EQS-Adhoc: Adtran Holdings, Inc.: ADTRAN announces deviation from analyst expectations for Q4 2023 and suspension of dividend payments

Ad hoc notification pursuant to Article 17 of Regulation (EU) No 596/2014

ADTRAN Holdings, Inc: ADTRAN Announces Deviation from Analyst Expectations for Q4 2023 and Suspension of Dividend Payments

Huntsville, Alabama (United States of America). November 6, 2023 (CT)

Based on current business performance, ADTRAN Holdings, Inc. (“ADTRAN Holdings” or the “Company”) (NASDAQ: ADTN; FSE: QH9) today determined that the Company’s guidance range for the fourth quarter of 2023 differs from analyst expectations as follows :

• The guidance range for fourth-quarter 2023 GAAP revenue is $210 million to $240 million, 27.03% to 16.61% below analyst expectations ($287.8 million).
• The forecast range for the non-GAAP operating margin for the fourth quarter of 2023 is between
  minus 7% and 0% and thus 6.1 percentage points below to 0.9 percentage points above analyst expectations (minus 0.9%).

Due to the uncertainty surrounding the current macroeconomic market situation, customer inventories and their impact on customers’ willingness to invest, the Company today decided to declare the dividend of ADTRAN Holdings as part of the so-called capital efficiency program to suspend, and the company also runs a comprehensive so-called cost efficiency program to meet these challenges.

Non-GAAP operating margin (calculated by dividing non-GAAP operating income (operating loss) by US-GAAP revenue) is a non-GAAP measure (ie, an adjusted value). The company provided fourth-quarter non-GAAP operating margin guidance. This non-GAAP measure excludes acquisition-related expenses, depreciation and amortization (consisting of intangible amortization of backlogs, developed technologies, customer relationships and brand names acquired in connection with business combinations, as well as amortization of adjustments to the fair value of inventories), stock-based compensation expense, depreciation and amortization actuarial losses from pension plans, adjustments for deferred compensation, integration expenses, restructuring expenses and asset impairments and goodwill are not taken into account. The Company has not reconciled the non-GAAP forecast to the forecast based on accounting principles generally accepted in the United States of America (“US GAAP”) because of the difficulty in determining the timing and amounts of the various items within a single period reasonable range, it is not possible without unreasonable effort to predict and quantify all adjustments that may occur during the reporting period. In particular, these non-GAAP measures exclude certain items, including continuing restructuring and integration costs, incurred as part of the implementation of the so-called business efficiency program develop further and therefore cannot be predicted quantitatively by society. Depending on the materiality of these items, they may have a material impact on the Company’s GAAP financial results.

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Cautionary Statement Regarding Forward-Looking Statements

The statements contained in this ad hoc release that are not historical facts, such as: B. Statements regarding expectations regarding income, expenses and margins, the ability of ADTRAN Holdings to reduce expenses in the coming year through the implementation of the so-called business efficiency program and the extent of such cost reductions, as well as ADTRAN Holdings’ strategy, outlook and financial forecast, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally include the use of words such as “believe”, “expect”, “intend”, “estimate”, “anticipate”, “will”, “may”, “could” and similar expressions. In addition, ADTRAN Holdings, through its management, may from time to time make forward-looking public statements on the matters discussed herein. ADTRAN Holdings undertakes no obligation to publicly update or revise any such forward-looking information, whether as a result of new information, future events or otherwise, except as required by law. Any such forward-looking statements are necessarily estimates and reflect management’s best judgment based on current information. Actual events or results may differ materially from those anticipated in these forward-looking statements due to a variety of factors. Although it is impossible to identify all of these factors, factors that have caused and may cause actual events or results to differ materially from those estimated by ADTRAN Holdings include: (i) Risks and uncertainties related to production and supply chain restrictions; (ii) risks and uncertainties associated with the completed business combination between the Company, ADTRAN, Inc. (“ADTRAN”) and Adtran Networks SE (“Adtran Networks”), including risks associated with the ability to continue the business of to successfully integrate ADTRAN and Adtran Networks, the disruption to management’s time for ongoing operations due to post-combination integration efforts and the risk that ADTRAN Holdings may be unable to achieve the expected synergies or that it may take longer or longer could be more expensive than expected to achieve these synergies; (iii) risks and uncertainties associated with the recent restatement of our consolidated financial statements for fiscal 2022 and the first and second quarters of 2023 and a continuing material weakness in our internal control over financial reporting; (iv) risks and uncertainties relating to ADTRAN Holdings’ ability to reduce expenditures and the impact of such reductions on the Company’s financial results and condition; (v) the risk of revenue fluctuations due to lengthy sales and approval processes required by major and other service providers for new products and continued stricter inventory management by ADTRAN’s customers; (vi) the risk posed by potential breaches of information systems and cyber-attacks; (vii) the risk that ADTRAN may be unable to compete effectively, including through product improvements and development; and (viii) other risks discussed in ADTRAN Holdings’ filings with the Securities and Exchange Commission (SEC), including its Annual Report on Form 10-K for the year ended December 31, 2022, as amended. and on Form 10-Q for the quarter ended June 30, 2023.

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Published by

Adtran Holdings, Inc.

www.adtran.com

For media

Gareth Spence

+44 1904 699 358

[email protected]

Notifying person and investor contact

Steven Williams

+49 89 890 665 918

[email protected]