Calix Reports Second Quarter 2016 Financial Results
/EINPresswire.com/ -- PETALUMA, CA--(Marketwired - August 02, 2016) - Calix, Inc. (NYSE: CALX) today announced unaudited financial results for the second quarter ended June 25, 2016. Revenue for the second quarter of 2016 was $107.4 million, an increase of 8.4% compared to $99.1 million for the second quarter of 2015.
"The second quarter was marked by solid demand with revenues near the upper end of our guidance range and increasing by more than 8% compared to the year ago quarter," said Carl Russo, Calix, Inc. President and CEO. "The year is off to a strong start, with 2016 first-half revenues also increasing by more than 8% compared to the same period of 2015. We continue to see increasing interest from existing and potential new customers in all geographies spanning our entire platform, software and systems portfolio. Recent highlights include selection of Calix AXOS NG-PON2 systems for lab trials with Verizon and Windstream's planned deployment of Calix AXOS G.fast nodes and GigaFamily solutions," added Russo.
The company's non-GAAP net loss for the second quarter of 2016 was $2.0 million, or $(0.04) per fully diluted share, compared to a non-GAAP net income of $3.3 million, or $0.06 per fully diluted share, for the second quarter of 2015. A reconciliation of GAAP and non-GAAP results is included as part of this release.
"Our reported loss per share was slightly better than guidance. Favorable customer and product mix offset higher litigation expenses and costs associated with the accelerated ramp of a turnkey network improvement project for an important customer," said William Atkins, Calix, Inc. Executive Vice President and CFO.
The GAAP net loss for the second quarter of 2016 was $5.8 million, or $(0.12) per basic and fully diluted share, compared to a GAAP net loss of $5.8 million, or $(0.11) per basic and fully diluted share, for the second quarter of 2015. A reconciliation of our second quarter 2016 operating results from non-GAAP to GAAP is provided below.
Calix, Inc.
(Unaudited, in thousands, except per share data)
Three Months Ended June 25, 2016
Amortization
of Acquisition-
Stock-Based Intangible Related
Non-GAAP Compensation Assets Costs GAAP
--------- ------------ ------------ ------------ ---------
Revenue $107,425 $ - $ - $ - $107,425
Cost of revenue 56,422 183 814 - 57,419
--------- ------------ ------------ ------------ ---------
Gross profit 51,003 (183) (814) - 50,006
Gross margin 47.5% (0.2)% (0.8)% -% 46.5%
Operating
expenses 53,026 2,785 - 76 55,887
--------- ------------ ------------ ------------ ---------
Operating loss (2,023) (2,968) (814) (76) (5,881)
Interest and
other income
(expense), net 179 - - - 179
--------- ------------ ------------ ------------ ---------
Loss before
provision for
income taxes (1,844) (2,968) (814) (76) (5,702)
Provision for
income taxes 124 - - - 124
--------- ------------ ------------ ------------ ---------
Net loss $ (1,968) $ (2,968) $ (814) $ (76) $ (5,826)
========= ============ ============ ============ =========
Weighted average
number of shares
used to compute
net loss per
common share:
Basic and
diluted 48,371 48,371 48,371 48,371 48,371
========= ============ ============ ============ =========
Net loss per
common share:
Basic and
diluted $ (0.04) $ (0.06) $ (0.02) $ - $ (0.12)
========= ============ ============ ============ =========
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 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) is a global leader in access innovation. Its Unified Access portfolio of broadband communications access software, systems, and services enables communications service providers worldwide to transform their 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 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, 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 Six Months Ended
--------------------- ---------------------
June 25, June 27, June 25, June 27,
2016 2015 2016 2015
---------- ---------- ---------- ----------
Revenue $ 107,425 $ 99,129 $ 205,800 $ 190,167
Cost of revenue:
Products and services (1) 56,605 48,752 107,835 95,212
Amortization of intangible
assets 814 2,088 2,477 4,176
---------- ---------- ---------- ----------
Total cost of revenue 57,419 50,840 110,312 99,388
---------- ---------- ---------- ----------
Gross profit 50,006 48,289 95,488 90,779
Operating expenses:
Research and development (1) 25,033 22,851 47,806 44,765
Sales and marketing (1) 19,213 19,215 38,275 38,974
General and administrative (1) 11,641 9,436 24,325 19,588
Amortization of intangible
assets - 2,552 1,701 5,104
---------- ---------- ---------- ----------
Total operating expenses 55,887 54,054 112,107 108,431
---------- ---------- ---------- ----------
Loss from operations (5,881) (5,765) (16,619) (17,652)
Interest and other income
(expense), net:
Interest income 216 338 427 717
Interest expense (170) (279) (334) (658)
Other income (expense), net 133 29 216 77
---------- ---------- ---------- ----------
Total interest and other
income (expense), net 179 88 309 136
---------- ---------- ---------- ----------
Loss before provision for income
taxes (5,702) (5,677) (16,310) (17,516)
Provision for income taxes 124 102 245 193
---------- ---------- ---------- ----------
Net loss $ (5,826) $ (5,779) $ (16,555) $ (17,709)
========== ========== ========== ==========
Net loss per common share:
Basic and diluted $ (0.12) $ (0.11) $ (0.34) $ (0.34)
========== ========== ========== ==========
Weighted average number of
shares used to compute net loss
per common share:
Basic and diluted 48,371 51,950 48,478 51,843
========== ========== ========== ==========
--------------------------------
(1) Includes stock-based
compensation as follows:
Cost of revenue $ 183 $ 211 $ 310 $ 386
Research and development 1,099 1,483 2,146 2,695
Sales and marketing 840 1,656 1,662 3,081
General and administrative 846 991 1,571 1,841
---------- ---------- ---------- ----------
$ 2,968 $ 4,341 $ 5,689 $ 8,003
========== ========== ========== ==========
Calix, Inc.
