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| 8-K - FORM 8-K - CALIX, INC | d296342d8k.htm |
Exhibit 99.1
Calix Reports Fourth Quarter and Fiscal Year 2011 Financial Results
Revenue Increases 9.5% Sequentially in Q4 2011; Up 20.1% Over Fiscal Year 2010 to $344.7 Million
PETALUMA, CA—(Marketwire - February 7, 2012) - Calix, Inc. (NYSE: CALX) today announced unaudited financial results for the fourth quarter ended December 31, 2011. Revenue for the fourth quarter of 2011 was $91.6 million, an increase of 9.5% compared to $83.7 million for the third quarter of 2011, and flat compared to $91.7 million for the fourth quarter of 2010.
“2011 ended on a strong note as a result of increasing demand and solid execution in all areas of the business,” said Carl Russo, Calix president and CEO. “Looking back on the year, we were pleased with the progress we made strengthening our organization, expanding our Unified Access portfolio, and delivering on our vision of network transformation to our over 1000 communications service provider customers worldwide.”
Non-GAAP net income for the fourth quarter of 2011 was $3.7 million, or $0.08 per fully diluted share, an increase of 5.4% compared to non-GAAP net income of $3.6 million, or $0.07 per fully diluted share for the third quarter of 2011, and a decrease of 65.0% compared to non-GAAP net income of $10.7 million, or $0.26 per fully diluted share, in the fourth quarter of 2010.
GAAP net loss for the fourth quarter of 2011 was $5.2 million, or $(0.11) per basic and diluted share, compared to a GAAP net loss of $6.9 million, or $(0.15) per basic and diluted share for the third quarter of 2011, and compared to a GAAP net loss of $0.7 million, or $(0.02) per basic and diluted share reported for the fourth quarter of 2010. A reconciliation of our fourth quarter 2011 operating results from non-GAAP to GAAP is provided below (in thousands, except per share data):
| Non-GAAP | Stock-Based Compensation |
Amortization of Intangible Assets |
GAAP | |||||||||||||
| Revenue |
$ | 91,585 | $ | — | $ | — | $ | 91,585 | ||||||||
| Cost of revenue |
52,127 | 362 | 2,042 | 54,531 | ||||||||||||
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| Gross profit |
39,458 | (362 | ) | (2,042 | ) | 37,054 | ||||||||||
| Operating expense |
35,653 | 4,004 | 2,553 | 42,210 | ||||||||||||
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| Operating income (loss) |
3,805 | (4,366 | ) | (4,595 | ) | (5,156 | ) | |||||||||
| Other income (expense), net |
(10 | ) | — | — | (10 | ) | ||||||||||
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| Income (loss) before taxes |
3,795 | (4,366 | ) | (4,595 | ) | (5,166 | ) | |||||||||
| Provision for income taxes |
48 | — | — | 48 | ||||||||||||
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| Net income (loss) |
$ | 3,747 | $ | (4,366 | ) | $ | (4,595 | ) | $ | (5,214 | ) | |||||
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| Weighted average basic and diluted shares used to compute GAAP net loss per common share |
47,398 | |||||||||||||||
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| Weighted average diluted shares used to compute non-GAAP net income per common share |
47,570 | 47,570 | 47,570 | |||||||||||||
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| GAAP net loss per common share |
$ | (0.11 | ) | |||||||||||||
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| Non-GAAP net income (loss) per share |
$ | 0.08 | $ | (0.09 | ) | $ | (0.10 | ) | ||||||||
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Conference Call
In conjunction with this announcement, Calix will host a conference call to discuss its fourth quarter and fiscal year 2011 results at 1:30 p.m. PST (4:30 p.m. EST) 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. To access the live webcast, please log in 10 minutes prior to the start of the call to download and install any necessary audio software. Interested parties may also dial into the live conference call at (877) 407-4019 (U.S.) or (201) 689-8337 (outside the U.S.). The conference call and webcast will include forward-looking information. A replay of the conference call will be available approximately one hour after the live call concludes on the company’s web site at http://investor-relations.calix.com.
Prior to the conference call, Calix will also post supplemental financial data on the Calix Investor Relations website at http://investor-relations.calix.com in order to provide the investment community additional time to analyze the company’s results and prepare for the call with management.
