- Q1 revenue above mid-point of guidance; non-GAAP profitability
in line with guidance
- $53 million sequential improvement in GAAP operating cash
flow
ADTRAN Holdings, Inc. (NASDAQ: ADTN and FSE: QH9) (“ADTRAN
Holdings” or the “Company”) today announced its unaudited financial
results for the first quarter of 2024.
GAAP gross margin for the first quarter was 31.9%, compared to
34.8% in Q4 2023 and 27.1% in the year-ago quarter, representing an
improvement of 484 basis points (“bps”) year-over-year but a
decrease of 285 bps quarter-over-quarter. The year-over-year
improvement primarily resulted from lower purchasing and
transportation costs, as well as lower acquisition-related
expenses, amortizations and adjustments. The sequential margin
decline is primarily due to $8.8 million of inventory charges
related to a strategy shift as part of our Business Efficiency
Program.
Non-GAAP gross margin for the first quarter was 41.6% compared
to 41.9% in Q4 2023 and 37.3% in the year-ago quarter representing
a decline of 33 bps sequentially and an improvement of 429 bps
year-over-year.
GAAP operating margin for the first quarter was negative 150.2%,
primarily driven by a non-cash goodwill impairment charge.
Non-GAAP operating margin for the first quarter was negative
3.9%, which was within the guidance range of between -7% and 0% of
revenues. Non-GAAP operating margin was negatively impacted by an
unfavorable currency rate development and seasonal effects in the
first quarter.
GAAP net loss attributable to the Company for the first quarter
of 2024, including the above mentioned impairment charge, was
$324.6 million. Diluted loss per share attributable to the Company
for the first quarter was $4.12.
Non-GAAP net loss attributable to the Company for the first
quarter of 2024 was $1.7 million. Non-GAAP diluted loss per share
attributable to the Company for the first quarter was $0.02.
ADTRAN Holdings’ Chairman and Chief Executive Officer Tom
Stanton stated, "First quarter revenue and profitability came in as
expected, with the weakness still impacting our results. However,
we were pleased with the continued momentum in our customer win
rate which was bolstered by the ongoing expansion of our Mosaic One
platform. As we continued to execute on our business efficiency
program, we were able to reduce inventory and significantly improve
our operating cashflow while maintaining our diligence in gaining
market share during this pivotal time in our industry. We believe
that as markets return to normal, our continued focus on these
measures, will lead to sustainable margin expansions and
shareholder value creation in the mid-term.”
The Company will hold a conference call to discuss its first
quarter results on Tuesday, May 07, 2024, at 9:30 a.m. Central
Time, or 4:30 p.m. Central European Summer Time. The Company 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 1st Quarter 2024 Financial Results and Earnings Call”, and
click on the webcast link.
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
future revenues; ADTRAN Holdings’ expected future customer win rate
and expansion of its Mosaic One platform; the ability of ADTRAN
Holdings’ ability to continue to effectively implement the Business
Efficiency Program; the impact of the foregoing measures on margin
expansion and shareholder value creation; 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, 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 have caused and may in the future cause actual events
or results to differ materially from those estimated by ADTRAN
Holdings include, but are not limited to: (i) risks and
uncertainties relating to ADTRAN Holdings’ ability to reduce
expenditures and the impact of such reductions on its financial
results and financial condition; (ii) the risk of fluctuations in
revenue due to lengthy sales and approval processes required by
major and other service providers for new products, as well as
ongoing tighter inventory management of ADTRAN Holdings’ customers
; (iii) risks and uncertainties relating to the recent restatements
of our previously issued consolidated financial statements and
ongoing material weaknesses in our internal control over financial
reporting; (iv) our ability to comply with the covenants set forth
in our credit facility; (v) risks posed by potential breaches of
information systems and cyber-attacks; (vi) the risk that ADTRAN
Holdings may not be able to effectively compete, including through
product improvements and development; and (vii) other risks set
forth in ADTRAN Holdings’ public filings made with the Securities
and Exchange Commission (“SEC”), including its Annual Report on
Form 10-K for the year ended December 31, 2023, filed with the SEC
on March 15, 2024, and risks to be disclosed in its Form 10-Q for
the quarterly period ended March 31, 2024.
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, net loss inclusive of the non-controlling interest, net
loss attributable to the Company, net income (loss) attributable to
the non-controlling interest, and 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 loss, non-GAAP
other expense, non-GAAP net loss inclusive of the non-controlling
interest, non-GAAP net loss attributable to the Company, non-GAAP
net income attributable to the non-controlling interest, non-GAAP
loss per share - basic and diluted, attributable to the Company,
respectively, and non-GAAP free cash flow. Such non-GAAP measures
exclude acquisition related expenses, amortization 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, integration expenses, restructuring expenses, goodwill
impairments, 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 these non-GAAP measures 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.
