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8-K - FORM 8-K - PC TEL INCd718051d8k.htm
EX-99.2 - EX-99.2 - PC TEL INCd718051dex992.htm

Exhibit 99.1

 

LOGO

PCTEL Achieves $23.7 Million in First Quarter Revenue

Raises Annual Guidance to $114 Million

BLOOMINGDALE, IL. – April 24, 2014 — PCTEL, Inc. (NASDAQ:PCTI), a leader in simplifying wireless and site solutions for private and public networks, announced its 2014 first quarter results.

First Quarter Highlights

$23.7 million in revenue for the quarter, a decrease of six percent from the same period last year.

Gross profit margin of 41 percent in the quarter, compared to 38 percent in the same period last year.

GAAP operating margin from continuing operations of negative two (2) percent for the quarter, compared to operating margin of negative five (5) percent for the same period last year.

GAAP net loss from continuing operations of $(146,000) for the quarter, or $(0.01) per diluted share, compared to net income of $2.0 million from continuing operations, or $0.11 per diluted share for the same period last year. Net income for the first quarter last year included a one-time gain from a legal settlement net of expenses of $0.11 per diluted share.

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 from continuing operations of five percent in the quarter, compared to six percent in the same period last year.

Non-GAAP net income from continuing operations of $914,000 or $0.05 per diluted share in the quarter, as compared to $1.2 million or $0.06 per diluted share in the same period last year.


$56.2 million of cash, short-term investments at March 31, 2014, a decrease of approximately $(1.7) million from the preceding quarter. During the quarter the company used cash to pay $2.4 million in annual accrued expenses from 2013 and $739,000 in dividends.

“Our in-building engineering services and scanning receiver revenue continue to grow as does our Site Solutions product sales,” said Marty Singer, PCTEL’s Chairman and CEO. “Core antenna sales were soft for seasonal reasons but we expect a strong rebound this quarter in that product area. That coupled with new business makes us comfortable with the high end of our previous revenue guidance of $112 - $114 million for our full year 2014. Finally, we had an extremely active quarter with respect to new product releases that will benefit the company this year,” 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) 734-5369 (U.S. / Canada) or (706) 679-6397 (International), conference ID: 28238948. 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 (855) 859-2056 (U.S./Canada), or International (404) 537-3406, conference ID: 28238948.

About PCTEL

PCTEL, Inc. (NASDAQ: PCTI), develops antenna, scanning receiver, and engineered site solutions and services for public and private networks. PCTEL RF Solutions enables superior utilization of wireless spectrum for cellular and WiFi networks. The RF Solutions services team specializes in the design, testing, and optimization of in-building, small cell, and traditional wireless networks. PCTEL RF Solutions develops and supports specialized network test equipment for LTE FDD, TD-LTE, WCDMA, GSM, CDMA, EV-DO, TD-SCDMA, and WiFi networks. The company’s SeeGull® scanning receivers and SeeHawk® visualization tool measure and analyze wireless signals for efficient cellular network planning, deployment, and optimization. Its IBflex™ simplifies in-building wireless network testing and SeeWave™ identifies and locates interference sources that impair network throughput.

PCTEL Connected Solutions™ simplifies network and site deployment for wireless data and communications applications for private and public networks, public safety, and government customers. PCTEL Connected Solutions develops and delivers high-value YAGI, Land Mobile Radio, WiFi, GPS, Subway, and broadband antennas (parabolic and flat panel) through its MAXRAD®, Bluewave™, and Wi-Sys™ product lines. PCTEL also sells specialized towers, enclosures, and cable assemblies for custom engineered site solutions. PCTEL delivers site solutions composed of PCTEL and third party sourced material to allow customers to cost effectively deploy and upgrade networks. The company’s vertical markets include SCADA, Health Care, Smart Grid, Positive Train Control, Precision Agriculture, Indoor Wireless, Telemetry, Off-loading, and Wireless Backhaul. 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, or www.rfsolutions.pctel.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 the growth of PCTEL’s in-building engineering services and scanning receiver sales, the performance of the Connected Solutions business and the anticipated success of our new antenna and scanning receiver 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.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

 

     (unaudited)
March 31,
2014
    December 31,
2013
 

ASSETS

    

Cash and cash equivalents

   $ 16,475      $ 21,790   

Short-term investment securities

     39,694        36,105   

Accounts receivable, net of allowance for doubtful accounts of $120 and $130 at March 31, 2014 and December 31, 2013, respectively

