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8-K - FORM 8-K - PC TEL INCd172142d8k.htm

Exhibit 99.1

 

LOGO

PCTEL Achieves $21.1 Million in First Quarter Revenue

BLOOMINGDALE, IL. – May 5, 2016 — PCTEL, Inc. (NASDAQ:PCTI), a leader in Performance Critical Telecom solutions, announced its 2016 first quarter results.

Quarter Highlights

$21.1 million in revenue for the quarter, a decrease of 20 percent from the same period last year.

Gross profit margin of 33.5 percent in the quarter compared to 38.7 percent for the same period last year.

GAAP operating margin of negative 13 percent for the quarter compared to operating margin of just under break even for the same period last year.

GAAP net loss of $1.5 million for the quarter, or $(0.09) per diluted share compared to just under break even for the same period last year.

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 negative three percent in the quarter, compared to four percent in the same period last year.

Non-GAAP net loss of $494,000 or $(0.03) per diluted share in the quarter, compared to $904,000 or $0.05 per diluted share in the same period last year.

$27.9 million of cash and short-term investments at March 31, 2016, a decrease of approximately $3.9 million from the preceding quarter.

783,000 common shares repurchased in the quarter for $4.1 million.

$870,000 dividends paid in the quarter.

$700,000 of free cash flow in the quarter.

“Over the past 15 months, we took several actions to align the business with significant changes in the industry,” said Marty Singer, PCTEL’s Chairman and CEO. “These changes include carrier spending declines which impacted our small cell kitting and engineering services revenue. We are confident, though, that our investments in direct sales to infrastructure vendors and in crowd-based, cloud-based network test and measurement will result in revenue growth and profit for the remainder of 2016 and in 2017. We are particularly well-positioned to participate in the growth associated with FirstNet, utilities, fleet, and network performance engineering,” 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 (888) 782-2072 (U.S. / Canada) or (706) 679-6397 (International), conference ID: 91470562. 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: 91470562.

About PCTEL

PCTEL, a global provider of RF expertise, delivers Performance Critical Telecom solutions to the wireless industry. PCTEL benchmarks and optimizes wireless networks with its data tools, engineering services, and RF products. PCTEL’s antennas and site solutions are vital elements for networks serving SCADA, fleet management, health care, public safety, and education.

PCTEL’s RF Solutions products and services improve the performance of wireless networks globally. PCTEL’s performance critical products include its SeeGull® MXflex®, IBflex®, and EXflex® scanning receivers. PCTEL tools also include CW transmitters, signal analyzers, and the SeeWave interference locating system. PCTEL’s SeeHawk® software portfolio includes SeeHawk™ Touch, SeeHawk® Collect, SeeHawk Engage™, SeeHawk Engage+™, SeeHawk Engage™ Lite, SeeHawk™ Studio, and SeeHawk™ Analytics. PCTEL provides specialized staffing, interference management and performance critical RF engineering services for wireless networks.

PCTEL Connected Solutions designs and delivers performance critical antennas and site solutions for public and private wireless networks globally. PCTEL’s performance critical antenna solutions include high rejection and high performance GNSS products and innovative broadband LTE and Wi-Fi solutions for fixed and mobile applications, including transit, in-building, and small cell networks. In addition, PCTEL provides a broad portfolio of LMR and Yagi antennas. We leverage our design, logistics, and support capabilities to deliver performance critical antenna and site solutions into carrier, railroad, utility applications, oil and gas, and other vertical markets.

PCTEL’s products are sold worldwide through direct and indirect channels. For more information, please visit the company’s web sites: pctel.com, antenna.com, or rfsolutions.pctel.com


PCTEL Safe Harbor Statement

This press release and our related comments in our earnings conference call contain “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Specifically, the statements regarding our future financial performance, new products and features, growth of our Connected Solutions and RF Solutions businesses, and anticipated demand for our network analytics, subject matter expert staffing and in-building engineering services 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 customer demand for these types of products and services generally, growth and continuity in the utilities, fleet, and public safety markets and small cell deployments, PCTEL’s ability to successfully grow the wireless products business, and its 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

PCTEL, Inc.

(630) 372-6800

 

Public Relations

PCTEL, Inc.

