Attached files

file filename
8-K - FORM 8-K - CALIX, INCform8-kearningreleaseq412.htm

Exhibit 99.1
Calix Reports Fourth Quarter and 2012 Fiscal Year Results
PETALUMA, CA February 5, 2013Calix, Inc. (NYSE: CALX) today announced financial results for the fourth quarter and fiscal year ended December 31, 2012. Revenue for the fourth quarter of 2012 was $91.4 million, an increase of 12.5% compared to $81.3 million for the third quarter of 2012, and flat compared to $91.6 million for the fourth quarter of 2011.
“Strong fourth quarter results ended 2012 on a positive note,” said Carl Russo, Calix president and CEO. “We are carrying this momentum into 2013, with a strengthened organization, an expanded Unified Access portfolio of software, systems and services, and our preferred global reseller agreement with Ericsson providing a solid foundation for growth.”
Non-GAAP net income for the fourth quarter of 2012 was $2.9 million, or $0.06 per fully diluted share, an increase of 61.3% compared to non-GAAP net income of $1.8 million, or $0.04 per fully diluted share for the third quarter of 2012, and a decrease of 22.2% compared to non-GAAP net income of $3.7 million, or $0.08 per fully diluted share, in the fourth quarter of 2011.
GAAP net loss for the fourth quarter of 2012 was $6.6 million, or $(0.14) per basic and diluted share, compared to a GAAP net loss of $7.1 million, or $(0.15) per basic and diluted share for the third quarter of 2012, and compared to a GAAP net loss of $5.2 million, or $(0.11) per basic and diluted share reported for the fourth quarter of 2011. A reconciliation of our fourth quarter 2012 operating results from non-GAAP to GAAP is provided below (in thousands, except per share data):

 
 
Three Months Ended December 31, 2012
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-GAAP
 
Acquisition Related Expenses
 
Gain on Bargain Purchase
 
Stock-Based Compensation
 
Amortization of Intangible Assets
 
GAAP
Revenue
 
$
91,424

 
$

 
$

 
$

 
$

 
$
91,424

Cost of revenue
 
51,962

 

 

 
344

 
2,088

 
54,394

Gross profit
 
39,462

 

 

 
(344
)
 
(2,088
)
 
37,030

Gross margin
 
43.2
%
 
%
 
%
 
(0.4
)%
 
(2.3
)%
 
40.5
%
Operating expenses
 
36,693

 
1,401

 

 
4,132

 
2,552

 
44,778

Operating income (loss)
 
2,769

 
(1,401
)
 

 
(4,476
)
 
(4,640
)
 
(7,748
)
Interest and other income (expense), net
 
23

 

 
1,029

 

 

 
1,052

Income (loss) before taxes
 
2,792

 
(1,401
)
 
1,029

 
(4,476
)
 
(4,640
)
 
(6,696
)
Benefit from income taxes
 
(122
)
 

 

 

 

 
(122
)
Net income (loss)
 
$
2,914

 
$
(1,401
)
 
$
1,029

 
$
(4,476
)
 
$
(4,640
)
 
$
(6,574
)
Weighted average basic and diluted shares used to compute GAAP net loss per common share
 
 
 
 
 
 
 
 
 
 
 
48,538

Weighted average diluted shares used to compute non-GAAP net income per common share
 
48,836

 
48,836

 
48,836

 
48,836

 
48,836

 
 
GAAP net loss per common share
 
 
 
 
 
 
 
 
 
 
 
$
(0.14
)
Non-GAAP net income (loss) per share
 
$
0.06

 
$
(0.03
)
 
$
0.02

 
$
(0.09
)
 
$
(0.10
)
 
 




1



Conference Call
Calix will host a conference call to discuss its fourth quarter and fiscal year 2012 results at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time) today. Interested parties can listen to a live webcast of the conference call by visiting the Calix Investor Relations website at http://investor-relations.calix.com/ or dialing 877-407-4019 within the U.S. or 201-689-8337 outside the U.S. A replay of the conference call will also be available at http://investor-relations.calix.com/ approximately one hour following the completion of the call. 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.
All statements other than statements of historical facts contained in this press release, including statements regarding our future operations and growth opportunities, are forward-looking statements and 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 reports filed with the SEC, including the Company's 2011 Annual Report on Form 10-K and its report on Form 10-Q for the fiscal quarter ended September 29, 2012, available at http://www.sec.gov.
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, amortization of acquisition-related intangible assets, gain from bargain purchase of Ericsson's fiber access assets, and non-recurring acquisition-related expenses, which the Company believes are not indicative of its core operating results. Acquisition-related expenses largely include legal and professional expenses, severance and integration-related expenses associated with our merger with Occam in 2011 and our acquisition of Ericsson's fiber access assets in 2012. In addition, acquisition-related expenses for 2011 include the charge resulting from the required revaluation of Occam inventory to its estimated fair value and inventory-related charges upon the completion of the acquisition. 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.


