Revenue increased 15% year-over-year and achieved gross profit margin of 45.8%
Strong execution for both product lines through significant orders for test & measurement products and the launch of an innovative new antenna portfolio
Recent Highlights
Neumann continued, “We recently launched a 10-in-1 combination antenna designed to perform in harsh conditions and therefore useful in numerous end markets. We have also made great progress within our test & measurement product line, securing multimillion dollar OEM orders for our leading products, the Gflex and HBflex, and launching a new product, SeeHawk™ Monitor, that will continuously monitor public safety RF performance. Finally, we have made significant advances in expanding our distribution channels globally, building on our strong foundation in the
Second Quarter Financial Results
Third Quarter 2022 Outlook
The following ranges represent our current expectations for the third quarter based upon available data and estimates.
CONFERENCE CALL / WEBCAST
PCTEL’s management team will discuss the Company’s results today at
Replay: A replay will be available for two weeks after the call on either the website listed above or by calling (877) 481-4010 (
About
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 about the Company’s expectations regarding our future financial performance; growth of our antenna and Industrial IoT business and our test & measurement business through execution of our three growth strategies; the ability of the Company to continue to innovate new products for its current product lines; the impact of the Smarteq acquisition on the Company’s ability to offer additional products, expand in the European market and through distribution channels, and generate revenue; the anticipated demand for certain products, including those related to public safety, Industrial IoT, 5G (e.g., the Gflex) and intelligent transportation; and the anticipated growth of public and private wireless systems are forward-looking statements. 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 higher than expected inflation; an economic recession in the
| CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) | ||||||||
| (in thousands, except share data) | ||||||||
|
2022 |
2021 |
|||||||
| ASSETS | ||||||||
| Cash and cash equivalents |
$ |
5,797 |
|
$ |
8,192 |
|
||
| Short-term investment securities |
|
22,276 |
|
|
22,562 |
|
||
| Accounts receivable, net of allowances of |
|
19,311 |
|
|
18,905 |
|
||
| Inventories, net |
|
14,189 |
|
|
13,691 |
|
||
| Prepaid expenses and other assets |
|
1,774 |
|
|
1,747 |
|
||
| Total current assets |
|
63,347 |
|
|
65,097 |
|
||
| Property and equipment, net |
|
10,784 |
|
|
11,949 |
|
||
| Long-term investment securities |
|
250 |
|
|
0 |
|
||
|
|
5,986 |
|
|
6,334 |
|
|||
| Intangible assets, net |
|
1,231 |
|
|
1,579 |
|
||
| Other noncurrent assets |
|
2,314 |
|
|
2,438 |
|
||
| TOTAL ASSETS |
$ |
83,912 |
|
$ |
87,397 |
|
||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Accounts payable |
$ |
5,630 |
|
$ |
5,360 |
|
||
| Accrued liabilities |
|
9,867 |
|
|
11,117 |
|
||
| Total current liabilities |
|
15,497 |
|
|
16,477 |
|
||
| Long-term liabilities |
|
3,732 |
|
|
3,999 |
|
||
| Total liabilities |
|
19,229 |
|
|
20,476 |
|
||
| Stockholders’ equity: | ||||||||
| Common stock, |
||||||||
| shares issued and outstanding at |
|
19 |
|
|
18 |
|
||
| Additional paid-in capital |
|
123,844 |
|
|
123,998 |
|
||
| Accumulated deficit |
|
(57,888 |
) |
|
(56,735 |
) |
||
| Accumulated other comprehensive loss |
|
(1,292 |
) |
|
(360 |
) |
||
| Total stockholders’ equity |
|
64,683 |
|
|
66,921 |
|
||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
$ |
83,912 |
|
$ |
87,397 |
|
||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) | |||||||||||||||
