Calix Reports First Quarter 2013 Financial Results

Calix Reports First Quarter 2013 Financial Results 
Strong Demand Bucks Seasonal Trend Resulting in Record First Quarter
Revenue 
PETALUMA, CA -- (Marketwired) -- 04/25/13 --  Calix, Inc. (NYSE:
CALX) today announced unaudited financial results for the first
quarter ended March 30, 2013. Revenue for the first quarter of 2013
was $90.5 million, an increase of 15.3% compared to $78.6 million for
the first quarter of 2012.  
"Our strong year-over-year first quarter revenue growth resulted in
record revenue for a first quarter and improved gross margin," said
Carl Russo, president and CEO of Calix. "These results reflect our
success in penetrating new customer accounts and expanding our
addressable market."  
Non-GAAP net income for the first quarter of 2013 was $3.2 million,
or $0.06 per fully diluted share. Non-GAAP net income was $0.6
million, or $0.01 per fully diluted share, for the first quarter of
2012. A reconciliation of GAAP and non-GAAP results is included as
part of this release.  
GAAP net loss for the first quarter of 2013 was $6.2 million, or
$(0.13) per basic and diluted share, compared to a GAAP net loss of
$7.5 million, or $(0.16) per basic and diluted share for the first
quarter of 2012. A reconciliation of our first quarter 2013 operating
results from non-GAAP to GAAP is provided below:  


 
                                                                            
                                    Three Months Ended March 30, 2013       
                             ---------------------------------------------- 
                                                     Amortization           
                                                          of                
                                        Stock-Based   Intangible            
                             Non-GAAP  Compensation     Assets       GAAP   
                             --------  ------------  ------------  -------- 
Revenue                      $ 90,548  $          -  $          -  $ 90,548 
Cost of revenue                46,994           351         2,088    49,433 
                             --------  ------------  ------------  -------- 
Gross profit                   43,554          (351)       (2,088)   41,115 
Gross margin                     48.1%         -0.4%         -2.3%     45.4%
Operating expenses             39,735         4,368         2,552    46,655 
                             --------  ------------  ------------  -------- 
Operating income (loss)         3,819        (4,719)       (4,640)   (5,540)
Interest and other income                                                   
 (expense), net                  (306)            -             -      (306)
                             --------  ------------  ------------  -------- 
Income (loss) before taxes      3,513        (4,719)       (4,640)   (5,846)
Provision for income taxes        357             -             -       357 
                             --------  ------------  ------------  -------- 
Net income (loss)            $  3,156  $     (4,719) $     (4,640) $ (6,203)
                             ========  ============  ============  ======== 
                                                                            
Weighted average basic and                                                  
 diluted shares used to                                                     
 compute GAAP net loss per                                                  
 common share                                                        48,911 
                                                                   ======== 
                                                                            
Weighted average diluted                                                    
 shares used to compute non-                                                
 GAAP net income per common                                                 
 share                         49,422        49,422        49,422           
                             ========  ============  ============           
                                                                            
GAAP net loss per common                                                    
 share                                                             $  (0.13)
                                                                   ======== 
                                                                            
Non-GAAP net income (loss)                                                  
 per share                   $   0.06  $      (0.10) $      (0.09)          
                             ========  ============  ============           

 
Conference Call  
In conjunction with this announcement, Calix will host a conference
call at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time) today to
discuss its first quarter 2013 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 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. 
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 acquisition-related and other expenses,
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 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       
                                             ------------------------------ 
                                                March 30,       March 31,   
                                                  2013            2012      
                                             --------------  -------------- 
Revenue                                      $       90,548  $       78,565 
Cost of revenue:                                                            
  Products and services(1)                           47,345          43,471 
  Amortization of intangible assets                   2,088           1,275 
                                             --------------  -------------- 
    Total cost of revenue                            49,433          44,746 
                                             --------------  -------------- 
Gross profit                                         41,115          33,819 
Operating expenses:                                                         
  Research and development(1)                        20,171          16,966 
  Sales and marketing(1)                             15,801          14,890 
  General and administrative(1)                       8,131           6,780 
  Amortization of intangible assets                   2,552           2,552 
                                             --------------  -------------- 
    Total operating expenses                         46,655          41,188 
                                             --------------  -------------- 
Loss from operations                                 (5,540)         (7,369)
Interest and other income (expense), net:                                   
  Interest income                                         1               7 
  Interest expense                                      (28)            (42)
  Other income (expense), net                          (279)            (22)
                                             --------------  -------------- 
Loss before provision for income taxes               (5,846)         (7,426)
Provision for income taxes                              357              95 
                                             --------------  -------------- 
Net loss                                     $       (6,203) $       (7,521)
                                             ==============  ============== 
Net loss per common share:                                                  
  Basic and diluted                          $        (0.13) $        (0.16)
                                             ==============  ============== 
Weighted average number of shares used to                                   
 compute net loss per common share:                                         
  Basic and diluted                                  48,911          47,850 
                                             ==============  ============== 
                                                                            
(1) Includes stock-based compensation as                                    
 follows:                                                                   
                                                                            
  Cost of revenue                            $          351  $          363 
  Research and development                            1,186           1,021 
  Sales and marketing                                 1,279           1,239 
  General and administrative                          1,903           1,692 
                                             --------------  -------------- 
                                             $        4,719  $        4,315 
                                             ==============  ============== 
                                                                            
                                                                            
                                                                            
                                Calix, Inc.                                 
                 Reconciliation of GAAP to Non-GAAP Results                 
              (Unaudited, in thousands except per share data)               
                                                                            
