Tuesday July 14, 6:37 am Eastern Time
Company Press Release
Adtran, Inc. Reports Second Quarter 1998 Results
HUNTSVILLE, Ala.--(BUSINESS WIRE)--July 14, 1998--ADTRAN, Inc. (NASDAQ: ADTN - news) reported results for both the
second quarter and the first six months ended June 30, 1998. Sales for the quarter increased 20.3% to $71,155,000 from sales of $59,125,000
for the quarter ended June 30, 1997. Sales for the six-month period ended June 30, 1998 increased 13.4% to $136,483,000 compared to sales
of $120,355,000 for the first six months of 1997.
Net income for the quarter increased 49.7% to $10,451,000 from net income of $6,980,000 for the quarter ended June 30, 1997. Net income
for the first six months of 1998 increased 21.4% to $20,038,000 compared to net income of $16,503,000 for the first six months of 1997.
Earnings per share, assuming dilution, for the second quarter increased 44% to $.26 compared to earnings per share of $.18 for the second
quarter of 1997. Earnings per share for the first six months for 1998 increased 21% to $.51 compared to earnings per share of $.42 for the
first six months of 1997.
ADTRAN Chairman and Chief Executive Officer Mark C. Smith stated, ''Strong growth in the Company's Customer Premise Equipment
(CPE) business continued in the second quarter. This segment grew by more than 48% to $31,474,000 from $21,184,000 over the prior year.
The growth in CPE sales was driven principally by sales of T1 products and reflects the demand for increased bandwidth. We are pleased that
our products are receiving recognition for their value to our customers in this market.''
The Telco business grew at approximately five percent from the second quarter 1997. Mr. Smith stated that, ''We are excited about prospects
for Telco results in the second half of 1998 due to the introduction of Total Reach(R) for the 64 kilobit access market and the introduction of
our new second generation Total Reach(R) for ISDN. Our recently announced new products such as the Total Access(TM) system,
ADTRAN's optical multi-service platform, will further enhance the Company's position in HDSL and enable us to provide integrated
solutions from the local loop to the desktop.''
Gross margins continue their increasing trend as investment in product development and innovative engineering drive down costs.
Component costs also were reduced due to favorable prices as a result of the Asian economic situation. In other matters, Mr. Smith noted that
the authorization to repurchase shares of ADTRAN common stock remains in effect. A summary of activity related to that program will be
included in the Form 10-Q to be filed for the second quarter.
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, 1997. 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 6/30/98 and 6/30/97
Unaudited
First First
Half Half
1998 1997
---- ----
Sales $136,482,686 $120,355,392
Cost of Sales 61,614,431 59,931,941
---------- ----------
Gross profit 74,868,255 60,423,451
Selling, general & administrative expenses 28,321,919 21,161,999
Research & development expenses 17,822,267 14,711,897
---------- ----------
Profit from operations 28,724,069 24,549,555
Interest expense (1,110,761) (751,199)
Other income (primarily interest) 2,861,033 1,986,866
--------- ---------
Income before income taxes 30,474,341 25,785,222
Provision for income taxes (10,436,792) (9,282,680)
------------ -----------
Net income $20,037,549 $16,502,542
=========== ===========
Weighted average shares outstanding
assuming dilution (1) 39,500,980 39,531,615
Earnings per common share
assuming dilution (1) $0.51 $0.42
Earnings per common share $0.51 $0.42
(1) Assumes exercise of dilutive stock options calculated under the
treasury stock method.
Condensed Statements of Income
For the quarters ending 6/30/98 and 6/30/97
Unaudited
Second Second
Quarter Quarter
1998 1997
---- ----
Sales $71,155,452 $59,125,208
Cost of Sales 32,205,894 30,493,144
---------- ----------
Gross profit 38,949,558 28,632,064
Selling, general & administrative expenses 15,064,329 10,624,484
Research & development expenses 9,443,911 7,716,639
--------- ---------
Profit from operations 14,441,318 10,290,941
Interest expense (576,333) (508,665)
Other income (primarily interest) 1,506,073 1,124,401
--------- ---------
Income before income taxes 15,371,058 10,906,677
Provision for income taxes (5,226,160) (3,926,404)
---------- -----------
Net income $10,144,898 $6,980,273
=========== ==========
Weighted average shares outstanding
assuming dilution (1) 39,431,601 39,523,277
Earnings per common share
assuming dilution (1) $0.26 $0.18
Earnings per common share $0.26 $0.18
(1) Assumes exercise of dilutive stock options calculated under the
treasury stock method.
Condensed Balance Sheet
June 30, 1998
Unaudited
Assets June 30,
1998
Cash & cash equivalents $25,539,437
Short-term investments 63,423,723
Accounts receivable 36,956,828
Other receivables 1,113,151
Inventory 41,822,741
Prepaid expenses 4,387,345
---------
Total current assets 173,243,225
Equipment (net) 30,968,087
Land 4,263,104
Bldg. & land improvements (net) 33,792,334
Other assets 220,000
Long term investments 55,035,000
----------
$297,521,750
============
Liabilities and stockholders' equity
Accounts payable $10,536,631
Accrued salaries 2,879,550
Accrued income taxes 2,294,364
Accrued taxes other than income taxes 260,015
Warranty payable 1,435,259
Accrued vacation 1,239,289
Interest payable 0
Other payables 1,367,583
---------
Total current liabilities 20,012,691
Long term liabilities 52,147,635
----------
Total liabilities 72,160,326
Stockholders' equity 225,361,424
-----------
$297,521,750
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