     17,541        18,603   

Inventories, net

     15,961        14,535   

Deferred tax assets, net

     1,629        1,629   

Prepaid expenses and other assets

     1,664        3,166   
  

 

 

   

 

 

 

Total current assets

     92,964        95,828   

Property and equipment, net

     14,892        14,971   

Goodwill

     161        161   

Intangible assets, net

     4,031        4,604   

Deferred tax assets, net

     11,915        11,827   

Other noncurrent assets

     39        41   
  

 

 

   

 

 

 

TOTAL ASSETS

   $ 124,002      $ 127,432   
  

 

 

   

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

    

Accounts payable

   $ 4,244      $ 4,440   

Accrued liabilities

     7,248        7,803   
  

 

 

   

 

 

 

Total current liabilities

     11,492        12,243   

Other long-term liabilities

     1,226        3,137   
  

 

 

   

 

 

 

Total liabilities

     12,718        15,380   
  

 

 

   

 

 

 

Stockholders’ equity:

    

Common stock, $0.001 par value, 100,000,000 shares authorized, 18,620,085 and 18,566,119 shares issued and outstanding at March 31, 2014 and December 31, 2013, respectively

     19        19   

Additional paid-in capital

     143,742        143,572   

Accumulated deficit

     (32,635     (31,748

Accumulated other comprehensive income

     158        209   
  

 

 

   

 

 

 

Total stockholders’ equity of PCTEL, Inc.

     111,284        112,052   
  

 

 

   

 

 

 

TOTAL LIABILITIES AND EQUITY

   $ 124,002      $ 127,432   
  

 

 

   

 

 

 


PCTEL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

 

     (unaudited)  
     Three Months Ended  
     March 31,  
     2014     2013  

REVENUES

   $ 23,656      $ 25,073   

COST OF REVENUES

     14,074        15,475   
  

 

 

   

 

 

 

GROSS PROFIT

     9,582        9,598   
  

 

 

   

 

 

 

OPERATING EXPENSES:

    

Research and development

     3,242        2,550   

Sales and marketing

     2,956        3,020   

General and administrative

     3,232        4,632   

Amortization of intangible assets

     574        604   

Restructuring charges

     0        101   
  

 

 

   

 

 

 

Total operating expenses

     10,004        10,907   
  

 

 

   

 

 

 

OPERATING LOSS

     (422     (1,309

Other income, net

     197        4,332   
  

 

 

   

 

 

 

INCOME (LOSS) BEFORE INCOME TAXES

     (225     3,023   

Expense (benefit) for income taxes

     (79     1,070   
  

 

 

   

 

 

 

NET INCOME (LOSS) FROM CONTINUING OPERATIONS

     (146     1,953   
  

 

 

   

 

 

 

LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX BENEFIT

     0        (88
  

 

 

   

 

 

 

NET INCOME (LOSS)

   ($ 146   $ 1,865   
  

 

 

   

 

 

 

Earnings (Loss) per Share from Continuing Operations:

    

Basic

   ($ 0.01   $ 0.11   

Diluted

   ($ 0.01   $ 0.11   

Earnings (Loss) per Share from Discontinued Operations:

    

Basic

   $ 0.00      ($ 0.00

Diluted

   $ 0.00      ($ 0.01

Earnings (Loss) per Share:

    

Basic

   ($ 0.01   $ 0.11   

Diluted

   ($ 0.01   $ 0.10   

Weighed Average Shares:

    

Basic

     18,176        17,684   

Diluted

     18,176        17,911   

Cash dividend per share

   $ 0.040      $ 0.035   


PCTEL, INC.

P&L INFORMATION BY SEGMENT - Continuing Operations

(in thousands)

 

     Three Months Ended March 31, 2014  
     Connected
Solutions
     RF Solutions      Consolidating     Total  

REVENUES

   $ 15,997       $ 7,722       ($ 63   $ 23,656   
  

 

 

    

 

 

    

 

 

   

 

 

 

GROSS PROFIT

     5,116         4,459         7        9,582   
  

 

 

    

 

 

    

 

 

   

 

 

 

OPERATING INCOME (LOSS)

   $ 1,170       $ 1,014       ($ 2,606   ($ 422
  

 

 

    

 

 

    

 

 

   

 

 

 

 

     Three Months Ended March 31, 2013  
     Connected
Solutions
     RF Solutions      Consolidating     Total  

REVENUES

   $ 19,356       $ 5,772       ($ 55   $ 25,073   
  

 

 

    

 

 

    

 

 

   

 

 

 

GROSS PROFIT

     6,011         3,581         6        9,598   
  

 

 

