PCTEL, Inc. (NASDAQ:PCTI), a leader in Performance
Critical Telecom solutions, announced its 2015 third
quarter results.
Quarter Highlights
- $26.5 million in revenue for the
quarter, a decrease of five percent from the same period last
year.
- Gross profit margin of 33 percent in
the quarter, compared to 41 percent for the same period last
year.
- GAAP operating margin of negative
eight percent for the quarter, compared to operating margin of
eight percent for the same period last year.
- GAAP net loss of $(1.1) million for
the quarter, or $(0.06) per diluted share, compared to net
income of $2.2 million, or $0.12 per diluted share 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 half a
percent in the quarter, compared to 12 percent in the same
period last year.
- Non-GAAP net income of $108,000 or
$0.01 per diluted share in the quarter, compared to $2.9
million or $0.16 per diluted share in the same period last
year.
- $34.3 million of cash and short-term
investments at September 30, 2015, a decrease of approximately
$6.9 million from the preceding quarter. Free cash flow in the
quarter was $461,000, comprised of $747,000 in cash flow from
operations and $286,000 of capital spending. During the quarter the
Company repurchased 1,114,000 shares of its common stock for
approximately $6.9 million, and paid a regular quarterly dividend
of $911,000.
“We made progress in our antenna and scanning receiver equipment
business,” said Marty Singer, PCTEL’s Chairman and CEO. “At the
same time our engineering services operations continue to weather
the downturn in carrier spending and we are investing resources
into our data analytics software product line. We expect our
engineering services to expand with renewed spending during the
fourth quarter and our data analytics investment to generate
revenue in 2016,” 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:
13775112. 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:
13775112.
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
MXflex®®, IBflex®®, and EXflex®® SeeGull®® scanning receivers and
related SeeHawk®® Touch, SeeHawk®® Collect, and SeeWave™ tools.
PCTEL’s sophisticated engineering services utilize these products
as well as the SeeHawk™ Analytics portfolio (Network Analytics,
Subscriber Analytics, Map Analytics, and Business
Intelligence).
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 GPS and GNSS products, the industry
leading Yagi portfolio, mobile and indoor LTE, broadband, and LMR
antennas and PIM-rated antennas for transit, in-building, and small
cell applications. 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: www.pctel.com, www.antenna.com, or
www.rfsolutions.pctel.com
PCTEL Safe Harbor Statement
This press release and our related comments in our third quarter
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, expectations regarding the
future growth of our antenna and wireless RF businesses, and demand
for 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, 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.
PCTEL, INC. CONDENSED CONSOLIDATED BALANCE
SHEETS (in thousands, except share data)
(unaudited) September 30,
December 31, 2015 2014 ASSETS
Cash and cash equivalents $ 12,887 $ 20,432 Short-term investment
securities 21,428 39,577 Accounts receivable, net of allowance for
doubtful accounts of $119 and $121 at September 30, 2015 and
December 31, 2014, respectively 20,643 23,874 Inventories, net
17,187 16,358 Deferred tax assets, net 2,279 2,281 Prepaid expenses
and other assets 2,440 1,757 Total
current assets 76,864 104,279 Property and equipment, net
14,042 14,842 Goodwill 3,493 161 Intangible assets, net 12,434
2,637 Deferred tax assets, net 10,348 9,710 Other noncurrent assets
36 40
TOTAL ASSETS $
117,217 $ 131,669
LIABILITIES AND STOCKHOLDERS’ EQUITY Accounts payable
$ 5,631 $ 5,495 Accrued liabilities 6,430
10,211 Total current liabilities 12,061 15,706 Other
long-term liabilities 930 448 Total liabilities
12,991 16,154 Stockholders’
equity: Common stock, $0.001 par value, 100,000,000 shares
authorized, 17,815,573 and 18,571,419 shares issued and outstanding
at September 30, 2015 and December 31, 2014, respectively 18 19
Additional paid-in capital 137,768 145,462 Accumulated deficit
(33,619 ) (30,101 ) Accumulated other comprehensive income
59 135 Total stockholders’ equity
104,226 115,515
TOTAL LIABILITIES
AND STOCKHOLDERS' EQUITY $ 117,217
$ 131,669 PCTEL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
(in thousands, except per share data)
Three Months Ended
Nine Months Ended September 30, September 30,
2015 2014 2015 2014
REVENUES $ 26,526 $ 27,932 $ 80,477 $ 77,769
COST OF
REVENUES 17,896 16,538 52,067
45,943
GROSS PROFIT 8,630
11,394 28,410 31,826
OPERATING
EXPENSES: Research and development 2,863 2,659 8,506 8,970
Sales and marketing 3,603 3,054 10,558 9,312 General and
administrative 2,847 3,120 9,513 9,822 Amortization of intangible
assets 1,125 465 2,963 1,503 Restructuring charges 413
0 852 0 Total operating expenses
10,851 9,298 32,392
29,607
OPERATING INCOME (LOSS) (2,221 ) 2,096 (3,982 ) 2,219
Other income, net 534 207 2,783
738
INCOME (LOSS) BEFORE INCOME TAXES (1,687 ) 2,303
(1,199 ) 2,957 Expense (benefit) for income taxes (625 )
85 (451 ) 340
NET INCOME (LOSS)
($1,062 ) $ 2,218 ($748 ) $ 2,617
Net Income
(Loss) per Share: Basic ($0.06 ) $ 0.12 ($0.04 ) $ 0.14 Diluted
($0.06 ) $ 0.12 ($0.04 ) $ 0.14
Weighed Average
Shares: Basic 17,626 18,112 18,059 18,155 Diluted 17,626 18,271
18,059 18,346 Cash dividend per share $ 0.05 $ 0.04 $ 0.15 $
0.12
PCTEL, INC. P&L INFORMATION BY SEGMENT
(unaudited) (in thousands)
Three
Months Ended September 30, 2015 Nine Months Ended September 30,
2015 Connected RF Connected RF Solutions Solutions Corporate Total
Solutions Solutions Corporate Total
REVENUES $ 17,450
$ 9,115 ($39 ) $ 26,526 $ 52,903 $ 27,749 ($175 ) $ 80,477
GROSS
PROFIT 4,729 3,894 7 8,630 15,588 12,802 20 28,410
OPERATING
INCOME (LOSS) $ 1,160 ($1,058 ) ($2,323 ) ($2,221
) $ 4,255 ($181 ) ($8,056 ) ($3,982 )
Three Months Ended September 30, 2014 Nine Months Ended September
30, 2014 Connected RF Connected RF Solutions Solutions Corporate
Total Solutions Solutions Corporate Total
REVENUES $
18,697 $ 9,283 ($48 ) $ 27,932 $ 52,409 $ 25,578 ($218 ) $ 77,769
GROSS
PROFIT 5,803 5,584 7 11,394 16,635 15,171 20 31,826
OPERATING
INCOME (LOSS) $ 2,262 $ 2,492 ($2,658 ) $ 2,096 $
5,278 $ 5,150 ($8,209 ) $ 2,219
Reconciliation of
GAAP to non-GAAP Results (unaudited)
(in thousands except per share information)
Reconciliation of
GAAP operating loss to non-GAAP operating income (a)
Three Months Ended September 30, Nine Months Ended
September 30,
2015
2014
2015
2014
Operating Income (Loss) ($2,221 ) $ 2,096 ($3,982 ) $ 2,219
(a) Add: Amortization of intangible assets 1,125 465 2,963
1,503 Restructuring: -Cost of Goods Sold 132 0 246 0 -Restructuring