                                                     Three Months Ended     
                                                 -------------------------- 
                                                   March 30,     March 31,  
                                                     2013          2012     
                                                 ------------  ------------ 
                                                                            
GAAP net loss  
                                  $     (6,203) $     (7,521)
Adjustments to reconcile GAAP net loss to non-                              
 GAAP net income:                                                           
Stock-based compensation                                4,719         4,315 
Amortization of intangible assets                       4,640         3,827 
                                                 ------------  ------------ 
Non-GAAP net income                              $      3,156  $        621 
                                                 ============  ======
====== 
                                                                            
Non-GAAP net income per common share                                        
  Basic                                          $       0.06  $       0.01 
                                                 ============  ============ 
  Diluted                                        $       0.06  $       0.01 
                                                 ============  ============ 
                                                                            
Weighted average shares used to compute non-GAAP                            
 net income per common share - Basic                   48,911        47,850 
                                                 ============  ============ 
                                                                            
Weighted average shares used to compute non-GAAP                            
 net income per common share - Diluted (1)             49,422        48,039 
                                                 ============  ============ 
                                                                            
(1) Includes the dilutive effect of outstanding stock options, restricted   
 stock units, and ESPP.                                                     
                                                                            
                                                                            
                                                                            
                                Calix, Inc.                                 
                   Condensed Consolidated Balance Sheets                    
                         (Unaudited, in thousands)                          
                                                                            
                                                   March 30,   December 31, 
                                                     2013          2012     
                                                 ------------  ------------ 
                                                                            
ASSETS                                                                      
Current assets:                                                             
  Cash and cash equivalents                      $     48,059  $     46,995 
  Accounts receivable, net                             70,717        59,519 
  Inventory                                            39,232        43,282 
  Deferred cost of revenue                             26,417        21,077 
  Prepaid expenses and other current assets             6,063         5,677 
                                                 ------------  ------------ 
    Total current assets                              190,488       176,550 
                                                                            
Property and equipment, net                            19,013        21,083 
Goodwill                                              116,175       116,175 
Intangible assets, net                                 57,661        62,301 
Other assets                                            1,694         1,788 
                                                 ------------  ------------ 
    Total assets                                 $    385,031  $    377,897 
                                                 ============  ============ 
                                                                            
LIABILITIES AND STOCKHOLDERS' EQUITY                                        
Current liabilities:                                                        
  Accounts payable                               $     13,673  $     16,804 
  Accrued liabilities                                  36,673        36,176 
  Deferred revenue                                     48,629        39,315 
                                                 ------------  ------------ 
    Total current liabilities                          98,975        92,295 
Long-term portion of deferred revenue                  16,917        15,782 
Other long-term liabilities                             1,525           745 
                                                 ------------  ------------ 
    Total liabilities                                 117,417       108,822 
                                                 ------------  ------------ 
                                                                            
Stockholders' equity:                                                       
  Common stock                                          1,222         1,222 
  Additional paid-in capital                          764,992       760,232 
  Accumulated other comprehensive income                  114           132 
  Accumulated deficit                                (498,714)     (492,511)
                                                 ------------  ------------ 
    Total stockholders' equity                        267,614       269,075 
                                                 ------------  ------------ 
    Total liabilities and stockholders' equity   $    385,031  $    377,897 
                                                 ============  ============ 
                                                                            
                                                                            
                                                                            
                                Calix, Inc.                                 
              Condensed Consolidated Statements of Cash Flows               
                         (Unaudited, in thousands)                          
                                                                            
                                                     Three Months Ended     
                                                 -------------------------- 
                                                   March 30,     March 31,  
                                                     2013          2012     
                                                 ------------  ------------ 
Operating activities:                                                       
  Net loss                                       $     (6,203) $     (7,521)
  Adjustments to reconcile net loss to net cash                             
   provided by operating activities:                                        
    Depreciation and amortization                       2,854         1,960 
    Loss on retirement of property and equipment          542             - 
    Amortization of intangible assets                   4,640         3,827 
    Stock-based compensation                            4,719         4,315 
    Changes in operating assets and liabilities:                            
      Restricted cash                                       -           754 
      Accounts receivable, net                        (11,198)         (836)
      Inventory                                         4,050         7,651 
      Deferred cost of revenue                         (5,340)       (1,281)
      Prepaid expenses and other assets                    74           623 
      Accounts payable                                 (3,131)         (117)
      Accrued liabilities                                 482          (293)
      Deferred revenue                                 10,449         4,765 
      Other long-term liabilities                         442          (330)
                                                 ------------  ------------ 
        Net cash provided by operating                                      
         activities                                     2,380        13,517 
                                                 ------------  ------------ 
                                                                            
Investing activities:                                                       
  Purchase of property and equipment                   (1,326)       (3,012)
                                                 ------------  ------------ 
        Net cash used in investing activities          (1,326)       (3,012)
                                                 ------------  ------------ 
                                                                            
Financing activities:                                                       
  Proceeds from exercise of stock options                  42            72 
                                                 ------------  ------------ 
        Net cash provided by financing                                      
         activities                                        42            72 
                                                 ------------  ------------ 
                                                                            
Effect of exchange rate changes on cash and cash                            
 equivalents                                              (32)           47 
Net increase in cash and cash equivalents               1,064        10,624 
Cash and cash equivalents at beginning of period       46,995        38,938 
                                                 ------------  ------------ 
Cash and cash equivalents at end of period       $     48,059  $     49,562 
                                                 ============  ============ 

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