ADTRAN (ADTN) 8-K ADTRAN, Inc. Reports Results for Fourth Quarter and Year 2008 and Declares Quarterly Cash Dividend

Exhibit 99.1

ADTRAN, Inc. Reports Results for Fourth Quarter and Year 2008 and Declares Quarterly Cash Dividend

HUNTSVILLE, Ala.--(BUSINESS WIRE)--January 20, 2009--ADTRAN, Inc. (NASDAQ:ADTN) reported results for the fourth quarter and year 2008. Sales were $112,413,000 for the quarter, compared to $118,971,000 for the fourth quarter of 2007. Sales were $500,676,000 for the year, compared to $476,778,000 for the year 2007. Net income was $16,709,000 for the quarter, compared to $18,111,000 for the fourth quarter of 2007 and $78,581,000 for the year, compared to $76,335,000 for the year 2007. Earnings per share, assuming dilution, were $0.27 for the quarter, compared to $0.27 for the fourth quarter of 2007 and $1.22 for the year, compared to $1.10 for the year 2007.

ADTRAN Chief Executive Officer Tom Stanton stated, “Although the slowing economy continued to impact our business, our strong operating metrics delivered a healthy level of profitability for the fourth quarter as we continued to gain market share in our growth areas. For the year, our growth businesses - Broadband Access, Optical Access and Internetworking - all reached record revenue levels, achieving 23% combined growth. While the industry continues to face uncertainty in the near term, we believe our operating discipline combined with the long term opportunities in our growth areas place us in a solid position.”

The Company also reported that during the fourth quarter of 2008, net realized investment losses of $2.3 million in its marketable equity securities portfolio were recorded as a result of declines in the equity securities markets. Tax effected, this reduced diluted earnings per share by $0.02 for the quarter.

The Company also reported that stock-based compensation expense for the fourth quarter of 2008 reduced diluted earnings per share by $0.02 compared to $0.02 for the fourth quarter of 2007.

The Company also reported that the tax provision rate for the fourth quarter of 2008 included recognition of research tax credits for the full year 2008 as legislation was enacted in the fourth quarter to extend the research tax credit. The amount of research credits recognized in the quarter was $2.3 million. Additionally, during the fourth quarter of 2008, the Company completed a review of its estimated tax deduction for the year 2008 relating to Section 199 of the Internal Revenue code. This review resulted in a $0.9 million reduction in the year’s tax provision which was recognized in the fourth quarter.

The Company also announced that its Board of Directors declared a cash dividend for the fourth quarter of 2008. The quarterly cash dividend is $0.09 per common share to be paid to holders of record at the close of business on February 5, 2009. The ex-dividend date is February 3, 2009 and the payment date is February 19, 2009.

The Company also confirmed that its fourth quarter conference call will be held Wednesday, January 21, 2009 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 for use in the last mile of today's telecommunications networks. Widely deployed by carriers and enterprises alike, ADTRAN solutions enable voice, data, video, and Internet communications across copper, fiber, and wireless network infrastructures. ADTRAN solutions are currently in use by every major U.S. service provider and many global ones, as well as by thousands of public, private and governmental organizations worldwide.

For more information, contact the company at 800 9ADTRAN (800 923-8726) or via e-mail 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, 2007 and Form 10-Q for the quarter ending September 30, 2008. These risks and uncertainties could cause actual results to differ materially from those in the forward-looking statements included in this press release.

Condensed Balance Sheet Unaudited (In thousands)
	December 31,		December 31,
	2008		2007
Assets
Cash and cash equivalents	$	41,909	$	13,941
Short-term investments		96,277		148,416
Accounts receivable, net		52,749		70,667
Other receivables		2,896		3,085
Inventory, net		47,406		48,546
Prepaid expenses		2,974		2,023
Deferred tax assets, net		8,653		7,659
Total current assets		252,864		294,337
Property, plant and equipment, net		75,487		75,969
Deferred tax assets, net		3,920		1,113
Other assets		103		505
Long-term investments		141,241		107,296
Total assets	$	473,615	$	479,220
Liabilities and Stockholders’ Equity
Accounts payable	$	20,313	$	22,200
Unearned revenue		6,141		5,361
Accrued expenses		3,536		3,801
Accrued wages and benefits		9,868		10,497
Income tax payable, net		266		1,217
Total current liabilities		40,124		43,076
Other non-current liabilities		9,422		9,213
Bonds payable		48,250		48,500
Total liabilities		97,796		100,789
Stockholders’ equity		375,819		378,431
Total liabilities and stockholders’ equity	$	473,615	$	479,220

