EXHIBIT 99.1
ADTRAN, Inc. Reports Third Quarter 2005 Results
and Declares Quarterly Cash Dividend
HUNTSVILLE, Ala.--(BUSINESS WIRE)--Oct. 17, 2005--ADTRAN, Inc.
(NASDAQ:ADTN) reported results for the third quarter ended September
30, 2005. Sales were $149,170,000 for the quarter, up 25% compared to
$118,873,000 for the second quarter of 2005, and up 29% compared to
$115,251,000 for the third quarter of 2004.
Net income was $33,015,000 for the quarter compared to $20,719,000
for the second quarter of 2005 and $18,751,000 for the third quarter
of 2004. Earnings per share, assuming dilution, were $0.42 for the
quarter, up 56% compared to $0.27 for the second quarter of 2005, and
up 83% compared to $0.23 for the third quarter of 2004.
Gross margin improved to 59.9% for the quarter compared to 57.6%
for the third quarter of 2004. The increase in gross margin is
principally the result of continuing improvements in manufacturing
efficiencies and product cost reductions.
Net cash provided by operating activities totaled $43 million for
the quarter. Unrestricted cash and marketable securities totaled $345
million, at September 30, 2005.
ADTRAN Chief Executive Officer Tom Stanton stated, "For the
quarter, we experienced strong and broad based revenue growth across
both Carrier Network and Enterprise Network divisions. Revenues were
strong both domestically and internationally. Our results benefited
from a significant revenue increase in primary growth areas,
particularly with DSLAM and Optical Access Products, accompanied by a
strong revenue increase in traditional product areas. We believe these
results reflect continuing momentum and share gains in the markets we
serve."
The Company also issued revised guidance for the year 2005.
Revenue for the year is expected to range from $512 million to $516
million. Earnings per share, assuming dilution, are expected to range
from $1.26 to $1.28.
The Company also announced that its Board of Directors declared a
cash dividend for the third quarter of 2005. The quarterly cash
dividend is $0.09 per common share to be paid to holders of record at
the close of business on November 4, 2005. The ex-dividend date is
November 2, 2005 and the payment date is November 17, 2005.
The Company also confirmed that its third quarter conference call
will be held Tuesday, October 18 at 9:30 a.m. Central Time. 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 17-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, 2004. 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
Unaudited
(In thousands)
September 30,
2005
-----------------
Assets
Cash & cash equivalents $70,585
Short-term investments 180,758
Accounts receivable (net) 71,554
Other receivables 7,260
Inventory (net) 53,629
Prepaid expenses and other current assets 9,482
-----------------
Total current assets $393,268
Equipment (net) $21,140
Land 4,263
Building & land improvements (net) 61,129
Other assets 1,346
Long-term investments 148,620
-----------------
Total long-term assets $236,498
Total assets $629,766
=================
Liabilities and stockholders' equity
Accounts payable $36,224
Accrued wages and benefits 8,176
Accrued income taxes 11,126
Accrued liabilities 7,612
-----------------
Total current liabilities $63,138
Deferred tax liabilities $3,978
Other non-current liabilities 5,161
Long-term debt 50,000
-----------------
Total long-term liabilities $59,139
Total liabilities $122,277
Stockholders' equity $507,489
-----------------
Total liabilities and stockholders' equity $629,766
=================
Condensed Statements of Income (1)
For the quarters ending 9/30/05 and 9/30/04
(In thousands, except per share data)
Unaudited
Third Quarter
2005 2004
--------- ---------
Sales $149,170 $115,251
Cost of Sales 59,856 48,869
--------- ---------
Gross Profit 89,314 66,382
Selling, general and administrative expenses 25,011 21,765
Research and development expenses 15,087 18,859
--------- ---------
Profit from operations 49,216 25,758
Interest expense (693) (644)
Other income (primarily interest) 3,107 2,137
--------- ---------
Income before provision for income taxes 51,630 27,251
Provision for income taxes (18,615) (8,500)
--------- ---------
Net income $33,015 $18,751
========= =========
Weighted average shares
Basic 75,710 77,778
Diluted (2) 78,213 80,437
Earnings per common share
Basic $0.44 $0.24
Diluted (2) $0.42 $0.23
(1) Certain reclassifications have been made to the 2004 Income
Statement in order to conform with the 2005 presentation. These
reclassifications had no effect on previously reported net income.
(2) Assumes exercise of dilutive stock options calculated under the
treasury stock method.
Condensed Statements of Income (1)
For the periods ending 9/30/05 and 9/30/04
(In thousands, except per share data)
Unaudited
Nine Months Ended
2005 2004
--------- ---------
Sales $372,620 $349,892
Cost of Sales 153,532 149,100
--------- ---------
Gross Profit 219,088 200,792
Selling, general and administrative expenses 72,257 67,150
Research and development expenses 47,797 49,572
--------- ---------
Profit from operations 99,034 84,070
Interest expense (1,901) (1,932)
Other income (primarily interest) 8,950 7,033
--------- ---------
Income before provision for income taxes 106,083 89,171
Provision for income taxes (37,129) (28,624)
--------- ---------
Net income $68,954 $60,547
========= =========
Weighted average shares
Basic 75,602 78,858
Diluted (2) 77,675 81,828
Earnings per common share
Basic $0.91 $0.77
Diluted (2) $0.89 $0.74
(1) Certain reclassifications have been made to the 2004 Income
Statement in order to conform with the 2005 presentation. These
reclassifications had no effect on previously reported net income.
(2) Assumes exercise of dilutive stock options calculated under the
treasury stock method.
CONTACT: ADTRAN, Inc.
Jim Matthews, 256-963-8775
or
Investor Services/Assistance:
Cathy Bartels, 256-963-8220