UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 17, 2019
 
ADTRAN, Inc.
(Exact name of Registrant as Specified in Its Charter)

Delaware	000-24612	63-0918200	
(State or Other Jurisdiction
of Incorporation)	(Commission File Number)	(IRS Employer
Identification No.)	
 	 	 	
901 Explorer Boulevard
Huntsville, Alabama	 	35806-2807	
(Address of Principal Executive Offices)	 	(Zip Code)	
Registrant’s Telephone Number, Including Area Code: (256) 963-8000
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):
☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)	
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)	
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))	
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))	
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company  ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐
Securities registered pursuant to Section 12(b) of the Act:
 
Title of each class	 	Trading Symbol	 	Name of exchange on which registered	
Common Stock, Par Value $0.01	 	ADTN	 	The NASDAQ Global Select Market	

  

Item 2.02 Results of Operations and Financial Condition.
 
On July 17, 2019, ADTRAN, Inc. announced its preliminary financial results for the fiscal quarter ended June 30, 2019 and certain other information.
 
ADTRAN also announced that its Board of Directors declared a quarterly cash dividend of $0.09 per common share to be paid to shareholders of record at the close of business on August 1, 2019. The ex-dividend date is July 31, 2019 and the payment date is August 15, 2019.
 
A copy of ADTRAN's press release announcing such preliminary financial results and other information is attached as Exhibit 99.1 hereto and incorporated by reference herein.
 
In addition, ADTRAN has posted supplemental information regarding revenues by segment and category for the fiscal quarter ended June 30, 2019 on the Investor Relations page of its website, www.adtran.com . A copy of the supplemental information is attached as Exhibit 99.2 hereto and incorporated by reference herein.

Item 9.01 Financial Statements and Exhibits.
 
(d)  Exhibits.
 
The following exhibits are furnished as part of this Current Report on Form 8-K.

Exhibit Number	Description	
99.1	Press Release dated July 17, 2019	
99.2	Revenues by segment and category classification	

 

  

SIGNATURES
 
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on July 18, 2019.
ADTRAN, Inc.
(Registrant) 

By : /s/ Michael Foliano
Michael Foliano
Senior Vice President of Finance and
Chief Financial Officer
(Principal Accounting Officer)

 

 

EXHIBIT 99.1
 
ADTRAN, Inc. Reports Preliminary Earnings for the Second Quarter 2019 and Declares Quarterly Cash Dividend
 
HUNTSVILLE, Ala.--(BUSINESS WIRE) -- July 17, 2019 -- ADTRAN, Inc. (NASDAQ:ADTN) reported preliminary financial results for the second quarter 2019.
 
Preliminary Financial Results
The Company’s reported results for the quarter and year to date ended June 30, 2019 are preliminary due to the Company’s ongoing assessment of the reasonableness of its current and previously reported excess and obsolete inventory reserves (“E&O reserves”). The Company is working diligently to finalize its assessment and evaluate the materiality of adjustments to the reserve, if any, and determine the appropriate method of correction to its current and previously reported financial results, as necessary. In addition to assessing the reasonableness of its E&O reserves, the Company is also assessing inventory related internal control deficiencies which may result in the identification of material weaknesses. If material changes to our preliminary results do occur, an updated press release will be issued.
 
Quarterly Results
For the quarter, revenue was $156.4 million compared to $128.0 million for the second quarter of 2018. Net income is estimated to be $5.1 million compared to a net loss of $7.7 million for the second quarter of 2018. Earnings per share, assuming dilution, is estimated to be $0.11 compared to a loss per share of $0.16 for the second quarter of 2018. Non-GAAP net income is estimated to be $6.9 million compared to a net loss of $4.6 million for the second quarter of 2018. Non-GAAP earnings per share, assuming dilution, is estimated to be $0.14 compared to a loss per share of $0.10 for the second quarter of 2018. Non-GAAP earnings per share exclude stock-based compensation expense, acquisition related amortizations and other expenses, restructuring expenses, gain on bargain purchase of a business or other contingencies, amortization of pension actuarial losses, and a reimbursement from a claim settlement. The reconciliation between GAAP net income (loss) and earnings (loss) per share to non-GAAP net income (loss) and non-GAAP earnings (loss) per share is in the table provided.
 
