ADTRAN (ADTN) 8-K/A Results of Operations and Financial Condition

Exhibit 99.1

Corrected Financial Information

On August 6, 2023, ADTRAN Holdings, Inc. (the “Company”) issued a press release that reported the Company’s financial results for the fiscal quarter and six months ended June 30, 2023 (the “Earnings Release”). A copy of the Earnings Release was attached as Exhibit 99.1 to the Company’s Current Report on Form 8-K that was furnished to the Securities and Exchange Commission on August 7, 2023. As disclosed in the Company’s Current Report on Form 8-K filed with the SEC on August 10, 2023 (the “August 10, 2023 Form 8-K”), subsequent to Company’s second fiscal quarter earnings call on August 8, 2023 and during the preparation of its unaudited condensed consolidated financial statements to be included in the Company’s Form 10-Q for the second fiscal quarter ended June 30, 2023 (the “Q2 Form 10-Q”), the Company determined that the principal amount of indebtedness outstanding under the Company’s revolving credit facility with a syndicate of banks, including Wells Fargo Bank, National Association (“Wells Fargo”), should be classified as noncurrent liabilities on the Company’s consolidated balance sheet. Therefore, the outstanding Wells Fargo revolving credit facility balances for the following prior periods were misclassified in the Earnings Release and have been adjusted from current to noncurrent liabilities on the balance sheets set forth in the Earnings Release as follows: $60.0 million as of December 31, 2022, and $200.0 million as of June 30, 2023. The adjustment of credit facility balances did not have any impact on, or result in any change to, the consolidated statements of income (loss), statements of cash flows and non-GAAP measures presented in the Earnings Release. Furthermore, the Company corrected an error in a supplemental disclosure of cash financing activities in the condensed consolidated statements of cash flow that appeared in the Earnings Release – cash used in operating activities related to operating leases, which amount for the six months ended June 30, 2023 should have been $5.082 million rather than $4.502 million.

Corrected versions of the condensed consolidated balance sheets and condensed consolidated statements of cash flows appearing in the Earnings Release are provided below (with the corrected or restated information identified by a “^”):

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands)

	June 30, 2023			December 31, 2022
Assets
Current Assets
Cash and cash equivalents	$	124,294		$	108,644
Short-term investments		3,089			340
Accounts receivable, net		239,565			279,435
Other receivables		32,394			32,831
Inventory, net		416,802			427,531
Prepaid expenses and other current assets		33,880			33,577
Total Current Assets		850,024			882,358
Property, plant and equipment, net		115,719			110,699
Deferred tax assets		82,076			67,839
Goodwill		388,163			381,724
Intangibles, net		355,084			401,211
Other non-current assets		60,634			66,998
Long-term investments		31,238			32,665
Total Assets	$	1,882,938		$	1,943,494
Liabilities, Redeemable Non-Controlling Interest and Equity
Current Liabilities
Accounts payable	$	171,735		$	237,699
Revolving credit agreements outstanding		10,912	^		35,936	^
Notes payable		—			24,598
Unearned revenue		48,030			41,193
Accrued expenses and other liabilities		26,807			35,235
Accrued wages and benefits		36,843			44,882
Income tax payable, net		15,314			9,032
Total Current Liabilities		309,641	^		428,575	^
Non-current revolving credit agreement outstanding		200,000	^		60,000	^
Deferred tax liabilities		44,614			61,629
Non-current unearned revenue		24,111			19,239
Pension liability		10,883			10,624
Deferred compensation liability		28,522			26,668
Non-current lease obligations		20,834			22,807
Other non-current liabilities		16,401			10,339
Total Liabilities		655,006			639,881
Redeemable Non-Controlling Interest		445,462			—
Equity
Common stock		787			781
Additional paid-in capital		766,428			895,834
Accumulated other comprehensive income		62,208			46,713
Retained (deficit) earnings		(41,010	)		55,338
Treasury stock		(5,943	)		(4,125	)
Non-controlling interest		—			309,072
Total Equity		782,470			1,303,613
Total Liabilities, Redeemable Non-Controlling Interest and Equity	$	1,882,938		$	1,943,494

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

	Six Months Ended June 30,
	2023			2022
Cash flows from operating activities:
Net (loss) income	$	(76,668	)		$1,016
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization		67,467			7,235
Amortization of debt issuance cost		291			—
(Gain) loss on investments		(4,530	)		7,882
Stock-based compensation expense		8,103			3,781
Deferred income taxes		(31,962	)		(93	)
Other, net		130			27
Inventory reserves		20,885			(4,296	)
Changes in operating assets and liabilities:
Accounts receivable, net		40,975			(14,315	)
Other receivables		561			2,606
Inventory		(6,920	)		(53,982	)
Prepaid expenses, other current assets and other assets		7,105			671
Accounts payable		(67,923	)		42,968
Accrued expenses and other liabilities		110			2,179
Income taxes payable, net		6,216			(1,597	)
Net cash used in by operating activities		(36,160	)		(5,918	)
Cash flows from investing activities:
Purchases of property, plant and equipment		(20,118	)		(3,285	)
Proceeds from sales and maturities of available-for-sale investments		2,074			25,071
Purchases of available-for-sale investments		(580	)		(17,002	)
Proceeds from beneficial interests in securitized accounts receivable		1,156			—
Net cash (used in) provided by investing activities		(17,468	)		4,784
Cash flows from financing activities:
Tax withholdings related to stock-based compensation settlements		(6,315	)		(333	)
Proceeds from stock option exercises		163			636
Dividend payments		(14,156	)		(8,877	)
Proceeds from draw on revolving credit agreements		163,729			28,000
Repayment of revolving credit agreements		(49,155	)		(28,000	)
Non-controlling interest put option buyback		(1,202	)		—
Repayment of notes payable		(24,885	)		—
Net cash provided by (used in) financing activities		68,179			(8,574	)
Net increase (decrease) in cash and cash equivalents		14,551			(9,708	)
Effect of exchange rate changes		1,099			(3,742	)
Cash and cash equivalents, beginning of period		108,644			56,818
Cash and cash equivalents, end of period	$	124,294		$	43,368
Supplemental disclosure of cash financing activities:
Cash paid for interest	$	4,719		$	124
Cash used in operating activities related to operating leases	$	5,082	^	$	915
Supplemental disclosure of non-cash investing activities:
Right-of-use assets obtained in exchange for lease obligations	$	515		$	552
Purchases of property, plant and equipment included in accounts payable	$	2,662		$	818