SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarterly Period Ended June 30, 1997
OR
[ ] Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Transition Period from ______ to ______
Commission File Number 0-24612
ADTRAN, INC.
(Exact name of Registrant as specified in its charter)
Delaware 63-0918200
(State of Incorporation) (I.R.S. Employer
Identification No.)
901 Explorer Boulevard, Huntsville, Alabama 35806-280
(Address of principal executive offices, including zip code)
(205) 963-8000
(Registrant's telephone number, including area code)
---------------
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding twelve months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes x No
Indicate the number of shares outstanding of each of the issuer's classes
of Common Stock as of the latest practicable date:
Class Outstanding at July 31, 1997
Common Stock, $.01 Par Value 39,264,889 shares
Page 1 of 17
Index of Exhibits on Page 15
<PAGE>
ADTRAN, INC.
Quarterly Report on Form 10-Q
For the Quarter Ended June 30, 1997
Table of Contents
Item Page
Number PART I. FINANCIAL INFORMATION Number
1 Financial Statements:
Condensed Balance Sheets as of December 31, 1996
and June 30, 1997 3
Condensed Statements of Income for the three
and six months ended June 30, 1996 and 1997 4
Condensed Statements of Cash Flows for the six
months ended June 30, 1996 and 1997 5
Notes to Condensed Financial Statements 6
2 Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
PART II. OTHER INFORMATION
4 Submission of Matters to a Vote of Security Holders 12
6 Exhibits and Reports on Form 8-K 13
SIGNATURE 14
INDEX OF EXHIBITS 15
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
ADTRAN, INC.
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS
December 31, June 30
1996 1997
(Unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents................................ $44,839,131 $21,578,144
Short-term investments................................... 32,555,930 28,533,240
Accounts receivable, less allowance for
doubtful accounts of $872,724 and $859,542
in 1996 and 1997, respectively........................ 33,825,560 31,755,693
Other receivables........................................ 362,578 453,585
Inventory................................................ 40,792,646 54,919,252
Prepaid expenses......................................... 2,261,338 2,305,986
Deferred tax assets...................................... 1,598,750 1,598,750
--------- ---------
Total current assets 156,235,933 141,144,650
Property, plant and equipment, less accumulated
depreciation of $13,637,007 and $17,188,755
in 1996 and 1997, respectively........................... 53,971,213 62,171,355
Long-term investments......................................... 0 50,000,000
------------ ----------
$210,207,146 $253,316,005
============ ============
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Accounts payable......................................... $9,350,266 $9,819,502
Accrued salaries......................................... 2,454,194 2,071,625
Accrued income taxes..................................... 1,803,706 0
Accrued taxes other than income taxes.................... 338,997 350,997
Accrued interest payable................................. 59,594 0
Warranty payable......................................... 1,026,156 1,080,270
Accrued vacation......................................... 693,218 923,824
------- -------
Total current liabilities 15,726,131 14,246,218
Long term liabilities:
Long term debt........................................... 20,000,000 50,000,000
Deferred income taxes.................................... 1,602,116 1,602,116
--------- ---------
Total liabilities 37,328,247 65,848,334
---------- ----------
Stockholders' equity:
Common stock, par value $.01 per share
200,000,000 shares authorized: 38,769,514 and
39,312,639 shares issued in 1996 and 1997, respectively 387,695 393,126
Additional paid-in capital............................... 90,172,863 90,453,662
Retained earnings........................................ 82,318,341 98,820,883
Treasury stock at cost, 100,000 shares................... 0 (2,200,000)
Net stockholders' equity................................. ` 172,878,899 187,467,671
----------- -----------
$210,207,146 $253,316,005
</TABLE>
See notes to condensed financial statements
<PAGE>
ADTRAN, INC.
