ADTN
$18.95
Adtran
($.37)
(1.92%)
Earnings Details
2nd Quarter June 2016
Tuesday, July 12, 2016 10:40:00 PM
Tweet Share Watch
Summary

Adtran Beats

Adtran (ADTN) reported 2nd Quarter June 2016 earnings of $0.22 per share on revenue of $162.7 million. The consensus earnings estimate was $0.19 per share on revenue of $162.4 million. The Earnings Whisper number was $0.21 per share. Revenue grew 1.6% on a year-over-year basis.

Adtran Inc provides networking and communications equipment. Its solutions enable voice, data, video and Internet communications across a variety of network infrastructures.

Results
Reported Earnings
$0.22
Earnings Whisper
$0.21
Consensus Estimate
$0.19
Reported Revenue
$162.7 Mil
Revenue Estimate
$162.4 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

ADTRAN, Inc. Reports Results for the Second Quarter 2016 and Declares Quarterly Cash Dividend

ADTRAN, Inc. (ADTN) reported results for the second quarter 2016. For the quarter, sales were $162,701,000 compared to $160,138,000 for the second quarter of 2015. Net income was $10,228,000 compared to $2,544,000 for the second quarter of 2015. Earnings per share, assuming dilution, were $0.21 compared to $0.05 for the second quarter of 2015. Non-GAAP earnings per share were $0.25 compared to $0.10 for the second 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 solid revenue and earnings results for the quarter due to strength in our domestic market and gross margin improvement. Growth in the U.S. market was led by our FTTP and 100 megabit portfolios, along with continued growth in our CAF II and Ethernet solutions. Our Services business also continued its strong growth with a 51% revenue increase year-over-year. Customers around the world are increasingly recognizing the benefits of deploying ultra-high speed broadband and are leveraging ADTRAN’s unique domain leadership and expertise in planning, developing and deploying business and residential services."

The Company also announced that its Board of Directors declared a cash dividend for the second 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 July 28, 2016. The ex-dividend date is July 26, 2016 and the payment date is August 11, 2016.

The Company confirmed that its second quarter conference call will be held Wednesday, July 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 and Form 10-Q for the quarter ended March 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.

Condensed Consolidated Balance Sheet
(Unaudited)
(In thousands)
June 30,
December 31,
2016
2015
Assets
Cash and cash equivalents
$
70,914
$
84,550
Short-term investments
50,867
34,396
Accounts receivable, net
89,386
71,917
Other receivables
11,676
19,321
Income tax receivable, net
2,405
-
Inventory
86,936
91,533
Prepaid expenses and other current assets
13,563
10,145
Deferred tax assets, net
18,488
18,924
Total Current Assets
344,235
330,786
Property, plant and equipment, net
74,115
73,233
Deferred tax assets, net
19,127
18,091
Goodwill
3,492
3,492
Other assets
9,340
9,276
Long-term investments
186,249
198,026
Total Assets
$ 636,558
$
632,904
Liabilities and Stockholders’ Equity
Accounts payable
$
59,211
$
48,668
Unearned revenue
15,982
16,615
Accrued expenses
12,126
12,108
Accrued wages and benefits
15,702
12,857
Income tax payable, net
-
2,395
Total Current Liabilities
103,021
92,643
Non-current unearned revenue
6,437
7,965
Other non-current liabilities
25,476
24,236
Bonds payable
27,900
27,900
Total Liabilities
162,834
152,744
Stockholders’ Equity
473,724
480,160
Total Liabilities and Stockholders’ Equity
$ 636,558
$
632,904
Consolidated Statements of Income
(Unaudited)
(In thousands, except per share data)
Three Months Ended
Six Months Ended
June 30,
June 30,
2016
2015
2016
2015
Sales
Products
$ 138,549
$ 144,098
$ 262,432
$ 273,603
Services
24,152
16,040
42,473
29,370
Total Sales
162,701
160,138
304,905
302,973
Cost of Sales
Products
67,844
84,210
131,917
155,770
Services
15,902
7,682
28,239
13,394
Total Cost of Sales
83,746
91,892
160,156
169,164
Gross Profit
78,955
68,246
144,749
133,809
Selling, general and administrative expenses
32,866
32,123
63,651
63,187
Research and development expenses
31,277
35,479
60,765
68,015
Operating Income
14,812
644
20,333
2,607
Interest and dividend income
927
908
1,782
1,841
Interest expense
(142 )
(149 )
(287 )
(297 )
Net realized investment gain
1,110
3,255
2,838
6,370
Other expense, net
(251 )
(547 )
(132 )
(900 )
Income before provision for income taxes
16,456
4,111
24,534
9,621
Provision for income taxes
(6,228 )
(1,567 )
(9,292 )
(3,760 )
Net Income
$
10,228
$
2,544
$
15,242
$
5,861
Weighted average shares outstanding - basic
48,831
51,822
49,026
52,607
Weighted average shares outstanding - diluted (1)
49,048
51,917
49,218
52,742
Earnings per common share - basic
$
0.21
$
0.05
$
0.31
$
0.11
Earnings per common share - diluted (1)
$
0.21
$
0.05
$
0.31
$
0.11
(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,
2016
2015
2016
2015
Net Income
$ 10,228
$
2,544
$ 15,242
$
5,861
Other Comprehensive Income (Loss), net of tax:
Unrealized losses on available-for-sale securities
(165 )
(1,783 )
(420 )
(2,286 )
Defined benefit plan adjustments
22
72
67
140
Foreign currency translation
(601 )
872
627
(2,446 )
Other Comprehensive Income (Loss), net of tax
(744 )
(839 )
274
(4,592 )
Comprehensive Income, net of tax
$
9,484
$
1,705
$ 15,516
$
1,269
Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
Six Months Ended
June 30,
2016
2015
Cash flows from operating activities:
Net income
$
15,242
$
5,861
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization
6,689
7,256
Amortization of net premium on available-for-sale investments
376
1,578
Net realized gain on long-term investments
(2,838 )
(6,370 )
Net loss on disposal of property, plant and equipment
5
160
Stock-based compensation expense
3,109
3,114
Deferred income taxes
(354 )
(1,743 )
Tax impact from stock option exercises
-
(23 )
Excess tax benefits from stock-based compensation arrangements
-
38
Change in operating assets and liabilities:
Accounts receivable, net
(17,192 )
(2,003 )
Other receivables
7,876
(119 )
Inventory
4,938
(14,254 )
Prepaid expenses and other assets
(4,263 )
(1,433 )
Accounts payable
10,354
30,938
Accrued expenses and other liabilities
1,474
2,175
Income tax payable/receivable, net
(4,799 )
(3,961 )
Net cash provided by operating activities
20,617
21,214
Cash flows from investing activities:
Purchases of property, plant and equipment
(6,679 )
(5,392 )
Proceeds from disposals of property, plant and equipment
-
8
Proceeds from sales and maturities of available-for-sale investments
109,993
120,422
Purchases of available-for-sale investments
(112,903 )
(62,626 )
Net cash provided by (used in) investing activities
(9,589 )
52,412
Cash flows from financing activities:
Proceeds from stock option exercises
541
833
Purchases of treasury stock
(16,579 )
(49,307 )
Dividend payments
(8,860 )
(9,509 )
Excess tax benefits from stock-based compensation arrangements
-
(38 )
Net cash used in financing activities
(24,898 )
(58,021 )
Net increase (decrease) in cash and cash equivalents
(13,870 )
15,605
Effect of exchange rate changes
234
(1,829 )
Cash and cash equivalents, beginning of period
84,550
73,439
Cash and cash equivalents, end of period
$
70,914
$
87,215
Supplemental disclosure of non-cash investing activities
Purchases of property, plant and equipment included in accounts
$
554
$
270
payable

Supplemental Information Restructuring 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, 2016 and 2015:

Three and Six Months Ended
June 30,
2016
2015
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 Information
Acquisition 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, 2016 and 2015 for both transactions are
as follows:
Three Months Ended
Six Months Ended
June 30,
June 30,
2016
2015
2016
2015
Bluesocket, Inc. acquisition
Amortization of acquired intangible assets and other purchase
$
173
$
226
$
346
$
452
accounting adjustments
NSN BBA acquisition
Amortization of acquired intangible assets
228
229
455
470
Amortization of other purchase accounting adjustments
44
140
80
294
Acquisition related professional fees, travel and other expenses
-
35
-
41
Subtotal
272
404
535
805
Total acquisition related expenses, amortizations and adjustments
445
630
881
1,257
Provision for income taxes
(152 )
(213 )
(301 )
(426 )
Total acquisition related expenses, amortizations and
$
293
$
417
$
580
$
831
adjustments, net of tax
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, 2016
and 2015:
Three Months Ended
Six Months Ended
June 30,
June 30,
2016
2015
2016
2015
Revenue (adjustments to deferred revenue recognized in the period)
$
-
$
64
$
-
$
131
Cost of goods sold
13
33
20
45
Subtotal
13
97
20
176
Selling, general and administrative expenses
4
39
7
51
Research and development expenses
428
494
854
1,030
Subtotal
432
533
861
1,081
Total acquisition related expenses, amortizations and adjustments
445
630
881
1,257
Provision for income taxes
(152 )
(213 )
(301 )
(426 )
Total acquisition related expenses, amortizations and
$
293
$
417
$
580
$
831
adjustments, net of tax
Supplemental Information
Stock-based Compensation Expense
(Unaudited)
(In thousands)
Three Months Ended
Six Months Ended
June 30,
June 30,
2016
2015
2016
2015
Stock-based compensation expense included in cost of sales
$
95
$
53
$
194
$
143
Selling, general and administrative expense
788
723
1,557
1,414
Research and development expense
668
699
1,358
1,557
Stock-based compensation expense included in operating expenses
1,456
1,422
2,915
2,971
Total stock-based compensation expense
1,551
1,475
3,109
3,114
Tax benefit for expense associated with non-qualified options
(213 )
(222 )
(425 )
(402 )
Total stock-based compensation expense, net of tax
$ 1,338
$ 1,253
$ 2,684
$
2,712
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,
2016
2015
2016
2015
GAAP earnings per common share - diluted
$ 0.21
$ 0.05
$ 0.31
$
0.11
Restructuring expense
-
0.02
-
0.02
Acquisition related expenses, amortizations and adjustments
0.01
0.01
0.01
0.02
Stock-based compensation expense
0.03
0.02
0.05
0.05
Non-GAAP earnings per common share - diluted
$ 0.25
$ 0.10
$ 0.37
$
0.20

http://cts.businesswire.com/ct/CT?id=bwnews&sty=20160712006783r1&sid=cmtx6&distro=nx&lang=en

View source version on businesswire.com: http://www.businesswire.com/news/home/20160712006783/en/

SOURCE: ADTRAN, Inc.

ADTRAN, Inc.
Roger Shannon, 256-963-8775
Senior Vice President & CFO
or
Investor Services/Assistance:
Gayle Ellis, 256-963-8220
Investor Services