Attached files
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| 8-K - FORM 8-K - CALIX, INC | d8k.htm |
Exhibit 99.1
Calix Reports Fourth Quarter 2010 Financial Results
PETALUMA, CA — February 3, 2011 — Calix, Inc. (NYSE: CALX) today announced unaudited financial results for the fourth quarter ended December 31, 2010. Revenue for the fourth quarter of 2010 was $91.7 million, an increase of 21.5% compared to $75.5 million for the third quarter of 2010, and an increase of 3.8% compared to $88.4 million for the fourth quarter of 2009.
“We are pleased with our strong performance in the fourth quarter, having achieved revenues and margins that were the highest in company history,” said Calix president and CEO Carl Russo. “Our business continued to accelerate throughout Q4, with a growing number of new customer wins, Broadband Stimulus vendor selections, as well as wide adoption of our new platforms.”
Non-GAAP net income for the fourth quarter of 2010 was $10.7 million, or $0.26 per fully diluted share, an increase of 83.8% compared to non-GAAP net income of $5.8 million, or $0.15 per fully diluted share, for the third quarter of 2010, and an increase of 54.5% compared to non-GAAP net income of $6.9 million, or $0.21 per fully diluted share, in the fourth quarter of 2009. Non-GAAP net income excludes non-cash items of stock-based compensation and amortization of acquisition-related intangible assets, non-cash and non-recurring changes in the fair market value of preferred stock warrants and preferred stock dividends, and non-recurring acquisition-related costs.
GAAP net loss for the fourth quarter of 2010 was $0.7 million, or $(0.02) per basic and diluted share, compared to a GAAP net loss of $5.4 million, or $(0.14) per basic and diluted share for the third quarter of 2010, and compared to a GAAP net income of $2.1 million, or $0.09 per basic and diluted share reported for the fourth quarter of 2009 assuming the conversion of preferred stock into common stock as of the beginning of the fourth quarter of 2009. A reconciliation of GAAP and non-GAAP results is included as part of this release.
Non-GAAP Results
| Q4 2010 | Q3 2010 | Vs. Q3 2010 |
Q4 2009 | Vs. Q4 2009 |
||||||||||||||||
| Revenue |
$ | 91.7 million | $ | 75.5 million | +21.5 | % | $ | 88.4 million | +3.8 | % | ||||||||||
| Net Income |
$ | 10.7 million | $ | 5.8 million | +83.8 | % | $ | 6.9 million | +54.5 | % | ||||||||||
| Diluted Income per Share(1)(2) |
$ | 0.26 | $ | 0.15 | +80.0 | % | $ | 0.21 | +23.8 | % | ||||||||||
| Press Release | Page 2 |
GAAP Results
| Q4 2010 | Q3 2010 | Vs. Q3 2010 |
Q4 2009 | Vs. Q4 2009 |
||||||||||||||||
| Revenue |
$ | 91.7 million | $ | 75.5 million | +21.5 | % | $ | 88.4 million | +3.8 | % | ||||||||||
| Net Income (Loss) |
$ | (0.7) million | $ | (5.4) million | +86.2 | % | $ | 2.1 million | -134.5 | % | ||||||||||
| Income (Loss) per Basic Share |
$ | (0.02 | ) | $ | (0.14 | ) | +85.7 | % | $ | 0.53 | -103.8 | % | ||||||||
| Income (Loss) per Diluted Share(3) |
$ | (0.02 | ) | $ | (0.14 | ) | +85.7 | % | $ | 0.50 | -104.0 | % | ||||||||
| Pro Forma Income (Loss) per Basic and Diluted Share(1)(3) |
$ | (0.02 | ) | $ | (0.14 | ) | +85.7 | % | $ | 0.09 | -122.2 | % | ||||||||
| (1) | Includes outstanding common shares and common shares resulting from the assumed conversion of preferred shares as if conversion occurred at the beginning of the fourth quarter of 2009. |
| (2) | Includes the dilutive effect of outstanding stock options, warrants and restricted stock units. |
| (3) | Includes the dilutive effect of outstanding stock options and warrants for the fourth quarter of 2009. |
Conference Call
In conjunction with this announcement, Calix will host a conference call at 1:30 p.m. PST (4:30 p.m. EST) today to discuss its fourth quarter 2010 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: (800) 561-2813 (U.S.) or (617) 614-3529 (outside the U.S.) |
| • | Passcode: 55658958 |
Replay call access information:
| • | Replay call dial-in: (888) 286-8010 (U.S.) or (617) 801-6888 (outside the U.S.) |
| • | Passcode: 95656553 |
The conference call and webcast will include forward looking information.
