ADTRAN Inc
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Information Technology : Communications Equipment | Small Cap Blend
Company profile

ADTRAN, Inc. is a provider of networking and communications platforms, software, and services focused on the broadband access market. The Company operates through two segments: Network Solutions and Services & Support. The Network Solutions segment includes hardware and software products. The Services & Support segment includes a portfolio of maintenance, network installation and solution integration services, which include hosted cloud services and subscription services. The two segments span across Access & Aggregation, Subscriber Solutions & Experience and Traditional & Other Products. Its Access & Aggregation is focused on solutions that are used by service providers to connect their network infrastructure to subscribers. Subscriber Solutions & Experience is concentrated on subscriber solutions that terminate broadband access in the home and/or business. Traditional & Other Products encompasses prior-generation technologies, products and services and certain other offerings.

Closing Price
$18.37
Day's Change
-0.23 (-1.24%)
Bid
--
Ask
--
B/A Size
--
Day's High
18.97
Day's Low
18.34
Volume
(Light)
Volume:
147,830

10-day average volume:
403,650
147,830

ADTRAN, Inc. Reports Earnings for the First Quarter of 2022 and Declares Quarterly Cash Dividend

8:05 pm ET May 4, 2022 (BusinessWire) Print

ADTRAN, Inc., (NASDAQ: ADTN) ("ADTRAN" or the "Company"), today announced financial results for the first quarter of 2022. For the quarter, revenue was $154.5 million. Earnings for the first quarter of 2022 was a net loss of $1.1 million and earnings per share was a loss of $0.02. Non-GAAP net income was $9.9 million and non-GAAP earnings per share was $0.20. Non-GAAP net income and non-GAAP earnings per share exclude stock-based compensation expense, acquisition related expenses, amortizations and adjustments, restructuring expenses, amortization of pension actuarial losses, deferred compensation related adjustments, change in valuation allowance related to our deferred tax assets, and the tax effect of these adjustments to net income (loss). The reconciliations between GAAP net income (loss) and earnings (loss) per share to non-GAAP net income and non-GAAP earnings per share are set forth in the table provided below.

ADTRAN Chairman and Chief Executive Officer Tom Stanton stated, "We continue to experience unprecedented demand for our solutions with revenue up 21% year-over-year. We had another quarter with strong order bookings, paired with high growth in our fiber access, connected home and cloud software solutions. Our fiber access platforms led the way with an impressive 61% year-over-year growth rate. Our continued success with fiber footprint capture, customer diversification, and the portfolio synergies offered by the announced ADVA combination provides an optimistic outlook for continued growth."

The Company also announced that its Board of Directors declared a cash dividend for the first quarter of 2022. The quarterly cash dividend of $0.09 per common share is to be paid to the Company's stockholders of record as of the close of business on May 19, 2022. The ex-dividend date is May 18, 2022 and the payment date will be June 2, 2022.

The Company confirmed that it will hold a conference call to discuss its first quarter results on Thursday, May 5, 2022, at 9:30 a.m. Central Time. ADTRAN will webcast this conference call. To listen, simply visit ADTRAN's Investor Relations site at www.adtran.com/investor approximately ten minutes prior to the start of the call, click on the event "ADTRAN Releases 1st Quarter 2022 Financial Results and Earnings Call", and click on the Webcast link.

An online replay of the Company's conference call, as well as the text of the Company's conference call, will be available on the Investor Relations site approximately 24 hours following the call and will remain available for at least 12 months. For more information, visit www.investors.adtran.com or email atinvestor.relations@adtran.com.

About ADTRAN

At ADTRAN, we believe amazing things happen when people connect. From the cloud edge to the subscriber edge, we help communications service providers around the world manage and scale services that connect people, places and things to advance human progress. Whether rural or urban, domestic or international, telco or cable, enterprise or residential--ADTRAN solutions optimize existing technology infrastructures and create new, multi-gigabit platforms that leverage cloud economics, data analytics, machine learning and open ecosystems--the future of global networking. Find more at ADTRAN.com, LinkedIn and Twitter.

