SOURCE: Calix, Inc.

Calix, Inc.

February 03, 2015 16:02 ET

Calix Reports Fourth Quarter 2014 Financial Results

PETALUMA, CA--(Marketwired - Feb 3, 2015) - Calix, Inc. (NYSE: CALX) today announced unaudited financial results for the fourth quarter ended December 31, 2014. Revenue for the fourth quarter of 2014 was $111.6 million, an increase of 18.8% compared to $94.0 million for the fourth quarter of 2013 and an increase of 5.5% on a sequential basis, compared to $105.8 million for the third quarter of 2014.

"In addition to achieving new, higher revenue levels for the quarter and for the year, we continued to execute on our Unified Access vision," said Carl Russo, Calix president and CEO. "Our new fiber-enabled GigaCenters are off to a great start with orders from more than 100 service provider customers since the product launch, strengthening our leadership position in the accelerating gigabit broadband access market," added Russo.

The company's non-GAAP net income for the fourth quarter of 2014 was $6.8 million, or $0.13 per fully diluted share, compared to a non-GAAP net income of $1.5 million, or $0.03 per fully diluted share, for the fourth quarter of 2013. A reconciliation of GAAP and non-GAAP results is included as part of this release.

The GAAP net loss for the fourth quarter of 2014 was $1.7 million, or $(0.03) per basic and diluted share, compared to a GAAP net loss of $6.5 million, or $(0.13) per basic and diluted share, for the fourth quarter of 2013. A reconciliation of our fourth quarter 2014 operating results from non-GAAP to GAAP is provided below:

   
   
Calix, Inc.  
(Unaudited, in thousands, except per share data)  
Three Months Ended December 31, 2014  
                         
    Non-GAAP     Stock-Based Compensation     Amortization
of
Intangible Assets
    GAAP  
Revenue   $ 111,633     $ --     $ --     $ 111,633  
Cost of revenue     57,898       206       2,088       60,192  
Gross profit     53,735       (206 )     (2,088 )     51,441  
Gross margin     48.1 %     (0.2 )%     (1.9 )%     46.1 %
Operating expenses     46,797       3,692       2,552       53,041  
Operating income (loss)     6,938       (3,898 )     (4,640 )     (1,600 )
Interest and other income (expense), net     118       --       --       118  
Income (loss) before taxes     7,056       (3,898 )     (4,640 )     (1,482 )
Provision for income taxes     253       --       --       253  
Net income (loss)   $ 6,803     $ (3,898 )   $ (4,640 )   $ (1,735 )
Weighted average diluted shares used to compute non-GAAP net income (loss) per common share    
52,047
     
52,047
     
52,047
         
Non-GAAP net income (loss) per diluted share   $ 0.13     $ (0.07 )   $ (0.09 )        
Weighted average basic and diluted shares used to compute GAAP net loss per common share                            
51,300
 
GAAP net loss per share                           $ (0.03 )
                                 
                                 

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 fourth 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. For more information about gigabit networks, visit www.calix.com/gigabit/.

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     Twelve Months Ended  
    December 31, 2014     December 31, 2013     December 31, 2014     December 31, 2013  
                                 
Revenue   $ 111,633     $ 94,003     $ 401,227     $ 382,618  
Cost of revenue:                                
  Products and services (1)     58,104       51,868       215,085       203,191  
  Amortization of intangible assets     2,088       2,088       8,353       8,353  
    Total cost of revenue     60,192       53,956       223,438       211,544  
Gross profit     51,441       40,047       177,789       171,074  
Operating expenses:                                
  Research and development (1)     21,207       19,316       80,311       79,299  
  Sales and marketing (1)     21,721       18,583       76,283       68,075  
  General and administrative (1)     7,561       7,652       30,118       31,945  
  Amortization of intangible assets     2,552       2,552       10,208       10,208  
    Total operating expenses     53,041       48,103       196,920       189,527  
Loss from operations     (1,600 )     (8,056 )     (19,131 )     (18,453 )
Interest and other income (expense), net:                                
  Interest income     643       3       729       7  
  Interest expense     (632 )     (73 )     (806 )     (167 )
  Utilization of inventory credit     --       1,651       --       1,651  
  Other income (expense), net     107       1       228       (317 )
    Total interest and other income (expense), net     118       1,582       151       1,174  
Loss before provision for income taxes     (1,482 )     (6,474 )     (18,980 )     (17,279 )
Provision for (benefit from) income taxes     253       (21 )     581       (14 )
Net loss   $ (1,735 )   $ (6,453 )   $ (19,561 )   $ (17,265 )
Net loss per common share:                                
    Basic and diluted   $ (0.03 )   $ (0.13 )   $ (0.38 )   $ (0.35 )
Weighted average number of shares used to compute net loss per common share:                                
    Basic and diluted     51,300       49,892       50,808       49,419  
                                 
(1) Includes stock-based compensation as follows:                                
  Cost of revenue   $ 206     $ 378     $ 1,120     $ 1,468  
  Research and development     1,363       1,231       5,056       4,896  
  Sales and marketing     1,455       1,439       5,601       5,577  
  General and administrative     874       1,908       4,240       7,980  
    $ 3,898     $ 4,956     $ 16,017     $ 19,921  
                                 
