ADTRAN, Inc. (NASDAQ:ADTN) reported results for the second
quarter 2015. For the quarter, sales were $160,138,000 compared to
$176,129,000 for the second quarter of 2014. Net income was
$2,544,000 compared to $14,395,000 for the second quarter of 2014.
Earnings per share, assuming dilution, were $0.05 compared to $0.26
for the second quarter of 2014. Non-GAAP earnings per share were
$0.10 compared to $0.30 for the second quarter of 2014. 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, “Revenue for
the quarter came in higher than expected, driven by the timing of
CAF-related orders in our domestic business. EPS on a GAAP basis
was reduced due to one-time restructuring charges as we continue to
focus our company on the opportunities that are ahead. During the
quarter, we saw an increase in broadband infrastructure activity in
our domestic markets as carriers seek to position themselves
competitively and utilize CAF funding to accelerate their
deployment plans.”
The Company also announced that its Board of Directors declared
a cash dividend for the second quarter of 2015. The quarterly cash
dividend is $0.09 per common share to be paid to holders of record
at the close of business on July 30, 2015. The ex-dividend date is
July 28, 2015 and the payment date is August 13, 2015.
The Company confirmed that its second quarter conference call
will be held Wednesday, July 15, 2015 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, 2014 and on
Form 10-Q for the quarter ended March 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.
Condensed Consolidated Balance Sheet
(Unaudited)
(In thousands)
June 30, 2015
December 31,2014
Assets Cash and cash equivalents $ 87,215 $ 73,439
Short-term investments 54,127 46,919 Accounts receivable, net
89,088 88,502 Other receivables 31,442 33,295 Inventory 100,048
86,710 Prepaid expenses 5,817 5,129 Deferred tax assets, net
17,038 17,095
Total Current Assets 384,775
351,089 Property, plant and equipment, net 73,347
74,828 Deferred tax assets, net 20,473 17,694 Goodwill 3,492 3,492
Other assets 10,236 10,942 Long-term investments 216,665
280,649
Total Assets $ 708,988
$ 738,694 Liabilities and Stockholders'
Equity Accounts payable $ 85,456 $ 56,414 Unearned revenue
17,495 22,762 Accrued expenses 15,538 11,077 Accrued wages and
benefits 15,515 13,855 Income tax payable, net 10,072
14,901
Total Current Liabilities 144,076
119,009 Non-current unearned revenue 9,444 10,948
Other non-current liabilities 31,268 30,924 Bonds payable
28,800 28,800
Total Liabilities 213,588
189,681 Stockholders' Equity
495,400 549,013 Total Liabilities
and Stockholders' Equity $ 708,988 $
738,694 Consolidated Statements of
Income (Unaudited) (In thousands, except per share
data) Three Months
Ended Six Months Ended June 30, June 30,
2015 2014 2015
2014 Sales $ 160,138 $ 176,129 $ 302,973 $ 323,133
Cost of sales 91,892 89,332
169,164 158,546
Gross Profit
68,246 86,797 133,809 164,587
Selling, general and administrative expenses 32,123 33,788 63,187
67,727 Research and development expenses 35,479
33,670 68,015 66,223
Operating Income 644 19,339
2,607 30,637 Interest and dividend income 908
1,054 1,841 2,348 Interest expense (149 ) (148 ) (297 ) (375 ) Net
realized investment gain 3,255 2,340 6,370 4,532 Other income
(expense), net (547 ) (774 ) (900 )
(652 )
Income before provision for income taxes
4,111 21,811 9,621 36,490
Provision for income taxes (1,567 ) (7,416 )
(3,760 ) (12,488 )
Net Income $
2,544 $ 14,395 $
5,861 $ 24,002 Weighted
average shares outstanding - basic 51,822 55,409 52,607 56,077
Weighted average shares outstanding - diluted (1) 51,917 55,729
52,742 56,559 Earnings per common share - basic $ 0.05 $
0.26 $ 0.11 $ 0.43 Earnings per common share - diluted (1) $ 0.05 $
0.26 $ 0.11 $ 0.42 (1) Assumes exercise of dilutive stock
options calculated under the treasury stock method.
