HUNTSVILLE, Ala., Oct 11, 2011 (BUSINESS WIRE) —
ADTRAN, Inc. (NASDAQ:ADTN, news, filings) reported results for the third quarter of 2011. Sales increased 18% to an all-time record level of $192,194,000 for the quarter, compared to $162,957,000 for the third quarter of 2010. Net income increased to $36,213,000 for the quarter, compared to $32,084,000 for the third quarter of 2010. Earnings per share, assuming dilution, increased to $0.56 for the quarter, compared to $0.50 for the third quarter of 2010.
ADTRAN Chief Executive Officer Tom Stanton stated, “Our Company’s strong performance in the quarter included record revenue performances by our three main product areas, Broadband Access, Internetworking and Optical Access. Our Broadband Access category grew a stellar 93% over the third quarter of 2010. Our Internetworking category also showed a strong performance by growing 44%, and our Optical Access category grew 20%. These results allowed the company to achieve its sixth consecutive all-time record revenue quarter. With nearly 80% of our revenues coming from these high growth areas, we feel the Company is well positioned for the future.”
The Company reported that stock-based compensation expense for the third quarter of 2011 reduced diluted earnings per share by $0.03 compared to a reduction of $0.03 for the third quarter of 2010.
The Company announced that its Board of Directors has authorized the repurchase of an additional 5,000,000 shares of the Company’s common stock to commence upon completion of the repurchase plan announced April 14, 2008. There are 869,425 shares remaining to be repurchased under the April 2008 plan. Upon completion of the current plan, the new plan will be implemented through open market or private purchases from time to time as conditions warrant.
The Company also announced that its Board of Directors declared a cash dividend for the third quarter of 2011. The quarterly cash dividend is $0.09 per common share to be paid to holders of record at the close of business on October 27, 2011. The ex-dividend date is October 25, 2011 and the payment date is November 10, 2011.
The Company confirmed that its third quarter conference call will be held Wednesday, October 12, 2011 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. 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, 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, 2010 and our quarterly report on Form 10Q for the quarter ended June 30, 2011. 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) | |||||||
| September 30,
2011 |
December 31,
2010 |
||||||
| Assets | |||||||
| Cash and cash equivalents | $ | 32,526 | $ | 31,677 | |||
| Short-term investments | 121,389 | 157,479 | |||||
| Accounts receivable, net | 89,631 | 70,893 | |||||
| Other receivables | 12,487 | 3,962 | |||||
| Income tax receivable, net | – | 2,741 | |||||
| Inventory | 87,313 | 74,274 | |||||
| Prepaid expenses | 3,337 | 3,270 | |||||
| Deferred tax assets, net | 12,247 | 10,617 | |||||
| Total Current Assets | 358,930 | 354,913 | |||||
| Property, plant and equipment, net | 75,698 | 73,986 | |||||
| Deferred tax assets, net | 5,918 | – | |||||
| Goodwill | 4,445 | – | |||||
| Other assets | 8,201 | 1,915 | |||||
| Long-term investments | 348,103 | 261,160 | |||||
| Total Assets | $ | 801,295 | $ | 691,974 | |||
| Liabilities and Stockholders’ Equity | |||||||
| Accounts payable | $ | 33,150 | $ | 22,785 | |||
| Unearned revenue | 18,708 | 10,138 | |||||
| Accrued expenses | 6,703 | 4,913 | |||||
| Accrued wages and benefits | 14,753 | 12,125 | |||||
| Income tax payable, net | 1,916 | – | |||||
| Total Current Liabilities | 75,230 | 49,961 | |||||
| Deferred tax liabilities, net | – | 10,350 | |||||
| Other non-current liabilities | 14,853 | 11,841 | |||||
| Bonds payable | 46,500 | 47,500 | |||||
| Total Liabilities | 136,583 | 119,652 | |||||
| Stockholders’ Equity | 664,712 | 572,322 | |||||
| Total Liabilities and Stockholders’ Equity | $ | 801,295 | $ | 691,974 | |||
| Consolidated Statements of Income | ||||||||||||||||||
| Unaudited | ||||||||||||||||||
| (In thousands, except per share data) | ||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||
| September 30, | September 30, | |||||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||||
| Sales | $ | 192,194 | $ | 162,957 | $ | 541,943 | $ | 440,345 | ||||||||||
| Cost of sales | 82,718 | 65,658 | 226,845 | 178,389 | ||||||||||||||
| Gross Profit | 109,476 | 97,299 | 315,098 | 261,956 | ||||||||||||||
| Selling, general and administrative expenses | 31,475 | 29,452 | 91,925 | 85,111 | ||||||||||||||
| Research and development expenses | 26,894 | 22,802 | 75,150 | 67,838 | ||||||||||||||
| Operating Income | 51,107 | 45,045 | 148,023 | 109,007 | ||||||||||||||
| Interest and dividend income | 2,037 | 1,622 | 5,829 | 4,803 | ||||||||||||||
| Interest expense | (599 | ) | (630 | ) | (1,795 | ) | (1,828 | ) | ||||||||||
| Net realized investment gain | 2,982 | 3,399 | 9,121 | 8,055 | ||||||||||||||
| Other expense, net | (155 | ) | (266 | ) | (397 | ) | (641 | ) | ||||||||||
