Calix Reports Third Quarter 2015 Financial Results
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PETALUMA, CA -- (Marketwired) -- 10/29/15 -- Calix, Inc. (NYSE: CALX) today announced unaudited financial results for the third quarter ended September 26, 2015. Revenue for the third quarter of 2015 was $112.3 million, an increase of 6.2% compared to $105.8 million for the third quarter of 2014.
"Our third quarter results were above our guidance, reflecting strong performance in our customer base for the quarter," said Carl Russo, Calix President and CEO. "This performance contributed to revenues in the first nine months of 2015 increasing 4.4% compared to the first nine months of 2014. In addition, solid execution and favorable product mix led non-GAAP gross margins for the first nine months to increase to 49.8% compared to 46.1% in the same period last year," added Russo.
"Earlier this week the era of Software Defined Access began. During our Calix User Group, we introduced AXOS, the most important launch in our company's history. AXOS is a Linux-based network operating system and software application platform. AXOS was built from the ground up to mesh with the coming shift to Software Defined Networking and Network Function Virtualization across all communications networks. Most importantly, AXOS enables our customers with a 'fast,' 'always-on' and 'simple' access infrastructure over which the flexible, real-time deployment of services to their subscribers becomes a reality. This is a watershed event in our industry and we are extremely excited by the benefits AXOS brings to our customers as well as to Calix," added Russo.
The company's non-GAAP net income for the third quarter of 2015 was $8.3 million, or $0.16 per fully diluted share, compared to a non-GAAP net income of $4.6 million, or $0.09 per fully diluted share, for the third quarter of 2014. A reconciliation of GAAP and non-GAAP results is included as part of this release.
"During the quarter, we repurchased $7.7 million worth of common stock via our previously announced $40 million stock buyback authorization," said William Atkins, Executive Vice President and CFO. "Given our long-term outlook for the company, we continue to view share repurchases as an attractive investment at current levels," added Atkins.
The GAAP net income for the third quarter of 2015 was $0.9 million, or $0.02 per basic and diluted share, compared to a GAAP net loss of $3.8 million, or $(0.08) per basic and diluted share, for the third quarter of 2014. A reconciliation of our third quarter 2015 operating results from non-GAAP to GAAP is provided below:
Calix, Inc.
(Unaudited, in thousands, except per share data)
Three Months Ended September 26, 2015
Amortization
of Acquisition
Stock-Based Intangible -Related
Non-GAAP Compensation Assets Costs GAAP
-------- ------------ ------------ ----------- --------
Revenue $112,297 $ - $ - $ - $112,297
Cost of
revenue 56,933 163 2,088 - 59,184
-------- ------------ ------------ ----------- --------
Gross profit 55,364 (163) (2,088) - 53,113
Gross margin 49.3% (0.1)% (1.9)% -% 47.3%
Operating
expenses 47,151 2,427 2,552 106 52,236
-------- ------------ ------------ ----------- --------
Operating
income
(loss) 8,213 (2,590) (4,640) (106) 877
Interest and
other income
(expense),
net 230 - - - 230
-------- ------------ ------------ ----------- --------
Income (loss)
before taxes 8,443 (2,590) (4,640) (106) 1,107
Provision for
income taxes 185 - - - 185
-------- ------------ ------------ ----------- --------
Net income
(loss) $ 8,258 $ (2,590) $ (4,640) $ (106) $ 922
======== ============ ============ =========== ========
Weighted
average
diluted
shares used
to compute
net income
(loss) per
common share 52,016 52,016 52,016 52,016 52,016
======== ============ ============ =========== ========
Net income
(loss) per
diluted
share $ 0.16 $ (0.05) $ (0.09) $ - $ 0.02
======== ============ ============ =========== ========
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 2015 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. For more information about gigabit networks, visit www.calix.com/gigabit/.
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 costs, which the Company believes are not indicative of its core operating results. Acquisition-related costs include legal fees and associated expenses incurred under a pre-existing contract between Occam and its retained advisor in connection with the Occam acquisition. 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.
