PCTEL Reports $23.5 Million in Second Quarter Revenue

BLOOMINGDALE, Ill.--(BUSINESS WIRE)--Aug. 8, 2019-- PCTEL, Inc. (Nasdaq: PCTI) announced its results for the second quarter ended June 30, 2019.

Highlights

• Revenue of $23.5 million in the quarter, 9% higher compared to the prior year. The second quarter revenue was higher by 82% for the test and measurement product line and lower by 8% for the antenna product line compared to the second quarter 2018.

• Gross profit margin of 45.5% in the quarter, up 9.4% compared to gross profit margin in the prior year. The increase in the second quarter is a result of higher revenues for test and measurement products and improved profitability for antenna products.

• GAAP net income per share of $0.05 in the quarter compared to a GAAP loss of $0.07 per share in the second quarter last year.

• Non-GAAP net income and adjusted EBITDA are measures the Company uses to reflect the results of its core earnings. A reconciliation of those non-GAAP measures to our GAAP financial statements is provided later in the press release.
  • Non-GAAP net income per share of $0.13 in the quarter compared to a break-even in the second quarter last year.
  • Adjusted EBITDA margin as a percent of revenue of 13% in the quarter compared to 2% in the second quarter last year.

• $36.8 million of cash and short-term investments at June 30, 2019 and no debt.

• The Company will incur restructuring expense in the second half of fiscal year 2019 related to the transition plan for China manufacturing.

“We are pleased with the sequential revenue and gross margin growth driven by 5G scanning receiver demand and significant Industrial IoT antenna project wins and facilitated by the cost reduction and realignment actions we took over the past year,” said David Neumann, PCTEL’s CEO. “We are in the early stages of 5G and the deployment of Industrial IoT systems. PCTEL has the capabilities and resources to grow with these markets and increase value for all stakeholders.”

CONFERENCE CALL / WEBCAST

PCTEL’s management team will discuss the Company’s results today at 4:30 p.m. ET.The call can be accessed by dialing (888) 782-2072 (U.S. / Canada) or (706) 679-6397 (International), conference ID: 5497038. The call will also be webcast at http://investor.pctel.com/news-events/webcasts-presentations.

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: 5497038.

About PCTEL

PCTEL, Inc. is a leading global supplier of antennas and wireless network testing solutions. Founded in 1994, we are currently celebrating our 25th anniversary. PCTEL’s precision antennas are deployed in small cells, enterprise Wi-Fi access points, fleet management and transit systems, and in equipment and devices for the Industrial Internet of Things (IIoT). We offer in-house design, testing, radio integration, and manufacturing capabilities for our customers. PCTEL’s test and measurement tools improve the performance of wireless networks globally, with a focus on LTE, public safety, and emerging 5G technologies. Network operators, neutral hosts, and equipment manufacturers rely on our scanning receivers and testing solutions to analyze, design, and optimize their networks.

For more information, please visit our website at https://www.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, growth of our antenna solutions and test and measurement businesses, the impact of our transition plan for manufacturing in China and our 2018 cost reduction actions, the anticipated demand for certain products including those related to public safety, the Industrial IoT and the rollout of 5G, the impact of tariffs on certain imports from China, and the anticipated growth of public and private wireless systems 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 impact of data densification and IoT on capacity and coverage demand, impact of 5G, customer demand for these types of products and services generally including demand from customers in China, growth and continuity in PCTEL’s defined market segments, and PCTEL’s ability to grow its wireless products business and create, protect and implement new technologies and solutions. 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 is a registered trademark of PCTEL, Inc. © 2019 PCTEL, Inc. All rights reserved.

 

PCTEL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
		June 30,				December 31,
		2019				2018
ASSETS
Cash and cash equivalents		$	4,066			$	4,329
Short-term investment securities			32,694				30,870
Accounts receivable, net of allowances of $99 and $63 at June 30, 2019 and December 31, 2018, respectively			16,108				15,864
Inventories, net			13,140				12,848
Prepaid expenses and other assets			1,412				1,416
Total current assets			67,420				65,327
Property and equipment, net			11,536				12,138
Goodwill			3,332				3,332
Intangible assets, net			574				1,029
Other noncurrent assets			1,291				45
TOTAL ASSETS		$	84,153			$	81,871
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable		$	5,881			$	6,083
Accrued liabilities			7,384				5,801
Total current liabilities			13,265				11,884
Long-term liabilities			759				381
Total liabilities			14,024				12,265
Stockholders’ equity:
Common stock, $0.001 par value, 100,000,000 shares authorized, 18,417,701 and 18,271,249 shares issued and outstanding at June 30, 2019 and December 31, 2018, respectively			18				18
Additional paid-in capital			133,753				133,859
Accumulated deficit			(63,431	)			(64,055	)
Accumulated other comprehensive loss			(211	)			(216	)
Total stockholders’ equity			70,129				69,606
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	84,153			$	81,871

