Attached files
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| 8-K - FORM 8-K - CALIX, INC | d8k.htm |
Exhibit 99.1
Calix Reports Second Quarter 2011 Financial Results
PETALUMA, CA—July 21, 2011—Calix, Inc. (NYSE: CALX) today announced unaudited financial results for the second quarter ended June 25, 2011. Revenue for the second quarter of 2011 was $98.0 million, an increase of 36.7% compared to $71.7 million for the second quarter of 2010.
“Calix set a new revenue record in Q2 as we built upon favorable secular trends affecting our markets,” said Carl Russo, president and CEO of Calix. “In our first full quarter of operations after closing our acquisition, we executed well across all areas of the business, and reported results that were ahead of expectations.”
Non-GAAP net income for the second quarter of 2011 was $7.8 million, or $0.16 per fully diluted share, an increase of 40.8% compared to non-GAAP net income of $5.5 million, or $0.14 per fully diluted share, for the second quarter of 2010. A reconciliation of GAAP and non-GAAP results is included as part of this release.
GAAP net loss for the second quarter of 2011 was $17.6 million, or $(0.38) per basic and diluted share, compared to a GAAP net loss of $3.2 million, or $(0.09) per basic and diluted share for the second quarter of 2010. A reconciliation of our Q2 2011 operating results from non-GAAP to GAAP is provided below:
| Non-GAAP | Merger Related and Other Expenses |
Stock-Based Compensation |
Amortization of Intangible Assets |
GAAP | ||||||||||||||||
| Revenue |
$ | 97,959 | $ | — | $ | — | $ | — | $ | 97,959 | ||||||||||
| Cost of revenue |
54,568 | 9,709 | 331 | 3,188 | 67,796 | |||||||||||||||
| Gross profit |
43,391 | (9,709 | ) | (331 | ) | (3,188 | ) | 30,163 | ||||||||||||
| Operating expense |
35,504 | 4,408 | 4,993 | 2,795 | 47,700 | |||||||||||||||
| Operating income (loss) |
7,887 | (14,117 | ) | (5,324 | ) | (5,983 | ) | (17,537 | ) | |||||||||||
| Other income/(expense), net |
5 | — | — | — | 5 | |||||||||||||||
| Income (loss) before taxes |
7,892 | (14,117 | ) | (5,324 | ) | (5,983 | ) | (17,532 | ) | |||||||||||
| Provision for income taxes |
114 | — | — | — | 114 | |||||||||||||||
| Net income (loss) |
$ | 7,778 | $ | (14,117 | ) | $ | (5,324 | ) | $ | (5,983 | ) | $ | (17,646 | ) | ||||||
| Weighted average basic and diluted shares used to compute GAAP net loss per common share |
46,050 | |||||||||||||||||||
| Weighted average diluted shares used to compute non-GAAP net income per common share |
48,139 | 48,139 | 48,139 | 48,139 | ||||||||||||||||
| GAAP net loss per common share |
$ | (0.38 | ) | |||||||||||||||||
| Non-GAAP net income (loss) per share |
$ | 0.16 | $ | (0.29 | ) | $ | (0.11 | ) | $ | (0.12 | ) | |||||||||
| Press Release | Page 2 |
Conference Call
In conjunction with this announcement, Calix will host a conference call at 1:30 p.m. PDT (4:30 p.m. EDT) today to discuss its second quarter 2011 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) 320-2978 (U.S.) or (617) 614-4923 (outside the U.S.) |
| • | Passcode: 80168277 |
Replay call access information:
| • | Replay call dial-in: (888) 286-8010 (U.S.) or (617) 801-6888 (outside the U.S.) |
| • | Passcode: 82555257 |
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 enable communications service providers worldwide to be 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 merger-related and other expenses, which the Company believes are not indicative of its core operating results. Merger-related and other expenses largely include the charge resulting from the required revaluation of Occam inventory to its estimated fair value, legal and professional expenses, and severance and integration-related expenses and inventory-related charges associated with our merger with Occam and to a lesser extent the settlement of litigation. 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 3 |