Reconciliation of GAAP to Non-GAAP Results
(Unaudited, in thousands, except per share data)
Three Months Ended Six Months Ended
--------------------- ---------------------
June 25, June 27, June 25, June 27,
2016 2015 2016 2015
---------- ---------- ---------- ----------
GAAP net loss $ (5,826) $ (5,779) $ (16,555) $ (17,709)
Adjustments to reconcile GAAP
net loss to non-GAAP net income
(loss):
Stock-based compensation 2,968 4,341 5,689 8,003
Amortization of intangible
assets 814 4,640 4,178 9,280
Acquisition-related costs 76 52 351 242
---------- ---------- ---------- ----------
Non-GAAP net income (loss) $ (1,968) $ 3,254 $ (6,337) $ (184)
========== ========== ========== ==========
Non-GAAP net income (loss) per
common share:
Basic $ (0.04) $ 0.06 $ (0.13) $ -
========== ========== ========== ==========
Diluted $ (0.04) $ 0.06 $ (0.13) $ -
========== ========== ========== ==========
Weighted average number of
shares used to compute non-GAAP
net income (loss) per common
share:
Basic 48,371 51,950 48,478 51,843
========== ========== ========== ==========
Diluted (1) 48,371 52,455 48,478 51,843
========== ========== ========== ==========
(1) Includes the dilutive effect of outstanding stock options, restricted
stock units and ESPP.
Calix, Inc.
Condensed Consolidated Balance Sheets
(Unaudited, in thousands)
December
June 25, 31,
2016 2015
---------- ----------
ASSETS
Current assets:
Cash and cash equivalents $ 26,045 $ 23,626
Marketable securities 38,167 49,964
Accounts receivable, net 49,118 47,155
Inventory 40,761 47,667
Deferred cost of revenue 6,812 4,918
Prepaid expenses and other current assets 8,139 9,470
---------- ----------
Total current assets 169,042 182,800
Property and equipment, net 15,648 17,149
Goodwill 116,175 116,175
Intangible assets, net 2,440 6,618
Other assets 1,075 1,144
---------- ----------
Total assets $ 304,380 $ 323,886
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 13,802 $ 19,603
Accrued liabilities 43,930 35,512
Deferred revenue 12,367 12,124
---------- ----------
Total current liabilities 70,099 67,239
Long-term portion of deferred revenue 19,649 19,569
Other long-term liabilities 1,085 1,293
---------- ----------
Total liabilities 90,833 88,101
---------- ----------
Stockholders' equity:
Common stock 1,351 1,326
Additional paid-in capital 825,790 818,754
Accumulated other comprehensive loss (130) (195)
Accumulated deficit (573,478) (556,923)
Treasury stock (39,986) (27,177)
---------- ----------
Total stockholders' equity 213,547 235,785
---------- ----------
Total liabilities and stockholders' equity $ 304,380 $ 323,886
========== ==========
Calix, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)
Six Months Ended
---------------------
June 25, June 27,
2016 2015
---------- ----------
Operating activities:
Net loss $ (16,555) $ (17,709)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and amortization 4,131 4,978
Loss on retirement of property and equipment - 5
Amortization of intangible assets 4,178 9,280
Amortization of premiums relating to available-
for-sale securities 233 541
Stock-based compensation 5,689 8,003
Changes in operating assets and liabilities:
Restricted cash - 295
Accounts receivable, net (1,963) (11,240)
Inventory 6,906 6,042
Deferred cost of revenue (1,894) 3,796
Prepaid expenses and other assets 1,394 1,065
Accounts payable (5,859) (5,091)
Accrued liabilities 9,012 (2,889)
Deferred revenue 323 (3,612)
Other long-term liabilities (207) (135)
---------- ----------
Net cash provided by (used in) operating
activities 5,388 (6,671)
---------- ----------
Investing activities:
Purchases of property and equipment (3,078) (3,618)
Purchases of marketable securities - (25,271)
Maturities of marketable securities 11,670 27,832
---------- ----------
Net cash provided by (used in) investing
activities 8,592 (1,057)
---------- ----------
Financing activities:
Proceeds from exercise of stock options 14 590
Proceeds from employee stock purchase plan 2,905 2,865
Payments for repurchases of common stock (12,809) (3,377)
Taxes paid for awards vested under equity incentive
plans (1,547) (1,510)
---------- ----------
Net cash used in financing activities (11,437) (1,432)
---------- ----------
Effect of exchange rate changes on cash and cash
equivalents (124) 3
---------- ----------
Net increase (decrease) in cash and cash equivalents 2,419 (9,157)
Cash and cash equivalents at beginning of period 23,626 48,829
---------- ----------
Cash and cash equivalents at end of period $ 26,045 $ 39,672
========== ==========
Investor Inquiries:
Thomas J. Dinges, CFA
408-474-0080
Tom.Dinges@calix.com
