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 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 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  

Investor.relations@adtran.com

 

 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     December 31, 2022     September 30, 2022     December 31, 2021       December 31, 2022     December 31, 2021   Net Income (loss) attributable to ADTRAN Holdings, Inc. $ 358,271     $ 340,709     $ 154,158       $ 1,025,536     $ 563,004                                   Cost of Revenue $ 250,868     $ 237,682     $ 99,723       $ 698,284     $ 344,627   Acquisition-related expenses, amortizations and adjustments   (31,577 ) (1)   (25,530 ) (3)   —         (57,108 ) (5)   (12 ) Stock-based compensation expense   (1,287 ) (2)   (1,269 ) (4)   (154 )       (2,876 ) (6)   (543 ) Pension adjustments   144       (59 )     —         85       —   Restructuring expenses   (8 )     —       —         (8 )     (15 ) Non-GAAP Cost of Revenue $ 218,140     $ 210,824     $ 99,569       $ 638,377     $ 344,057                                   Gross Profit $ 107,403     $ 103,027     $ 54,435       $ 327,252     $ 218,377   Non-GAAP Gross Profit $ 140,131     $ 129,885     $ 54,589       $ 387,159     $ 218,947                                   Gross Margin   30.0 %     30.2 %     35.3 %       31.9 %     38.8 % Non-GAAP Gross Margin   39.1 %     38.1 %     35.4 %       37.8 %     38.9 %

 

(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 $31.6 million is included in total cost of revenue, on the condensed consolidated statements of income (loss).
(2) Includes $1.0 million of cost of revenue expenses incremental stock-based award modification expense related to the business combination on the condensed consolidated statements of income (loss).
(3) 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, on the condensed consolidated statements of income (loss).
(4) Includes $1.0 million of cost of revenue expenses incremental stock-based award modification expense related to the business combination on the condensed consolidated statements of income (loss).
(5) 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 $57.1 million is included in total cost of revenue, on the condensed consolidated statements of income (loss).
(6) Includes $2.0 million of cost of revenue expenses incremental stock-based award modification expense related to the business combination on the condensed consolidated statements of income (loss).

 

Supplemental Information

Reconciliation of Preliminary Operating Expenses to Preliminary Non-GAAP Operating Expenses

(Unaudited)

(In thousands)

 

  Three Months Ended       Twelve Months Ended       December 31, 2022     September 30, 2022     December 31, 2021       December 31, 2022     December 31, 2021     Operating Expenses $ 139,813     $ 134,076     $ 61,673       $ 382,646     $ 233,077     Acquisition-related expenses, amortizations and adjustments   (8,328 )  (1)   (14,780 )  (6)   (6,529 )  (9)     (27,561 )  (12)   (15,988 )  (16) Stock-based compensation expense   (11,095 )  (2)   (10,862 )  (7)   (1,869 )  (10)     (25,418 )  (13)   (6,937 )  (17) Restructuring expenses   (1,618 )  (3)   —       (102 )  (11)     (1,620 )  (14)   (395 )  (18) Pension adjustments   43    (4)   (185 )  (8)   —         (142 )  (15)   —     Deferred compensation adjustments   (168 )  (5)   740    (5)   2    (5)     7,005    (5)   (2,089 )  (5) Non-GAAP Operating Expenses $ 118,647     $ 108,989     $ 53,175       $ 334,910     $ 207,668    

(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 $7.8 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) $9.4 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 $7.3 million in selling, general and administrative expenses and $0.6 million is included in research and development expenses incremental stock-based award modification expense related to the business combination.

(3) $0.1 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).

(4) $0.2 million is included in selling, general and administrative expenses and ($0.3) 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) 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 $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).

(7) $9.2 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 $7.3 million in selling, general and administrative expenses and $0.6 million is included in research and development expenses incremental stock-based award modification expense related to the business combination.

(8) Less than $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).