About Calix
Calix is a leading North American provider of broadband communications access systems and software for fiber- and copper- based network architectures that enable communications service providers to connect to their residential and business subscribers. Calix enables communications service providers to provide a wide range of revenue-generating services, from basic voice and data to advanced broadband services, over legacy and next-generation access networks. The Calix Unified Access Portfolio helps these companies to transform their legacy and mixed protocol access networks to fiber and Ethernet. Calix has shipped over eight million ports of its Unified Access Infrastructure portfolio to more than 600 North American and international customers, whose networks serve over 40 million subscriber lines in total. For more information, visit the Calix website at www.calix.com.
| Press Release | Page 3 |
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 exclude certain non-cash charges and non-recurring acquisition related costs 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 these results. A reconciliation of the non-GAAP results to the most directly comparable GAAP results is provided in the financial schedules portion of 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.
| Press Release | Page 4 |
The Company makes adjustments for the following items in analyzing its operating results as it does not consider these items to part of the Company’s ongoing operating activities or meaningful in evaluating the Company’s financial performance:
Stock-based Compensation
A non-cash expense incurred in accordance with SFAS 123R using the modified prospective transition method.
Amortization of Intangible Assets
A non-cash expense resulting from intangible assets acquired in the acquisition of Optical Solutions, Inc. (OSI) in February 2006. The Company is required to amortize these assets over their expected useful lives.
Change in Fair Value of Preferred Stock Warrants
A non-cash expense or benefit resulting from the revaluation of the Company’s preferred stock warrant liability. Upon completion of the Company’s initial public offering, the preferred warrant liability was reclassified as a component of stockholders’ equity, and the Company is no longer required to revalue the warrants.
Preferred Stock Dividends
Preferred stock dividends represent Series I preferred stock dividends paid to the Company’s Series I shareholders prior to the conversion of preferred stock in connection with the Company’s initial public offering.
Acquisition-related Costs
Acquisition-related costs represent legal and professional services associated with our intended merger with Occam Networks Inc.
Investor Relations Contact:
Carolyn Bass
415-445-3232
Carolyn.Bass@Calix.com
Press Contact:
Catherine Koo
415-992-4400
calix@lewispr.com
# # #
| Press Release | Page 5 |
Condensed Statement of Operations
(in thousands)
| Three Months Ended December 31, | Years Ended December 31, | |||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
| (unaudited) | (unaudited) | |||||||||||||||
| Revenue |
$ | 91,695 | $ | 88,359 | $ | 287,043 | $ | 232,947 | ||||||||
| Cost of revenue: |
||||||||||||||||
| Products and services(1) |
51,679 | 57,279 | 168,873 | 150,863 | ||||||||||||
| Amortization of existing technologies |
1,360 | 1,360 | 5,440 | 5,440 | ||||||||||||
| Total cost of revenue |
