SOURCE: Calix, Inc.

Calix, Inc.

April 29, 2014 16:02 ET

Calix Reports First Quarter 2014 Financial Results

PETALUMA, CA--(Marketwired - Apr 29, 2014) - Calix, Inc. (NYSE: CALX) today announced unaudited financial results for the first quarter ended March 29, 2014. Revenue for the first quarter of 2014 was $85.8 million, a decrease of 5.2% compared to $90.5 million for the first quarter of 2013.

"While the first quarter started off slowly as expected, we saw increasing demand as the quarter progressed," said Carl Russo, president and CEO of Calix. "Growing demand for gigabit services and the recently completed integration of E-Series solutions with the BLM 1500 platform and the EntriView management system allowed us to make solid progress in expanding our customer footprint both domestically and internationally during the first quarter."

Non-GAAP net loss for the first quarter of 2014 was $1.5 million, or $(0.03) per fully diluted share. Non-GAAP net income was $3.2 million, or $0.06 per fully diluted share, for the first quarter of 2013. A reconciliation of GAAP and non-GAAP results is included as part of this release.

GAAP net loss for the first quarter of 2014 was $10.0 million, or $(0.20) per basic and diluted share, compared to a GAAP net loss of $6.2 million, or $(0.13) per basic and diluted share for the first quarter of 2013. A reconciliation of our first quarter 2014 operating results from non-GAAP to GAAP is provided below:

   
Calix, Inc.  
(Unaudited, in thousands, except per share data)  
Three Months Ended March 29, 2014  
                         
    Non-GAAP     Stock-Based Compensation     Amortization of Intangible Assets     GAAP  
Revenue   $ 85,820     $ -     $ -     $ 85,820  
Cost of revenue     46,452       354       2,088       48,894  
Gross profit     39,368       (354 )     (2,088 )     36,926  
Gross margin     45.9 %     -0.4 %     -2.4 %     43.0 %
Operating expenses     40,723       3,548       2,552       46,823  
Operating loss     (1,355 )     (3,902 )     (4,640 )     (9,897 )
Interest and other income (expense), net     (20 )     -       -       (20 )
Loss before taxes     (1,375 )     (3,902 )     (4,640 )     (9,917 )
Provision for income taxes     110       -       -       110  
Net loss   $ (1,485 )   $ (3,902 )   $ (4,640 )   $ (10,027 )
Weighted average shares used to compute net loss per common share:                                
  Basic     50,271       50,271       50,271       50,271  
  Diluted     50,271       50,271       50,271       50,271  
Net loss per common share:                                
  Basic   $ (0.03 )   $ (0.08 )   $ (0.09 )   $ (0.20 )
  Diluted   $ (0.03 )   $ (0.08 )   $ (0.09 )   $ (0.20 )
                                 

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 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  
    March 29,     March 30,  
    2014     2013  
Revenue   $ 85,820     $ 90,548  
Cost of revenue:                
  Products and services (1)     46,806       47,345  
  Amortization of intangible assets     2,088       2,088  
    Total cost of revenue     48,894       49,433  
Gross profit     36,926       41,115  
Operating expenses:                
  Research and development (1)     19,630       20,171  
  Sales and marketing (1)     17,390       15,801  
  General and administrative (1)     7,251       8,131  
  Amortization of intangible assets     2,552       2,552  
    Total operating expenses     46,823       46,655  
Loss from operations     (9,897 )     (5,540 )
Interest and other income (expense), net:                
  Interest income     4       1  
  Interest expense     (57 )     (28 )
  Other income (expense), net     33       (279 )
Loss before provision for income taxes     (9,917 )     (5,846 )
Provision for income taxes     110       357  
Net loss   $ (10,027 )   $ (6,203 )
Net loss per common share:                
    Basic and diluted   $ (0.20 )   $ (0.13 )
Weighted average number of shares used to compute net loss per common share:                
    Basic and diluted     50,271       48,911  
                 
                 
(1) Includes stock-based compensation as follows:  
  Cost of revenue   $ 354     $ 351  
  Research and development     1,180       1,186  
  Sales and marketing     1,368       1,279  
  General and administrative     1,000       1,903  
    $ 3,902     $ 4,719  
                 
