Calix Reports Third Quarter 2011 Financial Results
PETALUMA, CA, Oct 20, 2011 (MARKETWIRE via COMTEX) --
Calix Inc. (NYSE: CALX) today announced unaudited financial results for the third quarter ended September 24, 2011. Revenue for the third quarter of 2011 was $83.7 million, an increase of 11% compared to $75.5 million for the third quarter of 2010. The company reported preliminary estimates for its third quarter results on September 27, 2011 of revenue between $83 and $85 million and non-GAAP earnings per share of $0.07 to $0.09 per share.
"While we are clearly disappointed with our Q3 results, we remain focused on bringing industry leading broadband access solutions to our existing and expanding base of customers," said Carl Russo, president and CEO of Calix. "After what we anticipate will be a pause in our growth, we are looking ahead and building a stronger company to address the secular growth drivers in front of us."
Non-GAAP net income for the third quarter of 2011 was $3.6 million, or $0.07 per fully diluted share, a decrease of 39% compared to non-GAAP net income of $5.8 million, or $0.15 per fully diluted share, for the third quarter of 2010. A reconciliation of GAAP and non-GAAP results is included as part of this release.
GAAP net loss for the third quarter of 2011 was $6.9 million, or $(0.15) per basic and diluted share, compared to a GAAP net loss of $5.4 million, or $(0.14) per basic and diluted share for the third quarter of 2010. A reconciliation of our third quarter 2011 operating results from non-GAAP to GAAP is provided below:
Merger
Related Amortization
and of
Other Stock-Based Intangible
Non-GAAP Expenses Compensation Assets GAAP
-------- -------- ------------ ------------ --------
Revenue $ 83,655 $ - $ - $ - $ 83,655
Cost of revenue 48,696 - 306 2,806 51,808
-------- -------- ------------ ------------ --------
Gross profit 34,959 - (306) (2,806) 31,847
Operating expenses 31,365 1,334 3,490 2,552 38,741
-------- -------- ------------ ------------ --------
Operating income
(loss) 3,594 (1,334) (3,796) (5,358) (6,894)
Other
income/(expense),
net (2) - - - (2)
-------- -------- ------------ ------------ --------
Income (loss)
before taxes 3,592 (1,334) (3,796) (5,358) (6,896)
Provision for
income taxes 38 - - - 38
-------- -------- ------------ ------------ --------
Net income (loss) $ 3,554 $ (1,334) $ (3,796) $ (5,358) $ (6,934)
======== ======== ============ ============ ========
Weighted average
basic and diluted
shares used to
compute GAAP net
loss per common
share 47,128
========
Weighted average
diluted shares
used to compute
non-GAAP net
income per common
share 48,092 48,092 48,092 48,092
======== ======== ============ ============
GAAP net loss per
common share $ (0.15)
========
Non-GAAP net
income (loss) per
share $ 0.07 $ (0.03) $ (0.08) $ (0.11)
======== ======== ============ ============
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 third 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: (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 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. 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 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.
This press release contains forward-looking statements, including a resumption of growth, that are based upon management's current expectations and are inherently uncertain. Forward-looking statements are based upon information available to us as of the date of this release, and we assume no obligation to revise or update any such forward-looking statement to reflect any event or circumstance after the date of this release, except as required by law. Actual results and the timing of events could differ materially from current expectations based on risks and uncertainties affecting the Company's business. The reader is cautioned not to unduly rely on the forward-looking statements contained in this press release. Additional information on potential factors that could affect Calix's results and other risks and uncertainties are detailed in its various SEC reports, including its Form 10-Q for the fiscal quarter ended June 25, 2011, filed with the SEC on July 22, 2011, available at http://www.sec.gov.
