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EQS-News: Adtran Holdings, Inc. Reports Preliminary Earnings for the Fourth Quarter of 2022 and Declares Quarterly Cash Dividend

EQS-News: Adtran Holdings, Inc. / Key word(s): Preliminary Results
Adtran Holdings, Inc. Reports Preliminary Earnings for the Fourth Quarter of 2022 and Declares Quarterly Cash Dividend

21.02.2023 / 05:00 CET/CEST
The issuer is solely responsible for the content of this announcement.

ADTRAN Holdings, Inc. Reports Preliminary Earnings for the Fourth Quarter of 2022 and Declares Quarterly Cash Dividend

HUNTSVILLE, Ala. — (February 20, 2023) — ADTRAN Holdings, Inc., (NASDAQ: ADTN and FSE: QH9) (“ADTRAN Holdings” or the “Company”), today announced preliminary and unaudited financial results for the fourth quarter of 2022. All figures in this release are approximate due to the preliminary nature of the announcement. For the quarter, preliminary revenue was $358.3 million. Preliminary net income inclusive of the non-controlling interest for the fourth quarter of 2022 was $35.0 million. Preliminary net income attributable to the Company for the fourth quarter of 2022 was $38.9 million and preliminary diluted earnings per share attributable to the Company was $0.49. Inclusive of non-controlling interests, preliminary non-GAAP net income was $15.7 million. Preliminary non-GAAP net income attributable to the Company was $9.9 million and preliminary non-GAAP diluted earnings per share attributable to the Company was $0.12. Non-GAAP net income and non-GAAP earnings per share exclude acquisition related expenses, amortizations, 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, restructuring expenses, 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, “Fourth quarter revenue was in the lower side of our guidance range at $358.3 million, as strength in optical networking solutions helped to offset delays in new product introductions. The supply environment has improved year-over-year, which had a positive effect on our gross margins. We also expect supply bottlenecks to continue to alleviate during 2023. Our strong growth in the EMEA region underlines our increased global presence with greater customer diversity as we move into an unprecedented network upgrade cycle.”

The Company also announced that its Board of Directors declared a cash dividend for the fourth 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 March 7, 2023. The ex-dividend date is March 6, 2023, and the payment date will be March 21, 2023.

The information contained in this press release is preliminary. Final results for the fourth quarter ended December 31, 2022 will be released on March 1, 2023.

The Company confirmed that it will hold a conference call to discuss its preliminary fourth quarter results on Tuesday, February 21, 2023, 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 investors.adtran.com approximately 10 minutes prior to the start of the call, click on the event “ADTRAN Holdings Releases 4th 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 investors.adtran.com or email at [email protected].

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 headquartered network innovator that empowers operators to deliver the cloud and mobile services that are vital to today’s society.

Cautionary Note Regarding Forward-Looking Statements

Statements contained in this press release which are not historical facts, such as those relating to strategy, outlook and financial guidance, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can also generally be identified by the use of words such as “believe,” “expect,” “intend,” “estimate,” “anticipate,” “will,” “may,” “could” and similar expressions. In addition, ADTRAN Holdings, through its senior management, may from time to time make forward-looking public statements concerning the matters described herein. All such projections and other forward-looking information speak only as of the date hereof, and ADTRAN Holdings undertakes no duty to publicly update or revise such forward-looking information, whether as a result of new information, future events, or otherwise, except to the extent as may be required by law. All such forward-looking statements are necessarily estimates and reflect management’s best judgment based upon current information. Actual events or results may differ materially from those anticipated in these forward-looking statements as a result of a variety of factors. While it is impossible to identify all such factors, factors which could cause actual events or results to differ materially from those estimated by ADTRAN Holdings include, but are not limited to: (i) risks and uncertainties related to manufacturing and supply chain constraints, including as a result of the continued impact of the SARS-CoV-2 coronavirus/COVID-19 global pandemic ; (ii) risks and uncertainties related to the completed business combination between the Company, ADTRAN and ADVA, including risks related to the ability to successfully integrate the ADTRAN’s and ADVA’s businesses, the disruption of management time from ongoing business operations due to integration efforts following the business combination, and 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; (iii) the risk of fluctuations in revenue due to lengthy sales and approval processes required by major and other service providers for new products; (iv) the risk posed by potential breaches of information systems and cyber-attacks; (v) the risks that ADTRAN may not be able to effectively compete, including through product improvements and development; and (vi) other risks set forth in ADTRAN Holdings’ public filings made with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2021 and Form 10‑Q for the quarterly period ended September 30, 2022, as well as its Form 10‑K for the year ended December 31, 2022 to be filed with the SEC.

