EXHIBIT 99.1
ADTRAN, INC.
REPORTS THIRD QUARTER 2004 RESULTS and DECLARES QUARTERLY CASH DIVIDEND
HUNTSVILLE, Ala.—(BUSINESS WIRE)—October 11, 2004—ADTRAN, Inc. (NASDAQ:ADTN—News) reported results for the third quarter ended September 30, 2004. Sales were $115,251,000 for the quarter compared to $106,201,000 for the third quarter of 2003.
Net income was $18,751,000 for the quarter compared to $17,165,000 for the third quarter of 2003. Earnings per share, assuming dilution, were $0.23 for the quarter compared to $0.21 for the third quarter of 2003.
Gross margin improved to 58.0% for the quarter compared to 55.5% in the third 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 $289 million, at September 30, 2004, after repurchasing 2.3 million shares of common stock during the quarter for $57.8 million.
ADTRAN Chairman and Chief Executive Officer Mark Smith stated, “We announced last week that weakness during the latter half of September centered around outside plant and remote terminal DSLAMs as we transitioned technologies, and integrated access devices. We are now meeting demand for our new, higher density ADSL2+ DSLAM products. Also, we continue to believe that the market for integrated access devices remains a growth area, and that we will continue to expand our leadership position in this market.”
Mr. Smith also stated, “During the quarter, research and development expenses increased $4 million compared to the same quarter last year. A significant portion of this increase relates to approvals activities for optical access products and acceleration of approvals activities as a result of recent DSLAM successes.”
The Company also announced that its Board of Directors declared a cash dividend for the sixth 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 November 2, 2004. The ex-dividend date is October 29, 2004 and the payment date is November 16, 2004.
The Company also confirmed that its third quarter conference call will be held Tuesday, October 12 at 9:30 a.m. Central Time. Guidance for the fourth quarter 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.comapproximately 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.comfor at least 12 months following the call.
ADTRAN, Inc. is one of the world’s most successful network access equipment suppliers, with a 16-year history of profitability and a portfolio of more than 1,300 solutions for use in the last mile of today’s telecommunications networks. Widely deployed by both carriers and enterprises, 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 domestic service provider and many international ones, as well as by thousands of public, private and government organizations worldwide.
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
September 30, 2004
Unaudited
(In thousands)
| September 30, 2004 | |||
Assets | |||
Cash & cash equivalents | $ | 144,239 | |
Short-term investments | $ | 25,036 | |
Accounts receivable (net) | $ | 64,374 | |
Other receivables | $ | 4,654 | |
Income tax receivable | $ | 2,679 | |
Inventory (net) | $ | 43,629 | |
Prepaid expenses and other current assets | $ | 7,431 | |
Total current assets | $ | 292,042 | |
Equipment (net) | $ | 23,813 | |
Land | $ | 4,263 | |
Bldg. & land improvements (net) | $ | 63,527 | |
Other assets | $ | 532 | |
Long-term investments | $ | 173,058 | |
Total long-term assets | $ | 265,193 | |
Total assets | $ | 557,235 | |
Liabilities and stockholders’ equity | |||
Accounts payable | $ | 25,576 | |
Accrued wages and benefits | $ | 6,187 | |
Accrued liabilities | $ | 3,492 | |
Total current liabilities | $ | 35,255 | |
Deferred tax liabilities | $ | 1,052 | |
Other non-current liabilities | $ | 1,285 | |
Long-term debt | $ | 50,000 | |
Total long term liabilities | $ | 52,337 | |
Total liabilities | $ | 87,592 | |
Stockholders’ equity | $ | 469,643 | |
Total liabilities and stockholders’ equity | $ | 557,235 | |
Condensed Statements of Income
For the quarters ending 9/30/04 and 9/30/03
(In thousands, except per share data)
Unaudited
| Third Quarter 2004 | Third Quarter 2003 | |||||||
Sales | $ | 115,251 | $ | 106,201 | ||||
Cost of sales | $ | 48,439 | $ | 47,284 | ||||
Gross profit | $ | 66,812 | $ | 58,917 | ||||
Selling, general and administrative expenses | $ | 22,195 | $ | 20,623 | ||||
Research and development expenses | $ | 18,859 | $ | 14,989 | ||||
Profit from operations | $ | 25,758 | $ | 23,305 | ||||
Interest expense | $ | (644 | ) | $ | (632 | ) | ||
Other income (primarily interest) | $ | 2,137 | $ | 3,035 | ||||
Income before provision for income taxes | $ | 27,251 | $ | 25,708 | ||||
Provision for income taxes | $ | (8,500 | ) | $ | (8,543 | ) | ||
Net income | $ | 18,751 | $ | 17,165 | ||||
Weighted average shares outstanding | ||||||||
Basic | 77,778 | 77,437 | ||||||
Diluted (1) | 80,437 | 81,440 | ||||||
Earnings per common share | ||||||||
Basic | $ | 0.24 | $ | 0.22 | ||||
Diluted (1) | $ | 0.23 | $ | 0.21 | ||||
| (1) | Assumes exercise of dilutive stock options calculated under the treasury stock method. |
Condensed Statements of Income
For the periods ending 9/30/04 and 9/30/03
(In thousands, except per share data)
Unaudited
Nine Months Ended 2004 | Nine Months Ended 2003 | |||||||
Sales | $ | 349,892 | $ | 282,860 | ||||
Cost of sales | $ | 147,800 | $ | 127,170 | ||||
Gross profit | $ | 202,092 | $ | 155,690 | ||||
Selling, general and administrative expenses | $ | 68,450 | $ | 61,121 | ||||
Research and development expenses | $ | 49,572 | $ | 42,899 | ||||
Profit from operations | $ | 84,070 | $ | 51,670 | ||||
Interest expense | $ | (1,932 | ) | $ | (1,951 | ) | ||
Other income (primarily interest) | $ | 7,033 | $ | 8,796 | ||||
Income before provision for income taxes | $ | 89,171 | $ | 58,515 | ||||
Provision for income taxes | $ | (28,624 | ) | $ | (18,432 | ) | ||
Net income | $ | 60,547 | $ | 40,083 | ||||
Weighted average shares outstanding | ||||||||
Basic | 78,585 | 76,231 | ||||||
Diluted (1) | 81,828 | 80,012 | ||||||
Earnings per common share | ||||||||
Basic | $ | 0.77 | $ | 0.53 | ||||
Diluted (1) | $ | 0.74 | $ | 0.50 | ||||
| (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