ADTRAN Holdings, Inc. reports preliminary fourth quarter 2023 financial results
-
Preliminary Q4 revenue at
$225.5 million and at mid-point of guidance - Sequential improvement in preliminary GAAP and non-GAAP operating expenses in Q4, with a 7.6% reduction in GAAP operating expenses and a 15.1% reduction in non-GAAP operating expenses respectively
Preliminary GAAP gross margin for the quarter was 34.8% and improved by 483 bps year-over-year and 754 bps quarter-over-quarter. Besides lower purchasing and transportation costs, the main driver for this improvement were lower acquisition-related expenses, amortizations and adjustments. Additionally, the current quarter was negatively impacted by an inventory write-off of
Preliminary non-GAAP gross margin of 41.9% was positively impacted by a favorable customer and product mix. This compares to 40.3% in Q3 2023 and 39.1% in the year-ago quarter representing an increase of 155 bps sequentially and 277 bps year over year.
Preliminary GAAP operating margin for the fourth quarter was negative 16.7%, and it was negatively impacted by lower revenue and acquisition-related expenses, amortizations and adjustments. The company reduced GAAP operating expenses by 7.6% sequentially and 17.0% year-over-year.
Preliminary non-GAAP operating margin for the quarter was negative 1.4%, which was at the upper end of the guidance range of between -7% and 0% of revenues. The Company reduced non-GAAP operating expenses by 15.1% sequentially and 17.7% year-over-year.
Preliminary GAAP net loss attributable to the Company for the fourth quarter of 2023 was
Preliminary non-GAAP net loss attributable to the Company for the fourth quarter of 2023 was
ADTRAN Holdings’ Chairman and Chief Executive Officer
The Company confirmed that it will hold a conference call to discuss its preliminary fourth quarter results on
An online replay of the Company’s conference call, as well as the transcript 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 investor.relations@adtran.com.
Cautionary Note Regarding Forward-Looking Statements
Statements contained in this press release which are not historical facts, such as those relating to expectations regarding earnings, expenses and margin; the ability of ADTRAN Holdings’ to reduce expenses in the coming year and the amount thereof through the implementation of the business efficiency program; and ADTRAN Holdings’ strategy and outlook, 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,
Additionally, the financial measures presented herein are preliminary estimates, remain subject to our internal controls and procedures, 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 (expense) income, net (loss) income inclusive of the non-controlling interest, net (loss) income attributable to the Company, net income (loss) attributable to the non-controlling interest, and (loss) earnings per share - basic and diluted, attributable to the Company, in each case as reported based on generally accepted accounting principles in
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.
About Adtran
Published by
www.adtran.com
Condensed Consolidated Balance Sheets (Preliminary, Unaudited) (In thousands) |
||||||||
ASSETS |
|
|
|
|
|
|
||