About Adtran
ADTRAN Holdings, Inc. (NASDAQ: ADTN and FSE: QH9) is the parent
company of Adtran, Inc., a leading global provider of open,
disaggregated networking and communications solutions that enable
voice, data, video and internet communications across any network
infrastructure. From the cloud edge to the subscriber edge, Adtran
empowers communications service providers around the world to
manage and scale services that connect people, places and things.
Adtran solutions are used by service providers, private
enterprises, government organizations and millions of individual
users worldwide. ADTRAN Holdings, Inc. is also the largest
shareholder of Adtran Networks SE, formerly ADVA Optical Networking
SE. Find more at Adtran, LinkedIn and Twitter.
Published by ADTRAN Holdings, Inc. www.adtran.com
Condensed Consolidated Balance
Sheets
(Unaudited)
(In thousands)
March 31,
December 31,
2024
2023
Assets
Current Assets
Cash and cash equivalents
$
106,757
$
87,167
Accounts receivable, net
187,554
216,445
Other receivables
12,116
17,450
Income tax receivable
8,717
7,933
Inventory, net
322,147
362,295
Prepaid expenses and other current
assets
59,667
45,566
Total Current Assets
696,958
736,856
Property, plant and equipment, net
126,969
123,020
Deferred tax assets
25,421
25,787
Goodwill
55,129
353,415
Intangibles, net
306,448
327,985
Other non-current assets
87,729
87,706
Long-term investments
29,252
27,743
Total Assets
$
1,327,906
$
1,682,512
Liabilities, Redeemable Non-Controlling
Interest and Equity
Current Liabilities
Accounts payable
$
159,083
$
162,922
Unearned revenue
55,124
46,731
Accrued expenses and other liabilities
36,404
37,607
Accrued wages and benefits
25,869
27,030
Income tax payable, net
6,266
5,221
Total Current Liabilities
282,746
279,511
Non-current revolving credit agreement
outstanding
195,000
195,000
Deferred tax liabilities
15,414
35,655
Non-current unearned revenue
22,884
25,109
Non-current pension liability
11,692
12,543
Deferred compensation liability
29,709
29,039
Non-current lease obligations
27,668
31,420
Other non-current liabilities
35,375
28,657
Total Liabilities
620,488
636,934
Redeemable Non-Controlling
Interest
441,635
451,756
Equity
Common stock
791
790
Additional paid-in capital
798,897
795,304
Accumulated other comprehensive income
29,656
47,461
Retained deficit
(558,363
)
(243,908
)
Treasury stock
(5,198
)
(5,825
)
Total Equity
265,783
593,822
Total Liabilities, Redeemable
Non-Controlling Interest and Equity
$
1,327,906
$
1,682,512
Condensed Consolidated
Statements of Loss
(Unaudited)
(In thousands, except per
share amounts)
Three Months Ended
March 31,
2024
2023
Revenue
Network Solutions
$
181,273
$
282,418
Services & Support
44,900
41,494
Total Revenue
226,173
323,912
Cost of Revenue
Network Solutions
126,326
219,130
Network Solutions - inventory
write-down
8,782
—
Services & Support
18,810
16,974
Total Cost of Revenue
153,918
236,104
Gross Profit
72,255
87,808
Selling, general and administrative
expenses
59,100
67,397
Research and development expenses
60,251
70,143
Goodwill impairment
292,583
—
Operating Loss
(339,679
)
(49,732
)
Interest and dividend income
397
304
Interest expense
(4,598
)
(3,287
)
Net investment gain
2,253
1,252
Other income (expense), net
1,310
(303
)
Loss Before Income Taxes
(340,317
)
(51,766
)
Income tax benefit
18,647
11,313
Net Loss
$
(321,670
)
$
(40,453
)
Less: Net Income (Loss) attributable to
non-controlling interest
2,880
(370
)
Net Loss attributable to ADTRAN
Holdings, Inc.