ADTRAN Chairman and Chief Executive Officer Tom Stanton stated, “We are pleased with our continued progress and solid performance for the second quarter of 2019.  Revenue for the quarter grew 22% year-over-year and 9% over the previous quarter. Our execution continues to be strong across North America, LATAM, EMEA, and the Pacific Rim with diverse and well-balanced material revenue contributions from each of these regions.  This sustained progress underscores the Company’s global impact as we help our customers build their best networks.”
 
The Company also announced that its Board of Directors declared a cash dividend for the second quarter of 2019. The quarterly cash dividend is $0.09 per common share to be paid to holders of record at the close of business on August 1, 2019. The ex-dividend date is July 31, 2019, and the payment date is August 15, 2019.
 
The Company confirmed that it will hold a conference call to discuss its second quarter preliminary results Thursday, July 18, 2019, at 9:30 a.m. Central Time. ADTRAN will webcast this conference call. To listen, simply visit the Investor Relations site at www.investors.adtran.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, as well as the text of the Company's earnings release, will be available on the Investor Relations site approximately 24 hours following the call and will remain available for at least 12 months. For more information, visit www.investors.adtran.com or via email at investor.relations@adtran.com.
 
At ADTRAN, we believe amazing things happen when people connect. From the cloud edge to the subscriber edge, we help communications service providers around the world manage and scale services that connect people, places and things to advance human progress. Whether rural or urban, domestic or international, telco or cable, enterprise or residential—ADTRAN solutions optimize existing technology infrastructures and create new, multi-gigabit platforms that leverage cloud economics, data analytics, machine learning and open ecosystems—the future of global networking. Find more at ADTRAN, LinkedIn and Twitter.
 
This press release contains forward-looking statements, generally identified by the use of words such as “believe,” “expect,” “intend,” “estimate,” “anticipate,” “will,” “may,” “could” and similar expressions, which forward-looking statements reflect management’s best judgment based on factors currently known. However, these statements involve risks and uncertainties, including the impact of the Company’s assessment of its excess and obsolete inventory reserve on its current and previously reported financial results and internal control over financial reporting, 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, 2018. These risks and uncertainties could cause actual results to differ materially from those in the forward-looking statements included in this press release.

 
To provide additional transparency, we have disclosed non-GAAP operating income (loss) which has been reconciled to operating income (loss) and non-GAAP net income (loss) and non-GAAP adjusted earnings (loss) per share - basic and diluted which have been reconciled to net income (loss) and earnings (loss) per share - basic and diluted as reported based on Generally Accepted Accounting Principles in the United States (U.S. GAAP). These measures exclude certain items which management believes are not reflective of the ongoing operating performance of the business. We believe this information is useful in providing period-to-period comparisons of the results of our ongoing operations. Additionally, these measures are used by management in our ongoing planning and annual budgeting processes. The presentation of non-GAAP operating income (loss), non-GAAP net income (loss) and non-GAAP earnings (loss) per share- basic and diluted, when combined with the U.S. GAAP presentation of operating income (loss), net income (loss), and net income (loss) per share is beneficial to the overall understanding of ongoing operating performance of the Company.
 
These measures are not in accordance with, or an alternative for, U.S. GAAP and therefore should not be considered in isolation or as a substitution for analysis of our results as reported under U.S. GAAP. Our calculation of non-GAAP operating income (loss), non-GAAP net income (loss) and non-GAAP earnings (loss) per share - basic and diluted may not be comparable to similar measures calculated by other companies.