   
Calix, Inc.  
Reconciliation of GAAP to Non-GAAP Results  
(Unaudited, in thousands, except per share data)  
             
    Three Months Ended  
    March 29,     March 30,  
    2014     2013  
GAAP net loss   $ (10,027 )   $ (6,203 )
Adjustments to reconcile GAAP net loss to non-GAAP net income (loss):                
Stock-based compensation     3,902       4,719  
Amortization of intangible assets     4,640       4,640  
Non-GAAP net income (loss)   $ (1,485 )   $ 3,156  
Non-GAAP net income (loss) per common share:                
  Basic   $ (0.03 )   $ 0.06  
  Diluted   $ (0.03 )   $ 0.06  
Weighted average shares used to compute non-GAAP net income (loss) per common share - Basic     50,271       48,911  
Weighted average shares used to compute non-GAAP net income per common share - Diluted (1)     50,271       49,422  
                 
(1) Includes the dilutive effect of outstanding stock options, restricted stock units and ESPP.
 
   
Calix, Inc.  
Condensed Consolidated Balance Sheets  
(Unaudited, in thousands)  
             
    March 29,     December 31,  
    2014     2013  
ASSETS                
Current assets:                
  Cash and cash equivalents   $ 75,169     $ 82,747  
  Restricted cash     295       295  
  Accounts receivable, net     44,134       43,520  
  Inventory     45,060       51,071  
  Deferred cost of revenue     17,843       21,076  
  Prepaid expenses and other current assets     4,869       5,757  
    Total current assets     187,370       204,466  
  Property and equipment, net     17,122       17,473  
  Goodwill     116,175       116,175  
  Intangible assets, net     39,100       43,740  
  Other assets     1,618       1,745  
    Total assets   $ 361,385     $ 383,599  
LIABILITIES AND STOCKHOLDERS' EQUITY  
Current liabilities:                
  Accounts payable   $ 10,887     $ 23,163  
  Accrued liabilities     34,570       32,075  
  Deferred revenue     29,013       34,862  
    Total current liabilities     74,470       90,100  
  Long-term portion of deferred revenue     18,469       18,431  
  Other long-term liabilities     1,090       1,145  
    Total liabilities     94,029       109,676  
Stockholders' equity:                
  Common stock     1,258       1,256  
  Additional paid-in capital     785,700       782,253  
  Accumulated other comprehensive income     201       190  
  Accumulated deficit     (519,803 )     (509,776 )
    Total stockholders' equity     267,356       273,923  
    Total liabilities and stockholders' equity   $ 361,385     $ 383,599  
                 
   
Calix, Inc.  
Condensed Consolidated Statements of Cash Flows  
(Unaudited, in thousands)  
             
    Three Months Ended  
    March 29,     March 30,  
    2014     2013  
Operating activities:                
Net loss   $ (10,027 )   $ (6,203 )
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:                
  Depreciation and amortization     2,271       2,854  
  Loss on retirement of property and equipment     -       542  
  Amortization of intangible assets     4,640       4,640  
  Stock-based compensation     3,902       4,719  
Changes in operating assets and liabilities:                
  Accounts receivable, net     (614 )     (11,198 )
  Inventory     6,011       4,050  
  Deferred cost of revenue     3,233       (5,340 )
  Prepaid expenses and other assets     1,016       74  
  Accounts payable     (12,276 )     (3,131 )
  Accrued liabilities     2,485       482  
  Deferred revenue     (5,811 )     10,449  
  Other long-term liabilities     (56 )     442  
    Net cash (used in) provided by operating activities     (5,226 )     2,380  
Investing activities:                
  Purchase of property and equipment     (1,908 )     (1,326 )
    Net cash used in investing activities     (1,908 )     (1,326 )
Financing activities:                
  Proceeds from exercise of stock options     21       42  
  Taxes withheld upon vesting of performance restricted stock units     (473 )     -  
    Net cash (used in) provided by financing activities     (452 )     42  
Effect of exchange rate changes on cash and cash equivalents     8       (32 )
Net (decrease) increase in cash and cash equivalents     (7,578 )     1,064  
Cash and cash equivalents at beginning of period     82,747       46,995  
Cash and cash equivalents at end of period   $ 75,169     $ 48,059  
                 

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