ADTRAN Inc. (ADTN, Financial) filed Quarterly Report for the period ended 2010-03-31.
Adtran Inc. has a market cap of $1.65 billion; its shares were traded at around $26.77 with a P/E ratio of 21.94 and P/S ratio of 3.42. The dividend yield of Adtran Inc. stocks is 1.34%. Adtran Inc. had an annual average earning growth of 16.1% over the past 10 years.ADTN is in the portfolios of John Hussman of Hussman Economtrics Advisors, Inc., Chuck Royce of Royce& Associates, John Buckingham of Al Frank Asset Management, Inc., Jim Simons of Renaissance Technologies LLC, Jeremy Grantham of GMO LLC, Steven Cohen of SAC Capital Advisors.
Liquidity At March 31, 2010, cash on hand was $26.9 million and short-term investments were $137.3 million, which resulted in available short-term liquidity of $164.2 million. At December 31, 2009, our cash on hand of $24.1 million and short-term investments of $172.5 million resulted in available short-term liquidity of $196.6 million. The decrease in liquidity from December 31, 2009 to March 31, 2010 primarily reflects a realignment of our investment portfolio from short-term to long-term, which increased long-term investments by $52.4 million in the first quarter of 2010 compared to December 31, 2009.
Our working capital, which consists of current assets less current liabilities, decreased 14.2% from $278.0 million as of December 31, 2009 to $238.5 million as of March 31, 2010. The quick ratio, defined as cash, cash equivalents, short-term investments, and net accounts receivable, divided by current liabilities, decreased from 5.54 as of December 31, 2009 to 3.42 as of March 31, 2010. The current ratio, defined as current assets divided by current liabilities, decreased from 6.82 as of December 31, 2009 to 4.42 as of March 31, 2010. Our working capital, the quick ratio, and the current ratio decreased due to a realignment of our investment portfolio from short-term to long-term, which increased long-term investments by $52.4 million, and an increase in current liabilities of $21.9 million, due primarily to increases of $9.0 million in accounts payable and $8.7 million in income taxes payable during the first quarter of 2010.
Net accounts receivable increased from $68.0 million at December 31, 2009 to $74.1 million at March 31, 2010. Our allowance for doubtful accounts was $0.1 million at December 31, 2009 and $0.2 million at March 31, 2010. Quarterly accounts receivable days sales outstanding (DSO) increased from 50 days as of December 31, 2009 to 53 days as of March 31, 2010. Net accounts receivable and DSO increased for the quarter ended March 31, 2010 due to the timing of sales during the quarter. Other receivables increased from $4.1 million at December 31, 2009 to $10.1 million at March 31, 2010. Generally, the change in other receivables is due to the timing of collections for materials supplied to our contract manufacturers.
We invest all available cash not required for immediate use in operations primarily in securities that we believe bear minimal risk of loss. At March 31, 2010 these investments included municipal variable rate demand notes of $69.2 million, municipal fixed-rate bonds of $145.1 million and corporate bonds issued by various banks that are guaranteed by the Federal Deposit Insurance Corporation (FDIC) of $41.0 million. At December 31, 2009, these investments included municipal variable rate demand notes of $84.4 million, municipal fixed-rate bonds of $141.3 million and corporate bonds guaranteed by the FDIC of $20.4 million.
Our long-term investments increased 32.3% from $162.2 million at December 31, 2009 to $214.6 million at March 31, 2010. The primary reason for the increase in our long-term investments during the first quarter of 2010 was the realignment of our investment portfolio. Long-term investments at March 31, 2010 and December 31, 2009 included an investment in a certificate of deposit of $48.3 million which serves as collateral for our revenue bonds, as discussed below. We have various equity investments included in long-term investments at a cost of $10.2 million and $9.8 million, and with a fair value of $41.4 million and $33.5 million, at March 31, 2010 and December 31, 2009, respectively, including a single equity security, of which we held 1.9 million shares and 2.1 million shares, carried at $29.4 million and $22.4 million of fair value at March 31, 2010 and December 31, 2009, respectively. The single security traded approximately 1.3 million shares per day in the first quarter of 2010 in an active market on a European stock exchange. Of the gross unrealized gains included in the fair value of our marketable securities at March 31, 2010, this single security comprised $28.7 million of this unrealized gain. Long-term investments at March 31, 2010 also include $3.6 million related to our deferred compensation plan; $2.2 million of other investments carried at cost, consisting of interests in two private equity funds and an investment in a privately held telecommunications equipment manufacturer; and $1.2 million of a fixed income bond fund.
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Adtran Inc. has a market cap of $1.65 billion; its shares were traded at around $26.77 with a P/E ratio of 21.94 and P/S ratio of 3.42. The dividend yield of Adtran Inc. stocks is 1.34%. Adtran Inc. had an annual average earning growth of 16.1% over the past 10 years.ADTN is in the portfolios of John Hussman of Hussman Economtrics Advisors, Inc., Chuck Royce of Royce& Associates, John Buckingham of Al Frank Asset Management, Inc., Jim Simons of Renaissance Technologies LLC, Jeremy Grantham of GMO LLC, Steven Cohen of SAC Capital Advisors.