Current Assets |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
87,167 |
|
|
$ |
108,644 |
|
Short-term investments |
|
|
— |
|
|
|
340 |
|
Accounts receivable, net |
|
|
216,445 |
|
|
|
279,435 |
|
Other receivables |
|
|
22,408 |
|
|
|
32,831 |
|
Inventory, net |
|
|
362,295 |
|
|
|
427,531 |
|
Prepaid expenses and other current assets |
|
|
45,565 |
|
|
|
33,577 |
|
Total Current Assets |
|
|
733,880 |
|
|
|
882,358 |
|
Property, plant and equipment, net |
|
|
123,020 |
|
|
|
110,699 |
|
Deferred tax assets, net |
|
|
25,787 |
|
|
|
67,839 |
|
|
|
|
353,415 |
|
|
|
381,724 |
|
Intangibles, net |
|
|
327,985 |
|
|
|
401,211 |
|
Other non-current assets |
|
|
87,706 |
|
|
|
66,998 |
|
Long-term investments |
|
|
27,743 |
|
|
|
32,665 |
|
Total Assets |
|
$ |
1,679,536 |
|
|
$ |
1,943,494 |
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
||
Current Liabilities |
|
|
|
|
|
|
||
Accounts payable |
|
$ |
162,922 |
|
|
$ |
237,699 |
|
Revolving credit agreements outstanding |
|
|
— |
|
|
|
35,936 |
|
Notes payable |
|
|
— |
|
|
|
24,598 |
|
Unearned revenue |
|
|
46,731 |
|
|
|
41,193 |
|
Accrued expenses and other liabilities |
|
|
37,607 |
|
|
|
35,235 |
|
Accrued wages and benefits |
|
|
27,030 |
|
|
|
44,882 |
|
Income tax payable, net |
|
|
2,245 |
|
|
|
9,032 |
|
Total Current Liabilities |
|
|
276,535 |
|
|
|
428,575 |
|
Non-current revolving credit agreement outstanding |
|
|
195,000 |
|
|
|
60,000 |
|
Deferred tax liabilities |
|
|
35,655 |
|
|
|
61,629 |
|
Non-current unearned revenue |
|
|
25,109 |
|
|
|
19,239 |
|
Non-current pension liability |
|
|
12,543 |
|
|
|
10,624 |
|
Deferred compensation liability |
|
|
29,039 |
|
|
|
26,668 |
|
Non-current lease obligations |
|
|
31,420 |
|
|
|
22,807 |
|
Other non-current liabilities |
|
|
28,657 |
|
|
|
10,339 |
|
Total Liabilities |
|
|
633,958 |
|
|
|
639,881 |
|
Redeemable Non-Controlling Interest |
|
|
451,756 |
|
|
|
— |
|
Equity |
|
|
|
|
|
|
||
Common stock |
|
|
790 |
|
|
|
781 |
|
Additional paid-in capital |
|
|
774,579 |
|
|
|
895,834 |
|
Accumulated other comprehensive income |
|
|
68,186 |
|
|
|
46,713 |
|
Retained (deficit) earnings |
|
|
(243,908 |
) |
|
|
55,338 |
|
|
|
|
(5,825 |
) |
|
|
(4,125 |
) |
Non-controlling interest |
|
|
— |
|
|
|
309,072 |
|
Total Equity |
|
|
593,822 |
|
|
|
1,303,613 |
|
Total Liabilities and Equity |
|
$ |
1,679,536 |
|
|
$ |
1,943,494 |
|
Condensed Consolidated Statements of (Loss) Income (Preliminary, Unaudited) (In thousands, except per share amounts) |
||||||||||||||||
|
|
Three Months Ended |
|
|
Twelve Months Ended |
|
||||||||||
|
|
|
|
|
|
|
||||||||||
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Network Solutions |
|
$ |
180,405 |
|
|
$ |
317,487 |
|
|
$ |
974,389 |
|
|
$ |
916,793 |
|
Services & Support |
|
|
45,074 |
|
|
|
40,784 |
|
|
|
174,711 |
|
|
|
108,743 |
|
Total Revenue |
|
|
225,479 |
|
|
|
358,271 |
|
|
|
1,149,100 |
|
|
|
1,025,536 |
|
Cost of Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Network Solutions |
|
|
126,248 |
|
|
|
233,925 |
|
|
|
722,582 |
|
|
|
647,105 |
|
Network Solutions - Inventory Write Down |
|
|
3,270 |
|
|
|
— |
|
|
|
24,313 |
|
|
|
— |
|
Services & Support |
|
|
17,496 |
|
|
|
16,943 |
|
|
|
69,142 |
|
|
|
51,179 |
|