This press release contains forward-looking statements, generally identified by the use of words such as "believe," "expect," "intend," "estimate," "anticipate," "will," "may," "could" and similar expressions, which forward-looking statements reflect management's best judgment based on factors currently known. However, these statements involve risks and uncertainties, including: (i) risks and uncertainties related to the continued impact of the SARS-CoV-2 coronavirus/COVID-19 global pandemic (including variants of the SARS-CoV-2 coronavirus), including with respect to continued manufacturing and supply chain constraintsI 3/4 (ii) risks and uncertainties related to the anticipated business combination between the Company and ADVA Optical Networking SE ("ADVA"), including the timing, receipt and terms and conditions of any required governmental and regulatory approvals of the contemplated business combination that could reduce anticipated benefits or cause the parties to abandon the transactionI 3/4 the occurrence of any event, change or other circumstances that could give rise to the termination of the business combination agreementI 3/4 the ability to successfully complete the proposed business combinationI 3/4 regulatory or other limitations imposed as a result of the proposed business combinationI 3/4 the success of the business following the proposed business combinationI 3/4 the ability to successfully integrate the ADTRAN and ADVA businessesI 3/4 the risk that the parties may not be able to satisfy the conditions to closing of the proposed business combination in a timely manner or at allI 3/4 risks related to disruption of management time from ongoing business operations due to the proposed business combinationI 3/4 the risk that the publicity surrounding or consummation of the proposed business combination could have adverse effects on the market price of ADTRAN's common stock or ADVA's common shares or the ability of ADTRAN and ADVA to retain customers, retain or hire key personnel, maintain relationships with their respective suppliers and customers, and on their operating results and businesses generallyI 3/4 the risk that the successor issuer ("Acorn HoldCo"), may be unable to achieve expected synergies or that it may take longer or be more costly than expected to achieve those synergiesI 3/4 the risk of fluctuations in revenue due to lengthy sales and approval process required by major and other service providers for new productsI 3/4 the risk posed by potential breaches of information systems and cyber-attacksI 3/4 the risks that ADTRAN, ADVA or the post-combination company may not be able to effectively compete, including through product improvements and development, and (iii) the other risks detailed in the Company's filings with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K for the year ended December 31, 2021. These risks and uncertainties could cause actual results to differ materially from those in the forward-looking statements included in this press release.

To provide additional transparency, we have disclosed in the tables below non-GAAP operating income, which has been reconciled to operating (loss), and non-GAAP net income and non-GAAP earnings per share - basic and diluted, which have been reconciled to net (loss) income and (loss) earnings per share - basic and diluted, in each case as reported based on Generally Accepted Accounting Principles in the United States ("U.S. GAAP"). These non-GAAP financial measures exclude certain items which management believes are not reflective of the ongoing operating performance of the business. We believe this information is useful in providing period-to-period comparisons of the results of our ongoing operations. Additionally, these measures are used by management in our ongoing planning and annual budgeting processes. We believe the presentation of non-GAAP operating income, non-GAAP net income and non-GAAP earnings per share - basic and diluted, when combined with the U.S. GAAP presentation of operating (loss), net (loss) income and (loss) earnings per share - basic and diluted, is beneficial to the overall understanding of ongoing operating performance of the Company.

These non-GAAP financial measures are not prepared in accordance with, or an alternative for, U.S. GAAP and therefore should not be considered in isolation or as a substitution for analysis of our results as reported under U.S. GAAP. Additionally, our calculation of non-GAAP operating income, non-GAAP net income and non-GAAP earnings per share - basic and diluted, may not be comparable to similar measures calculated by other companies.