Condensed Consolidated Statements of Operations
(in thousands)
Three Months Ended Nine Months Ended
-------------------------- --------------------------
September September September September
24, 25, 24, 25,
2011 2010 2011 2010
------------ ------------ ------------ ------------
(unaudited) (unaudited)
Revenue $ 83,655 $ 75,492 $ 253,084 $ 195,348
Cost of revenue:
Products and
services(1) 49,002 45,168 143,209 117,194
Merger-related
expenses - - 19,966 -
Amortization of
intangible assets 2,806 1,360 7,510 4,080
------------ ------------ ------------ ------------
Total cost of
revenue 51,808 46,528 170,685 121,274
------------ ------------ ------------ ------------
Gross profit 31,847 28,964 82,399 74,074
Operating expenses:
Research and
development(1) 16,717 14,299 50,340 39,232
Sales and
marketing(1) 12,593 10,408 38,831 29,014
General and
administrative(1) 5,475 7,344 21,450 19,515
Merger-related and
other expenses(1) 1,404 2,137 12,927 2,137
Amortization of
intangible assets 2,552 185 6,016 555
------------ ------------ ------------ ------------
Total operating
expenses 38,741 34,373 129,564 90,453
------------ ------------ ------------ ------------
Loss from operations (6,894) (5,409) (47,165) (16,379)
Other income
(expense):
Interest income 11 120 80 297
Interest expense (48) (45) (139) (1,138)
Change in fair
value of
preferred stock
warrants - - - (173)
Other income 35 4 64 13
------------ ------------ ------------ ------------
Net loss before
provision for
income taxes (6,896) (5,330) (47,160) (17,380)
Provision for income
taxes 38 21 176 435
------------ ------------ ------------ ------------
Net loss (6,934) (5,351) (47,336) (17,815)
Preferred stock
dividends - - - 900
------------ ------------ ------------ ------------
Net loss
attributable to
common stockholders $ (6,934) $ (5,351) $ (47,336) $ (18,715)
============ ============ ============ ============
Net loss per common
share:
Basic and diluted $ (0.15) $ (0.14) $ (1.06) $ (0.70)
============ ============ ============ ============
Pro forma basic
and diluted $ (0.15) $ (0.14) $ (1.06) $ (0.50)
============ ============ ============ ============
Weighted average
number of shares
used to compute net
loss per common
share:
Basic and diluted 47,128 37,341 44,866 26,751
============ ============ ============ ============
Pro forma basic
and diluted (2) 47,128 37,341 44,866 35,540
============ ============ ============ ============
(1) Includes stock-
based compensation
as follows: Three Months Ended Nine Months Ended
-------------------------- --------------------------
September September September September
24, 25, 24, 25,
2011 2010 2011 2010
------------ ------------ ------------ ------------
(unaudited) (unaudited)
Cost of revenue $ 306 $ 528 $ 1,141 $ 1,152
Research and
development 886 1,758 3,761 4,014
Sales and marketing 1,127 1,353 3,256 3,034
General and
administrative 1,407 3,855 7,845 9,282
Merger-related 70 - 1,234 -
------------ ------------ ------------ ------------
$ 3,796 $ 7,494 $ 17,237 $ 17,482
============ ============ ============ ============
(2) For the nine months ended September 25, 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 Nine Months Ended
---------------------------- ----------------------------
September 24, September 25, September 24, September 25,
2011 2010 2011 2010
------------- ------------- ------------- -------------
GAAP net loss $ (6,934) $ (5,351) $ (47,336) $ (18,715)
Adjustments to
reconcile GAAP
net loss to
non-GAAP net
income (loss):
Stock-based
compensation 3,726 7,494 16,003 17,482
Stock-based
compensation
(MRE) 70 - 1,234 -
Amortization of
intangible
assets 5,358 1,545 13,526 4,635
Merger-related
expenses (COGS) - - 19,966 -
Merger-related
and other
expenses (OPEX) 1,334 2,137 11,693 2,137
Change in fair
value of
preferred stock
warrants - - - 173
Preferred stock
dividends - - - 900
------------- ------------- ------------- -------------
Non-GAAP net
income $ 3,554 $ 5,825 $ 15,086 $ 6,612
============= ============= ============= =============
Non-GAAP net
income per
common share
Basic $ 0.08 $ 0.16 $ 0.34 $ 0.19
============= ============= ============= =============
Diluted $ 0.07 $ 0.15 $ 0.32 $ 0.18
============= ============= ============= =============
Weighted average
shares used to
compute non-
GAAP net income
per common
share - Basic
(1) 47,128 37,341 44,866 35,540
============= ============= ============= =============
Weighted average
shares used to
compute non-
GAAP net income
per common
share - Diluted
(1)(2) 48,092 39,976 46,718 37,619
============= ============= ============= =============
(1) For the nine months ended September 25, 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 outstanding stock options, warrants and
restricted stock units for all periods presented.
