SOURCE: Calix, Inc.

April 25, 2013 16:02 ET

Calix Reports First Quarter 2013 Financial Results

Strong Demand Bucks Seasonal Trend Resulting in Record First Quarter Revenue

PETALUMA, CA--(Marketwired - Apr 25, 2013) -  Calix, Inc. (NYSE: CALX) today announced unaudited financial results for the first quarter ended March 30, 2013. Revenue for the first quarter of 2013 was $90.5 million, an increase of 15.3% compared to $78.6 million for the first quarter of 2012.

"Our strong year-over-year first quarter revenue growth resulted in record revenue for a first quarter and improved gross margin," said Carl Russo, president and CEO of Calix. "These results reflect our success in penetrating new customer accounts and expanding our addressable market."

Non-GAAP net income for the first quarter of 2013 was $3.2 million, or $0.06 per fully diluted share. Non-GAAP net income was $0.6 million, or $0.01 per fully diluted share, for the first quarter of 2012. A reconciliation of GAAP and non-GAAP results is included as part of this release.

GAAP net loss for the first quarter of 2013 was $6.2 million, or $(0.13) per basic and diluted share, compared to a GAAP net loss of $7.5 million, or $(0.16) per basic and diluted share for the first quarter of 2012. A reconciliation of our first quarter 2013 operating results from non-GAAP to GAAP is provided below:

                         
    Three Months Ended March 30, 2013  
    Non-GAAP     Stock-Based Compensation     Amortization of Intangible Assets     GAAP  
Revenue   $ 90,548     $ -     $ -     $ 90,548  
Cost of revenue     46,994       351       2,088       49,433  
Gross profit     43,554       (351 )     (2,088 )     41,115  
Gross margin     48.1 %     -0.4 %     -2.3 %     45.4 %
Operating expenses     39,735       4,368       2,552       46,655  
Operating income (loss)     3,819       (4,719 )     (4,640 )     (5,540 )
Interest and other income (expense), net     (306 )     -       -       (306 )
Income (loss) before taxes     3,513       (4,719 )     (4,640 )     (5,846 )
Provision for income taxes     357       -       -       357  
Net income (loss)   $ 3,156     $ (4,719 )   $ (4,640 )   $ (6,203 )
                                 
Weighted average basic and diluted shares used to compute GAAP net loss per common share                             48,911  
                                 
Weighted average diluted shares used to compute non-GAAP net income per common share     49,422       49,422       49,422          
                                 
GAAP net loss per common share                           $ (0.13 )
                                 
Non-GAAP net income (loss) per share   $ 0.06     $ (0.10 )   $ (0.09 )        
                                 

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 2013 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 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  
  March 30,     March 31,  
  2013     2012  
Revenue $ 90,548     $ 78,565  
Cost of revenue:              
  Products and services(1)   47,345       43,471  
  Amortization of intangible assets   2,088       1,275  
    Total cost of revenue   49,433       44,746  
Gross profit   41,115       33,819  
Operating expenses:              
  Research and development(1)   20,171       16,966  
  Sales and marketing(1)   15,801       14,890  
  General and administrative(1)   8,131       6,780  
  Amortization of intangible assets   2,552       2,552  
    Total operating expenses   46,655       41,188  
Loss from operations   (5,540 )     (7,369 )
Interest and other income (expense), net:              
  Interest income   1       7  
  Interest expense   (28 )     (42 )
  Other income (expense), net   (279 )     (22 )
Loss before provision for income taxes   (5,846 )     (7,426 )
Provision for income taxes   357       95  
Net loss $ (6,203 )   $ (7,521 )
Net loss per common share:              
  Basic and diluted $ (0.13 )   $ (0.16 )
Weighted average number of shares used to compute net loss per common share:              
  Basic and diluted   48,911       47,850  
               
(1) Includes stock-based compensation as follows:              
               
  Cost of revenue $ 351     $ 363  
  Research and development   1,186       1,021  
  Sales and marketing   1,279       1,239  
  General and administrative   1,903       1,692  
  $ 4,719     $ 4,315  
               
               
                 