                                                      
                                                                  Condensed Consolidated Balance Sheets
                                                                               (Unaudited)
                                                                             (In thousands)
                                                      
                                   March 31,                         December 31,           
                                     2022                                2021               
                                          ------------------------------                                            ------------------------------
Assets                                                                   
Current Assets                                                           
Cash and cash equivalents                 $                        53,979     $                        56,603  
Restricted cash                                     52              215  
Short-term investments                             429              350  
Accounts receivable, net                       150,111          158,742  
Other receivables                               17,373           11,228  
Inventory, net                                 171,121          139,891  
Prepaid expenses and other current assets        9,076            9,296  
                                          -------------------- ----------                                           -------------------- ----------
Total Current Assets                           402,141          376,325  
Property, plant and equipment, net              54,384           55,766  
Deferred tax assets, net                         8,939            9,079  
Goodwill                                         6,968            6,968  
Intangibles, net                                18,405           19,293  
Other non-current assets                        30,542           30,971  
Long-term investments                           67,713           70,615  
                                          -------------------- ----------                                           -------------------- ----------
Total Assets                              $                       589,092     $                       569,017  
                                          ==================== ==========                                           ==================== ==========
                                                      
Liabilities and Stockholders' Equity                                     
Current Liabilities                                                      
Accounts payable                          $                       127,111     $                       102,489  
Unearned revenue                                19,454           17,737  
Accrued expenses and other liabilities          18,736           13,673  
Accrued wages and benefits                      13,953           14,900  
Income tax payable, net                          3,519            6,560  
                                          -------------------- ----------                                           -------------------- ----------
Total Current Liabilities                      182,773          155,359  
Non-current unearned revenue                     9,381            9,271  
Pension liability                               10,667           11,402  
Deferred compensation liability                 29,691           31,383  
Other non-current liabilities                    4,264            4,500  
                                          -------------------- ----------                                           -------------------- ----------
Total Liabilities                              236,776          211,915  
Stockholders' Equity                           352,316          357,102  
                                          -------------------- ----------                                           -------------------- ----------
                                                                                                                                      
                                                                                                   Condensed Consolidated Statements of (Loss) Income
                                                                                                                       (Unaudited)
                                                                                                          (In thousands, except per share data)
                                                                                                                                      
                                                                                      Three Months Ended                                                 
                                                                                           March 31,                                                     
                                                                                ----------------------------------------------------------------------------------------------------
                                                        2022                                2021                   
                                                                                ------------------------------                                            ------------------------------
Revenue                                                                                         
Network Solutions                                            $                       138,374     $                       113,809      
Services & Support                                                 16,144           13,724      
                                                                                -------------------- ----------                                           -------------------- ----------
                                                                  154,518          127,533      
   Total Revenue
Cost of Revenue                                                                                 
Network Solutions                                                  90,653           65,001      
Services & Support                                                  9,549            8,931      
                                                                                -------------------- ----------                                           -------------------- ----------
                                                                  100,202           73,932      
   Total Cost of Revenue
                                                                   54,316           53,601      
   Gross Profit
Selling, general and administrative expenses                       27,893           27,435      
Research and development expenses                                  26,491           27,501      
                                                                                -------------------- ----------                                           -------------------- ----------
                                                                      (68 )                            (1,335 )                       
   Operating Loss
Interest and dividend income                                          204              290      
Interest expense                                                      (30 )                                (6 )                       
Net investment (loss) gain                                         (3,415 )                               996      
Other (expense) income, net                                          (226 )                             1,999      
                                                                                -------------------- ----------                                           -------------------- ----------
(Loss) Income Before Income Taxes                                  (3,535 )                             1,944      
Income tax benefit (expense)                                        2,408           (1,048 )                       
                                                                                -------------------- ----------                                           -------------------- ----------
                                                             $                        (1,127 )                      $                           896      
   Net (Loss) Income
                                                                                ==================== ==========                                           ==================== ==========
                                                                             
Weighted average shares outstanding - basic           49,113           48,336      
Weighted average shares outstanding - diluted         49,113           49,004           (1 )          
                                                                             
(Loss) earnings per common share - basic        $                         (0.02 )                      $                          0.02      
(1) Assumes exercise of dilutive stock options calculated under the treasury stock method.
                                                                                                                                                              
