Adtran Boosts Q2 Sales, Income

HUNTSVILLE, Ala. -- ADTRAN, Inc. (NASDAQ:ADTN) reported results for the second quarter ended June 30, 2003. Sales were $90,437,000 for the quarter compared to $85,784,000 for the second quarter of 2002. Net income increased 149% to $12,379,000 for the quarter compared to $4,967,000 for the second quarter of 2002. Earnings per share, assuming dilution, were $0.31 for the quarter compared to $0.13 for the second quarter of 2002. Net income increased 104% for the quarter compared to pro-forma net income of $6,076,000 for the second quarter of 2002. Pro-forma earnings per share were $0.16 for the second quarter of 2002. Pro-forma net income and pro-forma earnings per share for the second quarter of 2002 excluded the effect of an impairment charge primarily related to other than temporary declines in the fair value of marketable equity securities and write-downs of private securities. A reconciliation of pro-forma net income and pro-forma earnings per share to net income and earnings per share is included in the Condensed Statements of Income attached to this release. Gross margins were 54.9% for the quarter compared to 48.5% in the second quarter of 2002. Cash and marketable securities, net of debt, increased to $312 million during the quarter. ADTRAN Chairman and Chief Executive Officer Mark Smith stated, "In addition to market share expansion of existing products, we continue to observe sequential revenue increases in all new product areas comprised of DSLAMS, optical access products and access routers. Our product development and cost leadership capabilities position us well for revenue and earnings growth in a tight spending environment. This strategy bodes particularly well for the eventual improvement in the economy and return of enterprise spending." The Company also announced that on July 14, 2003 its Board of Directors declared a special and quarterly cash dividend of $2.00 and $0.15 per common share, respectively, to be paid to holders of record at the close of business on July 31, 2003. The payment date for each of the special and second quarter dividend will be August 29, 2003. Mr. Smith stated, "Our Company's strong operating model has generated cash over the years well in excess of its needs and with recent legislation cash dividends are now a tax efficient way to release value to shareholders. As a result of recent tax legislation, we anticipate distributing cash dividends to our shareholders quarterly, as we remain confident of our continuing ability to generate earnings and surplus cash. We believe our Company's ensuing balances of cash and liquid assets, and anticipated continuing cash flow, will be more than adequate to fund working capital requirements, top-line growth and strategic initiatives for the future." Adtran Inc.