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Calix Reports First Quarter 2016 Financial Results


/EINPresswire.com/ -- PETALUMA, CA--(Marketwired - May 03, 2016) - Calix, Inc. (NYSE: CALX) today announced unaudited financial results for the first quarter ended March 26, 2016. Revenue for the first quarter of 2016 was $98.4 million, an increase of 8.1% compared to $91.0 million for the first quarter of 2015.

"During the first quarter, we experienced solid demand across our customers, products and regions," said Carl Russo, Calix, Inc. President and CEO. "As communications service providers worldwide increasingly seek to improve the subscriber experience, we believe our AXOS platform, along with our Unified Access portfolio of broadband access software, systems, and services led by Compass and next generation copper and fiber technologies, positions Calix customers to deliver an unmatched broadband experience to their subscribers," added Russo.

The company's non-GAAP net loss for the first quarter of 2016 was $4.4 million, or $(0.09) per basic and fully diluted share, compared to a non-GAAP net loss of $3.4 million, or $(0.07) per basic and fully diluted share, for the first quarter of 2015. A reconciliation of GAAP and non-GAAP results is included as part of this release.

"During the quarter, we repurchased a total of $12.8 million of stock, thereby completing our $40 million stock repurchase program, previously authorized by our Board in April 2015. Under the program, we repurchased a total of 5.3 million shares of common stock in 2015 and 2016," said William Atkins, Calix, Inc. Executive Vice President and CFO.

The GAAP net loss for the first quarter of 2016 was $10.7 million, or $(0.22) per basic and fully diluted share, compared to a GAAP net loss of $11.9 million, or $(0.23) per basic and fully diluted share, for the first quarter of 2015. A reconciliation of our first quarter 2016 operating results from non-GAAP to GAAP is provided on the next page.

As described in more detail in our Form 8-K filed April 18, 2016 with the SEC, Calix has entered into a memorandum of understanding of a settlement in principle of the litigation related to its 2011 acquisition of Occam Networks, Inc. Under the terms of the settlement, Calix would not be responsible for contributing any portion of the settlement consideration. In addition, as part of the settlement, Calix will receive payment of $4.5 million in partial recovery of certain out-of-pocket expenses.

                                                                                                
                                                    Calix, Inc.                                 
                                  (Unaudited, in thousands, except per share data)              
                                         Three Months Ended March 26, 2016                      
                                                                                                
                                                             Amortization                       
                                                                  of      Acquisition-          
                                                 Stock-Based  Intangible     Related            
                                       Non-GAAP Compensation    Assets       Costs       GAAP   
                                       -------- ------------ ------------ ------------ ---------
                    Revenue            $98,375  $        -   $        -   $         -  $ 98,375 
                    Cost of revenue     51,103         127        1,663             -    52,893 
                                       -------- ------------ ------------ ------------ ---------
                    Gross profit        47,272        (127)      (1,663)            -    45,482 
                    Gross margin          48.1%       (0.1)%       (1.7)%           -%     46.2%
                    Operating expenses  51,650       2,594        1,701           275    56,220 
                                       -------- ------------ ------------ ------------ ---------
                    Operating loss      (4,378)     (2,721)      (3,364)         (275)  (10,738)
                    Interest and other                                                          
                     income (expense),                                                          
                     net                   130           -            -             -       130 
                                       -------- ------------ ------------ ------------ ---------
                    Loss before                                                                 
                     provision for                                                              
                     income taxes       (4,248)     (2,721)      (3,364)         (275)  (10,608)
                    Provision for                                                               
                     income taxes          121           -            -             -       121 
                                       -------- ------------ ------------ ------------ ---------
                    Net loss           $(4,369) $   (2,721)  $   (3,364)  $      (275) $(10,729)
                                       ======== ============ ============ ============ =========
                    Weighted average                                                            
                     number of shares                                                           
                     used to compute                                                            
                     net loss per                                                               
                     common share:                                                              
                        Basic and                                                               
                         diluted        48,591      48,591       48,591        48,591    48,591 
                                       ======== ============ ============ ============ =========
                    Net loss per                                                                
                     common share:                                                              
                      Basic and                                                                 
                       diluted         $ (0.09) $    (0.06)  $    (0.07)  $     (0.01) $  (0.22)
                                       ======== ============ ============ ============ =========
                                                                                                