Additionally, the financial measures presented herein are preliminary estimates and are subject to risks and uncertainties, including, among others, changes in connection with quarter-end adjustments. Any variation between the Company’s actual results and the preliminary financial information set forth herein may be material.

Explanation of Use of Non-GAAP Financial Measures

Set forth in the tables below are reconciliations of gross profit, gross margin, operating expenses, operating loss, other income (expense), net income inclusive of the non-controlling interest, net income attributable to the Company, net loss attributable to the no-controlling interest and earnings (loss) per share - basic and diluted, attributable to the Company, in each case as reported based on generally accepted accounting principles in the United States (“GAAP”), to non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, non-GAAP other income, non-GAAP net income inclusive of the non-controlling interest, non-GAAP net income attributable to the Company, non-GAAP net income attributable to the non-controlling interest, and non-GAAP earnings per share - basic and diluted, 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, restructuring expenses, 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 gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, non-GAAP other income, non-GAAP net income inclusive of the non-controlling interest, non-GAAP net income attributable to the Company, non-GAAP net income attributable to the non-controlling interest, and non-GAAP earnings per share - basic and diluted, 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 measures may not be comparable to similar measures calculated by other companies.

Investor Services/Assistance:

Rhonda Lambert/256-963-7450

[email protected]

Condensed Consolidated Balance Sheets

(Preliminary, Unaudited)

(In thousands)

ASSETS	December 31, 2022			December 31, 2021
Current Assets
Cash and cash equivalents	$	108,644		$	56,603
Restricted cash		—			215
Short-term investments		340			350
Accounts receivable, net		279,436			158,742
Other receivables		32,831			11,228
Inventory, net		427,531			139,891
Prepaid expenses and other current assets		33,577			9,296
Total Current Assets		882,359			376,325
Property, plant and equipment, net		111,493			55,766
Deferred tax assets, net		6,210			9,079
Goodwill		381,724			6,968
Intangibles, net		401,211			19,293
Other non-current assets		66,203			30,971
Long-term investments		32,665			70,615
Total Assets	$	1,881,865		$	569,017
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable		237,699			102,489
Revolving credit agreements outstanding		95,936			—
Notes payable		24,598			—
Unearned revenue		41,193			17,737
Accrued expenses and other liabilities		35,235			13,673
Accrued wages and benefits		44,882			14,900
Income tax payable, net		9,032			6,560
Total Current Liabilities		488,575			155,359
Non-current unearned revenue		19,239			9,271
Pension liability		10,624			11,402
Deferred compensation liability		26,668			31,383
Non-current lease obligations		22,807			3,269
Other non-current liabilities		10,339			1,231
Total Liabilities		578,252			211,915
Equity
Common stock		781			797
Additional paid-in capital		895,834			288,946
Accumulated other comprehensive income (loss)		46,713			(11,914	)
Retained earnings		55,338			740,820
Treasury stock		(4,125	)		(661,547	)
Non-controlling interest		309,072			—
Total Equity		1,303,613			357,102
Total Liabilities and Equity	$	1,881,865		$	569,017

Condensed Consolidated Statements of Income (Loss)

(Preliminary, Unaudited)

(In thousands, except per share data)