413 0 852 0 TelWorx investigation: -General & Administrative 9
188 100 686 Legal settlement: -General & Administrative 0 0 0
75 Stock Compensation: -Cost of Goods Sold 115 112 244 315
-Engineering 99 149 244 509 -Sales & Marketing 230 155 370 491
-General & Administrative 206 315
534 1,263 2,329 1,384 5,553 4,842
Non-GAAP Operating Income $ 108
$ 3,480 $ 1,571 $ 7,061 % of revenue 0.4 %
12.5 % 2.0 % 9.1 %
Reconciliation of
GAAP net loss to non-GAAP net income (b)
Three Months Ended September 30, Nine Months Ended
September 30,
2015
2014
2015
2014
Net Income (Loss) ($1,062 ) $ 2,218 ($748 ) $ 2,617
Adjustments: (a) Non-GAAP adjustment to operating income 2,329
1,384 5,553 4,842 (b) Other income related to SEC investigation of
TelWorx (10 ) (188 ) (99 ) (660 ) (b) Legal Settlement - Amendment
to Nexgen APA (500 ) 0 (2,660 ) 0 (b) Legal Settlement - other 0 0
0 (75 ) (b) Income Taxes (649 ) (545 ) (738 )
(932 ) 1,170 651 2,056 3,175
Non-GAAP Net Income $ 108 $ 2,869 $ 1,308 $
5,792
Non-GAAP Earning per Share: Basic $ 0.01
$ 0.16 $ 0.07 $ 0.32 Diluted $ 0.01 $ 0.16 $ 0.07 $ 0.32
Weighed Average Shares: Basic 17,626 18,112 18,059 18,155
Diluted 17,809 18,271 18,428 18,346
This schedule reconciles the Company's
GAAP operating loss and GAAP net loss 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 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 September 30, 2015 Nine Months Ended September
30, 2015 Connected RF Connected RF Solutions Solutions Corporate
Total Solutions Solutions Corporate Total
Operating Income (Loss) $ 1,160 ($1,058 ) ($2,323 ) ($2,221
) $ 4,255 ($181 ) ($8,056 ) ($3,982 ) Add: Amortization of
intangible assets 195 930 0 1,125 655 2,308 0 2,963 TelWorx
investigation: -General & Administrative 0 0 9 9 0 0 100 100
Restructuring: -Cost of Goods Sold 132 0 0 132 246 0 0 246
-Restructuring charges 113 300 0 413 538 314 0 852 Stock
Compensation: -Cost of Goods Sold 40 75 0 115 54 190 0 244
-Engineering (5 ) 104 0 99 55 189 0 244 -Sales & Marketing 88
142 0 230 173 197 0 370 -General & Administrative 16
44 146 206 6
43 485 534 579 1,595 155 2,329
1,727 3,241 585 5,553
Non-GAAP Operating Income (Loss) $ 1,739
$ 537 ($2,168 ) $ 108 $ 5,982 $ 3,060
($7,471 ) $ 1,571 Three Months Ended September
30, 2014 Nine Months Ended September 30, 2014 Connected RF
Connected RF Solutions Solutions Corporate Total Solutions
Solutions Corporate Total
Operating Income
(Loss) $ 2,262 $ 2,492 ($2,658 ) $ 2,096 $ 5,278 $ 5,150
($8,209 ) 2,219 Add: Amortization of intangible assets 261
204 0 465 891 612 0 1,503 TelWorx investigation: -General &
Administrative 0 0 188 188 0 0 686 686 Legal settlement: -General
& Administrative 0 0 0 0 0 0 75 75 Stock Compensation: -Cost of
Goods Sold 58 54 0 112 157 158 0 315 -Engineering 63 86 0 149 229
280 0 509 -Sales & Marketing 122 33 0 155 401 90 0 491 -General
& Administrative 54 31 230
315 202 98 963
1,263 558 408 418 1,384 1,880 1,238 1,724 4,842
Non-GAAP
Operating Income (Loss) $ 2,820 $ 2,900 ($2,240 )
$ 3,480 $ 7,158 $ 6,388 ($6,485 ) $ 7,061
This schedule reconciles the Company's
GAAP operating income (loss) by segment to its non-GAAP operating
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.
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PCTEL, Inc.John SchoenCFO(630) 372-6800orJack SellerPublic
Relations(630)372-6800Jack.seller@pctel.com
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