                                 
                                 
Calix, Inc.  
Reconciliation of GAAP to Non-GAAP Results  
(Unaudited, in thousands, except per share data)  
                         
    Three Months Ended     Twelve Months Ended  
    December 31, 2014     December 31, 2013     December 31, 2014     December 31, 2013  
GAAP net loss income   $ (1,735 )   $ (6,453 )   $ (19,561 )   $ (17,265 )
Adjustments to reconcile GAAP net loss to non-GAAP net income:                                
  Stock-based compensation     3,898       4,956       16,017       19,921  
  Amortization of intangible assets     4,640       4,640       18,561       18,561  
  Utilization of inventory credit     --       (1,651 )     --       (1,651 )
Non-GAAP net income   $ 6,803     $ 1,492     $ 15,017     $ 19,566  
Non-GAAP net income per common share:                                
  Basic   $ 0.13     $ 0.03     $ 0.30     $ 0.40  
  Diluted   $ 0.13     $ 0.03     $ 0.29     $ 0.39  
Weighted average shares used to compute non-GAAP net income per common share - basic    
51,300
     
49,892
     
50,808
     
49,419
 
Weighted average shares used to compute non-GAAP net income per common share - diluted (1)    
52,047
     
51,068
     
51,450
     
50,437
 
                                 
(1) Includes the dilutive effect of outstanding stock options, restricted stock units and ESPP.  
   
   
   
Calix, Inc.  
Condensed Consolidated Balance Sheets  
(Unaudited, in thousands)  
             
    December 31,     December 31,  
    2014     2013  
ASSETS                
Current assets:                
  Cash and cash equivalents   $ 48,829     $ 82,747  
  Marketable securities     62,850       --  
  Restricted cash     295       295  
  Accounts receivable, net     30,744       43,520  
  Inventory     46,753       51,071  
  Deferred cost of revenue     5,080       21,076  
  Prepaid expenses and other current assets     12,910       5,757  
    Total current assets     207,461       204,466  
  Property and equipment, net     20,144       17,473  
  Goodwill     116,175       116,175  
  Intangible assets, net     25,179       43,740  
  Other assets     1,236       1,745  
    Total assets   $ 370,195     $ 383,599  
LIABILITIES AND STOCKHOLDERS' EQUITY  
Current liabilities:                
  Accounts payable   $ 23,629     $ 23,163  
  Accrued liabilities     38,164       32,075  
  Deferred revenue     12,722       34,862  
    Total current liabilities     74,515       90,100  
  Long-term portion of deferred revenue     19,393       18,431  
  Other long-term liabilities     2,443       1,145  
    Total liabilities     96,351       109,676  
Stockholders' equity:                
  Common stock     1,291       1,256  
  Additional paid-in capital     801,810       782,253  
  Accumulated other comprehensive income     80       190  
  Accumulated deficit     (529,337 )     (509,776 )
    Total stockholders' equity     273,844       273,923  
    Total liabilities and stockholders' equity   $ 370,195     $ 383,599  
                     
                     
                     
Calix, Inc.  
Condensed Consolidated Statements of Cash Flows  
(Unaudited, in thousands)  
             
    Twelve Months Ended  
    December 31,     December 31,  
    2014     2013  
Operating activities:                
Net loss   $ (19,561 )   $ (17,265 )
Adjustments to reconcile net loss to net cash provided by operating activities:                
  Depreciation and amortization     9,263       10,181  
  Loss on retirement of property and equipment     50       569  
  Amortization of intangible assets     18,561       18,561  
  Amortization of premiums related to available-for-sale securities     574       --  
  Gain on sale of available-for-sale securities     (1 )     --  
  Stock-based compensation     16,017       19,921  
  Utilization of inventory credit     --       (1,651 )
  Changes in operating assets and liabilities:                
    Restricted cash     --       (295 )
    Accounts receivable, net     12,776       15,999  
    Inventory     4,319       (6,138 )
    Deferred cost of revenue     15,996       1  
    Prepaid expenses and other assets     (5,881 )     535  
    Accounts payable     467       6,359  
    Accrued liabilities     6,160       (4,217 )
    Deferred revenue     (21,178 )     (1,804 )
    Other long-term liabilities     513       62  
      Net cash provided by operating activities     38,075       40,818  
Investing activities:                
  Purchase of property and equipment     (11,961 )     (6,987 )
  Purchase of marketable securities     (67,698 )     --  
  Proceeds from sale of marketable securities     4,215       --  
      Net cash used in investing activities     (75,444 )     (6,987 )
Financing activities:                
  Proceeds from exercise of stock options     1,668       747  
  Proceeds from employee stock purchase plan     4,627       4,828  
  Taxes paid for awards vested under equity incentive plans     (2,720 )     (3,441 )
  Payments for debt issuance costs     --       (316 )
      Net cash provided by financing activities     3,575       1,818  
Effect of exchange rate changes on cash and cash equivalents     (124 )     103  
Net (decrease) increase in cash and cash equivalents     (33,918 )     35,752  
Cash and cash equivalents at beginning of period     82,747       46,995  
Cash and cash equivalents at end of period   $ 48,829     $ 82,747  
                 
                 

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