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): November 7, 2022‌
 
ADTRAN Holdings, Inc.‌
(Exact name of Registrant as Specified in Its Charter)‌

			
Delaware	001-41446	87-2164282	
(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))‌
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	
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. 

 

 
Item 2.02 Results of Operations and Financial Condition.
 
On November 7, 2022, ADTRAN Holdings, Inc. (“ADTRAN”) announced its financial results for the fiscal quarter and nine months ended September 30, 2022.
 
ADTRAN also announced that its Board of Directors declared a quarterly cash dividend of $0.09 per common share, to be paid to ADTRAN’s stockholders of record as of the close of business on November 22, 2022. The ex-dividend date is August 21, 2022 and the payment date is December 6, 2022.
 
A copy of ADTRAN’s press release announcing its financial results and the declaration of the quarterly cash dividend is attached as Exhibit 99.1 hereto and incorporated by reference herein.
 
The information included in, or furnished with, Item 2.02 of this Current Report on Form 8-K shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
 
Item 9.01 Financial Statements and Exhibits.

Exhibit Number	Description	
99.1	Press Release dated November 7, 2022	
104	Cover Page Interactive Data File – the cover page iXBRL tags are embedded within the Inline XBRL document	

 

 

 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		
Date: November 8, 2022	ADTRAN Holdings, Inc.
 
By: /s/ Michael Foliano 
Michael Foliano
Chief Financial Officer	

 

 
EXHIBIT 99.1
ADTRAN Holdings, Inc. Reports Earnings for the Third Quarter of 2022 and Declares Quarterly Cash Dividend
 
HUNTSVILLE, Ala. — (November 7, 2022) — ADTRAN Holdings, Inc., (NASDAQ: ADTN and FSE: QH9) (“ADTRAN Holdings” or the “Company”), today announced financial results for the third quarter of 2022. For the quarter, revenue was $340.7 million. Net loss inclusive of the non-controlling interest for the third quarter of 2022 was $44.9 million. Net loss attributable to the Company for the third quarter of 2022 was $41.9 million and loss per share attributable to the Company was $0.57. Net loss and loss per share are inclusive of consolidated financial results, significant purchase accounting adjustments, and certain one-time transaction expenses related to the business combination of the Company, ADTRAN, Inc. (“ADTRAN”), and ADVA Optical Networking SE (“ADVA”). Inclusive of non-controlling interests, non-GAAP net income was $12.2 million. Non-GAAP net income attributable to the Company was $7.7 million and non-GAAP diluted earnings per share attributable to the Company was $0.11. Non-GAAP net income and non-GAAP earnings per share exclude acquisition related expenses, amortizations, and adjustments (consisting of intangible amortization of backlog, developed technology, customer relationships, and trade names acquired in connection with business combinations and amortization of inventory fair value adjustments), stock-based compensation expense, amortization of pension actuarial losses, deferred compensation adjustments, certain asset impairments, changes in valuation allowance related to our deferred tax assets, and the tax effect of these adjustments to net income. The reconciliations between the non-GAAP net income measures presented herein and the respective equivalent GAAP financial measures are set forth in the tables provided below.
 
ADTRAN Holdings Chairman and Chief Executive Officer Tom Stanton stated, “Our third quarter marked a new era in our history as we closed the business combination agreement with ADVA Optical Networking SE. The combined company’s broader portfolio, paired with a larger, more diversified, and regionally balanced customer base, positions us to capitalize on the global fiber conversion. The Q3 results highlight our increased market presence in optical networking and subscriber solutions, two portfolio categories that complement our continued success in fiber access. This success reinforces the positive outlook we have in our ability to maximize our growth potential in the ongoing global investment cycle in fiber networks.”
 
The Company also announced that its Board of Directors declared a cash dividend for the third quarter of 2022. The quarterly cash dividend of $0.09 per common share is to be paid to the Company’s stockholders of record as of the close of business on November 22, 2022. The ex-dividend date is November 21, 2022, and the payment date will be December 6, 2022.
 