About Calix
Calix (NYSE: CALX) is a global leader in access innovation. Its Unified Access portfolio of broadband communications access systems and software enable communications service providers worldwide to transform their 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 net income per common share. These non-GAAP measures are provided to enhance the reader’s understanding of the Company’s operating performance as they primarily exclude certain non-cash charges for stock-based compensation and amortization of acquisition-related intangible assets, and non-recurring merger-related and other expenses, which the Company believes are not indicative of its core operating results. Merger-related and other expenses largely include the charge resulting from the required revaluation of Occam inventory to its estimated fair value, legal and professional expenses, and severance and integration-related expenses and inventory-related charges associated with our merger with Occam. Management believes that the non-GAAP measures used in this press release provide investors with important perspective into the Company’s ongoing business performance and management uses these non-GAAP measures to evaluate financial results and to establish operational goals. The presentation of these non-GAAP measures is not meant to be a substitute for results presented in accordance with GAAP, but rather should be evaluated in conjunction with those GAAP results. A reconciliation of the non-GAAP results to the most directly comparable GAAP results is provided in the financial schedules portion of this press release. The non-GAAP financial measures used by the company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies.
CALIX, INC.
Condensed Statement of Operations
(In thousands, except per share data)
| Three Months Ended | ||||||||||||||||||||
| December 31, | September 24, | December 31, | Years Ended December 31, | |||||||||||||||||
| 2011 | 2011 | 2010 | 2011 | 2010 | ||||||||||||||||
| (unaudited) | (unaudited) | |||||||||||||||||||
| Revenue |
$ | 91,585 | $ | 83,655 | $ | 91,695 | $ | 344,669 | $ | 287,043 | ||||||||||
| Cost of revenue: |
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| Products and services(1) |
52,489 | 49,002 | 51,679 | 195,698 | 168,873 | |||||||||||||||
| Merger-related expenses |
— | — | — | 19,966 | — | |||||||||||||||
| Amortization of intangible assets |
2,042 | 2,806 | 1,360 | 9,552 | 5,440 | |||||||||||||||
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| Total cost of revenue |
54,531 | 51,808 | 53,039 | 225,216 | 174,313 | |||||||||||||||
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| Gross profit |
37,054 | 31,847 | 38,656 | 119,453 | 112,730 | |||||||||||||||
| Operating expenses: |
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| Research and development(1) |
17,385 | 16,717 | 16,180 | 67,725 | 55,412 | |||||||||||||||
| Sales and marketing(1) |
16,720 | 12,593 | 13,107 | 55,551 | 42,121 | |||||||||||||||
| General and administrative(1) |
5,552 | 5,475 | 8,483 | 27,002 | 27,998 | |||||||||||||||
| Merger-related and other expenses |
— | 1,404 | 1,805 | 12,927 | 3,942 | |||||||||||||||
| Amortization of intangible assets |
2,553 | 2,552 | 185 | 8,569 | 740 | |||||||||||||||
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| Total operating expenses |
42,210 | 38,741 | 39,760 | 171,774 | 130,213 | |||||||||||||||
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| Loss from operations |
(5,156 | ) | (6,894 | ) | (1,104 | ) | (52,321 | ) | (17,483 | ) | ||||||||||
| Other income (expense): |
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| Interest income |
7 | 11 | 88 | 87 | 384 | |||||||||||||||
| Interest expense |
(45 | ) | (48 | ) | (50 | ) | (184 | ) | (1,188 | ) | ||||||||||
| Change in fair value of preferred stock warrants |
— | — | — | — | (173 | ) | ||||||||||||||
| Other income |
28 | 35 | (25 | ) | 92 | (12 | ) | |||||||||||||
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| Loss before provision (benefit) for income taxes |
(5,166 | ) | (6,896 | ) | (1,091 | ) | (52,326 | ) | (18,472 | ) | ||||||||||
| Provision (benefit) for income taxes |
48 | 38 | (354 | ) | 224 | 81 | ||||||||||||||
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| Net loss |
(5,214 | ) | (6,934 | ) | (737 | ) | (52,550 | ) | (18,553 | ) | ||||||||||
| Preferred stock dividends |
— | — | — | — | 900 | |||||||||||||||
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| Net loss attributable to common stockholders |
$ | (5,214 | ) | $ | (6,934 | ) | $ | (737 | ) | $ | (52,550 | ) | $ | (19,453 | ) | |||||
