CALIX, INC - FORM 8-K - EX-99.1 - PRESS RELEASE - July 30, 2013

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Exhibit 99.1
Calix Reports Second Quarter 2013 Financial Results
20% Growth in Year-Over-Year Revenues
PETALUMA, CA – July 30, 2013 – Calix, Inc. (NYSE: CALX) today announced unaudited financial results for the second quarter ended June 29, 2013. Revenue for the second quarter of 2013 was $94.4 million, an increase of 20% compared to $78.9 million for the second quarter of 2012.
"Our year-over-year revenue growth in Q2 and better-than-anticipated bottom line results reflect our solid execution and progress in expanding our reach into both our domestic and international markets," said Carl Russo, president and CEO of Calix. "Our Unified Access portfolio continues to resonate with communication service providers as they map out their network strategies."
Non-GAAP net income for the second quarter of 2013 was $4.8 million, or $0.10 per fully diluted share. Non-GAAP net income was $1.9 million, or $0.04 per fully diluted share, for the second quarter of 2012. A reconciliation of GAAP and non-GAAP results is included as part of this release.
GAAP net loss for the second quarter of 2013 was $5.2 million, or $(0.10) 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 second quarter of 2012. A reconciliation of our second quarter 2013 operating results from non-GAAP to GAAP is provided below:

Calix, Inc.
(Unaudited, in thousands, except per share data)
Three Months Ended June 29, 2013
 
 
 
 
 
 
 
 
 
 
 
Non-GAAP
 
Stock-Based Compensation
 
Amortization of Intangible Assets
 
GAAP
Revenue
 
$
94,439

 
$
—

 
$
—

 
$
94,439

Cost of revenue
 
49,469

 
377

 
2,088

 
51,934

Gross profit
 
44,970

 
(377
)
 
(2,088
)
 
42,505

Gross margin
 
47.6
%
 
-0.4
 %
 
-2.2
 %
 
45.0
%
Operating expenses
 
39,900

 
4,898

 
2,552

 
47,350

Operating income (loss)
 
5,070

 
(5,275
)
 
(4,640
)
 
(4,845
)
Interest and other income (expense), net
 
(84
)
 
—

 
—

 
(84
)
Income (loss) before provision for income taxes
 
4,986

 
(5,275
)
 
(4,640
)
 
(4,929
)
Provision for income taxes
 
224

 
—

 
—

 
224

Net income (loss)
 
$
4,762

 
$
(5,275
)
 
$
(4,640
)
 
$
(5,153
)
Weighted average basic and diluted shares used
 
 
 
 
 
 
 
 
to compute GAAP net loss per common share
 

 

 

 
49,153

Weighted average diluted shares used to compute
 
 
 
 
 
 
 
 
non-GAAP net income (loss) per common share
 
50,073

 
50,073

 
50,073

 

GAAP net loss per common share
 

 

 

 
$
(0.10
)
Non-GAAP net income (loss) per common share
 
$
0.10

 
$
(0.11
)
 
$
(0.09
)
 



1
                                       
Calix Press Release
 
Page 2


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 second 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 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 Press Release
 
Page 3


Calix, Inc.
Condensed Consolidated Statements of Operations
(Unaudited, in thousands, except per share data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
 
 
 
 
June 29,
 
June 30,
 
June 29,
 
June 30,
 
 
 
 
2013
 
2012
 
2013
 
2012
Revenue
 
$
94,439

 
$
78,928

 
$
184,987

 
$
157,493

Cost of revenue:
 

 

 
 
 
 
 
Products and services (1)
 
49,846

 
43,619

 
97,191

 
87,090

 
Amortization of intangible assets
 
2,088

 
2,088

 
4,176

 
3,363

 
 
Total cost of revenue
 
51,934

 
45,707

 
101,367

 
90,453

Gross profit
 
42,505

 
33,221

 
83,620

 
67,040

Operating expenses:
 
 
 
 
 
 
 
 
 
Research and development (1)
 
20,035

 
16,473

 
40,206

 
33,439

 
Sales and marketing (1)
 
17,079

 
14,897

 
32,880

 
29,787

 
General and administrative (1)
 
7,684

 
6,129

 
15,815

 
12,909

 
Amortization of intangible assets
 
2,552

 
2,552

 
5,104

 
5,104

 
 
Total operating expenses
 
47,350

 
40,051

 
94,005

 
81,239

Loss from operations
 
(4,845
)
 
(6,830
)
 
(10,385
)
 
(14,199
)
Interest and other income (expense), net:
 
 
 
 
 
 
 
 

Interest income
 
1

 
4

 
2

 
11


Interest expense
 
(42
)
 
(57
)
 
(70
)
 
(99
)

Other income (expense), net
 
(43
)
 
(67
)
 
(322
)
 
(89
)
Loss before provision for income taxes
 
(4,929
)
 
(6,950
)
 
(10,775
)
 
(14,376
)
Provision for income taxes
 
224

 
141

 
581

 
236

Net loss
 
$
(5,153
)
 
$
(7,091
)
 
$
(11,356
)
 
$
(14,612
)
Net loss per common share:
 
 
 
 
 
 
 
 
 
Basic and diluted
 
$
(0.10
)
 
$
(0.15
)
 
$
(0.23
)
 
$
(0.30
)
Weighted average number of shares used to compute
 
 
 
 
 
 
 
 
 
net loss per common share:
 
 
 
 
 
 
 
 
 
Basic and diluted
 
49,153

 
47,972

 
49,034

 
47,911

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)
Includes stock-based compensation as follows:
 
