calx-20210403

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended April 3, 2021


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-34674

Calix, Inc.

(Exact Name of Registrant as Specified in Its Charter)


Delaware						68-0438710
(State or Other Jurisdiction of Incorporation or Organization)						(I.R.S. Employer Identification No.)

2777 Orchard Parkway, San Jose, CA 95134

(Address of Principal Executive Offices) (Zip Code)

(408) 514-3000

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol

Name of Each Exchange on Which Registered

Common Stock, par value $0.025 per share

CALX

New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes: x No: o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes: x No: o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer

☐

Accelerated Filer

☒

Non-accelerated filer

☐

Smaller Reporting Company

☐

Emerging Growth Company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Table of Contents

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes: ☐ No: x

As of April 19, 2021, there were 62,853,519 shares of the Registrant’s common stock, par value $0.025 outstanding.

Table of Contents

CALIX, INC.

FORM 10-Q

TABLE OF CONTENTS


PART I. FINANCIAL INFORMATION			4

Item 1. Financial Statements (Unaudited)			4

Condensed Consolidated Balance Sheets			4

Condensed Consolidated Statements of Comprehensive Income (Loss)			5

Condensed Consolidated Statements of Stockholders' Equity			6

Condensed Consolidated Statements of Cash Flows			7

Notes to Condensed Consolidated Financial Statements			8

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			17

Overview			17

Critical Accounting Policies and Estimates			18

Results of Operations			19

Liquidity and Capital Resources			22

Item 3. Quantitative and Qualitative Disclosures About Market Risk			25

Item 4. Controls and Procedures			26

PART II. OTHER INFORMATION			27

Item 1. Legal Proceedings			27

Item 1A. Risk Factors			27

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			40

Item 3. Defaults Upon Senior Securities			41

Item 4. Mine Safety Disclosures			41

Item 5. Other Information			41

Item 6. Exhibits			42

SIGNATURES			43

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PART I. FINANCIAL INFORMATION

ITEM 1.Financial Statements

CALIX, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except par value)


	April 3, 2021		December 31, 2020
	(Unaudited)		(See Note 1)
ASSETS
Current assets:
Cash and cash equivalents	$	85,854	$	80,807
Marketable securities	64,174		52,982
Accounts receivable, net	74,408		69,419
Inventory	72,211		52,268
Prepaid expenses and other current assets	13,122		11,414
Total current assets	309,769		266,890
Property and equipment, net	20,103		20,381
Right-of-use operating leases	11,015		11,741
Goodwill	116,175		116,175
Other assets	11,073		12,165
	$	468,135	$	427,352
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	29,224	$	13,115
Accrued liabilities	56,031		68,736
Deferred revenue	24,127		19,189
Total current liabilities	109,382		101,040
Long-term portion of deferred revenue	20,329		19,904
Operating leases	12,167		12,946
Other long-term liabilities	11,542		13,137
Total liabilities	153,420		147,027
Commitments and contingencies (See Note 7)
Stockholders’ equity:
Preferred stock, $0.025 par value; 5,000 shares authorized; no shares issued and outstanding as of April 3, 2021 and December 31, 2020	—		—
Common stock, $0.025 par value; 100,000 shares authorized; 62,851 shares issued and outstanding as of April 3, 2021, and 62,122 shares issued and outstanding as of December 31, 2020	1,572		1,553
Additional paid-in capital	961,846		948,055
Accumulated other comprehensive loss	(226)		(191)
Accumulated deficit	(648,477)		(669,092)
Total stockholders’ equity	314,715		280,325
	$	468,135	$	427,352

See accompanying notes to condensed consolidated financial statements.

