Calix Reports Third Quarter 2012 Financial Results
by Marketwire
PETALUMA, CA -- (Marketwire) -- 10/25/12 -- 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
Amortization
of
Stock-Based Intangible
Non-GAAP Compensation 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)
============ ============ ============
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.
Calix, Inc.
Condensed Consolidated Statements of Operations
(Unaudited, in thousands, except per share data)
Three Months Ended Nine Months Ended
---------------------- ----------------------
September September September September
29, 24, 29, 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
---------- ---------- ---------- ----------
Calix, Inc.
Reconciliation of GAAP to Non-GAAP Results
(Unaudited, in thousands except per share data)
Three Months Ended Nine Months Ended
---------------------- ----------------------
September September September September
29, 24, 29, 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.
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
============= =============
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