 
 
 
 
Cost of revenue
 
$
377

 
$
381

 
$
728

 
$
744

 
Research and development
 
1,300

 
1,091

 
2,486

 
2,112

 
Sales and marketing
 
1,464

 
1,338

 
2,743

 
2,577

 
General and administrative
 
2,134

 
1,529

 
4,037

 
3,221

 
 
 
 
$
5,275

 
$
4,339

 
$
9,994

 
$
8,654



                                       
Calix Press Release
 
Page 4


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

 
Three Months Ended
 
Six Months Ended

 
June 29,
 
June 30,
 
June 29,
 
June 30,

 
2013
 
2012
 
2013
 
2012
GAAP net loss
 
$
(5,153
)
 
$
(7,091
)
 
$
(11,356
)
 
$
(14,612
)
Adjustments to reconcile GAAP net loss to
 
 
 
 
 
 
 
 
   non-GAAP net income:
 
 
 
 
 
 
 
 
Stock-based compensation
 
5,275

 
4,339

 
9,994

 
8,654

Amortization of intangible assets
 
4,640

 
4,640

 
9,280

 
8,467

Non-GAAP net income
 
$
4,762

 
$
1,888

 
$
7,918

 
$
2,509

Non-GAAP net income per common share
 
 
 
 
 
 
 
 
   Basic
 
$
0.10

 
$
0.04

 
$
0.16

 
$
0.05

   Diluted
 
$
0.10

 
$
0.04

 
$
0.16

 
$
0.05

Weighted average shares used to compute non-GAAP
 
 
 
 
 
 
 
 
   net income per common share - Basic
 
49,153

 
47,972

 
49,034

 
47,911

Weighted average shares used to compute non-GAAP
 
 
 
 
 
 
 
 
   net income per common share - Diluted (1)
 
50,073

 
48,113

 
49,751

 
48,076


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


                                       
Calix Press Release
 
Page 5


Calix, Inc.
Condensed Consolidated Balance Sheets
(Unaudited, in thousands)
 
 
 
 
 
 
 
June 29,
 
December 31,
 
 
2013
 
2012
ASSETS
 
 
 
 
Current assets:
 
 
 
 
Cash and cash equivalents
 
$
69,379

 
$
46,995

Accounts receivable, net
 
62,726

 
59,519

Inventory
 
37,402

 
43,282

Deferred cost of revenue
 
29,068

 
21,077

Prepaid expenses and other current assets
 
8,126

 
5,677

 Total current assets
 
206,701

 
176,550

Property and equipment, net
 
18,547

 
21,083

Goodwill
 
116,175

 
116,175

Intangible assets, net
 
53,021

 
62,301

Other assets
 
1,591

 
1,788

 Total assets
 
$
396,035

 
$
377,897

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
 
 
 
 
Accounts payable
 
$
16,714

 
$
16,804

Accrued liabilities
 
36,664

 
36,176

Deferred revenue
 
53,763

 
39,315

Total current liabilities
 
107,141

 
92,295

Long-term portion of deferred revenue
 
17,335

 
15,782

Other long-term liabilities
 
1,394

 
745

Total liabilities
 
125,870

 
108,822

Stockholders' equity:
 
 
 
 
Common stock
 
1,238

 
1,222

Additional paid-in capital
 
772,650

 
760,232

Accumulated other comprehensive income
 
144

 
132

Accumulated deficit
 
(503,867
)
 
(492,511
)
Total stockholders' equity
 
270,165

 
269,075

Total liabilities and stockholders' equity
 
$
396,035

 
$
377,897



                                       
Calix Press Release
 
Page 6


Calix, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)
 
 
 
 
 
 
 
Six Months Ended
 
 
June 29,
 
June 30,
 
 
2013
 
2012
Operating activities:
 
 
 
 
Net loss
 
$
(11,356
)
 
$
(14,612
)
Adjustments to reconcile net loss to net cash provided by operating activities:
 
 
 
 
Depreciation and amortization
 
5,363

 
4,129

Loss on retirement of property and equipment
 
560

 
84

Amortization of intangible assets
 
9,280

 
8,467

Stock-based compensation
 
9,994

 
8,654

Changes in operating assets and liabilities:
 
 
 
 
Restricted cash
 
—

 
754

Accounts receivable, net
 
(3,207
)
 
(8,656
)
Inventory
 
5,880

 
11,409

Deferred cost of revenue
 
(7,991
)
 
(4,398
)
Prepaid expenses and other assets
 
(2,009
)
 
134

Accounts payable
 
(90
)
 
5,997

Accrued liabilities
 
464

 
(2,508
)
Deferred revenue
 
16,001

 
9,167

Other long-term liabilities
 
311

 
(514
)
Net cash provided by operating activities
 
23,200

 
18,107

Investing activities:
 
 
 
 
Purchase of property and equipment
 
(3,265
)
 
(6,296
)
Net cash used in investing activities
 
(3,265
)
 
(6,296
)
Financing activities:
 
 
 
 
Proceeds from exercise of stock options
 
288

 
139

Proceeds from employee stock purchase plan
 
2,464

 
2,222

Taxes withheld upon vesting of restricted stock units
 
(312
)
 
(54
)
Net cash provided by financing activities
 
2,440

 
2,307

Effect of exchange rate changes on cash and cash equivalents
 
9

 
29

Net increase in cash and cash equivalents
 
22,384

 
14,147

Cash and cash equivalents at beginning of period
 
46,995

 
38,938

Cash and cash equivalents at end of period
 
$
69,379

 
$
53,085



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


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