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): January 24, 2005

 
ADTRAN, Inc.
(Exact name of registrant as specified in its charter) 

 
					
Delaware	 	0-24612	 	63-0918200	
(State of Incorporation) 	 	(Commission file number) 	 	(I.R.S. Employer 
(Identification Number) 	
 
901 Explorer Boulevard, Huntsville, Alabama 35806-2807
(Address of principal executive offices, including zip code)
 
(256) 963-8000
(Registrant’s telephone number, including area code)

 
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 Instruction 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))	

Item 2.02. Results of Operations and Financial Condition.
 
On January 24, 2005, ADTRAN, Inc. announced its financial results for the fiscal quarter ended December 31, 2004 and certain other information. ADTRAN also announced that its Board of Directors declared a quarterly cash dividend. The quarterly cash dividend is $0.08 per common share to be paid to holders of record at the close of business on February 4, 2005. The ex-dividend date is February 2, 2005 and the payment date is February 16, 2005. A copy of ADTRAN’s press release announcing such financial results and other information is attached as Exhibit 99.1 hereto and  incorporated by reference herein.
 
Item 9.01. Financial Statements and Exhibits.
 
(c) Exhibits.
 
The following exhibit is furnished as part of this Current Report on Form 8-K.

Exhibit
Number
	 	Description
	
99.1	 	Press Release dated January 24, 2005	

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 January 24, 2005.

ADTRAN, Inc.	
(Registrant)
 	
By:	 	/s/ James E. Matthews
	
 	 	James E. Matthews
Senior Vice President – Finance,
Chief Financial Officer and Treasurer	

EXHIBIT INDEX

Exhibit
Number
	 	Description
	
99.1	 	Press Release dated January 24, 2005	
 
EXHIBIT 99.1
 
ADTRAN, INC.
REPORTS YEAR and FOURTH QUARTER 2004 RESULTS and DECLARES QUARTERLY CASH DIVIDEND
 
HUNTSVILLE, Ala.—(BUSINESS WIRE) —January 24, 2005—ADTRAN, Inc. (NASDAQ:ADTN - News) reported results for the year and fourth quarter ended December 31, 2004. Sales increased 15% to $454,805,000 for the year compared to $396,676,000 for 2003, and net income increased 23% to $75,403,000 for the year compared to $61,515,000 for 2003. Earnings per share, assuming dilution, were $0.93 for the year compared to $0.76 for 2003.
 
Sales were $104,913,000 for the fourth quarter compared to $113,815,000 for the fourth quarter of 2003. Net income was $14,856,000 for the fourth quarter compared to $21,432,000 for the fourth quarter of 2003. Earnings per share, assuming dilution, were $0.19 for the quarter compared to $0.26 for the fourth quarter of 2003.
 
Net cash provided by operating activities totaled $86 million for the year and $27 million for the fourth quarter.
 
ADTRAN Chairman and Chief Executive Officer Mark Smith stated, “During 2004, we continued to escalate our positions in new, significantly larger markets, in addition to solidifying our leadership positions within our traditional markets. After experiencing significant revenue growth since 2002, we saw a pause in our markets in the last half of 2004. We anticipate this pause will resolve itself as employment and IT spending continue to expand and as carriers continue to aggressively promote consumer broadband services.”
 
Mr. Smith also stated, “During the quarter, research and development expenses increased $2.6 million compared to the same quarter in 2003. A significant portion of this increase relates to approval activities for optical access products and acceleration of approval activities as a result of recent DSLAM successes.”
 
The Company also announced that its Board of Directors declared a cash dividend for the seventh consecutive quarter. The quarterly cash dividend is $0.08 per common share to be paid to holders of record at the close of business on February 4, 2005. The ex-dividend date is February 2, 2005 and the payment date is February 16, 2005.
 
The Company also confirmed that its fourth quarter conference call will be held Tuesday, January 25 at 9:30 a.m. Central Time. Guidance for the first quarter and full 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 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 16-year history of profitability and a portfolio of more than 1,300 solutions for use in the last mile of today’s telecommunications networks. Widely deployed by both carriers and enterprises, ADTRAN solutions enable voice, data, video, and Internet 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 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, 2003. 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
December 31, 2004
Unaudited
(In thousands)

 	  	December 31,
2004
	
Assets	  	 	 	
Cash & cash equivalents	  	$	150,984	
Short-term investments	  	$	31,449	
Accounts receivable (net)	  	$	63,729	
Other receivables	  	$	4,335	
Income tax receivable	  	$	2,321	
Inventory (net)	  	$	42,283	
Prepaid expenses and other current assets	  	$	7,200	
 	  			
