Calix Achieves Record Revenues in Third Quarter 2013

Calix Achieves Record Revenues in Third Quarter 2013 
PETALUMA, CA -- (Marketwired) -- 10/29/13 --  Calix, Inc. (NYSE:
CALX) today announced unaudited financial results for the third
quarter ended September 28, 2013. Revenue for the third quarter of
2013 was a record $103.6 million, an increase of 27% compared to
$81.3 million for the third quarter of 2012. 
"Our strong Q3 results reflect our solid execution in the quarter,"
said Carl Russo, president and CEO of Calix. "Our year-to-date
progress reflects the increasing value Calix customers place on
transforming their access networks." 
Non-GAAP net income for the third quarter of 2013 was $10.2 million,
or $0.20 per fully diluted share. Non-GAAP net income was $1.8
million, or $0.04 per fully diluted share, for the third quarter of
2012. A reconciliation of GAAP and non-GAAP results is included as
part of this release. 
GAAP net income for the third quarter of 2013 was $0.5 million, or
$0.01 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. A reconciliation of our third quarter 2013 operating
results from non-GAAP to GAAP is provided below:  


 
                                                                            
                                Calix, Inc.                                 
              (Unaudited, in thousands, except per share data)              
                   Three Months Ended September 28, 2013                    
                                                                            
                                                Amortization                
                                 Stock-Based   of Intangible                
                    Non-GAAP     Compensation      Assets          GAAP     
                 -------------  -------------  -------------  ------------- 
Revenue          $     103,628  $          --  $          --  $     103,628 
Cost of revenue         53,770            362          2,089         56,221 
                 -------------  -------------  -------------  ------------- 
Gross profit            49,858           (362)        (2,089)        47,407 
Gross margin              48.1%          -0.3%          -2.0%          45.7%
Operating                                                                   
 expenses               40,258          4,609          2,552         47,419 
                 -------------  -------------  -------------  ------------- 
Operating income                                                            
 (loss)                  9,600         (4,971)        (4,641)           (12)
Interest and                                                                
 other income                                                               
 (expense), net            (18)            --             --            (18)
                 -------------  -------------  -------------  ------------- 
Income (loss)                                                               
 before benefit                                                             
 from income                                                                
 taxes                   9,582         (4,971)        (4,641)           (30)
Benefit from                                                                
 income taxes             (574)            --             --           (574)
                 -------------  -------------  -------------  ------------- 
Net income                                                                  
 (loss)          $      10,156  $      (4,971) $      (4,641) $         544 
                 =============  =============  =============  ============= 
Weighted average                                                            
 shares used to                                                             
 computenet                                                                 
 income (loss)                                                              
 per common                                                                 
 share:                                                                     
                                                                            
  Basic                 49,694         49,694         49,694         49,694 
                 =============  =============  =============  ============= 
  Diluted               51,142         51,142         51,142         51,142 
                 =============  =============  =============  ============= 
Net income                                                                  
 (loss) per                                                                 
 common share:                                                              
  Basic          $        0.20  $       (0.10) $       (0.09) $        0.01 
                 =============  =============  =============  ============= 
  Diluted        $        0.20  $       (0.10) $       (0.09) $        0.01 
                 =============  =============  =============  ============= 