2



Calix, Inc.
Condensed Consolidated Statements of Operations
(Unaudited, in thousands, except per share data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Twelve Months Ended
 
 
 
 
December 31,
 
December 31,
 
December 31,
 
December 31,
 
 
 
 
2012
 
2011
 
2012
 
2011
Revenue
 
$
91,424

 
$
91,585

 
$
330,218

 
$
344,669

Cost of revenue:
 

 

 

 

 
Products and services(1)
 
52,306

 
52,489

 
185,103

 
195,698

 
Acquisition-related expenses
 

 

 

 
19,966

 
Amortization of intangible assets
 
2,088

 
2,042

 
7,539

 
9,552

 
 
Total cost of revenue
 
54,394

 
54,531

 
192,642

 
225,216

Gross profit
 
37,030

 
37,054

 
137,576

 
119,453

Operating expenses:
 
 
 
 
 
 
 
 
 
Research and development(1)
 
17,144

 
17,385

 
66,748

 
67,725

 
Sales and marketing(1)
 
17,249

 
16,720

 
62,129

 
55,551

 
General and administrative(1)
 
6,432

 
5,552

 
26,114

 
27,002

 
Acquisition-related expenses(1)
 
1,401

 

 
1,401

 
12,927

 
Amortization of intangible assets
 
2,552

 
2,553

 
10,208

 
8,569

 
 
Total operating expenses
 
44,778

 
42,210

 
166,600

 
171,774

Loss from operations
 
(7,748
)
 
(5,156
)
 
(29,024
)
 
(52,321
)
Interest and other income (expense), net:
 
 
 
 
 
 
 
 

Interest income
 
1

 
7

 
15

 
87


Interest expense
 
(45
)
 
(45
)
 
(185
)
 
(184
)
 
Gain on bargain purchase
 
1,029

 

 
1,029

 


Other income (expense), net
 
67

 
28

 
(3
)
 
92

Loss before provision for (benefit from) income taxes
 
(6,696
)
 
(5,166
)
 
(28,168
)
 
(52,326
)
Provision for (benefit from) income taxes
 
(122
)
 
48

 
158

 
224

Net loss
 
$
(6,574
)
 
$
(5,214
)
 
$
(28,326
)
 
$
(52,550
)
Net loss per common share:
 
 
 
 
 
 
 
 
 
Basic and diluted
 
$
(0.14
)
 
$
(0.11
)
 
$
(0.59
)
 
$
(1.15
)
Weighted average number of shares used to compute net loss per common share:
 
 
 
 
 
 
 
 
 
Basic and diluted
 
48,538

 
47,398

 
48,180

 
45,546

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)
Includes stock-based compensation as follows:
 
Cost of revenue
 
$
344

 
$
362

 
$
1,433

 
$
1,503

 
Research and development
 
1,098

 
1,067

 
4,227

 
4,828

 
Sales and marketing
 
1,320

 
1,244

 
5,160

 
4,500

 
General and administrative
 
1,714

 
1,693

 
6,617

 
9,538

 
Acquisition-related expenses
 

 

 

 
1,234

 
 
 
 
$
4,476

 
$
4,366

 
$
17,437

 
$
21,603





3



Calix, Inc.
Reconciliation of GAAP to Non-GAAP Results
(Unaudited, in thousands, except per share data)
 
 
 
 
 
 
 
 

Three Months Ended
 
Twelve Months Ended

December 31,
 
December 31,
 
December 31,
 
December 31,

2012
 
2011
 
2012
 
2011
GAAP net loss
$
(6,574
)
 
$
(5,214
)
 
$
(28,326
)
 
$
(52,550
)
Adjustments to reconcile GAAP net loss to
 
 
 
 
 
 
 
   non-GAAP net income:
 
 
 
 
 
 
 
Stock-based compensation
4,476

 
4,366

 
17,437

 
21,603

Amortization of intangible assets
4,640

 
4,595

 
17,747

 
18,121

Acquisition-related expenses
1,401

 

 
1,401

 
31,659

Gain on bargain purchase
(1,029
)
 

 
(1,029
)
 

Non-GAAP net income
$
2,914

 
$
3,747

 
$
7,230

 
$
18,833

Non-GAAP net income per common share
 
 
 
 
 
 
 
   Basic
$
0.06

 
$
0.08

 
$
0.15

 
$
0.41

   Diluted
$
0.06

 
$
0.08

 
$
0.15

 
$
0.40

Weighted average shares used to compute non-GAAP
 
 
 
 
 
 
 
   net income per common share - Basic
48,538

 
47,398

 
48,180

 
45,546

Weighted average shares used to compute non-GAAP
 
 
 
 
 
 
 
   net income per common share - Diluted (1)
48,836

 
47,570

 
48,367

 
46,947


(1) Includes the dilutive effect of outstanding stock options and restricted stock units.