                                                                                              Condensed Consolidated Statements of Cash Flows
                                                                                                                (Unaudited)
                                                                                                              (In thousands)
                                                                                                                                                              
                                                                                                                Three Months Ended                                               
                                                                                                                     March 31,                                                   
                                                                                                        --------------------------------------------------------------------------------------------------------
                                                                                2022                                  2021                 
                                                                                                        ------------------------------                                            ----------------------------------
Cash flows from operating activities:                                                                                   
                                                                                     $                        (1,127 )                      $                               896  
   Net (loss) income
                                                                                                                        
   Adjustments to reconcile net loss to net cash provided by operating activities:
                                                                                            3,661                4,122  
      Depreciation and amortization
                                                                                            3,304               (1,161 )
      Loss (gain) on investments
                                                                                            1,893                1,807  
      Stock-based compensation expense
                                                                                              (62 )                                    84  
      Other, net
                                                                                           (1,754 )                                (2,131 )
      Inventory reserves
                                                                                                                        
      Changes in operating assets and liabilities:
                                                                                            8,697               (4,762 )
         Accounts receivable, net
                                                                                           (6,205 )                                (1,220 )
         Other receivables
                                                                                          (29,685 )                                 4,024  
         Inventory
                                                                                           (1,170 )                                  (417 )
         Prepaid expenses, other current assets and other assets
                                                                                           24,818                5,629  
         Accounts payable
                                                                                            3,803                3,317  
         Accrued expenses and other liabilities
                                                                                           (1,304 )                                   497  
         Income taxes payable, net
                                                                                                        -------------------- ----------                                           -------------------- --------------
Net cash provided by operating activities                                                   4,869               10,685  
                                                                                                        -------------------- ----------                                           -------------------- --------------
                                                                                                     
Cash flows from investing activities:                                                                                   
                                                                                           (1,461 )                                  (741 )
   Purchases of property, plant and equipment
                                                                                           10,265               10,087  
   Proceeds from sales and maturities of available-for-sale investments
                                                                                          (11,504 )                               (11,350 )
   Purchases of available-for-sale investments
                                                                                                        -------------------- ----------                                           -------------------- --------------
Net cash used in investing activities                                                      (2,700 )                                (2,004 )
                                                                                                        -------------------- ----------                                           -------------------- --------------
                                                                                                     
Cash flows from financing activities:                                                                                   
                                                                                              (54 )                                  (113 )
   Tax withholdings related to stock-based compensation settlements
                                                                                              568                1,244  
   Proceeds from stock option exercises
                                                                                           (4,438 )                                (4,361 )
   Dividend payments
                                                                                            8,000       --  
   Proceeds from draw on line of credit
                                                                                           (8,000 )                        --  
   Repayment of line of credit
                                                                                                        -------------------- ----------                                           -------------------- --------------
Net cash used in financing activities                                                      (3,924 )                                (3,230 )
                                                                                                        -------------------- ----------                                           -------------------- --------------
                                                                                                     
                                                                                           (1,755 )                                 5,451  
   Net (decrease) increase in cash, cash equivalents and restricted cash
                                                                                           (1,032 )                                (1,734 )
   Effect of exchange rate changes
Cash, cash equivalents and restricted cash, beginning of period                            56,818               60,179  
                                                                                                        -------------------- ----------                                           -------------------- --------------
                                                                                                     
Cash, cash equivalents and restricted cash, end of period                            $                        54,031     $                            63,896  
                                                                                                        ==================== ==========                                           ==================== ==============
                                                                                                     
Supplemental disclosure of non-cash investing activities:                                                               
                                                                                     $                           332     $                               248  
   Right-of-use assets obtained in exchange for lease obligations
                                                                                     $                           392     $                               199  
   Purchases of property, plant and equipment included in accounts payable
                                                                                                                           