 
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 third 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, 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
diluted weighted average shares used to compute both GAAP and
non-GAAP net income per share include the dilutive effect of
outstanding stock options, restricted stock units, performance
restricted stock units, and ESPP, which have been calculated under
the treasury stock method. 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          Nine Months Ended      
                    --------------------------- --------------------------- 
                    September 28, September 29, September 28, September 29, 
                        2013          2012          2013          2012      
                    ------------- ------------- ------------- ------------- 
Revenue             $     103,628 $      81,301 $     288,615 $     238,794 
Cost of revenue:                                                            
   Products and                                                             
    services (1)           54,132        45,707       151,323       132,797 
   Amortization of                                                          
    intangible                                                              
    assets                  2,089         2,088         6,265         5,451 
                    ------------- ------------- ------------- ------------- 
     Total cost of                                                          
      revenue              56,221        47,795       157,588       138,248 
                    ------------- ------------- ------------- ------------- 
Gross profit               47,407        33,506       131,027       100,546 
Operating expenses:                                                         
   Research and                                                             
    development (1)        19,777        16,165        59,983        49,604 
   Sales and                                                                
    marketing (1)          16,612        15,093        49,492        44,880 
   General and                                                              
    administrative                                                          
    (1)                     8,478         6,773        24,293        19,682 
   Amortization of                                                          
    intangible                                                              
    assets                  2,552         2,552         7,656         7,656 
                    ------------- ------------- ------------- ------------- 
     Total operating                                                        
      expenses             47,419        40,583       141,424       121,822 
                    ------------- ------------- ------------- ------------- 
Loss from operations          (12)       (7,077)      (10,397)      (21,276)
Interest and other                                                          
 income (expense),                                                          
 net:                                                                       
   Interest income              2             3             4            14 
   Interest expense           (24)          (41)          (94)         (140)
   Other income                                                             
    (expense), net              4            19          (318)          (70)
                    ------------- ------------- ------------- ------------- 
Loss before                                                                 
 provision for                                                              
 (benefit from)                                                             
 income taxes                 (30)       (7,096)      (10,805)      (21,472)
                    ------------- ------------- ------------- ------------- 
Provision for                                                               
 (benefit from)                                                             
 income taxes                (574)           44             7           280 
                    ------------- ------------- ------------- ------------- 
Net income (loss)   $         544 $      (7,140)$     (10,812)$     (21,752)
                    ============= ============= ============= ============= 
Net income (loss)                                                           
 per common share:                                                          
   Basic            $        0.01 $       (0.15)$       (0.22)$       (0.45)
                    ============= ============= ============= ============= 
   Diluted          $        0.01 $       (0.15)$       (0.22)$       (0.45)
                    ============= ============= ============= ============= 
Weighted average                                                            
 shares used to                                                             
 compute net income                                                         
 (loss) per common                                                          
 share:                                                                     
   Basic                   49,694        48,353        49,255        48,059 
                    ============= ============= ============= ============= 
   Diluted                 51,142        48,353        49,255        48,059 
                    ============= ============= ============= ============= 
                                                                            
                                                                            
(1)Includes stock-                                                          
    based                                                                   
    compensation as                                                         
    follows:                                                                
   Cost of revenue  $         362 $         345 $       1,090 $       1,089 
   Research and                                                             
    development             1,179         1,017         3,665         3,129 
   Sales and                                                                
    marketing               1,395         1,263         4,138         3,840 
   General and                                                              
    administrative          2,035         1,682         6,072         4,903 
                    ------------- ------------- ------------- ------------- 
                    $       4,971 $       4,307 $      14,965 $      12,961 
                    ============= ============= ============= ============= 
                                                                            
                                                                            
                                                                            
                                Calix, Inc.                                 
                 Reconciliation of GAAP to Non-GAAP Results                 
              (Unaudited, in thousands, except per share data)              
                                                                            
                                                                            
                       Three Months Ended            Nine Months Ended      
                  ---------------------------  ---------------------------- 
                  September 28, September 29,  September 28,  September 29, 
                       2013          2012           2013           2012     
                  ------------- -------------  -------------  ------------- 
GAAP net income                                                             
 (loss)           $         544 $      (7,140) $     (10,812) $     (21,752)
Adjustments to                                                              
 reconcile GAAP                                                             
 net income                                                                 
 (loss) to non-                                                             
 GAAP net income:                                                           
Stock-based                                                                 
 compensation             4,971         4,307         14,965         12,961 
Amortization of                                                             
 intangible                                                                 
 assets                   4,641         4,640         13,921         13,107 
                  ------------- -------------  -------------  ------------- 
Non-GAAP net                                                                
 income           $      10,156 $       1,807  $      18,074  $       4,316 
                  ============= =============  =============  ============= 
Non-GAAP net                                                                
 income per                                                                 
 common share:                                                              
  Basic           $        0.20 $        0.04  $        0.37  $        0.09 
                  ============= =============  =============  ============= 
  Diluted         $        0.20 $        0.04  $        0.36  $        0.09 
                  ============= =============  =============  ============= 
Weighted average                                                            
 shares used to                                                             
 compute non-GAAP                                                           
 net income per                                                             
 common share:                                                              
                                                                            
  Basic                  49,694        48,353         49,255         48,059 
                  ============= =============  =============  ============= 
  Diluted                51,142        48,472         50,218         48,208 
                  ============= =============  =============  ============= 

 
                                                                            
                                                                            
                                                                            