The Company confirmed that it will hold a conference call to discuss its third quarter results on Tuesday, November 8, 2022, at 9:30 a.m. Central Time or 4:30 p.m. Central European Time. ADTRAN Holdings will webcast this conference call. To listen, simply visit our Investor Relations site at adtran.com/investor approximately 10 minutes prior to the start of the call, click on the event “ADTRAN Holdings Releases 3rd Quarter 2022 Financial Results and Earnings Call”, and click on the Webcast link.
 
An online replay of the Company’s conference call, as well as the text of the Company's conference call, 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 email at investor.relations@adtran.com.
 
About ADTRAN Holdings, Inc.
 
ADTRAN Holdings, Inc. is the parent company of ADTRAN, Inc., a wholly owned subsidiary and a leading global provider of open, disaggregated networking and communications solutions. ADTRAN Holdings is also the largest shareholder of ADVA, a European telecommunications vendor that provides network equipment for data, storage, voice, and video services.
 
Cautionary Note Regarding Forward-Looking Statements
 
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: (i) risks and uncertainties related to the continued impact of the SARS-CoV-2 coronavirus/COVID-19 global pandemic (including variants of the SARS-CoV-2 coronavirus), including with respect to continued manufacturing and supply chain constraints; (ii) risks and uncertainties related to the completed business combination between the Company, ADTRAN and ADVA, including risks related to regulatory or other limitations imposed following the closing of the business combination on July 15, 2022 and the proposed domination and profit and loss transfer agreement between the Company as the controlling entity, and ADVA as the controlled entity; the ability to successfully integrate the ADTRAN and ADVA businesses; risks related to disruption of management time from ongoing business operations due to integration efforts following the business combination; the risk that the business combination could have adverse effects on the market

 
price of ADTRAN Holdings’ common stock or ADVA’s common shares or the ability of the Company, ADTRAN, and ADVA to retain customers, retain or hire key personnel, maintain relationships with their respective suppliers and customers, and on their operating results and businesses generally; the risk that ADTRAN Holdings may be unable to achieve expected synergies or that it may take longer or be more costly than expected to achieve those synergies; the risk of fluctuations in revenue due to lengthy sales and approval processes required by major and other service providers for new products; the risk posed by potential breaches of information systems and cyber-attacks; the risks that ADTRAN, ADVA or ADTRAN Holdings may not be able to effectively compete, including through product improvements and development; and (iii) other risks set forth in ADVA’s annual and interim financial reports made publicly available and ADTRAN’s and ADTRAN Holdings’ public filings made with the Securities and Exchange Commission, including ADTRAN’s Annual Report on Form 10-K for the year ended December 31, 2021 and ADTRAN Holdings’ Form 10-Q for the quarterly period ended June 30, 2022. These risks and uncertainties could cause actual results to differ materially from those in the forward-looking statements included in this press release.
 
Explanation of Use of Non-GAAP Financial Measures
 
Set forth in the tables below are reconciliations of operating loss, net loss inclusive of the non-controlling interest, net loss attributable to the Company, and loss per share attributable to the Company, in each case as reported based on generally accepted accounting principles in the United States (“GAAP”), to non-GAAP operating income, non-GAAP net income inclusive of the non-controlling interest, non-GAAP net income attributable to the Company, and non-GAAP diluted earnings per share attributable to the Company, respectively. Such non-GAAP measures exclude acquisition related expenses, amortizations and adjustments (consisting of intangible amortization of backlog, developed technology, customer relationships, and trade names acquired in connection with business combinations and amortization of inventory fair value adjustments), stock-based compensation expense, amortization of pension actuarial losses, deferred compensation adjustments, certain asset impairments, changes in valuation allowance related to our deferred tax assets, and the tax effect of these adjustments to net income. These measures are used by management in our ongoing planning and annual budgeting processes. Additionally, we believe the presentation of non-GAAP operating income, non-GAAP net income inclusive of the non-controlling interest, non-GAAP net income attributable to the Company, and non-GAAP diluted earnings per share attributable to the Company, when combined with the presentation of the most directly comparable GAAP financial measure, is beneficial to the overall understanding of ongoing operating performance of the Company.
 