| (in thousands, except per share data) | |||||||||||||||
|
Three Months Ended |
|
Six Months Ended |
|||||||||||||
|
|
|
|
|||||||||||||
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|||||||||
| REVENUES |
$ |
24,976 |
$ |
21,681 |
|
$ |
47,518 |
|
$ |
39,388 |
|
||||
| COST OF REVENUES |
|
13,549 |
|
11,739 |
|
|
26,758 |
|
|
21,108 |
|
||||
| GROSS PROFIT |
|
11,427 |
|
9,942 |
|
|
20,760 |
|
|
18,280 |
|
||||
| OPERATING EXPENSES: | |||||||||||||||
| Research and development |
|
3,356 |
|
3,221 |
|
|
6,605 |
|
|
6,416 |
|
||||
| Sales and marketing |
|
3,908 |
|
3,388 |
|
|
7,310 |
|
|
6,151 |
|
||||
| General and administrative |
|
3,451 |
|
3,335 |
|
|
6,694 |
|
|
6,411 |
|
||||
| Amortization of intangible assets |
|
67 |
|
55 |
|
|
138 |
|
|
55 |
|
||||
| Restructuring expenses |
|
317 |
|
60 |
|
|
1,252 |
|
|
60 |
|
||||
| Total operating expenses |
|
11,099 |
|
10,059 |
|
|
21,999 |
|
|
19,093 |
|
||||
| OPERATING INCOME (LOSS) |
|
328 |
|
(117 |
) |
|
(1,239 |
) |
|
(813 |
) |
||||
| Other income (expense), net |
|
114 |
|
(45 |
) |
|
125 |
|
|
(6 |
) |
||||
| INCOME (LOSS) BEFORE INCOME TAXES |
|
442 |
|
(162 |
) |
|
(1,114 |
) |
|
(819 |
) |
||||
| Expense for income taxes |
|
31 |
|
7 |
|
|
39 |
|
|
12 |
|
||||
| NET INCOME (LOSS) |
$ |
411 |
$ |
(169 |
) |
$ |
(1,153 |
) |
$ |
(831 |
) |
||||
| Net Income (Loss) per Share: | |||||||||||||||
| Basic |
$ |
0.02 |
$ |
(0.01 |
) |
$ |
(0.06 |
) |
$ |
(0.05 |
) |
||||
| Diluted |
$ |
0.02 |
$ |
(0.01 |
) |
$ |
(0.06 |
) |
$ |
(0.05 |
) |
||||
| Weighted Average Shares: | |||||||||||||||
| Basic |
|
18,157 |
|
18,241 |
|
|
18,065 |
|
|
18,158 |
|
||||
| Diluted |
|
18,157 |
|
18,241 |
|
|
18,065 |
|
|
18,158 |
|
||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) | ||||||||
| (in thousands) | ||||||||
|
Six Months Ended |
||||||||
|
2022 |
|
2021 |
||||||
| Operating Activities: | ||||||||
| Net loss |
$ |
(1,153 |
) |
$ |
(831 |
) |
||
| Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
| Depreciation and amortization |
|
1,562 |
|
|
1,493 |
|
||
| Intangible asset amortization |
|
177 |
|
|
70 |
|
||
| Stock-based compensation |
|
1,860 |
|
|
1,657 |
|
||
| Loss on disposal of property and equipment |
|
7 |
|
|
3 |
|
||
| Restructuring costs |
|
(328 |
) |
|
45 |
|
||
| Bad debt provision |
|
17 |
|
|
(34 |
) |
||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable |
|
(614 |
) |
|
1,260 |
|
||
| Inventories |
|
(715 |
) |
|
(1,121 |
) |
||
| Prepaid expenses and other assets |
|
100 |
|
|
532 |
|
||
| Accounts payable |
|
435 |
|
|
(630 |
) |
||
| Income taxes payable |
|
(1 |
) |
|
(18 |
) |
||
| Other accrued liabilities |
|
(900 |
) |
|
624 |
|
||
| Deferred revenue |
|
(126 |
) |
|
63 |
|
||
| Net cash provided by operating activities |
|
321 |
|
|
3,113 |
|
||
| Investing Activities: | ||||||||
| Capital expenditures |
|
(420 |
) |
|
(1,266 |
) |
||
| Purchases of investments |
|
(15,587 |
) |
|
(16,058 |
) |
||
| Redemptions/maturities of short-term investments |
|
15,623 |
|
|
26,278 |
|
||
| Cash paid for acquisition, net of cash acquired |
|
0 |
|
|
(6,277 |
) |
||
| Net cash (used in) provided by investing activities |
|
(384 |
) |
|
2,677 |
|
||
| Financing Activities: | ||||||||
| Proceeds from issuance of common stock |
|
404 |
|
|
418 |
|
||
| Payment of withholding tax on stock-based compensation |
|
(396 |
) |
|
(782 |
) |
||
| Principal payments on finance leases |
|
(37 |
) |
|
(35 |
) |
||
| Purchase of common stock from repurchase program |
|
0 |
|
|
(733 |
) |
||
| Cash dividends |
|
(2,021 |
) |
|
(2,018 |
) |
||
| Net cash used in financing activities |
|
(2,050 |
) |
|
(3,150 |
) |
||
| Net (decrease) increase in cash and cash equivalents |
|
(2,113 |
) |
|
2,640 |
|
||
| Effect of exchange rate changes on cash |
|
(282 |
) |
|
24 |
|
||
| Cash and cash equivalents, beginning of period |
|
