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): May 5, 2021
 
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))	
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 2.02Results of Operations and Financial Condition.
 
On May 5, 2021, ADTRAN, Inc. (“ADTRAN”) announced its financial results for the fiscal quarter ended March 31, 2021.
 
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 May 20, 2021. The ex-dividend date is May 19, 2021, and the payment date is June 3, 2021.
 
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.
 
Item 9.01Financial Statements and Exhibits.

Exhibit Number	Description	
99.1	Press Release dated May 5, 2021	
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: May 6, 2021                                            	ADTRAN, Inc.
 
By: /s/ Michael Foliano
Michael Foliano
Senior Vice President of Finance and	
 	Chief Financial Officer
(Principal Accounting Officer)	

 

EXHIBIT 99.1
 
ADTRAN, Inc. Reports Earnings for the First Quarter of 2021 and Declares Quarterly Cash Dividend
HUNTSVILLE, Ala.--(May 5, 2021)—ADTRAN, Inc., (NASDAQ:ADTN), today announced financial results for the first quarter of 2021. For the quarter, revenue was $127.5 million. Net income for the first quarter of 2021 was $0.9 million and earnings per share, assuming dilution, was $0.02 per share. Non-GAAP net income was $6.3 million and non-GAAP earnings per share, assuming dilution, was $0.13 per share. Non-GAAP net income and non-GAAP earnings per share exclude stock-based compensation expense, acquisition-related expenses and amortizations, restructuring expenses, amortization of pension actuarial losses, change in valuation allowance related to our deferred tax assets, non-cash deferred compensation, asset impairments and other one-time adjustments. The reconciliations between GAAP net income (loss) and earnings (loss) per share to non-GAAP net income (loss) and non-GAAP earnings (loss) per share are set forth in the table provided below.
ADTRAN Chairman and Chief Executive Officer Tom Stanton stated, “Our business continues to be driven by strong demand for our fiber access platforms, in-home service delivery platforms and software platforms with regional service providers across the U.S. and Europe. These service providers increasingly turn to ADTRAN for end-to-end solutions that simplify the deployment of fiber-based broadband services while providing an enhanced subscriber experience. The increased demand for ADTRAN’s solutions was highlighted by record product order bookings in the quarter.”
The Company also announced that its Board of Directors declared a cash dividend for the first quarter of 2021. 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 May 20, 2021. The payment date will be June 3, 2021.
The Company confirmed that it will hold a conference call to discuss its first quarter results on Thursday, May 6, 2021, at 9:30 a.m. Central Time. ADTRAN will webcast this conference call. To listen, simply visit ADTRAN’s Investor Relations site at www.adtran.com/investor approximately 10 minutes prior to the start of the call, click on the event “ADTRAN releases 1st Quarter Financial Results and Conference 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
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.com, 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: (i) risks and uncertainties related to the continued impact of the COVID-19 global pandemic, including the severity, geographic reach and duration of the pandemic and the speed of distribution and effectiveness of vaccines, which could lead to a decrease in demand for the Company’s products and services, and which has disrupted, and could lead to further disruptions in, the Company’s supply chain, adversely impacting the operations and financial condition of the Company and its customers; actions that have been taken and that may be taken by the Company, its customers, suppliers and counterparties in response to the pandemic, including the implementation of alternative work arrangements for employees, which may delay the timing of some orders and expected deliveries and which may impact the Company’s ability to mitigate inefficiencies, delays and additional costs in the Company’s product development, sales, marketing and customer service efforts; the legal, regulatory and administrative developments that occur at the federal, state and local levels and in foreign jurisdictions in response to the pandemic, including travel bans and restrictions, quarantines, shelter-in-place orders, and business limitations and shutdowns; potential disruptions, breaches, or other incidents affecting the proper operation, availability or security of the Company’s or its partners’ information systems; declines in revenues due to declining customer demand and deteriorating macroeconomic conditions; potential increased expenses related to labor, raw materials, freight or other expenditures; the impact of the COVID-19 pandemic on the Company’s liquidity, as well as risks associated with disruptions in the financial markets and the business of financial institutions as a result of the COVID-19 pandemic which could impact the Company from a financial perspective; (ii) those risks and uncertainties related to evolving U.S. and foreign laws and regulations regarding privacy, data protection and other matters, including uncertainty and potential additional compliance obligations arising from the Court of Justice of the European Union’s recent issuance of a decision that invalidated the EU-U.S. Privacy Shield framework as a basis for transfers of personal data from the EU to the U.S.; and (iii) the other risks detailed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. 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 in the table below non-GAAP operating income (loss), which has been reconciled to operating loss, and non-GAAP net income (loss) and non-GAAP earnings (loss) per share - basic and diluted, which have been reconciled to net income (loss) and earnings (loss) per share - basic and diluted, in each case as reported based on Generally Accepted Accounting Principles in the United States (“U.S. GAAP”). These non-GAAP financial 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 loss, net income (loss) and earnings (loss) per share - basic and diluted, 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, 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. Additionally, our calculation of non-GAAP operating 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 Sheets
(Unaudited)
(In thousands)
 
