Calix Reports Second Quarter 2014 Financial Results

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News Desk 2018

Jul 29, 2014 at 4:15 PM

PETALUMA, CA--(Marketwired - Jul 29, 2014) - Calix, Inc. ( NYSE : CALX ) today announced unaudited financial results for the second quarter ended June 28, 2014. Revenue for the second quarter of 2014 was $98.0 million, an increase of 3.8% compared to $94.4 million for the second quarter of 2013.

"We continue to make solid progress expanding our domestic and international customer footprint and achieved our highest level of sales for a second fiscal quarter," said Carl Russo, Calix president and CEO. "Service providers of all types are pursuing device-enabled subscribers who are increasingly accessing cloud-based content and applications. Calix Unified Access solutions are architected to be flexible, feature-rich and cost-effective in order to meet the demanding requirements of our service provider customers and their subscribers."

The company's non-GAAP net income for the second quarter of 2014 was $5.1 million, or $0.10 per fully diluted share, compared to a non-GAAP net income of $4.8 million, or $0.10 per fully diluted share, for the second quarter of 2013. A reconciliation of GAAP and non-GAAP results is included as part of this release.

The GAAP net loss for the second quarter of 2014 was $4.0 million, or $(0.08) per basic and diluted share, compared to a GAAP net loss of $5.2 million, or $(0.10) per basic and diluted share, for the second quarter of 2013. A reconciliation of our second quarter 2014 operating results from non-GAAP to GAAP is provided below:


Calix, Inc.
(Unaudited, in thousands, except per share data)
Three Months Ended June 28, 2014

	Non-GAAP			Stock-Based Compensation			Amortization of Intangible Assets			GAAP
Revenue	$	98,005		$	--		$	--		$	98,005
Cost of revenue		51,221			354			2,088			53,663
Gross profit		46,784			(354	)		(2,088	)		44,342
Gross margin		47.7	%		--			--			45.2	%
Operating expenses		41,630			4,050			2,552			48,232
Operating income (loss)		5,154			(4,404	)		(4,640	)		(3,890	)
Interest and other income (expense), net		42			--			--			42
Income (loss) before taxes		5,196			(4,404	)		(4,640	)		(3,848	)
Provision for income taxes		103			--			--			103
Net income (loss)	$	5,093		$	(4,404	)	$	(4,640	)	$	(3,951	)
Weighted average diluted shares used to compute non-GAAP net income (loss) per common share		50,961			50,961			50,961
Non-GAAP net income (loss) per diluted share	$	0.10		$	(0.09	)	$	(0.09	)
Weighted average basic and diluted shares used to compute GAAP net loss per common share											50,573
GAAP net loss per share										$	(0.08	)

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 2014 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 (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 and other expenses, which the Company believes are not indicative of its core operating results. 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 28,			June 29,			June 28,			June 29,
			2014			2013			2014			2013
Revenue			$	98,005		$	94,439		$	183,825		$	184,987
Cost of revenue:
	Products and services ⁽¹⁾			51,575			49,846			98,381			97,191
	Amortization of intangible assets			2,088			2,088			4,176			4,176
		Total cost of revenue		53,663			51,934			102,557			101,367
Gross profit				44,342			42,505			81,268			83,620
Operating expenses:
	Research and development ⁽¹⁾			19,544			20,035			39,174			40,206
	Sales and marketing ⁽¹⁾			18,455			17,079			35,845			32,880
	General and administrative ⁽¹⁾			7,681			7,684			14,932			15,815
	Amortization of intangible assets			2,552			2,552			5,104			5,104
		Total operating expenses		48,232			47,350			95,055			94,005
Loss from operations				(3,890	)		(4,845	)		(13,787	)		(10,385	)
	Interest and other income (expense), net:
	Interest income			30			1			34			2
	Interest expense			(58	)		(42	)		(115	)		(70	)
Other income (expense), net				70			(43	)		103			(322	)
Loss before provision for income taxes				(3,848	)		(4,929	)		(13,765	)		(10,775	)
Provision for income taxes				103			224			213			581
Net loss			$	(3,951	)	$	(5,153	)	$	(13,978	)	$	(11,356	)
Net loss per common share:
		Basic and diluted	$	(0.08	)	$	(0.10	)	$	(0.28	)	$	(0.23	)
Weighted average number of shares used to compute net loss per common share:
		Basic and diluted		50,573			49,153			50,425			49,034