| Income before provision for income taxes | 55,372 | 49,170 | 160,781 | 119,396 | ||||||||||||||
| Provision for income taxes | (19,159 | ) | (17,086 | ) | (53,367 | ) | (41,367 | ) | ||||||||||
| Net Income | $ | 36,213 | $ | 32,084 | $ | 107,414 | $ | 78,029 | ||||||||||
| Weighted average shares outstanding – basic | 64,023 | 62,771 | 64,300 | 62,316 | ||||||||||||||
| Weighted average shares outstanding – diluted(1) | 64,961 | 64,300 | 65,697 | 63,638 | ||||||||||||||
| Earnings per common share – basic | $ | 0.57 | $ | 0.51 | $ | 1.67 | $ | 1.25 | ||||||||||
| Earnings per common share – diluted(1) | $ | 0.56 | $ | 0.50 | $ | 1.63 | $ | 1.23 | ||||||||||
| (1) Assumes exercise of dilutive stock options calculated under the treasury stock method. | ||||||||||||||||||
| Supplemental Information | ||
| Acquisition Related Expenses | ||
| Unaudited | ||
| (In thousands) | ||
| On August 4, 2011, we closed on the acquisition of Bluesocket, Inc., a provider of virtual wireless network solutions. For the three months ended September 30, 2011, acquisition related expenses were as follows: | ||
| Acquisition related professional fees and travel expenses | $ | 630 |
| Amortization of acquired intangible assets | 198 | |
| Other non-cash items | 217 | |
| Total | $ | 1,045 |
| Supplemental Information | |||||||||||||||||
| Stock-based Compensation Expense | |||||||||||||||||
| Unaudited | |||||||||||||||||
| (In thousands) | |||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||
| September 30, | September 30, | ||||||||||||||||
| 2011 | 2010 | 2011 | 2010 | ||||||||||||||
| Stock-based compensation expense included in cost of sales | $ | 100 | $ | 69 | $ | 280 | $ | 210 | |||||||||
| Selling, general and administrative expense | 1,090 | 775 | 3,096 | 2,360 | |||||||||||||
| Research and development expense | 1,100 | 886 | 3,079 | 2,657 | |||||||||||||
| Stock-based compensation expense included in operating expenses | 2,190 | 1,661 | 6,175 | 5,017 | |||||||||||||
| Total stock-based compensation expense | 2,290 | 1,730 | 6,455 | 5,227 | |||||||||||||
| Tax benefit for expense associated with non-qualified options | (302 | ) | (43 | ) | (1,018 | ) | (415 | ) | |||||||||
| Total stock-based compensation expense, net of tax | $ | 1,988 | $ | 1,687 | $ | 5,437 | $ | 4,812 | |||||||||
| Consolidated Statements of Cash Flows | |||||||||
| Unaudited | |||||||||
| (In thousands) | |||||||||
| Nine Months Ended | |||||||||
| September 30, | |||||||||
| 2011 | 2010 | ||||||||
| Cash flows from operating activities: | |||||||||
| Net income | $ | 107,414 | $ | 78,029 | |||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||
| Depreciation and amortization | 8,435 | 7,842 | |||||||
| Amortization of net premium on available-for-sale investments | 4,697 | 3,267 | |||||||
| Net realized gain on long-term investments | (9,121 | ) | (8,055 | ) | |||||
| Net loss on disposal of property, plant and equipment | 14 | 9 | |||||||
| Stock-based compensation expense | 6,455 | 5,227 | |||||||
| Deferred income taxes | 128 | (1,624 | ) | ||||||
| Tax benefit from stock option exercises | 10,457 | 4,459 | |||||||
| Excess tax benefits from stock-based compensation arrangements | (9,311 | ) | (3,986 | ) | |||||
| Change in operating assets and liabilities: | |||||||||
| Accounts receivable, net | (18,440 | ) | (1,351 | ) | |||||
| Other receivables | (8,525 | ) | (3,256 | ) | |||||
| Income tax receivable, net | 2,741 | – | |||||||
| Inventory | (12,247 | ) | (24,278 | ) | |||||
| Prepaid expenses and other assets | 207 | (829 | ) | ||||||
| Accounts payable | 8,924 | 1,188 | |||||||
| Accrued expenses and other liabilities | 15,047 | 7,525 | |||||||
| Income tax payable, net | 1,916 | (1,121 | ) | ||||||
| Net cash provided by operating activities | 108,791 | 63,046 | |||||||
| Cash flows from investing activities: | |||||||||
| Purchases of property, plant and equipment | (9,531 | ) | (7,375 | ) | |||||
| Proceeds from sales and maturities of available-for-sale investments | 378,288 | 221,173 | |||||||
| Purchases of available-for-sale investments | (443,275 | ) | (272,383 | ) | |||||
| Acquisition of business, net of cash acquired | (22,762 | ) | – | ||||||
| Net cash used in investing activities | (97,280 | ) | (58,585 | ) | |||||
| Cash flows from financing activities: | |||||||||
| Proceeds from stock option exercises | 33,631 | 19,769 | |||||||
| Purchases of treasury stock | (35,178 | ) | (10,330 | ) | |||||
| Dividend payments | (17,395 | ) | (16,822 | ) | |||||
| Excess tax benefits from stock-based compensation arrangements | 9,311 | 3,986 | |||||||
| Net cash used in financing activities | (9,631 | ) | (3,397 | ) | |||||
| Net increase in cash and cash equivalents | 1,880 | 1,064 | |||||||
| Effect of exchange rate changes | (1,031 | ) | 863 | ||||||
| Cash and cash equivalents, beginning of period | 31,677 | 24,135 | |||||||
| Cash and cash equivalents, end of period | $ | 32,526 | $ | 26,062 | |||||
SOURCE: ADTRAN, Inc.
ADTRAN, Inc. Jim Matthews, Senior Vice President/CFO, 256-963-8775 or Investor Services/Assistance: Gayle Ellis, 256-963-8220
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