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8-K - FORM 8-K - PC TEL INCc63254e8vk.htm
Exhibit 99.1
(PCTEL LOGO)
PCTEL Achieves $18.6 Million in Fourth Quarter Revenue; $69.3 Million in Annual
Revenue

Cites Strong Growth in Vertical Antenna Market and New Technology Deployment
Bloomingdale, IL February 24, 2011 — PCTEL, Inc. (NASDAQ: PCTI), a leader in propagation and wireless network optimization solutions, announced results for the fourth quarter and year ended December 31, 2010.
Fourth Quarter and Annual Highlights
    $18.6 million in revenue for the quarter, an increase of 26 percent over the same period in 2009. $69.3 million in revenue for the year, an increase of 24 percent over 2009.
 
    Gross profit margin of 47 percent in the quarter, unchanged from the same period last year. Gross profit margin of 45 percent for the year, as compared to 47 percent in 2009.
 
    GAAP Operating margin of negative (7) percent for the quarter, compared to negative (4) percent for the same period in 2009. Operating margin for the year of negative (9) percent as compared to negative (11) percent in 2009.
 
    GAAP Net loss of $(705,000) for the quarter, or $(0.04) per basic share, compared to a net loss of $(572,000), or $(0.03) per basic share for the same period in 2009. Net Loss of $(3.5) million for the year or $(0.20) per basic share, as compared to a net loss of $(4.5) million or $(0.26) per basic share in 2009.
 
    Non-GAAP operating profit and net income are measures the company uses to reflect the results of its core earnings. The Company’s reporting of non-GAAP net income excludes expenses for restructuring, gain or loss on sale of assets, stock based compensation, amortization and impairment of intangible assets and goodwill related to the Company’s acquisitions, and non-cash related income tax expense.
    Non-GAAP operating margin of 10 percent in the quarter, as compared to 4 percent in the same period in 2009. Non-GAAP operating margin for the year was 5% as compared to 3% for 2009.
 
    Non-GAAP net income of $1.6 million or $0.09 per diluted share in the quarter, as compared to $663,000 or $0.04 per diluted share in the same period in 2009. Non-GAAP net income of $3.3 million or $0.18 per diluted share for the year, as compared to $2.2 million or $0.12 per diluted share in 2009.


 

    $70.9 million of cash, short-term investments, and long-term investments at December 31, 2010, a decrease of $700,000 from the preceding quarter. During the quarter the Company repurchased approximately 213,000 shares of its common stock for $1.3 million, and generated approximately $600,000 of cash and investments from all other sources. The Company has approximately $2.6 million remaining on its current share repurchase program authorization.
“PCTEL’s revenue growth suggests that we have made progress in certain vertical antenna markets, including offloading, smart grid, SCADA, fleet and asset tracking,” said Marty Singer, the company’s Chairman and CEO. “We also began to see positive results from our investment in scanning receiver technology and new, regional deployments of cellular networks. We are optimistic about our growth prospects in 2011 and believe that we have an opportunity to leverage our R&D and business development investments in new markets, such as secure telephony,” added Singer.
CONFERENCE CALL / WEBCAST
PCTEL’s management team will discuss the Company’s results today at 5:15 PM ET. The call can be accessed by dialing (877) 693-6682 (U.S. / Canada) or (706) 679-6397 (International), conference ID: 37532282. The call will also be webcast at http://investor.pctel.com/events.cfm. REPLAY: A replay will be available for two weeks after the call on either the website listed above or by calling (800) 642-1687 (U.S./Canada), or International (706) 645-9291, conference ID: 37532282.
About PCTEL
PCTEL, Inc. (NASDAQ: PCTI), is a global leader in propagation and wireless network optimization solutions. The company designs and develops software-based radios for wireless network optimization and develops and distributes innovative antenna solutions. The company’s SeeGull® scanning receivers, receiver-based products and CLARIFY® interference management solutions are used to measure, monitor and optimize mobile networks. PCTEL’s SeeGull scanning receivers are deployed in industry leading wireless test and measurement equipment and viewed as an essential wireless data collection tool for cellular network optimization, drive tests, and spectrum clearing. PCTEL develops and supports scanning receivers for LTE, EVDO, CDMA, WCDMA, TD-SCDMA and WiMAX networks. SeeHawk™, PCTEL’s latest analysis tool, facilitates the visualization of data from all of PCTEL’s data collection devices. PCTEL Secure, a joint venture with Eclipse Design Technologies, designs Android-based, secure communication products.
PCTEL’s MAXRAD®, Bluewave™ and Wi-Sys™ antenna solutions address public safety, military, aviation, defense and government applications; SCADA, Health Care, Energy, Smart Grid and Agricultural applications; Indoor Wireless, Wireless Backhaul, and Cellular applications. Its portfolio includes a broad range of WiMAX antennas, WiFi antennas, Land Mobile Radio antennas, and precision GPS antennas that serve innovative applications in telemetry, RFID, in-building, fleet management, and mesh networks. PCTEL provides parabolic antennas, ruggedized antennas, Yagi antennas, military