| Investor Relations Contact: | Press Contact: | |
| Carolyn Bass | Catherine Koo | |
| 415-445-3232 | 415-992-4400 | |
| Carolyn.Bass@Calix.com | calix@lewispr.com |
| Press Release | Page 4 |
Condensed Consolidated Statements of Operations
(in thousands)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 25, 2011 |
June 26, 2010 |
June 25, 2011 |
June 26, 2010 |
|||||||||||||
| (unaudited) | (unaudited) | |||||||||||||||
| Revenue |
$ | 97,959 | $ | 71,653 | $ | 169,429 | $ | 119,856 | ||||||||
| Cost of revenue: |
||||||||||||||||
| Products and services(1) |
54,899 | 41,855 | 94,207 | 72,026 | ||||||||||||
| Merger-related expenses |
9,709 | — | 19,966 | — | ||||||||||||
| Amortization of intangible assets |
3,188 | 1,360 | 4,704 | 2,720 | ||||||||||||
| Total cost of revenue |
67,796 | 43,215 | 118,877 | 74,746 | ||||||||||||
| Gross profit |
30,163 | 28,438 | 50,552 | 45,110 | ||||||||||||
| Operating expenses: |
||||||||||||||||
| Research and development(1) |
18,584 | 13,086 | 33,623 | 24,933 | ||||||||||||
| Sales and marketing(1) |
14,172 | 10,184 | 26,238 | 18,606 | ||||||||||||
| General and administrative(1) |
6,667 | 7,423 | 15,975 | 12,171 | ||||||||||||
| Merger-related and other expenses(1) |
5,482 | — | 11,523 | — | ||||||||||||
| Amortization of intangible assets |
2,795 | 185 | 3,464 | 370 | ||||||||||||
| Total operating expenses |
47,700 | 30,878 | 90,823 | 56,080 | ||||||||||||
| Loss from operations |
(17,537 | ) | (2,440 | ) | (40,271 | ) | (10,970 | ) | ||||||||
| Other income (expense): |
||||||||||||||||
| Interest income |
26 | 103 | 69 | 177 | ||||||||||||
| Interest expense |
(45 | ) | (620 | ) | (91 | ) | (1,093 | ) | ||||||||
| Change in fair value of preferred stock warrants |
— | — | — | (173 | ) | |||||||||||
| Other income |
24 | (2 | ) | 29 | 9 | |||||||||||
| Loss before provision for income taxes |
(17,532 | ) | (2,959 | ) | (40,264 | ) | (12,050 | ) | ||||||||
| Provision for income taxes |
114 | 243 | 138 | 414 | ||||||||||||
| Net loss |
(17,646 | ) | (3,202 | ) | (40,402 | ) | (12,464 | ) | ||||||||
| Preferred stock dividends |
— | — | — | 900 | ||||||||||||
| Net loss attributable to common stockholders |
$ | (17,646 | ) | $ | (3,202 | ) | $ | (40,402 | ) | $ | (13,364 | ) | ||||
| Net loss per common share: |
||||||||||||||||
| Basic and diluted |
$ | (0.38 | ) | $ | (0.09 | ) | $ | (0.92 | ) | $ | (0.63 | ) | ||||
| Pro forma basic and diluted |
$ | (0.38 | ) | $ | (0.09 | ) | $ | (0.92 | ) | $ | (0.36 | ) | ||||
| Weighted average number of shares used to compute net loss per common share: |
||||||||||||||||
| Basic and diluted |
46,050 | 37,212 | 43,697 | 21,305 | ||||||||||||
| Pro forma basic and diluted (2) |
46,050 | 37,212 | 43,697 | 34,614 | ||||||||||||
|
(1) Includes stock-based compensation as follows: |
||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 25, 2011 |
June 26, 2010 |
June 25, 2011 |
June 26, 2010 |
|||||||||||||
| (unaudited) | (unaudited) | |||||||||||||||
| Cost of revenue |
$ | 331 | $ | 484 | 835 | 624 | ||||||||||
| Research and development |
1,233 | 1,686 | 2,875 | 2,256 | ||||||||||||
| Sales and marketing |
831 | 1,247 | 2,129 | 1,681 | ||||||||||||
| General and administrative |
1,855 | 3,764 | 6,438 | 5,427 | ||||||||||||
| Merger-related |
1,074 | — | 1,164 | — | ||||||||||||