(9) 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 $6.0 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).

(10) $1.3 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).

(11) Less than $0.1 million is included in selling, general and administrative expenses and less than $0.1 million is included in research and development expenses on the condensed consolidated statements of income (loss).

(12) 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 $25.6 million is included in selling, general and administrative expenses and $1.9 million is included in research and development expenses on the condensed consolidated statements of income (loss).

(13) $20.8 million is included in selling, general and administrative expenses and $4.6 million is included in research and development expenses on the condensed consolidated statements of income (loss). Includes $14.6 million in selling, general and administrative expenses and $1.2 million is included in research and development expenses incremental stock-based award modification expense related to the business combination.

(14) $0.1 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).

(15) $0.3 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).

(16) 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 $14.1 million is included in selling, general and administrative expenses and $1.9 million is included in research and development expenses on the condensed consolidated statements of income (loss).

(17) $4.6 million is included in selling, general and administrative expenses and $2.3 million is included in research and development expenses on the condensed consolidated statements of income (loss).

(18) $0.2 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 Preliminary Operating Loss to Preliminary Non-GAAP Operating Income

(Unaudited)

(In thousands)

 

  Three Months Ended       Twelve Months Ended       December 31, 2022     September 30, 2022     December 31, 2021       December 31, 2022     December 31, 2021     Operating Loss $ (32,874 )   $ (48,018 )   $ (7,238 )     $ (72,827 )   $ (14,700 )   Acquisition related expenses, amortizations and adjustments   39,904       40,310       6,529         84,667       15,999     Asset impairments   463       16,969       —         17,432       —     Stock-based compensation expense   12,383       12,131       2,023         28,295       7,480     Pension adjustments   (187 )     244       —         57       —     Restructuring expenses   1,627       —       102         1,629       411     Deferred compensation adjustments (1)   168       (740 )     (2 )       (7,005 )     2,089     Non-GAAP Operating Income $ 21,484     $ 20,896     $ 1,414       $ 52,248     $ 11,279    

 

(1) 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).

 

Supplemental Information

Reconciliation of Preliminary Other Income (Expense) to Preliminary Non-GAAP Other Income

(Unaudited)

(In thousands)

 

  Three Months Ended       Twelve Months Ended     December 31, 2022     September 30, 2022     December 31, 2021       December 31, 2022     December 31, 2021   Interest and dividend income $ 1,355     $ 347     $ 1,957       $ 2,123     $ 2,844   Interest expense   (2,010 )     (1,303 )     (16 )       (3,437 )     (34 ) Net investment (loss) gain   (587 )     (2,691 )     (1,181 )       (11,339 )     1,761   Other income (expense), net   11,568       2,494       1,151         14,517       3,824   Total Other Income (Expense) $ 10,326     $ (1,153 )   $ 1,911       $ 1,864     $ 8,395   Deferred compensation adjustments (1)   (349 )     1,124       673         6,211       (864 ) Pension expense (2)   77       81       263         333       1,088   Non-GAAP Other Income $ 10,054     $ 52     $ 2,847       $ 8,408     $ 8,619  

(1) Includes non-cash change in fair value of equity investments held in the ADTRAN Holdings, Inc. Deferred Compensation Program for Employees.

(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 Income (Loss) inclusive of Non-Controlling Interest to

Preliminary Non-GAAP Net Income (Loss) inclusive of Non-Controlling Interest

(Unaudited)

 

and

 

Reconciliation of Preliminary Net Loss attributable to Non-Controlling Interest to

Preliminary Non-GAAP Net Income attributable to Non-Controlling Interest

(Unaudited)

 

and

 

Reconciliation of Preliminary Net Income (Loss) attributable to ADTRAN Holdings, Inc. and

Preliminary Earnings (Loss) per Common Share attributable to ADTRAN Holdings, Inc. – Basic and Diluted to