  

Condensed Consolidated Balance Sheet
(Unaudited)
(In thousands)
 
	June 30,	 	 	December 31,	 	
 	2019	 	 	2018	 	
Assets	 	 	 	 	 	 	 	
Cash and cash equivalents	$	106,817	 	 	$	105,504	 	
Short-term investments	 	30,888	 	 	 	3,246	 	
Accounts receivable, net	 	116,661	 	 	 	99,385	 	
Other receivables	 	24,984	 	 	 	36,699	 	
Inventory, net (1)	 	96,379	 	 	 	99,848	 	
Prepaid expenses and other current assets	 	8,909	 	 	 	10,744	 	
Total Current Assets (1)	 	384,638	 	 	 	355,426	 	
 	 	 	 	 	 	 	 	
Property, plant and equipment, net	 	78,813	 	 	 	80,635	 	
Deferred tax assets, net (1)	 	38,998	 	 	 	37,187	 	
Goodwill	 	6,968	 	 	 	7,106	 	
Intangibles, net	 	30,503	 	 	 	33,183	 	
Other assets	 	13,820	 	 	 	5,668	 	
Long-term investments	 	87,280	 	 	 	108,822	 	
Total Assets (1)	$	641,020	 	 	$	628,027	 	
 	 	 	 	 	 	 	 	
Liabilities and Stockholders' Equity	 	 	 	 	 	 	 	
Accounts payable	$	63,827	 	 	$	60,054	 	
Bonds payable	 	25,600	 	 	 	1,000	 	
Unearned revenue	 	12,910	 	 	 	17,940	 	
Accrued expenses	 	14,331	 	 	 	11,746	 	
Accrued wages and benefits	 	19,126	 	 	 	14,752	 	
Income tax payable, net (1)	 	9,741	 	 	 	12,518	 	
Total Current Liabilities	 	145,535	 	 	 	118,010	 	
 	 	 	 	 	 	 	 	
Non-current unearned revenue	 	4,265	 	 	 	5,296	 	
Other non-current liabilities	 	44,181	 	 	 	33,842	 	
Bonds payable	 	—	 	 	 	24,600	 	
Total Liabilities	 	193,981	 	 	 	181,748	 	
  	 	 	 	 	 	 	 	
Stockholders' Equity (1)	 	447,039	 	 	 	446,279	 	
 	 	 	 	 	 	 	 	
Total Liabilities and Stockholders' Equity (1)	$	641,020	 	 	$	628,027	 	
 
(1) Results are subject to change based on the Company’s ongoing assessment of the reasonableness of its excess and obsolete inventory reserve.

 

Consolidated Statements of Income
(Unaudited)
(In thousands, except per share data)
 