 


 

antennas, precision aviation antennas and other high performance antennas for many applications. PCTEL’s products are sold worldwide through direct and indirect channels. For more information, please visit the company’s web sites www.pctel.com, www.antenna.com, www.antenna.pctel.com, www.rfsolutions.pctel.com or www.pctelsecure.com
PCTEL Safe Harbor Statement
This press release contains “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Specifically, the statements regarding PCTEL aggressively developing vertical markets for its antenna products and investing in scanning receiver and secure communication products are forward-looking statements within the meaning of the safe harbor. These statements are based on management’s current expectations and actual results may differ materially from those projected as a result of certain risks and uncertainties, including the ability to successfully grow the wireless products business and the ability to implement new technologies and obtain protection for the related intellectual property. These and other risks and uncertainties are detailed in PCTEL’s Securities and Exchange Commission filings. These forward-looking statements are made only as of the date hereof, and PCTEL disclaims any obligation to update or revise the information contained in any forward-looking statement, whether as a result of new information, future events or otherwise.
For further information contact:
     
John Schoen
  Jack Seller
CFO
  Public Relations
PCTEL, Inc.
  PCTEL, Inc.
(630) 372-6800
  (630)372-6800
 
 
  Jack.seller@pctel.com

 


 

PCTEL, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
                 
    December 31,     December 31,  
    2010     2009  
ASSETS
               
Cash and cash equivalents
  $ 23,998     $ 35,543  
Short-term investment securities
    37,146       27,896  
Accounts receivable, net of allowance for doubtful accounts of $160 and $89 at December 31, 2010 and December 31, 2009, respectively
    13,873       9,756  
Inventories, net
    10,729       8,107  
Deferred tax assets, net
    1,013       1,024  
Prepaid expenses and other assets
    3,900       2,541  
 
           
Total current assets
    90,659       84,867  
 
               
Property and equipment, net
    11,088       12,093  
Long-term investment securities
    9,802       12,135  
Other intangible assets, net
    8,865       9,241  
Deferred tax assets, net
    9,004       9,947  
Other noncurrent assets
    1,147       935  
 
           
TOTAL ASSETS
  $ 130,565     $ 129,218  
 
           
 
               
LIABILITIES AND STOCKHOLDERS’ EQUITY
               
Accounts payable
  $ 4,253     $ 2,192  
Accrued liabilities
    7,546       3,786  
 
           
Total current liabilities
    11,799       5,978  
 
Long-term liabilities
    2,111       2,172  
 
           
Total liabilities
    13,910       8,150  
 
           
 
               
Stockholders’ equity:
               
Common stock, $0.001 par value, 100,000,000 shares authorized, 18,285,784 and 18,494,499 shares issued and outstanding at December 31, 2010 and December 31, 2009, respectively
    18       18  
Additional paid-in capital
    137,154       138,141  
Accumulated deficit
    (20,578 )     (17,122 )
Accumulated other comprehensive income
    61       31  
 
           
Total stockholders’ equity
    116,655       121,068  
 
           
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
  $ 130,565     $ 129,218  
 
           
The accompanying notes are an integral part of these consolidated financial statements.