8,192 |
|
|
5,761 |
|
||
| Cash and Cash Equivalents, End of Period |
$ |
5,797 |
|
$ |
8,425 |
|
||
| Reconciliation of GAAP to Non-GAAP results (unaudited) | |||||||||||||
| (in thousands except per share information) | |||||||||||||
| Reconciliation of GAAP operating income (loss) to Non-GAAP operating income | |||||||||||||
|
Three Months Ended |
|
Six Months Ended |
|||||||||||
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|||||||
| Operating Income (Loss) |
|
|
( |
) |
( |
) |
( |
) |
|||||
| (a) | Add: | ||||||||||||
| Amortization of inventory step-up to fair value |
0 |
|
283 |
|
0 |
|
283 |
|
|||||
| Amortization of intangible assets | |||||||||||||
| -Cost of revenues |
19 |
|
15 |
|
39 |
|
15 |
|
|||||
| -Operating expenses |
67 |
|
55 |
|
138 |
|
55 |
|
|||||
| Restructuring expenses |
317 |
|
60 |
|
1,252 |
|
60 |
|
|||||
| Stock compensation expenses: | |||||||||||||
| -Cost of revenues |
31 |
|
65 |
|
96 |
|
134 |
|
|||||
| -Research and development |
172 |
|
140 |
|
308 |
|
282 |
|
|||||
| -Sales & marketing |
255 |
|
226 |
|
452 |
|
386 |
|
|||||
| -General & administrative |
628 |
|
608 |
|
1,004 |
|
855 |
|
|||||
| Acquisition related expenses |
0 |
|
121 |
|
86 |
|
304 |
|
|||||
|
1,489 |
|
1,573 |
|
3,375 |
|
2,374 |
|
||||||
| Non-GAAP Operating Income |
|
|
|
|
|
|
|
|
|||||
| % of revenue |
7.3 |
% |
6.7 |
% |
4.5 |
% |
4.0 |
% |
|||||
| Reconciliation of GAAP net loss to Non-GAAP net income | |||||||||||||
|
Three Months Ended |
|
Six Months Ended |
|||||||||||
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|||||||
| Net Income (Loss) |
|
|
( |
) |
( |
) |
( |
) |
|||||
| Adjustments: | |||||||||||||
| (a) | Non-GAAP adjustments to operating loss |
1,489 |
|
1,573 |
|
3,375 |
|
2,374 |
|
||||
| (b) | Income Taxes |
(123 |
) |
(106 |
) |
(142 |
) |
(112 |
) |
||||
|
1,366 |
|
1,467 |
|
3,233 |
|
2,262 |
|
||||||
| Non-GAAP Net Income |
|
|
|
|
|
|
|
|
|||||
| Non-GAAP Income per Share: | |||||||||||||
| Basic |
|
|
|
|
|
|
|
|
|||||
| Diluted |
|
|
|
|
|
|
|
|
|||||
| Weighed Average Shares: | |||||||||||||
| Basic |
18,157 |
|
18,241 |
|
18,065 |
|
18,158 |
|
|||||
| Diluted |
18,157 |
|
18,191 |
|
18,122 |
|
18,158 |
|
|||||
| This schedule reconciles the Company's GAAP operating income (loss) 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. | |||||||||||||
|
The adjustments to GAAP operating income (loss) (a) consist of stock compensation expense, amortization of intangible assets, restructuring expenses, and acquisition related expenses. 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. |
|||||||||||||
| REVENUE AND GROSS PROFIT BY PRODUCT LINE (unaudited) | ||||||||||||||||||||||||
| Reconciliation of GAAP Gross Profit percentage to Non-GAAP Gross Profit percentage | ||||||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||||||
| Three Months Ended |
Six Months Ended |
|||||||||||||||||||||||
| Antennas and Industrial IoT Devices |
Test & Measurement Products |
Corporate | Total | Antennas and Industrial IoT Devices |
Test & Measurement Products |
Corporate | Total | |||||||||||||||||
| REVENUES |
|
|
|
|
( |
) |
|
|
|
|
|
|
( |
) |
|
|
||||||||
| GROSS PROFIT |
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
||||||||
| GAAP GROSS PROFIT % |
32.0 |
% |
77.5 |
% |
45.8 |
% |
31.4 |
% |
76.2 |
% |
43.7 |
% |
||||||||||||
| Non-GAAP adjustments: | ||||||||||||||||||||||||
| Amortization of inventory step-up |
0.0 |
% |
0.0 |
% |
0.0 |
% |
0.0 |
% |
0.0 |
% |
0.0 |
% |
||||||||||||
| Amortization of intangible assets |
0.1 |
% |
0.0 |
% |
0.1 |
% |
0.1 |
% |
0.0 |
% |
0.1 |
% |
||||||||||||
| Stock compensation expenses |
0.3 |
% |
-0.2 |
% |
0.1 |
% |
0.2 |
% |
0.2 |
% |
0.2 |
% |
||||||||||||
| Non-GAAP GROSS PROFIT % |
32.4 |
% |
77.3 |
% |
46.0 |
% |
31.7 |
% |
76.4 |
% |
44.0 |
% |
||||||||||||
| Three Months Ended |