	 	Three Months Ended	 	 	Six Months Ended	 	
 	 	June 30,	 	 	June 30,	 	
 	 	2019	 	 	2018	 	 	2019	 	 	2018	 	
Sales	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Products	 	$	139,167	 	 	$	115,063	 	 	$	264,989	 	 	$	220,316	 	
Services	 	 	17,224	 	 	 	12,985	 	 	 	35,193	 	 	 	28,538	 	
Total Sales	 	 	156,391	 	 	 	128,048	 	 	 	300,182	 	 	 	248,854	 	
Cost of Sales	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Products (1)	 	 	78,916	 	 	 	69,629	 	 	 	149,650	 	 	 	138,241	 	
Services	 	 	11,201	 	 	 	8,423	 	 	 	23,646	 	 	 	20,884	 	
Total Cost of Sales (1)	 	 	90,117	 	 	 	78,052	 	 	 	173,296	 	 	 	159,125	 	
Gross Profit (1)	 	 	66,274	 	 	 	49,996	 	 	 	126,886	 	 	 	89,729	 	
Selling, general and administrative expenses	 	 	33,619	 	 	 	32,080	 	 	 	68,751	 	 	 	65,611	 	
Research and development expenses	 	 	32,064	 	 	 	30,729	 	 	 	63,711	 	 	 	63,578	 	
Gain on contingency	 	 	(1,230	)	 	 	—	 	 	 	(1,230	)	 	 	—	 	
Operating Income (Loss) (1)	 	 	1,821	 	 	 	(12,813	)	 	 	(4,346	)	 	 	(39,460	)	
Interest and dividend income	 	 	692	 	 	 	913	 	 	 	1,283	 	 	 	1,779	 	
Interest expense	 	 	(127	)	 	 	(132	)	 	 	(254	)	 	 	(264	)	
Net investment gain	 	 	2,485	 	 	 	990	 	 	 	8,411	 	 	 	893	 	
Other income (expense), net	 	 	(205	)	 	 	(217	)	 	 	650	 	 	 	(274	)	
Gain on bargain purchase of a business, net	 	 	—	 	 	 	—	 	 	 	—	 	 	 	11,322	 	
Income (Loss) Before Provision for Income Taxes (1)	 	 	4,666	 	 	 	(11,259	)	 	 	5,744	 	 	 	(26,004	)	
Benefit for income taxes (1)	 	 	385	 	 	 	3,589	 	 	 	77	 	 	 	7,520	 	
Net Income (Loss) (1)	 	$	5,051	 	 	$	(7,670	)	 	$	5,821	 	 	$	(18,484	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Weighted average shares outstanding – basic	 	 	47,802	 	 	 	47,856	 	 	 	47,792	 	 	 	48,043	 	
Weighted average shares outstanding – diluted	 	 	48,036	 	(2)	 	47,856	 	 	 	47,939	 	(2)	 	48,043	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Earnings (loss) per common share – basic (1)	 	$	0.11	 	 	$	(0.16	)	 	$	0.12	 	 	$	(0.38	)	
Earnings (loss) per common share – diluted (1)	 	$	0.11	 	(2)	$	(0.16	)	 	$	0.12	 	(2)	$	(0.38	)	
 
(1) Results are subject to change based on the Company’s ongoing assessment of the reasonableness of its excess and obsolete inventory reserve.
(2) Assumes exercise of dilutive stock options calculated under the treasury stock method.

 

Consolidated Statements of Comprehensive Income (Loss)
(Unaudited)
(In thousands)
 
	 	Three Months Ended	 	 	Six Months Ended	 	
 	 	June 30,	 	 	June 30,	 	
 	 	2019	 	 	2018	 	 	2019	 	 	2018	 	
Net Income (Loss) (1)	 	$	5,051	 	 	$	(7,670	)	 	$	5,821	 	 	$	(18,484	)	
Other Comprehensive Income (Loss), net of tax	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net unrealized gains (losses) on available-for-sale securities	 	 	107	 	 	 	104	 	 	 	292	 	 	 	(3,308	)	
Defined benefit plan adjustments	 	 	150	 	 	 	5	 	 	 	271	 	 	 	67	 	
Foreign currency translation	 	 	540	 	 	 	(3,424	)	 	 	(620	)	 	 	(2,582	)	
Other Comprehensive Income (Loss), net of tax	 	 	797	 	 	 	(3,315	)	 	 	(57	)	 	 	(5,823	)	
Comprehensive Income (Loss), net of tax (1)	 	$	5,848	 	 	$	(10,985	)	 	$	5,764	 	 	$	(24,307	)	
 
(1) Results are subject to change based on the Company’s ongoing assessment of the reasonableness of its excess and obsolete inventory reserve.

 

Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
 
	 	Six Months Ended	 	
 	 	June 30,	 	
 	 	2019	 	 	2018	 	
Cash flows from operating activities:	 	 	 	 	 	 	 	 	
Net income (loss) (1)	 	$	5,821	 	 	$	(18,484	)	
Adjustments to reconcile net income (loss) to net cash provided by operating activities:	 	 	 	 	 	 	 	 	
Depreciation and amortization	 	 	8,912	 	 	 	7,526	 	
Amortization of net premium on available-for-sale investments	 	 	(57	)	 	 	20	 	
Net gain on long-term investments	 	 	(8,411	)	 	 	(893	)	
Net loss on disposal of property, plant and equipment	 	 	58	 	 	 	68	 	
Gain on contingency	 	 	(1,230	)	 	 	—	 	
Gain on bargain purchase of a business	 	 	—	 	 	 	(11,322	)	
Stock-based compensation expense	 	 	3,313	 	 	 	3,603	 	
Deferred income taxes (1)	 	 	(1,844	)	 	 	(16,384	)	
Changes in operating assets and liabilities:	 	 	 	 	 	 	 	 	
Accounts receivable, net	 	 	(17,282	)	 	 	66,931	 	
Other receivables	 	 	11,679	 	 	 	9	 	
Inventory, net (1)	 	 	3,346	 	 	 	2,063	 	
Prepaid expenses and other assets	 	 	4,714	 	 	 	10,157	 	
Accounts payable, net	 	 	5,017	 	 	 	683	 	
Accrued expenses and other liabilities	 	 	637	 	 	 	2,008	 	
Income tax payable (1)	 	 	(2,658	)	 	 	6,945	 	
Net cash provided by operating activities (1)	 	 	12,015	 	 	 	52,930	 	
 	 	 	 	 	 	 	 	 	
Cash flows from investing activities:	 	 	 	 	 	 	 	 	
Purchases of property, plant and equipment	 	 	(4,306	)	 	 	(4,183	)	
Proceeds from sales and maturities of debt and equity investments	 	 	24,306	 	 	 	86,436	 	
Purchases of debt and equity investments	 	 	(21,544	)	 	 	(89,801	)	
Acquisition of business	 	 	13	 	 	 	(7,806	)	
Net cash used in investing activities	 	 	(1,531	)	 	 	(15,354	)	
 	 	 	 	 	 	 	 	 	
Cash flows from financing activities:	 	 	 	 	 	 	 	 	
Proceeds from stock option exercises	 	 	526	 	 	 	369	 	
Purchases of treasury stock	 	 	(184	)	 	 	(12,774	)	
Dividend payments	 	 	(8,604	)	 	 	(8,679	)	
Net cash used in financing activities	 	 	(8,262	)	 	 	(21,084	)	
 	 	 	 	 	 	 	 	 	
Net increase in cash and cash equivalents	 	 	2,222	 	 	 	16,492	 	
Effect of exchange rate changes	 	 	(909	)	 	 	(2,606	)	
Cash and cash equivalents, beginning of period	 	 	105,504	 	 	 	86,433	 	
 	 	 	 	 	 	 	 	 	
Cash and cash equivalents, end of period	 	$	106,817	 	 	$	100,319	 	
 	 	 	 	 	 	 	 	 	
Supplemental disclosure of non-cash investing activities:	 	 	 	 	 	 	 	 	
Purchases of property, plant and equipment included in accounts payable	 	$	205	 	 	$	209	 	
 
(1) Results are subject to change based on the Company’s ongoing assessment of the reasonableness of its excess and obsolete inventory reserve.

 

Supplemental Information
Reconciliation of Operating Income (Loss) to Non-GAAP Operating Income (Loss)
(Unaudited)
 
	 	Three Months ended
June 30,	 	 	 	Six Months ended
June 30,	 	 	
 	 	2019	 	 	 	2018	 	 	 	2019	 	 	 	2018	 	 	
Operating Income (Loss) (1)	 	$	1,821	 	 	 	$	(12,813	)	 	 	$	(4,346	)	 	 	$	(39,460	)	 	
Acquisition related expenses, amortizations and adjustments	 	 	1,506	 	(2)	 	 	1,142	 	(8)	 	 	3,003	 	(11)	 	 	1,725	 	(14)	
Stock-based compensation expense	 	 	1,454	 	(3)	 	 	1,784	 	(9)	 	 	3,313	 	(12)	 	 	3,603	 	(15)	
Restructuring expenses	 	 	1,400	 	(4)	 	 	1,025	 	(10)	 	 	3,463	 	(13)	 	 	6,975	 	(16)	
Deferred compensation income (expense)	 	 	683	 	(5)	 	 	132	 	(5)	 	 	2,807	 	(5)	 	 	(254	)	(5)	
Gain on contingency	 	 	(1,230	)	(6)	 	 	  —
 	 	 	 	 	(1,230	)	(6)	 	 	  —
 	 	 	