| $ | 5,324 | $ | 7,181 | $ | 13,441 | $ | 9,988 | |||||||||
| (2) | For the six months ended June 26, 2010, includes outstanding common shares and common shares resulting from the assumed conversion of preferred shares as if conversion occurred at the beginning of the first quarter of 2010. |
| Press Release | Page 5 |
Reconciliation of GAAP to Non-GAAP Results
(Unaudited, in thousands except per share data)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 25, 2011 |
June 26, 2010 |
June 25, 2011 |
June 26, 2010 |
|||||||||||||
| GAAP net loss |
$ | (17,646 | ) | $ | (3,202 | ) | $ | (40,402 | ) | $ | (13,364 | ) | ||||
| Adjustments to reconcile GAAP net loss to non-GAAP net income (loss): |
||||||||||||||||
| Stock-based compensation |
4,250 | 7,181 | 12,277 | 9,988 | ||||||||||||
| Stock-based compensation (MRE) |
1,074 | — | 1,164 | — | ||||||||||||
| Amortization of intangible assets |
5,983 | 1,545 | 8,168 | 3,090 | ||||||||||||
| Merger-related expenses (COGS) |
9,709 | — | 19,966 | — | ||||||||||||
| Merger-related and other expenses (OPEX) |
4,408 | — | 10,359 | — | ||||||||||||
| Change in fair value of preferred stock warrants |
— | — | — | 173 | ||||||||||||
| Preferred stock dividends |
— | — | — | 900 | ||||||||||||
| Non-GAAP net income |
$ | 7,778 | $ | 5,524 | $ | 11,532 | $ | 787 | ||||||||
| Non-GAAP net income per common share |
||||||||||||||||
| Basic |
$ | 0.17 | $ | 0.15 | $ | 0.26 | $ | 0.02 | ||||||||
| Diluted |
$ | 0.16 | $ | 0.14 | $ | 0.25 | $ | 0.02 | ||||||||
| Weighted average shares used to compute non-GAAP net income per common share - Basic (1) |
46,050 | 37,212 | 43,697 | 34,614 | ||||||||||||
| Weighted average shares used to compute non-GAAP net income per common share - Diluted (1)(2) |
48,139 | 39,413 | 46,008 | 36,409 | ||||||||||||
| (1) | For the six months ended June 26, 2010, includes outstanding common shares and common shares resulting from the the assumed conversion of preferred shares as if conversion occurred at the beginning of the first quarter of 2010. |
| (2) | Includes the dilutive effect of oustanding stock options, warrants and restricted stock units for all periods presented. |
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||
| June 25, 2011 |
June 26, 2010 |
June 25, 2011 |
June 26, 2010 |
|||||||||||||||||||||||||||||
| GAAP gross profit and gross margin |
$ | 30,163 | 30.8 | % | $ | 28,438 | 39.7 | % | $ | 50,552 | 29.8 | % | $ | 45,110 | 37.6 | % | ||||||||||||||||
| Adjustments to reconcile GAAP gross profit and gross margin to non-GAAP gross profit and gross margin: |
||||||||||||||||||||||||||||||||
| Stock-based compensation |
331 | 484 | 835 | 624 | ||||||||||||||||||||||||||||
| Amortization of intangible assets |
3,188 | 1,360 | 4,704 | 2,720 | ||||||||||||||||||||||||||||
| Merger-related expenses |
9,709 | — | 19,966 | — | ||||||||||||||||||||||||||||
| Non-GAAP gross profit and gross margin |
$ | 43,391 | 44.3 | % | $ | 30,282 | 42.3 | % | $ | 76,057 | 44.9 | % | $ | 48,454 | 40.4 | % | ||||||||||||||||
| Press Release | Page 6 |
Condensed Consolidated Balance Sheets
(In thousands)
| June 25, 2011 |
December 31, 2010 |
|||||||
| (unaudited) | ||||||||
| ASSETS |
||||||||
| Current Assets: |
||||||||
| Cash and cash equivalents |
$ | 18,660 | $ | 66,304 | ||||
| Marketable securities |
8,911 | 32,020 | ||||||
| Restricted cash |
1,054 | — | ||||||
| Accounts receivable, net |
57,940 | 43,377 | ||||||
| Inventory |
38,489 | 24,557 | ||||||
| Deferred cost of revenue |
10,835 | 7,771 | ||||||
| Prepaid and other current assets |
5,340 | 3,245 | ||||||