Six Months Ended |
|||||||||||||||||||||||
| Antennas and Industrial IoT Devices |
Test & Measurement Products |
Corporate | Total | Antennas and Industrial IoT Devices |
Test & Measurement Products |
Corporate | Total | |||||||||||||||||
| REVENUES |
|
|
|
|
( |
) |
|
|
|
|
|
|
( |
) |
|
|
||||||||
| GROSS PROFIT |
|
|
|
|
( |
) |
|
|
|
|
|
|
( |
) |
|
|
||||||||
| GROSS PROFIT % |
33.3 |
% |
75.4 |
% |
45.9 |
% |
32.7 |
% |
74.7 |
% |
46.4 |
% |
||||||||||||
| Non-GAAP adjustments: | ||||||||||||||||||||||||
| Amortization of inventory step-up |
1.8 |
% |
0.0 |
% |
1.2 |
% |
1.0 |
% |
0.0 |
% |
0.7 |
% |
||||||||||||
| Amortization of intangible assets |
0.1 |
% |
0.0 |
% |
0.1 |
% |
0.1 |
% |
0.0 |
% |
0.0 |
% |
||||||||||||
| Stock compensation expenses |
0.2 |
% |
0.5 |
% |
0.3 |
% |
0.2 |
% |
0.5 |
% |
0.4 |
% |
||||||||||||
| Non-GAAP GROSS PROFIT % |
35.4 |
% |
75.9 |
% |
47.5 |
% |
34.0 |
% |
75.2 |
% |
47.5 |
% |
||||||||||||
|
The Corporate column includes the elimination of intercompany revenues between Antennas and Industrial IoT Devices and Test & Measurement Products and other licensing revenues.
|
|
This schedule reconciles the Company's GAAP gross profit percentage to its Non-GAAP gross profit percentage. 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 adjustments on this schedule consist of amortization of intangible assets and stock compensation expenses. |
| Reconciliation of GAAP operating loss to adjusted EBITDA (unaudited) | ||||||||||||
| (in thousands) | ||||||||||||
|
Three Months Ended |
Six Months Ended |
|||||||||||
|
2022 |
2021 |
2022 |
2021 |
|||||||||
| Operating income (loss) |
|
|
( |
) |
( |
) |
( |
) |
||||
| Add: | ||||||||||||
| Amortization of inventory step-up to fair value |
0 |
|
283 |
|
0 |
|
283 |
|
||||
| Depreciation and amortization |
781 |
|
751 |
|
1,562 |
|
1,493 |
|
||||
| Intangible amortization |
86 |
|
70 |
|
177 |
|
70 |
|
||||
| Restructuring expenses |
317 |
|
60 |
|
1,252 |
|
60 |
|
||||
| Stock compensation expenses |
1,086 |
|
1,039 |
|
1,860 |
|
1,657 |
|
||||
| Acquisition related expenses |
0 |
|
121 |
|
86 |
|
304 |
|
||||
| Adjusted EBITDA |
|
|
|
|
|
|
|
|
||||
| % of revenue |
10.4 |
% |
10.2 |
% |
7.8 |
% |
7.8 |
% |
||||
| 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 and extraordinary expenses. The adjustments on this schedule consist of depreciation, amortization of intangible assets, stock compensation expenses, restructuring expenses, and acquisition related expenses. | ||||||||||||
| Reconciliation of GAAP operating expenses to Non-GAAP operating expenses (unaudited) | ||||||||||||
| (in thousands) | ||||||||||||
|
Three Months Ended |
|
Six Months Ended |
||||||||||
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||
| GAAP operating expenses |
|
|
|
|
|
|
|
|
||||
| Stock compensation expenses |
(1,055 |
) |
(974 |
) |
(1,764 |
) |
(1,523 |
) |
||||
| Amortization of intangible assets |
(67 |
) |
(55 |
) |
(138 |
) |
(55 |
) |
||||
| Restructuring expenses |
(317 |
) |
(60 |
) |
(1,252 |
) |
(60 |
) |
||||
| Acquisition related expenses |
0 |
|
(121 |
) |
(86 |
) |
(304 |
) |
||||
| Non-GAAP Operating expenses |
|
|
|
|
|
|
|
|
||||
|
This schedule reconciles the Company's GAAP operating expenses to its Non-GAAP operating expenses. 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 adjustments on this schedule consist of amortization of intangible assets, stock compensation expenses, restructuring expenses, and acquisition related expenses. |
||||||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20220809005896/en/
PCTEL Company Contacts
CFO
(630) 339-2051
Vice President, Product Management & Global Marketing
(630) 339-2107
public.relations@pctel.com
PCTEL Investor Relations Contact
312-445-2870
PCTI@alpha-ir.com
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