Exhibit 99.1
Calix Reports Second Quarter 2014 Financial Results
PETALUMA, CA – July 29, 2014 – Calix, Inc. (NYSE: CALX) today announced unaudited financial results for the second quarter ended June 28, 2014. Revenue for the second quarter of 2014 was $98.0 million, an increase of 3.8% compared to $94.4 million for the second quarter of 2013.
"We continue to make solid progress expanding our domestic and international customer footprint and achieved our highest level of sales for a second fiscal quarter,” said Carl Russo, Calix president and CEO. “Service providers of all types are pursuing device-enabled subscribers who are increasingly accessing cloud-based content and applications. Calix Unified Access solutions are architected to be flexible, feature-rich and cost-effective in order to meet the demanding requirements of our service provider customers and their subscribers.”
The company’s non-GAAP net income for the second quarter of 2014 was $5.1 million, or $0.10 per fully diluted share, compared to a non-GAAP net income of $4.8 million, or $0.10 per fully diluted share, for the second quarter of 2013. A reconciliation of GAAP and non-GAAP results is included as part of this release.
The GAAP net loss for the second quarter of 2014 was $4.0 million, or $(0.08) per basic and diluted share, compared to a GAAP net loss of $5.2 million, or $(0.10) per basic and diluted share, for the second quarter of 2013. A reconciliation of our second quarter 2014 operating results from non-GAAP to GAAP is provided below:
Calix, Inc. | ||||||||||||||||
(Unaudited, in thousands, except per share data) | ||||||||||||||||
Three Months Ended June 28, 2014 | ||||||||||||||||
Non-GAAP | Stock-Based Compensation | Amortization of Intangible Assets | GAAP | |||||||||||||
Revenue | $ | 98,005 | $ | — | $ | — | $ | 98,005 | ||||||||
Cost of revenue | 51,221 | 354 | 2,088 | 53,663 | ||||||||||||
Gross profit | 46,784 | (354 | ) | (2,088 | ) | 44,342 | ||||||||||
Gross margin | 47.7 | % | — | — | 45.2 | % | ||||||||||
Operating expenses | 41,630 | 4,050 | 2,552 | 48,232 | ||||||||||||
Operating income (loss) | 5,154 | (4,404 | ) | (4,640 | ) | (3,890 | ) | |||||||||
Interest and other income (expense), net | 42 | — | — | 42 | ||||||||||||
Income (loss) before taxes | 5,196 | (4,404 | ) | (4,640 | ) | (3,848 | ) | |||||||||
Provision for income taxes | 103 | — | — | 103 | ||||||||||||
Net income (loss) | $ | 5,093 | $ | (4,404 | ) | $ | (4,640 | ) | $ | (3,951 | ) | |||||
Weighted average diluted shares used to compute | ||||||||||||||||
non-GAAP net income (loss) per common share | 50,961 | 50,961 | 50,961 | |||||||||||||
Non-GAAP net income (loss) per diluted share | $ | 0.10 | $ | (0.09 | ) | $ | (0.09 | ) | ||||||||
Weighted average basic and diluted shares used to | ||||||||||||||||
compute GAAP net loss per common share | 50,573 | |||||||||||||||
GAAP net loss per share | $ | (0.08 | ) |
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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 2014 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 (loss) and non-GAAP basic and diluted income (loss) 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 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 28, | June 29, | June 28, | June 29, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||||
Revenue | $ | 98,005 | $ | 94,439 | $ | 183,825 | $ | 184,987 | ||||||||||