$
(324,550
)
$
(40,083
)
Weighted average shares outstanding –
basic
78,814
78,358
Weighted average shares outstanding –
diluted
78,814
78,358
Loss per common share attributable to
ADTRAN Holdings, Inc. – basic
$
(4.12
)
$
(0.51
)
Loss per common share attributable to
ADTRAN Holdings, Inc. – diluted
$
(4.12
)
$
(0.51
)
Condensed Consolidated
Statements of Cash Flows
(Unaudited)
(In thousands)
Three Months Ended
March 31,
2024
2023
Cash flows from operating
activities:
Net loss
$
(321,670
)
$
(40,453
)
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities:
Depreciation and amortization
22,528
33,402
Goodwill impairment
292,583
—
Amortization of debt issuance cost
1,013
146
Gain on investments, net
(2,621
)
(3,154
)
Net loss on disposal of property, plant
and equipment
150
—
Stock-based compensation expense
3,957
3,812
Deferred income taxes
(19,738
)
(24,019
)
Other, net
545
(1
)
Inventory write down
8,782
—
Inventory reserves
(17,247
)
16,051
Changes in operating assets and
liabilities:
Accounts receivable, net
26,002
17,658
Other receivables
5,606
1,980
Income taxes receivable, net
(1,296
)
—
Inventory
49,514
(2,764
)
Prepaid expenses, other current assets and
other assets
(15,888
)
1,118
Accounts payable
(4,236
)
(40,367
)
Accrued expenses and other liabilities
7,459
6,349
Income taxes payable, net
1,155
10,316
Net cash provided by (used in)
operating activities
36,598
(19,926
)
Cash flows from investing
activities:
Purchases of property, plant and
equipment
(13,374
)
(8,439
)
Proceeds from sales and maturities of
available-for-sale investments
873
930
Purchases of available-for-sale
investments
(44
)
(516
)
Proceeds from beneficial interests in
securitized accounts receivable
—
1,231
Net cash used in investing
activities
(12,545
)
(6,794
)
Cash flows from financing
activities:
Tax withholdings related to stock-based
compensation settlements
(176
)
(6,258
)
Proceeds from stock option exercises
219
58
Dividend payments
—
(7,076
)
Proceeds from receivables purchase
agreement
30,231
—
Repayments on receivables purchase
agreement
(32,437
)
—
Proceeds from draw on revolving credit
agreements
—
138,236
Repayment of revolving credit
agreements
—
(43,464
)
Payment of redemption of redeemable
non-controlling interest
(5
)
(1,176
)
Payment of debt issuance cost
(1,994
)
—
Repayment of notes payable
—
(24,692
)
Net cash (used in) provided by
financing activities
(4,162
)
55,628
Net increase in cash and cash
equivalents
19,891
28,908
Effect of exchange rate changes
(301
)
(1,095
)
Cash and cash equivalents, beginning of
period
87,167
108,644
Cash and cash equivalents, end of
period
$
106,757
$
136,457
Supplemental disclosure of cash financing
activities:
Cash paid for interest
$
5,243
$
1,610
Cash paid for income taxes
$
2,315
$
1,251
Cash used in operating activities related
to operating leases
$
2,384
$
4,057
Supplemental disclosure of non-cash
investing activities:
Right-of-use assets obtained in exchange
for lease obligations
$
842
$
486
Purchases of property, plant and equipment
included in accounts payable
$
1,689
$
4,354
Supplemental
Information
Reconciliation of Gross Profit
and Gross Margin to
Non-GAAP Gross Profit and
Non-GAAP Gross Margin
(Unaudited)
(In thousands)
Three Months Ended
March 31, 2024
December 31, 2023
March 31, 2023
Total Revenue
$
226,173
$
225,479
$
323,912
Cost of Revenue
$
153,918
$
147,014
$
236,104
Acquisition-related expenses,
amortizations and adjustments(1)
(10,177
)
(10,048
)
(32,578
)
Stock-based compensation expense
(275
)
(440
)
(240
)
Restructuring expenses(2)
(11,247
)
(5,517
)
(76
)
Integration expenses(3)
(35
)
39
—
Non-GAAP Cost of Revenue
$
132,184
$
131,048
$
203,210
Gross Profit
$
72,255
$
78,465
$
87,808
Non-GAAP Gross Profit
$
93,989
$
94,431
$
120,702
Gross Margin
31.9
%
34.8
%
27.1
%
Non-GAAP Gross Margin
41.6
%
41.9
%
37.3
%
(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. These
expenses include inventory write down and other charges of $8.8M
incurred as a result of a strategic shift in certain product lines
in connection with the restructuring program. The restructuring
program commenced upon the closing of the business combination with
Adtran Networks SE and is expected to be substantially 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.
