Exhibit 99.1
Calix Reports First Quarter 2011 Financial Results
PETALUMA, CA — April 28, 2011 — Calix, Inc. (NYSE: CALX) today announced unaudited financial results for the first quarter ended March 26, 2011. Revenue for the first quarter of 2011 was $71.5 million, an increase of 48.3% compared to $48.2 million for the first quarter of 2010.
“Q1 was a record-setting quarter for Calix, and represented a strong start to fiscal year 2011,” said Carl Russo, Calix president and CEO. “We executed well across all segments of our business, and reported results that were ahead of expectations. Our integration of Occam Networks is progressing quickly and smoothly, resulting in accelerating innovation across our Unified Access portfolio and deeper relationships with our over 900 customers.”
Non-GAAP net income for the first quarter of 2011 was $3.8 million, or $0.09 per fully diluted share, an increase of 179.2% compared to non-GAAP net loss of $4.7 million, or $(0.15) per fully diluted share, for the first quarter of 2010. A reconciliation of GAAP and non-GAAP results is included as part of this release.
GAAP net loss for the first quarter of 2011 was $22.8 million, or $(0.55) per basic and diluted share, compared to a GAAP net loss of $10.2 million, or $(0.32) per basic and diluted share for the first quarter of 2010 assuming the conversion of preferred stock into common stock as of the beginning of the first quarter of 2010. A reconciliation of our Q1 2011 operating results from non-GAAP to GAAP is provided below:
| Non-GAAP | Merger Related and Other Expenses |
Stock-Based Compensation |
Amortization of Intangible Assets |
GAAP | ||||||||||||||||
| Revenue |
$ | 71,470 | — | — | — | $ | 71,470 | |||||||||||||
| Cost of revenue |
38,804 | 10,257 | 504 | 1,516 | 51,081 | |||||||||||||||
| Gross profit |
32,666 | (10,257 | ) | (504 | ) | (1,516 | ) | 20,389 | ||||||||||||
| Operating expense |
28,890 | 5,951 | 7,613 | 669 | 43,123 | |||||||||||||||
| Operating income (loss) |
3,776 | (16,208 | ) | (8,117 | ) | (2,185 | ) | (22,734 | ) | |||||||||||
| Other income/(expense), net |
2 | — | — | — | 2 | |||||||||||||||
| Income (loss) before taxes |
3,778 | (16,208 | ) | (8,117 | ) | (2,185 | ) | (22,732 | ) | |||||||||||
| Provision for income taxes |
24 | — | — | — | 24 | |||||||||||||||
| Net income (loss) |
$ | 3,754 | $ | (16,208 | ) | $ | (8,117 | ) | $ | (2,185 | ) | $ | (22,756 | ) | ||||||
| Weighted average basic and diluted shares used to compute GAAP net loss per common share |
41,177 | |||||||||||||||||||
| Weighted average diluted shares used to compute non-GAAP net income per common share |
43,728 | 43,728 | 43,728 | 43,728 | ||||||||||||||||
| GAAP net loss per common share |
$ | (0.55 | ) | |||||||||||||||||
| Non-GAAP net income per share |
$ | 0.09 | $ | (0.37 | ) | $ | (0.19 | ) | $ | (0.05 | ) | |||||||||
Conference Call
In conjunction with this announcement, Calix will host a conference call at 1:30 p.m. PDT (4:30 p.m. EDT) today to discuss its first quarter 2011 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: (866) 788-0542 (U.S.) or (857) 350-1680 (outside the U.S.) |
| • | Passcode: 67453797 |
Replay call access information:
| • | Replay call dial-in: (888) 286-8010 (U.S.) or (617) 801-6888 (outside the U.S.) |
| • | Passcode: 92801418 |
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 enable communications service providers worldwide to be 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 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 and to a lesser extent the settlement of litigation. 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 these 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.