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| Net loss per common share: |
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| Basic and diluted |
$ | (0.11 | ) | $ | (0.15 | ) | $ | (0.02 | ) | $ | (1.15 | ) | $ | (0.65 | ) | |||||
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| Pro forma basic and diluted |
$ | (0.11 | ) | $ | (0.15 | ) | $ | (0.02 | ) | $ | (1.15 | ) | $ | (0.51 | ) | |||||
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| Weighted average number of shares used to compute net loss per common share: |
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| Basic and diluted |
47,398 | 47,128 | 38,144 | 45,546 | 29,778 | |||||||||||||||
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| Pro forma basic and diluted(2) |
47,398 | 47,128 | 38,144 | 45,546 | 36,232 | |||||||||||||||
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| (1) | Includes stock-based compensation as follows: |
| Three Months Ended | Years
Ended December 31, |
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| December
31, 2011 |
September
24, 2011 |
December
31, 2010 |
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| 2011 | 2010 | |||||||||||||||||||
| (unaudited) | (unaudited) | |||||||||||||||||||
| Cost of revenue |
$ | 362 | $ | 306 | $ | 593 | $ | 1,503 | $ | 1,745 | ||||||||||
| Research and development |
1,067 | 886 | 1,952 | 4,828 | 5,966 | |||||||||||||||
| Sales and marketing |
1,244 | 1,127 | 1,521 | 4,500 | 4,555 | |||||||||||||||
| General and administrative |
1,693 | 1,407 | 4,027 | 9,538 | 13,309 | |||||||||||||||
| Merger-related expenses |
— | 70 | — | 1,234 | — | |||||||||||||||
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| $ | 4,366 | $ | 3,796 | $ | 8,093 | $ | 21,603 | $ | 25,575 | |||||||||||
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| (2) | For the year ended December 31, 2010, includes outstanding common shares and common shares resulting from the assumed conversion of preferred shares as if conversion occurred at the beginning of the year ended December 31, 2010. |
CALIX, INC.
Reconciliation of GAAP to Non-GAAP Results
(Unaudited, in thousands except per share data)
| Three Months Ended | Years Ended December 31, |
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| December 31, | September 24, | December 31, | ||||||||||||||||||
| 2011 | 2011 | 2010 | 2011 | 2010 | ||||||||||||||||
| GAAP net loss attributable to common stockholders |
$ | (5,214 | ) | $ | (6,934 | ) | $ | (737 | ) | $ | (52,550 | ) | $ | (19,453 | ) | |||||
| Adjustments to reconcile GAAP net loss to non-GAAP net loss: |
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| Stock-based compensation |
4,366 | 3,726 | 8,093 | 20,369 | 25,575 | |||||||||||||||
| Stock-based compensation (merger-related) |
— | 70 | — | 1,234 | — | |||||||||||||||
| Amortization of intangible assets |
4,595 | 5,358 | 1,545 | 18,121 | 6,180 | |||||||||||||||
| Merger-related expenses (cost of revenue) |
— | — | — | 19,966 | — | |||||||||||||||
| Merger-related and other expenses (operating expense) |
— | 1,334 | 1,805 | 11,693 | 3,942 | |||||||||||||||
| Change in fair value of preferred stock warrants |
— | — | — | — | 173 | |||||||||||||||
| Preferred stock dividends |
— | — | — | — | 900 | |||||||||||||||
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| Non-GAAP net income |
$ | 3,747 | $ | 3,554 | $ | 10,706 | $ | 18,833 | $ | 17,317 | ||||||||||
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| Non-GAAP net income per common share |
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| Basic |
$ | 0.08 | $ | 0.08 | $ | 0.28 | $ | 0.41 | $ | 0.48 | ||||||||||
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| Diluted |
$ | 0.08 | $ | 0.07 | $ | 0.26 | $ | 0.40 | $ | 0.45 | ||||||||||
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| Weighted average shares used to compute non-GAAP |
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| Net income per common share - Basic(1) |
47,398 | 47,128 | 38,144 | 45,546 | 36,232 | |||||||||||||||
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| Net income per common share - Diluted(1)(2) |
47,570 | 48,092 | 40,943 | 46,947 | 38,502 | |||||||||||||||
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| (1) | For the year ended December 31, 2010, includes outstanding common shares and common shares resulting from the assumed conversion of preferred shares as if conversion occurred at the beginning of the year ended December 31, 2010. |
| (2) | Includes the dilutive effect of outstanding stock options, warrants and restricted stock units for all periods presented. |
Calix, Inc.
