ADTRAN, Inc. Reports Second Quarter 2005 Results, Declares Increased Quarterly Cash Dividend and Announces Executive Management Succession.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, 2005. Sales were $118,873,000 for the quarter compared to $104,577,000 for the first quarter of 2005 and $120,601,000 for the second quarter of 2004. Net income was $20,719,000 for the quarter compared to $15,220,000 for the first quarter of 2005 and $21,398,000 for the second quarter of 2004. 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 $0.27 for the quarter compared to $0.20 for the first quarter of 2005 and $0.26 for the second quarter of 2004. Gross margin improved to 58.5% for the quarter compared to 57.5% for the second 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 $22 million for the quarter. Unrestricted 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 totaled $308 million, at June 30, 2005. ADTRAN Chairman and Chief Executive Officer Mark Smith stated, "Revenues for the quarter were stronger than anticipated. Our results benefited from robust sequential One after the other in some consecutive order such as by name or number. revenue growth in DSLAM (DSL Access Multiplexor) A central office (CO) device for ADSL service that intermixes voice traffic and DSL traffic onto a customer's DSL line. It also separates incoming phone and data signals and directs them onto the appropriate carrier's network. See DSL. , optical access and NetVanta product categories accompanied ac·com·pa·ny v. ac·com·pa·nied, ac·com·pa·ny·ing, ac·com·pa·nies v.tr. 1. To be or go with as a companion. 2. by strength in HDSL See DSL. HDSL - High bit-rate Digital Subscriber Line revenues. We believe these results reflect continuing momentum and share gains in the markets we serve." The Company also announced that its Board of Directors declared an increased cash dividend for the second 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 August 5, 2005. 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 August 3, 2005 and the payment date is August 19, 2005. Mark Smith, the Company's CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. since its founding, announced that he will retire as CEO effective on his 65th birthday of September September: see month. 10, 2005. Mr. Smith will remain as the non-executive non-executive adj non-executive director → direttore m senza potere esecutivo Chairman of the Board. Howard Howard, English noble family. Landowners in Norfolk from the 13th cent., the Howards obtained the duchy of Norfolk through the marriage of Sir Robert Howard to Margaret Mowbray, daughter of Thomas Mowbray, 1st duke of Norfolk. Thrailkill, the Company's President, COO (Cell Of Origin) See mobile positioning. and Director will also retire from each of these positions on September 10, 2005. Mr. Thrailkill has been with the Company and served as its COO for 13 years and also its President and Director for the past 10 years. The Company also announced that its Board of Directors has elected Tom Stanton Stanton, city (1990 pop. 30,491), Orange co., SW Calif., SW of Anaheim; inc. 1956. The city's population grew rapidly in the late 20th century. Manufactures include electrical and electronic goods, signs, computer equipment, building materials, and plastics. as Chief Executive Officer and Director and Danny Windham Windham, town (1990 pop. 22,039), Windham co., E Conn.; inc. 1692. It includes the industrial city of Willimantic. At Windham Center (settled c.1688) are several old buildings. as President, Chief Operating Officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. and Secretary, both effective September 10, 2005. Mark Smith stated, "The elections of Tom Stanton and Danny Windham to their respective positions clearly demonstrate our Board's attention to perpetuating the unique and long standing culture at ADTRAN. Both individuals have served many years at ADTRAN. They bring immense levels of experience and respect as seasoned businessmen, entrepreneurs and technologists and we are very excited about ADTRAN's continuing growth opportunities under their leadership." Mark Smith also stated, "Our Board and employees are grateful to Howard Thrailkill for his service at ADTRAN. Howard helped to lead our Company through many years of growth and we wish him well." The Company also confirmed that its second quarter conference call will be held Tuesday Tuesday: see week. , July July: see month. 19 at 9:30 a.m. Central Time. Guidance for the third quarter and year 2005 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 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 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 by both carriers and enterprises, ADTRAN solutions enable voice, data, video, and Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the 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 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, 2004. Such risks and uncertainties could cause actual results to differ materially from those in the forward-looking statements included in this press release.
ADTRAN
Condensed Balance Sheet
June 30, 2005
Unaudited
(In thousands)
June 30,
2005
---------
Assets
Cash & cash equivalents $53,433
Short-term investments 147,979
Accounts receivable (net) 64,119
Other receivables 7,985
Inventory (net) 46,738
Prepaid expenses and other current assets 8,293
---------
Total current assets $328,547
Equipment (net) $21,881
Land 4,263
Building & land improvements (net) 61,586
Other assets 583
Long-term investments 157,730
---------
Total long-term assets $246,043
Total assets $574,590
=========
Liabilities and stockholders' equity
Accounts payable $31,030
Accrued wages and benefits 8,569
Accrued income taxes 1,616
Accrued liabilities 6,144
---------
Total current liabilities $47,359
Deferred tax liabilities $3,692
Other non-current liabilities 2,766
Long-term debt 50,000
---------
Total long-term liabilities $56,458
Total liabilities $103,817
Stockholders' equity $470,773
---------
Total liabilities and stockholders' equity $574,590
=========
ADTRAN
Condensed Statements of Income(1)
For the quarters ending 6/30/05 and 6/30/04
(In thousands, except per share data)
Unaudited
Second Quarter
2005 2004
--------- ---------
Sales $118,873 $120,601
Cost of Sales 49,327 51,279
--------- ---------
Gross Profit 69,546 69,322
Selling, general and administrative expenses 24,297 23,545
Research and development expenses 16,367 15,896
--------- ---------
Profit from operations 28,882 29,881
Interest expense (625) (644)
Other income (primarily interest) 2,995 2,464
--------- ---------
Income before provision for income taxes 31,252 31,701
Provision for income taxes (10,533) (10,303)
--------- ---------
Net income $20,719 $21,398
========= =========
Weighted average shares
Basic 75,341 79,313
Diluted(2) 77,495 82,221
Earnings per common share
Basic $0.28 $0.27
Diluted(2) $0.27 $0.26
(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.
ADTRAN
Condensed Statements of Income(1)
For the periods ending 6/30/05 and 6/30/04
(In thousands, except per share data)
Unaudited
Six Months Ended
2005 2004
--------- ---------
Sales $223,450 $234,640
Cost of Sales 93,676 100,230
--------- ---------
Gross Profit 129,774 134,410
Selling, general and administrative expenses 47,246 45,385
Research and development expenses 32,710 30,713
--------- ---------
Profit from operations 49,818 58,312
Interest expense (1,208) (1,288)
Other income (primarily interest) 5,843 4,896
--------- ---------
Income before provision for income taxes 54,453 61,920
Provision for income taxes (18,514) (20,124)
--------- ---------
Net income $35,939 $41,796
========= =========
Weighted average shares
Basic 75,543 79,405
Diluted(2) 77,437 82,517
Earnings per common share
Basic $0.48 $0.53
Diluted(2) $0.46 $0.51
(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.
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