Form: 8-K

Current report

October 25, 2012

Documents



Exhibit 99.1
Calix Reports Third Quarter 2012 Financial Results
PETALUMA, CA – October 25, 2012 – Calix, Inc. (NYSE: CALX) today announced unaudited financial results for the third quarter ended September 29, 2012. Revenue for the third quarter of 2012 was $81.3 million, an increase of 3.0% compared to $78.9 million in the prior quarter and a decrease of 2.8% compared to $83.7 million for the third quarter of 2011.
“The modest year-over-year decrease in revenue confirms the challenging macro-economic environment that the entire communications equipment segment has seen,” said Carl Russo, president and CEO of Calix. “Our three percent sequential growth and improving balance sheet, however, point to our strengthening competitive position moving forward.”
Non-GAAP net income for the third quarter of 2012 was $1.8 million, or $0.04 per fully diluted share. Non-GAAP net income was $3.6 million, or $0.07 per fully diluted share, for the third quarter of 2011. A reconciliation of GAAP and non-GAAP results is included as part of this release.
GAAP net loss for the third quarter of 2012 was $7.1 million, or $(0.15) per basic and diluted share, compared to a GAAP net loss of $6.9 million, or $(0.15) per basic and diluted share for the third quarter of 2011. A reconciliation of our third quarter 2012 operating results from non-GAAP to GAAP is provided below:

Calix, Inc.
(Unaudited, in thousands, except per share data)
Three Months Ended September 29, 2012
 
 
 
 
 
 
 
 
 
 
 
Non-GAAP
 
Stock-Based Compensation
 
Amortization of Intangible Assets
 
GAAP
Revenue
 
$
81,301

 
$
—

 
$
—

 
$
81,301

Cost of revenue
 
45,362

 
345

 
2,088

 
47,795

Gross profit
 
35,939

 
(345
)
 
(2,088
)
 
33,506

Gross margin
 
44.2
%
 
-0.4
 %
 
-2.6
 %
 
41.2
%
Operating expenses
 
34,069

 
3,962

 
2,552

 
40,583

Operating income (loss)
 
1,870

 
(4,307
)
 
(4,640
)
 
(7,077
)
Interest and other income (expense), net
 
(19
)
 
—

 
—

 
(19
)
Income (loss) before taxes
 
1,851

 
(4,307
)
 
(4,640
)
 
(7,096
)
Provision for income taxes
 
44

 
—

 
—

 
44

Net income (loss)
 
$
1,807

 
$
(4,307
)
 
$
(4,640
)
 
$
(7,140
)
Weighted average basic and diluted shares used
 
 
 
 
 
 
 
 
to compute GAAP net loss per common share
 

 

 

 
48,353

Weighted average diluted shares used to compute
 
 
 
 
 
 
 
 
non-GAAP net income per common share
 
48,472

 
48,472

 
48,472

 

GAAP net loss per common share
 

 

 

 
$
(0.15
)
Non-GAAP net income (loss) per share
 
$
0.04

 
$
(0.09
)
 
$
(0.10
)
 



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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 third 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 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.
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.

2


Calix, Inc.
Condensed Consolidated Statements of Operations
(Unaudited, in thousands, except per share data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Nine Months Ended
 
 
 
 
September 29,
 
September 24,
 
September 29,
 
September 24,
 
 
 
 
2012
 
2011
 
2012
 
2011
Revenue
 
$
81,301

 
$
83,655

 
$
238,794

 
$
253,084

Cost of revenue:
 

 

 

 

 
Products and services(1)
 
45,707

 
49,002

 
132,797

 
143,209

 
Merger-related expenses
 
—

 
—

 
—

 
19,966

 
Amortization of intangible assets
 
2,088

 
2,806

 
5,451

 
7,510

 
 
Total cost of revenue
 
47,795

 
51,808

 
138,248

 
170,685

Gross profit
 
33,506

 
31,847

 
100,546

 
82,399

Operating expenses:
 