Consolidated Statements of Comprehensive Income
(Unaudited) (In thousands)
Three Months Ended Six Months
Ended June 30, June 30, 2015
2014 2015 2014 Net Income
$ 2,544 $ 14,395 $ 5,861 $ 24,002
Other
Comprehensive Income (Loss), net of tax: Unrealized
gains (losses) on available-for-sale securities (1,783 ) 1,219
(2,286 ) 298 Defined benefit plan adjustments 72 - 140 - Foreign
currency translation 872 134 (2,446 )
386
Other Comprehensive Income (Loss), net of
tax (839 ) 1,353
(4,592 ) 684 Comprehensive
Income, net of tax $ 1,705 $
15,748 $ 1,269 $ 24,686
Consolidated Statements of Cash Flows
(Unaudited) (In thousands)
Six Months Ended June 30, 2015
2014 Cash flows from operating activities: Net
income
$ 5,861 $ 24,002 Adjustments to
reconcile net income to net cash provided by operating activities:
Depreciation and amortization 7,256 7,467 Amortization of net
premium on available-for-sale investments 1,578 2,272 Net realized
gain on long-term investments (6,370 ) (4,532 ) Net loss on
disposal of property, plant and equipment 160 37 Stock-based
compensation expense 3,114 4,149 Deferred income taxes (1,743 ) 377
Tax benefit from stock option exercises (23 ) 67 Excess tax
benefits from stock-based compensation arrangements 38 (58 ) Change
in operating assets and liabilities: Accounts receivable, net
(2,003 ) (31,583 ) Other receivables (119 ) (4,072 ) Inventory
(14,254 ) 841 Prepaid expenses and other assets (1,433 ) (3,103 )
Accounts payable 30,938 14,425 Accrued expenses and other
liabilities 2,175 8,248 Income tax payable, net (3,961 )
4,442
Net cash provided by operating
activities 21,214 22,979
Cash flows from investing activities:
Purchases of property, plant and equipment (5,392 ) (4,919 )
Proceeds from disposals of property, plant and equipment 8 1
Proceeds from sales and maturities of available-for-sale
investments 120,422 166,518 Purchases of available-for-sale
investments (62,626 ) (106,406 )
Net cash provided
by investing activities 52,412
55,194 Cash flows from financing
activities: Proceeds from stock option exercises 833 1,781
Purchases of treasury stock (49,307 ) (53,091 ) Dividend payments
(9,509 ) (10,137 ) Payments on long-term debt - (16,500 ) Excess
tax benefits from stock-based compensation arrangements (38
) 58
Net cash used in financing activities
(58,021 ) (77,889 )
Net increase in cash and cash equivalents 15,605 284 Effect
of exchange rate changes (1,829 ) 321
Cash and cash equivalents,
beginning of period 73,439
58,298 Cash and cash equivalents, end of
period $ 87,215 $ 58,903
Supplemental disclosure of non-cash investing
activities Purchases of property, plant and equipment included in
accounts payable $ 270 $ 423
Supplemental InformationRestructuring
Expenses(Unaudited)(In thousands)
Restructuring expenses were recorded in the following
Consolidated Statements of Income categories for the three and six
months ended June 30, 2015 and 2014:
Three and Six Months Ended June
30, 2015 2014
Restructuring expense included in cost of sales $
98 $ - Selling, general and
administrative expense 644 - Research and development expense
1,383 -
Restructuring expense
included in operating expenses 2,027
-
Total restructuring expense 2,125
- Provision for income taxes (829 ) -
Total restructuring expense, net of tax $
1,296 $ -
Supplemental InformationAcquisition
Related Expenses, Amortizations and
Adjustments(Unaudited)(In thousands)
On August 4, 2011, we closed on the acquisition of Bluesocket,
Inc. and on May 4, 2012, we closed on the acquisition of the Nokia
Siemens Networks Broadband Access business (NSN BBA). Acquisition
related expenses, amortizations and adjustments for the three and
six months ended June 30, 2015 and 2014 for both transactions are
as follows:
Three Months Ended Six
Months Ended June 30, June 30, 2015
2014 2015 2014
Bluesocket, Inc. acquisition Amortization of acquired intangible
assets and other purchase accounting adjustments $ 226 $ 226
$ 452 $ 472
NSN BBA acquisition
Amortization of acquired intangible assets 229 295 470 597
Amortization of other purchase accounting adjustments 140 294 294
655 Acquisition related professional fees, travel and other
expenses 35 17 41
65
Subtotal 404
606 805 1,317
Total acquisition related expenses, amortizations
and adjustments 630 832 1,257 1,789
Provision for income taxes (213 ) (276 ) (426
) (592 )
Total acquisition related expenses,
amortizations and adjustments, net of tax $ 417
$ 556 $ 831
$ 1,197
The acquisition related expenses, amortizations and adjustments
above were recorded in the following Consolidated Statements of
Income categories for the three and six months ended June 30, 2015
and 2014:
Three Months Ended Six
Months Ended June 30, June 30, 2015
2014 2015 2014
Revenue (adjustments to deferred revenue recognized in the period)
$ 64 $ 180 $ 131 $ 423 Cost of goods sold 33
23 45 57
Subtotal
97 203 176
480 Selling, general and
administrative expenses 39 24 51 79 Research and development
expenses 494 605 1,030
1,230
Subtotal 533
629 1,081
1,309 Total acquisition related expenses,
amortizations and adjustments 630 832
1,257 1,789 Provision for income taxes (213 )
(276 ) (426 ) (592 )
Total
acquisition related expenses, amortizations and adjustments, net of
tax $ 417 $ 556
$ 831 $ 1,197
Supplemental Information Stock-based Compensation
Expense (Unaudited) (In thousands)
Three Months Ended Six Months
Ended June 30, June 30, 2015
2014 2015 2014
Stock-based compensation expense included in cost of sales
$ 53 $ 119 $
143 $ 235 Selling,
general and administrative expense 723 1,015 1,414 2,041 Research
and development expense 699 958
1,557 1,873
Stock-based compensation
expense included in operating expenses 1,422
1,973 2,971
3,914 Total stock-based compensation
expense 1,475 2,092 3,114 4,149 Tax
benefit for expense associated with non-qualified options
(222 ) (296 ) (402 ) (580 )
Total
stock-based compensation expense, net of tax $
1,253 $ 1,796 $
2,712 $ 3,569
Reconciliation of GAAP net income per share, diluted, to
Non-GAAP net income per share, diluted (Unaudited)
Three Months Ended
Six Months Ended June 30, June 30, 2015
2014 2015 2014
GAAP earnings per common share – diluted $
0.05 $ 0.26 $ 0.11 $
0.42 Restructuring expense 0.02 - 0.02 - Acquisition
related expenses, amortizations and adjustments 0.01 0.01 0.02 0.02
Stock-based compensation expense 0.02 0.03
0.05 0.06
Non-GAAP earnings per common share –
diluted $ 0.10 $ 0.30 $
0.20 $ 0.50
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version on businesswire.com: http://www.businesswire.com/news/home/20150714006778/en/
ADTRAN, Inc.Michael Foliano, 256-963-8885Senior Vice President
& Interim CFOorINVESTOR SERVICES/ASSISTANCE:Gayle Ellis,
256-963-8220Investor Services
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