These non-GAAP financial measures are not prepared in accordance with, or an alternative for, GAAP and therefore should not be considered in isolation or as a substitution for analysis of our results as reported under GAAP. Additionally, our calculation of non-GAAP operating income, non-GAAP net income and non-GAAP earnings per share - basic and diluted, may not be comparable to similar measures calculated by other companies.
 
Investor Services/Assistance:
Rhonda Lambert/256-963-7450
Investor.relations@adtran.com

 

 

Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands)

 	September 30,	 	 	December 31,	 	
 	2022	 	 	2021	 	
Assets	 	 	 	 	 	
Current Assets	 	 	 	 	 	
Cash and cash equivalents	$	111,099	 	 	$	56,603	 	
Restricted cash	 	—	 	 	 	215	 	
Short-term investments	 	803	 	 	 	350	 	
Accounts receivable, net	 	302,401	 	 	 	158,742	 	
Other receivables	 	14,350	 	 	 	11,228	 	
Inventory, net	 	416,163	 	 	 	139,891	 	
Prepaid expenses and other current assets	 	30,739	 	 	 	9,296	 	
Total Current Assets	 	875,555	 	 	 	376,325	 	
Property, plant and equipment, net	 	104,577	 	 	 	55,766	 	
Deferred tax assets, net	 	—	 	 	 	9,079	 	
Goodwill	 	357,869	 	 	 	6,968	 	
Intangibles, net	 	393,575	 	 	 	19,293	 	
Other non-current assets	 	56,347	 	 	 	30,971	 	
Long-term investments	 	50,131	 	 	 	70,615	 	
Total Assets	$	1,838,054	 	 	$	569,017	 	
 	 	 	 	 	 	
Liabilities and Equity	 	 	 	 	 	
Current Liabilities	 	 	 	 	 	
Accounts payable	$	276,026	 	 	$	102,489	 	
Revolving credit agreements outstanding	 	84,503	 	 	 	—	 	
Notes payable	 	29,782	 	 	 	—	 	
Unearned revenue	 	40,993	 	 	 	17,737	 	
Accrued expenses and other liabilities	 	25,554	 	 	 	13,673	 	
Accrued wages and benefits	 	41,595	 	 	 	14,900	 	
Income tax payable, net	 	26,838	 	 	 	6,560	 	
Total Current Liabilities	 	525,291	 	 	 	155,359	 	
Deferred tax liabilities, net	 	36,884	 	 	 	—	 	
Non-current unearned revenue	 	18,269	 	 	 	9,271	 	
Pension liability	 	16,220	 	 	 	11,402	 	
Deferred compensation liability	 	25,376	 	 	 	31,383	 	
Non-current lease obligations	 	21,490	 	 	 	3,269	 	
Other non-current liabilities	 	9,697	 	 	 	1,231	 	
Total Liabilities	 	653,227	 	 	 	211,915	 	
Common stock	 	776	 	 	 	797	 	
Additional paid-in capital	 	883,210	 	 	 	288,946	 	
Accumulated other comprehensive loss	 	(40,288	)	 	 	(11,914	)	
Retained earnings	 	31,535	 	 	 	740,820	 	
Treasury stock	 	(4,083	)	 	 	(661,547	)	
Non-controlling interest	 	313,677	 	 	 	—	 	
Total Equity	 	1,184,827	 	 	 	357,102	 	
Total Liabilities Equity	$	1,838,054	 	 	$	569,017	 	

 

Condensed Consolidated Statements of Loss
(Unaudited)
(In thousands, except per share data)