Calix, Inc.  
Reconciliation of GAAP to Non-GAAP Results  
(Unaudited, in thousands except per share data)  
             
    Three Months Ended  
    March 30,     March 31,  
    2013     2012  
                 
GAAP net loss   $ (6,203 )   $ (7,521 )
Adjustments to reconcile GAAP net loss to non-GAAP net income:                
Stock-based compensation     4,719       4,315  
Amortization of intangible assets     4,640       3,827  
Non-GAAP net income   $ 3,156     $ 621  
                 
Non-GAAP net income per common share                
  Basic   $ 0.06     $ 0.01  
  Diluted   $ 0.06     $ 0.01  
                 
Weighted average shares used to compute non-GAAP net income per common share - Basic     48,911       47,850  
                 
Weighted average shares used to compute non-GAAP net income per common share - Diluted (1)     49,422       48,039  
                 
(1) Includes the dilutive effect of outstanding stock options, restricted stock units, and ESPP.  
   
   
   
Calix, Inc.  
Condensed Consolidated Balance Sheets  
(Unaudited, in thousands)  
             
    March 30,     December 31,  
    2013     2012  
                 
ASSETS                
Current assets:                
  Cash and cash equivalents   $ 48,059     $ 46,995  
  Accounts receivable, net     70,717       59,519  
  Inventory     39,232       43,282  
  Deferred cost of revenue     26,417       21,077  
  Prepaid expenses and other current assets     6,063       5,677  
    Total current assets     190,488       176,550  
                 
Property and equipment, net     19,013       21,083  
Goodwill     116,175       116,175  
Intangible assets, net     57,661       62,301  
Other assets     1,694       1,788  
    Total assets   $ 385,031     $ 377,897  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY                
Current liabilities:                
  Accounts payable   $ 13,673     $ 16,804  
  Accrued liabilities     36,673       36,176  
  Deferred revenue     48,629       39,315  
    Total current liabilities     98,975       92,295  
Long-term portion of deferred revenue     16,917       15,782  
Other long-term liabilities     1,525       745  
    Total liabilities     117,417       108,822  
                 
Stockholders' equity:                
  Common stock     1,222       1,222  
  Additional paid-in capital     764,992       760,232  
  Accumulated other comprehensive income     114       132  
  Accumulated deficit     (498,714 )     (492,511 )
    Total stockholders' equity     267,614       269,075  
    Total liabilities and stockholders' equity   $ 385,031     $ 377,897  
                     
                     
                     
Calix, Inc.  
Condensed Consolidated Statements of Cash Flows  
(Unaudited, in thousands)  
             
    Three Months Ended  
    March 30,     March 31,  
    2013     2012  
Operating activities:                
  Net loss   $ (6,203 )   $ (7,521 )
  Adjustments to reconcile net loss to net cash provided by operating activities:                
    Depreciation and amortization     2,854       1,960  
    Loss on retirement of property and equipment     542       -  
    Amortization of intangible assets     4,640       3,827  
    Stock-based compensation     4,719       4,315  
    Changes in operating assets and liabilities:                
      Restricted cash     -       754  
      Accounts receivable, net     (11,198 )     (836 )
      Inventory     4,050       7,651  
      Deferred cost of revenue     (5,340 )     (1,281 )
      Prepaid expenses and other assets     74       623  
      Accounts payable     (3,131 )     (117 )
      Accrued liabilities     482       (293 )
      Deferred revenue     10,449       4,765  
      Other long-term liabilities     442       (330 )
        Net cash provided by operating activities     2,380       13,517  
                 
Investing activities:                
  Purchase of property and equipment     (1,326 )     (3,012 )
        Net cash used in investing activities     (1,326 )     (3,012 )
                 
Financing activities:                
  Proceeds from exercise of stock options     42       72  
        Net cash provided by financing activities     42       72  
                 
Effect of exchange rate changes on cash and cash equivalents     (32 )     47  
Net increase in cash and cash equivalents     1,064       10,624  
Cash and cash equivalents at beginning of period     46,995       38,938  
Cash and cash equivalents at end of period   $ 48,059     $ 49,562  

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