Calix Reports Second Quarter 2011 Financial Results
PETALUMA, CA, Jul 21, 2011 (MARKETWIRE via COMTEX) --
Calix, Inc. (NYSE: CALX) today announced unaudited financial results for the second quarter ended June 25, 2011. Revenue for the second quarter of 2011 was $98.0 million, an increase of 36.7% compared to $71.7 million for the second quarter of 2010.
"Calix set a new revenue record in Q2 as we built upon favorable secular trends affecting our markets," said Carl Russo, president and CEO of Calix. "In our first full quarter of operations after closing our acquisition, we executed well across all areas of the business, and reported results that were ahead of expectations."
Non-GAAP net income for the second quarter of 2011 was $7.8 million, or $0.16 per fully diluted share, an increase of 40.8% compared to non-GAAP net income of $5.5 million, or $0.14 per fully diluted share, for the second quarter of 2010. A reconciliation of GAAP and non-GAAP results is included as part of this release.
GAAP net loss for the second quarter of 2011 was $17.6 million, or $(0.38) per basic and diluted share, compared to a GAAP net loss of $3.2 million, or $(0.09) per basic and diluted share for the second quarter of 2010. A reconciliation of our Q2 2011 operating results from non-GAAP to GAAP is provided below:
Merger Amortization
Related of
and Other Stock-Based Intangible
Non-GAAP Expenses Compensation Assets GAAP
-------- ---------- ------------ ------------- --------
Revenue $ 97,959 $ - $ - $ - $ 97,959
Cost of revenue 54,568 9,709 331 3,188 67,796
-------- ---------- ------------ ------------- --------
Gross profit 43,391 (9,709) (331) (3,188) 30,163
Operating
expense 35,504 4,408 4,993 2,795 47,700
-------- ---------- ------------ ------------- --------
Operating
income (loss) 7,887 (14,117) (5,324) (5,983) (17,537)
Other income /
(expense), net 5 - - - 5
-------- ---------- ------------ ------------- --------
Income (loss)
before taxes 7,892 (14,117) (5,324) (5,983) (17,532)
Provision for
income taxes 114 - - - 114
-------- ---------- ------------ ------------- --------
Net income
(loss) $ 7,778 $ (14,117) $ (5,324) $ (5,983) $(17,646)
======== ========== ============ ============= ========
Weighted
average basic
and diluted
shares used to
compute GAAP
net loss per
common share 46,050
========
Weighted
average
diluted shares
used to
compute non-
GAAP net
income per
common share 48,139 48,139 48,139 48,139
======== ========== ============ =============
GAAP net loss
per common
share $ (0.38)
========
Non-GAAP net
income (loss)
per share $ 0.16 $ (0.29) $ (0.11) $ (0.12)
======== ========== ============ =============
Conference Call
In conjunction with this announcement, Calix will host a conference call at 1:30 p.m. PDT (4:30 p.m. EDT) today to discuss its second quarter 2011 financial results. A live audio webcast and replay of the call will be available in the Investor Relations section of the Calix web site at http://investor-relations.calix.com.
Live call access information:
-- Dial-in number: (800) 320-2978 (U.S.) or (617) 614-4923 (outside the
U.S.)
-- Passcode: 80168277
Replay call access information:
-- Replay call dial-in: (888) 286-8010 (U.S.) or (617) 801-6888 (outside
the U.S.)
-- Passcode: 82555257
The conference call and webcast will include forward looking information.
About Calix
Calix (NYSE: CALX) is a global leader in access innovation. Its Unified Access portfolio of broadband communications access systems and software enable communications service providers worldwide to be the broadband provider of choice to their subscribers. For more information, visit the Calix website at www.calix.com.
Use of Non-GAAP Financial Information
The Company uses certain non-GAAP financial measures in this press release to supplement its consolidated financial statements, which are presented in accordance with GAAP. These non-GAAP measures include non-GAAP net income and non-GAAP basic and diluted income per share. These non-GAAP measures are provided to enhance the reader's understanding of the Company's operating performance as they primarily exclude certain non-cash charges for stock-based compensation and amortization of acquisition-related intangible assets, and non-recurring merger-related and other expenses, which the Company believes are not indicative of its core operating results. Merger-related and other expenses largely include the charge resulting from the required revaluation of Occam inventory to its estimated fair value, legal and professional expenses, and severance and integration-related expenses and inventory-related charges associated with our merger with Occam and to a lesser extent the settlement of litigation. Management believes that the non-GAAP measures used in this press release provide investors with important perspectives into the Company's ongoing business performance and management uses these non-GAAP measures to evaluate financial results and to establish operational goals. The presentation of these non-GAAP measures is not meant to be a substitute for results presented in accordance with GAAP, but rather should be evaluated in conjunction with these results. A reconciliation of the non-GAAP results to the most directly comparable GAAP results is provided in the financial schedules portion of this press release. The non-GAAP financial measures used by the company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies.