Total Cost of Revenue |
|
|
147,014 |
|
|
|
250,868 |
|
|
|
816,037 |
|
|
|
698,284 |
|
Gross Profit |
|
|
78,465 |
|
|
|
107,403 |
|
|
|
333,063 |
|
|
|
327,252 |
|
Selling, general and administrative expenses |
|
|
61,262 |
|
|
|
78,243 |
|
|
|
258,149 |
|
|
|
208,889 |
|
Research and development expenses |
|
|
54,818 |
|
|
|
61,570 |
|
|
|
258,311 |
|
|
|
173,757 |
|
Asset impairment |
|
|
— |
|
|
|
464 |
|
|
|
— |
|
|
|
17,433 |
|
|
|
|
— |
|
|
|
— |
|
|
|
37,874 |
|
|
|
— |
|
Operating Loss |
|
|
(37,615 |
) |
|
|
(32,874 |
) |
|
|
(221,271 |
) |
|
|
(72,827 |
) |
Interest and dividend income |
|
|
1,157 |
|
|
|
1,355 |
|
|
|
2,340 |
|
|
|
2,123 |
|
Interest expense |
|
|
(4,441 |
) |
|
|
(2,010 |
) |
|
|
(16,299 |
) |
|
|
(3,437 |
) |
Net investment gain (loss) |
|
|
1,683 |
|
|
|
(587 |
) |
|
|
2,754 |
|
|
|
(11,339 |
) |
Other income, net |
|
|
(3,448 |
) |
|
|
11,568 |
|
|
|
1,266 |
|
|
|
14,517 |
|
Loss Before Income Taxes |
|
|
(42,664 |
) |
|
|
(22,548 |
) |
|
|
(231,210 |
) |
|
|
(70,963 |
) |
Income tax (expense) benefit |
|
|
(64,362 |
) |
|
|
57,503 |
|
|
|
(28,133 |
) |
|
|
62,075 |
|
Net (Loss) Income |
|
$ |
(107,026 |
) |
|
$ |
34,955 |
|
|
$ |
(259,343 |
) |
|
$ |
(8,888 |
) |
Net Income (loss) attributable to non-controlling interest |
|
|
2,919 |
|
|
|
(3,926 |
) |
|
|
8,345 |
|
|
|
(6,851 |
) |
Net (Loss) Income attributable to |
|
$ |
(109,945 |
) |
|
$ |
38,881 |
|
|
$ |
(267,688 |
) |
|
$ |
(2,037 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average shares outstanding – basic |
|
|
78,530 |
|
|
|
77,659 |
|
|
|
78,416 |
|
|
|
62,346 |
|
Weighted average shares outstanding – diluted |
|
|
78,530 |
|
|
|
79,243 |
|
|
|
78,416 |
|
|
|
62,346 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
(Loss) Earnings per common share attributable to |
|
$ |
(1.40 |
) |
|
$ |
0.50 |
|
|
$ |
(3.41 |
) |
|
$ |
(0.03 |
) |
(Loss) Earnings per common share attributable to |
|
$ |
(1.40 |
) |
|
$ |
0.49 |
|
|
$ |
(3.41 |
) |
|
$ |
(0.03 |
) |
Condensed Consolidated Statements of Cash Flows (Preliminary, Unaudited) (In thousands) |
||||||||
|
|
Twelve Months Ended
|
|
|||||
|
|
2023 |
|
|
2022 |
|
||
Cash flows from operating activities: |
|
|
|
|
|
|
||
Net Loss |
|
$ |
(259,343 |
) |
|
$ |
(8,888 |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
112,949 |
|
|
|
67,553 |
|
Asset impairment |
|
|
— |
|
|
|
17,433 |
|
|
|
|
37,874 |
|
|
|
— |
|
Amortization of debt issuance cost |
|
|
862 |
|
|
|
288 |
|
(Accretion) amortization on available-for-sale investments, net |
|
|
(22 |
) |
|
|
19 |
|
(Gain) loss on investments |
|
|
(2,900 |
) |
|
|
9,826 |
|
Net loss on disposal of property, plant and equipment |
|
|
458 |
|
|
|
152 |
|
Stock-based compensation expense |
|
|
16,016 |
|
|
|
28,322 |
|
Deferred income taxes |
|
|
15,558 |
|
|
|
(62,388 |
) |
Inventory write down |
|
|
24,313 |
|
|
|
— |
|
Inventory reserves |
|
|
25,546 |
|
|
|
(2,363 |
) |
Other, net |
|
|
(2,942 |
) |
|
|
— |
|
Change in operating assets and liabilities: |
|
|
|
|
|
|
||
Accounts receivable, net |
|
|
58,283 |
|
|
|
788 |
|
Other receivables |
|
|
10,560 |
|
|
|
(20,088 |
) |
Inventory |
|
|
20,537 |
|
|
|
(73,237 |
) |
Prepaid expenses other current assets and other assets |
|
|