Preliminary Non-GAAP Net Income attributable to ADTRAN Holdings, Inc. and

Preliminary Non-GAAP Earnings per Common Share attributable to ADTRAN Holdings, Inc. – Basic and Diluted

(Unaudited)

 

(In thousands, except per share amounts)

 

    Three Months Ended       Twelve Months Ended         December 31, 2022     September 30, 2022     December 31, 2021       December 31, 2022     December 31, 2021     Net Income (loss) attributable to ADTRAN Holdings, Inc.   $ 38,881     $ (41,934 )   $ (4,190 )     $ (2,037 )   $ (8,635 )   Plus: Net Loss attributable to non-controlling interest (1)     (3,926 )     (2,925 )     —         (6,851 )     —     Net Income (loss) inclusive of non-controlling interest   $ 34,955     $ (44,859 )   $ (4,190 )     $ (8,888 )   $ (8,635 )   Acquisition related expenses, amortizations and adjustments     39,904       40,310       6,529         84,667       15,999     Asset impairments     463       16,969       —         17,432       —     Stock-based compensation expense     12,383       12,131       2,023         28,295       7,480     Valuation allowance     (60,908 )     3,182       333         (45,358 )     4,746     Deferred compensation adjustments(2)     (182 )     383       673         (794 )     1,225     Pension adjustments(3)     (109 )     325       263         390       1,088     Restructuring expenses     1,627       —       102         1,629       411     Tax effect of adjustments to net income (loss)     (12,463 )     (16,245 )     (1,016 )       (29,892 )     (3,947 )   Non-GAAP Net Income inclusive of non-controlling interest   $ 15,670     $ 12,196     $ 4,717       $ 47,481     $ 18,367     Less: Non-GAAP Net Income attributable to non-controlling interest (1)     5,769       4,486       —         10,255       —     Non-GAAP Net Income attributable to ADTRAN Holdings, Inc.   $ 9,901     $ 7,710     $ 4,717       $ 37,226     $ 18,367                                         GAAP Net Loss attributable to non-controlling interest (1)   $ (3,926 )   $ (2,925 )   $ —       $ (6,851 )   $ —     Acquisition related expenses, amortizations and adjustments     9,039       7,120       —         16,159       —     Restructuring expenses     402       —       —         402       —     Stock-based compensation expense     300       231       —         531       —     Pension adjustments (3)     (46 )     60       —         14       —     Non-GAAP Net Income attributable to non-controlling interest (1)   $ 5,769     $ 4,486     $ —       $ 10,255     $ —                                         Weighted average shares outstanding – basic     77,659       73,036       48,914         62,346       48,582     Weighted average shares outstanding – diluted     79,243       73,036       48,914         62,346       48,582                                         Earnings (loss) per common share attributable to ADTRAN Holdings, Inc. - basic   $ 0.50     $ (0.57 )   $ (0.09 )     $ (0.03 )   $ (0.18 )   Earnings (loss) per common share attributable to ADTRAN Holdings, Inc. - diluted   $ 0.49     $ (0.57 )   $ (0.09 )     $ (0.03 )   $ (0.18 )                                       Non-GAAP Earnings per common share attributable to ADTRAN Holdings, Inc. - basic   $ 0.13     $ 0.11     $ 0.10       $ 0.60     $ 0.38     Non-GAAP Earnings per common share attributable to ADTRAN Holdings, Inc. - diluted   $ 0.12     $ 0.11     $ 0.10       $ 0.60     $ 0.38    

(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) Represents the non-controlling interest portion of the Company's ownership of ADVA.


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Language: English Company: Adtran Holdings, Inc. 901 Explorer Boulevard 35806 Huntsville United States Internet: www.adtran.com ISIN: US00486H1059 WKN: 892015 Indices: MDAX, TecDAX Listed: Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Munich, Stuttgart; Nasdaq EQS News ID: 1564329
  End of News EQS News Service

1564329  21.02.2023 CET/CEST