| Investor Relations Contact: | Press Contact: | |||
| Carolyn Bass | Catherine Koo | |||
| 415-445-3232 | 415-992-4400 | |||
| Carolyn.Bass@Calix.com | calix@lewispr.com |
Condensed Consolidated Statement of Operations
(in thousands)
| Three Months Ended | ||||||||
| March 26, | March 27, | |||||||
| 2011 | 2010 | |||||||
| (unaudited) | ||||||||
| Revenue |
$ | 71,470 | $ | 48,203 | ||||
| Cost of revenue: |
||||||||
| Products and services(1) |
39,308 | 30,171 | ||||||
| Merger-related expenses |
10,257 | — | ||||||
| Amortization of intangible assets |
1,516 | 1,360 | ||||||
| Total cost of revenue |
51,081 | 31,531 | ||||||
| Gross profit |
20,389 | 16,672 | ||||||
| Operating expenses: |
||||||||
| Research and development(1) |
15,039 | 11,847 | ||||||
| Sales and marketing(1) |
12,066 | 8,422 | ||||||
| General and administrative(1) |
9,308 | 4,748 | ||||||
| Merger-related and other expenses(1) |
6,041 | — | ||||||
| Amortization of intangible assets |
669 | 185 | ||||||
| Total operating expenses |
43,123 | 25,202 | ||||||
| Loss from operations |
(22,734 | ) | (8,530 | ) | ||||
| Other income (expense): |
||||||||
| Interest income |
43 | 74 | ||||||
| Interest expense |
(46 | ) | (473 | ) | ||||
| Change in fair value of preferred stock warrants |
— | (173 | ) | |||||
| Other income |
5 | 11 | ||||||
| Loss before provision for income taxes |
(22,732 | ) | (9,091 | ) | ||||
| Provision for income taxes |
24 | 171 | ||||||
| Net loss |
(22,756 | ) | (9,262 | ) | ||||
| Preferred stock dividends |
— | 900 | ||||||
| Net loss attributable to common stockholders |
$ | (22,756 | ) | $ | (10,162 | ) | ||
| Net loss per common share: |
||||||||
| Basic and diluted |
$ | (0.55 | ) | $ | (2.27 | ) | ||
| Pro forma basic and diluted |
$ | (0.55 | ) | $ | (0.32 | ) | ||
| Weighted average number of shares used to compute net loss per common share: |
||||||||
| Basic and diluted |
41,177 | 4,474 | ||||||
| Pro forma basic and diluted (2) |
41,177 | 31,865 | ||||||
| (1) | Includes stock-based compensation as follows: |
| Three Months Ended | ||||||||
| March 26, | March 27, | |||||||
| 2011 | 2010 | |||||||
| (unaudited) | ||||||||
| Cost of revenue |
$ | 504 | $ | 140 | ||||
| Research and development |
1,642 | 570 | ||||||
| Sales and marketing |
1,298 | 434 | ||||||
| General and administrative |
4,583 | 1,663 | ||||||
| Merger-related |
90 | — | ||||||
| $ | 8,117 | $ | 2,807 | |||||
| (2) | For the first quarter ended March 27, 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 first quarter of 2010. |
Reconciliation of GAAP to Non-GAAP Results
(Unaudited, in thousands except per share data)
| Three Months Ended | ||||||||
| March 26, | March 27, | |||||||
| 2011 | 2010 | |||||||
| GAAP net loss |
$ | (22,756 | ) | $ | (10,162 | ) | ||
| Adjustments to reconcile GAAP net loss to non-GAAP net income (loss): |
||||||||
| Stock-based compensation |
8,027 | 2,807 | ||||||
| Stock-based compensation (MRE) |
90 | — | ||||||
| Amortization of intangible assets |
2,185 | 1,545 | ||||||
| Merger-related expenses (COGS) |
10,257 | — | ||||||
| Merger-related and other expenses (OPEX) |
5,951 | — | ||||||
| Change in fair value of preferred stock warrants |
— | 173 | ||||||
| Preferred stock dividends |
— | 900 | ||||||
| Non-GAAP net income (loss) |
$ | 3,754 | $ | (4,737 | ) | |||
| Non-GAAP net income (loss) per common share |
||||||||
| Basic |
$ | 0.09 | $ | (0.15 | ) | |||
| Diluted |
$ | 0.09 | $ | (0.15 | ) | |||
| Weighted average shares used to compute non-GAAP net income (loss) per common share - Basic (1) |
41,177 | 31,865 | ||||||
| Weighted average shares used to compute non-GAAP net income (loss) per common share - Diluted (1)(2) |
43,728 | 31,865 | ||||||
| (1) | For the first quarter ended March 27, 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 first quarter of 2010. |
| (2) | Includes the dilutive effect of outstanding stock options, warrants and restricted stock units for the first quarter of 2011. |
| Three Months Ended | ||||||||||||||||
| March 26, | March 27, | |||||||||||||||
| 2011 | 2010 | |||||||||||||||
| GAAP gross profit and gross margin |