	Three Months Ended							Twelve Months Ended
	December 31,							December 31,
	2022			2021				2022			2021
Revenue
Network Solutions	$	317,487		$	138,809			$	916,793		$	498,834
Services & Support		40,784			15,349				108,743			64,170
Total Revenue		358,271			154,158				1,025,536			563,004
Cost of Revenue
Network Solutions		233,925			91,797				647,105			307,841
Services & Support		16,943			7,926				51,179			36,786
Total Cost of Revenue		250,868			99,723				698,284			344,627
Gross Profit		107,403			54,435				327,252			218,377
Selling, general and administrative expenses		78,243			35,141				208,889			124,414
Research and development expenses		61,570			26,532				173,757			108,663
Asset impairment		464			—				17,433			—
Operating Loss		(32,874	)		(7,238	)			(72,827	)		(14,700	)
Interest and dividend income		1,355			1,957				2,123			2,844
Interest expense		(2,010	)		(16	)			(3,437	)		(34	)
Net investment (loss) gain		(587	)		(1,181	)			(11,339	)		1,761
Other income, net		11,568			1,151				14,517			3,824
Loss Before Income Taxes		(22,548	)		(5,327	)			(70,963	)		(6,305	)
Income tax benefit (expense)		57,503			1,137				62,075			(2,330	)
Net Income (Loss)	$	34,955		$	(4,190	)		$	(8,888	)	$	(8,635	)
Less: Net Loss attributable to non-controlling interest		(3,926	)		—				(6,851	)		—
Net Income (Loss) attributable to ADTRAN Holdings, Inc.	$	38,881		$	(4,190	)		$	(2,037	)	$	(8,635	)

Weighted average shares outstanding – basic		77,659			48,914				62,346			48,582
Weighted average shares outstanding – diluted		79,243			48,914		⁽¹⁾		62,346			48,582

Earnings (Loss) per common share attributable to ADTRAN Holdings, Inc. – basic	$	0.50		$	(0.09	)		$	(0.03	)	$	(0.18	)
Earnings (Loss) per common share attributable to ADTRAN Holdings, Inc. – diluted	$	0.49		$	(0.09	)	⁽¹⁾	$	(0.03	)	$	(0.18	)

Condensed Consolidated Statements of Cash Flows

(Preliminary, Unaudited)

(In thousands)

	Twelve Months Ended December 31,
	2022			2021
Cash flows from operating activities:
Net (Loss) Income	$	(8,888	)	$	(8,635	)
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:
Depreciation and amortization		67,553			16,084
Asset impairments		17,433			—
Amortization of debt issuance cost		288			—
Amortization of net discount on available-for-sale investments		19			108
Loss (gain) on investments		9,826			(5,127	)
Net loss on disposal of property, plant and equipment		85			4
Stock-based compensation expense		28,322			7,480
Deferred income taxes		(62,388	)		(1,784	)
Inventory reserves		(7,250	)		(5,029	)
Change in operating assets and liabilities:
Accounts receivable, net		788			(60,864	)
Other receivables		(20,088	)		9,752
Inventory		(68,349	)		(10,638	)
Prepaid expenses other current assets and other assets		(6,367	)		(7,146	)
Accounts payable		28,105			53,270
Accrued expenses and other liabilities		(20,483	)		10,063
Income taxes payable		(2,151	)		5,470
Net cash (used in) provided by operating activities		(43,545	)		3,008
Cash flows from investing activities:
Purchases of property, plant and equipment		(18,453	)		(5,669	)
Proceeds from sales and maturities of available-for-sale investments		51,661			50,466
Purchases of available-for-sale investments		(23,899	)		(35,031	)
Proceeds from beneficial interests in securitized accounts receivable		1,126			—
Proceeds from disposals of property, plant and equipment		561			—
Insurance proceeds received		—			500
Acquisition of business, net of cash acquired		44,003			—
Net cash provided by investing activities		54,999			10,266
Cash flows from financing activities:
Tax withholdings related to stock-based compensation settlements		(6,070	)		(1,860	)
Proceeds from stock option exercises		6,904			6,431
Dividend payments		(22,885	)		(17,529	)
Proceeds from draw on revolving credit agreements		141,887			10,000
Repayment of revolving credit agreements		(48,000	)		(10,000	)
Payment of debt issuance cost		(3,015	)		—
Excess tax benefits from stock-based compensation arrangements		(4,253	)		—
Repayment of notes payable		(17,702	)		—
Net cash provided by (used in) financing activities		46,866			(12,958	)
Net increase (decrease) in cash and cash equivalents		58,320			316
Effect of exchange rate changes		(6,494	)		(3,677	)
Cash, cash equivalents and restricted cash, beginning of year		56,818			60,179
Cash, cash equivalents and restricted cash, end of year	$	108,644		$	56,818