4



Calix, Inc.
Condensed Consolidated Balance Sheets
(Unaudited, in thousands)
 
 
 
 
 
December 31,
 
December 31,
 
2012
 
2011
ASSETS
 
 
 
Current Assets:
 
 
 
Cash and cash equivalents
$
46,995

 
$
38,938

Restricted cash

 
754

Accounts receivable, net
59,519

 
46,508

Inventory
43,282

 
45,229

Deferred cost of revenue
21,077

 
7,698

Prepaid and other current assets
5,677

 
4,429

 Total current assets
176,550

 
143,556

Property and equipment, net
21,083

 
16,130

Goodwill
116,175

 
116,175

Intangible assets, net
62,301

 
80,048

Other assets
1,788

 
2,194

 Total assets
$
377,897

 
$
358,103

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
 
 
 
Accounts payable
$
16,804

 
$
14,250

Accrued liabilities
36,176

 
36,214

Deferred revenue
39,315

 
15,347

Total current liabilities
92,295

 
65,811

Long-term portion of deferred revenue
15,782

 
13,347

Other long term liabilities
745

 
1,528

Total liabilities
108,822

 
80,686

Stockholders' equity:
 
 
 
Common stock
1,222

 
1,195

Additional paid-in capital
760,232

 
740,309

Accumulated other comprehensive income
132

 
98

Accumulated deficit
(492,511
)
 
(464,185
)
Total stockholders' equity
269,075

 
277,417

Total liabilities and stockholders' equity
$
377,897

 
$
358,103





5



Calix, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)
 
 
 
 
 
 
 
Twelve Months Ended
 
 
December 31,
 
December 31,
 
 
2012
 
2011
Operating activities:
 
 
 
 
Net loss
 
$
(28,326
)
 
$
(52,550
)
Adjustments to reconcile net loss to net cash provided by operating activities:
 
 
 
 
Amortization of premiums relating to available-for-sale securities
 

 
244

Depreciation and amortization
 
8,562

 
7,954

Loss on retirement of property and equipment
 
262

 
2,449

Amortization of intangible assets
 
17,747

 
18,121

Stock-based compensation
 
17,437

 
21,603

Gain on bargain purchase
 
(1,029
)
 

Changes in operating assets and liabilities:
 
 
 
 
Restricted cash
 
754

 
300

Accounts receivable, net
 
(13,011
)
 
13,722

Inventory
 
11,308

 
8,557

Deferred cost of revenue
 
(13,378
)
 
73

Prepaids and other assets
 
47

 
(148
)
Accounts payable
 
2,553

 
(7,818
)
Accrued liabilities
 
(870
)
 
(386
)
Deferred revenue
 
26,404

 
2,781

Other long-term liabilities
 
(782
)
 
(313
)
Net cash provided by operating activities
 
27,678

 
14,589

Investing activities:
 
 
 
 
Purchase of property and equipment
 
(10,179
)
 
(7,355
)
Maturities of marketable securities
 

 
31,755

Acquisition of businesses, net of cash acquired
 
(12,000
)
 
(60,809
)
Net cash used in investing activities
 
(22,179
)
 
(36,409
)
Financing activities:
 
 
 
 
Proceeds from exercise of stock options and other
 
194

 
804

Proceeds from employee stock purchase plan
 
4,063

 
3,938

Taxes withheld upon vesting of restricted stock units and restricted stock awards
 
(1,744
)
 
(10,376
)
Net cash provided by (used in) financing activities
 
2,513

 
(5,634
)
Effect of exchange rate changes on cash and cash equivalents
 
45

 
88

Net increase (decrease) in cash and cash equivalents
 
8,057

 
(27,366
)
Cash and cash equivalents at beginning of period
 
38,938

 
66,304

Cash and cash equivalents at end of period
 
$
46,995

 
$
38,938



Contact Information
Investor Inquiries:
David H. Allen
408-474-0080
David.Allen@Calix.com


6