Forward-Looking Statements
Statements made in this press release and the earnings call referencing the press release that are not statements of historical fact are forward-looking statements. Forward-looking statements are subject to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements relate to, but are not limited to, the execution of a stock repurchase program. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from expectations, including but not limited to the risks described in our 2014 Form 10-K and our quarterly reports on Form 10-Q, each as filed with the SEC and available at www.sec.gov, particularly in the sections titled "Risk Factors." Forward-looking statements speak only as of the date the statements are made and are based on information available to us at the time those statements are made and/or management's good faith belief as of that time with respect to future events. We assume no obligation to update forward-looking statements to reflect actual performance or results, changes in assumptions or changes in other factors affecting forward-looking information, except to the extent required by applicable securities laws. Accordingly, investors should not place undue reliance on any forward-looking statements.
Calix, Inc.
Condensed Consolidated Statements of Operations
(Unaudited, in thousands, except per share data)
Three Months Ended Nine Months Ended
------------------------ ------------------------
September September September September
26, 27, 26, 27,
2015 2014 2015 2014
----------- ----------- ----------- -----------
Revenue $ 112,297 $ 105,769 $ 302,464 $ 289,594
Cost of revenue:
Products and services
(1) 57,096 58,600 152,308 156,981
Amortization of
intangible assets 2,088 2,089 6,264 6,265
----------- ----------- ----------- -----------
Total cost of
revenue 59,184 60,689 158,572 163,246
----------- ----------- ----------- -----------
Gross profit 53,113 45,080 143,892 126,348
Operating expenses:
Research and
development (1) 22,120 19,930 66,885 59,104
Sales and marketing
(1) 18,424 18,717 57,398 54,562
General and
administrative (1) 9,140 7,625 28,728 22,557
Amortization of
intangible assets 2,552 2,552 7,656 7,656
----------- ----------- ----------- -----------
Total operating
expenses 52,236 48,824 160,667 143,879
----------- ----------- ----------- -----------
Income (loss) from
operations 877 (3,744) (16,775) (17,531)
Interest and other
income (expense), net:
Interest income 297 52 1,014 86
Interest expense (263) (59) (921) (174)
Other income
(expense), net 196 18 273 121
----------- ----------- ----------- -----------
Total interest and
other income
(expense), net 230 11 366 33
----------- ----------- ----------- -----------
Income (loss) before
provision for income
taxes 1,107 (3,733) (16,409) (17,498)
Provision for income
taxes 185 115 378 328
----------- ----------- ----------- -----------
Net income (loss) $ 922 $ (3,848) $ (16,787) $ (17,826)
=========== =========== =========== ===========
Net income (loss) per
common share:
Basic $ 0.02 $ (0.08) $ (0.32) $ (0.35)
=========== =========== =========== ===========
Diluted $ 0.02 $ (0.08) $ (0.32) $ (0.35)
=========== =========== =========== ===========
Weighted average number
of shares used to
compute net income
(loss) per common
share:
Basic 51,756 51,048 51,814 50,635
=========== =========== =========== ===========
Diluted 52,016 51,048 51,814 50,635
=========== =========== =========== ===========
------------------------
(1) Includes stock-based
compensation as
follows:
Cost of revenue $ 163 $ 206 $ 549 $ 914
Research and
development 964 1,207 3,659 3,693
Sales and marketing 688 1,316 3,769 4,146
General and
administrative 775 1,084 2,616 3,366
----------- ----------- ----------- -----------
$ 2,590 $ 3,813 $ 10,593 $ 12,119
=========== =========== =========== ===========
Calix, Inc.
Reconciliation of GAAP to Non-GAAP Results
(Unaudited, in thousands, except per share data)
Three Months Ended Nine Months Ended
----------------------- ------------------------
September September September September
26, 27, 26, 27,
2015 2014 2015 2014
----------- ----------- ----------- -----------
GAAP net income (loss) $ 922 $ (3,848) $ (16,787) $ (17,826)
Adjustments to reconcile
GAAP net income (loss)
to non-GAAP net income:
Stock-based
compensation 2,590 3,813 10,593 12,119
Amortization of
intangible assets 4,640 4,641 13,920 13,921
Acquisition-related
costs 106 - 348 -
----------- ----------- ----------- -----------
Non-GAAP net income $ 8,258 $ 4,606 $ 8,074 $ 8,214
=========== =========== =========== ===========
Non-GAAP net income per
common share:
Basic $ 0.16 $ 0.09 $ 0.16 $ 0.16
=========== =========== =========== ===========
Diluted $ 0.16 $ 0.09 $ 0.15 $ 0.16
=========== =========== =========== ===========
Weighted average shares
used to compute non-GAAP
net income per common
share:
Basic 51,756 51,048 51,814 50,635
=========== =========== =========== ===========
Diluted (1) 52,016 51,552 52,344 51,122
=========== =========== =========== ===========
(1) Includes the dilutive effect of outstanding stock options, restricted
stock units and ESPP.