                    

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 first 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, 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 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    
                                                                       ------------------------ 
                                                                        March 26,    March 28,  
                                                                          2016         2015     
                                                                       -----------  ----------- 
                    Revenue                                            $    98,375  $    91,038 
                    Cost of revenue:                                                            
                      Products and services (1)                             51,230       46,460 
                      Amortization of intangible assets                      1,663        2,088 
                                                                       -----------  ----------- 
                        Total cost of revenue                               52,893       48,548 
                                                                       -----------  ----------- 
                    Gross profit                                            45,482       42,490 
                    Operating expenses:                                                         
                      Research and development (1)                          22,773       21,914 
                      Sales and marketing (1)                               19,062       19,759 
                      General and administrative (1)                        12,684       10,152 
                      Amortization of intangible assets                      1,701        2,552 
                                                                       -----------  ----------- 
                        Total operating expenses                            56,220       54,377 
                                                                       -----------  ----------- 
                    Loss from operations                                   (10,738)     (11,887)
                    Interest and other income (expense), net:                                   
                      Interest income                                          211          379 
                      Interest expense                                        (164)        (379)
                      Other income (expense), net                               83           48 
                                                                       -----------  ----------- 
                        Total interest and other income (expense), net         130           48 
                                                                       -----------  ----------- 
                    Loss before provision for income taxes                 (10,608)     (11,839)
                    Provision for income taxes                                 121           91 
                                                                       -----------  ----------- 
                    Net loss                                           $   (10,729) $   (11,930)
                                                                       ===========  =========== 
                    Net loss per common share:                                                  
                        Basic and diluted                              $     (0.22) $     (0.23)
                                                                       ===========  =========== 
                    Weighted average number of shares used to compute                           
                     net loss per common share:                                                 
                        Basic and diluted                                   48,591       51,732 
                                                                       ===========  =========== 
                                                                                                
                    --------------------------------------------------                          
                    (1) Includes stock-based compensation as follows:                           
                      Cost of revenue                                  $       127  $       175 
                      Research and development                               1,047        1,212 
                      Sales and marketing                                      822        1,425 
                      General and administrative                               725          850 
                                                                       -----------  ----------- 
                                                                       $     2,721  $     3,662 
                                                                       ===========  =========== 
                                                                                                
                                                                                                
                                                                                                
                    
                                                    Calix, Inc.                                 
                                     Reconciliation of GAAP to Non-GAAP Results                 
                                  (Unaudited, in thousands, except per share data)              
                                                                                                
                                                                          Three Months Ended    
                                                                       -------------------------
                                                                        March 26,    March 28,  
                                                                           2016         2015    
                                                                       ------------ ------------
                    GAAP net loss                                      $   (10,729) $   (11,930)
                    Adjustments to reconcile GAAP net loss to non-GAAP                          
                     net loss:                                                                  
                      Stock-based compensation                               2,721        3,662 
                      Amortization of intangible assets                      3,364        4,640 
                      Acquisition-related costs                                275          190 
                                                                       ------------ ------------
                    Non-GAAP net loss                                  $    (4,369) $    (3,438)
                                                                       ============ ============
                    Non-GAAP net loss per common share:                                         
                      Basic and diluted                                $     (0.09) $     (0.07)
                                                                       ============ ============
                    Weighted average number of shares used to compute                           
                     non-GAAP net loss per common share:                                        
                      Basic and diluted                                     48,591       51,732 
                                                                       ============ ============
                                                                                                
                                                                                                
                                                                                                
                    
                                                    Calix, Inc.                                 
                                       Condensed Consolidated Balance Sheets                    
                                             (Unaudited, in thousands)                          
                                                                                                