53,039 | 58,639 | 174,313 | 156,303 | ||||||||||||
| Gross profit |
38,656 | 29,720 | 112,730 | 76,644 | ||||||||||||
| Operating expenses: |
||||||||||||||||
| Research and development(1) |
16,180 | 12,945 | 55,412 | 46,132 | ||||||||||||
| Sales and marketing(1) |
13,107 | 9,795 | 42,121 | 33,486 | ||||||||||||
| General and administrative(1) |
8,483 | 3,984 | 27,998 | 15,613 | ||||||||||||
| Acquisition-related costs |
1,805 | — | 3,942 | — | ||||||||||||
| Amortization of intangible assets |
185 | 185 | 740 | 740 | ||||||||||||
| Total operating expenses |
39,760 | 26,909 | 130,213 | 95,971 | ||||||||||||
| Income/(loss) from operations |
(1,104 | ) | 2,811 | (17,483 | ) | (19,327 | ) | |||||||||
| Other income (expense): |
||||||||||||||||
| Interest income |
88 | 101 | 384 | 245 | ||||||||||||
| Interest expense |
(50 | ) | (441 | ) | (1,188 | ) | (3,867 | ) | ||||||||
| Change in fair value of preferred stock warrants |
— | (35 | ) | (173 | ) | 37 | ||||||||||
| Other income |
(25 | ) | 6 | (12 | ) | 119 | ||||||||||
| Income/(loss) before provision (benefit) for income taxes |
(1,091 | ) | 2,442 | (18,472 | ) | (22,793 | ) | |||||||||
| Provision (benefit) for income taxes |
(354 | ) | (403 | ) | 81 | (352 | ) | |||||||||
| Net income/(loss) |
(737 | ) | 2,845 | (18,553 | ) | (22,441 | ) | |||||||||
| Preferred stock dividends |
— | 706 | 900 | 3,747 | ||||||||||||
| Net income/(loss) attributable to common stockholders |
$ | (737 | ) | $ | 2,139 | $ | (19,453 | ) | $ | (26,188 | ) | |||||
| Net income/(loss) per common share: |
||||||||||||||||
| Basic |
$ | (0.02 | ) | $ | 0.53 | $ | (0.65 | ) | $ | (6.48 | ) | |||||
| Diluted |
$ | (0.02 | ) | $ | 0.50 | $ | (0.65 | ) | $ | (6.48 | ) | |||||
| Pro forma basic |
$ | (0.02 | ) | $ | 0.09 | $ | (0.51 | ) | $ | (0.77 | ) | |||||
| Pro forma diluted |
$ | (0.02 | ) | $ | 0.09 | $ | (0.51 | ) | $ | (0.77 | ) | |||||
| Weighted average number of shares used to compute net income/(loss) per common share: |
||||||||||||||||
| Basic |
38,144 | 4,072 | 29,778 | 4,040 | ||||||||||||
| Diluted |
38,144 | 4,309 | 29,778 | 4,040 | ||||||||||||
| Pro forma basic(2) |
38,144 | 32,057 | 36,232 | 28,991 | ||||||||||||
| Pro forma diluted (2) |
38,144 | 32,294 | 36,232 | 28,991 | ||||||||||||
| (1) | Includes stock-based compensation as follows: |
| Three Months Ended December 31, | Years Ended December 31, | |||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
| (unaudited) | (unaudited) | |||||||||||||||
| Cost of revenue |
$ | 593 | $ | 166 | $ | 1,745 | $ | 682 | ||||||||
| Research and development |
1,952 | 688 | 5,966 | 2,657 | ||||||||||||
| Sales and marketing |
1,521 | 452 | 4,555 | 1,739 | ||||||||||||
| General and administrative |
4,027 | 1,200 | 13,309 | 4,118 | ||||||||||||
| $ | 8,093 | $ | 2,506 | $ | 25,575 | $ | 9,196 | |||||||||
| (2) | Includes outstanding common shares and common shares resulting from the assumed conversion of preferred shares as if conversion occurred at the beginning of the fourth quarter of 2009 and the beginning of the twelve month periods ended December 31, 2010 and December 31, 2009. |
| Press Release | Page 6 |
Reconciliation of GAAP to Non-GAAP Results
(Unaudited, in thousands except per share data)
| Three Months Ended December 31, | Years Ended December 31, | |||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
| GAAP net loss attributable to common stockholders |