Cost of revenue: | ||||||||||||||||||
Products and services (1) | 51,575 | 49,846 | 98,381 | 97,191 | ||||||||||||||
Amortization of intangible assets | 2,088 | 2,088 | 4,176 | 4,176 | ||||||||||||||
Total cost of revenue | 53,663 | 51,934 | 102,557 | 101,367 | ||||||||||||||
Gross profit | 44,342 | 42,505 | 81,268 | 83,620 | ||||||||||||||
Operating expenses: | ||||||||||||||||||
Research and development (1) | 19,544 | 20,035 | 39,174 | 40,206 | ||||||||||||||
Sales and marketing (1) | 18,455 | 17,079 | 35,845 | 32,880 | ||||||||||||||
General and administrative (1) | 7,681 | 7,684 | 14,932 | 15,815 | ||||||||||||||
Amortization of intangible assets | 2,552 | 2,552 | 5,104 | 5,104 | ||||||||||||||
Total operating expenses | 48,232 | 47,350 | 95,055 | 94,005 | ||||||||||||||
Loss from operations | (3,890 | ) | (4,845 | ) | (13,787 | ) | (10,385 | ) | ||||||||||
Interest and other income (expense), net: | ||||||||||||||||||
Interest income | 30 | 1 | 34 | 2 | ||||||||||||||
Interest expense | (58 | ) | (42 | ) | (115 | ) | (70 | ) | ||||||||||
Other income (expense), net | 70 | (43 | ) | 103 | (322 | ) | ||||||||||||
Loss before provision for income taxes | (3,848 | ) | (4,929 | ) | (13,765 | ) | (10,775 | ) | ||||||||||
Provision for income taxes | 103 | 224 | 213 | 581 | ||||||||||||||
Net loss | $ | (3,951 | ) | $ | (5,153 | ) | $ | (13,978 | ) | $ | (11,356 | ) | ||||||
Net loss per common share: | ||||||||||||||||||
Basic and diluted | $ | (0.08 | ) | $ | (0.10 | ) | $ | (0.28 | ) | $ | (0.23 | ) | ||||||
Weighted average number of shares used to compute | ||||||||||||||||||
net loss per common share: | ||||||||||||||||||
Basic and diluted | 50,573 | 49,153 | 50,425 | 49,034 | ||||||||||||||
(1) | Includes stock-based compensation as follows: | |||||||||||||||||
Cost of revenue | $ | 354 | $ | 377 | $ | 708 | $ | 728 | ||||||||||
Research and development | 1,306 | 1,300 | 2,486 | 2,486 | ||||||||||||||
Sales and marketing | 1,462 | 1,464 | 2,830 | 2,743 | ||||||||||||||
General and administrative | 1,282 | 2,134 | 2,282 | 4,037 | ||||||||||||||
$ | 4,404 | $ | 5,275 | $ | 8,306 | $ | 9,994 |
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 28, | June 29, | June 28, | June 29, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
GAAP net loss | $ | (3,951 | ) | $ | (5,153 | ) | $ | (13,978 | ) | $ | (11,356 | ) | ||||
Adjustments to reconcile GAAP net loss to | ||||||||||||||||
non-GAAP net income: | ||||||||||||||||
Stock-based compensation | 4,404 | 5,275 | 8,306 | 9,994 | ||||||||||||
Amortization of intangible assets | 4,640 | 4,640 | 9,280 | 9,280 | ||||||||||||
Non-GAAP net income | 5,093 | 4,762 | 3,608 | 7,918 | ||||||||||||
Non-GAAP net income per common share: | ||||||||||||||||
Basic | $ | 0.10 | $ | 0.10 | $ | 0.07 | $ | 0.16 | ||||||||
Diluted | $ | 0.10 | $ | 0.10 | $ | 0.07 | $ | 0.16 | ||||||||
Weighted average shares used to compute non-GAAP | ||||||||||||||||
net income per common share - Basic | 50,573 | 49,153 | 50,425 | 49,034 | ||||||||||||
Weighted average shares used to compute non-GAAP | ||||||||||||||||
net income per common share - Diluted (1) | 50,961 | 50,073 | 50,904 | 49,751 | ||||||||||||
(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 28, | December 31, | |||||||
2014 | 2013 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 32,543 | $ | 82,747 | ||||
Marketable securities | 46,439 | — | ||||||