CONDENSED STATEMENTS OF INCOME
Unaudited
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1996 1997 1996 1997
<S> <C> <C> <C> <C>
Sales................................................ $63,305,259 $59,125,208 $117,849,700 $120,355,392
Cost of sales....................................... 33,370,298 30,493,144 62,230,572 59,931,941
---------- ---------- ---------- ----------
Gross profit............................... 29,934,961 28,632,064 55,619,128 60,423,451
Selling, general and administrative expenses......... 7,959,675 10,624,484 15,217,363 21,161,999
Research and development expenses 6,173,695 7,716,639 11,624,120 14,711,897
--------- --------- ---------- ----------
Income from operations..................... 15,801,591 10,290,941 28,777,645 24,549,555
Interest expense.................................... (166,834) (508,665) (446,870) (751,199)
Other income......................................... 667,861 1,124,401 1,079,288 1,986,866
------- --------- --------- ---------
Income before income taxes........................... 16,302,618 10,906,677 29,410,063 25,785,222
Provision for income taxes........................... (5,962,397) (3,926,404) (10,446,454) (9,282,680)
---------- ---------- ----------- ----------
Net income................................. $10,340,221 $6,980,273 $18,963,609 $16,502,542
=========== ========== =========== ===========
Net income per common and common
equivalent share........................... $ .26 $ .18 $ .48 $ .42
----------- ---------- ----------- -----------
Weighted average common and common
equivalent shares outstanding.............. 39,581,732 39,525,254 39,580,123 39,539,532
========== ========== ========== ==========
</TABLE>
See notes to condensed financial statements
<PAGE>
ADTRAN, INC.
CONDENSED STATEMENTS OF CASH FLOWS
Unaudited
<TABLE>
<CAPTION>
Six Months Ended
June 30,
1996 1997
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income............................................... $18,963,609 $16,502,542
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation.......................................... 2,048,429 3,597,865
Provision for losses on accounts receivable........... 154,598 0
Provision for losses on inventory..................... 1,702,954 1,216,879
Provision for losses on warranty claims............... 529,729 702,402
(Gain) loss on sale of property, plant and equipment.. 12,861 (12,220)
Loss on short-term investments....................... 355,885 55,930
Change in operating assets:
Accounts receivable.............................. (3,653,650) 2,069,867
Inventory........................................... (2,794,996) (15,343,485)
Other current assets............................. (381,409) (135,655)
Change in operating liabilities:
Accounts payable................................. (2,913,244) 469,236
Other liabilities................................ (649,695) (2,651,551)
---------- ----------
Net cash provided by operating activities............ 13,375,071 6,471,810
Cash flows from investing activities:
Expenditures for property, plant and equipment........... (16,535,490) (11,814,233)
Proceeds from the disposition of property, plant and
equipment............................................. 4,602 28,446
Purchase of restricted investments....................... 0 (50,000,000)
Net (purchase) sale of short-term investments............ (2,478,820) 3,966,760
----------- ---------
Net cash provided by (used in) investing activities. (19,009,708) (57,819,026)
------------ ------------
Cash flows from financing activities:
Proceeds from issuance of bonds.......................... 0 50,000,000
Redemption of bonds payable.............................. 0 (20,000,000)
Purchase of treasury stock.............................. 0 (2,200,000)
Proceeds from issuance of common stock................... 468,692 286,230
------- -------
Net cash provided by financing activities................ 468,692 28,086,230
------- ----------
Net increase (decrease) in cash and cash equivalents (5,165,945) (23,260,987)
Cash and cash equivalents, beginning of period................ 35,027,609 44,839,131
---------- ----------
Cash and cash equivalents, end of period...................... $29,861,664 $21,578,144
=========== ===========
Supplemental disclosure of cash flow information:
Cash paid during the period for interest, net of $193,566
and $126,434 of capitalized interest in 1996 and
1997, respectively................................... $ 658,653 $848,506
Cash paid during the period for taxes.................... $ 11,168,075 $11,673,130
============ ===========
</TABLE>
See notes to condensed financial statements
<PAGE>
ADTRAN, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
1. BASIS OF PRESENTATION The accompanying unaudited condensed financial
statements of ADTRAN, Inc. (the "Company") have been prepared pursuant to the
rules and regulations for reporting on Form 10-Q. Accordingly, certain
information and notes required by generally accepted accounting principles for
complete financial statements are not included herein. In the opinion of
management, all adjustments necessary for a fair presentation of these interim
statements have been included and are of a normal and recurring nature.
Operating results for the six months ended June 30, 1997 are not necessarily
indicative of the results that may be expected for the year ending December 31,
1997. The interim statements should be read in conjunction with the financial
statements and notes thereto included in the Company's latest Annual Report on
Form 10-K.