                                                                                        Supplemental Information
                                                                      Reconciliation of Operating Loss to Non-GAAP Operating Income
                                                                                               (Unaudited)
                                                                                     (Amounts in table in thousands)
                                                                                                                           
                                                                                 Three Months Ended                                           
                                                                                                         March 31,
                                                            --------------------------------------------------------------------------------------------
                                                     2022                            2021               
                                                            --------------------------                                            --------------------------
Operating Loss                                              $                       (68 )                      $                    (1,335 )                     
Acquisition-related expenses, amortizations and adjustments    2,330   (1)                     1,045   (5)
Stock-based compensation expense                               1,893   (2)                     1,807   (6)
Restructuring expenses                                             2   (3)                       301   (7)
Deferred compensation adjustments                             (2,696 )                    (4)                       556   (4)
                                                            -------------------- ------                                           -------------------- ------
(1) $1.8 million is included in selling, general and administrative expenses and $0.5 million is included in research and development expenses on the condensed consolidated statements of (loss) income.
 
(2) $0.2 million is included in total cost of revenue, $1.1 million is included in selling, general and administrative expenses and $0.6 million is included in research and development expenses on the condensed consolidated statements of (loss) income.
 
(3) Less than $0.1 million is included in selling, general and administrative expenses on the condensed consolidated statements of (loss) income.
 
(4) Includes non-cash change in fair value of equity investments held in the ADTRAN, Inc. Deferred Compensation Program for Employees, all of which is included in selling, general and administrative expenses on the condensed consolidated statement of (loss) income.
 
(5) $0.6 million is included in selling, general and administrative expenses and $0.5 million is included in research and development expenses on the condensed consolidated statements of (loss) income.
 
(6) $0.1 million is included in total cost of revenue, $1.1 million is included in selling, general and administrative expenses and $0.6 million is included in research and development expenses on the condensed consolidated statements of (loss) income.
 
                                                                                                                                     
                                                                                                      Supplemental Information
                                                              Reconciliation of Net (Loss) Income and (Loss) Earnings per Common Share - Basic and Diluted
                                                                   to Non-GAAP Net Income and Non-GAAP Earnings per Common Share - Basic and Diluted
                                                                                                             (Unaudited)
                                                                                      (Amounts in table in thousands, except per share amounts)
                                                                                                                                     
                                                                                       Three Months Ended                                               
                                                                                                                                  March 31,
                                                                                 ----------------------------------------------------------------------------------------------------
                                                         2022                                2021                 
                                                                                 ------------------------------                                            ------------------------------
Net (Loss) Income                                             $                        (1,127 )                      $                           896    
Acquisition-related expenses, amortizations and adjustments          2,330            1,045    
Stock-based compensation expense                                     1,893            1,807    
Restructuring expenses                                                   2              301    
Deferred compensation adjustments(1)                                  (855 )                               268    
Pension expense(2)                                                      89              278    
Valuation allowance related to deferred tax assets                   8,079            2,685    
Tax effect of adjustments to net (loss) income                        (505 )                              (952 )                     
                                                                                 -------------------- ----------                                           -------------------- ----------
Non-GAAP Net Income                                           $                         9,906     $                         6,328    
                                                                                 ==================== ==========                                           ==================== ==========
                                                                            
Weighted average shares outstanding - basic            49,113           48,336    
Weighted average shares outstanding - diluted          49,113           49,004    
                                                                            
(Loss) earnings per common share - basic                      $                         (0.02 )                      $                          0.02    
(Loss) earnings per common share - diluted                    $                         (0.02 )                      $                          0.02    
                                                                            
Non-GAAP earnings per common share - basic                    $                          0.20     $                          0.13    
(1) Includes non-cash change in fair value of equity investments held in deferred compensation plans offered to certain employees.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220504006153/en/

SOURCE: ADTRAN, Inc.

Investor Services/Assistance:
Rhonda Lambert/256-963-7450
investor@adtran.com
comtex tracking

COMTEX_406707787/1006/2022-05-04T20:05:00

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