ADTRAN, Inc. Reports Third Quarter 2005 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 third quarter ended September September: see month. 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 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 $0.42 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 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 $345 million, at September 30, 2005. ADTRAN Chief Executive Officer 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. 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 (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. and Optical Access Products, 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 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 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 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 November: see month. 4, 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 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 Tuesday: see week. , October October: see month. 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 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 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.
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.
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