PCTEL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
(in thousands, except per share data)
			Three Months Ended							Six Months Ended
			June 30,							June 30,
			2019			2018				2019			2018
	REVENUES		$	23,499		$	21,582			$	44,090		$	43,313
	COST OF REVENUES			12,805			13,783				24,737			27,650
	GROSS PROFIT			10,694			7,799				19,353			15,663
	OPERATING EXPENSES:
	Research and development			3,006			3,053				6,009			5,993
	Sales and marketing			3,097			3,075				5,895			6,102
	General and administrative			3,914			3,149				7,167			6,143
	Amortization of intangible assets			48			124				122			248
	Restructuring expenses			0			0				0			0
	Total operating expenses			10,065			9,401				19,193			18,486
	OPERATING INCOME (LOSS)			629			(1,602	)			160			(2,823	)
	Other income, net			320			209				481			260
	INCOME (LOSS) BEFORE INCOME TAXES			949			(1,393	)			641			(2,563	)
	Expense (benefit) for income taxes			8			(167	)			17			(479	)
	NET INCOME (LOSS)		$	941		$	(1,226	)		$	624		$	(2,084	)
	Net Income (Loss) per Share:
	Basic		$	0.05		$	(0.07	)		$	0.04		$	(0.12	)
	Diluted		$	0.05		$	(0.07	)		$	0.03		$	(0.12	)
	Weighted Average Shares:
	Basic			17,828			17,142				17,725			17,099
	Diluted			17,934			17,142				17,916			17,099
	Cash dividend per share		$	0.055		$	0.055			$	0.110		$	0.110

PCTEL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
		Six Months Ended June 30,
.		2019				2018
Operating Activities:
Net income (loss)		$	624			$	(2,084	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and Amortization			1,425				1,381
Intangible asset amortization			455				581
Stock-based compensation			2,328				1,786
Loss on disposal of property and equipment			30				(5	)
Restructuring costs			(14	)			(20	)
Bad debt provision			11				124
Deferred tax provision			0				(390	)
Changes in operating assets and liabilities:
Accounts receivable			(234	)			473
Inventories			(268	)			(813	)
Prepaid expenses and other assets			354				330
Accounts payable			(231	)			2,743
Income taxes payable			(46	)			(38	)
Other accrued liabilities			675				(2,107	)
Deferred revenue			(40	)			16
Net cash provided by operating activities			5,069				1,977
Investing Activities:
Capital expenditures			(986	)			(1,519	)
Proceeds from disposal of property and equipment			0				14
Purchases of investments			(26,823	)			(22,712	)
Redemptions/maturities of short-term investments			24,999				26,307
Net cash (used in) provided by investing activities			(2,810	)			2,090
Financing Activities:
Proceeds from issuance of common stock			338				364
Payment of withholding tax on stock-based compensation			(743	)			(289	)
Principle payments on finance leases			(52	)			(57	)
Cash dividends			(2,029	)			(1,999	)
Net cash used in financing activities			(2,486	)			(1,981	)
Net (decrease) increase in cash and cash equivalents			(227	)			2,086
Effect of exchange rate changes on cash			(36	)			(42	)
Cash and cash equivalents, beginning of period			4,329				5,559
Cash and Cash Equivalents, End of Period		$	4,066			$	7,603