⁽¹⁾ Includes stock-based compensation as follows:
		Cost of revenue	$	354		$	377		$	708		$	728
		Research and development		1,306			1,300			2,486			2,486
		Sales and marketing		1,462			1,464			2,830			2,743
		General and administrative		1,282			2,134			2,282			4,037
			$	4,404		$	5,275		$	8,306		$	9,994

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

		Three Months Ended						Six Months Ended
		June 28,			June 29,			June 28,			June 29,
		2014			2013			2014			2013
GAAP net loss		$	(3,951	)	$	(5,153	)	$	(13,978	)	$	(11,356	)
Adjustments to reconcile GAAP net loss to non-GAAP net income:
Stock-based compensation			4,404			5,275			8,306			9,994
Amortization of intangible assets			4,640			4,640			9,280			9,280
Non-GAAP net income			5,093			4,762			3,608			7,918
Non-GAAP net income per common share:
	Basic	$	0.10		$	0.10		$	0.07		$	0.16
	Diluted	$	0.10		$	0.10		$	0.07		$	0.16
Weighted average shares used to compute non-GAAP net income per common share - Basic			50,573			49,153			50,425			49,034
Weighted average shares used to compute non-GAAP net income per common share - Diluted (1)			50,961			50,073			50,904			49,751

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

Calix, Inc.
Condensed Consolidated Balance Sheets
(Unaudited, in thousands)

			June 28,			December 31,
			2014			2013
ASSETS
Current assets:
	Cash and cash equivalents		$	32,543		$	82,747
	Marketable securities			46,439			--
	Restricted cash			295			295
	Accounts receivable, net			47,330			43,520
	Inventory			45,888			51,071
	Deferred cost of revenue			15,957			21,076
	Prepaid expenses and other current assets			5,038			5,757
		Total current assets		193,490			204,466
	Property and equipment, net			17,289			17,473
	Goodwill			116,175			116,175
	Intangible assets, net			34,460			43,740
	Other assets			1,503			1,745
		Total assets	$	362,917		$	383,599
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
	Accounts payable		$	12,850		$	23,163
	Accrued liabilities			34,689			32,075
	Deferred revenue			26,346			34,862
		Total current liabilities		73,885			90,100
	Long-term portion of deferred revenue			18,640			18,431
	Other long-term liabilities			958			1,145
		Total liabilities		93,483			109,676
Stockholders' equity:
	Common stock			1,273			1,256
	Additional paid-in capital			791,756			782,253
	Accumulated other comprehensive income			159			190
	Accumulated deficit			(523,754	)		(509,776	)
		Total stockholders' equity		269,434			273,923
		Total liabilities and stockholders' equity	$	362,917		$	383,599

Calix, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)

			Six Months Ended
			June 28,			June 29,
			2014			2013
Operating activities:
Net loss			$	(13,978	)	$	(11,356	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
	Depreciation and amortization			4,522			5,363
	Loss on retirement of property and equipment			--			560
	Amortization of intangible assets			9,280			9,280
	Amortization of premiums related to available-for-sale securities			108			--
	Stock-based compensation			8,306			9,994
Changes in operating assets and liabilities:
	Accounts receivable, net			(3,809	)		(3,207	)
	Inventory			5,183			5,880
	Deferred cost of revenue			5,119			(7,991	)
	Prepaid expenses and other assets			960			(2,009	)
	Accounts payable			(10,313	)		(90	)
	Accrued liabilities			2,601			464
	Deferred revenue			(8,307	)		16,001
	Other long-term liabilities			(188	)		311
		Net cash (used in) provided by operating activities		(516	)		23,200
Investing activities:
	Purchase of marketable securities			(46,572	)		--
	Purchase of property and equipment			(4,328	)		(3,265	)
		Net cash used in investing activities		(50,900	)		(3,265	)
Financing activities:
	Proceeds from exercise of stock options			139			288
	Proceeds from employee stock purchase plan			2,453			2,464
	Taxes paid for awards vested under equity incentive plans			(1,377	)		(312	)
		Net cash provided by financing activities		1,215			2,440
Effect of exchange rate changes on cash and cash equivalents				(3	)		9
Net (decrease) increase in cash and cash equivalents				(50,204	)		22,384
Cash and cash equivalents at beginning of period				82,747			46,995
Cash and cash equivalents at end of period			$	32,543		$	69,379

Investor Inquiries: David H. Allen 408-474-0080 David.Allen@Calix.com

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