(29,883 |
) |
|
|
(7,116 |
) |
Accounts payable |
|
|
(91,907 |
) |
|
|
28,105 |
|
Accrued expenses and other liabilities |
|
|
17,929 |
|
|
|
(20,483 |
) |
Income taxes payable, net |
|
|
(6,820 |
) |
|
|
(2,151 |
) |
Net cash used in operating activities |
|
|
(52,932 |
) |
|
|
(44,228 |
) |
Cash flows from investing activities: |
|
|
|
|
|
|
||
Purchases of property, plant and equipment |
|
|
(43,121 |
) |
|
|
(17,072 |
) |
Proceeds from sales and maturities of available-for-sale investments |
|
|
10,567 |
|
|
|
51,661 |
|
Purchases of available-for-sale investments |
|
|
(868 |
) |
|
|
(23,899 |
) |
Proceeds from beneficial interests in securitized accounts receivable |
|
|
8,547 |
|
|
|
1,126 |
|
Proceeds from disposals of property, plant and equipment |
|
|
— |
|
|
|
12 |
|
Insurance proceeds received |
|
|
— |
|
|
|
— |
|
Acquisition of business, net of cash acquired |
|
|
— |
|
|
|
44,003 |
|
Net cash (used in) provided by investing activities |
|
|
(24,875 |
) |
|
|
55,831 |
|
Cash flows from financing activities: |
|
|
|
|
|
|
||
Tax withholdings related to stock-based compensation settlements |
|
|
(6,459 |
) |
|
|
(4,253 |
) |
Proceeds from stock option exercises |
|
|
540 |
|
|
|
6,904 |
|
Dividend payments |
|
|
(21,237 |
) |
|
|
(22,885 |
) |
Proceeds from receivables purchase agreement |
|
|
14,099 |
|
|
|
— |
|
Proceeds from draw on revolving credit agreements |
|
|
163,733 |
|
|
|
141,887 |
|
Repayment of revolving credit agreements |
|
|
(64,987 |
) |
|
|
(48,000 |
) |
Redemption of redeemable non-controlling interest |
|
|
(1,224 |
) |
|
|
— |
|
Payment of debt issuance cost |
|
|
(708 |
) |
|
|
(3,015 |
) |
Repayment of notes payable |
|
|
(24,891 |
) |
|
|
(17,702 |
) |
Net cash provided by financing activities |
|
|
58,866 |
|
|
|
52,936 |
|
Net (decrease) increase in cash and cash equivalents |
|
|
(18,941 |
) |
|
|
64,539 |
|
Effect of exchange rate changes |
|
|
(2,536 |
) |
|
|
(12,713 |
) |
Cash and cash equivalents, beginning of year |
|
|
108,644 |
|
|
|
56,818 |
|
Cash and cash equivalents, end of year |
|
$ |
87,167 |
|
|
$ |
108,644 |
|
|
|
|
|
|
|
|
||
Supplemental disclosure of cash financing activities |
|
|
|
|
|
|
||
Cash paid for interest |
|
$ |
12,596 |
|
|
$ |
1,728 |
|
Cash paid for income taxes |
|
$ |
18,552 |
|
|
$ |
3,832 |
|
Cash used in operating activities related to operating leases |
|
$ |
9,682 |
|
|
$ |
5,229 |
|
Supplemental disclosure of non-cash investing activities |
|
|
|
|
|
|
||
Right-of-use assets obtained in exchange for lease obligations |
|
$ |
17,865 |
|
|
$ |
3,410 |
|
Purchases of property, plant and equipment included in accounts payable |
|
$ |
1,298 |
|
|
$ |
1,165 |
|
Adtran Networks common shares exchanged in acquisition |
|
$ |
— |
|
|
$ |
565,491 |
|
Adtran Networks options assumed in acquisition |
|
$ |
— |
|
|
$ |
12,769 |
|
Non-controlling interest related to Adtran Networks |
|
$ |
— |
|
|
$ |
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 |
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Total Revenue |
|
$ |
225,479 |
|
|
$ |
272,331 |
|
|
$ |
358,271 |
|
|
|
$ |
1,149,100 |
|
|
$ |
1,025,536 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cost of Revenue |
|
$ |
147,014 |
|
|
$ |
198,094 |