 	 	Three Months Ended	 	 	Nine Months Ended	 	 	
 	 	September 30,	 	 	September 30,	 	 	
 	 	2022	 	 	2021	 	 	2022	 	 	2021	 	 	
Revenue	 	 	 	 	 	 	 	 	 	 	 	 	 	
Network Solutions	 	$	304,940	 	 	$	120,767	 	 	$	599,306	 	 	$	360,025	 	 	
Services & Support	 	 	35,769	 	 	 	17,314	 	 	 	67,959	 	 	 	48,821	 	 	
Total Revenue	 	 	340,709	 	 	 	138,081	 	 	 	667,265	 	 	 	408,846	 	 	
Cost of Revenue	 	 	 	 	 	 	 	 	 	 	 	 	 	
Network Solutions	 	 	226,635	 	 	 	81,029	 	 	 	417,209	 	 	 	216,044	 	 	
Services & Support	 	 	11,047	 	 	 	9,379	 	 	 	30,207	 	 	 	28,860	 	 	
Total Cost of Revenue	 	 	237,682	 	 	 	90,408	 	 	 	447,416	 	 	 	244,904	 	 	
Gross Profit	 	 	103,027	 	 	 	47,673	 	 	 	219,849	 	 	 	163,942	 	 	
Selling, general and administrative expenses	 	 	74,880	 	 	 	30,972	 	 	 	130,646	 	 	 	89,273	 	 	
Research and development expenses	 	 	59,196	 	 	 	26,759	 	 	 	112,187	 	 	 	82,131	 	 	
Asset impairment	 	 	16,969	 	 	 	—	 	 	 	16,969	 	 	 	—	 	 	
Operating Loss	 	 	(48,018	)	 	 	(10,058	)	 	 	(39,953	)	 	 	(7,462	)	 	
Interest and dividend income	 	 	347	 	 	 	344	 	 	 	768	 	 	 	887	 	 	
Interest expense	 	 	(1,303	)	 	 	(6	)	 	 	(1,427	)	 	 	(18	)	 	
Net investment (loss) gain	 	 	(2,691	)	 	 	(63	)	 	 	(10,752	)	 	 	2,942	 	 	
Other income, net	 	 	2,494	 	 	 	648	 	 	 	2,949	 	 	 	2,673	 	 	
Loss Before Income Taxes	 	 	(49,171	)	 	 	(9,135	)	 	 	(48,415	)	 	 	(978	)	 	
Income tax benefit (expense)	 	 	4,312	 	 	 	(1,292	)	 	 	4,572	 	 	 	(3,467	)	 	
Net Loss	 	$	(44,859	)	 	$	(10,427	)	 	$	(43,843	)	 	$	(4,445	)	 	
Less: Net Loss attributable to non-controlling interest	 	 	(2,925	)	 	 	—	 	 	 	(2,925	)	 	 	—	 	 	
Net Loss attributable to ADTRAN Holdings, Inc.	 	$	(41,934	)	 	$	(10,427	)	 	$	(40,918	)	 	$	(4,445	)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Weighted average shares outstanding – basic	 	 	73,036	 	 	 	48,609	 	 	 	57,175	 	 	 	48,470	 	 	
Weighted average shares outstanding – diluted	 	 	73,036	 	 	 	48,609	 	 	 	57,175	 	 	 	48,470	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss per common share attributable to ADTRAN Holdings, Inc. – basic	 	$	(0.57	)	 	$	(0.21	)	 	$	(0.72	)	 	$	(0.09	)	 	
Loss per common share attributable to ADTRAN Holdings, Inc. – diluted	 	$	(0.57	)	 	$	(0.21	)	 	$	(0.72	)	 	$	(0.09	)	 	

 

 
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)

