash and cash equivalents (8,416 ) 5,834
Effect of exchange rate changes 1,079 1,225
Cash and cash equivalents, beginning of period 79,895 84,550
Cash and cash equivalents, end of period $ 72,558 $ 91,609
Supplemental disclosure of non-cash investing activities
Purchases of property, plant and equipment included in accounts payable $ 509 $ 485

Supplemental Information

Acquisition Related Expenses, Amortizations and Adjustments

(Unaudited)

(In thousands)

On August 4, 2011, we closed on the acquisition of Bluesocket, Inc., on May 4, 2012, we closed on the acquisition of the Nokia Siemens Networks Broadband Access business (NSN BBA), and on September 13, 2016, we closed on the acquisition of CommScope’s active fiber business (CommScope). Acquisition related expenses, amortizations and adjustments for the three months ended March 31, 2017 and 2016 for all three transactions are as follows:

Three Months Ended
March 31,
2017 2016
Bluesocket, Inc. acquisition
Amortization of acquired intangible assets $ 158 $ 173
NSN BBA acquisition
Amortization of acquired intangible assets 208 227
Amortization of other purchase accounting adjustments 28 36
Subtotal NSN BBA acquisition 236 263
CommScope acquisition
Amortization of acquired intangible assets 686
Amortization of other purchase accounting adjustments

50
Acquisition related professional fees, travel and other expenses 8
Subtotal CommScope acquisition 744

Total acquisition related expenses, amortizations and adjustments

1,138 436
Provision for income taxes (425 ) (149 )
Total acquisition related expenses, amortizations and adjustments, net of tax $ 713 $ 287

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, 2017 and 2016:

Three Months Ended
March 31,
2017 2016
Cost of goods sold $ 50 $ 7
Selling, general and administrative expenses 62 3
Research and development expenses 1,026 426

Total acquisition related expenses, amortizations and adjustments included in operating expenses

1,088 429
Total acquisition related expenses, amortizations and adjustments 1,138 436
Provision for income taxes (425 ) (149 )
Total acquisition related expenses, amortizations and adjustments, net of tax $ 713 $ 287

Supplemental Information

Stock-based Compensation Expense

(Unaudited)

(In thousands)

Three Months Ended
March 31,
2017 2016
Stock-based compensation expense included in cost of sales $ 91 $ 99
Selling, general and administrative expense 1,016 769
Research and development expense 776 690
Stock-based compensation expense included in operating expenses 1,792 1,459
Total stock-based compensation expense 1,883 1,558

Tax benefit for expense associated with non-qualified options,
restricted stock units and restricted stock

(380 ) (212 )
Total stock-based compensation expense, net of tax $ 1,503 $ 1,346

Reconciliation of GAAP net income per share, diluted, to

Non-GAAP net income per share, diluted

(Unaudited)

Three Months Ended
March 31,
2017 2016
GAAP earnings per common share – diluted $ 0.14 $ 0.10
Acquisition related expenses, amortizations and adjustments 0.01 0.01
Stock-based compensation expense 0.03 0.03
Non-GAAP earnings per common share – diluted $ 0.18 $ 0.14

Source: ADTRAN, Inc.

ADTRAN, Inc.
Investor Services/Assistance:
Gloria Brown, 256-963-8220
This email address is being protected from spambots. You need JavaScript enabled to view it.