 
 
 
 
 
 
 
 
Research and development(1)
 
16,165

 
16,717

 
49,604

 
50,340

 
Sales and marketing(1)
 
15,093

 
12,593

 
44,880

 
38,831

 
General and administrative(1)
 
6,773

 
5,475

 
19,682

 
21,450

 
Merger-related and other expenses(1)
 
—

 
1,404

 
—

 
12,927

 
Amortization of intangible assets
 
2,552

 
2,552

 
7,656

 
6,016

 
 
Total operating expenses
 
40,583

 
38,741

 
121,822

 
129,564

Loss from operations
 
(7,077
)
 
(6,894
)
 
(21,276
)
 
(47,165
)
Interest and other income (expense), net:
 
 
 
 
 
 
 
 

Interest income
 
3

 
11

 
14

 
80


Interest expense
 
(41
)
 
(48
)
 
(140
)
 
(139
)

Other income (expense), net
 
19

 
35

 
(70
)
 
64

Loss before provision for income taxes
 
(7,096
)
 
(6,896
)
 
(21,472
)
 
(47,160
)
Provision for income taxes
 
44

 
38

 
280

 
176

Net loss
 
$
(7,140
)
 
$
(6,934
)
 
$
(21,752
)
 
$
(47,336
)
Net loss per common share:
 
 
 
 
 
 
 
 
 
Basic and diluted
 
$
(0.15
)
 
$
(0.15
)
 
$
(0.45
)
 
$
(1.06
)
Weighted average number of shares used to compute
 
 
 
 
 
 
 
 
 
net loss per common share:
 
 
 
 
 
 
 
 
 
Basic and diluted
 
48,353

 
47,128

 
48,059

 
44,866

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)
Includes stock-based compensation as follows:
 
Cost of revenue
 
$
345

 
$
306

 
$
1,089

 
$
1,141

 
Research and development
 
1,017

 
886

 
3,129

 
3,761

 
Sales and marketing
 
1,263

 
1,127

 
3,840

 
3,256

 
General and administrative
 
1,682

 
1,407

 
4,903

 
7,845

 
Merger-related and other expenses
 
—

 
70

 
—

 
1,234

 
 
 
 
$
4,307

 
$
3,796

 
$
12,961

 
$
17,237



3


Calix, Inc.
Reconciliation of GAAP to Non-GAAP Results
(Unaudited, in thousands except per share data)
 
 
 
 
 
 
 
 

Three Months Ended
 
Nine Months Ended

September 29,
 
September 24,
 
September 29,
 
September 24,

2012
 
2011
 
2012
 
2011
GAAP net loss
$
(7,140
)
 
$
(6,934
)
 
$
(21,752
)
 
$
(47,336
)
Adjustments to reconcile GAAP net loss to
 
 
 
 
 
 
 
   non-GAAP net income:
 
 
 
 
 
 
 
Stock-based compensation
4,307

 
3,796

 
12,961

 
17,237

Amortization of intangible assets
4,640

 
5,358

 
13,107

 
13,526

Merger-related and other expenses
—

 
1,334

 
—

 
31,659

Non-GAAP net income
$
1,807

 
$
3,554

 
$
4,316

 
$
15,086

Non-GAAP net income per common share
 
 
 
 
 
 
 
   Basic
$
0.04

 
$
0.08

 
$
0.09

 
$
0.34

   Diluted
$
0.04

 
$
0.07

 
$
0.09

 
$
0.32

Weighted average shares used to compute non-GAAP
 
 
 
 
 
 
 
   net income per common share - Basic
48,353

 
47,128

 
48,059

 
44,866

Weighted average shares used to compute non-GAAP
 
 
 
 
 
 
 
   net income per common share - Diluted (1)
48,472

 
48,092

 
48,208

 
46,718


(1) Includes the dilutive effect of outstanding stock options and restricted stock units.