                                                                        March 26,   December 31,
                                                                           2016         2015    
                                                                       ------------ ------------
                    ASSETS                                                                      
                    Current assets:                                                             
                      Cash and cash equivalents                        $    21,365  $    23,626 
                      Marketable securities                                 42,895       49,964 
                      Accounts receivable, net                              43,804       47,155 
                      Inventory                                             41,127       47,667 
                      Deferred cost of revenue                               4,108        4,918 
                      Prepaid expenses and other current assets              9,972        9,470 
                                                                       ------------ ------------
                        Total current assets                               163,271      182,800 
                      Property and equipment, net                           16,515       17,149 
                      Goodwill                                             116,175      116,175 
                      Intangible assets, net                                 3,254        6,618 
                      Other assets                                           1,202        1,144 
                                                                       ------------ ------------
                        Total assets                                   $   300,417  $   323,886 
                                                                       ============ ============
                    LIABILITIES AND STOCKHOLDERS' EQUITY                                        
                    Current liabilities:                                                        
                      Accounts payable                                 $    11,144  $    19,603 
                      Accrued liabilities                                   43,801       35,512 
                      Deferred revenue                                       9,802       12,124 
                                                                       ------------ ------------
                        Total current liabilities                           64,747       67,239 
                      Long-term portion of deferred revenue                 19,696       19,569 
                      Other long-term liabilities                            1,196        1,293 
                                                                       ------------ ------------
                        Total liabilities                                   85,639       88,101 
                                                                       ------------ ------------
                    Stockholders' equity:                                                       
                      Common stock                                           1,328        1,326 
                      Additional paid-in capital                           821,236      818,754 
                      Accumulated other comprehensive loss                    (148)        (195)
                      Accumulated deficit                                 (567,652)    (556,923)
                      Treasury stock                                       (39,986)     (27,177)
                                                                       ------------ ------------
                        Total stockholders' equity                         214,778      235,785 
                                                                       ------------ ------------
                        Total liabilities and stockholders' equity     $   300,417  $   323,886 
                                                                       ============ ============
                                                                                                
                                                                                                
                                                                                                
                    
                                                    Calix, Inc.                                 
                                  Condensed Consolidated Statements of Cash Flows               
                                             (Unaudited, in thousands)                          
                                                                                                
                                                                          Three Months Ended    
                                                                       -------------------------
                                                                        March 26,    March 28,  
                                                                           2016         2015    
                                                                       ------------ ------------
                    Operating activities:                                                       
                      Net loss                                         $   (10,729) $   (11,930)
                      Adjustments to reconcile net loss to net cash                             
                       provided by (used in) operating activities:                              
                        Depreciation and amortization                        1,955        2,480 
                        Loss on retirement of property and equipment             -           10 
                        Amortization of intangible assets                    3,364        4,640 
                        Amortization of premiums relating to                                    
                         available-for-sale securities                         114          287 
                        Stock-based compensation                             2,721        3,662 
                        Changes in operating assets and liabilities:                            
                          Restricted cash                                        -          295 
                          Accounts receivable, net                           3,351       (8,256)
                          Inventory                                          6,540        6,115 
                          Deferred cost of revenue                             810        3,318 
                          Prepaid expenses and other assets                   (576)       1,974 
                          Accounts payable                                  (8,459)     (10,836)
                          Accrued liabilities                                8,471           54 
                          Deferred revenue                                  (2,195)      (3,651)
                          Other long-term liabilities                          (98)         (59)
                                                                       ------------ ------------
                            Net cash provided by (used in) operating                            
                             activities                                      5,269      (11,897)
                                                                       ------------ ------------
                    Investing activities:                                                       
                      Purchases of property and equipment                   (1,453)      (1,742)
                      Purchases of marketable securities                         -      (17,004)
                      Maturities of marketable securities                    7,020       11,450 
                                                                       ------------ ------------
                            Net cash provided by (used in) investing                            
                             activities                                      5,567       (7,296)
                                                                       ------------ ------------
                    Financing activities:                                                       
                      Proceeds from exercise of stock options                   14          564 
                      Payments for repurchases of common stock             (12,809)           - 
                      Taxes paid for awards vested under equity                                 
                       incentive plans                                        (251)        (506)
                                                                       ------------ ------------
                            Net cash provided by (used in) financing                            
                             activities                                    (13,046)          58 
                                                                       ------------ ------------
                    Effect of exchange rate changes on cash and cash                            
                     equivalents                                               (51)         (76)
                                                                       ------------ ------------
                    Net decrease in cash and cash equivalents               (2,261)     (19,211)
                    Cash and cash equivalents at beginning of period        23,626       48,829 
                                                                       ------------ ------------
                    Cash and cash equivalents at end of period         $    21,365  $    29,618 
                                                                       ============ ============
                                                                                                
                    

Investor Inquiries:
Thomas J. Dinges, CFA
408-474-0080
Tom.Dinges@calix.com


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