ADTRAN, Inc. Reports Second Quarter 2004 Results and Declares Quarterly Cash Dividend.HUNTSVILLE Huntsville, town, Canada Huntsville, town (1991 pop. 14,997), SE Ont., Canada, on the Muskoka River. It has lumber mills and a woodworking plant, but it is sustained mainly by its year-round tourist trade. , Ala ALA aminolevulinic acid. Ala alanine. ala (a´lah) pl. a´lae [L.] a winglike process. . -- ADTRAN, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :ADTN ADTN Administrative Data Transmission Network ADTN Administrative Data Telecommunications Network ) reported results for the second quarter ended June June: see month. 30, 2004. Sales increased 33% to $120,601,000 for the quarter compared to $90,437,000 for the second quarter of 2003. Net income increased 73% to $21,464,000 for the quarter compared to $12,379,000 for the second quarter of 2003. Earnings per share, assuming dilution Dilution A reduction in earnings per share of common stock that occurs through the issuance of additional shares or the conversion of convertible securities. Notes: Adding to the number of shares outstanding reduces the value of holdings of existing shareholders. , were $0.26 for the quarter compared to $0.15 for the second quarter of 2003. Gross margin improved to 57.8% for the quarter compared to 55.0% in the second quarter of 2003. The increase in gross margin is principally the result of continuing improvements in manufacturing efficiencies and product cost reductions. Cash and marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has , net of debt, totaled $338 million, at June 30, 2004, after repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. of $12.4 million in common stock. ADTRAN Chairman and Chief Executive Officer Mark Smith stated, "Continued expansion of new product revenues significantly contributed to record second quarter sales and earnings for our company. We anticipate new product revenues will persist in Verb 1. persist in - do something repeatedly and showing no intention to stop; "We continued our research into the cause of the illness"; "The landlord persists in asking us to move" continue providing our primary growth towards record revenues and operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before this year." The Company also announced that its Board of Directors declared de·clare v. de·clared, de·clar·ing, de·clares v.tr. 1. To make known formally or officially. See Synonyms at announce. 2. To state emphatically or authoritatively; affirm. 3. a cash dividend for the fifth 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 August 3, 2004. The ex-dividend date Ex-dividend date The first day of trading when the buyer of a stock is no longer entitled to the most recently announced dividend payment ( i.e. the trade will settle the day after the record date, too late for the buyer to appear on the shareholder record and receive the dividend. is July July: see month. 30, 2004 and the payment date is August 17, 2004. The Company also confirmed that its second quarter conference call will be held Tuesday Tuesday: see week. , July 13 at 9:30 a.m. Central Time. Guidance for the third quarter and year 2004 will be issued during this conference call. This conference call will be webcast live through StreetEvents.com. To listen, simply visit the Investor Relations Investor relations The process by which the corporation communicates with its investors. site at http://www.adtran.com or http://streetevents.com approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 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 an established supplier of advanced transmission products that provide users access to today's expansive telecommunications networks A telecommunications network is a of telecommunications links and nodes arranged so that messages may be passed from one part of the network to another over multiple links and through various nodes. . Widely deployed in carrier, enterprise and global networks worldwide, ADTRAN products support all major digital access technologies. ADTRAN equipment is widely deployed by major Incumbent Local Exchange Carriers ILEC, short for incumbent local exchange carrier, is a local telephone company in the United States that was in existence at the time of the break up of AT&T into the Regional Bell Operating Companies (RBOCs) also known as the "Baby Bells". , Inter-exchange Carriers (communications) inter-exchange carrier - (IXC) A company allowed to handle long-distance calls following the break-up of the Bell system in the US by anti-trust regulators. , ISPs, Competitive Service Providers, international service providers, public and private enterprises, and original equipment manufacturers. This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. 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 Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December December: see month. 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 Statements of Income
For the periods ending 6/30/04 and 6/30/03
(In thousands, except per share data)
Unaudited
Six Months Six Months
Ended Ended
2004 2003
------------ ------------
Sales $234,640 $176,659
Cost of Sales $99,361 $79,886
------- --------
Gross Profit $135,279 $96,773
Selling, general and administrative expenses $46,254 $40,503
Research and development expenses $30,713 $27,909
------- --------
Profit from operations $58,312 $28,361
Interest expense ($1,288) ($1,319)
Other income (primarily interest) $4,994 $5,765
------- --------
Income before provision for income taxes $62,018 $32,807
Provision for income taxes ($20,156) ($9,889)
--------- --------
Net income $41,862 $22,918
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Weighted average shares
Basic 79,405 75,618
Diluted (1) 82,517 79,019
Earnings per common share
Basic $0.53 $0.30
Diluted (1) $0.51 $0.29
(1) Assumes exercise of dilutive stock options calculated under the
treasury stock method.
Condensed Statements of Income
For the quarters ending 6/30/04 and 6/30/03
(In thousands, except per share data)
Unaudited
Second Second
Quarter Quarter
2004 2003
----------- -----------
Sales $120,601 $90,437
Cost of Sales $50,840 $40,737
------- -------
Gross Profit $69,761 $49,700
Selling, general and administrative expenses $23,984 $20,346
Research and development expenses $15,896 $13,639
------- -------
Profit from operations $29,881 $15,715
Interest expense ($644) ($660)
Other income (primarily interest) $2,562 $2,907
------ -------
Income before provision for income taxes $31,799 $17,962
Provision for income taxes ($10,335) ($5,583)
--------- --------
Net income $21,464 $12,379
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Weighted average shares
Basic 79,313 76,037
Diluted (1) 82,221 79,899
Earnings per common share
Basic $0.27 $0.16
Diluted (1) $0.26 $0.15
(1) Assumes exercise of dilutive stock options calculated under the
treasury stock method.
Condensed Balance Sheet
June 30, 2004
Unaudited
(In thousands)
June 30,
2004
-----------------
Assets
Cash & cash equivalents $230,520
Short term investments $15,147
Accounts receivable (net) $69,657
Other receivables $7,273
Inventory (net) $43,649
Prepaid expenses and other current assets $7,390
------
Total current assets $373,636
Equipment (net) $24,620
Land $4,263
Bldg. & land improvements (net) $64,170
Other assets $496
Deferred tax assets $3,344
Long term investments $144,614
--------
Total long term assets $241,507
Total assets $615,143
========
Liabilities and stockholders' equity
Accounts payable $28,622
Accrued wages and benefits $7,452
Accrued liabilities $5,822
------
Total current liabilities $41,896
Deferred tax liabilities $6,313
Other non-current liablilties $1,544
Long term debt $50,000
-------
Total long term liabilities $57,857
Total liabilities $99,753
Stockholders' equity $515,390
--------
Total liabilities and stockholders' equity $615,143
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