Three Months Ended Nine Months Ended
---------------------------- ----------------------------
September 24, September 25, September 24, September 25,
2011 2010 2011 2010
------------- ------------- ------------- -------------
GAAP gross
profit and
gross margin $ 31,847 38.1% $ 28,964 38.4% $ 82,399 32.6% $ 74,074 37.9%
Adjustments to
reconcile GAAP
gross profit
and gross
margin to non-
GAAP gross
profit and
gross margin:
Stock-based
compensation 306 528 1,141 1,152
Amortization of
intangible
assets 2,806 1,360 7,510 4,080
Merger-related
expenses - - 19,966 -
-------- -------- -------- --------
Non-GAAP gross
profit and
gross margin $ 34,959 41.8% $ 30,852 40.9% $111,016 43.9% $ 79,306 40.6%
======== ======== ======== ========
Condensed Consolidated Balance Sheets
(In thousands)
September 24, December 31,
2011 2010
-------------- --------------
ASSETS (unaudited)
Current Assets:
Cash and cash equivalents $ 30,249 $ 66,304
Marketable securities 2,014 32,020
Restricted cash 1,054 -
Accounts receivable, net 47,901 43,377
Inventory 44,152 24,557
Deferred cost of revenue 8,932 7,771
Prepaid and other current assets 6,493 3,245
-------------- --------------
Total current assets 140,795 177,274
Property and equipment, net 17,222 11,815
Goodwill 116,175 65,576
Intangible assets, net 84,643 515
Other assets 2,273 2,376
-------------- --------------
Total assets $ 361,108 $ 257,556
============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 11,942 $ 10,268
Accrued liabilities 39,450 25,987
Deferred revenue 19,448 14,062
-------------- --------------
Total current liabilities 70,840 50,317
Long-term portion of deferred revenue 12,265 10,985
Other long term liabilities 1,662 951
-------------- --------------
Total liabilities 84,767 62,253
-------------- --------------
Stockholders' equity:
Common stock 1,182 968
Additional paid-in capital 734,045 605,939
Other comprehensive income 85 31
Accumulated deficit (458,971) (411,635)
-------------- --------------
Total stockholders' equity 276,341 195,303
-------------- --------------
Total liabilities and stockholders' equity $ 361,108 $ 257,556
============== ==============
Condensed Consolidated Statements of Cash Flows
(in thousands)
Nine Months Ended
------------------------------
September 24, September 25,
2011 2010
-------------- --------------
(unaudited)
Operating activities
Net loss $ (47,336) $ (17,815)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Amortization of premiums relating to
available-for-sale securities 229 740
Depreciation and amortization 5,949 3,692
Loss on retirement of property and
equipment 2,278 -
Amortization of intangible assets 13,526 4,635
Revaluation of warranty liabilities - 173
Stock-based compensation 17,237 17,482
Changes in operating assets and liabilities:
Change in restricted cash - 629
Accounts receivable, net 12,329 14,111
Inventory 9,634 (6,364)
Deferred cost of revenue (1,161) 6,041
Prepaids and other assets (2,291) 1,423
Accounts payable (10,126) (5,850)
Accrued liabilities 2,850 (2,663)
Deferred revenue 5,800 (7,939)
Other long-term liabilities (179) 82
-------------- --------------
Net cash provided by operating activities 8,739 8,377
-------------- --------------
Investing activities
Purchase of property and equipment (6,271) (3,923)
Acquisition of Occam Networks, net of cash
assumed (60,809) -
Purchase of marketable securities - (74,577)
Sales and maturities of marketable
securities 29,755 36,060
-------------- --------------
Net cash used in investing activities (37,325) (42,440)
-------------- --------------
Financing activities
Proceeds from exercise of stock options
and other 766 72
Proceeds from issuance of common stock
under employee stock purchase plan 2,062 -
Taxes withheld upon vesting of restricted
stock units (10,373) -
Principal payment on loans - (20,000)
Proceeds from initial public offering of
common stock, net of issuance costs - 57,311
-------------- --------------
Net cash (used in) provided by financing
activities (7,545) 37,383
-------------- --------------
Effect of exchange rate changes on cash
and cash equivalents 76 -
Net (decrease) increase in cash and cash
equivalents (36,055) 3,320
Cash and cash equivalents at beginning of
period 66,304 31,821
-------------- --------------
Cash and cash equivalents at end of period $ 30,249 $ 35,141
============== ==============
Non-cash investing activities
Value of common stock issued in
acquisition $ 117,258 $ -
Fair value of equity awards assumed $ 1,370 $ -