Calix Reports Third Quarter 2016 Financial Results
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PETALUMA, CA -- (Marketwired) -- 11/01/16 -- Calix, Inc. (NYSE: CALX) today announced unaudited financial results for the third quarter ended September 24, 2016. Revenue for the third quarter of 2016 was $121.2 million, an increase of 7.9% compared to $112.3 million for the third quarter of 2015.
"Demand for Software Defined Access (SDA) and Calix AXOS systems, software, and services drove our better than expected 8% year-on-year third quarter revenue growth and produced earnings at the upper end of expectations," said Carl Russo, Calix, Inc. President and CEO. "We continue to see strong interest from new and existing customers both for our established and our recently introduced products, including our AXOS E-Series systems and Compass cloud services," added Russo.
The company's non-GAAP net income for the third quarter of 2016 was $6.1 million, or $0.12 per fully diluted share, compared to a non-GAAP net income of $8.3 million, or $0.16 per fully diluted share, for the third quarter of 2015. A reconciliation of GAAP and non-GAAP results is included as part of this release.
"Our 8% year-on-year revenue growth for the first nine months of 2016 marks Calix's strongest growth for the past three years. Profitability for the third quarter reflected the strong revenue growth offset by investments necessary to support our growth initiatives as well as our on-going turnkey network improvement projects, which we expect to continue over the near-term," said William Atkins, Calix, Inc. Executive Vice President and CFO.
The GAAP net income for the third quarter of 2016 was $0.6 million, or $0.01 per basic and fully diluted share, compared to a GAAP net income of $0.9 million, or $0.02 per basic and fully diluted share, for the third quarter of 2015. A reconciliation of our third quarter 2016 operating results from non-GAAP to GAAP is provided below.
Calix, Inc.
(Unaudited, in thousands, except per share data)
Three Months Ended September 24, 2016
Amortization
of Acquisition
Stock-Based Intangible -Related
Non-GAAP Compensation Assets Costs GAAP
---------- ------------- ------------- ------------ ----------
Revenue $ 121,187 $ - $ - $ - $ 121,187
Cost of
revenue 66,656 174 813 - 67,643
---------- ------------- ------------- ------------ ----------
Gross profit 54,531 (174) (813) - 53,544
Gross margin 45.0% (0.1)% (0.7)% -% 44.2%
Operating
expenses 48,306 4,503 - - 52,809
---------- ------------- -------------------------- ----------
Operating
income
(loss) 6,225 (4,677) (813) - 735
Interest and
other income
(expense),
net 110 - - - 110
---------- ------------- -------------------------- ----------
Income (loss)
before
provision
for income
taxes 6,335 (4,677) (813) - 845
Provision for
income taxes 209 - - - 209
---------- ------------- ------------- ------------ ----------
Net income
(loss) $ 6,126 $ (4,677) $ (813) $ - $ 636
========== ============= ============= ============ ==========
Weighted
average
diluted
shares used
to compute
net income
(loss) per
common share 49,309 49,309 49,309 49,309 49,309
========== ============= ============= ============ ==========
Net income
(loss) per
diluted
share $ 0.12 $ (0.09) $ (0.02) $ - $ 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 2016 financial results. A live audio webcast and replay of the call will be available in the Investor Relations section of the Calix website 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, Inc. (NYSE: CALX) pioneered Software Defined Access (SDA) and is a global leader in platform innovations for Access Networks. Its portfolio of access systems and services combines AXOS, the revolutionary platform for access, with Compass cloud, an innovative SDA-based framework for network data analytics and subscriber experience assurance. Together, they enable communications service providers to transform their businesses and be the winning service providers of tomorrow. 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, amortization of acquisition-related intangible assets, and non-recurring acquisition-related costs, 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.
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, statements about potential customer or market opportunities. 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 2015 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
24, 26, 24, 26,
2016 2015 2016 2015
------------ ------------ ------------ ------------
Revenue $ 121,187 $ 112,297 $ 326,987 $ 302,464
Cost of revenue:
Products and
services (1) 66,830 57,096 174,665 152,308
Amortization of
intangible assets 813 2,088 3,290 6,264
------------ ------------ ------------ ------------
Total cost of
revenue 67,643 59,184 177,955 158,572
------------ ------------ ------------ ------------
Gross profit 53,544 53,113 149,032 143,892
Operating expenses:
Research and
development (1) 28,119 22,120 75,925 66,885
Sales and marketing
(1) 20,575 18,424 58,850 57,398
General and
administrative (1) 8,615 9,140 32,940 28,728
Amortization of
intangible assets - 2,552 1,701 7,656
Litigation
settlement gain (4,500) - (4,500) -
------------ ------------ ------------ ------------
Total operating
expenses 52,809 52,236 164,916 160,667
------------ ------------ ------------ ------------
Income (loss) from
operations 735 877 (15,884) (16,775)
Interest and other
income (expense), net:
Interest income 184 297 611 1,014
Interest expense (155) (263) (489) (921)
Other income
(expense), net 81 196 297 273
------------ ------------ ------------ ------------
Total interest and
other income
(expense), net 110 230 419 366
------------ ------------ ------------ ------------
Income (loss) before
provision for income
taxes 845 1,107 (15,465) (16,409)
Provision for income
taxes 209 185 454 378
------------------------- ------------ ------------
Net income (loss) $ 636 $ 922 $ (15,919) $ (16,787)
============ ============ ============ ============
Net income (loss) per
common share:
Basic $ 0.01 $ 0.02 $ (0.33) $ (0.32)
============ ============ ============ ============
Diluted $ 0.01 $ 0.02 $ (0.33) $ (0.32)
============ ============ ============ ============
Weighted average number
of shares used to
compute net income
(loss) per common
share:
Basic 48,773 51,756 48,578 51,814
============ ============ ============ ============
Diluted 49,309 52,016 48,578 51,814
============ ============ ============ ============
-------------------------
(1) Includes stock-based
compensation as
follows:
Cost of revenue $ 174 $ 163 $ 484 $ 549
Research and
development 1,573 964 3,719 3,659
Sales and marketing 1,661 688 3,323 3,769
General and
administrative 1,269 775 2,840 2,616
------------ ------------ ------------ ------------
$ 4,677 $ 2,590 $ 10,366 $ 10,593
============ ============ ============ ============
Calix, Inc.
