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ADTRAN Management Discusses Q2 2012 Results - Earnings Call Transcript

Looking at our business from a product segment perspective, our organic Broadband Access segment was up both sequentially and year-over-year, driven by our Fiber-to-the-Node platforms as we saw meaningful increases in shipments to a domestic Tier 1 carrier, coupled with a strong performance in Latin America. This area also helped by a strong performance by the Total Access 5000 platform in the Tier 2 and Tier 3 markets, where we continue to add in excess of 20 new carrier customers per quarter.

Our Optical business was impacted by the slower Tier 1 sales, although it was partially offset by an increase of our newly released ONE product line. Also during the quarter, we received approvals from 2 additional Tier 2 carriers for our ONE products and began initial shipments to 1 of those 2.

Looking at our business from a geographic perspective, U.S. sales were down 19% year-over-year for the quarter, driven predominantly

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products to Tier 1 carrier customers.

As most of you know, who follow the company, the decline in these product areas has been expected, and we continue to drive the focus of the company towards packet-based technologies.

Conversely, it is important to note that total international revenues represented nearly 30% of the total company revenue, and our organic international revenues grew 32% year-over-year as we continued our global -- or goal of geographic and customer diversification.

We closed on the NSN Broadband Access business on May 4 this year, and I'm pleased to report we remain on track with our integration activities. During the quarter, we successfully on-boarded the required personnel, negotiated terms of supply agreements with all the major vendors and began production of selected products using ADTRAN's supply chain. It is our belief that in the years to come, ADTRAN's growth will be influenced by our ability to expand our geographic presence and our relevance with Tier 1 carriers around the world. This business, with its entrenched incumbency at large carriers outside of North America, will without a doubt substantially accelerate our initiatives and increase our odds for long-term success.

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