$ | (737 | ) | $ | 2,139 | $ | (19,453 | ) | $ | (26,188 | ) | |||||
| Adjustments to reconcile GAAP net loss to non-GAAP net loss: |
||||||||||||||||
| Stock-based compensation |
8,093 | 2,506 | 25,575 | 9,196 | ||||||||||||
| Amortization of intangible assets |
1,545 | 1,545 | 6,180 | 6,180 | ||||||||||||
| Acquisition-related costs |
1,805 | — | 3,942 | — | ||||||||||||
| Change in fair value of preferred stock warrants |
— | 35 | 173 | (37 | ) | |||||||||||
| Preferred stock dividends |
— | 706 | 900 | 3,747 | ||||||||||||
| Non-GAAP net income (loss) |
$ | 10,706 | $ | 6,931 | $ | 17,317 | $ | (7,102 | ) | |||||||
| Non-GAAP net income (loss) per common share |
||||||||||||||||
| Basic |
$ | 0.28 | $ | 0.22 | $ | 0.48 | $ | (0.24 | ) | |||||||
| Diluted |
$ | 0.26 | $ | 0.21 | $ | 0.45 | $ | (0.24 | ) | |||||||
| Weighted average shares used to compute non-GAAP net income (loss) per common share - Basic (1) |
38,144 | 32,057 | 36,232 | 28,991 | ||||||||||||
| Weighted average shares used to compute non-GAAP net income (loss) per common share - Diluted (1)(2) |
40,943 | 32,294 | 38,502 | 28,991 | ||||||||||||
| (1) | Includes outstanding common shares and common shares resulting from the assumed conversion of preferred shares as if conversion occurred at the beginning of the fourth quarter ended December 31, 2009 and the beginning of the twelve month periods ended December 31, 2010 and December 31, 2009. |
| (2) | Includes the dilutive effect of outstanding stock options, warrants and restricted stock units for the three and twelve months ended December 31, 2010. |
| Three Months Ended December 31, | Years Ended December 31, | |||||||||||||||||||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||||||||||||||||||
| GAAP gross profit and gross margin |
$ | 38,656 | 42.2 | % | $ | 29,720 | 33.6 | % | $ | 112,730 | 39.3 | % | $ | 76,644 | 32.9 | % | ||||||||||||||||
| Adjustments to reconcile GAAP gross profit and gross margin to non-GAAP gross profit and gross margin: |
||||||||||||||||||||||||||||||||
| Stock-based compensation |
593 | 166 | 1,745 | 682 | ||||||||||||||||||||||||||||
| Amortization of intangible assets |
1,360 | 1,360 | 5,440 | 5,440 | ||||||||||||||||||||||||||||
| Non-GAAP gross profit and gross margin |
$ | 40,609 | 44.3 | % | $ | 31,246 | 35.4 | % | $ | 119,915 | 41.8 | % | $ | 82,766 | 35.5 | % | ||||||||||||||||
| Press Release | Page 7 |
Condensed Balance Sheets
(In thousands)
| December 31, | ||||||||
| 2010 | 2009 | |||||||
| (unaudited) | ||||||||
| ASSETS |
||||||||
| Current Assets: |
||||||||
| Cash and cash equivalents |
$ | 66,304 | $ | 31,821 | ||||
| Marketable securities |
32,020 | 36,228 | ||||||
| Restricted cash |
— | 629 | ||||||
| Accounts receivable, net |
43,377 | 46,992 | ||||||
| Inventory |
24,557 | 18,556 | ||||||
| Deferred cost of goods sold |
7,771 | 16,468 | ||||||
| Prepaid and other current assets |
3,245 | 4,018 | ||||||
| Total current assets |
177,274 | 154,712 | ||||||
| Property and equipment, net |
11,815 | 11,293 | ||||||
| Goodwill |
65,576 | 65,576 | ||||||
| Intangible assets, net |
515 | 6,695 | ||||||
| Other assets |
2,376 | 2,840 | ||||||
| Total assets |
$ | 257,556 | $ | 241,116 | ||||
| LIABILITIES, CONVERTIBLE PREFERRED STOCK AND |
||||||||
| STOCKHOLDERS’ EQUITY (DEFICIT) |
||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ | 10,268 | $ | 14,635 | ||||
| Accrued liabilities |
