ADTN
$17.79
Adtran
($.26)
(1.44%)
Earnings Details
2nd Quarter June 2021
Wednesday, August 4, 2021 8:05:00 PM
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Summary

Adtran (ADTN) Recent Earnings

Adtran (ADTN) reported 2nd Quarter June 2021 earnings of $0.14 per share on revenue of $143.2 million. The consensus earnings estimate was $0.12 per share on revenue of $141.8 million. Revenue grew 11.3% 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
$0.14
Earnings Whisper
-
Consensus Estimate
$0.12
Reported Revenue
$143.2 Mil
Revenue Estimate
$141.8 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

ADTRAN, Inc. Reports Earnings for the Second Quarter of 2021 and Declares Quarterly Cash Dividend

HUNTSVILLE, Ala.--(BUSINESS WIRE)--ADTRAN, Inc., (NASDAQ:ADTN) (“ADTRAN” or the “Company”), today announced financial results for the second quarter of 2021. For the quarter, revenue was $143.2 million. Net income for the second quarter of 2021 was $5.1 million and earnings per share, assuming dilution, was $0.10 per share. Non-GAAP net income was $8.1 million and non-GAAP earnings per share, assuming dilution, was $0.16 per share. Non-GAAP net income and non-GAAP earnings per share exclude acquisition-related expenses, amortizations and adjustments, stock-based compensation expense, restructuring expenses, amortization of pension actuarial losses, non-cash deferred compensation, change in valuation allowance related to our deferred tax assets, asset impairments and the tax effect of these adjustments to net income. The reconciliations between GAAP net income (loss) and earnings (loss) per share to non-GAAP net income (loss) and non-GAAP earnings (loss) per share are set forth in the table provided below.

ADTRAN Chairman and Chief Executive Officer Tom Stanton stated, Strong demand for fiber access continued to drive multiple segments of our business including infrastructure, in-home premises equipment and our SaaS platforms. Tier 3 regional operators, both in the U.S and Europe, showed exceptional strength with growth over 50% on a year-over-year basis. Demand continues to be strong and we believe we are in the early phases of this growth cycle.”

The Company also announced that its Board of Directors declared a cash dividend for the second quarter of 2021. 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 August 19, 2021. The payment date will be September 2, 2021.

The Company confirmed that it will hold a conference call to discuss its second quarter results on Thursday, August 5, 2021, 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 to Release 2nd Quarter 2021 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 at investor.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 (or variants of the SARS-CoV-2 coronavirus, including the Delta variant), including the severity and duration of the pandemic and the delivery, acceptance and effectiveness of vaccines, which could lead to a decrease in demand for the Company’s products and services, and which has disrupted, and could lead to further disruptions in, the Company’s supply chain, adversely impacting the operations and financial condition of the Company and its customers; actions that have been taken and that may be taken by the Company, its customers, suppliers and counterparties in response to the pandemic, including the implementation of alternative work arrangements for employees, which may delay the timing of some orders and expected deliveries and which may impact the Company’s ability to mitigate inefficiencies, delays and additional costs in the Company’s product development, sales, marketing and customer service efforts; the legal, regulatory and administrative developments that have occurred and may continue to occur at the federal, state and local levels and in foreign jurisdictions in response to the pandemic, including travel bans and restrictions, quarantines, shelter-in-place orders, and business limitations and shutdowns; potential disruptions, breaches, or other incidents affecting the proper operation, availability or security of the Company’s or its partners’ information systems; potential declines in revenues due to declining customer demand and deteriorating macroeconomic conditions; increased expenses related to labor, raw materials, freight or other expenditures; the impact of the COVID-19 pandemic on the Company’s liquidity, as well as risks associated with disruptions in the financial markets and the business of financial institutions as a result of the COVID-19 pandemic which could impact the Company from a financial perspective; the pace of recovery in our markets when the COVID-19 pandemic subsides, which could affect demand for our products; and (ii) the other risks detailed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 and the Company’s quarterly report on Form 10-Q for the quarter ended March 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 table below non-GAAP operating income (loss), which has been reconciled to operating income (loss), and non-GAAP net income (loss) and non-GAAP earnings (loss) per share - basic and diluted, which have been reconciled to net income (loss) and earnings (loss) 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. The presentation of non-GAAP operating income (loss), non-GAAP net income (loss) and non-GAAP earnings (loss) per share - basic and diluted, when combined with the U.S. GAAP presentation of operating income (loss), net income (loss) and earnings (loss) 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 (loss), non-GAAP net income (loss) and non-GAAP earnings (loss) per share - basic and diluted, may not be comparable to similar measures calculated by other companies.