|
|
$ |
250,868 |
|
|
|
$ |
816,037 |
|
|
$ |
698,284 |
|
Acquisition-related expenses, amortization and adjustments(1) |
|
|
(10,048 |
) |
|
|
(13,537 |
) |
|
|
(31,577 |
) |
|
|
|
(89,602 |
) |
|
|
(57,108 |
) |
Stock-based compensation expense |
|
|
(440 |
) |
|
|
(279 |
) |
|
|
(1,287 |
) |
|
|
|
(1,294 |
) |
|
|
(2,876 |
) |
Pension adjustments |
|
|
— |
|
|
|
— |
|
|
|
144 |
|
|
|
|
— |
|
|
|
85 |
|
Restructuring expenses(2) |
|
|
(5,517 |
) |
|
|
(21,630 |
) |
|
|
(8 |
) |
|
|
|
(27,223 |
) |
|
|
(8 |
) |
Integration expenses(3) |
|
|
39 |
|
|
|
(154 |
) |
|
|
— |
|
|
|
|
(115 |
) |
|
|
— |
|
Non-GAAP Cost of Revenue |
|
$ |
131,048 |
|
|
$ |
162,494 |
|
|
$ |
218,140 |
|
|
|
$ |
697,803 |
|
|
$ |
638,377 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Gross Profit |
|
$ |
78,465 |
|
|
$ |
74,237 |
|
|
$ |
107,403 |
|
|
|
$ |
333,063 |
|
|
$ |
327,252 |
|
Non-GAAP Gross Profit |
|
$ |
94,431 |
|
|
$ |
109,837 |
|
|
$ |
140,131 |
|
|
|
$ |
451,297 |
|
|
$ |
387,159 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Gross Margin |
|
|
34.8 |
% |
|
|
27.3 |
% |
|
|
30.0 |
% |
|
|
|
29.0 |
% |
|
|
31.9 |
% |
Non-GAAP Gross Margin |
|
|
41.9 |
% |
|
|
40.3 |
% |
|
|
39.1 |
% |
|
|
|
39.3 |
% |
|
|
37.8 |
% |
(1) Includes intangible amortization of backlog, inventory fair value adjustments, developed technology, customer relationships, and trade names acquired in connection with business combinations. (2) Includes expenses for restructuring program designed to optimize the assets and business processes following the business combination with Adtran Networks SE. The restructuring program commenced upon the closing of the business combination with Adtran Networks SE and is expected to be completed in late 2024.
(3) Includes expenses related to the Company's one-time integration bonus program in connection with synergy targets as a result of the business combination with Adtran Networks SE of which |
Supplemental Information Reconciliation of Preliminary Operating Expenses to Preliminary Non-GAAP Operating Expenses (Unaudited) (In thousands) |
||||||||||||||||||||
|
Three Months Ended |
|
|
Twelve Months Ended |
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Operating Expenses |
$ |
116,080 |
|
|
$ |
125,659 |
|
|
$ |
139,813 |
|
|
$ |
516,460 |
|
|
$ |
382,646 |
|
|
Acquisition-related expenses, amortization and adjustments |
|
(4,150 |
) |
(1) |
|
(4,534 |
) |
(6) |
|
(8,328 |
) |
(10) |
|
(17,666 |
) |
(14) |
|
(27,561 |
) |
(18) |
Stock-based compensation expense |
|
(3,181 |
) |
(2) |
|
(3,251 |
) |
(7) |
|
(11,095 |
) |
(11) |
|
(13,864 |
) |
(15) |
|
(25,418 |
) |
(19) |
Restructuring expenses |
|
(7,859 |
) |
(3) |
|
(3,243 |
) |
(8) |
|
(1,618 |
) |
(12) |
|
(19,331 |
) |
(16) |
|
(1,620 |
) |
(20) |
Integration expenses |
|
(1,928 |
) |
(4) |
|
(1,485 |
) |
(9) |
|
— |
|
|
|
(4,825 |
) |
(17) |
|
|
|
|
Pension adjustments |
|
— |
|
|
|
— |
|
|
|
43 |
|
(13) |
|
— |
|
|
|
(142 |
) |
(21) |
Deferred compensation adjustments(5) |
|
(1,324 |
) |
|
|
1,801 |
|
|
|
(168 |
) |
|
|
390 |
|
|
|
7,005 |
|
|
Non-GAAP Operating Expenses |
$ |
97,638 |
|
|
$ |
114,947 |
|
|
$ |
118,647 |
|
|
$ |
461,164 |
|
|
$ |
334,910 |
|
|