Reconciliation of GAAP to Non-GAAP Results
(Unaudited, in thousands, except per share data)
Three Months Ended Nine Months Ended
--------------------------- ---------------------------
September 24, September 26, September 24, September 26,
2016 2015 2016 2015
------------- ------------- ------------- -------------
GAAP net income
(loss) $ 636 $ 922 $ (15,919) $ (16,787)
Adjustments to
reconcile GAAP net
income (loss) to
non-GAAP net income
(loss):
Stock-based
compensation 4,677 2,590 10,366 10,593
Amortization of
intangible assets 813 4,640 4,991 13,920
Acquisition-
related costs - 106 351 348
------------- ------------- ------------- -------------
Non-GAAP net income
(loss) $ 6,126 $ 8,258 $ (211) $ 8,074
============= ============= ============= ===========-=
Non-GAAP net income
(loss) per common
share:
Basic $ 0.13 $ 0.16 $ - $ 0.16
============= ============= ============= =============
Diluted $ 0.12 $ 0.16 $ - $ 0.15
============= ============= ============= =============
Weighted average
number of shares
used to compute
non-GAAP net income
(loss) per common
share:
Basic 48,773 51,756 48,578 51,814
============= ============= ============= =============
Diluted (1) 49,309 52,016 48,578 52,344
============= ============= ============= =============
(1) Includes the dilutive effect of outstanding stock options, restricted
stock units and ESPP.
Calix, Inc.
Condensed Consolidated Balance Sheets
(Unaudited, in thousands)
September 24, December 31,
2016 2015
-------------- --------------
ASSETS
Current assets:
Cash and cash equivalents $ 31,764 $ 23,626
Marketable securities 29,554 49,964
Accounts receivable, net 57,256 47,155
Inventory 40,190 47,667
Deferred cost of revenue 14,718 4,918
Prepaid expenses and other current assets 15,700 9,470
-------------- --------------
Total current assets 189,182 182,800
Property and equipment, net 16,017 17,149
Goodwill 116,175 116,175
Intangible assets, net 1,627 6,618
Other assets 937 1,144
-------------- --------------
Total assets $ 323,938 $ 323,886
============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 19,340 $ 19,603
Accrued liabilities 49,019 35,512
Deferred revenue 16,226 12,124
-------------- --------------
Total current liabilities 84,585 67,239
Long-term portion of deferred revenue 19,850 19,569
Other long-term liabilities 979 1,293
-------------- --------------
Total liabilities 105,414 88,101
-------------- --------------
Stockholders' equity:
Common stock 1,353 1,326
Additional paid-in capital 830,225 818,754
Accumulated other comprehensive loss (226) (195)
Accumulated deficit (572,842) (556,923)
Treasury stock (39,986) (27,177)
-------------- --------------
Total stockholders' equity 218,524 235,785
-------------- --------------
Total liabilities and stockholders' equity $ 323,938 $ 323,886
============== ==============
Calix, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)
Nine Months Ended
-----------------------------
September 24, September 26,
2016 2015
-------------- --------------
Operating activities:
Net loss $ (15,919) $ (16,787)
Adjustments to reconcile net loss to net
cash provided by (used in) operating
activities:
Depreciation and amortization 6,282 7,602
Loss on retirement of property and
equipment - 14
Amortization of intangible assets 4,991 13,920
Amortization of premiums relating to
available-for-sale securities 337 743
Stock-based compensation 10,366 10,593
Changes in operating assets and
liabilities:
Restricted cash - 295
Accounts receivable, net (10,104) (17,443)
Inventory 7,477 2,983
Deferred cost of revenue (9,800) 2,082
Prepaid expenses and other assets (6,058) 4,181
Accounts payable (356) (6,841)
Accrued liabilities 13,974 (1,055)
Deferred revenue 4,383 (1,312)
Other long-term liabilities (313) (167)
-------------- --------------
Net cash provided by (used in)
operating activities 5,260 (1,192)
-------------- --------------
Investing activities:
Purchases of property and equipment (5,364) (5,943)
Purchases of marketable securities - (46,750)
Maturities of marketable securities 20,170 51,265
-------------- --------------
Net cash provided by (used in) investing
activities 14,806 (1,428)
-------------- --------------
Financing activities:
Proceeds from exercise of stock options 14 625
Proceeds from employee stock purchase plan 2,905 2,865
Payments for repurchases of common stock (12,809) (11,124)
Taxes paid for awards vested under equity
incentive plans (1,787) (2,093)
-------------- --------------
Net cash used in financing activities (11,677) (9,727)
-------------- --------------
Effect of exchange rate changes on cash and
cash equivalents (251) (288)
-------------- --------------
Net increase (decrease) in cash and cash
equivalents 8,138 (12,635)
Cash and cash equivalents at beginning of
period 23,626 48,829
-------------- --------------
Cash and cash equivalents at end of period $ 31,764 $ 36,194
============== ==============
Investor Inquiries:Thomas J. [email protected]
Source: Calix, Inc.
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