Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - CALIX, INC | d241302d8k.htm |
Exhibit 99.1
Calix Reports Third Quarter 2011 Financial Results
PETALUMA, CA—(Marketwire - October 20, 2011) - Calix Inc. (NYSE: CALX) today announced unaudited financial results for the third quarter ended September 24, 2011. Revenue for the third quarter of 2011 was $83.7 million, an increase of 11% compared to $75.5 million for the third quarter of 2010. The company reported preliminary estimates for its third quarter results on September 27, 2011 of revenue between $83 and $85 million and non-GAAP earnings per share of $0.07 to $0.09 per share.
“While we are clearly disappointed with our Q3 results, we remain focused on bringing industry leading broadband access solutions to our existing and expanding base of customers,” said Carl Russo, president and CEO of Calix. “After what we anticipate will be a pause in our growth, we are looking ahead and building a stronger company to address the secular growth drivers in front of us.”
Non-GAAP net income for the third quarter of 2011 was $3.6 million, or $0.07 per fully diluted share, a decrease of 39% compared to non-GAAP net income of $5.8 million, or $0.15 per fully diluted share, for the third quarter of 2010. A reconciliation of GAAP and non-GAAP results is included as part of this release.
GAAP net loss for the third quarter of 2011 was $6.9 million, or $(0.15) 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. A reconciliation of our third quarter 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 |
$ | 83,655 | $ | — | $ | — | $ | — | $ | 83,655 | ||||||||||
| Cost of revenue |
48,696 | — | 306 | 2,806 | 51,808 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Gross profit |
34,959 | — | (306 | ) | (2,806 | ) | 31,847 | |||||||||||||
| Operating expenses |
31,365 | 1,334 | 3,490 | 2,552 | 38,741 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Operating income (loss) |
3,594 | (1,334 | ) | (3,796 | ) | (5,358 | ) | (6,894 | ) | |||||||||||
| Other income/(expense), net |
(2 | ) | — | — | — | (2 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Income (loss) before taxes |
3,592 | (1,334 | ) | (3,796 | ) | (5,358 | ) | (6,896 | ) | |||||||||||
| Provision for income taxes |
38 | — | — | — | 38 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net income (loss) |
$ | 3,554 | $ | (1,334 | ) | $ | (3,796 | ) | $ | (5,358 | ) | $ | (6,934 | ) | ||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Weighted average basic and diluted shares used to compute GAAP net loss per common share |
47,128 | |||||||||||||||||||
|
|
|
|||||||||||||||||||
| Weighted average diluted shares used to compute non-GAAP net income per common share |
48,092 | 48,092 | 48,092 | 48,092 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
| GAAP net loss per common share |
$ | (0.15 | ) | |||||||||||||||||
|
|
|
|||||||||||||||||||
| Non-GAAP net income (loss) per share |
$ | 0.07 | $ | (0.03 | ) | $ | (0.08 | ) | $ | (0.11 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
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 third 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: (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 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. 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 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.
This press release contains forward-looking statements, including a resumption of growth, that are based upon management’s current expectations and are inherently uncertain. Forward-looking statements are based upon information available to us as of the date of this release, and we assume no obligation to revise or update any such forward-looking statement to reflect any event or circumstance after the date of this release, except as required by law. Actual results and the timing of events could differ materially from current expectations based on risks and uncertainties affecting the Company’s business. The reader is cautioned not to unduly rely on the forward-looking statements contained in this press release. Additional information on potential factors that could affect Calix’s results and other risks and uncertainties are detailed in its various SEC reports, including its Form 10-Q for the fiscal quarter ended June 25, 2011, filed with the SEC on July 22, 2011, available at http://www.sec.gov.
