EXHIBIT 99.1
ADTRAN, INC.
REPORTS YEAR and FOURTH QUARTER 2004 RESULTS and DECLARES QUARTERLY CASH DIVIDEND
HUNTSVILLE, Ala.—(BUSINESS WIRE)—January 24, 2005—ADTRAN, Inc. (NASDAQ:ADTN - News) reported results for the year and fourth quarter ended December 31, 2004. Sales increased 15% to $454,805,000 for the year compared to $396,676,000 for 2003, and net income increased 23% to $75,403,000 for the year compared to $61,515,000 for 2003. Earnings per share, assuming dilution, were $0.93 for the year compared to $0.76 for 2003.
Sales were $104,913,000 for the fourth quarter compared to $113,815,000 for the fourth quarter of 2003. Net income was $14,856,000 for the fourth quarter compared to $21,432,000 for the fourth quarter of 2003. Earnings per share, assuming dilution, were $0.19 for the quarter compared to $0.26 for the fourth quarter of 2003.
Net cash provided by operating activities totaled $86 million for the year and $27 million for the fourth quarter.
ADTRAN Chairman and Chief Executive Officer Mark Smith stated, “During 2004, we continued to escalate our positions in new, significantly larger markets, in addition to solidifying our leadership positions within our traditional markets. After experiencing significant revenue growth since 2002, we saw a pause in our markets in the last half of 2004. We anticipate this pause will resolve itself as employment and IT spending continue to expand and as carriers continue to aggressively promote consumer broadband services.”
Mr. Smith also stated, “During the quarter, research and development expenses increased $2.6 million compared to the same quarter in 2003. A significant portion of this increase relates to approval activities for optical access products and acceleration of approval activities as a result of recent DSLAM successes.”
The Company also announced that its Board of Directors declared a cash dividend for the seventh 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 February 4, 2005. The ex-dividend date is February 2, 2005 and the payment date is February 16, 2005.
The Company also confirmed that its fourth quarter conference call will be held Tuesday, January 25 at 9:30 a.m. Central Time. Guidance for the first quarter and full year 2005 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 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
December 31, 2004
Unaudited
(In thousands)
| | | |
| | | December 31, 2004
|
Assets | | | |
Cash & cash equivalents | | $ | 150,984 |
Short-term investments | | $ | 31,449 |
Accounts receivable (net) | | $ | 63,729 |
Other receivables | | $ | 4,335 |
Income tax receivable | | $ | 2,321 |
Inventory (net) | | $ | 42,283 |
Prepaid expenses and other current assets | | $ | 7,200 |
| | |
|
|
Total current assets | | $ | 302,301 |
| |
Equipment (net) | | $ | 22,174 |
Land | | $ | 4,263 |
Bldg. & land improvements (net) | | $ | 62,818 |
Other assets | | $ | 586 |
Long-term investments | | $ | 167,609 |
| | |
|
|
Total long-term assets | | $ | 257,450 |
| |
Total assets | | $ | 559,751 |
| | |
|
|
Liabilities and stockholders’ equity | | | |
Accounts payable | | $ | 22,856 |
Accrued wages and benefits | | $ | 8,347 |
Accrued liabilities | | $ | 5,092 |
| | |
|
|
Total current liabilities | | $ | 36,295 |
| |
Deferred tax liabilities | | $ | 4,825 |
Other non-current liabilities | | $ | 1,732 |
Long-term debt | | $ | 50,000 |
| | |
|
|
Total long-term liabilities | | $ | 56,557 |
| |
Total liabilities | | $ | 92,852 |
| |
Stockholders’ equity | | $ | 466,899 |
| | |
|
|
Total liabilities and stockholders’ equity | | $ | 559,751 |
| | |
|
|
Condensed Statements of Income
For the quarters ending 12/31/04 and 12/31/03
(In thousands, except per share data)
Unaudited
| | | | | | | | |
| | | Fourth Quarter
2004
| | | Fourth Quarter
2003
| |
Sales | | $ | 104,913 | | | $ | 113,815 | |
Cost of sales | | $ | 45,658 | | | $ | 47,511 | |
| | |
|
|
| |
|
|
|
Gross profit | | $ | 59,255 | | | $ | 66,304 | |
| | |
Selling, general and administrative expenses | | $ | 23,382 | | | $ | 22,109 | |
Research and development expenses | | $ | 17,799 | | | $ | 15,246 | |
| | |
|
|
| |
|
|
|
Profit from operations | | $ | 18,074 | | | $ | 28,949 | |
| | |
Interest expense | | $ | (610 | ) | | $ | (583 | ) |
Other income (primarily interest) | | $ | 3,764 | | | $ | 1,949 | |
| | |
|
|
| |
|
|
|
Income before provision for income taxes | | $ | 21,228 | | | $ | 30,315 | |
| | |
Provision for income taxes | | $ | (6,372 | ) | | $ | (8,883 | ) |
| | |
|
|
| |
|
|
|
Net income | | $ | 14,856 | | | $ | 21,432 | |
| | |
|
|
| |
|
|
|
Weighted average shares outstanding | | | | | | | | |
Basic | | | 76,587 | | | | 79,054 | |
Diluted (1) | | | 78,725 | | | | 82,588 | |
| | |
Earnings per common share | | | | | | | | |
Basic | | $ | 0.19 | | | $ | 0.27 | |
Diluted (1) | | $ | 0.19 | | | $ | 0.26 | |
| (1) | Assumes exercise of dilutive stock options calculated under the treasury stock method. |
Condensed Statements of Income
For the periods ending 12/31/04 and 12/31/03
(In thousands, except per share data)
Unaudited
| | | | | | | | |
| | | Year Ended
2004
| | | Year Ended
2003
| |
Sales | | $ | 454,805 | | | $ | 396,676 | |
Cost of sales | | $ | 193,458 | | | $ | 174,681 | |
| | |
|
|
| |
|
|
|
Gross profit | | $ | 261,347 | | | $ | 221,995 | |
| | |
Selling, general and administrative expenses | | $ | 91,832 | | | $ | 83,234 | |
Research and development expenses | | $ | 67,371 | | | $ | 58,144 | |
| | |
|
|
| |
|
|
|
Profit from operations | | $ | 102,144 | | | $ | 80,617 | |
| | |
Interest expense | | $ | (2,542 | ) | | $ | (2,534 | ) |
Other income (primarily interest) | | $ | 10,797 | | | $ | 10,747 | |
| | |
|
|
| |
|
|
|
Income before provision for income taxes | | $ | 110,399 | | | $ | 88,830 | |
| | |
Provision for income taxes | | $ | (34,996 | ) | | $ | (27,315 | ) |
| | |
|
|
| |
|
|
|
Net income | | $ | 75,403 | | | $ | 61,515 | |
| | |
|
|
| |
|
|
|
Weighted average shares outstanding | | | | | | | | |
Basic | | | 78,235 | | | | 76,942 | |
Diluted (1) | | | 80,984 | | | | 80,739 | |
| | |
Earnings per common share | | | | | | | | |
Basic | | $ | 0.96 | | | $ | 0.80 | |
Diluted (1) | | $ | 0.93 | | | $ | 0.76 | |
| (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