 	March 31,	 	 	December 31,	 	
 	2021	 	 	2020	 	
ASSETS	 	 	 	 	 	 	 	
Current Assets	 	 	 	 	 	 	 	
Cash and cash equivalents	$	63,777	 	 	$	60,161	 	
Restricted cash	 	119	 	 	 	18	 	
Short-term investments	 	4,092	 	 	 	3,131	 	
Accounts receivable, net	 	103,201	 	 	 	98,827	 	
Other receivables	 	22,669	 	 	 	21,531	 	
Inventory, net	 	122,862	 	 	 	125,457	 	
Prepaid expenses and other current assets	 	7,625	 	 	 	8,293	 	
Total Current Assets	 	324,345	 	 	 	317,418	 	
Property, plant and equipment, net	 	60,157	 	 	 	62,399	 	
Deferred tax assets, net	 	9,448	 	 	 	9,869	 	
Goodwill	 	6,968	 	 	 	6,968	 	
Intangibles, net	 	22,384	 	 	 	23,470	 	
Other non-current assets	 	26,195	 	 	 	25,425	 	
Long-term investments	 	81,266	 	 	 	80,130	 	
Total Assets	$	530,763	 	 	$	525,679	 	
LIABILITIES AND STOCKHOLDERS’ EQUITY	 	 	 	 	 	 	 	
Current Liabilities	 	 	 	 	 	 	 	
Accounts payable	$	55,476	 	 	$	49,929	 	
Unearned revenue	 	14,457	 	 	 	14,092	 	
Accrued expenses and other liabilities	 	14,601	 	 	 	13,609	 	
Accrued wages and benefits	 	15,856	 	 	 	15,262	 	
Income tax payable, net	 	1,765	 	 	 	1,301	 	
Total Current Liabilities	 	102,155	 	 	 	94,193	 	
Non-current unearned revenue	 	7,040	 	 	 	6,888	 	
Pension liability	 	17,579	 	 	 	18,664	 	
Deferred compensation liability	 	26,658	 	 	 	25,866	 	
Other non-current liabilities	 	6,956	 	 	 	7,124	 	
Total Liabilities	 	160,388	 	 	 	152,735	 	
 	 	 	 	 	 	 	 	
Stockholders' Equity	 	370,375	 	 	 	372,944	 	
 	 	 	 	 	 	 	 	
Total Liabilities and Stockholders' Equity	$	530,763	 	 	$	525,679	 	

 
Condensed Consolidated Statements of Income (Loss)
(Unaudited)
(In thousands, except per share amounts)
 