Condensed Consolidated Statements of Operations
(in thousands)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 24, 2011 |
September 25, 2010 |
September 24, 2011 |
September 25, 2010 |
|||||||||||||
| (unaudited) | (unaudited) | |||||||||||||||
| Revenue |
$ | 83,655 | $ | 75,492 | $ | 253,084 | $ | 195,348 | ||||||||
| Cost of revenue: |
||||||||||||||||
| Products and services(1) |
49,002 | 45,168 | 143,209 | 117,194 | ||||||||||||
| Merger-related expenses |
— | — | 19,966 | — | ||||||||||||
| Amortization of intangible assets |
2,806 | 1,360 | 7,510 | 4,080 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total cost of revenue |
51,808 | 46,528 | 170,685 | 121,274 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Gross profit |
31,847 | 28,964 | 82,399 | 74,074 | ||||||||||||
| Operating expenses: |
||||||||||||||||
| Research and development(1) |
16,717 | 14,299 | 50,340 | 39,232 | ||||||||||||
| Sales and marketing(1) |
12,593 | 10,408 | 38,831 | 29,014 | ||||||||||||
| General and administrative(1) |
5,475 | 7,344 | 21,450 | 19,515 | ||||||||||||
| Merger-related and other expenses(1) |
1,404 | 2,137 | 12,927 | 2,137 | ||||||||||||
| Amortization of intangible assets |
2,552 | 185 | 6,016 | 555 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total operating expenses |
38,741 | 34,373 | 129,564 | 90,453 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Loss from operations |
(6,894 | ) | (5,409 | ) | (47,165 | ) | (16,379 | ) | ||||||||
| Other income (expense): |
||||||||||||||||
| Interest income |
11 | 120 | 80 | 297 | ||||||||||||
| Interest expense |
(48 | ) | (45 | ) | (139 | ) | (1,138 | ) | ||||||||
| Change in fair value of preferred stock warrants |
— | — | — | (173 | ) | |||||||||||
| Other income |
35 | 4 | 64 | 13 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net loss before provision for income taxes |
(6,896 | ) | (5,330 | ) | (47,160 | ) | (17,380 | ) | ||||||||
| Provision for income taxes |
38 | 21 | 176 | 435 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net loss |
(6,934 | ) | (5,351 | ) | (47,336 | ) | (17,815 | ) | ||||||||
| Preferred stock dividends |
— | — | — | 900 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net loss attributable to common stockholders |
$ | (6,934 | ) | $ | (5,351 | ) | $ | (47,336 | ) | $ | (18,715 | ) | ||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net loss per common share: |
||||||||||||||||
| Basic and diluted |
$ | (0.15 | ) | $ | (0.14 | ) | $ | (1.06 | ) | $ | (0.70 | ) | ||||
|
|
|
|
|
|
|
|
|
|||||||||
| Pro forma basic and diluted |
$ | (0.15 | ) | $ | (0.14 | ) | $ | (1.06 | ) | $ | (0.50 | ) | ||||
|
|
|
|
|
|
|
|
|
|||||||||
| Weighted average number of shares used to compute net loss per common share: |
||||||||||||||||
| Basic and diluted |
47,128 | 37,341 | 44,866 | 26,751 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Pro forma basic and diluted(2) |
47,128 | 37,341 | 44,866 | 35,540 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| (1) | Includes stock- based compensation as follows: |
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 24, 2011 |
September 25, 2010 |
September 24, 2011 |
September 25, 2010 |
|||||||||||||
| (unaudited) | (unaudited) | |||||||||||||||
| Cost of revenue |
$ | 306 | $ | 528 | $ | 1,141 | $ | 1,152 | ||||||||
| Research and development |
886 | 1,758 | 3,761 | 4,014 | ||||||||||||
| Sales and marketing |
1,127 | 1,353 | 3,256 | 3,034 | ||||||||||||
| General and administrative |
1,407 | 3,855 | 7,845 | 9,282 | ||||||||||||
| Merger-related |
70 | — | 1,234 | — | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| $ | 3,796 | $ | 7,494 | $ | 17,237 | $ | 17,482 | |||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| (2) | For the nine months ended September 25, 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. |