Highlight of Business Operations:
Sales were $127.0 million for the three months ended March 31, 2010 compared to $110.4 million for the three months ended March 31, 2009. Product revenues for our three primary growth areas, Broadband Access, Optical Access and Internetworking, were $69.8 million for the three months ended March 31, 2010 compared to $48.2 million for the three months ended March 31, 2009. Our gross margin decreased for the three months ended March 31, 2010 to 59.3% from 61.1% for the three months ended March 31, 2009. Our operating income margin decreased to 20.0% for the three months ended March 31, 2010 from 20.8% for the three months ended March 31, 2009. Net income was $18.2 million for the three months ended March 31, 2010 compared to $15.2 million for the three months ended March 31, 2009. Our effective tax rate increased from 26.3% for the three months ended March 31, 2009 to 35.7% for the three months ended March 31, 2010. Earnings per share, assuming dilution, were $0.29 for the three months ended March 31, 2010 compared to $0.24 for the three months ended March 31, 2009.Liquidity At March 31, 2010, cash on hand was $26.9 million and short-term investments were $137.3 million, which resulted in available short-term liquidity of $164.2 million. At December 31, 2009, our cash on hand of $24.1 million and short-term investments of $172.5 million resulted in available short-term liquidity of $196.6 million. The decrease in liquidity from December 31, 2009 to March 31, 2010 primarily reflects a realignment of our investment portfolio from short-term to long-term, which increased long-term investments by $52.4 million in the first quarter of 2010 compared to December 31, 2009.
Our working capital, which consists of current assets less current liabilities, decreased 14.2% from $278.0 million as of December 31, 2009 to $238.5 million as of March 31, 2010. The quick ratio, defined as cash, cash equivalents, short-term investments, and net accounts receivable, divided by current liabilities, decreased from 5.54 as of December 31, 2009 to 3.42 as of March 31, 2010. The current ratio, defined as current assets divided by current liabilities, decreased from 6.82 as of December 31, 2009 to 4.42 as of March 31, 2010. Our working capital, the quick ratio, and the current ratio decreased due to a realignment of our investment portfolio from short-term to long-term, which increased long-term investments by $52.4 million, and an increase in current liabilities of $21.9 million, due primarily to increases of $9.0 million in accounts payable and $8.7 million in income taxes payable during the first quarter of 2010.
Net accounts receivable increased from $68.0 million at December 31, 2009 to $74.1 million at March 31, 2010. Our allowance for doubtful accounts was $0.1 million at December 31, 2009 and $0.2 million at March 31, 2010. Quarterly accounts receivable days sales outstanding (DSO) increased from 50 days as of December 31, 2009 to 53 days as of March 31, 2010. Net accounts receivable and DSO increased for the quarter ended March 31, 2010 due to the timing of sales during the quarter. Other receivables increased from $4.1 million at December 31, 2009 to $10.1 million at March 31, 2010. Generally, the change in other receivables is due to the timing of collections for materials supplied to our contract manufacturers.
We invest all available cash not required for immediate use in operations primarily in securities that we believe bear minimal risk of loss. At March 31, 2010 these investments included municipal variable rate demand notes of $69.2 million, municipal fixed-rate bonds of $145.1 million and corporate bonds issued by various banks that are guaranteed by the Federal Deposit Insurance Corporation (FDIC) of $41.0 million. At December 31, 2009, these investments included municipal variable rate demand notes of $84.4 million, municipal fixed-rate bonds of $141.3 million and corporate bonds guaranteed by the FDIC of $20.4 million.
Our long-term investments increased 32.3% from $162.2 million at December 31, 2009 to $214.6 million at March 31, 2010. The primary reason for the increase in our long-term investments during the first quarter of 2010 was the realignment of our investment portfolio. Long-term investments at March 31, 2010 and December 31, 2009 included an investment in a certificate of deposit of $48.3 million which serves as collateral for our revenue bonds, as discussed below. We have various equity investments included in long-term investments at a cost of $10.2 million and $9.8 million, and with a fair value of $41.4 million and $33.5 million, at March 31, 2010 and December 31, 2009, respectively, including a single equity security, of which we held 1.9 million shares and 2.1 million shares, carried at $29.4 million and $22.4 million of fair value at March 31, 2010 and December 31, 2009, respectively. The single security traded approximately 1.3 million shares per day in the first quarter of 2010 in an active market on a European stock exchange. Of the gross unrealized gains included in the fair value of our marketable securities at March 31, 2010, this single security comprised $28.7 million of this unrealized gain. Long-term investments at March 31, 2010 also include $3.6 million related to our deferred compensation plan; $2.2 million of other investments carried at cost, consisting of interests in two private equity funds and an investment in a privately held telecommunications equipment manufacturer; and $1.2 million of a fixed income bond fund.
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