Supplemental disclosure of cash financing activities
Cash paid for interest	$	1,728		$	13
Cash used in operating activities related to operating leases	$	5,229		$	1,892
Supplemental disclosure of non-cash investing activities
Right-of-use assets obtained in exchange for lease obligations	$	3,410		$	1,875
Purchases of property, plant and equipment included in accounts payable	$	1,165		$	638
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 Preliminary Gross Profit and Preliminary Gross Margin to Preliminary Non-GAAP Gross Profit and Preliminary Non-GAAP Gross Margin

(Unaudited)

(In thousands)

	Three Months Ended							Twelve Months Ended
Die wichtigsten Finanzdaten auf einen Blick
	2017	2018	2019	2020	2021	2022	2023e
Umsatzerlöse¹	556,66	462,36	406,45	356,57	440,45	858,64	882,75
EBITDA^1,2	44,30	-25,80	-19,81	5,58	1,22	-4,94	-98,13
EBITDA-Marge³	7,96	-5,58	-4,87	1,56	0,28	-0,58
EBIT^1,4	31,21	-39,68	-35,68	-7,95	-12,98	-68,21	-200,46
EBIT-Marge⁵	5,61	-8,58	-8,78	-2,23	-2,95	-7,94	-22,71
Jahresüberschuss¹	19,90	-16,98	-47,31	1,94	-7,62	-8,32	-234,94
Netto-Marge⁶	3,57	-3,67	-11,64	0,54	-1,73	-0,97	-26,62
Cashflow^1,7	-35,37	48,44	-2,21	-13,45	2,67	-41,42	-47,95
Ergebnis je Aktie⁸	0,49	-0,40	-0,99	0,04	-0,16	-0,03	-3,09
Dividende⁸	0,26	0,31	0,35	0,35	0,35	0,33	0,34

Quelle: boersengefluester.de und Firmenangaben

Geschäftsbericht 2022 - Kostenfrei herunterladen.

¹ in Mio. Euro; ² EBITDA = Ergebnis vor Zinsen, Steuern und Abschreibungen; ³ EBITDA in Relation zum Umsatz; ⁴ EBIT = Ergebnis vor Zinsen und Steuern; ⁵ EBIT in Relation zum Umsatz; ⁶ Jahresüberschuss (-fehlbetrag) in Relation zum Umsatz; ⁷ Cashflow aus der gewöhnlichen Geschäftstätigkeit; ⁸ in Euro; Quelle: boersengefluester.de

Wirtschaftsprüfer: PricewaterhouseCoopers

INVESTOR-INFORMATIONEN
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Adtran Holdings
WKN	Kurs in €	Einschätzung	Börsenwert in Mio. €
A3C7M6	4,502		356,18
KGV 2025e	KGV 10Y-Ø	BGFL-Ratio	Shiller-KGV
11,26	33,83	0,33	-14,71
KBV	KCV	KUV	EV/EBITDA
0,66	-	0,40	-4,62
Dividende '22 in €	Dividende '23e in €	Div.-Rendite '23e in %	Hauptversammlung
0,33	0,00	0,00	08.05.2024
Q1-Zahlen	Q2-Zahlen	Q3-Zahlen	Bilanz-PK
	09.08.2024		15.03.2024
Abstand 60Tage-Linie	Abstand 200Tage-Linie	Performance YtD	Performance 52 Wochen
-15,41%	-30,35%	-33,68%	-46,72%