2. INVENTORY
At December 31, 1996 and June 30, 1997, inventory consisted of the
following:
December 31, June 30,
1996 1997
Raw materials $24,454,251 $30,847,510
Work in progress 2,963,220 5,723,930
Finished goods 13,375,175 18,347,812
----------- -----------
$40,792,646 $54,919,252
3. THE ALABAMA STATE INDUSTRIAL DEVELOPMENT AUTHORITY
The Company's long-term debt outstanding as of June 30, 1997,consisted of a
loan in the amount of $50,000,000 related to the expansion of the Company's
facilities in Huntsville, Alabama. The Company is continuing a project to expand
its facilities in Huntsville in phases over the next four years at a cost
expected to exceed $100,000,000, of which $43,331,614 had been incurred at June
30, 1997. The debt associated with $50,000,000 of this project has been approved
for participation in an incentive program offered by the Alabama State
Industrial Development Authority (the "Authority"). That incentive program
enables participating companies such as the Company to generate Alabama
corporate income tax credits that can be used to reduce the amount of Alabama
corporate income taxes that would otherwise be payable. There can be no
assurance that the State of Alabama will continue to make these corporate income
tax credits available in the future, and the Company therefore may not realize
the full benefit of these incentives. The Company will make payments to the
Authority in amounts necessary to pay the principal of and interest on the
Authority's Taxable Revenue Bond, Series 1995 (ADTRAN, Inc. Project), as
amended, currently outstanding in the aggregate principal amount of $50,000,000.
Said bond matures on January 1, 2020, and bears interest at the rate of 45 basis
points over the money market rate of First Union National Bank of Tennessee.
4. RECENT ACCOUNTING DEVELOPMENTS
In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128, "Earnings Per Share" (SFAS 128). SFAS
128 supersedes existing generally accepted accounting principles relative to the
calculation of earnings per share, is effective for years ending after December
15, 1997 and requires restatement of all prior period earnings per share
information upon adoption. Generally, SFAS 128 requires a calculation of basic
earnings per share, which takes into consideration income (loss) available to
common shareholders and the weighted average of common shares outstanding. SFAS
128 also requires the calculation of diluted earnings per share, which takes
into account the impact of all additional common shares that would have been
outstanding if all dilutive potential common shares relating to options,
warrants, and convertible securities had been issued, as long as their effect is
dilutive, with a related adjustment of income available for common shareholders,
as appropriate. SFAS 128 requires dual presentation of basic and diluted
earnings per share on the face of the statement of operations and requires a
reconciliation of the numerator and denominator of the basic earnings per share
computation. The Company does not expect the effect of its adoption of SFAS 128
to be material.
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Overview
ADTRAN, Inc. (the "Company") designs, develops, manufactures, markets and
services a broad range of high speed digital transmission products utilized by
telephone companies ("Telcos") and corporate end-users to implement advanced
digital data services over existing telephone networks. The Company currently
sells its products to Telcos (including all of the Regional Bell Operating
Companies), Original Equipment Manufacturers ("OEMs") and, since 1991, private
end-users in the Customer Premises Equipment ("CPE") market.
The Company's sales have increased each year, with the exception of the
second quarter of 1997, due primarily to increases in the number of units sold
to both new and existing customers. These annual sales increases reflect the
Company's strategy of increasing unit volume and market share through the
introduction of succeeding generations of products having lower selling prices
and increased functionality as compared to the prior generation of a product and
to the products of competitors. An important part of the Company's strategy is
to engineer the reduction of the product cost of each succeeding product
generation and then to lower the product's price based on the cost savings
achieved. As a part of this strategy, the Company seeks in most instances to be
a low cost, high quality provider of products in its markets. The Company's
success to date is attributable in large measure to its ability to initially
design its products with a view to their subsequent re-design, allowing
efficient enhancements of the product in each succeeding product generation.
This strategy has enabled the Company to sell succeeding generations of products
to existing customers as well as to increase its market share by selling these
enhanced products to new customers.
The Company intends to retain all earnings for use in the development of
its business and does not anticipate paying any cash dividends in the
foreseeable future.
When used in this Form 10-Q, the words "believe," "anticipate," "think,"
"intend," "will be," and similar expressions identify forward-looking
statements. Such statements are subject to certain risks and uncertainties which
could cause actual results to differ materially from those projected. Readers
are cautioned not to place undue reliance on these forward looking statements
which speak only as of the date hereof. Readers are also urged to carefully
review and consider the various disclosures made by the Company which attempt to
advise interested parties of the factors which affect the Company's business,
including the disclosures made in other periodic reports on Forms 10-K, 10-Q and
8-K, when appropriate, filed with the Securities and Exchange Commission.
