The company is very honest about its exposure to the recession. During 2008, it realized $2.8 million in losses in the stock market and its filing notes that the company also owns municipal bonds that have not yet lost value, but which could lose value or liquidity in the future.
Nevertheless, this is a profitable company, with $78.5 million net income for 2008 and a debt to equity ratio of barely more than 10 percent.
The company has already seen a slowdown in sales and foresees a further slowdown in Q1 2009, noting, "Beginning in the latter part of the third quarter of 2008 and extending through the fourth quarter of 2008, we experienced an overall decline in order rates across most of our product categories. We believe this decline in order rates was the result of slowing macroeconomic conditions, coupled with the fact that our sales in the fourth quarter of each year have typically been lower than our sales in the preceding third quarter due to seasonality. Our sales in the first quarter of each year have also typically been lower than our sales in the second and third quarters of the previous year due to seasonality."
Like many companies that are still profitable, it plans to reduce its debt. For example, the company is making early payments on a loan from the State of Alabama.
Consider ADTRAN a bellwether for companies that do their engineering in North America and sell to North American customers, as over 90 percent of its sales revenue in 2008 was generated in North America.