 

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands)

 

 

June 30,

 

 

December 31,

 

 

2021

 

 

2020

 

Assets

 

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

 

Cash and cash equivalents

$

69,927

 

 

$

60,161

 

Restricted cash

 

54

 

 

 

18

 

Short-term investments

 

2,818

 

 

 

3,131

 

Accounts receivable, net

 

122,669

 

 

 

98,827

 

Other receivables

 

20,187

 

 

 

21,531

 

Inventory, net

 

119,012

 

 

 

125,457

 

Prepaid expenses and other current assets

 

9,830

 

 

 

8,293

 

Total Current Assets

 

344,497

 

 

 

317,418

 

Property, plant and equipment, net

 

58,270

 

 

 

62,399

 

Deferred tax assets, net

 

9,165

 

 

 

9,869

 

Goodwill

 

6,968

 

 

 

6,968

 

Intangibles, net

 

21,354

 

 

 

23,470

 

Other assets

 

28,394

 

 

 

25,425

 

Long-term investments

 

82,778

 

 

 

80,130

 

Total Assets

$

551,426

 

 

$

525,679

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

Accounts payable

$

66,499

 

 

$

49,929

 

Unearned revenue

 

15,889

 

 

 

14,092

 

Accrued expenses and other liabilities

 

15,655

 

 

 

13,609

 

Accrued wages and benefits

 

15,681

 

 

 

15,262

 

Income tax payable, net

 

2,345

 

 

 

1,301

 

Total Current Liabilities

 

116,069

 

 

 

94,193

 

Non-current unearned revenue

 

7,030

 

 

 

6,888

 

Pension liability

 

17,566

 

 

 

18,664

 

Deferred compensation liability

 

28,769

 

 

 

25,866

 

Other non-current liabilities

 

6,477

 

 

 

7,124

 

Total Liabilities

 

175,911

 

 

 

152,735

 

Stockholders' Equity

 

375,515

 

 

 

372,944

 

Total Liabilities and Stockholders' Equity

$

551,426

 

 

$

525,679

 

 

 

Condensed Consolidated Statements of Income (Loss)

(Unaudited)

(In thousands, except per share data)

 

 

 

Three Months Ended

 

 

 

 

Six Months Ended

 

 

 

 

 

 

June 30,

 

 

 

 

June 30,

 

 

 

 

 

 

2021

 

 

 

 

2020

 

 

 

 

2021

 

 

2020

 

 

 

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Network Solutions

 

$

125,449

 

 

 

 

$

111,323

 

 

 

 

$

239,258

 

 

$

208,695

 

 

 

 

Services & Support

 

 

17,783

 

 

 

 

 

17,392

 

 

 

 

 

31,507

 

 

 

34,543

 

 

 

 

Total Revenue

 

 

143,232

 

 

 

 

 

128,715

 

 

 

 

 

270,765

 

 

 

243,238

 

 

 

 

Cost of Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Network Solutions

 

 

70,014

 

 

 

 

 

64,071

 

 

 

 

 

135,015

 

 

 

115,697

 

 

 

 

Services & Support

 

 

10,550

 

 

 

 

 

11,172

 

 

 

 

 

19,481

 

 

 

22,469

 

 

 

 

Total Cost of Revenue

 