(630)372-6800

 

Jack.seller@pctel.com

    


PCTEL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

 

     (unaudited)
March 31,
2016
    December 31,
2015
 

ASSETS

    

Cash and cash equivalents

   $ 4,451      $ 7,055   

Short-term investment securities

     23,431        24,728   

Accounts receivable, net of allowance for doubtful accounts of $263 and $314 at March 31, 2016 and December 31, 2015, respectively

     16,158        21,001   

Inventories, net

     17,479        17,596   

Prepaid expenses and other assets

     1,726        1,586   
  

 

 

   

 

 

 

Total current assets

     63,245        71,966   

Property and equipment, net

     13,659        13,839   

Goodwill

     3,332        3,332   

Intangible assets, net

     10,609        11,378   

Deferred tax assets, net

     14,566        13,155   

Other noncurrent assets

     39        40   
  

 

 

   

 

 

 

TOTAL ASSETS

   $ 105,450      $ 113,710   
  

 

 

   

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

    

Accounts payable

   $ 4,729      $ 6,735   

Accrued liabilities

     5,283        6,190   
  

 

 

   

 

 

 

Total current liabilities

     10,012        12,925   

Other long-term liabilities

     415        388   
  

 

 

   

 

 

 

Total liabilities

     10,427        13,313   
  

 

 

   

 

 

 

Stockholders’ equity:

    

Common stock, $0.001 par value, 100,000,000 shares authorized, 17,249,586 and 17,654,236 shares issued and outstanding at March 31, 2016 and December 31, 2015, respectively

     17        18   

Additional paid-in capital

     132,643        135,714   

Accumulated deficit

     (37,646     (35,320

Accumulated other comprehensive income (loss)

     9        (15
  

 

 

   

 

 

 

Total stockholders’ equity

     95,023        100,397   
  

 

 

   

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

   $ 105,450      $ 113,710   
  

 

 

   

 

 

 


PCTEL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

(in thousands, except per share data)

 

     Three Months Ended  
     March 31,  
     2016     2015  

REVENUES

   $ 21,074      $ 26,326   

COST OF REVENUES

     14,023        16,137   
  

 

 

   

 

 

 

GROSS PROFIT

     7,051        10,189   
  

 

 

   

 

 

 

OPERATING EXPENSES:

    

Research and development

     2,607        2,738   

Sales and marketing

     3,115        3,530   

General and administrative

     2,962        3,363   

Amortization of intangible assets

     603        654   

Restructuring expenses

     517        0   
  

 

 

   

 

 

 

Total operating expenses

     9,804        10,285   
  

 

 

   

 

 

 

OPERATING LOSS

     (2,753 )      (96 ) 

Other income, net

     6        44   
  

 

 

   

 

 

 

LOSS BEFORE INCOME TAXES

     (2,747 )      (52 ) 

Benefit for income taxes

     (1,291     (19
  

 

 

   

 

 

 

NET LOSS

   $ (1,456 )    $ (33 ) 
  

 

 

   

 

 

 

Net Loss per Share:

    

Basic

   $ (0.09   $ (0.00

Diluted

   $ (0.09   $ (0.00

Weighted Average Shares:

    

Basic

     16,324        18,312   

Diluted

     16,324        18,312   

Cash dividend per share

   $ 0.05      $ 0.05   


PCTEL, INC.

P&L INFORMATION BY SEGMENT (unaudited)

(in thousands)

 

     Three Months Ended March 31, 2016  
     Connected
Solutions
     RF Solutions     Corporate     Total  

REVENUES

   $ 14,699       $ 6,435      ($ 60   $ 21,074   
  

 

 

    

 

 

   

 

 

   

 

 

 

GROSS PROFIT

     4,324         2,730        (3     7,051   
  

 

 

    

 

 

   

 

 

   

 

 

 

OPERATING (LOSS) INCOME

   $ 1,305       ($ 1,527   ($ 2,531   ($ 2,753
  

 

 

    

 

 

   

 

 

   

 

 

 
     Three Months Ended March 31, 2015  
     Connected
Solutions
     RF Solutions     Corporate     Total  

REVENUES

   $ 17,354       $ 9,051      ($ 79   $ 26,326   
  

 

 

    

 

 

   

 

 

   

 

 

 

GROSS PROFIT

     5,444         4,736        9        10,189   
  

 

 

    

 

 

   

 

 

   

 

 

 

OPERATING (LOSS) INCOME

   $ 1,613       $ 1,210      ($ 2,919   ($ 96
  

 

 

    

 

 

   

 

 

   

 

 

 


Reconciliation of GAAP to non-GAAP Results (unaudited)

(in thousands except per share information)

Reconciliation of GAAP operating loss to non-GAAP operating (loss) income (a)

 

     Three Months Ended
March 31,
 
     2016     2015  

Operating Loss

   ($ 2,753   ($ 96

(a) Add:

    

Amortization of intangible assets

    

-Cost of revenues

     166        0   

-Operating expenses

     603        654   

Restructuring expenses

     517        0   

TelWorx investigation:

    

-General & Administrative

     5        38   

Stock Compensation:

    

-Cost of revenues

     131        73   

-Engineering

     167        115   

-Sales & Marketing

     145        158   

-General & Administrative

     416        155   
  

 

 

   

 

 

 
     2,150        1,193   
  

 

 

   

 

 

 

Non-GAAP Operating (Loss) Income

   ($ 603   $ 1,097   
  

 

 

   

 

 

 

% of revenue

     -2.9     4.2

Reconciliation of GAAP net loss to non-GAAP net (loss) income (b)

 

     Three Months Ended
March 31,
 
     2016      2015  

Net Loss

   ($ 1,456    ($ 33

Adjustments:

     

(a)       Non-GAAP adjustment to operating (loss) income

     2,150         1,193   

(b)      Other income related to SEC investigation of TelWorx

     (5      (38

(b)      Income Taxes

     (1,183      (218
  

 

 

    

 

 

 
     962         937   
  

 

 

    

 

 

 

Non-GAAP Net (Loss) Income

   ($ 494    $ 904   
  

 

 

    

 

 

 

Non-GAAP (Loss) Earning per Share:

     

Basic

   ($ 0.03    $ 0.05   

Diluted

   ($ 0.03    $ 0.05   

Weighed Average Shares:

     

Basic

     16,324         18,312   

Diluted

     16,324         18,525   

This schedule reconciles the Company’s GAAP operating loss and GAAP net loss to its non-GAAP operating (loss) income and non-GAAP net (loss) 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 SEC investigation of TelWorx.

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


Reconciliation of GAAP to non-GAAP SEGMENT INFORMATION (unaudited) (a)

(in thousands except per share information)

 

     Three Months Ended March 31, 2016  
     Connected
Solutions
     RF
Solutions
     Corporate      Total  

Operating (Loss) Income

   $ 1,305       ($ 1,527    ($ 2,531    ($ 2,753

Add:

           

Amortization of intangible assets

           

-Cost of revenues

     0         166         0         166   

-Operating expenses

     70         533         0         603   

Restructuring expenses

     44         417         56         517   

TelWorx investigation:

           

-General & Administrative

     0         0         5         5   

Stock Compensation:

           

-Cost of revenues

     41         90         0         131   

-Engineering

     42         125         0         167   

-Sales & Marketing

     87         58         0         145   

-General & Administrative

     40         72         304         416   
  

 

 

    

 

 

    

 

 

    

 

 

 
     324         1,461         365         2,150   
  

 

 

    

 

 

    

 

 

    

 

 

 

Non-GAAP Operating (Loss) Income

   $ 1,629       ($ 66    ($ 2,166    ($ 603
  

 

 

    

 

 

    

 

 

    

 

 

 

 

     Three Months Ended March 31, 2015  
     Connected
Solutions
     RF
Solutions
     Corporate      Total  

Operating (Loss) Income

   $ 1,613       $ 1,210       ($ 2,919    ($ 96

Add:

           

Amortization of intangible assets

     230         424         0         654   

TelWorx investigation:

           

-General & Administrative

     0         0         38         38   

Stock Compensation:

           

-Cost of Goods Sold

     36         37         0         73   

-Engineering

     46         69         0         115   

-Sales & Marketing

     103         55         0         158   

-General & Administrative

     25         19         111         155   
  

 

 

    

 

 

    

 

 

    

 

 

 
     440         604         149         1,193   
  

 

 

    

 

 

    

 

 

    

 

 

 

Non-GAAP Operating (Loss) Income

   $ 2,053       $ 1,814       ($ 2,770    $ 1,097   
  

 

 

    

 

 

    

 

 

    

 

 

 

This schedule reconciles the Company’s GAAP operating income (loss) by segment to its non-GAAP operating (loss) 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 SEC investigation of TelWorx.