| Total current assets |
141,229 | 177,274 | ||||||
| Property and equipment, net |
18,206 | 11,815 | ||||||
| Goodwill |
116,175 | 65,576 | ||||||
| Intangible assets, net |
90,001 | 515 | ||||||
| Other assets |
2,381 | 2,376 | ||||||
| Total assets |
$ | 367,992 | $ | 257,556 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ | 10,932 | $ | 10,268 | ||||
| Accrued liabilities |
39,629 | 25,987 | ||||||
| Deferred revenue |
23,081 | 14,062 | ||||||
| Total current liabilities |
73,642 | 50,317 | ||||||
| Long-term portion of deferred revenue |
11,970 | 10,985 | ||||||
| Other long term liabilities |
1,588 | 951 | ||||||
| Total liabilities |
87,200 | 62,253 | ||||||
| Stockholders’ equity: |
||||||||
| Common stock |
1,167 | 968 | ||||||
| Additional paid-in capital |
731,617 | 605,939 | ||||||
| Other comprehensive income |
45 | 31 | ||||||
| Accumulated deficit |
(452,037 | ) | (411,635 | ) | ||||
| Total stockholders’ equity |
280,792 | 195,303 | ||||||
| Total liabilities and stockholders’ equity |
$ | 367,992 | $ | 257,556 | ||||
| Press Release | Page 7 |
Condensed Consolidated Statements of Cash Flows
(in thousands)
| Six Months Ended | ||||||||
| June 25, 2011 |
June 26, 2010 |
|||||||
| (unaudited) | ||||||||
| Operating activities |
||||||||
| Net loss |
$ | (40,402 | ) | $ | (12,464 | ) | ||
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |
||||||||
| Amortization of premiums relating to available-for-sale securities |
184 | 415 | ||||||
| Loss on retirement of property and equipment |
1,621 | — | ||||||
| Depreciation and amortization |
3,859 | 2,381 | ||||||
| Amortization of intangible assets |
8,168 | 3,090 | ||||||
| Revaluation of warrant liability |
— | 173 | ||||||
| Stock-based compensation |
13,441 | 9,988 | ||||||
| Changes in operating assets and liabilities: |
||||||||
| Change in restricted cash |
— | 629 | ||||||
| Accounts receivable, net |
2,290 | 11,452 | ||||||
| Inventory |
15,297 | (6,387 | ) | |||||
| Deferred cost of revenue |
(3,064 | ) | 622 | |||||
| Prepaids and other assets |
(1,246 | ) | 858 | |||||
| Accounts payable |
(11,136 | ) | (10,326 | ) | ||||
| Accrued liabilities |
3,029 | (2,119 | ) | |||||
| Deferred Revenue |
9,138 | 1,358 | ||||||
| Other long-term liabilities |
(253 | ) | 130 | |||||
| Net cash provided by (used in) operating activities |
926 | (200 | ) | |||||
| Investing activities |
||||||||
| Acquisition of property and equipment |
(4,508 | ) | (2,906 | ) | ||||
| Acquisition of Occam Networks, net of cash assumed |
(60,809 | ) | — | |||||
| Purchase of marketable securities |
— | (56,567 | ) | |||||
| Sales of marketable securities |
— | 15,208 | ||||||
| Maturities of marketable securities |
22,905 | — | ||||||
| Net cash used in investing activities |
(42,412 | ) | (44,265 | ) | ||||
| Financing activities |
||||||||
| Proceeds from exercise of stock options and other |
667 | 72 | ||||||
| Proceeds from employee stock purchase plan |
2,062 | — | ||||||
| Taxes withheld upon vesting of restricted stock units |
(8,921 | ) | — | |||||
| Principal payment on loans |
— | (20,000 | ) | |||||
| Proceeds from initial public offering of common stock, net of issuance costs |
— | 57,293 | ||||||
| Net cash provided by (used in) financing activities |
(6,192 | ) | 37,365 | |||||
| Effect of exchange rate changes on cash and cash equivalents |
34 | — | ||||||
| Net decrease in cash and cash equivalents |
(47,644 | ) | (7,100 | ) | ||||
| Cash and cash equivalents at beginning of period |
66,304 | 31,821 | ||||||
| Cash and cash equivalents at end of period |
$ | 18,660 | $ | 24,721 | ||||