Consolidated Statements of Income (In thousands, except per share data) Unaudited
	Three Months Ended			Three Months Ended			Twelve Months Ended			Twelve Months Ended
	December 31, 2008			December 31, 2007			December 31, 2008			December 31, 2007
Sales	$	112,413		$	118,971		$	500,676		$	476,778
Cost of sales		44,825			49,452			201,771			193,792
Gross profit		67,588			69,519			298,905			282,986
Selling, general and administrative expenses		25,713			25,363			103,286			103,329
Research and development expenses		20,363			18,728			81,819			75,367
Operating income		21,512			25,428			113,800			104,290
Interest and dividend income		2,019			2,765			8,708			11,521
Interest expense		(609	)		(626	)		(2,514	)		(2,502	)
Net realized investment gain (loss)		(2,258	)		(10	)		(2,409	)		498
Other income (expense), net		(21	)		64			688			764
Life insurance proceeds		-			-			-			1,000
Income before provision for income taxes		20,643			27,621			118,273			115,571
Provision for income taxes		(3,934	)		(9,510	)		(39,692	)		(39,236	)
Net income	$	16,709		$	18,111		$	78,581		$	76,335
Weighted average shares outstanding
Basic		62,283			65,752			63,549			67,848
Diluted (1)		62,709			66,866			64,408			69,212
Earnings per common share
Basic	$	0.27		$	0.28		$	1.24		$	1.13
Diluted (1)	$	0.27		$	0.27		$	1.22		$	1.10

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

Supplemental Information Stock Based Compensation Expense (In thousands)
	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
	2008			2007			2008			2007
Stock-based compensation expense included in cost of sales	$	16		$	(15	)	$	253		$	268
Selling, general and administrative expense		508			273			3,263			3,495
Research and development expense		813			817			3,822			4,052
Stock-based compensation expense included in operating expenses		1,321			1,090			7,085			7,547
Total stock-based compensation expense		1,337			1,075			7,338			7,815
Tax benefit for expense associated with non-qualified options		(69	)		(1	)		(669	)		(680	)
Total stock-based compensation expense, net of tax	$	1,268		$	1,074		$	6,669		$	7,135

Consolidated Statements of Cash Flow For the Twelve Months Ended December 31, Unaudited (In thousands)
	2008			2007
Cash flows from operating activities:
Net income	$	78,581		$	76,335
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		9,891			10,695
Amortization of net premium on available-for-sale investments		2,101			2,094
Net realized loss (gain) on long-term investments		2,409			(498	)
Loss on disposal of property, plant and equipment		83			65
Stock-based compensation expense		7,338			7,815
Deferred income taxes		(903	)		(2,990	)
Tax benefits from stock option exercises		981			4,408
Excess tax benefits from stock-based compensation arrangements		(619	)		(3,249	)
Change in operating assets and liabilities:
Accounts receivable, net		17,918			(13,898	)
Other receivables		189			4,396
Income tax receivable, net		-			1,446
Inventory, net		1,140			4,571
Prepaid expenses and other assets		(549	)		596
Accounts payable		(1,887	)		(7,933	)
Accrued expenses and other liabilities		93			3,517
Income taxes payable, net		(951	)		1,507
Net cash provided by operating activities		115,815			88,877
Cash flows from investing activities:
Purchases of property, plant and equipment		(9,492	)		(6,535	)
Proceeds from sales and maturities of available-for-sale investments		248,688			253,339
Purchases of available-for-sale investments		(242,791	)		(217,316	)
Net cash provided by (used in) investing activities		(3,595	)		29,488
Cash flows from financing activities:
Proceeds from stock option exercises		3,691			15,288
Purchases of treasury stock		(63,569	)		(138,589	)
Dividend payments		(22,919	)		(24,600	)
Payments on long-term debt		(250	)		(500	)
Excess tax benefits from stock-based compensation arrangements		619			3,249
Net cash used in financing activities		(82,428	)		(145,152	)
Net increase (decrease) in cash and cash equivalents		29,792			(26,787	)
Effect of exchange rate changes		(1,824	)		581
Cash and cash equivalents, beginning of period		13,941			40,147
Cash and cash equivalents, end of period	$	41,909		$	13,941

CONTACT:
ADTRAN, Inc.
Jim Matthews, 256-963-8775
Senior Vice President/CFO
or
Investor Services/Assistance:
Gayle Ellis, 256-963-8220