PCTEL, INC.
REVENUE AND GROSS PROFIT BY PRODUCT LINE (unaudited)
(in thousands)
		Three Months Ended June 30, 2019								Six Months Ended June 30, 2019
		Antenna Products		Test & Measurement Products		Corporate		Total		Antenna Products		Test & Measurement Products		Corporate		Total
REVENUES		$16,014		$7,526		($41)		$23,499		$31,102		$13,062		($74)		$44,090
GROSS PROFIT		$5,569		$5,112		$13		$10,694		$10,430		$8,898		$25		$19,353
GROSS PROFIT %		34.8%		67.9%				45.5%		33.5%		68.1%				43.9%
		Three Months Ended June 30, 2018								Six Months Ended June 30, 2018
		Antenna Products		Test & Measurement Products		Corporate		Total		Antenna Products		Test & Measurement Products		Corporate		Total
REVENUES		$17,478		$4,135		($31)		$21,582		$35,243		$8,134		($64)		$43,313
GROSS PROFIT		$5,031		$2,755		$13		$7,799		$10,229		$5,426		$8		$15,663
GROSS PROFIT %		28.8%		66.6%				36.1%		29.0%		66.7%				36.2%

Reconciliation of GAAP to non-GAAP Results (unaudited)
(in thousands except per share information)
Reconciliation of GAAP operating loss to non-GAAP operating income (loss)
			Three Months Ended June 30,				Six Months Ended June 30,
			2019		2018		2019		2018
	Operating Income (Loss)		$629		($1,602)		$160		($2,823)
(a)	Add:
	Amortization of intangible assets
	-Cost of revenues		167		167		333		333
	-Operating expenses		48		124		122		248
	Restructuring		0		0		0		0
	Stock Compensation:
	-Cost of revenues		102		93		205		181
	-Engineering		177		159		350		297
	-Sales & marketing		182		157		363		288
	-General & administrative		983		710		1,410		1,021
			1,659		1,410		2,783		2,368
	Non-GAAP Operating Income (Loss)		$2,288		($192)		$2,943		($455)
	% of revenue		9.7%		-0.9%		6.7%		-1.1%
Reconciliation of GAAP net loss to non-GAAP net income (loss)
			Three Months Ended June 30,				Six Months Ended June 30,
			2019		2018		2019		2018
	Net Income (Loss)		$941		($1,226)		$624		($2,084)
	Adjustments:
(a)	Non-GAAP adjustment to operating income (loss)		1,659		1,410		2,783		2,368
	Income Taxes		(201)		(168)		(257)		(463)
			1,458		1,242		2,526		1,905
	Non-GAAP Net Income (Loss)		$2,399		$16		$3,150		($179)
	Non-GAAP Income (Loss) per Share:
	Basic		$0.13		$0.00		$0.18		($0.01)
	Diluted		$0.13		$0.00		$0.18		($0.01)
	Weighed Average Shares:
	Basic		17,828		17,142		17,725		17,099
	Diluted		17,934		17,554		17,916		17,099
	This schedule reconciles the Company's GAAP operating income (loss) to its non-GAAP operating income (loss). 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.
	The adjustments to GAAP operating income (loss) (a) consist of stock compensation expense and amortization of intangible assets. The adjustments to GAAP net income (loss) include the non-GAAP adjustments to operating income (loss) as well as adjustments for (b) non-cash income tax expense.

PCTEL, Inc.
Reconciliation of GAAP operating loss to Adjusted EBITDA
(unaudited, in thousands)
					Three Months Ended June 30,				Year Ended June 30,
					2019		2018		2019		2018
	Operating Income (Loss)				$629		($1,602)		$160		($2,823)
	Add:
	Depreciation and amortization				713		707		1,425		1,381
	Intangible amortization				215		291		455		581
	Stock compensation expenses				1,444		1,119		2,328		1,787
	Adjusted EBITDA				$3,001		$515		$4,368		$926
	% of revenue				12.8%		2.4%		9.9%		2.1%
	This schedule reconciles the Company's GAAP operating income (loss) to Adjusted EBITDA. The Company believes that 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 Adjusted EBITDA when evaluating its financial results as well as for internal planning and forecasting purposes. Adjusted EBITDA should not be viewed as a substitute for the Company's GAAP results.
	Adjusted EBITDA is defined as net income before interest, income taxes, depreciation and amortization. The adjustments on this schedule consist of depreciation, amortization of intangible assets, and stock compensation expenses

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20190808005769/en/

Source: PCTEL, Inc.

Kevin McGowan
CFO
PCTEL, Inc.
(630) 372-6800

Michael Rosenberg
Director of Marketing
PCTEL, Inc.
(301) 444-2046
public.relations@pctel.com