 

80,564

 

 

 

 

 

75,243

 

 

 

 

 

154,496

 

 

 

138,166

 

 

 

 

Gross Profit

 

 

62,668

 

 

 

 

 

53,472

 

 

 

 

 

116,269

 

 

 

105,072

 

 

 

 

Selling, general and administrative expenses

 

 

30,866

 

 

 

 

 

30,799

 

 

 

 

 

58,301

 

 

 

57,419

 

 

 

 

Research and development expenses

 

 

27,871

 

 

 

 

 

28,712

 

 

 

 

 

55,372

 

 

 

58,571

 

 

 

 

Asset impairments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

65

 

 

 

 

Operating Income (Loss)

 

 

3,931

 

 

 

 

 

(6,039

)

 

 

 

 

2,596

 

 

 

(10,983

)

 

 

 

Interest and dividend income

 

 

253

 

 

 

 

 

331

 

 

 

 

 

543

 

 

 

687

 

 

 

 

Interest expense

 

 

(6

)

 

 

 

 

 

 

 

 

 

(12

)

 

 

(1

)

 

 

 

Net investment gain (loss)

 

 

2,009

 

 

 

 

 

9,852

 

 

 

 

 

3,005

 

 

 

(1,025

)

 

 

 

Other income (expense), net

 

 

26

 

 

 

 

 

(1,757

)

 

 

 

 

2,025

 

 

 

(628

)

 

 

 

Income (Loss) Before Income Taxes

 

 

6,213

 

 

 

 

 

2,387

 

 

 

 

 

8,157

 

 

 

(11,950

)

 

 

 

Income tax (expense) benefit

 

 

(1,127

)

 

 

 

 

(1,635

)

 

 

 

 

(2,175

)

 

 

2,733

 

 

 

 

Net Income (Loss)

 

$

5,086

 

 

 

 

$

752

 

 

 

 

$

5,982

 

 

$

(9,217

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding – basic

 

 

48,449

 

 

 

 

 

47,958

 

 

 

 

 

48,393

 

 

 

47,957

 

 

 

 

Weighted average shares outstanding – diluted

 

 

49,426

 

(1)

 

 

 

48,254

 

(1)

 

 

 

49,225

 

(1)

 

47,957

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) per common share – basic

 

$

0.10

 

 

 

 

$

0.02

 

 

 

 

$

0.12

 

 

$

(0.19

)

 

 

 

Earnings (loss) per common share – diluted

 

$

0.10

 

(1)

 

 

$

0.02

 

(1)

 

 

$

0.12

 

(1)

$

(0.19

)

 

 

 

 

(1) Assumes exercise of dilutive stock awards calculated under the treasury stock method.

 

 

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

 

 

 

Six Months Ended

 

 

 

June 30,

 

 

 

2021

 

 

2020

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income (loss)

 

$

5,982

 

 

$

(9,217

)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

8,232

 

 

 

8,404

 

(Gain) loss on investments

 

 

(3,255

)

 

 

1,025

 

Stock-based compensation expense

 

 

3,615

 

 

 

3,446

 

Deferred income taxes

 

 

441

 

 

 

(5

)

Other

 

 

53

 

 

 

138

 

Asset impairments

 

 

 

 

 

65

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable, net

 

 

(24,322

)

 

 

(4,727

)

Other receivables

 

 

1,412

 

 

 

(9,468

)

Inventory, net

 

 

5,940

 

 

 

(7,878

)

Prepaid expenses, other current assets and other assets

 

 

(4,767

)

 

 

1,444

 

Accounts payable

 

 

16,814

 

 

 

17,389

 

Accrued expenses and other liabilities

 

 

6,999

 

 

 

2,097

 

Income taxes payable, net

 

 

1,069

 

 

 

(1,032

)

Net cash provided by operating activities

 

 

18,213

 

 

 

1,681

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Purchases of property, plant and equipment

 

 

(2,210

)

 

 

(3,148

)

