Calix Reports Second Quarter 2012 Financial Results
PETALUMA, CA -- (Marketwire) -- 07/31/12 -- Calix, Inc. (NYSE: CALX) today announced unaudited financial results for the second quarter ended June 30, 2012. Revenue for the second quarter of 2012 was $78.9 million, a decrease of 19.4% compared to $98.0 million for the second quarter of 2011.
"As we noted on July 11th when we announced preliminary Q2 results, softness in demand across multiple customer markets led to an unexpected slowdown in capital expenditures by service providers increasingly concerned about macro-economic conditions and uncertainties associated with the implementation of regulatory reforms," said Carl Russo, president and CEO of Calix. "In spite of these challenges, Calix maintained gross margins at expected levels while reducing inventories and producing another quarter of positive cash flow."
Non-GAAP net income for the second quarter of 2012 was $1.9 million, or $0.04 per fully diluted share. Non-GAAP net income was $7.8 million, or $0.16 per fully diluted share, for the second quarter of 2011. A reconciliation of GAAP and non-GAAP results is included as part of this release.
GAAP net loss for the second quarter of 2012 was $7.1 million, or $(0.15) per basic and diluted share, compared to a GAAP net loss of $17.6 million, or $(0.38) per basic and diluted share for the second quarter of 2011. A reconciliation of our second quarter 2012 operating results from non-GAAP to GAAP is provided below:
Calix, Inc.
(Unaudited, in thousands, except per share data)
Three Months Ended June 30, 2012
Amortization
of
Stock-Based Intangible
Non-GAAP Compensation Assets GAAP
------------ ------------ ------------ ------------
Revenue $ 78,928 $ - $ - $ 78,928
Cost of revenue 43,238 381 2,088 45,707
------------ ------------ ------------ ------------
Gross profit 35,690 (381) (2,088) 33,221
Gross margin 45.2% -0.5% -2.6% 42.1%
Operating expenses 33,541 3,958 2,552 40,051
------------ ------------ ------------ ------------
Operating income
(loss) 2,149 (4,339) (4,640) (6,830)
Interest and other
income (expense),
net (120) - - (120)
------------ ------------ ------------ ------------
Income (loss) before
taxes 2,029 (4,339) (4,640) (6,950)
Provision for income
taxes 141 - - 141
------------ ------------ ------------ ------------
Net income (loss) $ 1,888 $ (4,339) $ (4,640) $ (7,091)
============ ============ ============ ============
Weighted average
basic and diluted
shares used to
compute GAAP net
loss per common
share 47,972
============
Weighted average
diluted shares used
to compute non-GAAP
net income per
common share 48,113 48,113 48,113
============ ============ ============
GAAP net loss per
common share $ (0.15)
============
Non-GAAP net income
(loss) per share $ 0.04 $ (0.09) $ (0.10)
============ ============ ============
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 second quarter 2012 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 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, severance and integration-related expenses and inventory-related charges associated with our merger with Occam. 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.
Calix. Inc.
Condensed Consolidated Statements of Operations
(Unaudited, in thousands, except per share data)
Three Months Ended Six Months Ended
---------------------- ----------------------
June 30, June 25, June 30, June 25,
2012 2011 2012 2011
---------- ---------- ---------- ----------
Revenue $ 78,928 $ 97,959 $ 157,493 $ 169,429
Cost of revenue:
Products and services(1) 43,619 54,899 87,090 94,207
Merger-related expenses - 9,709 - 19,966
Amortization of intangible
assets 2,088 3,188 3,363 4,704
---------- ---------- ---------- ----------
Total cost of revenue 45,707 67,796 90,453 118,877
---------- ---------- ---------- ----------
Gross profit 33,221 30,163 67,040 50,552
Operating expenses:
Research and
development(1) 16,473 18,584 33,439 33,623
Sales and marketing(1) 14,897 14,172 29,787 26,238
General and
administrative(1) 6,129 6,667 12,909 15,975
Merger-related and other
expenses(1) - 5,482 - 11,523
Amortization of intangible
assets 2,552 2,795 5,104 3,464
---------- ---------- ---------- ----------
Total operating expenses 40,051 47,700 81,239 90,823
---------- ---------- ---------- ----------
Loss from operations (6,830) (17,537) (14,199) (40,271)
Interest and other income
(expense), net:
Interest income 4 26 11 69
Interest expense (57) (45) (99) (91)
Other income (expense),
net (67) 24 (89) 29
---------- ---------- ---------- ----------
Loss before provision for
income taxes (6,950) (17,532) (14,376) (40,264)
Provision for income taxes 141 114 236 138
---------- ---------- ---------- ----------
Net loss $ (7,091) $ (17,646) $ (14,612) $ (40,402)
========== ========== ========== ==========
Net loss per common share:
Basic and diluted $ (0.15) $ (0.38) $ (0.30) $ (0.92)
========== ========== ========== ==========
Weighted average number of
shares used to compute net
loss per common share:
Basic and diluted 47,972 46,050 47,911 43,697
========== ========== ========== ==========
(1) Includes stock-based
compensation as follows:
Cost of revenue $ 381 $ 331 $ 744 $ 835
Research and development 1,091 1,233 2,112 2,875
Sales and marketing 1,338 831 2,577 2,129
General and administrative 1,529 1,855 3,221 6,438
Merger-related and other
expenses - 1,074 - 1,164
---------- ---------- ---------- ----------
$ 4,339 $ 5,324 $ 8,654 $ 13,441
========== ========== ========== ==========
Calix, Inc.
