PCTI PCTEL Inc

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (date of earliest event reported)

November 3, 2015

 

 

PCTEL, Inc.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware		000-27115		77-0364943
(State or Other Jurisdiction of Incorporation)		(Commission File Number)		(IRS Employer Identification No.)

471 Brighton Drive

Bloomingdale, Illinois 60108

(Address of Principal Executive Offices, including Zip Code)

(630) 372-6800

(Registrant’s telephone number, including area code)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12(b))

 

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

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Item 2.02

Results of Operations and Financial Condition

The following information is intended to be furnished under Item 2.02 of Form 8-K, “Results of Operations and Financial Condition.” This information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

On November 3, 2015, PCTEL, Inc. issued a press release regarding its financial results for its third fiscal quarter ended September 30, 2015. The full text of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

 

Item 9.01

Financial Statements and Exhibits

 

(d)

Exhibits.

 

99.1		Press release, dated November 3, 2015, of PCTEL, Inc. announcing its financial results for its third fiscal quarter ended September 30, 2015.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: November 3, 2015

 

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EXHIBIT INDEX

 

Exhibit Number		Description
Exhibit 99.1		Press release, dated November 3, 2015, of PCTEL, Inc. announcing its financial results for its third fiscal quarter ended September 30, 2015.

Exhibit 99.1

 

PCTEL Achieves $26.5 Million in Third Quarter Revenue

BLOOMINGDALE, IL. – November 3, 2015 — 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.

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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.

# # #

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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

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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

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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

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PCTEL, INC.

P&L INFORMATION BY SEGMENT (unaudited)

(in thousands)

 

		Three Months Ended September 30, 2015																Nine Months Ended September 30, 2015
		Connected Solutions				RF Solutions				Corporate				Total				Connected Solutions				RF 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 Solutions				RF Solutions				Corporate				Total				Connected Solutions				RF 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

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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.

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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 Solutions				RF Solutions				Corporate				Total				Connected Solutions				RF 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 Solutions				RF Solutions				Corporate				Total				Connected Solutions				RF 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.