Reconciliation of GAAP to Non-GAAP Results
(Unaudited, in thousands except per share data)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 24, 2011 |
September 25, 2010 |
September 24, 2011 |
September 25, 2010 |
|||||||||||||
| GAAP net loss |
$ | (6,934 | ) | $ | (5,351 | ) | $ | (47,336 | ) | $ | (18,715 | ) | ||||
| Adjustments to reconcile GAAP net loss to non-GAAP net income (loss): |
||||||||||||||||
| Stock-based compensation |
3,726 | 7,494 | 16,003 | 17,482 | ||||||||||||
| Stock-based compensation (MRE) |
70 | — | 1,234 | — | ||||||||||||
| Amortization of intangible assets |
5,358 | 1,545 | 13,526 | 4,635 | ||||||||||||
| Merger-related expenses (COGS) |
— | — | 19,966 | — | ||||||||||||
| Merger-related and other expenses (OPEX) |
1,334 | 2,137 | 11,693 | 2,137 | ||||||||||||
| Change in fair value of preferred stock warrants |
— | — | — | 173 | ||||||||||||
| Preferred stock dividends |
— | — | — | 900 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Non-GAAP net income |
$ | 3,554 | $ | 5,825 | $ | 15,086 | $ | 6,612 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Non-GAAP net income per common share |
||||||||||||||||
| Basic |
$ | 0.08 | $ | 0.16 | $ | 0.34 | $ | 0.19 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Diluted |
$ | 0.07 | $ | 0.15 | $ | 0.32 | $ | 0.18 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Weighted average shares used to compute non- GAAP net income per common share - Basic(1) |
47,128 | 37,341 | 44,866 | 35,540 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Weighted average shares used to compute non- GAAP net income per common share - Diluted(1)(2) |
48,092 | 39,976 | 46,718 | 37,619 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| (1) | For the nine months ended September 25, 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. |
| (2) | Includes the dilutive effect of outstanding stock options, warrants and restricted stock units for all periods presented. |
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||
| September 24, 2011 |
September 25, 2010 |
September 24, 2011 |
September 25, 2010 | |||||||||||||||||||||
| GAAP gross profit and gross margin |
$ | 31,847 | 38.1% | $ | 28,964 | 38.4% | $ | 82,399 | 32.6% | $ | 74,074 | 37.9% | ||||||||||||
| Adjustments to reconcile GAAP gross profit and gross |
||||||||||||||||||||||||
| margin to non- GAAP gross profit and gross margin: |
||||||||||||||||||||||||
| Stock-based compensation |
306 | 528 | 1,141 | 1,152 | ||||||||||||||||||||
| Amortization of intangible assets |
2,806 | 1,360 | 7,510 | 4,080 | ||||||||||||||||||||
| Merger-related expenses |
— | — | 19,966 | — | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Non-GAAP gross profit and gross margin |
$ | 34,959 | 41.8% | $ | 30,852 | 40.9% | $ | 111,016 | 43.9% | $ | 79,306 | 40.6% | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Condensed Consolidated Balance Sheets
(In thousands)
| September 24, 2011 |
December 31, 2010 |
|||||||
| (unaudited) | ||||||||
| ASSETS | ||||||||
| Current Assets: |
||||||||
| Cash and cash equivalents |
$ | 30,249 | $ | 66,304 | ||||
| Marketable securities |
2,014 | 32,020 | ||||||
| Restricted cash |
1,054 | — | ||||||
| Accounts receivable, net |
47,901 | 43,377 | ||||||
| Inventory |
44,152 | 24,557 | ||||||
| Deferred cost of revenue |
8,932 | 7,771 | ||||||
| Prepaid and other current assets |
6,493 | 3,245 | ||||||
|
|
|
|
|
|||||
| Total current assets |
140,795 | 177,274 | ||||||
| Property and equipment, net |
17,222 | 11,815 | ||||||
| Goodwill |
116,175 | 65,576 | ||||||
| Intangible assets, net |
84,643 | 515 | ||||||
| Other assets |
2,273 | 2,376 | ||||||
|
|
|
|
|
|||||
| Total assets |
$ | 361,108 | $ | 257,556 | ||||
|
|
|
|
|