 	 	Nine Months Ended	 	
 	 	September 30,	 	
 	 	2022	 	 	2021	 	
Cash flows from operating activities:	 	 	 	 	 	 	
Net loss	 	$	(43,843	)	 	$	(4,445	)	
Adjustments to reconcile net income to net cash (used in) provided by operating activities:	 	 	 	 	 	 	
Depreciation and amortization	 	 	34,783	 	 	 	12,246	 	
Asset impairment	 	 	16,969	 	 	 	—	 	
Amortization of debt issuance cost	 	 	200	 	 	 	—	 	
Loss (gain) on investments	 	 	10,395	 	 	 	(3,320	)	
Stock-based compensation expense	 	 	15,912	 	 	 	5,457	 	
Deferred income taxes	 	 	(26,366	)	 	 	437	 	
Other, net	 	 	32	 	 	 	89	 	
Inventory reserves	 	 	(6,681	)	 	 	(4,789	)	
Changes in operating assets and liabilities:	 	 	 	 	 	 	
Accounts receivable, net	 	 	(34,535	)	 	 	(26,346	)	
Other receivables	 	 	(2,154	)	 	 	11,152	 	
Inventory	 	 	(76,293	)	 	 	2,120	 	
Prepaid expenses, other current assets and other assets	 	 	610	 	 	 	(8,514	)	
Accounts payable	 	 	70,381	 	 	 	29,614	 	
Accrued expenses and other liabilities	 	 	(23,005	)	 	 	10,392	 	
Income taxes payable, net	 	 	20,862	 	 	 	4,798	 	
Net cash (used in) provided by operating activities	 	 	(42,733	)	 	 	28,891	 	
 	 	 	 	 	 	 	
Cash flows from investing activities:	 	 	 	 	 	 	
Purchases of property, plant and equipment	 	 	(10,141	)	 	 	(3,572	)	
Proceeds from sales and maturities of available-for-sale investments	 	 	30,474	 	 	 	28,305	 	
Purchases of available-for-sale investments	 	 	(22,215	)	 	 	(28,853	)	
Proceeds from beneficial interests in securitized accounts receivable	 	 	1,294	 	 	 	—	 	
Proceeds from disposals of property, plant and equipment	 	 	12	 	 	 	—	 	
Insurance proceeds received	 	 	—	 	 	 	500	 	
Acquisition of business, net of cash acquired	 	 	43,957	 	 	 	—	 	
Net cash provided by (used in) investing activities	 	 	43,381	 	 	 	(3,620	)	
 	 	 	 	 	 	 	
Cash flows from financing activities:	 	 	 	 	 	 	
Tax withholdings related to stock-based compensation settlements	 	 	(515	)	 	 	(113	)	
Proceeds from stock option exercises	 	 	5,434	 	 	 	6,111	 	
Dividend payments	 	 	(15,859	)	 	 	(13,124	)	
Proceeds from draw on revolving credit agreement	 	 	133,141	 	 	 	—	 	
Repayment of revolving credit agreement	 	 	(48,000	)	 	 	—	 	
Payment of debt issuance cost	 	 	(3,015	)	 	 	—	 	
Repayment of notes payable	 	 	(10,057	)	 	 	—	 	
Net cash provided by (used in) financing activities	 	 	61,129	 	 	 	(7,126	)	
 	 	 	 	 	 	 	
Net increase in cash, cash equivalents and restricted cash	 	 	61,777	 	 	 	18,145	 	
Effect of exchange rate changes	 	 	(7,496	)	 	 	(2,719	)	
Cash, cash equivalents and restricted cash, beginning of period	 	 	56,818	 	 	 	60,179	 	
Cash, cash equivalents and restricted cash, end of period	 	$	111,099	 	 	$	75,605	 	
 	 	 	 	 	 	 	
Supplemental disclosure of cash financing activities:	 	 	 	 	 	 	
Cash paid for interest	 	$	633	 	 	$	—	 	
Supplemental disclosure of non-cash investing activities	 	 	 	 	 	 	
Right-of-use assets obtained in exchange for lease obligations	 	$	904	 	 	$	1,833	 	
Purchases of property, plant and equipment included in accounts payable	 	$	1,037	 	 	$	100	 	
ADVA common shares exchanged in acquisition	 	$	565,491	 	 	$	—	 	
ADVA options assumed in acquisition	 	$	12,769	 	 	$	—	 	
Non-controlling interest related to ADVA	 	$	316,415	 	 	$	—	 	

 

 
Supplemental Information
Reconciliation of Operating Loss to Non-GAAP Operating Income (Loss)
(Unaudited)
(In thousands)