Condensed Consolidated Statements of Operations
(in thousands)
Three Months Ended Six Months Ended
------------------ ------------------
June 25, June 26, June 25, June 26,
2011 2010 2011 2010
-------- -------- -------- --------
(unaudited) (unaudited)
Revenue $ 97,959 $ 71,653 $169,429 $119,856
Cost of revenue:
Products and services(1) 54,899 41,855 94,207 72,026
Merger-related expenses 9,709 - 19,966 -
Amortization of intangible
assets 3,188 1,360 4,704 2,720
-------- -------- -------- --------
Total cost of revenue 67,796 43,215 118,877 74,746
-------- -------- -------- --------
Gross profit 30,163 28,438 50,552 45,110
Operating expenses:
Research and development(1) 18,584 13,086 33,623 24,933
Sales and marketing(1) 14,172 10,184 26,238 18,606
General and administrative(1) 6,667 7,423 15,975 12,171
Merger-related and other
expenses(1) 5,482 - 11,523 -
Amortization of intangible
assets 2,795 185 3,464 370
-------- -------- -------- --------
Total operating expenses 47,700 30,878 90,823 56,080
-------- -------- -------- --------
Loss from operations (17,537) (2,440) (40,271) (10,970)
Other income (expense):
Interest income 26 103 69 177
Interest expense (45) (620) (91) (1,093)
Change in fair value of
preferred stock warrants - - - (173)
Other income 24 (2) 29 9
-------- -------- -------- --------
Loss before provision for income
taxes (17,532) (2,959) (40,264) (12,050)
Provision for income taxes 114 243 138 414
-------- -------- -------- --------
Net loss (17,646) (3,202) (40,402) (12,464)
Preferred stock dividends - - - 900
-------- -------- -------- --------
Net loss attributable to common
stockholders $(17,646) $ (3,202) $(40,402) $(13,364)
======== ======== ======== ========
Net loss per common share:
Basic and diluted $ (0.38) $ (0.09) $ (0.92) $ (0.63)
======== ======== ======== ========
Pro forma basic and diluted $ (0.38) $ (0.09) $ (0.92) $ (0.36)
======== ======== ======== ========
Weighted average number of shares
used to compute net loss per common
share:
Basic and diluted 46,050 37,212 43,697 21,305
======== ======== ======== ========
Pro forma basic and diluted (2) 46,050 37,212 43,697 34,614
======== ======== ======== ========
-
(1) Includes stock-based
compensation as follows: Three Months Ended Six Months Ended
------------------ ------------------
June 25, June 26, June 25, June 26,
2011 2010 2011 2010
-------- -------- -------- --------
(unaudited) (unaudited)
Cost of revenue $ 331 $ 484 $ 835 $ 624
Research and development 1,233 1,686 2,875 2,256
Sales and marketing 831 1,247 2,129 1,681
General and administrative 1,855 3,764 6,438 5,427
Merger-related 1,074 - 1,164 -
-------- -------- -------- --------
$ 5,324 $ 7,181 $ 13,441 $ 9,988
======== ======== ======== ========
(2) For the six months ended June 26, 2010, includes outstanding common
shares and common shares resulting from the assumed conversion of
preferred shares as if conversion occurred at the beginning of the
first quarter of 2010.
Reconciliation of GAAP to Non-GAAP Results
(Unaudited, in thousands except per share data)
Three Months Ended Six Months Ended
------------------ ------------------
June 25, June 26, June 25, June 26,
2011 2010 2011 2010
-------- -------- -------- --------
GAAP net loss $(17,646) $ (3,202) $(40,402) $(13,364)
Adjustments to reconcile GAAP net
loss to non-GAAP net income (loss):
Stock-based compensation 4,250 7,181 12,277 9,988
Stock-based compensation (MRE) 1,074 - 1,164 -
Amortization of intangible assets 5,983 1,545 8,168 3,090
Merger-related expenses (COGS) 9,709 - 19,966 -
Merger-related and other expenses
(OPEX) 4,408 - 10,359 -
Change in fair value of preferred
stock warrants - - - 173
Preferred stock dividends - - - 900
-------- -------- -------- --------
Non-GAAP net income $ 7,778 $ 5,524 $ 11,532 $ 787
======== ======== ======== ========
Non-GAAP net income per common share
Basic $ 0.17 $ 0.15 $ 0.26 $ 0.02
======== ======== ======== ========
Diluted $ 0.16 $ 0.14 $ 0.25 $ 0.02
======== ======== ======== ========
Weighted average shares used to
compute non-GAAP net income per
common share - Basic (1) 46,050 37,212 43,697 34,614
======== ======== ======== ========
Weighted average shares used to
compute non-GAAP net income per
common share - Diluted (1)(2) 48,139 39,413 46,008 36,409
======== ======== ======== ========
(1) For the six months ended June 26, 2010, includes outstanding common
shares and common shares resulting from the assumed conversion of
preferred shares as if conversion occurred at the beginning of the
first quarter of 2010.
(2) Includes the dilutive effect of oustanding stock options, warrants and
restricted stock units for all periods presented.
----------------------------------------------------------------------------
Three Months Ended Six Months Ended
-------------------------- --------------------------
June 25, June 26, June 25, June 26,
2011 2010 2011 2010
-------------------------- --------------------------
GAAP gross profit
and gross margin $30,163 30.8% $28,438 39.7% $50,552 29.8% $45,110 37.6%
Adjustments to
reconcile GAAP
gross profit and
gross margin to
non-GAAP gross
profit and gross
margin:
Stock-based
compensation 331 484 835 624
Amortization of
intangible assets 3,188 1,360 4,704 2,720
Merger-related
expenses 9,709 - 19,966 -
------- ------- ------- -------
Non-GAAP gross
profit and gross
margin $43,391 44.3% $30,282 42.3% $76,057 44.9% $48,454 40.4%
======= ======= ======= =======
Condensed Consolidated Balance Sheets
(In thousands)
June 25, December 31,
2011 2010
------------ ------------
ASSETS (unaudited)
Current Assets:
Cash and cash equivalents $ 18,660 $ 66,304
Marketable securities 8,911 32,020
Restricted cash 1,054 -
Accounts receivable, net 57,940 43,377
Inventory 38,489 24,557
Deferred cost of revenue 10,835 7,771
Prepaid and other current assets 5,340 3,245
------------ ------------
Total current assets 141,229 177,274
Property and equipment, net 18,206 11,815
Goodwill 116,175 65,576
Intangible assets, net 90,001 515
Other assets 2,381 2,376
------------ ------------
Total assets $ 367,992 $ 257,556
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 10,932 $ 10,268
Accrued liabilities 39,629 25,987
Deferred revenue 23,081 14,062
------------ ------------
Total current liabilities 73,642 50,317
Long-term portion of deferred revenue 11,970 10,985
Other long term liabilities 1,588 951
------------ ------------
Total liabilities 87,200 62,253
------------ ------------
Stockholders' equity:
Common stock 1,167 968
Additional paid-in capital 731,617 605,939
Other comprehensive income 45 31
Accumulated deficit (452,037) (411,635)
------------ ------------
Total stockholders' equity 280,792 195,303
------------ ------------
Total liabilities and stockholders' equity $ 367,992 $ 257,556
============ ============
Condensed Consolidated Statements of Cash Flows
(in thousands)
Six Months Ended
---------------------------
June 25, June 26,
2011 2010
------------ ------------
(unaudited)
Operating activities
Net loss $ (40,402) $ (12,464)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Amortization of premiums relating to
available-for-sale securities 184 415
Loss on retirement of property and equipment 1,621 -
Depreciation and amortization 3,859 2,381
Amortization of intangible assets 8,168 3,090
Revaluation of warrant liability - 173
Stock-based compensation 13,441 9,988
Changes in operating assets and liabilities:
Change in restricted cash - 629
Accounts receivable, net 2,290 11,452
Inventory 15,297 (6,387)
Deferred cost of revenue (3,064) 622
Prepaids and other assets (1,246) 858
Accounts payable (11,136) (10,326)
Accrued liabilities 3,029 (2,119)
Deferred Revenue 9,138 1,358
Other long-term liabilities (253) 130
------------ ------------
Net cash provided by (used in) operating
activities 926 (200)
------------ ------------
Investing activities
Acquisition of property and equipment (4,508) (2,906)
Acquisition of Occam Networks, net of cash
assumed (60,809) -
Purchase of marketable securities - (56,567)
Sales of marketable securities - 15,208
Maturities of marketable securities 22,905 -
------------ ------------
Net cash used in investing activities (42,412) (44,265)
------------ ------------
Financing activities
Proceeds from exercise of stock options and
other 667 72
Proceeds from employee stock purchase plan 2,062 -
Taxes withheld upon vesting of restricted
stock units (8,921) -
Principal payment on loans - (20,000)
Proceeds from initial public offering of
common stock, net of issuance costs - 57,293
------------ ------------
Net cash provided by (used in) financing
activities (6,192) 37,365
------------ ------------
Effect of exchange rate changes on cash and
cash equivalents 34 -
Net decrease in cash and cash equivalents (47,644) (7,100)
Cash and cash equivalents at beginning of
period 66,304 31,821
------------ ------------
Cash and cash equivalents at end of period $ 18,660 $ 24,721
============ ============