Total current assets	  	$	302,301	
		
Equipment (net)	  	$	22,174	
Land	  	$	4,263	
Bldg. & land improvements (net)	  	$	62,818	
Other assets	  	$	586	
Long-term investments	  	$	167,609	
 	  			
Total long-term assets	  	$	257,450	
		
Total assets	  	$	559,751	
 	  			
Liabilities and stockholders’ equity	  	 	 	
Accounts payable	  	$	22,856	
Accrued wages and benefits	  	$	8,347	
Accrued liabilities	  	$	5,092	
 	  			
Total current liabilities	  	$	36,295	
		
Deferred tax liabilities	  	$	4,825	
Other non-current liabilities	  	$	1,732	
Long-term debt	  	$	50,000	
 	  			
Total long-term liabilities	  	$	56,557	
		
Total liabilities	  	$	92,852	
		
Stockholders’ equity	  	$	466,899	
 	  			
Total liabilities and stockholders’ equity	  	$	559,751	

Condensed Statements of Income
For the quarters ending 12/31/04 and 12/31/03
(In thousands, except per share  data)
Unaudited

 	  	Fourth Quarter
2004
	 	 	Fourth Quarter
2003
	 	
Sales	  	$	104,913	 	 	$	113,815	 	
Cost of sales	  	$	45,658	 	 	$	47,511	 	
 	  				 				
Gross profit	  	$	59,255	 	 	$	66,304	 	
			
Selling, general and administrative expenses	  	$	23,382	 	 	$	22,109	 	
Research and development expenses	  	$	17,799	 	 	$	15,246	 	
 	  				 				
Profit from operations	  	$	18,074	 	 	$	28,949	 	
			
Interest expense	  	$	(610	)	 	$	(583	)	
Other income (primarily interest)	  	$	3,764	 	 	$	1,949	 	
 	  				 				
Income before provision for income taxes	  	$	21,228	 	 	$	30,315	 	
			
Provision for income taxes	  	$	(6,372	)	 	$	(8,883	)	
 	  				 				
Net income	  	$	14,856	 	 	$	21,432	 	
 	  				 				
Weighted average shares outstanding	  	 	 	 	 	 	 	 	
Basic	  	 	76,587	 	 	 	79,054	 	
Diluted (1)	  	 	78,725	 	 	 	82,588	 	
			
Earnings per common share	  	 	 	 	 	 	 	 	
Basic	  	$	0.19	 	 	$	0.27	 	
Diluted (1)	  	$	0.19	 	 	$	0.26	 	

(1)	Assumes exercise of dilutive stock options calculated under the treasury stock method.	

Condensed Statements of Income
For the periods ending 12/31/04 and 12/31/03
(In thousands, except per share  data)
Unaudited

 	  	Year Ended
2004
	 	 	Year Ended
2003
	 	
Sales	  	$	454,805	 	 	$	396,676	 	
Cost of sales	  	$	193,458	 	 	$	174,681	 	
 	  				 				
Gross profit	  	$	261,347	 	 	$	221,995	 	
			
Selling, general and administrative expenses	  	$	91,832	 	 	$	83,234	 	
Research and development expenses	  	$	67,371	 	 	$	58,144	 	
 	  				 				
Profit from operations	  	$	102,144	 	 	$	80,617	 	
			
Interest expense	  	$	(2,542	)	 	$	(2,534	)	
Other income (primarily interest)	  	$	10,797	 	 	$	10,747	 	
 	  				 				
Income before provision for income taxes	  	$	110,399	 	 	$	88,830	 	
			
Provision for income taxes	  	$	(34,996	)	 	$	(27,315	)	
 	  				 				
Net income	  	$	75,403	 	 	$	61,515	 	
 	  				 				
Weighted average shares outstanding	  	 	 	 	 	 	 	 	
Basic	  	 	78,235	 	 	 	76,942	 	
Diluted (1)	  	 	80,984	 	 	 	80,739	 	
			
Earnings per common share	  	 	 	 	 	 	 	 	
Basic	  	$	0.96	 	 	$	0.80	 	
Diluted (1)	  	$	0.93	 	 	$	0.76	 	

(1)	Assumes exercise of dilutive stock options calculated under the treasury stock method.	
 
CONTACT:
 
Jim Matthews
Senior Vice President – Finance
Chief Financial Officer
256-963-8775
 
INVESTOR SERVICES/ASSISTANCE:
 
Charlene Little
256-963-8611
 
Cathy Bartels
256-963-8220