25,987 | 28,629 | ||||||
| Preferred stock warrant liabilities |
— | 195 | ||||||
| Loans payable |
— | 3,333 | ||||||
| Deferred revenue |
14,062 | 29,921 | ||||||
| Total current liabilities |
50,317 | 76,713 | ||||||
| Loans payable |
— | 16,667 | ||||||
| Long-term portion of deferred revenue |
10,985 | 6,556 | ||||||
| Other long term liabilities |
951 | 910 | ||||||
| Total liabilities |
62,253 | 100,846 | ||||||
| Convertible preferred stock |
— | 479,628 | ||||||
| Stockholders’ equity (deficit): |
||||||||
| Common stock |
968 | 102 | ||||||
| Additional paid-in capital |
605,939 | 52,739 | ||||||
| Other comprehensive income (loss) |
31 | (17 | ) | |||||
| Accumulated deficit |
(411,635 | ) | (392,182 | ) | ||||
| Total stockholders’ equity (deficit) |
195,303 | (339,358 | ) | |||||
| Total liabilities, convertible preferred stock and stockholders’ equity (deficit) |
$ | 257,556 | $ | 241,116 | ||||
| Press Release | Page 8 |
Condensed Statement of Cash Flows
(in thousands)
| Years Ended December 31, |
||||||||
| 2010 | 2009 | |||||||
| (unaudited) | ||||||||
| Operating activities |
||||||||
| Net loss |
(18,553 | ) | $ | (22,441 | ) | |||
| Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
| Amortization of premiums relating to available-for-sale securities |
967 | — | ||||||
| Depreciation and amortization |
5,015 | 4,942 | ||||||
| Amortization of intangible assets |
6,180 | 6,180 | ||||||
| Revaluation of warrant liability |
173 | (37 | ) | |||||
| Stock-based compensation |
25,575 | 9,196 | ||||||
| Net gains on investments |
(37 | ) | — | |||||
| Loss on disposal of property and equipment |
77 | — | ||||||
| Changes in operating assets and liabilities: |
||||||||
| Change in restricted cash |
629 | 4,227 | ||||||
| Accounts receivable, net |
3,615 | (14,209 | ) | |||||
| Inventory |
(6,001 | ) | 4,841 | |||||
| Deferred cost of goods sold |
8,697 | (2,260 | ) | |||||
| Prepaid and other assets |
1,237 | (4,252 | ) | |||||
| Accounts payable |
(4,367 | ) | (3,855 | ) | ||||
| Accrued liabilities |
(2,642 | ) | 12,138 | |||||
| Deferred revenue |
(11,430 | ) | 7,664 | |||||
| Other long-term liabilities |
41 | (744 | ) | |||||
| Net cash provided by (used in) operating activities |
$ | 9,176 | $ | 1,390 | ||||
| Investing activities |
||||||||
| Acquisition of property and equipment |
(5,614 | ) | (5,064 | ) | ||||
| Purchase of marketable securities |
(79,190 | ) | (36,245 | ) | ||||
| Sales and maturities of marketable securities |
82,516 | — | ||||||
| Net cash used in investing activities |
(2,288 | ) | (41,309 | ) | ||||
| Financing activities |
||||||||
| Proceeds from initial public offering of common stock, net of issuance costs |
57,311 | — | ||||||
| Proceeds from loans |
— | 20,000 | ||||||
| Principal payments on loans |
(20,000 | ) | (21,000 | ) | ||||
| Taxes payable on vesting of restricted stock units |
(10,004 | ) | ||||||
| Proceeds from issuance of Series J preferred stock |
— | 49,478 | ||||||
| Proceeds from exercise of stock options and warrants and other |
288 | 60 | ||||||
| Repurchase of common and preferred stock |
— | (12 | ) | |||||
| Net cash provided by financing activities |
27,595 | 48,526 | ||||||
| Net increase in cash and cash equivalents |
34,483 | 8,607 | ||||||
| Cash and cash equivalents at beginning of year |
31,821 | 23,214 | ||||||
| Cash and cash equivalents at end of year |
$ | 66,304 | $ | 31,821 | ||||