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

EXHIBIT 99.1

Corrected Financial Information

On February 3, 2021, ADTRAN, Inc. (“ADTRAN” or the “Company”) issued a press release that reported the Company’s financial results for the fiscal quarter and twelve months ended December 31, 2020 (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 February 4, 2021. While conducting final procedures in connection with the preparation of the Company’s audited financial statements as of and for the year ended December 31, 2020, a variance was identified in the accounting for inventory related to goods that were “in transit” as of such date. The Company’s inventory, net as of December 31, 2020 was understated in the Earnings Release by approximately $6.7 million, with the associated accounts payable understated by the same amount.  In addition, these variances resulted in a corresponding $6.7 million understatement of total current assets and total assets and a $6.7 million understatement of total current liabilities, total liabilities and total liabilities and stockholders’ equity on the consolidated balance sheet as of December 31, 2020. The variances also affected the inventory, net and accounts payable, net line items in the Company’s consolidated statement of cash flows for the twelve months ended December 31, 2020, but did not affect the Company’s net cash used in operating activities. The Company’s consolidated statements of income for the three and twelve months ended December 31, 2020 were not affected.  

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

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands)

	December 31,			December 31,
	2020			2019
Assets
Cash and cash equivalents	$	60,161		$	73,773
Restricted cash		18			—
Short-term investments		3,131			33,243
Accounts receivable, net		98,827			90,531
Other receivables		21,531			16,566
Inventory, net		125,457	^		98,305
Prepaid expenses and other current assets		8,293			7,892
Total Current Assets		317,418	^		320,310
Property, plant and equipment, net		62,399			68,086
Deferred tax assets, net		9,869			7,561
Goodwill		6,968			6,968
Intangibles, net		23,470			27,821
Other non-current assets		25,425			19,883
Long-term investments		80,130			94,489
Total Assets	$	525,679	^	$	545,118
Liabilities and Stockholders' Equity
Accounts payable	$	49,929	^	$	44,870
Bonds payable		—			24,600
Unearned revenue		14,092			11,963
Accrued expenses and other liabilities		13,609			13,876
Accrued wages and benefits		15,262			13,890
Income tax payable, net		1,301			3,512
Total Current Liabilities		94,193	^		112,711
Non-current unearned revenue		6,888			6,012
Pension liability		18,664			15,886
Deferred compensation liability		25,866			21,698
Other non-current liabilities		7,124			8,385
Total Liabilities		152,735	^		164,692
Stockholders' Equity		372,944			380,426
Total Liabilities and Stockholders' Equity	$	525,679	^	$	545,118

Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

	Twelve Months Ended
	December 31,
	2020				2019
Cash flows from operating activities:
Net Income (Loss)	$	2,378			$	(52,982	)
Adjustments to reconcile net income (loss) to net cash used in operating    activities:
Depreciation and amortization		16,627				17,771
Asset impairments		65				3,872
Gain on investments		(5,802	)			(11,434	)
Stock-based compensation expense		6,834				6,962
Deferred income taxes		(1,356	)			30,070
Gain on contingency payment		—				(1,230	)
Gain on life insurance proceeds		—				(1,000	)
Other		216				(33	)
Change in operating assets and liabilities:
Accounts receivable, net		(7,269	)			8,282
Other receivables		(4,732	)			20,046
Inventory, net		(25,582	)	^		1,252
Prepaid expenses and other assets		(5,239	)			2,749
Accounts payable, net		4,543		^		(13,494	)
Accrued expenses and other liabilities		5,093				(4,598	)
Income taxes payable		(2,294	)			(8,705	)
Net cash used in operating activities		(16,518	)			(2,472	)
Cash flows from investing activities:
Purchases of property, plant and equipment		(6,413	)			(9,494	)
Proceeds from disposals of property, plant and equipment		2				—
Proceeds from sales and maturities of available-for-sale investments		105,100				47,268
Purchases of available-for-sale investments		(56,767	)			(48,578	)
Acquisition of note receivable		(523	)			—
Life insurance proceeds received		—				1,000
Acquisition of business		—				13
Net cash provided by (used in) investing activities		41,399				(9,791	)
Cash flows from financing activities:
Dividend payments		(17,334	)			(17,212	)
Repayment of bonds payable		(24,600	)			—
Tax withholdings related to stock-based compensation settlements		(1,043	)			—
Proceeds from stock option exercises		—				526
Purchases of treasury stock		—				(184	)
Payments on long-term debt		—				(1,000	)
Net cash used in financing activities		(42,977	)			(17,870	)
Net decrease in cash and cash equivalents		(18,096	)			(30,133	)
Effect of exchange rate changes		4,502				(1,598	)
Cash, cash equivalents and restricted cash, beginning of year		73,773				105,504
Cash, cash equivalents and restricted cash, end of year	$	60,179			$	73,773
Supplemental disclosure of cash flow information
Cash paid during the year for interest	$	24			$	512
Cash paid during the year for income taxes	$	7,609			$	9,357
Supplemental disclosure of non-cash investing activities
Purchases of property, plant and equipment included in accounts payable	$	108			$	90