Condensed Balance Sheets
(In thousands)
| December 31, | ||||||||
| 2011 | 2010 | |||||||
| (unaudited) | ||||||||
| ASSETS |
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| Current Assets: |
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| Cash and cash equivalents |
$ | 38,938 | $ | 66,304 | ||||
| Marketable securities |
— | 32,020 | ||||||
| Restricted cash |
754 | — | ||||||
| Accounts receivable, net |
47,943 | 43,377 | ||||||
| Inventory |
44,604 | 24,557 | ||||||
| Deferred cost of revenue |
8,324 | 7,771 | ||||||
| Prepaid and other current assets |
4,429 | 3,245 | ||||||
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| Total current assets |
144,992 | 177,274 | ||||||
| Property and equipment, net |
16,130 | 11,815 | ||||||
| Goodwill |
116,175 | 65,576 | ||||||
| Intangible assets, net |
80,048 | 515 | ||||||
| Other assets |
2,194 | 2,376 | ||||||
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| Total assets |
$ | 359,539 | $ | 257,556 | ||||
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| LIABILITIES AND STOCKHOLDERS’ EQUITY |
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| Current liabilities: |
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| Accounts payable |
$ | 14,250 | $ | 10,268 | ||||
| Accrued liabilities |
36,214 | 25,987 | ||||||
| Deferred revenue |
16,783 | 14,062 | ||||||
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| Total current liabilities |
67,247 | 50,317 | ||||||
| Long-term portion of deferred revenue |
13,347 | 10,985 | ||||||
| Other long term liabilities |
1,528 | 951 | ||||||
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| Total liabilities |
82,122 | 62,253 | ||||||
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| Stockholders’ equity: |
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| Common stock |
1,195 | 968 | ||||||
| Additional paid-in capital |
740,309 | 605,939 | ||||||
| Other comprehensive income |
98 | 31 | ||||||
| Accumulated deficit |
(464,185 | ) | (411,635 | ) | ||||
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| Total stockholders’ equity |
277,417 | 195,303 | ||||||
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| Total liabilities and stockholders’ equity |
$ | 359,539 | $ | 257,556 | ||||
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Condensed Consolidated Statements of Cash Flows
(in thousands)
| Years Ended December 31, | ||||||||
| 2011 | 2010 | |||||||
| (unaudited) | ||||||||
| OPERATING ACTIVITIES |
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| Net loss |
$ | (52,550 | ) | $ | (18,553 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: |
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| Amortization of premiums relating to available-for-sale securities |
244 | 967 | ||||||
| Depreciation and amortization |
7,954 | 5,015 | ||||||
| Loss on retirement of property and equipment |
2,449 | 77 | ||||||
| Amortization of intangible assets |
18,121 | 6,180 | ||||||
| Revaluation of warrant liability |
— | 173 | ||||||
| Stock-based compensation |
21,603 | 25,575 | ||||||
| Net gains on investments |
— | (37 | ) | |||||
| Changes in operating assets and liabilities: |
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| Change in restricted cash |
300 | 629 | ||||||
| Accounts receivable, net |
12,287 | 3,615 | ||||||
| Inventory |
9,182 | (6,001 | ) | |||||
| Deferred cost of revenue |
(553 | ) | 8,697 | |||||
| Prepaid and other assets |
(148 | ) | 1,237 | |||||
| Accounts payable |
(7,818 | ) | (4,367 | ) | ||||
| Accrued liabilities |
(386 | ) | (2,642 | ) | ||||
| Deferred revenue |
4,217 | (11,430 | ) | |||||
| Other long-term liabilities |
(313 | ) | 41 | |||||
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| Net cash provided by operating activities |
14,589 | 9,176 | ||||||
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| INVESTING ACTIVITIES |
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| Purchase of property and equipment |
(7,355 | ) | (5,614 | ) | ||||
| Acquisition of Occam Networks, net of cash assumed |
(60,809 | ) | — | |||||
| Purchases of marketable securities |
— | (79,190 | ) | |||||
| Sales of marketable securities |
— | 29,214 | ||||||
| Maturities of marketable securities |
31,755 | 53,302 | ||||||
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| Net cash used in investing activities |
(36,409 | ) | (2,288 | ) | ||||
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| FINANCING ACTIVITIES |
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| Proceeds from exercise of stock options and other |
804 | 288 | ||||||
| Proceeds from employee stock purchase plan |
3,938 | — | ||||||
| Taxes paid upon the vesting of restricted stock units |
(10,376 | ) | (10,004 | ) | ||||
| Principal payment on loans |
— | (20,000 | ) | |||||
| Proceeds from initial public offering of common stock, net of issuance costs |
— | 57,311 | ||||||
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| Net cash (used in) provided by financing activities |
(5,634 | ) | 27,595 | |||||
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| Effect of exchange rate changes on cash and cash equivalents |
88 | — | ||||||
| Net (decrease) increase in cash and cash equivalents |
$ | (27,366 | ) | $ | 34,483 | |||
| Cash and cash equivalents at beginning of year |
66,304 | 31,821 | ||||||
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| Cash and cash equivalents at end of year |
$ | 38,938 | $ | 66,304 | ||||
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Contact Information
Investor Relations contact:
David H. Allen
510-360-3703
David.Allen@Calix.com