 	 	Three Months Ended
September 30,	 	 	Nine Months ended
September 30,	 	 	
 	 	2022	 	 	2021	 	 	2022	 	 	2021	 	 	
Operating Loss	 	$	(48,018	)	 	$	(10,058	)	 	$	(39,953	)	 	$	(7,462	)	 	
Acquisition related expenses, amortizations and adjustments	 	 	40,310	 	 (1)	 	6,041	 	 (6)	 	44,763	 	  (8)	 	9,470	 	 (11)	
Asset impairments	 	 	16,969	 	 (2)	 	—	 	 	 	16,969	 	  (2)	 	—	 	 	
Stock-based compensation expense	 	 	12,131	 	 (3)	 	1,842	 	 (7)	 	15,912	 	  (9)	 	5,457	 	 (12)	
Pension adjustments	 	 	244	 	 (4)	 	—	 	 	 	244	 	  (4)	 	—	 	 	
Restructuring expenses	 	 	—	 	 	 	—	 	 	 	2	 	 (10)	 	309	 	 (13)	
Deferred compensation adjustments	 	 	(740	)	 (5)	 	(459	)	 (5)	 	(7,173	)	  (5)	 	2,091	 	 (5)	
Non-GAAP Operating Income (Loss)	 	$	20,896	 	 	$	(2,634	)	 	$	30,764	 	 	$	9,865	 	 	
 
(1) Includes intangible amortization of backlog, inventory fair value adjustments, developed technology, customer relationships, and trade names acquired in connection with business combinations, and certain one-time transaction expenses of which $25.5 million is included in total cost of revenue, $14.3 million is included in selling, general and administrative expenses and $0.5 million is included in research and development expenses on the condensed consolidated statements of income (loss).
(2) Includes impairment charges related to the abandonment of certain information technology projects due to the business combination.
(3) $1.3 million is included in total cost of revenue, $9.1 million is included in selling, general and administrative expenses and $1.7 million is included in research and development expenses on the condensed consolidated statements of income (loss). Includes $8.9 million of incremental stock-based award modification expense related to the business combination.
(4) Less than $0.1 million is included in total cost of revenue, $0.1 million is included in selling, general and administrative expenses and $0.1 million is included in research and development expenses on the condensed consolidated statements of income (loss).
(5) Includes non-cash change in fair value of equity investments held in the ADTRAN Holdings, Inc. Deferred Compensation Program for Employees, all of which is included in selling, general and administrative expenses on the condensed consolidated statement of income (loss).
(6) $5.5 million is included in selling, general and administrative expenses and $0.5 million is included in research and development expenses on the condensed consolidated statements of income (loss).
(7) $0.1 million is included in total cost of revenue, $1.1 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 (loss).
(8) Includes intangible amortization of backlog, inventory fair value adjustments, developed technology, customer relationships, and trade names acquired in connection with business combinations, and certain one-time transaction expenses of which $25.5 million is included in total cost of revenue, $17.8 million is included in selling, general and administrative expenses and $1.5 million is included in research and development expenses on the condensed consolidated statements of income (loss).
(9) $1.6 million is included in total cost of revenue, $11.4 million is included in selling, general and administrative expenses and $2.9 million is included in research and development expenses on the condensed consolidated statements of income (loss). Includes $8.9 million of incremental stock-based award modification expense related to the business combination.
(10) Less than $0.1 million is included in selling, general and administrative expenses condensed consolidated statements of income (loss).
(11) $8.0 million is included in selling, general and administrative expenses and $1.5 million is included in research and development expenses on the condensed consolidated statements of income (loss).
(12) $0.4 million is included in total cost of revenue, $3.3 million is included in selling, general and administrative expenses and $1.8 million is included in research and development expenses on the condensed consolidated statements of income (loss).
(13) $0.1 million is included in selling, general and administrative expenses and $0.2 million is included in research and development expenses on the condensed consolidated statements of income (loss).