|||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ | 11,942 | $ | 10,268 | ||||
| Accrued liabilities |
39,450 | 25,987 | ||||||
| Deferred revenue |
19,448 | 14,062 | ||||||
|
|
|
|
|
|||||
| Total current liabilities |
70,840 | 50,317 | ||||||
| Long-term portion of deferred revenue |
12,265 | 10,985 | ||||||
| Other long term liabilities |
1,662 | 951 | ||||||
|
|
|
|
|
|||||
| Total liabilities |
84,767 | 62,253 | ||||||
|
|
|
|
|
|||||
| Stockholders’ equity: |
||||||||
| Common stock |
1,182 | 968 | ||||||
| Additional paid-in capital |
734,045 | 605,939 | ||||||
| Other comprehensive income |
85 | 31 | ||||||
| Accumulated deficit |
(458,971 | ) | (411,635 | ) | ||||
|
|
|
|
|
|||||
| Total stockholders’ equity |
276,341 | 195,303 | ||||||
|
|
|
|
|
|||||
| Total liabilities and stockholders’ equity |
$ | 361,108 | $ | 257,556 | ||||
|
|
|
|
|
|||||
Condensed Consolidated Statements of Cash Flows
(in thousands)
| Nine Months Ended | ||||||||
| September 24, 2011 |
September 25, 2010 |
|||||||
| (unaudited) | ||||||||
| Operating activities |
||||||||
| Net loss |
$ | (47,336 | ) | $ | (17,815 | ) | ||
| Adjustments to reconcile net loss to net cash provided by operating activities: |
||||||||
| Amortization of premiums relating to available-for-sale securities |
229 | 740 | ||||||
| Depreciation and amortization |
5,949 | 3,692 | ||||||
| Loss on retirement of property and equipment |
2,278 | — | ||||||
| Amortization of intangible assets |
13,526 | 4,635 | ||||||
| Revaluation of warranty liabilities |
— | 173 | ||||||
| Stock-based compensation |
17,237 | 17,482 | ||||||
| Changes in operating assets and liabilities: |
||||||||
| Change in restricted cash |
— | 629 | ||||||
| Accounts receivable, net |
12,329 | 14,111 | ||||||
| Inventory |
9,634 | (6,364 | ) | |||||
| Deferred cost of revenue |
(1,161 | ) | 6,041 | |||||
| Prepaids and other assets |
(2,291 | ) | 1,423 | |||||
| Accounts payable |
(10,126 | ) | (5,850 | ) | ||||
| Accrued liabilities |
2,850 | (2,663 | ) | |||||
| Deferred revenue |
5,800 | (7,939 | ) | |||||
| Other long-term liabilities |
(179 | ) | 82 | |||||
|
|
|
|
|
|||||
| Net cash provided by operating activities |
8,739 | 8,377 | ||||||
|
|
|
|
|
|||||
| Investing activities |
||||||||
| Purchase of property and equipment |
(6,271 | ) | (3,923 | ) | ||||
| Acquisition of Occam Networks, net of cash assumed |
(60,809 | ) | — | |||||
| Purchase of marketable securities |
— | (74,577 | ) | |||||
| Sales and maturities of marketable securities |
29,755 | 36,060 | ||||||
|
|
|
|
|
|||||
| Net cash used in investing activities |
(37,325 | ) | (42,440 | ) | ||||
|
|
|
|
|
|||||
| Financing activities |
||||||||
| Proceeds from exercise of stock options and other |
766 | 72 | ||||||
| Proceeds from issuance of common stock under employee stock purchase plan |
2,062 | — | ||||||
| Taxes withheld upon vesting of restricted stock units |
(10,373 | ) | — | |||||
| Principal payment on loans |
— | (20,000 | ) | |||||
| Proceeds from initial public offering of common stock, net of issuance costs |
— | 57,311 | ||||||
|
|
|
|
|
|||||
| Net cash (used in) provided by financing activities |
(7,545 | ) | 37,383 | |||||
|
|
|
|
|
|||||
| Effect of exchange rate changes on cash and cash equivalents |
76 | — | ||||||
| Net (decrease) increase in cash and cash equivalents |
(36,055 | ) | 3,320 | |||||
| Cash and cash equivalents at beginning of period |
66,304 | 31,821 | ||||||
|
|
|
|
|
|||||
| Cash and cash equivalents at end of period |
$ | 30,249 | $ | 35,141 | ||||
|
|
|
|
|
|||||
| Non-cash investing activities |
||||||||
| Value of common stock issued in acquisition |
$ | 117,258 | $ | — | ||||
| Fair value of equity awards assumed |
$ | 1,370 | $ | — | ||||
Contact Information
For more information, contact:
David H. Allen
1 510 360 3703
David.Allen@calix.com