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

Release Details

Calix Reports First Quarter 2015 Financial Results

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