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CALIX, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands, except per share data)

(Unaudited)


	Three Months Ended
	April 3, 2021		March 28, 2020
Revenue:
Systems	$	153,302	$	94,509
Services	8,772		7,173
Total revenue	162,074		101,682
Cost of revenue:
Systems	69,663		50,708
Services	6,169		5,350
Total cost of revenue	75,832		56,058
Gross profit	86,242		45,624
Operating expenses:
Sales and marketing	28,051		20,624
Research and development	24,364		20,671
General and administrative	13,025		10,669


Total operating expenses	65,440		51,964
Income (loss) from operations	20,802		(6,340)
Interest and other income, net:
Interest expense, net	(125)		(290)
Other income, net	88		15
Total interest and other income, net	(37)		(275)
Income (loss) before provision for income taxes	20,765		(6,615)
Provision for income taxes	150		329
Net income (loss)	$	20,615	$	(6,944)
Net income (loss) per common share:
Basic	$	0.33	$	(0.12)
Diluted	$	0.31	$	(0.12)
Weighted-average number of shares used to compute
net income (loss) per common share:
Basic	62,554		56,540
Diluted	67,019		56,540

Net income (loss)	$	20,615	$	(6,944)



Other comprehensive loss, net of tax - foreign currency translation adjustments, net	(35)		(252)

Comprehensive income (loss)	$	20,580	$	(7,196)

See accompanying notes to condensed consolidated financial statements.

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CALIX, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(In thousands, unaudited)


	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Treasury Stock		Total Stockholders’ Equity
	Shares	Amount
Balance at December 31, 2020	62,122	$	1,553	$	948,055	$	(191)	$	(669,092)	$	—	$	280,325
Stock-based compensation	—	—		5,171		—		—		—		5,171
Issuance of common stock under equity incentive plans, net of forfeitures	729	19		8,620		—		—		—		8,639
Net income	—	—		—		—		20,615		—		20,615
Other comprehensive loss	—	—		—		(35)		—		—		(35)
Balance at April 3, 2021	62,851	$	1,572	$	961,846	$	(226)	$	(648,477)	$	—	$	314,715


	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Treasury Stock		Total Stockholders’ Equity
	Shares	Amount
Balance at December 31, 2019	56,448	$	1,545	$	895,899	$	(854)	$	(702,576)	$	(39,986)	$	154,028
Stock-based compensation	—	—		2,984		—		—		—		2,984
Issuance of common stock under equity incentive plans, net of forfeitures	180	4		1,095		—		—		—		1,099
Net loss	—	—		—		—		(6,944)		—		(6,944)
Other comprehensive loss	—	—		—		(252)		—		—		(252)
Balance at March 28, 2020	56,628	$	1,549	$	899,978	$	(1,106)	$	(709,520)	$	(39,986)	$	150,915

See accompanying notes to condensed consolidated financial statements.

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CALIX, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands, unaudited)


	Three Months Ended
	April 3, 2021		March 28, 2020
Operating activities:
Net income (loss)	$	20,615	$	(6,944)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Stock-based compensation	5,171		2,984
Depreciation and amortization	4,077		3,544


Changes in operating assets and liabilities:
Accounts receivable, net	(4,989)		(20,627)
Inventory	(19,943)		9,614
Prepaid expenses and other assets	(1,321)		758
Accounts payable	16,156		9,472
Accrued liabilities	(12,856)		1,367
Deferred revenue	5,362		2,071
Other long-term liabilities	(2,374)		(990)
Net cash provided by operating activities	9,898		1,249
Investing activities
Purchases of property and equipment	(2,274)		(1,729)
Purchases of marketable securities	(54,192)		—
Maturities of marketable securities	43,000		—
Net cash used in investing activities	(13,466)		(1,729)
Financing activities:
Proceeds from common stock issuances related to employee benefit plans	8,639		1,099


Payments related to financing arrangements	—		(842)

Proceeds from line of credit	—		30,000
Repayment of line of credit	—		(30,000)
Payments to originate the line of credit	—		(177)
Net cash provided by financing activities	8,639		80
Effect of exchange rate changes on cash and cash equivalents	(24)		(240)
Net increase (decrease) in cash, cash equivalents and restricted cash	5,047		(640)
Cash, cash equivalents and restricted cash at beginning of period	80,807		47,457

SEC Form 10-Q filed by Calix, Inc