 	 	Three Months Ended	 	
 	 	March 31,	 	
 	 	2021	 	 	2020	 	
Revenue	 	 	 	 	 	 	 	 	
Network Solutions	 	$	113,809	 	 	$	97,372	 	
Services & Support	 	 	13,724	 	 	 	17,151	 	
Total Revenue	 	 	127,533	 	 	 	114,523	 	
Cost of Revenue	 	 	 	 	 	 	 	 	
Network Solutions	 	 	65,001	 	 	 	51,626	 	
Services & Support	 	 	8,931	 	 	 	11,297	 	
Total Cost of Revenue	 	 	73,932	 	 	 	62,923	 	
Gross Profit	 	 	53,601	 	 	 	51,600	 	
Selling, general and administrative expenses	 	 	27,435	 	 	 	26,620	 	
Research and development expenses	 	 	27,501	 	 	 	29,859	 	
Asset impairments	 	 	—	 	 	 	65	 	
Operating Loss	 	 	(1,335	)	 	 	(4,944	)	
Interest and dividend income	 	 	290	 	 	 	356	 	
Interest expense	 	 	(6	)	 	 	(1	)	
Net investment gain (loss)	 	 	996	 	 	 	(10,877	)	
Other income, net	 	 	1,999	 	 	 	1,129	 	
Income (Loss) Before Income Taxes	 	 	1,944	 	 	 	(14,337	)	
Income tax (expense) benefit	 	 	(1,048	)	 	 	4,368	 	
Net Income (Loss)	 	$	896	 	 	$	(9,969	)	
 	 	 	 	 	 	 	 	 	
Weighted average shares outstanding – basic	 	 	48,336	 	 	 	47,957	 	
Weighted average shares outstanding – diluted	 	 	49,004	 	(1)	 	47,957	 	
 	 	 	 	 	 	 	 	 	
Earnings (loss) per common share – basic	 	$	0.02	 	 	$	(0.21	)	
Earnings (loss) per common share – diluted	 	$	0.02	 	(1)	$	(0.21	)	
(1) Assumes exercise of dilutive stock awards calculated under the treasury stock method.

 

Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
 
 	 	Three Months Ended	 	
 	 	March 31,	 	
 	 	2021	 	 	2020	 	
Cash flows from operating activities:	 	 	 	 	 	 	 	 	
Net income (loss)	 	$	896	 	 	$	(9,969	)	
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:	 	 	 	 	 	 	 	 	
Depreciation and amortization	 	 	4,122	 	 	 	4,365	 	
(Gain) loss on investments	 	 	(1,161	)	 	 	10,877	 	
Stock-based compensation expense	 	 	1,807	 	 	 	1,791	 	
Other	 	 	84	 	 	 	115	 	
Changes in operating assets and liabilities:	 	 	 	 	 	 	 	 	
Accounts receivable, net	 	 	(4,762	)	 	 	3,052	 	
Other receivables	 	 	(1,220	)	 	 	(6,707	)	
Inventory, net	 	 	1,893	 	 	 	(1,598	)	
Prepaid expenses and other assets	 	 	(417	)	 	 	2,206	 	
Accounts payable, net	 	 	5,629	 	 	 	2,712	 	
Accrued expenses and other liabilities	 	 	3,317	 	 	 	(6,680	)	
Income taxes payable	 	 	497	 	 	 	(188	)	
Net cash provided by (used in) operating activities	 	 	10,685	 	 	 	(24	)	
 	 	 	 	 	 	 	 	 	
Cash flows from investing activities:	 	 	 	 	 	 	 	 	
Purchases of property, plant and equipment	 	 	(741	)	 	 	(1,406	)	
Proceeds from sales and maturities of available-for-sale investments	 	 	10,087	 	 	 	46,440	 	
Purchases of available-for-sale investments	 	 	(11,350	)	 	 	(16,879	)	
Acquisition of note receivable	 	 	—	 	 	 	(523	)	
Net cash provided by (used in) investing activities	 	 	(2,004	)	 	 	27,632	 	
 	 	 	 	 	 	 	 	 	
Cash flows from financing activities:	 	 	 	 	 	 	 	 	
Dividend payments	 	 	(4,361	)	 	 	(4,328	)	
Proceeds from stock option exercises	 	 	1,244	 	 	 	—	 	
Tax withholdings related to stock-based compensation settlements	 	 	(113	)	 	 	—	 	
Repayment of bonds payable	 	 	—	 	 	 	(24,600	)	
Net cash used in financing activities	 	 	(3,230	)	 	 	(28,928	)	
 	 	 	 	 	 	 	 	 	
