Fast Net News, DSL Prime, DOCSIS Report

Calix as a private company has reached annual sales of over $200M, selling access systems to the regional U.S. carriers. About a third of their sales went to CenturyLink, while a second company (?Windstream) took another 11%. TDS, one of the few funded in RUS stimulus round one, has also been a Calix customer. These carriers have been actively installing 20 meg ADSL2+/VDSL systems for several years, including field terminals, as they deploy more aggressively than the bells. The smaller U.S. telcos are often installing Calix GPON gear, which CenturyLink is using for cell tower backhaul as well. Many of the smaller carriers are buying GPON systems from Calix. Leaving out the Verizon contract, Calix/Optical Solutions is the leading GPON merchant in the U.S. other than at Verizon.

Russo put in $12M earlier this year, part of a private funding round that included $10M from Adam Grosser's Foundation Capital. Foundation had invested $20M in 2007, and is one of five VC firms that own between 6% and 9% of the company. Russo owns 15% of the company, 7M shares.

From the S-1, I learned that Calix "outsources a portion of our quality assurance and cost reduction engineering to a dedicated team of engineers based in Nanjing, China. We also outsource a portion of our software development to a team of software engineers based in Shenyang, China." Nearly all their sales were in the U.S., but they also are finding customers in the Bahamas, Barbados, Dominican Republic, Jamaica and Trinidad.

One good sign is that Calix has a number of engineering job openings. They also need a Director of SEC Reporting and Compliance. The S-1 as always needs a close reading. It's been hard going getting to Calix's current market position, resulting in U.S. federal and state net operating loss, or NOL, carryforwards of approximately $408.2 million and $270.7 million, respectively.