Restricted cash | 295 | 295 | ||||||
Accounts receivable, net | 47,330 | 43,520 | ||||||
Inventory | 45,888 | 51,071 | ||||||
Deferred cost of revenue | 15,957 | 21,076 | ||||||
Prepaid expenses and other current assets | 5,038 | 5,757 | ||||||
Total current assets | 193,490 | 204,466 | ||||||
Property and equipment, net | 17,289 | 17,473 | ||||||
Goodwill | 116,175 | 116,175 | ||||||
Intangible assets, net | 34,460 | 43,740 | ||||||
Other assets | 1,503 | 1,745 | ||||||
Total assets | $ | 362,917 | $ | 383,599 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 12,850 | $ | 23,163 | ||||
Accrued liabilities | 34,689 | 32,075 | ||||||
Deferred revenue | 26,346 | 34,862 | ||||||
Total current liabilities | 73,885 | 90,100 | ||||||
Long-term portion of deferred revenue | 18,640 | 18,431 | ||||||
Other long-term liabilities | 958 | 1,145 | ||||||
Total liabilities | 93,483 | 109,676 | ||||||
Stockholders' equity: | ||||||||
Common stock | 1,273 | 1,256 | ||||||
Additional paid-in capital | 791,756 | 782,253 | ||||||
Accumulated other comprehensive income | 159 | 190 | ||||||
Accumulated deficit | (523,754 | ) | (509,776 | ) | ||||
Total stockholders' equity | 269,434 | 273,923 | ||||||
Total liabilities and stockholders' equity | $ | 362,917 | $ | 383,599 |
Calix Press Release | Page 6 |
Calix, Inc. | ||||||||
Condensed Consolidated Statements of Cash Flows | ||||||||
(Unaudited, in thousands) | ||||||||
Six Months Ended | ||||||||
June 28, | June 29, | |||||||
2014 | 2013 | |||||||
Operating activities: | ||||||||
Net loss | $ | (13,978 | ) | $ | (11,356 | ) | ||
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||||||||
Depreciation and amortization | 4,522 | 5,363 | ||||||
Loss on retirement of property and equipment | — | 560 | ||||||
Amortization of intangible assets | 9,280 | 9,280 | ||||||
Amortization of premiums related to available-for-sale securities | 108 | — | ||||||
Stock-based compensation | 8,306 | 9,994 | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable, net | (3,809 | ) | (3,207 | ) | ||||
Inventory | 5,183 | 5,880 | ||||||
Deferred cost of revenue | 5,119 | (7,991 | ) | |||||
Prepaid expenses and other assets | 960 | (2,009 | ) | |||||
Accounts payable | (10,313 | ) | (90 | ) | ||||
Accrued liabilities | 2,601 | 464 | ||||||
Deferred revenue | (8,307 | ) | 16,001 | |||||
Other long-term liabilities | (188 | ) | 311 | |||||
Net cash (used in) provided by operating activities | (516 | ) | 23,200 | |||||
Investing activities: | ||||||||
Purchase of marketable securities | (46,572 | ) | — | |||||
Purchase of property and equipment | (4,328 | ) | (3,265 | ) | ||||
Net cash used in investing activities | (50,900 | ) | (3,265 | ) | ||||
Financing activities: | ||||||||
Proceeds from exercise of stock options | 139 | 288 | ||||||
Proceeds from employee stock purchase plan | 2,453 | 2,464 | ||||||
Taxes paid for awards vested under equity incentive plans | (1,377 | ) | (312 | ) | ||||
Net cash provided by financing activities | 1,215 | 2,440 | ||||||
Effect of exchange rate changes on cash and cash equivalents | (3 | ) | 9 | |||||
Net (decrease) increase in cash and cash equivalents | (50,204 | ) | 22,384 | |||||
Cash and cash equivalents at beginning of period | 82,747 | 46,995 | ||||||
Cash and cash equivalents at end of period | $ | 32,543 | $ | 69,379 |
Investor Inquiries:
David H. Allen
408-474-0080
David.Allen@Calix.com