<PAGE>
Results of Operations - Three Months and Six Months Ended June 30, 1996
Compared to Three Months and Six Months Ended June 30, 1997
Sales
The Company's sales decreased 6.6% from $63,305,259 in the three months
ended June 30, 1996 to $59,125,208 in the three months ended June 30, 1997.
However, sales increased 2.1% from $117,849,700 in the six months ended June 30,
1996 to $120,355,392 in the six months ended June 30, 1997. The increased sales
resulted from an increase in sales volume to existing customers and from
increased market penetration. Sales to Telcos decreased 13.4% from $40,333,248
in the three months ended June 30, 1996 to $34,944,502 in the three months ended
June 30, 1997 and decreased less than 1% from $72,718,633 in the six months
ended June 30, 1996 to $72,152,599 in the six months ended June 30, 1997. The
decrease in Telco sales in the 1997 period resulted primarily from decreased
sales of Integrated Services Digital Network ("ISDN") products and Digital Data
Service ("DDS") products. Telco sales as a percentage of total sales decreased
from 63.7% in the three months ended June 30, 1996 to 59.1% in the three months
ended June 30, 1997 and decreased from 61.7% in the six months ended June 30,
1996 to 60.0% in the six months ended June 30, 1997. Sales of CPE products
increased 30.7% from $15,582,164 in the three months ended June 30, 1996 to
$20,361,008 in the three months ended June 30, 1997 and increased 23.4% from
$30,725,374 in the six months ended June 30, 1996 to $37,929,951 in the six
months ended June 30, 1997, as a result of increased CPE sales of ISDN products
and T1 Service Unit ("TSU") products. OEM sales decreased 48.3% from $7,389,848
in the three months ended June 30, 1996 to $3,819,698 in the three months ended
June 30, 1997 and decreased 28.7% from $14,405,693 in the six months ended June
30, 1996 to $10,272,842 in the six months ended June 30, 1997. This decrease was
attributable primarily to reduced demand related to mature programs combined
with the low volume normally encountered on new programs. Additionally, the
Company has converted numerous products originally developed under OEM contract
status to ADTRAN standard product status. This conversion was accomplished with
permission from the OEM contract holders and was done to allow the Company to
pursue markets directly that will no longer support a two-tier distribution
structure. The financial effect of the increase in overall unit volume was
offset somewhat by lower unit selling prices for many of the Company's products.
Cost of Sales
Cost of sales decreased 8.6% from $33,370,298 in the three months ended
June 30, 1996 to $30,493,144 in the three months ended June 30, 1997 and
decreased 3.7% from $62,230,572 in the six months ended June 30, 1996 to
$59,931,941 in the six months ended June 30, 1997. As a percentage of sales,
cost of sales decreased from 52.7% in the three months ended June 30, 1996 to
51.6% in the three months ended June 30, 1997 and decreased from 52.8% in the
six months ended June 30, 1996 to 49.8%in the six months ended June 30, 1997. An
important part of the Company's strategy is to reduce the product cost of each
succeeding product generation and then to lower the product's price based on the
cost savings achieved. This strategy sometimes results in variations in the
Company's gross profit margin due to timing differences between the recognition
of cost reductions and the lowering of product selling prices. In view of the
rapid pace of new product introductions by the Company, this strategy may result
in variations in gross profit margins that, for any particular financial period,
can be difficult to predict.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased 33.5% from
$7,959,675 in the three months ended June 30, 1996 to $10,624,484 in the three
months ended June 30, 1997 and increased 39.1% from $15,217,363 in the six
months ended June 30, 1996 to $21,161,999 in the six months ended June 30, 1997.
The increase was due to additional sales and support expenditures necessary as a
result of the Company's expanded sales base, increased distribution activities
associated with the CPE market, and general expansion into international
markets. Selling, general and administrative expenses as a percentage of sales
increased from 12.6% in the three months ended June 30, 1996 to 18.0% in the
three months ended June 30, 1997 and increased from 12.9% in the six months
ended June 30, 1996 to 17.6% in the six months ended June 30, 1997.
Research and Development Expenses
Research and development expenses increased 25.0% from $6,173,695 in
the three months ended June 30, 1996 to $7,716,639 in the three months ended
June 30, 1997 and increased 26.6% from $11,624,120 in the six months ended June
30, 1996 to $14,711,897 in the six months ended June 30, 1997. The increase was
due to increased engineering costs associated with new product introductions and
product cost and feature enhancement activities. As a percentage of sales,
research and development expenses increased from 9.8% in the three months ended
June 30, 1996 to 13.1% in the three months ended June 30, 1997 and increased
from 9.9% in the six months ended June 30, 1996 to 12.2% in the six months ended
June 30, 1997.