    

 

 

    

 

 

   

 

 

 

OPERATING INCOME (LOSS)

   $ 1,687       $ 1,042       ($ 4,038   ($ 1,309
  

 

 

    

 

 

    

 

 

   

 

 

 


Reconciliation GAAP To non-GAAP Results Of Continuing Operations (unaudited)

(in thousands except per share information)

Reconciliation of GAAP operating income to non-GAAP operating income (a) from Continuing Operations

 

     Three Months Ended March 31,  
     2014     2013  

Operating Loss

   ($ 422   ($ 1,309

(a) Add:

    

Amortization of intangible assets

     574        604   

TelWorx restructuring:

    

-Restructuring charges

     0        101   

TelWorx investigation:

    

-General & Administrative

     235        1,391   

Stock Compensation:

    

-Cost of Goods Sold

     86        85   

-Engineering

     173        145   

-Sales & Marketing

     147        106   

-General & Administrative

     345        286   
    

 

 

   

 

 

 
     1,560        2,718   
    

 

 

   

 

 

 

Non-GAAP Operating Income

   $ 1,138      $ 1,409   
    

 

 

   

 

 

 

% of revenue

     4.8     5.6

Reconciliation of GAAP net income to non-GAAP net income (b) from Continuing Operations

 

     Three Months Ended March 31,  
     2014     2013  

Net Income (Loss) from Continuing Operations

   ($ 146   $ 1,953   

Adjustments:

    

(a) Non-GAAP adjustment to operating income

     1,560        2,718   

Other income related to the TelWorx settlement and TelWorx SEC investigation

     (220     (4,330

(b) Income Taxes

     (280     816   
  

 

 

   

 

 

 
     1,060        (796
  

 

 

   

 

 

 

Non-GAAP Net Income from Continuing Operations

   $ 914      $ 1,157   
  

 

 

   

 

 

 

Non-GAAP Earning per Share:

    

Basic

   $ 0.05      $ 0.07   

Diluted

   $ 0.05      $ 0.06   

Weighed Average Shares:

    

Basic

     18,176        17,684   

Diluted

     18,379        17,911   

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, and general and administrative expenses associated with the TelWorx investigation.

(b) These adjustments include the items described in footnote (a) as well as other income for the TelWorx legal settlement and insurance claims related to the TelWorx investigation, and non-cash income tax expense.


Reconciliation GAAP To non-GAAP SEGMENT INFORMATION (unaudited) (a) - Continuing Operations

(in thousands except per share information)

 

     Three Months Ended March 31, 2014  
     Connected
Solutions
     RF Solutions      Consolidating     Total  

Operating Income (Loss)

   $ 1,170       $ 1,014       ($ 2,606   ($ 422

Add:

          

Amortization of intangible assets

     370         204         0        574   

TelWorx investigation:

          

-General & Administrative

     0         0         235        235   

Stock Compensation:

          

-Cost of Goods Sold

     45         40         0        85   

-Engineering

     80         93         0        173   

-Sales & Marketing

     128         19         0        147   

-General & Administrative

     87         30         229        346   
  

 

 

    

 

 

    

 

 

   

 

 

 
     710         386         464        1,560   
  

 

 

    

 

 

    

 

 

   

 

 

 

Non-GAAP Operating Income (Loss)

   $ 1,880       $ 1,400       ($ 2,142   $ 1,138   
  

 

 

    

 

 

    

 

 

   

 

 

 

 

     Three Months Ended March 31, 2013  
     Connected
Solutions
     RF Solutions      Consolidating     Total  

Operating Income (Loss)

   $ 1,687       $ 1,042       ($ 4,038   ($ 1,309

Add:

          

Amortization of intangible assets

     394         210         0        604   

Restructuring charges

     101         0         0        101   

TelWorx investigation:

          

-General & Administrative

     0         0         1,391        1,391   

Stock Compensation:

          

-Cost of Goods Sold

     27         58         0        85   

-Engineering

     55         90         0        145   

-Sales & Marketing

     78         28         0        106   

-General & Administrative

     66         15         205        286   
  

 

 

    

 

 

    

 

 

   

 

 

 
     721         401         1,596        2,718   
  

 

 

    

 

 

    

 

 

   

 

 

 

Non-GAAP Operating Income (Loss)

   $ 2,408       $ 1,443       ($ 2,442   $ 1,409   
  

 

 

    

 

 

    

 

 

   

 

 

 

This schedule reconciles the Company’s GAAP operating income by segment 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, and general and administrative expenses associated with the TelWorx investigation.