Supplemental
Information
Reconciliation of Operating
Expenses to Non-GAAP Operating Expenses
(Unaudited)
(In thousands)
Three Months Ended
March 31,
December 31,
March 31,
2024
2023
2023
Operating Expenses
$
411,934
$
116,080
$
137,540
Acquisition-related expenses,
amortizations and adjustments
(4,881
)
(1)
(4,150
)
(7)
(4,584
)
(11)
Stock-based compensation expense
(3,447
)
(2)
(3,181
)
(8)
(3,458
)
(12)
Restructuring expenses
(5,862
)
(3)
(7,859
)
(9)
(2,361
)
(13)
Integration expenses
(480
)
(4)
(1,928
)
(10)
(849
)
(14)
Deferred compensation adjustments(5)
(1,940
)
(1,324
)
(394
)
Goodwill impairment
(292,583
)
(6)
—
—
Non-GAAP Operating Expenses
$
102,741
$
97,638
$
125,894
(1) Includes intangible amortization of
developed technology, customer relationships, and trade names
acquired in connection with business combinations, of which $4.4
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 loss.
(2) $2.5 million is included in selling,
general and administrative expenses and $1.0 million is included in
research and development expenses on the condensed consolidated
statements of loss.
(3) $1.8 million is included in selling,
general and administrative expenses and $4.1 million is included in
research and development expenses on the condensed consolidated
statements of loss.
(4) $0.5 million is included in selling,
general and administrative expenses and $0.02 million is included
in research and development expenses on the condensed consolidated
statements of loss. Includes legal and advisory fees totaling $0.1
million related primarily to the DPLTA proceedings that are
recorded in selling, general and administrative expenses. Includes
expenses totaling $0.4 million 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
$0.4 million are included in selling, general and administrative
expenses and $0.02 million are included in research and development
expenses. The transformation bonus expense of $0.4 million includes
$0.2 million of stock compensation expense.
(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 loss.
(6) Non-cash impairment of goodwill in our
Network Solutions reporting unit, necessitated by factors such as a
decrease in the Company’s market capitalization, cautious service
provider spending due to economic uncertainty and continued
customer inventory adjustments.
(7) Includes intangible amortization of
developed technology, customer relationships, and trade names
acquired in connection with business combinations, of which $3.7
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 loss.
(8) $2.3 million is included in selling,
general and administrative expenses and $0.9 million is included in
research and development expenses on the condensed consolidated
statements of loss.
(9) $4.6 million is included in selling,
general and administrative expenses and $3.2 million is included in
research and development expenses on the condensed consolidated
statements of loss.
(10) $1.9 million is included in selling,
general and administrative expenses and $0.02 million is included
in research and development expenses on the condensed consolidated
statements of loss. Includes legal and advisory fees totaling $1.2
million related to a contemplated capital raise transaction that
are recorded in selling, general and administrative expenses.
Includes expenses totaling $0.4 million 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 $0.4 million are included in selling, general
and administrative expenses and $0.02 million are included in
research and development expenses. The integration bonus expense of
$0.4 million includes $0.2 million of stock compensation expense.
Additionally, includes fees relating to the expansion of internal
controls at Adtran Networks SE and the implementation of the
DPLTA.
(11) Includes intangible amortization of
backlog, inventory fair value adjustments, developed technology,
customer relationships, and trade names acquired in connection with
business combinations, of which $4.1 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 loss.
(12) $2.5 million is included in selling,
general and administrative expenses and $1.0 million is included in
research and development expenses on the condensed consolidated
statements of loss.
(13) $2.2 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 loss.
(14) $0.8 million is included in selling,
general and administrative expenses on the condensed consolidated
statements of loss. Includes fees relating to the expansion of
internal controls at ADTRAN Networks SE and the implementation of
the DPLTA.
Supplemental
Information
Reconciliation of Operating
Loss to Non-GAAP Operating Loss
(Unaudited)
(In thousands)
Three Months Ended
March 31,
December 31,
March 31,
2024
2023
2023
Operating Loss
$
(339,679
)
$
(37,615
)
$
(49,732
)
Acquisition related expenses,
amortizations and adjustments(1)
15,058
14,198
37,162
Stock-based compensation expense
3,722
3,621
3,698
Restructuring expenses(2)
17,110
13,376
2,437
Integration expenses(3)
514
1,890
849
Deferred compensation adjustments(4)
1,940
1,324
394
Goodwill impairment(5)
292,583
—
—
Non-GAAP Operating Loss
$
(8,752
)
$
(3,206
)
$
(5,192
)
(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. These
expenses include inventory write down and other charges of $8.8M
incurred as a result of a strategic shift in certain product lines
in connection with the restructuring program. 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 results 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.
(4) 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 loss.
(5) Non-cash impairment of goodwill in our
Network Solutions reporting unit, necessitated by factors such as a
decrease in the Company’s market capitalization, cautious service
provider spending due to economic uncertainty and continued
customer inventory adjustments.