 

PCTEL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
                                 
    (unaudited)        
    Three Months Ended     Year Ended  
    December 31,     December 31,  
    2010     2009     2010     2009  
REVENUES
  $ 18,560     $ 14,786     $ 69,254     $ 56,002  
COST OF REVENUES
    9,794       7,822       38,142       29,883  
 
                       
GROSS PROFIT
    8,766       6,964       31,112       26,119  
 
                       
OPERATING EXPENSES:
                               
Research and development
    2,649       2,712       11,777       10,723  
Sales and marketing
    2,764       1,883       10,095       7,725  
General and administrative
    2,576       2,430       10,224       9,674  
Amortization of other intangible assets
    654       565       2,934       2,225  
Restructuring charges
    346             931       493  
Impairment of goodwill and other intangible assets
    1,084             1,084       1,485  
Gain (loss) on sale of product lines and related note receivable
          (75 )           379  
Royalties
                      (400 )
 
                       
Total operating expenses
    10,073       7,515       37,045       32,304  
 
                       
OPERATING LOSS
    (1,307 )     (551 )     (5,933 )     (6,185 )
Other income, net
    280       177       602       919  
 
                       
LOSS BEFORE INCOME TAXES
    (1,027 )     (374 )     (5,331 )     (5,266 )
Provision (benefit) for income taxes
    (322 )     198       (1,875 )     (783 )
 
                       
NET LOSS
    ($705 )     ($572 )     ($3,456 )     ($4,483 )
 
                       
 
                               
Basic Earnings per Share:
                               
Net Loss
    ($0.04 )     ($0.03 )     ($0.20 )     ($0.26 )
Diluted Earnings per Share:
                               
Net Loss
    ($0.04 )     ($0.03 )     ($0.20 )     ($0.26 )
 
                               
Weighted average shares — Basic
    17,092       17,446       17,408       17,542  
Weighted average shares — Diluted
    17,092       17,446       17,408       17,542  
The accompanying notes are an integral part of these consolidated financial statements.


 

Reconciliation GAAP To non-GAAP Results Of Operations (unaudited)
(in thousands except per share information)
Reconciliation of GAAP operating income to non-GAAP operating income (a)
                                 
    Three Months Ended December 31,     Year Ended December 31,  
    2010     2009     2010     2009  
Operating Loss
    ($1,307 )     ($551 )     ($5,933 )     ($6,185 )
 
                               
(a) Add:
                               
Amortization of intangible assets
    654       565       2,934       2,225  
Restructuring charges
    346             931       493  
Impairment of goodwill
    1,084             1,084       1,485  
Gain (loss) on sale of product lines and related note receivable
          (75 )           379  
Stock Compensation:
                               
-Cost of Goods Sold
    78       76       415       334  
-Engineering
    155       143       674       634  
-Sales & Marketing
    256       101       975       500  
-General & Administrative
    645       371       2,546       1,894  
 
                       
 
    3,218       1,181       9,559       7,944  
 
                               
 
                       
Non-GAAP Operating Income
  $ 1,911     $ 630     $ 3,626     $ 1,759  
 
                       
% of revenue
    10.3 %     4.3 %     5.2 %     3.1 %
Reconciliation of GAAP net income to non-GAAP net income (b)
                                 
    Three Months Ended December 31,     Year Ended December 31,  
    2010     2009     2010     2009  
Net Loss
    ($705 )     ($572 )     ($3,456 )     ($4,483 )
Add:
                               
(a)    Non-GAAP adjustment to operating loss
    3,218       1,181       9,559       7,944  
(b)    Income Taxes
    (681 )     54       (2,601 )     (1,262 )
(b)    Other income
    (197 )     0       (197 )     0  
 
                       
 
    2,340       1,235       6,761       6,682  
 
                               
 
                       
Non-GAAP Net Income
  $ 1,635     $ 663     $ 3,305     $ 2,199  
 
                       
Basic Earnings per Share:
                               
Non-GAAP Net Income
  $ 0.10     $ 0.04     $ 0.19     $ 0.13  
 
                               
Diluted Earnings per Share:
                               
Non-GAAP Net Income
  $ 0.09     $ 0.04     $ 0.18     $ 0.12  
 
                               
Weighted average shares — Basic
    17,092       17,446       17,408       17,542  
Weighted average shares — Diluted
    17,516       17,794       17,954       17,862  
This schedule reconciles the company’s GAAP operating income and GAAP net income to its non-GAAP operating income and non-GAAP net income. The company believes that presentation of this schedule provides meaningful supplemental information to both management and investors that is indicative of the company’s core operating results and facilitates comparison of operating results across reporting periods. The company uses these non-GAAP measures when evaluating its financial results as well as for internal planning and forecasting purposes. These non-GAAP measures should not be viewed as a substitute for the company’s GAAP results.
(a) These adjustments reflect stock based compensation expense, amortization of intangible assets, restructuring charges, impairment charges, and the loss on the sale of product lines.
(b) These adjustments include the items described in footnote (a) as well as the non-cash income tax expense and non-cash other income related to write-off of note payables.