                                Calix, Inc.                                 
                   Condensed Consolidated Balance Sheets                    
                         (Unaudited, in thousands)                          
                                                                            
                                               September 28,   December 31, 
                                                    2013           2012     
                                               -------------  ------------- 
ASSETS                                                                      
Current assets:                                                             
  Cash and cash equivalents                    $      79,124  $      46,995 
  Restricted cash                                        972             -- 
  Accounts receivable, net                            54,421         59,519 
  Inventory                                           39,376         43,282 
  Deferred cost of revenue                            26,826         21,077 
  Prepaid expenses and other current assets            6,656          5,677 
                                               -------------  ------------- 
    Total current assets                             207,375        176,550 
Property and equipment, net                           18,379         21,083 
Goodwill                                             116,175        116,175 
Intangible assets, net                                48,380         62,301 
Other assets                                           1,827          1,788 
                                               -------------  ------------- 
    Total assets                               $     392,136  $     377,897 
                                               =============  ============= 
LIABILITIES AND STOCKHOLDERS' EQUITY                                        
Current liabilities:                                                        
  Accounts payable                             $      18,073  $      16,804 
  Accrued liabilities                                 35,034         36,176 
  Deferred revenue                                    45,202         39,315 
                                               -------------  ------------- 
    Total current liabilities                         98,309         92,295 
Long-term portion of deferred revenue                 18,197         15,782 
Other long-term liabilities                            1,321            745 
                                               -------------  ------------- 
    Total liabilities                                117,827        108,822 
                                               -------------  ------------- 
Stockholders' equity:                                                       
  Common stock                                         1,244          1,222 
  Additional paid-in capital                         776,209        760,232 
  Accumulated other comprehensive income                 179            132 
  Accumulated deficit                               (503,323)      (492,511)
                                               -------------  ------------- 
    Total stockholders' equity                       274,309        269,075 
                                               -------------  ------------- 
    Total liabilities and stockholders' equity $     392,136  $     377,897 
                                               =============  ============= 
                                                                            
                                                                            
                                                                            
                                Calix, Inc.                                 
              Condensed Consolidated Statements of Cash Flows               
                         (Unaudited, in thousands)                          
                                                                            
                                                     Nine Months Ended      
                                               ---------------------------- 
                                               September 28,  September 29, 
                                                    2013           2012     
                                               -------------  ------------- 
Operating activities:                                                       
Net loss                                       $     (10,812) $     (21,752)
Adjustments to reconcile net loss to net cash                               
 provided by operating activities:                                          
  Depreciation and amortization                        7,767          6,351 
  Loss on retirement of property and equipment           564            262 
  Amortization of intangible assets                   13,921         13,107 
  Stock-based compensation                            14,965         12,961 
Changes in operating assets and liabilities:                                
  Restricted cash                                       (972)           754 
  Accounts receivable, net                             5,098         (9,359)
  Inventory                                            3,906         14,855 
  Deferred cost of revenue                            (5,749)        (9,063)
  Prepaid expenses and other assets                     (466)           491 
  Accounts payable                                     1,269          2,186 
  Accrued liabilities                                 (1,224)        (2,098)
  Deferred revenue                                     8,302         16,755 
  Other long-term liabilities                            238           (633)
                                               -------------  ------------- 
    Net cash provided by operating activities         36,807         24,817 
                                               -------------  ------------- 
Investing activities:                                                       
  Purchase of property and equipment                  (5,475)        (7,879)
                                               -------------  ------------- 
    Net cash used in investing activities             (5,475)        (7,879)
                                               -------------  ------------- 
Financing activities:                                                       
  Proceeds from exercise of stock options                671            158 
  Proceeds from employee stock purchase plan           2,464          2,222 
  Taxes withheld upon vesting of restricted                                 
   stock units and restricted stock awards            (2,102)          (880)
  Payments for debt issuance costs                      (301)            -- 
                                               -------------  ------------- 
    Net cash provided by financing activities            732          1,500 
                                               -------------  ------------- 
Effect of exchange rate changes on cash and                                 
 cash equivalents                                         65             46 
Net increase in cash and cash equivalents             32,129         18,484 
Cash and cash equivalents at beginning of                                   
 period                                               46,995         38,938 
                                               -------------  ------------- 
Cash and cash equivalents at end of period     $      79,124  $      57,422 
                                               =============  ============= 

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