Net increase (decrease) in cash, cash equivalents and restricted cash	 	 	5,451	 	 	 	(1,320	)	
Effect of exchange rate changes	 	 	(1,734	)	 	 	(1,168	)	
Cash, cash equivalents and restricted cash, beginning of period	 	 	60,179	 	 	 	73,773	 	
 	 	 	 	 	 	 	 	 	
Cash, cash equivalents and restricted cash, end of period	 	$	63,896	 	 	$	71,285	 	
 	 	 	 	 	 	 	 	 	
Supplemental Cash Flow Information:	 	 	 	 	 	 	 	 	
Right-of-use assets obtained in exchange for lease obligations	 	$	248	 	 	$	85	 	
Non-cash Investing Activities:	 	 	 	 	 	 	 	 	
Purchases of property, plant and equipment included in accounts payable	 	$	199	 	 	$	302	 	

 
Supplemental Information
Reconciliation of Operating Loss to Non-GAAP Operating Income (Loss)
(Unaudited)
 
 	 	Three Months Ended
March 31,	 	 	
 	 	2021	 	 	2020	 	 	
Operating Loss	 	$	(1,335	)	 	$	(4,944	)	 	
Acquisition related expenses, amortizations and adjustments	 	 	1,045	 	(1)	 	1,358	 	(5)	
Stock-based compensation expense	 	 	1,807	 	(2)	 	1,791	 	(6)	
Restructuring expenses	 	 	301	 	(3)	 	553	 	(7)	
Deferred compensation adjustments	 	 	556	 	(4)	 	(3,460	)	(4)	
Asset impairments	 	 	—	 	 	 	65	 	(8)	
Non-GAAP Operating Income (Loss)	 	$	2,374	 	 	$	(4,637	)	 	
(1) $0.6 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) $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 condensed consolidated statements of income (loss).
(3)  $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).
(4) Includes non-cash change in fair value of equity investments held in the ADTRAN, Inc. Deferred Compensation Program for Employees, all of which is included in selling, general and administrative expenses on the condensed consolidated statements of income (loss).
(5) $0.3 million is included in total cost of revenue, $0.6 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).
(6) $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 condensed consolidated statements of income (loss).
(7) $0.1 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).
(8) Includes abandonment of certain information technology projects.

 

Supplemental Information
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
March 31,	 	 	 	
 	 	2021	 	 	2020	 	 	 	
Net Income (Loss)	 	$	896	 	 	$	(9,969	)	 	 	
Acquisition related expenses, amortizations and adjustments	 	 	1,045	 	 	 	1,358	 	 	 	
Stock-based compensation expense	 	 	1,807	 	 	 	1,791	 	 	 	
Restructuring expenses	 	 	301	 	 	 	553	 	 	 	
Deferred compensation adjustments (1)	 	 	268	 	 	 	(1,787	)	(3)	 	
Pension expense (2)	 	 	278	 	 	 	237	 	 	 	
Valuation allowance	 	 	2,685	 	 	 	6,090	 	 	 	
Asset impairments	 	 	—	 	 	 	65	 	 	 	
Tax effect of adjustments to net income (loss)	 	 	(952	)	 	 	(578	)	 	 	
Non-GAAP Net Income (Loss)	 	$	6,328	 	 	$	(2,240	)	 	 	
 	 	 	 	 	 	 	 	 	 	 	
Weighted average shares outstanding – basic	 	 	48,336	 	 	 	47,957	 	 	 	
Weighted average shares outstanding – diluted	 	 	49,004	 	 	 	47,957	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	
Earnings (loss) per common share - basic	 	$	0.02	 	 	$	(0.21	)	 	 	
Earnings (loss) per common share - diluted	 	$	0.02	 	 	$	(0.21	)	 	 	
 	 	 	 	 	 	 	 	 	 	 	
Non-GAAP earnings (loss) per common share - basic	 	$	0.13	 	 	$	(0.05	)	 	 	
Non-GAAP earnings (loss) per common share - diluted	 	$	0.13	 	 	$	(0.05	)	 	 	
(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.
(3) Includes net investment gain of $1.5 million related to the out-of-period remeasurement to historical cost basis of certain long-term investments held in the Company's stock as part of one of the Company’s deferred compensation plans.