4


Calix, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
 
 
 
 
 
September 29,
 
December 31,
 
2012
 
2011
 
(Unaudited)
 
 
ASSETS
 
 
 
Current Assets:
 
 
 
Cash and cash equivalents
$
57,422

 
$
38,938

Restricted cash
—

 
754

Accounts receivable, net
56,392

 
47,943

Inventory
30,175

 
44,604

Deferred cost of goods sold
16,960

 
8,324

Prepaid and other current assets
4,383

 
4,429

 Total current assets
165,332

 
144,992

Property and equipment, net
17,381

 
16,130

Goodwill
116,175

 
116,175

Intangible assets, net
66,941

 
80,048

Other assets
1,774

 
2,194

 Total assets
$
367,603

 
$
359,539

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
 
 
 
Accounts payable
$
16,436

 
$
14,250

Accrued liabilities
34,137

 
36,214

Deferred revenue
30,674

 
16,783

Total current liabilities
81,247

 
67,247

Long-term portion of deferred revenue
15,299

 
13,347

Other long term liabilities
896

 
1,528

Total liabilities
97,442

 
82,122

Stockholders' equity:
 
 
 
Common stock
1,210

 
1,195

Additional paid-in capital
754,755

 
740,309

Accumulated other comprehensive income
133

 
98

Accumulated deficit
(485,937
)
 
(464,185
)
Total stockholders' equity
270,161

 
277,417

Total liabilities and stockholders' equity
$
367,603

 
$
359,539



5


Calix, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)
 
 
 
 
 
 
 
Nine Months Ended
 
 
September 29,
 
September 24,
 
 
2012
 
2011
Operating activities:
 
 
 
 
Net loss
 
$
(21,752
)
 
$
(47,336
)
Adjustments to reconcile net loss to net cash provided by operating activities:
 
 
 
 
Amortization of premiums relating to available-for-sale securities
 
—

 
229

Depreciation and amortization
 
6,351

 
5,949

Loss on retirement of property and equipment
 
262

 
2,278

Amortization of intangible assets
 
13,107

 
13,526

Stock-based compensation
 
12,961

 
17,237

Changes in operating assets and liabilities:
 
 
 
 
Restricted cash
 
754

 
—

Accounts receivable, net
 
(8,449
)
 
12,329

Inventory
 
14,429

 
9,634

Deferred cost of revenue
 
(8,636
)
 
(1,161
)
Prepaids and other assets
 
491

 
(2,291
)
Accounts payable
 
2,186

 
(10,126
)
Accrued liabilities
 
(2,098
)
 
2,850

Deferred revenue
 
15,844

 
5,800

Other long-term liabilities
 
(633
)
 
(179
)
Net cash provided by operating activities
 
24,817

 
8,739

Investing activities:
 
 
 
 
Purchase of property and equipment
 
(7,879
)
 
(6,271
)
Sales and maturities of marketable securities
 
—

 
29,755

Acquisition of Occam Networks, net of cash acquired
 
—

 
(60,809
)
Net cash used in investing activities
 
(7,879
)
 
(37,325
)
Financing activities:
 
 
 
 
Proceeds from exercise of stock options and other
 
158

 
766

Proceeds from employee stock purchase plan
 
2,222

 
2,062

Taxes withheld upon vesting of restricted stock units and restricted stock awards
 
(880
)
 
(10,373
)
Net cash provided by (used in) financing activities
 
1,500

 
(7,545
)
Effect of exchange rate changes on cash and cash equivalents
 
46

 
76

Net increase (decrease) in cash and cash equivalents
 
18,484

 
(36,055
)
Cash and cash equivalents at beginning of period
 
38,938

 
66,304

Cash and cash equivalents at end of period
 
$
57,422

 
$
30,249


For more information, contact:

David H. Allen
510 360 3703
David.Allen@Calix.com


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