Interest Expense
Interest expense increased 204.9% from $166,834 in the three months
ended June 30, 1996 to $508,665 in the three months ended June 30, 1997 and
increased 68.1% from $446,870 in the six months ended June 30, 1996 to $751,199
in the six months ended June 30, 1997. The increase was due to interest cost
incurred as a part of the cost of acquiring certain assets. The Company paid
interest on $50,000,000 of revenue bond proceeds of which $20,000,000 was loaned
to the Company in January 1995 and $30,000,000 was loaned to the Company in
April 1997. The proceeds are being used to expand the Company's facilities in
Huntsville, Alabama. See "Liquidity and Capital Resources" below.
Net Income
As a result of the above factors, net income decreased 32.5% from
$10,340,221 in the three months ended June 30, 1996, to $6,980,273 in the three
months ended June 30, 1997 and decreased 13.0% from $18,963,609 in the six
months ended June 30, 1996 to $16,502,542 in the six months ended June 30, 1997.
As a percentage of sales, net income decreased from 16.3% in the three months
ended June 30, 1996 to 11.8% in the three months ended June 30, 1997 and
decreased from 16.1% in the six months ended June 30, 1996 to 13.7% in the six
months ended June 30, 1997.
Liquidity and Capital Resources
The Company is continuing a project to expand its facilities in Huntsville,
Alabama in phases over the next four years at a cost expected to exceed
$100,000,000 of which $43,331,614 had been incurred at June 30, 1997. The debt
associated with $50,000,000 of this project has been approved for participation
in an incentive program offered by the Alabama State Industrial Development
Authority (the "Authority"). That incentive program enables participating
companies such as the Company to generate Alabama corporate income tax credits
that can be used to reduce the amount of Alabama corporate income taxes that
would otherwise be payable. There can be no assurance that the State of Alabama
will continue to make these corporate income tax credits available in the
future, and the Company therefore may not realize the full benefit of these
incentives. The Company will make payments to the Authority in amounts necessary
to pay the principal of and interest on the Authority's Taxable Revenue Bond,
Series 1995 (ADTRAN, Inc. Project), as amended, currently outstanding in
the aggregate principal amount of $50,000,000. Said bond matures on January 1,
2020 and bears interest at the rate of 45 basis points over the money market
rate of First Union National Bank.
The Company's working capital position declined from $140,509,802 as of
December 31, 1996 to $126,898,432 as of June 30, 1997. This decline was due to a
reclassification of the Company's investments in the amount of $20,000,000 that
were classified as a short-term investment at December 31, 1996 and reinvested
on April 25, 1997 as a long-term investment. The Company has used, and expects
to continue to use, the remaining proceeds of prior public offerings for working
capital and other general corporate purposes, including (i) product development
activities to enhance its existing products and develop new products and (ii)
expansion of sales and marketing activities. Inventory increased 34.6% from
December 31, 1996 to June 30, 1997. This increase was attributable to the
introduction of new products and to lower than anticipated sales volume.
On March 31, 1997, the Board of Directors authorized the Company to
repurchase up to 1,000,000 shares of the Company's outstanding common stock. As
of June 30, 1997, the Company had repurchased 100,000 shares of its common stock
at a total cost of $2,200,000.
Capital expenditures totaling $29,661,438 in 1996 and $11,814,233 in
the first six months of 1997 were used to expand the Company's headquarters and
to purchase equipment.
At June 30, 1997, the Company's cash on hand of $21,578,144,
investments of $28,533,240 and $10,000,000 available under a $10,000,000 bank
line of credit placed the Company's potential cash availability at $60,111,384,
of which a portion is being used to expand the Company's facilities under the
incentive program described above. The Company's $10,000,000 bank line of credit
bears interest at the rate of 87.5 basis points over the 30 day London
inter-bank offered rate. The Company intends to renew its $10,000,000 bank line
of credit upon expiration.
The Company intends to finance its operations in the future with cash
flow from operations, the remaining net proceeds of the public offerings,
amounts available under the bank line of credit, borrowed taxable revenue bond
proceeds, and possible additional public financings. These available sources of
funds are expected to be adequate to meet the Company's operating and capital
needs for the foreseeable future.