Settlement income	 	 	(746	)	(7)	 	 	  —
 	 	 	 	 	(746	)	(7)	 	 	  —
 	 	 	
Non-GAAP Operating Income (Loss) (1)	 	$	4,888	 	 	 	$	(8,730	)	 	 	$	6,264	 	 	 	$	(27,411	)	 	
 
(1) Results are subject to change based on the Company’s ongoing assessment of the reasonableness of its excess and obsolete inventory reserve.
(2) $0.4 million is included in total cost of sales, $0.6 million is included in selling, general and administrative expenses and $0.5 million is included in research and development expenses on the consolidated statements of income.
(3) $0.1 million is included in total cost of sales, $0.7 million is included in selling, general and administrative expenses and $0.7 million is included in research and development expenses on the consolidated statements of income.
(4) $0.1 million is included in total cost of sales, $0.7 million is included in selling, general and administrative expenses and $0.6 million is included in research and development expenses on the consolidated statements of income.
(5) Includes non-cash change in fair value of equity investments held in the ADTRAN, Inc. Deferred Compensation Program for Employees (as amended and restated as of June 1, 2010) per ASU 2016-01, all of which is included in selling, general and administrative expenses on the consolidated statement of income.
(6) Includes gain related to unearned contingent liabilities recognized upon the acquisition of a business in November 2018.
(7) Includes income related to certain freight forwarder claim settlements which were received during the three months ended June 30, 2019, all of which is included in total cost of sales on the consolidated statements of income.
(8) $0.4 million is included in total cost of sales, $0.3 million is included in selling, general and administrative expenses and $0.4 million is included in research and development expenses on the consolidated statements of income.
(9) $0.1 million is included in total cost of sales, $1.0 million is included in selling, general and administrative expenses and $0.7 million is included in research and development expenses on the consolidated statements of income.
(10) $0.4 million is included in total cost of sales and $0.6 million is included in selling, general and administrative expenses on the consolidated statements of income.
(11) $0.9 million is included in total cost of sales, $1.1 million is included in selling, general and administrative expenses and $1.0 is included in research and development expenses on the consolidated statements of income.
(12) $0.2 million is included in total cost of sales, $1.7 million is included in selling, general and administrative expenses and $1.4 million is included in research and development expenses on the consolidated statements of income.
(13) $0.7 million is included in total cost of sales, $1.5 million is included in selling, general and administrative expenses and $1.2 million is included in research and development expenses on the consolidated statements of income.
(14) $0.5 million is included in total cost of sales, $0.6 million is included in selling, general and administrative expenses and $0.7 million is included in research and development expenses on the consolidated statements of income.
(15) $0.2 million is included in total cost of sales, $2.0 million is included in selling, general and administrative expenses and $1.4 million is included in research and development expenses on the consolidated statements of income.
(16) $2.8 million is included in total cost of sales, $2.4 million is included in selling, general and administrative expenses and $1.8 million is included in research and development expenses on the consolidated statements of income.

 

