ADTRAN, INC. REPORTS THIRD QUARTER 1997 RESULTS.

HUNTSVILLE, Ala.--(BUSINESS WIRE)--Oct. 14, 1997--ADTRAN, Inc. (NASDAQ:ADTN) reported results for the third quarter and the first nine months ended September 30, 1997. Sales for the quarter increased 12.7% to $70,578,975 from sales of $62,634,637 for the quarter ended September 30, 1996. Sales for the nine-month period ended September 30, 1997 were $190,934,367 compared to $180,484,338 for the same nine months of 1996. Sales for the third quarter increased 19.4% for the second quarter of 1997.

Net income for the quarter increased 18.4% to $11,140,539 from net income of $9,405,557 for the quarter ended September 30, 1996. Net income for the nine month period ended September 30, 1997 was $27,643,082 compared to $28,369,165 for the same nine month period of 1996. Net income for the third quarter increased 59.6% for the second quarter of 1997. Earnings per share for the quarter increased to $.28 from $.24 reported for the third quarter of 1996. Earnings per share for the period ended September 30, 1997 were $.70 compared to $.72 for the same nine months of 1996.

Commenting on the results, Mark C. Smith, Chairman and CEO of ADTRAN, stated, "We believe the third quarter confirmed a resumption of more normal business activity in the telecommunications sector. For the second consecutive quarter, we experienced the highest quarterly revenue in the history of our CPE (Customer Premise Equipment) business. We expect continued strength in this area with the introduction of our new Atlas 800 Integrated Access family of products. In addition, revenues from our Telco business jumped 22% from the second quarter of 1997 boosted primarily by increased shipments of HDSL products. The long term demand for digital transmission products continues to grow, and we expect to fully participate in this growth by developing innovative new products while adding features, reducing the cost and improving the serviceability of our existing products."

With respect to product lines, Mr. Smith noted that HDSL/T1 revenues increased 47% from the prior year's third quarter. DDS/Frame Relay revenues declined by 17% from the third quarter of 1996 and ISDN revenues increased 6% from the third quarter of 1996.

ADTRAN, Inc. designs, develops and markets a broad range of high-speed digital transmission products utilized by Telcos, corporate end users, and OEMs to implement digital data service over existing telephone networks.

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, 1996. Such risks and uncertainties could cause actual results to differ materially from those in the forward-looking statements included in this press release. -0-

                              ADTRAN
                       Condensed Balance Sheet
                        September 30, 1997
                             Unaudited

Assets                                        September 30,
                                                  1997

Cash & cash equivalents                        $27,082,564
Short-term investments                          33,533,240
Accounts receivable                             37,679,530
Other receivables                                  420,407
Inventory                                       46,618,219
Prepaid expenses                                 3,521,951
                                                 ---------

Total current assets                           148,855,911

Equipment (net)                                 26,506,754
Land                                             4,263,104
Bldg. & land improvements (net)                 33,620,878
Other assets                                       200,000
Long term investments                           50,000,000
                                                ----------

                                              $263,446,647
                                              ------------
                                              ------------

Liabilities and stockholders' equity

Accounts payable                                $7,298,882
Accrued salaries                                 1,613,563
Accrued income taxes                               835,452
Accrued taxes other than income taxes              339,374
Warranty payable                                 1,404,802
Accrued vacation                                   911,237
Interest payable                                         0
Other payables                                     788,205
                                                   -------

Total current liabilities                       13,191,515

Long term liabilities                           51,602,116
                                                ----------

Total liabilities                               64,793,631

Stockholders' equity                           198,653,016
                                               -----------

                                              $263,446,647
                                              ------------
                                              ------------

                     Condensed Statements of Income
                For the quarters ending 9/30/97 and 9/30/96
                                 Unaudited

                                              Third           Third
                                             Quarter         Quarter
                                              1997            1996
                                          ---------------------------

Sales                                     $70,578,975     $62,634,637

Cost of sales                              34,486,972      32,930,249
                                           ----------      ----------

Gross profit                               36,092,003      29,704,388

Selling, general and administrative
 expenses                                  11,482,374       8,472,083
Research & development expenses             7,831,535       6,269,711
                                            ---------       ---------

Profit from operations                     16,778,094      14,962,594

Interest expense                             (521,449)       (219,597)
Other income (primarily interest)           1,150,447         643,159
                                            ---------         -------

Income before income taxes                 17,407,092      15,386,156

Provision for income taxes                 (6,266,553)     (5,980,599)
                                           -----------     -----------

Net income                                $11,140,539      $9,405,557

Weighted average common
 and common equivalent shares
 outstanding (1)                           39,693,383      39,579,894
                                           ----------      ----------
                                           ----------      ----------
Net income per common and
 common equivalent share (1)                    $0.28           $0.24
                                                -----           -----
                                                -----           -----

    (1) Assumes exercise of dilutive stock options calculated under
the treasury stock method.


                     Condensed Statements of Income
     For the periods ended September 30, 1997 and September 30, 1996
                               Unaudited


                                              Nine            Nine
                                             Months          Months
                                              1997            1996
                                        -----------------------------

Sales                                    $190,934,367    $180,484,338

Cost of sales                              94,418,912      95,352,361
                                           ----------      ----------
Gross profit                               96,515,455      85,131,977

Selling, general and
 administrative expenses                   32,640,664      23,494,632
Research & development expenses            22,547,141      17,897,106
                                           ----------      ----------

 Profit from operations                    41,327,650      43,740,239

Interest expense                           (1,272,649)       (666,467)
Other income (primarily interest)           3,137,314       1,722,446
                                            ---------       ---------
Income before income taxes                 43,192,315      44,796,218

Provision for income taxes                (15,549,233)    (16,427,053)
                                          ------------    ------------

Net income                                $27,643,082     $28,369,165
                                          -----------     -----------
                                          -----------     -----------

Weighted average common and common
 equivalent shares outstanding (1)         39,611,783      39,568,602
                                           ----------      ----------
                                           ----------      ----------
Net income per common and
 common equivalent share (1)                    $0.70           $0.72
                                                -----           -----
                                                -----           -----

    (1)  Assumes exercise of dilutive stock options calculated
under the treasury stock method.

CONTACT: ADTRAN Inc., Huntsville

John Cooper, 205/963-8354