$ | 20,389 | 28.5 | % | $ | 16,672 | 34.6 | % | ||||||||
| Adjustments to reconcile GAAP gross profit and gross margin to non-GAAP gross profit and gross margin: |
||||||||||||||||
| Stock-based compensation |
504 | 140 | ||||||||||||||
| Amortization of intangible assets |
1,516 | 1,360 | ||||||||||||||
| Merger-related expenses |
10,257 | — | ||||||||||||||
| Non-GAAP gross profit and gross margin |
$ | 32,666 | 45.7 | % | $ | 18,172 | 37.7 | % | ||||||||
Condensed Consolidated Balance Sheets
(In thousands)
| March 26, | December 31, | |||||||
| 2011 | 2010 | |||||||
| (unaudited) | ||||||||
| ASSETS |
||||||||
| Current Assets: |
||||||||
| Cash and cash equivalents |
$ | 29,547 | $ | 66,304 | ||||
| Marketable securities |
8,999 | 32,020 | ||||||
| Restricted cash |
1,054 | — | ||||||
| Accounts receivable, net |
54,342 | 43,377 | ||||||
| Inventory |
49,380 | 24,557 | ||||||
| Deferred cost of goods sold |
9,854 | 7,771 | ||||||
| Prepaid and other current assets |
2,838 | 3,245 | ||||||
| Total current assets |
156,014 | 177,274 | ||||||
| Property and equipment, net |
19,283 | 11,815 | ||||||
| Goodwill |
118,552 | 65,576 | ||||||
| Intangible assets, net |
95,984 | 515 | ||||||
| Other assets |
2,491 | 2,376 | ||||||
| Total assets |
$ | 392,324 | $ | 257,556 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ | 16,000 | $ | 10,268 | ||||
| Accrued liabilities |
44,668 | 25,987 | ||||||
| Deferred revenue |
18,076 | 14,062 | ||||||
| Total current liabilities |
78,744 | 50,317 | ||||||
| Long-term portion of deferred revenue |
11,609 | 10,985 | ||||||
| Other long term liabilities |
1,833 | 951 | ||||||
| Total liabilities |
92,186 | 62,253 | ||||||
| Stockholders’ equity: |
||||||||
| Common stock |
1,133 | 968 | ||||||
| Additional paid-in capital |
733,360 | 605,939 | ||||||
| Other comprehensive income |
36 | 31 | ||||||
| Accumulated deficit |
(434,391 | ) | (411,635 | ) | ||||
| Total stockholders’ equity |
300,138 | 195,303 | ||||||
| Total liabilities and stockholders’ equity |
$ | 392,324 | $ | 257,556 | ||||
Condensed Consolidated Statement of Cash Flows
(in thousands)
| Three Months Ended | ||||||||
| March 26, | March 27, | |||||||
| 2011 | 2010 | |||||||
| (unaudited) | ||||||||
| Operating activities |
||||||||
| Net loss |
$ | (22,756 | ) | $ | (9,262 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
| Amortization of premiums relating to available-for-sale securities |
108 | 133 | ||||||
| Depreciation and amortization |
1,617 | 1,183 | ||||||
| Amortization of intangible assets |
2,185 | 1,545 | ||||||
| Revaluation of warrant liability |
— | 173 | ||||||
| Stock-based compensation |
8,117 | 2,807 | ||||||
| Changes in operating assets and liabilities: |
||||||||
| Change in restricted cash |
— | 629 | ||||||
| Accounts receivable, net |
4,177 | 21,814 | ||||||
| Inventory |
4,406 | (7,711 | ) | |||||
| Deferred cost of revenue |
(2,083 | ) | 2,622 | |||||
| Prepaids and other assets |
1,159 | 2,435 | ||||||
| Accounts payable |
(6,068 | ) | (7,149 | ) | ||||
| Accrued liabilities |
8,068 | 179 | ||||||
| Other long-term liabilities |
(8 | ) | 179 | |||||
| Deferred revenue |
3,772 | (4,519 | ) | |||||
| Net cash provided by operating activities |
2,694 | 5,058 | ||||||
| Investing activities |
||||||||
| Acquisition of property and equipment |
(1,722 | ) | (1,481 | ) | ||||
| Purchase of marketable securities |
— | (7,434 | ) | |||||
| Sales of marketable securities |
— | 6,708 | ||||||
| Maturities of marketable securities |
22,905 | — | ||||||
| Acquisition of Occam Networks, net of cash assumed |
(60,788 | ) | — | |||||
| Net cash used in investing activities |
(39,605 | ) | (2,207 | ) | ||||
| Financing activities |
||||||||
| Proceeds from exercise of stock options and other |
154 | 62 | ||||||
| Proceeds from initial public offering of common stock, net of issuance costs |
— | 46,229 | ||||||
| Net cash provided by financing activities |
154 | 46,291 | ||||||
| Net increase (decrease) in cash and cash equivalents |
(36,757 | ) | 49,142 | |||||
| Cash and cash equivalents at beginning of year |
66,304 | 31,821 | ||||||
| Cash and cash equivalents at end of year |
$ | 29,547 | $ | 80,963 | ||||