(1) Includes intangible amortization of developed technology, customer relationships, and trade names acquired in connection with business combinations, of which
(2)
(3)
(4)
(5) Includes non-cash change in fair value of equity investments held in the
(6) Includes intangible amortization of developed technology, customer relationships, and trade names acquired in connection with business combinations, of which
(7)
(8)
(9)
(10) Includes intangible amortization of developed technology, customer relationships, and trade names acquired in connection with business combinations, of which
(11)
(12)
(13)
(14) Includes intangible amortization of developed technology, customer relationships, and trade names acquired in connection with business combinations, of which
(15)
(16)
(17)
(18) Includes intangible amortization of developed technology, customer relationships, and trade names acquired in connection with business combinations, and certain one-time transaction expenses of which
(19)
(20)
(21) |
Supplemental Information Reconciliation of Preliminary Operating Loss to Preliminary Non-GAAP Operating (Loss) Income (Unaudited) (In thousands) |
||||||||||||||||||||
|
Three Months Ended |
|
|
Twelve Months Ended |
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Operating Loss |
$ |
(37,615 |
) |
|
$ |
(89,296 |
) |
|
$ |
(32,874 |
) |
|
$ |
(221,271 |
) |
|
$ |
(72,827 |
) |
|
Acquisition related expenses, amortizations and adjustments(1) |
|
14,198 |
|
|
|
18,070 |
|
|
|
39,904 |
|
|
|
107,267 |
|
|
|
84,667 |
|
|
Asset impairments(2) |
|
— |
|
|
|
— |
|
|
|
463 |
|
|
|
— |
|
|
|
17,432 |
|
|
Stock-based compensation expense |
|
3,621 |
|
|
|
3,530 |
|
|
|
12,383 |
|
|
|
15,158 |
|
|
|
28,295 |
|
|
Pension adjustments |
|
— |
|
|
|
— |
|
|
|
(187 |
) |
|
|
— |
|
|
|
57 |
|
|
Restructuring expenses(3) |
|
13,376 |
|
|
|
24,873 |
|
|
|
1,627 |
|
|
|
46,554 |
|
|
|
1,629 |
|
|
Integration expenses(4) |
|
1,890 |
|
|
|
1,639 |
|
|
|
— |
|
|
|
4,941 |
|
|
|
— |
|
|
Deferred compensation adjustments(5) |
|
1,324 |
|
|
|
(1,801 |
) |
|
|
168 |
|
|
|
(390 |
) |
|
|
(7,005 |
) |
|
|
|
— |
|
|
|
37,874 |
|
|
|
— |
|
|
|
37,874 |
|
|
|
— |
|
|
Non-GAAP Operating (Loss) Income |
$ |
(3,206 |
) |
|
$ |
(5,111 |
) |
|
$ |
21,484 |
|
|
$ |
(9,867 |
) |
|
$ |
52,248 |
|
|
(1) Includes intangible amortization of backlog, inventory fair value adjustments, developed technology, customer relationships, and trade names acquired in connection with business combinations. (2) Includes impairment charges related to the abandonment of certain information technology projects due to the business combination.
(3) Includes expenses for restructuring program designed to optimize the assets and business processes following the business combination with Adtran Networks SE. These expenses include inventory write down charges totaling approximately (4) Includes expenses related to the Company's one-time integration bonus program in connection with synergy targets as a result of the business combination with Adtran Networks SE. Additionally, includes legal and advisory fees relating to a contemplated capital raise transactions as part of the integration. Includes fees incurred for the expansion of internal controls at Adtran Networks SE and the implementation of the DPTLA.
