ADTRAN, Inc. Reports Third Quarter 1998 Results and Announces Approval of Additional Stock Repurchase.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. .--(BUSINESS WIRE)--Oct. 14, 1998--ADTRAN, Inc. (Nasdaq: ADTN ADTN Administrative Data Transmission Network ADTN Administrative Data Telecommunications Network ) reported results for both the third quarter and the first nine months ended September September: see month. 30, 1998. Sales for the quarter increased 9.2% to $77,044,000 from sales of $70,579,000 for the quarter ended September 30, 1997. Sales for the nine-month period ended September 30, 1998 increased 11.8% to $213,526,000 compared to sales of $190,934,000 for the first nine months of 1997. Net income for the quarter increased 2.7% to $11,441,000 from net income of $11,141,000 for the quarter ended September 30, 1997. Net income for the first nine months of 1998 increased 13.9% to $31,479,000 compared to net income of $27,643,000 for the first nine months of 1997. 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. , for the third quarter increased 4.1% to $.29 compared to earnings per share of $.28 for the third quarter of 1997. Earnings per share for the first nine months for 1998 increased 14.9% to $.80 compared to earnings per share of $.70 for the first nine months of 1997. ADTRAN Chairman and Chief Executive Officer Mark C. Smith stated, "Revenues in both of our market segments were strong during the third quarter. Telco revenue (58% of the total) increased 12.7% sequentially se·quen·tial adj. 1. Forming or characterized by a sequence, as of units or musical notes. 2. Sequent. se·quen due to the continuing ramp of conversions to our Total Reach(R) 64 kilobit (thousand bits). For technical specifications, it refers to 1,024 bits. In general usage, it typically refers to an even one thousand bits (see kilo). Also Kb, Kbit and K-bit. See space/time. (unit) kilobit - 2^10 = 1024 bits of storage (1 Kb). technology and the continuing strength of our HDSL See DSL. HDSL - High bit-rate Digital Subscriber Line products. CPE (Customer Premises Equipment) Communications equipment that resides on the customer's premises. CPE - Customer Premises Equipment had another record revenue quarter (up 28% over the third quarter of 1997) primarily due to continued strength in the T1 market. We are pleased that ATLAS, our flexible integrated access device An IAD is a customer premises device that provides access to wide area networks and the Internet. Specifically, it aggregates multiple channels of information including voice and data across a single shared access link to a carrier or service provider PoP (Point of Presence). , continues its revenue ramp while serving the additional role of acting as a pull-through pull-through a surgical technique for abdominoperineal resection of the rectum. After removal of a segment, the rectum is sutured to the perineal skin, forming a new mucocutaneous junction. Used in the treatment of rectal neoplasms and anal furunculosis. product for the rest of our CPE offerings." Commenting further on the financial results, Mr. Smith noted that shipments were linear throughout the period with no month accounting for more than 37% of revenues for the quarter. He also noted that the primary factor causing the substantial increase in inventories during the quarter was new business relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc Total Reach(R) technology and new HDSL orders which will commence shipping in the fourth quarter. Additional amounts were on hand at the end of the third quarter to ensure that adequate quantities are available to assure smooth customer transitions. The Company expects inventory to move back to more normal levels as these transitions are accomplished. Mr. Smith also announced that ADTRAN has completed the 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 1,000,000 shares of its common stock and that the Board of Directors has authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: the repurchase of an additional 2,000,000 shares of common stock through open market purchases from time to time as conditions warrant. He stated that management believes the repurchase of shares at current depressed price Depressed price In the context of stocks, stock whose market price is low in comparison to stocks in its sector. levels represents an excellent use of available cash to enhance shareholder value. ADTRAN, Inc. designs, develops, and markets a broad range of high-speed high-speed adj. 1. Operated or designed for operation at high speed: a high-speed food processor. 2. Taking place at high speed: a high-speed chase. 3. 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 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, 1997. Such risks and uncertainties could cause actual results to differ materially from those in the forward-looking statements included in this press release. -0-
Condensed Balance Sheet
September 30, 1998
Unaudited
Assets
Cash & cash equivalents $13,109,385
Short-term investments 56,753,013
Accounts receivable 48,260,625
Other receivables 747,121
Inventory 60,655,793
Prepaid expenses 4,086,594
---------
Total current assets 183,612,531
Equipment (net) 30,995,129
Land 4,263,104
Bldg. & land improvements (net) 37,600,013
Other assets 220,000
Long-term investments 55,035,000
----------
$311,725,777
============
Liabilities and stockholders' equity
Accounts payable $15,250,031
Accrued salaries 2,311,439
Accrued income taxes 2,961,614
Accrued taxes other than income taxes 183,768
Warranty payable 1,510,259
Accrued vacation 1,313,414
Interest payable 190,000
Other payables 1,065,437
---------
Total current liabilities 24,785,962
Long-term liabilities 52,147,635
----------
Total liabilities 76,933,597
Stockholders' equity 234,792,180
-----------
$311,725,777
============
Condensed Statements of Income
For the quarters ending 9/30/98 and 9/30/97
Unaudited
Third Third
Quarter Quarter
1998 1997
---- ----
Sales $77,043,635 $70,578,975
Cost of sales 34,734,064 34,486,972
---------- ----------
Gross profit 42,309,571 36,092,003
Selling, general and
administrative expenses 16,022,809 11,482,374
Research & development expenses 9,909,567 7,831,535
--------- ---------
Profit from operations 16,377,195 16,778,094
Interest expense (582,667) (521,449)
Other income (primarily interest) 1,426,290 1,150,447
--------- ---------
Income before income taxes 17,220,818 17,407,092
Provision for income taxes (5,779,562) (6,266,553)
----------- -----------
Net income $11,441,256 $11,140,539
=========== ===========
Weighted average shares outstanding
assuming dilution(1) 39,138,763 39,693,383
Earnings per common share
assuming $0.29 $0.28
dilution(1)
Earnings per common share $0.29 $0.28
(1) Assumes exercise of dilutive stock options calculated under the
treasury stock method.
Condensed Statements of Income
For the periods ending 9/30/98 and 9/30/97
Unaudited
Nine Nine
Months Months
1998 1997
---- ----
Sales $213,526,321 $190,934,367
Cost of sales 96,364,654 94,418,912
---------- ----------
Gross profit 117,161,667 96,515,455
Selling, general and
administrative expenses 44,300,674 32,640,664
Research & development expenses 27,759,729 22,547,141
---------- ----------
Profit from operations 45,101,264 41,327,650
Interest expense (1,693,428) (1,272,649)
Other income (primarily interest) 4,287,323 3,137,314
--------- ---------
Income before income taxes 47,695,159 43,192,315
Provision for income taxes (16,216,354) (15,549,233)
------------ ------------
Net income $31,478,805 $27,643,082
=========== ===========
Weighted average shares outstanding 39,276,989 39,611,783
assuming dilution(1)
Earnings per common share $0.80 $0.70
assuming
dilution(1)
Earnings per common share $0.81 $0.71
(1) Assumes exercise of dilutive stock options calculated under the
treasury stock method.
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