EXHIBIT 99.1
ADTRAN, INC.
REPORTS SECOND QUARTER 2004 RESULTS and DECLARES QUARTERLY CASH DIVIDEND
HUNTSVILLE, Ala.—(BUSINESS WIRE)—July 12, 2004—ADTRAN, Inc. (NASDAQ:ADTN - News) reported results for the second quarter ended June 30, 2004. Sales increased 33% to $120,601,000 for the quarter compared to $90,437,000 for the second quarter of 2003.
Net income increased 73% to $21,464,000 for the quarter compared to $12,379,000 for the second quarter of 2003. Earnings per share, assuming dilution, were $0.26 for the quarter compared to $0.15 for the second quarter of 2003.
Gross margin improved to 57.8% for the quarter compared to 55.0% in the second quarter of 2003. The increase in gross margin is principally the result of continuing improvements in manufacturing efficiencies and product cost reductions.
Cash and marketable securities, net of debt, totaled $338 million, at June 30, 2004, after repurchase of $12.4 million in common stock.
ADTRAN Chairman and Chief Executive Officer Mark Smith stated, “Continued expansion of new product revenues significantly contributed to record second quarter sales and earnings for our company. We anticipate new product revenues will persist in providing our primary growth towards record revenues and operating earnings this year.”
The Company also announced that its Board of Directors declared a cash dividend for the fifth consecutive quarter. The quarterly cash dividend is $0.08 per common share to be paid to holders of record at the close of business on August 3, 2004. The ex-dividend date is July 30, 2004 and the payment date is August 17, 2004.
The Company also confirmed that its second quarter conference call will be held Tuesday, July 13 at 9:30 a.m. Central Time. Guidance for the third quarter and year 2004 will be issued during this conference call. This conference call will be webcast 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 an established supplier of advanced transmission products that provide users access to today’s expansive telecommunications networks. Widely deployed in carrier, enterprise and global networks worldwide, ADTRAN products support all major digital access technologies. ADTRAN equipment is widely deployed by major Incumbent Local Exchange Carriers, Inter-exchange Carriers, ISPs, Competitive Service Providers, international service providers, public and private enterprises, and original equipment manufacturers.
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, 2003. Such 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
June 30, 2004
Unaudited
(In thousands)
| | | |
| | | June 30,
2004
|
Assets | | | |
Cash & cash equivalents | | $ | 230,520 |
Short-term investments | | $ | 15,147 |
Accounts receivable (net) | | $ | 69,657 |
Other receivables | | $ | 7,273 |
Inventory (net) | | $ | 43,649 |
Prepaid expenses and other current assets | | $ | 7,390 |
| | |
|
|
Total current assets | | $ | 373,636 |
| |
Equipment (net) | | $ | 24,620 |
Land | | $ | 4,263 |
Bldg. & land improvements (net) | | $ | 64,170 |
Other assets | | $ | 496 |
Deferred tax assets | | $ | 3,344 |
Long-term investments | | $ | 144,614 |
| | |
|
|
Total long term assets | | $ | 241,507 |
| |
Total assets | | $ | 615,143 |
| | |
|
|
Liabilities and stockholders’ equity | | | |
Accounts payable | | $ | 28,622 |
Accrued wages and benefits | | $ | 7,452 |
Accrued liabilities | | $ | 5,822 |
| | |
|
|
Total current liabilities | | $ | 41,896 |
| |
Deferred tax liabilities | | $ | 6,313 |
Other non-current liabilities | | $ | 1,544 |
Long term debt | | $ | 50,000 |
| | |
|
|
Total long term liabilities | | $ | 57,857 |
| |
Total liabilities | | $ | 99,753 |
| |
Stockholders’ equity | | $ | 515,390 |
| | |
|
|
Total liabilities and stockholders’ equity | | $ | 615,143 |
| | |
|
|
Condensed Statements of Income
For the quarters ending 6/30/04 and 6/30/03
(In thousands, except per share data)
Unaudited
| | | | | | | | |
| | | Second Quarter
2004
| | | Second Quarter 2003
| |
Sales | | $ | 120,601 | | | $ | 90,437 | |
Cost of sales | | $ | 50,840 | | | $ | 40,737 | |
| | |
|
|
| |
|
|
|
Gross profit | | $ | 69,761 | | | $ | 49,700 | |
Selling, general and administrative expenses | | $ | 23,984 | | | $ | 20,346 | |
Research and development expenses | | $ | 15,896 | | | $ | 13,639 | |
| | |
|
|
| |
|
|
|
Profit from operations | | $ | 29,881 | | | $ | 15,715 | |
Interest expense | | $ | (644 | ) | | $ | (660 | ) |
Other income (primarily interest) | | $ | 2,562 | | | $ | 2,907 | |
| | |
|
|
| |
|
|
|
Income before provision for income taxes | | $ | 31,799 | | | $ | 17,962 | |
Provision for income taxes | | $ | (10,335 | ) | | $ | (5,583 | ) |
| | |
|
|
| |
|
|
|
Net income | | $ | 21,464 | | | $ | 12,379 | |
| | |
|
|
| |
|
|
|
Weighted average shares outstanding | | | | | | | | |
Basic | | | 79,313 | | | | 76,037 | |
Diluted (1) | | | 82,221 | | | | 79,899 | |
| | |
Earnings per common share | | | | | | | | |
Basic | | $ | 0.27 | | | $ | 0.16 | |
Diluted (1) | | $ | 0.26 | | | $ | 0.15 | |
| (1) | Assumes exercise of dilutive stock options calculated under the treasury stock method. |
Condensed Statements of Income
For the periods ending 6/30/04 and 6/30/03
(In thousands, except per share data)
Unaudited
| | | | | | | | |
| | | Six Months Ended
2004
| | | Six Months Ended
2003
| |
Sales | | $ | 234,640 | | | $ | 176,659 | |
Cost of sales | | $ | 99,361 | | | $ | 79,886 | |
| | |
|
|
| |
|
|
|
Gross profit | | $ | 135,279 | | | $ | 96,773 | |
Selling, general and administrative expenses | | $ | 46,254 | | | $ | 40,503 | |
Research and development expenses | | $ | 30,713 | | | $ | 27,909 | |
| | |
|
|
| |
|
|
|
Profit from operations | | $ | 58,312 | | | $ | 28,361 | |
Interest expense | | $ | (1,288 | ) | | $ | (1,319 | ) |
Other income (primarily interest) | | $ | 4,994 | | | $ | 5,765 | |
| | |
|
|
| |
|
|
|
Income before provision for income taxes | | $ | 62,018 | | | $ | 32,807 | |
Provision for income taxes | | $ | (20,156 | ) | | $ | (9,889 | ) |
| | |
|
|
| |
|
|
|
Net income | | $ | 41,862 | | | $ | 22,918 | |
| | |
|
|
| |
|
|
|
Weighted average shares outstanding | | | | | | | | |
Basic | | | 79,405 | | | | 75,618 | |
Diluted (1) | | | 82,517 | | | | 79,019 | |
| | |
Earnings per common share | | | | | | | | |
Basic | | $ | 0.53 | | | $ | 0.30 | |
Diluted (1) | | $ | 0.51 | | | $ | 0.29 | |
| (1) | Assumes exercise of dilutive stock options calculated under the treasury stock method. |
CONTACT:
Jim Matthews
Senior Vice President – Finance
Chief Financial Officer
256-963-8775
INVESTOR SERVICES/ASSISTANCE:
Charlene Little
256-963-8611
Cathy Bartels
256-963-8220