(5) Includes non-cash change in fair value of equity investments held in the (6) Includes non-cash goodwill impairment charge related to our Services and Support reporting unit. The impairment primarily resulted from a decrease in projected revenue growth rates and EBITDA margins. |
Supplemental Information Reconciliation of Preliminary Other (Expense) Income to Preliminary Non-GAAP Other (Expense) Income (Unaudited) (In thousands) |
|||||||||||||||||||||
|
|
Three Months Ended |
|
|
|
Twelve Months Ended |
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest and dividend income |
|
$ |
1,157 |
|
|
$ |
521 |
|
|
$ |
1,355 |
|
|
|
$ |
2,340 |
|
|
$ |
2,123 |
|
Interest expense |
|
|
(4,441 |
) |
|
|
(4,507 |
) |
|
|
(2,010 |
) |
|
|
|
(16,299 |
) |
|
|
(3,437 |
) |
Net investment gain (loss) |
|
|
1,683 |
|
|
|
(1,443 |
) |
|
|
(587 |
) |
|
|
|
2,754 |
|
|
|
(11,339 |
) |
Other (expense) income, net |
|
|
(3,448 |
) |
|
|
2,523 |
|
|
|
11,568 |
|
|
|
|
1,266 |
|
|
|
14,517 |
|
Total Other (Expense) Income |
|
$ |
(5,049 |
) |
|
$ |
(2,906 |
) |
|
$ |
10,326 |
|
|
|
$ |
(9,939 |
) |
|
$ |
1,864 |
|
Deferred compensation adjustments (1) |
|
|
(1,590 |
) |
|
|
1,117 |
|
|
|
(349 |
) |
|
|
|
(2,977 |
) |
|
|
6,211 |
|
Pension expense (2) |
|
|
6 |
|
|
|
7 |
|
|
|
77 |
|
|
|
|
26 |
|
|
|
333 |
|
Non-GAAP Other (Expense) Income |
|
$ |
(6,633 |
) |
|
$ |
(1,782 |
) |
|
$ |
10,054 |
|
|
|
$ |
(12,890 |
) |
|
$ |
8,408 |
|
(1) Includes non-cash change in fair value of equity investments held in the (2) Includes amortization of actuarial losses related to the Company's pension plan for employees in certain foreign countries. |
Supplemental Information Reconciliation of Preliminary Net (Loss) Income inclusive of Non-Controlling Interest to Preliminary Non-GAAP Net (Loss) Income inclusive of Non-Controlling Interest (Unaudited) and Reconciliation of Preliminary Net Income (Loss) attributable to Non-Controlling Interest to Preliminary Non-GAAP Net Income attributable to Non-Controlling Interest (Unaudited) and
Reconciliation of Preliminary Net (Loss) Income attributable to
Preliminary (Loss) Earnings per Common Share attributable to
Preliminary Non-GAAP Net (Loss) Income attributable to
Preliminary Non-GAAP (Loss) Earnings per Common Share attributable to (Unaudited) (In thousands, except per share amounts) |
||||||||||||||||||||||
|
|
Three Months Ended |
|
|
|
Twelve Months Ended |
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net (Loss) income attributable to |
|
$ |
(109,945 |
) |
|
$ |
(78,563 |
) |
|
$ |
38,881 |
|
|
|
$ |
(267,688 |
) |
|
$ |
(2,037 |
) |
|
Net Income (loss) attributable to non-controlling interest(1) |
|
|
2,919 |
|
|
|
2,914 |
|
|
|
(3,926 |
) |
|
|
|
8,345 |
|
|
|
(6,851 |
) |
|
Net (Loss) income inclusive of non-controlling interest |
|
$ |
(107,026 |
) |
|
$ |
(75,649 |
) |
|
$ |
34,955 |
|
|
|
$ |
(259,343 |
) |
|
$ |
(8,888 |
) |
|
Acquisition related expenses, amortization and adjustments |
|
|
14,198 |
|
|
|
18,070 |
|
|
|
39,904 |
|
|
|
|
107,267 |
|
|
|
84,667 |
|
|
Asset impairments |
|
|
— |
|
|
|
— |
|
|
|
463 |
|
|
|
|
— |
|
|
|
17,432 |
|
|
Stock-based compensation expense |
|
|
3,621 |
|
|
|
3,530 |
|
|
|
12,383 |
|
|
|
|
15,158 |
|
|
|
28,295 |
|
|
Deferred compensation adjustments (2) |
|
|
(267 |
) |
|
|
(684 |
) |
|
|
(182 |
) |
|
|
|
(3,368 |
) |
|
|
(794 |
) |
|
Pension adjustments (3) |