Proceeds from sales and maturities of available-for-sale investments

 

 

20,597

 

 

 

63,318

 

Purchases of available-for-sale investments

 

 

(20,121

)

 

 

(31,897

)

Acquisition of note receivable

 

 

 

 

 

(523

)

Net cash provided by (used in) investing activities

 

 

(1,734

)

 

 

27,750

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Proceeds from stock option exercises

 

 

3,552

 

 

 

 

Tax withholdings related to stock-based compensation settlements

 

 

(113

)

 

 

 

Dividend payments

 

 

(8,735

)

 

 

(8,665

)

Repayment of bonds payable

 

 

 

 

 

(24,600

)

Net cash used in financing activities

 

 

(5,296

)

 

 

(33,265

)

 

 

 

 

 

 

 

 

 

Net increase (decrease) in cash, cash equivalents and restricted cash

 

 

11,183

 

 

 

(3,834

)

Effect of exchange rate changes

 

 

(1,381

)

 

 

306

 

Cash, cash equivalents and restricted cash, beginning of period

 

 

60,179

 

 

 

73,773

 

Cash, cash equivalents and restricted cash, end of period

 

$

69,981

 

 

$

70,245

 

 

 

 

 

 

 

 

 

 

Supplemental disclosure of non-cash investing activities:

 

 

 

 

 

 

 

 

Right-of-use assets obtained in exchange for lease obligations

 

$

275

 

 

$

93

 

Purchases of property, plant and equipment included in accounts payable

 

$

144

 

 

$

198

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental Information

Reconciliation of Operating Income (Loss) to Non-GAAP Operating Income (Loss)

(Unaudited)

 

 

Three Months Ended

June 30,

 

 

 

Six Months ended

June 30,

 

 

 

2021

 

 

 

 

2020

 

 

 

2021

 

 

2020

 

 

Operating Income (Loss)

$

3,931

 

 

 

 

$

(6,039

)

 

 

$

2,596

 

 

$

(10,983

)

 

Acquisition-related expenses, amortizations and adjustments

 

2,384

(1)

 

 

 

 

1,100

(5)

 

 

 

3,429

(8)

 

 

2,457

(11)

 

Stock-based compensation expense

 

1,808

(2)

 

 

 

 

1,655

(6)

 

 

 

3,615

(9)

 

 

3,446

(12)

 

Restructuring expenses

 

8

(3)

 

 

 

 

1,192

(7)

 

 

 

309

(10)

 

 

1,745

(13)

 

Deferred compensation adjustments

 

1,994

(4)

 

 

 

 

3,433

(4)

 

 

 

2,550

(4)

 

 

(26)

(4)

 

Asset impairments

 

 

 

 

 

 

 

 

 

 

 

 

 

65

(14)

 

Non-GAAP Operating Income (Loss)

$

10,125

 

 

 

 

$

1,341

 

 

 

$

12,499

 

 

$

(3,296)

 

 

(1) $1.9 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 income (loss).

 

(2) $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 income (loss).

 

(3) Less than $0.1 million is included in each of selling, general and administrative expenses and research and development expenses on the condensed consolidated statements of income (loss).

 

(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 income (loss).

 

(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 income (loss).

 

(6) $0.1 million is included in total cost of revenue, $1.0 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 income (loss).

 

(7) $0.5 million is included in selling, general and administrative expenses and $0.7 million is included in research and development expenses on the condensed consolidated statements of income (loss).

 

(8) $2.4 million is included in selling, general and administrative expenses and $1.0 million is included in research and development expenses on the condensed consolidated statements of income (loss).

 

(9) $0.2 million is included in total cost of revenue, $2.2 million is included in selling, general and administrative expenses and $1.2 million is included in research and development expenses on the condensed consolidated statements of income (loss).

 

(10) $0.1 million is included in selling, general and administrative expenses and $0.2 million is included in research and development expenses on the condensed consolidated statements of income (loss).

 

(11) $0.3 million is included in total cost of revenue, $1.2 million is included in selling, general and administrative expenses and $1.0 million is included in research and development expenses on the consolidated statements of income (loss).

 

(12) $0.2 million is included in total cost of revenue, $2.0 million is included in selling, general and administrative expenses and $1.2 million is included in research and development expenses on the consolidated statements of income (loss).

 

(13) $0.1 million is included in total cost of revenue, $0.5 million is included in selling, general and administrative expenses and $1.1 million is included in research and development expenses on the consolidated statements of income (loss).

 

(14) Includes abandonment of certain information technology projects.

 

 

Supplemental Information

Reconciliation of Net Income (Loss) and Earnings (Loss) per Common Share – Basic and Diluted

to Non-GAAP Net Income (Loss) and Non-GAAP Earnings (Loss) per Common Share – Basic and Diluted

(Unaudited)

 

 

 

Three Months Ended

June 30,

 

 

 

Six Months ended

June 30,

 

 

 

 

 

 

2021

 

 

2020

 

 

 

2021

 

 

2020

 

 

 

 

Net Income (Loss)

 

$

5,086

 

 

$

752

 

 

 

$

5,982

 

 

$

(9,217

)

 

 

 

Acquisition-related expenses, amortizations and adjustments

 

 

2,384

 

 

 

1,100

 

 

 

 

3,429

 

 

 

2,457

 

 

 

 

Stock-based compensation expense

 

 

1,808

 

 

 

1,655

 

 

 

 

3,615

 

 

 

3,446

 

 

 

 

Restructuring expenses

 

 

8

 

 

 

1,192

 

 

 

 

309

 

 

 

1,745

 

 

 

 

Pension expense(1)

 

 

275

 

 

 

235

 

 

 

 

553

 

 

 

472

 

 

 

 

Deferred compensation adjustments(2)

 

 

546

 

 

 

445

 

 

 

 

814

 

 

 

(1,342)

(3)

 

 

 

Valuation allowance related to deferred tax assets

 

 

(727

)

 

 

(2,512

)

 

 

 

1,958

 

 

 

3,578

 

 

 

 

Asset impairments

 

 

 

 

 

 

 

 

 

 

 

 

65

 

 

 

 

Tax effect of adjustments to net income (loss)

 

 

(1,243

)

 

 

(1,233

)

 

 

 

(2,195

)

 

 

(1,810)

 

 

 

 

Non-GAAP Net Income (Loss)

 

$

8,137

 

 

$

1,634

 

 

 

$

14,465

 

 

$

(606)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding – basic

 

 

48,449

 

 

 

47,958

 

 

 

 

48,393

 

 

 

47,957

 

 

 

 

Weighted average shares outstanding – diluted

 

 

49,426

 

 

 

48,254

 

 

 

 

49,225

 

 

 

47,957

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) per common share - basic

 

$

0.10

 

 

$

0.02

 

 

 

$

0.12

 

 

$

(0.19

)

 

 

 

Earnings (loss) per common share - diluted

 

$

0.10

 

 

$

0.02

 

 

 

$

0.12

 

 

$

(0.19

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP earnings (loss) per common share - basic

 

$

0.17

 

 

$

0.04

 

 

 

$

0.30

 

 

$

(0.01

)

 

 

 

Non-GAAP earnings (loss) per common share - diluted

 

$

0.16

 

 

$

0.04

 

 

 

$

0.29

 

 

$

(0.01

)

 

 

 

 

(1) Includes amortization of actuarial losses related to the Company's pension plan for employees in certain foreign countries.

(2) Includes a non-cash change in fair value of equity investments held in deferred compensation plans offered to certain employees.

(3) Includes a net investment gain of $1.5 million related to the out of period remeasurement to historical cost basis of certain long-term investments held in the Company's stock as part of one of the Company’s deferred compensation plans.

 

Rhonda Lambert
256-963-7450

Source: ADTRAN, Inc.