Calix, Inc.
Condensed Consolidated Balance Sheets
(Unaudited, in thousands)
September 26, December 31,
2015 2014
------------- -------------
ASSETS
Current assets:
Cash and cash equivalents $ 36,194 $ 48,829
Marketable securities 57,659 62,850
Restricted cash - 295
Accounts receivable, net 48,188 30,744
Inventory 43,769 46,753
Deferred cost of revenue 2,998 5,080
Prepaid expenses and other current assets 8,311 12,936
------------- -------------
Total current assets 197,119 207,487
Property and equipment, net 18,484 20,144
Goodwill 116,175 116,175
Intangible assets, net 11,259 25,179
Other assets 1,091 1,236
------------- -------------
Total assets $ 344,128 $ 370,221
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 16,784 $ 23,629
Accrued liabilities 38,280 39,443
Deferred revenue 11,414 12,722
------------- -------------
Total current liabilities 66,478 75,794
Long-term portion of deferred revenue 19,390 19,393
Other long-term liabilities 1,700 2,443
------------- -------------
Total liabilities 87,568 97,630
------------- -------------
Stockholders' equity:
Common stock 1,316 1,291
Additional paid-in capital 813,776 801,810
Accumulated other comprehensive income (31) 80
Accumulated deficit (547,377) (530,590)
Treasury stock (11,124) -
------------- -------------
Total stockholders' equity 256,560 272,591
------------- -------------
Total liabilities and stockholders' equity $ 344,128 $ 370,221
============= =============
Calix, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)
Nine Months Ended
----------------------------
September 26, September 27,
2015 2014
------------- -------------
Operating activities:
Net loss $ (16,787) $ (17,826)
Adjustments to reconcile net loss to net
cash provided by (used in) operating
activities:
Depreciation and amortization 7,602 6,772
Loss on retirement of property and
equipment 14 41
Amortization of intangible assets 13,920 13,921
Amortization of premiums related to
available-for-sale securities 743 302
Gain on sale of available-for-sale
securities - (1)
Stock-based compensation 10,593 12,119
Changes in operating assets and
liabilities:
Restricted cash 295 -
Accounts receivable, net (17,443) 739
Inventory 2,983 7,226
Deferred cost of revenue 2,082 9,742
Prepaid expenses and other assets 4,181 (315)
Accounts payable (6,841) (9,904)
Accrued liabilities (1,055) 5,520
Deferred revenue (1,312) (14,391)
Other long-term liabilities (167) 597
------------- -------------
Net cash provided by (used in)
operating activities (1,192) 14,542
------------- -------------
Investing activities:
Purchases of property and equipment (5,943) (9,481)
Purchases of marketable securities (46,750) (49,356)
Sales of marketable securities - 615
Maturities of marketable securities 51,265 -
------------- -------------
Net cash used in investing activities (1,428) (58,222)
------------- -------------
Financing activities:
Proceeds from exercise of stock options 625 429
Proceeds from employee stock purchase plan 2,865 2,453
Payments for repurchases of common stock (11,124) -
Taxes paid for awards vested under equity
incentive plans (2,093) (2,505)
------------- -------------
Net cash provided by (used in)
financing activities (9,727) 377
------------- -------------
Effect of exchange rate changes on cash and
cash equivalents (288) (45)
------------- -------------
Net decrease in cash and cash equivalents (12,635) (43,348)
Cash and cash equivalents at beginning of
period 48,829 82,747
------------- -------------
Cash and cash equivalents at end of period $ 36,194 $ 39,399
============= =============
Investor Inquiries:William J. [email protected] J. Dinges, [email protected]
Source: Calix, Inc.
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