Reconciliation of GAAP to Non-GAAP Results
(Unaudited, in thousands except per share data)
Three Months Ended Six Months Ended
---------------------- ----------------------
June 30, June 25, June 30, June 25,
2012 2011 2012 2011
---------- ---------- ---------- ----------
GAAP net loss $ (7,091) $ (17,646) $ (14,612) $ (40,402)
Adjustments to reconcile
GAAP net loss to non-GAAP
net income:
Stock-based compensation 4,339 5,324 8,654 13,441
Amortization of intangible
assets 4,640 5,983 8,467 8,168
Merger-related and other
expenses - 14,117 - 30,325
---------- ---------- ---------- ----------
Non-GAAP net income $ 1,888 $ 7,778 $ 2,509 $ 11,532
========== ========== ========== ==========
Non-GAAP net income per
common share
Basic $ 0.04 $ 0.17 $ 0.05 $ 0.26
========== ========== ========== ==========
Diluted $ 0.04 $ 0.16 $ 0.05 $ 0.25
========== ========== ========== ==========
Weighted average shares used
to compute non-GAAP net
income per common share -
Basic 47,972 46,050 47,911 43,697
========== ========== ========== ==========
Weighted average shares used
to compute non-GAAP net
income per common share -
Diluted (1) 48,113 48,139 48,076 46,008
========== ========== ========== ==========
(1) Includes the dilutive effect of outstanding stock options and
restricted stock units.
Calix, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
June 30, December 31,
2012 2011
------------- -------------
(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $ 53,085 $ 38,938
Restricted cash - 754
Accounts receivable, net 56,391 47,943
Inventory 33,243 44,604
Deferred cost of goods sold 12,673 8,324
Prepaid and other current assets 4,597 4,429
------------- -------------
Total current assets 159,989 144,992
Property and equipment, net 18,195 16,130
Goodwill 116,175 116,175
Intangible assets, net 71,581 80,048
Other assets 1,892 2,194
------------- -------------
Total assets $ 367,832 $ 359,539
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 20,247 $ 14,250
Accrued liabilities 33,706 36,214
Deferred revenue 24,152 16,783
------------- -------------
Total current liabilities 78,105 67,247
Long-term portion of deferred revenue 14,936 13,347
Other long term liabilities 1,014 1,528
------------- -------------
Total liabilities 94,055 82,122
------------- -------------
Stockholders' equity:
Common stock 1,205 1,195
Additional paid-in capital 751,260 740,309
Accumulated other comprehensive income 109 98
Accumulated deficit (478,797) (464,185)
------------- -------------
Total stockholders' equity 273,777 277,417
------------- -------------
Total liabilities and stockholders' equity $ 367,832 $ 359,539
============= =============
Calix, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)
Six Months Ended
--------------------------
June 30, June 25,
2012 2011
------------ ------------
Operating activities:
Net loss $ (14,612) $ (40,402)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Amortization of premiums relating to
available-for-sale securities - 184
Depreciation and amortization 4,129 3,859
Loss on retirement of property and equipment 84 1,621
Amortization of intangible assets 8,467 8,168
Stock-based compensation 8,654 13,441
Changes in operating assets and liabilities:
Restricted cash 754 -
Accounts receivable, net (8,448) 2,290
Inventory 11,361 15,297
Deferred cost of revenue (4,349) (3,064)
Prepaids and other assets 134 (1,246)
Accounts payable 5,997 (11,136)
Accrued liabilities (2,508) 3,029
Deferred revenue 8,958 9,138
Other long-term liabilities (514) (253)
------------ ------------
Net cash provided by operating
activities 18,107 926
------------ ------------
Investing activities:
Purchase of property and equipment (6,296) (4,508)
Maturities of marketable securities - 22,905
Acquisition of Occam Networks, net of cash
acquired - (60,809)
------------ ------------
Net cash used in investing activities (6,296) (42,412)
------------ ------------
Financing activities:
Proceeds from exercise of stock options and
other 139 667
Proceeds from employee stock purchase plan 2,222 2,062
Taxes withheld upon vesting of restricted
stock units (54) (8,921)
------------ ------------
Net cash provided by (used in) financing
activities 2,307 (6,192)
------------ ------------
Effect of exchange rate changes on cash and cash
equivalents 29 34
Net increase (decrease) in cash and cash
equivalents 14,147 (47,644)
Cash and cash equivalents at beginning of period 38,938 66,304
------------ ------------
Cash and cash equivalents at end of period $ 53,085 $ 18,660
============ ============
Investor Relations Contact: David H. Allen 510-360-3703 David.Allen@Calix.com
Source: Calix, Inc.
Released July 31, 2012