 

Supplemental Information
 
Reconciliation of Net Loss inclusive of Non-Controlling Interest to
Non-GAAP Net Income (Loss) inclusive of Non-Controlling Interest
(Unaudited)
 
and
 
Reconciliation of Net Loss attributable to ADTRAN Holdings, Inc. and Loss per Common Share attributable to
ADTRAN Holdings, Inc. – Basic and Diluted to Non-GAAP Net Income (Loss) attributable to ADTRAN Holdings, Inc.
and Non-GAAP Earnings (Loss) per Common Share attributable to ADTRAN Holdings, Inc. – Basic and Diluted
(Unaudited)
 
(In thousands, except per share amounts)

 	 	Three Months Ended
September 30,	 	 	Nine Months ended
September 30,	 	 	
 	 	2022	 	 	2021	 	 	2022	 	 	2021	 	 	
Net Loss attributable to ADTRAN Holdings, Inc.	 	$	(41,934	)	 	$	(10,427	)	 	$	(40,918	)	 	$	(4,445	)	 	
Plus: Net Loss attributable to non-controlling interest	 	 	(2,925	)	 	 	—	 	 	 	(2,925	)	 	 	—	 	 	
Net Loss inclusive of non-controlling interest	 	$	(44,859	)	 	$	(10,427	)	 	$	(43,843	)	 	$	(4,445	)	 	
Acquisition related expenses, amortizations and adjustments	 	 	40,310	 	 	 	6,041	 	 	 	44,763	 	 	 	9,470	 	 	
Asset impairments	 	 	16,969	 	 	 	—	 	 	 	16,969	 	 	 	—	 	 	
Stock-based compensation expense	 	 	12,131	 	 	 	1,842	 	 	 	15,912	 	 	 	5,457	 	 	
Valuation allowance	 	 	3,182	 	 	 	2,455	 	 	 	15,550	 	 	 	4,413	 	 	
Deferred compensation adjustments (1)	 	 	383	 	 	 	(262	)	 	 	(612	)	 	 	552	 	 	
Pension adjustments (2)	 	 	325	 	 	 	272	 	 	 	499	 	 	 	825	 	 	
Restructuring expenses	 	 	—	 	 	 	—	 	 	 	2	 	 	 	309	 	 	
Tax effect of adjustments to net income (loss)	 	 	(16,245	)	 	 	(736	)	 	 	(17,430	)	 	 	(2,931	)	 	
Non-GAAP Net Income (Loss) inclusive of non-controlling interest	 	$	12,196	 	 	$	(815	)	 	$	31,810	 	 	$	13,650	 	 	
Less: Non-GAAP Net Income attributable to non-controlling interest	 	 	4,486	 	 	 	—	 	 	 	4,486	 	 	 	—	 	 	
Non-GAAP Net Income (Loss) attributable to ADTRAN Holdings, Inc.	 	$	7,710	 	 	$	(815	)	 	$	27,324	 	 	$	13,650	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Weighted average shares outstanding – basic	 	 	73,036	 	 	 	48,609	 	 	 	57,175	 	 	 	48,470	 	 	
Weighted average shares outstanding – diluted	 	 	73,036	 	 	 	48,609	 	 	 	57,175	 	 	 	48,470	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss per common share attributable to ADTRAN Holdings, Inc. - basic	 	$	(0.57	)	 	$	(0.21	)	 	$	(0.72	)	 	$	(0.09	)	 	
Loss per common share attributable to ADTRAN Holdings, Inc. - diluted	 	$	(0.57	)	 	$	(0.21	)	 	$	(0.72	)	 	$	(0.09	)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Non-GAAP earnings (loss) per common share attributable to ADTRAN Holdings, Inc. - basic	 	$	0.11	 	 	$	(0.02	)	 	$	0.48	 	 	$	0.28	 	 	
Non-GAAP earnings (loss) per common share attributable to ADTRAN Holdings, Inc. - basic	 	$	0.11	 	 	$	(0.02	)	 	$	0.48	 	 	$	0.28	 	 	
(1) Includes non-cash change in fair value of equity investments held in deferred compensation plans offered to certain employees.
(2) Includes amortization of actuarial losses related to the Company's pension plan for employees in certain foreign countries.