Reconciliation of Net Income (Loss) and Earnings (Loss) per Common Share – Basic and Diluted to Non-GAAP
Net Income (Loss) and Non-GAAP Earnings (Loss) per Common Share – Basic and Diluted
(Unaudited)
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three Months ended
June 30,	 	 	 	Six Months ended
June 30,	 	 	
 	 	2019	 	 	2018	 	 	 	2019	 	 	2018	 	 	
Net Income (Loss) (1)	 	$	5,051	 	 	$	(7,670	)	 	 	$	5,821	 	 	$	(18,484	)	 	
Acquisition related expenses, amortizations and adjustments	 	 	1,506	 	 	 	1,142	 	 	 	 	3,003	 	 	 	1,725	 	 	
Stock-based compensation expense	 	 	1,454	 	 	 	1,784	 	 	 	 	3,313	 	 	 	3,603	 	 	
Restructuring expenses	 	 	1,400	 	 	 	1,025	 	 	 	 	3,463	 	 	 	6,975	 	 	
Pension expense (2)	 	 	199	 	 	 	62	 	 	 	 	402	 	 	 	126	 	 	
Gain on contingency	 	 	(1,230	)	 	 	—	 	 	 	 	(1,230	)	 	 	—	 	 	
Settlement income	 	 	(746	)	 	 	—	 	 	 	 	(746	)	 	 	—	 	 	
Gain on bargain purchase of a business	 	 	—	 	 	 	—	 	 	 	 	—	 	 	 	(11,322	)	 	
Tax effect of adjustments to net income (loss)	 	 	(714	)	 	 	(927	)	 	 	 	(2,238	)	 	 	(3,033	)	 	
Non-GAAP Net Income (Loss) (1)	 	$	6,920	 	 	$	(4,584	)	 	 	$	11,788	 	 	$	(20,410	)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Weighted average shares outstanding – basic	 	 	47,802	 	 	 	47,856	 	 	 	 	47,792	 	 	 	48,043	 	 	
Weighted average shares outstanding – diluted	 	 	48,036	 	 	 	47,856	 	 	 	 	47,939	 	 	 	48,043	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Earnings (loss) per common share - basic (1)	 	$	0.11	 	 	$	(0.16	)	 	 	$	0.12	 	 	$	(0.38	)	 	
Earnings (loss) per common share - diluted (1)	 	$	0.11	 	 	$	(0.16	)	 	 	$	0.12	 	 	$	(0.38	)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Non-GAAP earnings (loss) per common share - basic (1)	 	$	0.14	 	 	$	(0.10	)	 	 	$	0.25	 	 	$	(0.42	)	 	
Non-GAAP earnings (loss) per common share - diluted (1)	 	$	0.14	 	 	$	(0.10	)	 	 	$	0.25	 	 	$	(0.42	)	 	
 
(1) Results are subject to change based on the Company’s ongoing assessment of the reasonableness of its excess and obsolete inventory reserve.
(2) Includes amortization of actuarial losses related to the Company's pension plan for employees in certain foreign countries.

 

EXHIBIT 99.2
 
Segment and Category Revenues
(Unaudited)
(In thousands)
 
	 	Three Months Ended	 	 	Six Months Ended	 	
 	 	June 30,	 	 	June 30,	 	
 	 	2019	 	 	2018	 	 	2019	 	 	2018	 	
Segment Revenues:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Network Solutions	 	$	139,167	 	 	$	115,063	 	 	$	264,989	 	 	$	220,316	 	
Services & Support	 	 	17,224	 	 	 	12,985	 	 	 	35,193	 	 	 	28,538	 	
Total	 	$	156,391	 	 	$	128,048	 	 	$	300,182	 	 	$	248,854	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Category Revenues:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Access & Aggregation	 	$	109,421	 	 	$	84,742	 	 	$	209,199	 	 	$	166,422	 	
Subscriber Solutions & Experience	 	 	40,502	 	 	 	34,560	 	 	 	77,255	 	 	 	64,661	 	
Traditional & Other Products	 	 	6,468	 	 	 	8,746	 	 	 	13,728	 	 	 	17,771	 	
Total	 	$	156,391	 	 	$	128,048	 	 	$	300,182	 	 	$	248,854	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Sales by Geographic Region:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
United States	 	$	75,288	 	 	$	68,222	 	 	$	147,816	 	 	$	130,308	 	
International	 	 	81,103	 	 	 	59,826	 	 	 	152,366	 	 	 	118,546	 	
Total	 	$	156,391	 	 	$	128,048	 	 	$	300,182	 	 	$	248,854