Calix Reports Fourth Quarter and 2012 Fiscal Year Results

Calix Reports Fourth Quarter and 2012 Fiscal Year Results 
PETALUMA, CA -- (Marketwire) -- 02/05/13 --  Calix, 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             
              ------------------------------------------------------------- 
                                               Stock-  Amortization         
                       Acquisition  Gain on    Based        of              
                         Related    Bargain  Compensa-  Intangible          
               Non-GAAP  Expenses   Purchase    tion      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)         
              --------- ---------  --------- ---------  ----------          

 
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 webs
ite 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.  


 
                                                                            
                                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 
                     ------------  ------------  ------------  ------------ 
                                                                            
                                                                            
                                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.                                  
                                                                            
                                                                            
                                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 li
abilities                          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 
                                                 ------------  ------------ 
                                                                            
                                                                            
                                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 
                                                 ============  ============ 

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