Supplemental
Information
Reconciliation of Other
Expense to Non-GAAP Other Expense
(Unaudited)
(In thousands)
Three Months Ended
March 31, 2024
December 31, 2023
March 31, 2023
Interest and dividend income
$
397
$
1,157
$
304
Interest expense
(4,598
)
(4,441
)
(3,287
)
Net investment gain
2,253
1,683
1,252
Other income (expense), net
1,310
(3,448
)
(303
)
Total Other Expense
$
(638
)
$
(5,049
)
$
(2,034
)
Deferred compensation adjustments (1)
(2,439
)
(1,590
)
(1,250
)
Pension expense (2)
7
6
7
Non-GAAP Other Expense
$
(3,070
)
$
(6,633
)
$
(3,277
)
(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 Net Loss
inclusive of Non-Controlling Interest to
Non-GAAP Net Loss inclusive of
Non-Controlling Interest
(Unaudited)
and
Reconciliation of Net Income
(Loss) attributable to Non-Controlling Interest to
Non-GAAP Net Income
attributable to Non-Controlling Interest
(Unaudited)
and
Reconciliation of Net Loss
attributable to ADTRAN Holdings, Inc. and
Loss per Common Share
attributable to ADTRAN Holdings, Inc. – Basic and Diluted
to
Non-GAAP Net Loss attributable
to ADTRAN Holdings, Inc. and
Non-GAAP Loss per Common Share
attributable to ADTRAN Holdings, Inc. – Basic and Diluted
(Unaudited)
(In thousands, except per
share amounts)
Three Months Ended
March 31, 2024
December 31, 2023
March 31, 2023
Net Loss attributable to ADTRAN
Holdings, Inc.
$
(324,550
)
$
(109,945
)
$
(40,083
)
Plus: Net Income (Loss) attributable to
non-controlling interest (1)
2,880
2,919
(370
)
Net Loss inclusive of non-controlling
interest
$
(321,670
)
$
(107,026
)
$
(40,453
)
Acquisition related expenses,
amortizations and adjustments
15,058
14,198
37,162
Stock-based compensation expense
3,722
3,621
3,698
Deferred compensation adjustments (2)
(499
)
(267
)
(856
)
Pension adjustments (3)
7
6
7
Restructuring expenses
17,110
13,376
2,437
Integration expenses
514
1,890
849
Goodwill impairment
292,583
—
—
Tax effect of adjustments to net loss
(5,614
)
(8,735
)
(12,307
)
Non-GAAP Net Loss inclusive of
non-controlling interest
$
1,211
$
(82,937
)
$
(9,463
)
Less: Non-GAAP Net Income attributable
to non-controlling interest (1)
2,880
2,919
1,159
Non-GAAP Net Loss attributable to
ADTRAN Holdings, Inc.
$
(1,669
)
$
(85,856
)
$
(10,622
)
GAAP Net Income (Loss) attributable to
non-controlling interest (1)
$
2,880
$
2,919
$
(370
)
Acquisition related expenses,
amortizations and adjustments
—
—
1,457
Restructuring expenses
—
—
29
Integration expenses
—
—
6
Stock-based compensation expense
—
—
37
Non-GAAP Net Income attributable to
non-controlling interest (1)
$
2,880
$
2,919
$
1,159
Weighted average shares outstanding –
basic
78,814
78,530
78,358
Weighted average shares outstanding –
diluted
78,814
78,530
78,358
Loss per common share attributable to
ADTRAN Holdings, Inc. – basic
$
(4.12
)
$
(1.40
)
$
(0.51
)
Loss per common share attributable to
ADTRAN Holdings, Inc. – diluted
$
(4.12
)
$
(1.40
)
$
(0.51
)
Non-GAAP Loss per common share
attributable to ADTRAN – basic
$
(0.02
)
$
(1.09
)
$
(0.14
)
Non-GAAP Loss per common share
attributable to ADTRAN – diluted
$
(0.02
)
$
(1.09
)
$
(0.14
)
(1) Represents the non-controlling
interest portion of the Company's ownership of Adtran Networks SE
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.
Supplemental
Information
Reconciliation of Net Cash
Provided By (Used In) Operating Activities to Free Cash
Flow
(Unaudited)
(In thousands)
Three Months Ended
March 31,
December 31,
March 31,
2024
2023
2023
Net Cash provided by (used in)
operating activities
$
36,598
$
(16,290)
$
(19,926)
Purchases of property, plant and
equipment
(13,374)
(9,447)
(8,439)
Free cash flow
$
23,224
$
(25,737)
$
(28,365)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240506994216/en/
For media Gareth Spence +44 1904 699 358
public.relations@adtran.com
For investors Steven Williams +49 89 890 665 918
investor@adtran.com
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