|
|
6 |
|
|
|
7 |
|
|
|
(109 |
) |
|
|
|
26 |
|
|
|
390 |
|
|
Restructuring expenses |
|
|
13,376 |
|
|
|
24,873 |
|
|
|
1,627 |
|
|
|
|
46,554 |
|
|
|
1,629 |
|
|
Integration expenses |
|
|
1,890 |
|
|
|
1,639 |
|
|
|
— |
|
|
|
|
4,941 |
|
|
|
— |
|
|
|
|
|
— |
|
|
|
37,874 |
|
|
|
— |
|
|
|
|
37,874 |
|
|
|
— |
|
|
Tax effect of adjustments to net (loss) income |
|
|
(8,735 |
) |
|
|
(23,366 |
) |
|
|
(12,463 |
) |
|
|
|
(57,834 |
) |
|
|
(29,892 |
) |
|
Non-GAAP Net (Loss) income inclusive of non-controlling interest |
|
$ |
(82,937 |
) |
|
$ |
(13,706 |
) |
|
$ |
76,578 |
|
|
|
$ |
(108,725 |
) |
|
$ |
92,839 |
|
|
Net Income attributable to non-controlling interest(1) |
|
|
2,919 |
|
|
|
2,914 |
|
|
|
5,769 |
|
|
|
|
9,874 |
|
|
|
10,255 |
|
|
Non-GAAP Net (Loss) income attributable to |
|
$ |
(85,856 |
) |
|
$ |
(16,620 |
) |
|
$ |
70,809 |
|
|
|
$ |
(118,599 |
) |
|
$ |
82,584 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
GAAP Net Income (loss) attributable to non-controlling interest (1) |
|
$ |
2,919 |
|
|
$ |
2,914 |
|
|
$ |
(3,926 |
) |
|
|
$ |
8,345 |
|
|
$ |
(6,851 |
) |
|
Acquisition related expenses, amortizations and adjustments |
|
|
— |
|
|
|
— |
|
|
|
9,039 |
|
|
|
|
1,457 |
|
|
|
16,159 |
|
|
Restructuring expenses |
|
|
— |
|
|
|
— |
|
|
|
402 |
|
|
|
|
29 |
|
|
|
402 |
|
|
Integration expenses |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
6 |
|
|
|
— |
|
|
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
300 |
|
|
|
|
37 |
|
|
|
531 |
|
|
Pension adjustments(3) |
|
|
— |
|
|
|
— |
|
|
|
(46 |
) |
|
|
|
— |
|
|
|
14 |
|
|
Non-GAAP Net Income attributable to non-controlling interest (1) |
|
$ |
2,919 |
|
|
$ |
2,914 |
|
|
$ |
5,769 |
|
|
|
$ |
9,874 |
|
|
$ |
10,255 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Weighted average shares outstanding – basic |
|
|
78,530 |
|
|
|
78,389 |
|
|
|
77,659 |
|
|
|
|
78,416 |
|
|
|
62,346 |
|
|
Weighted average shares outstanding – diluted |
|
|
78,530 |
|
|
|
78,389 |
|
|
|
79,243 |
|
|
|
|
78,416 |
|
|
|
62,346 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
(Loss) earnings per common share attributable to |
|
$ |
(1.40 |
) |
|
$ |
(1.00 |
) |
|
$ |
0.50 |
|
|
|
$ |
(3.41 |
) |
|
$ |
(0.03 |
) |
|
(Loss) earnings per common share attributable to |
|
$ |
(1.40 |
) |
|
$ |
(1.00 |
) |
|
$ |
0.49 |
|
|
|
$ |
(3.41 |
) |
|
$ |
(0.03 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Non-GAAP (Loss) earnings per common share attributable to |
|
$ |
(1.09 |
) |
|
$ |
(0.21 |
) |
|
$ |
0.91 |
|
|
|
$ |
(1.51 |
) |
|
$ |
1.32 |
|
|
Non-GAAP (Loss) earnings per common share attributable to |
|
$ |
(1.09 |
) |
|
$ |
(0.21 |
) |
|
$ |
0.89 |
|
|
|
$ |
(1.51 |
) |
|
$ |
1.32 |
|
|
(1) Represents the non-controlling interest portion of the Company's ownership of Adtran Networks pre-DPLTA and the annual recurring compensation earned by redeemable non-controlling interests and accrued by the Company post-DPLTA. (2) Includes non-cash change in fair value of equity investments held in deferred compensation plans offered to certain employees. (3) Includes amortization of actuarial losses related to the Company's pension plan for employees in certain foreign countries.. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240226381369/en/
For media
+44 1904 699 358
public.relations@adtran.com
For investors
+49 89 890 665 918
investor@adtran.com
Source: