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Calix Reports First Quarter 2015 Financial Results

April 28, 2015
ETALUMA, CA -- (Marketwired) -- 04/28/15 -- Calix, Inc. (NYSE: CALX) today announced unaudited financial results for the first quarter ended March 28, 2015. Revenue for the first quarter of 2015 was $91.0 million, an increase of 6.1% compared to $85.8 million for the first quarter of 2014.

"Our first quarter results reflected strong operating performance as we continued to execute on our Unified Access vision and strengthened our leadership position in the broadband access market," said Carl Russo, Calix president and CEO. "Our new fiber-enabled GigaCenters continued to gain traction with orders from more than 200 domestic and international service provider customers since the product launch late last year," added Russo.

In a separate press release issued today, Calix announced that its board of directors has authorized a program to repurchase up to $40 million of its common stock. Please refer to that announcement for further information.

The company's non-GAAP net loss for the first quarter of 2015 was $3.4 million, or $(0.07) per basic and fully diluted share, compared to a non-GAAP net loss of $1.5 million, or $(0.03) per basic and fully diluted share, for the first quarter of 2014. A reconciliation of GAAP and non-GAAP results is included as part of this release.

The GAAP net loss for the first quarter of 2015 was $11.9 million, or $(0.23) per basic and diluted share, compared to a GAAP net loss of $10.0 million, or $(0.20) per basic and diluted share, for the first quarter of 2014. A reconciliation of our first quarter 2015 operating results from non-GAAP to GAAP is provided below:

Calix, Inc.  
(Unaudited, in thousands, except per share data)  
Three Months Ended March 28, 2015  
                             
  Non-GAAP     Stock-Based Compensation     Amortization of Intangible Assets     Acquisition-Related Costs     GAAP  
Revenue $ 91,038$    
-$    
-$    
-$    
91,038  
Cost of revenue   46,285       175       2,088       -       48,548  
Gross profit   44,753       (175)
    (2,088)
    -       42,490  
Gross margin   49.2%
    (0.2)%
    (2.3)%
    -%
    46.7%
Operating expenses   48,148       3,487       2,552       190       54,377  
Operating loss   (3,395)
    (3,662)
    (4,640)
    (190)
    (11,887)
Interest and other income (expense), net   48       -       -       -       48  
Provision for income taxes   91       -       -       -       91  
Net loss $ (3,438)
  $ (3,662)
  $ (4,640)
  $ (190)
  $
(11,930)
Weighted average shares used to compute net loss per common share:                                      
  Basic and diluted   51,732       51,732       51,732       51,732       51,732  
Net loss per common share:                                      
  Basic and diluted $ (0.07)
  $ (0.07)
  $ (0.09)
  $ -     $ (0.23)

Conference Call

In conjunction with this announcement, Calix will host a conference call at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time) today to discuss its first quarter 2015 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: (877) 407-4019 (U.S.) or (201) 689-8337 (outside the U.S.)

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 enables communications service providers worldwide to transform their copper- and fiber-based networks and become the broadband provider of choice to their subscribers. For more information, visit the Calix website at www.calix.com. For more information about gigabit networks, visit www.calix.com/gigabit/.

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 (loss) and non-GAAP basic and diluted income (loss) 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 acquisition-related costs, which the Company believes are not indicative of its core operating results. Acquisition-related costs include legal fees and associated expenses incurred under a pre-existing contract between Occam and its retained advisor in connection with the Occam acquisition. 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 those GAAP results. A reconciliation of the non-GAAP results to the most directly comparable GAAP results is provided in 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.

Forward-Looking Statements

Statements made in this press release and the earnings call referencing the press release that are not statements of historical fact are forward-looking statements. Forward-looking statements are subject to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements relate to, but are not limited to, the execution of a stock repurchase program. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from expectations, including but not limited to the risks described in our 2014 Form 10-K and our quarterly reports on Form 10-Q, each as filed with the SEC and available at www.sec.gov, particularly in the sections titled "Risk Factors." Forward-looking statements speak only as of the date the statements are made and are based on information available to us at the time those statements are made and/or management's good faith belief as of that time with respect to future events. We assume no obligation to update forward-looking statements to reflect actual performance or results, changes in assumptions or changes in other factors affecting forward-looking information, except to the extent required by applicable securities laws. Accordingly, investors should not place undue reliance on any forward-looking statements.

Calix, Inc.  
Condensed Consolidated Statements of Operations  
(Unaudited, in thousands, except per share data)  
     
  Three Months Ended  
  March 28,     March 29,  
  2015     2014  
Revenue $ 91,038     $ 85,820  
Cost of revenue:              
  Products and services (1)   46,460       46,806  
  Amortization of intangible assets   2,088       2,088  
    Total cost of revenue   48,548       48,894  
Gross profit   42,490       36,926  
Operating expenses:              
  Research and development (1)   21,914       19,630  
  Sales and marketing (1)   19,759       17,390  
  General and administrative (1)   10,152       7,251  
  Amortization of intangible assets   2,552       2,552  
    Total operating expenses   54,377       46,823  
Loss from operations   (11,887)
    (9,897)
Interest and other income (expense), net:              
  Interest income   379       4  
  Interest expense   (379)
    (57)
  Other income (expense), net   48       33  
    Total interest and other income (expense), net   48       (20 )
Loss before provision for income taxes   (11,839)
    (9,917)
Provision for income taxes   91       110  
Net loss $ (11,930)
  $ (10,027)
Net loss per common share:              
  Basic and diluted $ (0.23)
  $ (0.20)
Weighted average number of shares used to compute net loss per common share:              
  Basic and diluted   51,732       50,271  
               
(1) Includes stock-based compensation as follows:              
  Cost of revenue $ 175     $ 354  
  Research and development   1,212       1,180  
  Sales and marketing   1,425       1,368  
  General and administrative   850       1,000  
  $ 3,662     $ 3,902  
Calix, Inc.  
Reconciliation of GAAP to Non-GAAP Results  
(Unaudited, in thousands, except per share data)  
           
  Three Months Ended  
  March 28,     March 29,  
  2015     2014  
GAAP net loss $ (11,930)
  $ (10,027)
Adjustments to reconcile GAAP net loss to non-GAAP net loss:              
  Stock-based compensation   3,662       3,902  
  Amortization of intangible assets   4,640       4,640  
  Acquisition-related costs   190       -  
Non-GAAP net loss $ (3,438)
  $ (1,485)
Non-GAAP net loss per common share:              
  Basic and diluted $ (0.07)
  $ (0.03)
Weighted average shares used to compute non-GAAP net loss per common share:              
  Basic and diluted   51,732       50,271  
Calix, Inc.  
Condensed Consolidated Balance Sheets  
(Unaudited, in thousands)  
           
  March 28,     December 31,  
  2015     2014  
ASSETS          
Current assets:          
  Cash and cash equivalents $ 29,618     $ 48,829  
  Marketable securities   68,157       62,850  
  Restricted cash   -       295  
  Accounts receivable, net   39,000       30,744  
  Inventory   40,637       46,753  
  Deferred cost of revenue   1,762       5,080  
  Prepaid expenses and other current assets   10,779       12,936  
    Total current assets   189,953       207,487  
  Property and equipment, net   19,403       20,144  
  Goodwill   116,175       116,175  
  Intangible assets, net   20,539       25,179  
  Other assets   1,113       1,236  
    Total assets $ 347,183     $ 370,221  
LIABILITIES AND STOCKHOLDERS' EQUITY              
Current liabilities:              
  Accounts payable $ 12,792     $ 23,629  
  Accrued liabilities   39,447       39,443  
  Deferred revenue   9,036       12,722  
    Total current liabilities   61,275       75,794  
  Long-term portion of deferred revenue   19,428       19,393  
  Other long-term liabilities   2,091       2,443  
    Total liabilities   82,794       97,630  
Stockholders' equity:              
  Common stock   1,295       1,291  
  Additional paid-in capital   805,525       801,810  
  Accumulated other comprehensive income   89       80  
  Accumulated deficit   (542,520)
    (530,590)
    Total stockholders' equity   264,389       272,591  
    Total liabilities and stockholders' equity $ 347,183     $ 370,221  
Calix, Inc.  
Condensed Consolidated Statements of Cash Flows  
(Unaudited, in thousands)  
           
  Three Months Ended  
  March 28,     March 29,  
  2015     2014  
Operating activities:          
  Net loss $ (11,930)
  $ (10,027)
  Adjustments to reconcile net loss to net cash used in operating activities:              
    Depreciation and amortization   2,480       2,271  
    Loss on retirement of property and equipment   10       -  
    Amortization of intangible assets   4,640       4,640  
    Amortization of premiums related to available-for-sale securities   287       -  
    Stock-based compensation   3,662       3,902  
    Changes in operating assets and liabilities:              
      Restricted cash   295       -  
      Accounts receivable, net   (8,256)
    (614)
      Inventory   6,115       6,011  
      Deferred cost of revenue   3,318       3,233  
      Prepaid expenses and other assets   1,974       1,016  
      Accounts payable   (10,836)
    (12,276)
      Accrued liabilities   54       2,485  
      Deferred revenue   (3,651)
    (5,811)
      Other long-term liabilities   (59)
    (56)
        Net cash used in operating activities   (11,897)
    (5,226)
Investing activities:              
  Purchases of property and equipment   (1,742)
    (1,908)
  Purchases of marketable securities   (17,004)
    -  
  Maturities of marketable securities   11,450       -  
    Net cash used in investing activities   (7,296)
    (1,908)
Financing activities:              
  Proceeds from exercise of stock options   564       21  
  Taxes paid for awards vested under equity incentive plans   (506)
    (473)
      Net cash provided by (used in) financing activities   58       (452)
Effect of exchange rate changes on cash and cash equivalents   (76)
    8  
Net decrease in cash and cash equivalents   (19,211)
    (7,578)
Cash and cash equivalents at beginning of period   48,829       82,747  
Cash and cash equivalents at end of period $ 29,618     $ 75,169  

         

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