<PAGE>
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
The 1997 Annual Meeting of Stockholders of the Company was held on
April 23, 1997. Proxies with regard to the matters to be voted upon at the
Annual Meeting were solicited under Regulation 14A of the Securities Exchange
Act of 1934, as amended. Set forth below is a brief description of each matter
voted upon at the Annual Meeting and the results of the voting on each such
matter.
(a) Election of the seven directors named below to serve until the next
Annual Meeting of Stockholders. There was no solicitation in opposition to
any of the nominees listed in the proxy statement, and all of the nominees
were elected.
Votes
Nominees For Withheld
Mark C. Smith 36,871,579 125,545
Lonnie S. McMillian 36,872,829 124,295
Howard A. Thrailkill 36,660,354 336,770
O.Gene Gabbard 36,886,383 110,741
William J. Marks 35,405,168 1,591,956
Roy J. Nichols 36,885,179 111,945
James L. North 36,652,429 344,695
(b) Resolution to adopt an amendment to the Certificate of
Incorporation of the Company to increase the number of authorized
shares of Common Stock, par value $.01 per share, from 60,000,000
shares to 200,000,000 shares.
Votes
For Against Abstain
34,848,623 2,130,511 17,990
(c) Resolution to adopt an amendment to the ADTRAN, Inc. 1996
Employees Incentive Stock Option Plan to increase the number of
shares available for issuance thereunder from 488,100 shares to
2,488,100 shares.
Votes
For Against Abstain
31,317,653 334,963 25,810
(d) Ratification of the appointment of Coopers & Lybrand L.L.P. as
independent accountants of the Company for 1997.
Votes
For Against Abstain
36,963,311 17,245 16,568
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
(a) The following exhibits are being filed with this report.
Exhibit No. Description
11 Weighted Average Common and Common Equivalent
Shares Outstanding
27 Financial Data Schedule
(b) Reports on Form 8-K. None
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
ADTRAN, INC.
(Registrant)
Date: August 13, 1997 /s/ John R. Cooper
------------------
John R. Cooper
Vice President - Finance and
Chief Financial Officer
<PAGE>
INDEX OF EXHIBITS
Exhibit No. Description Page No.
11 Weighted Average Common and Common Equivalent
Shares Outstanding 16
27 Financial Data Schedule 17
<TABLE>
<CAPTION>
EXHIBIT 11
ADTRAN, INC
WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING
For the Three Months and Six Months Ended June 30, 1996 and 1997
Three Months Ended Six Months Ended
June 30, June 30,
1996 1997 1996 1997
<S> <C> <C> <C> <C>
Weighted average common shares outstanding.................... 38,649,998 39,244,514 38,472,186 39,137,998
Net weighted average common stock options
outstanding under the treasury stock method................ 931,734 280,740 1,107,307 401,534
------- ------- --------- -------
Weighted average common and common
equivalent shares outstanding............................. 39,581,732 39,525,254 39,580,123 39,539,532
========== ========== ========== ==========
Net income.................................................... $10,340,221 $6,980,273 $18,963,609 $16,502,542
=========== ========== =========== ===========
Net income per common and common equivalent
share.................................................... $ .26 $ .18 $ .48 $ .42
============ =========== ============ ===========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED STATEMENT OF INCOME FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND THE
CONDENSED BALANCE SHEET AS OF JUNE 30, 1997 AND IS QUALIFIED IN INTS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000926282
<NAME> ADTRAN, INC.
<MULTIPLIER> 1
<CURRENCY> US Dollar
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<EXCHANGE-RATE> 1
<CASH> $21,578,144
<SECURITIES> 28,533,240
<RECEIVABLES> 32,615,235
<ALLOWANCES> (859,542)
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<CURRENT-ASSETS> 141,144,650
<PP&E> 79,360,110
<DEPRECIATION> (17,188,755)
<TOTAL-ASSETS> 253,316,005
<CURRENT-LIABILITIES> 14,246,218
<BONDS> 50,000,000
0
0
<COMMON> 393,126
<OTHER-SE> 187,074,545
<TOTAL-LIABILITY-AND-EQUITY> 253,316,005
<SALES> 120,355,392
<TOTAL-REVENUES> 120,355,392
<CGS> 59,931,941
<TOTAL-COSTS> 59,931,941
<OTHER-EXPENSES> 21,161,999
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</TABLE>
