Exhibit 99.1
PCTEL Achieves $27.6 Million in Second Quarter Revenue
An Increase of Six Percent from the Same Period Last Year
BLOOMINGDALE, IL. – August 4, 2015 — PCTEL, Inc. (NASDAQ:PCTI), a leader inPerformanceCriticalTelecom solutions, announced its 2015 second quarter results.
First Quarter Highlights
$27.6 million in revenue for the quarter, an increase of six percent from the same period last year.
Gross profit margin of 35 percent in the quarter, compared to 41 percent for the same period last year.
GAAP operating margin of negative six percent for the quarter,compared to operating margin of two percent for the same period last year.
GAAP net income of $347,000 for the quarter, or $0.02 per diluted share, compared to net income of $545,000, or $0.03 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 one percent in the quarter, compared to nine percent in the same period last year.
Non-GAAP net income of $295,000 or $0.02 per diluted share in the quarter,compared to $2.0 million or $0.11 per diluted share in the same period last year.
$41.3 million of cash and short-term investments at June 30, 2015,an increase of approximately $2.4 million from the preceding quarter. Free cash flow in the quarter was $6.0 million, comprised of $6.9 million in cash flow from operations and $933,000 of capital spending. During the quarter the Company repurchased 380,000 shares of its common stock for approximately $2.8 million, paid a regular quarterly dividend of $929,000.
“As we have opened up new markets in China and expanded our field of play with network analytics and services, we have also been exposed to additional risks,” said Marty Singer, PCTEL’s Chairman and CEO. “Challenges are not new to us and we are confident in our growth in both business operations,” 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:13775111. The call will also be webcast athttp://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:13775111.
About PCTEL
PCTEL deliversPerformanceCriticalTelecom solutions. The industry relies upon PCTEL to benchmark network performance, analyze trends, and optimize wireless networks. PCTEL’s antennas and site solutions are vital elements for SCADA, oil and gas, utilities, fleet management, health care, public safety, education, small cell, and network timing.
PCTEL’sRF 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® and SeeWave™ tools. PCTEL’s sophisticated engineering services utilize these products as well as the Meridian™ network analytics portfolio (Map IQ™, Network IQ™, and Subscriber IQ™).
PCTELConnected Solutions™ designs and delivers performance critical antennas and site solutions for wireless networks globally. PCTEL’s performance critical MAXRAD® and Bluewave™ 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 site solutions into carrier, railroad, and utility applications.
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, orwww.rfsolutions.pctel.com.
PCTEL Safe Harbor Statement
This press release and our related comments in our second quarter earnings conference call contain “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Specifically, the statements regarding the 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.
# # #
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 |
PCTEL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(unaudited) | ||||||||
June 30, | December 31, | |||||||
2015 | 2014 | |||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | 16,184 | $ | 20,432 | ||||
Short-term investment securities | 25,075 | 39,577 | ||||||
Accounts receivable, net of allowance for doubtful accounts of $108 and $121 at June 30, 2015 and December 31, 2014, respectively | 21,667 | 23,874 | ||||||
Inventories, net | 17,696 | 16,358 | ||||||
Deferred tax assets, net | 2,149 | 2,281 | ||||||
Prepaid expenses and other assets | 2,131 | 1,757 | ||||||
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Total current assets | 84,902 | 104,279 | ||||||
Property and equipment, net | 14,628 | 14,842 | ||||||
Goodwill | 4,123 | 161 | ||||||
Intangible assets, net | 12,929 | 2,637 | ||||||
Deferred tax assets, net | 9,710 | 9,710 | ||||||
Other noncurrent assets | 36 | 40 | ||||||
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TOTAL ASSETS | $ | 126,328 | $ | 131,669 | ||||
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LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Accounts payable | $ | 5,811 | $ | 5,495 | ||||
Accrued liabilities | 6,961 | 10,211 | ||||||
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Total current liabilities | 12,772 | 15,706 | ||||||
Other long-term liabilities | 1,426 | 448 | ||||||
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Total liabilities | 14,198 | 16,154 | ||||||
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Stockholders’ equity: | ||||||||
Common stock, $0.001 par value, 100,000,000 shares authorized, 18,555,427 and 18,571,419 shares issued and outstanding at June 30, 2015 and December 31, 2014, respectively | 19 | 19 | ||||||
Additional paid-in capital | 143,616 | 145,462 | ||||||
Accumulated deficit | (31,646 | ) | (30,101 | ) | ||||
Accumulated other comprehensive income | 141 | 135 | ||||||
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Total stockholders’ equity | 112,130 | 115,515 | ||||||
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TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 126,328 | $ | 131,669 | ||||
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PCTEL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
(in thousands, except per share data)
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
REVENUES | $ | 27,625 | $ | 26,182 | $ | 53,951 | $ | 49,837 | ||||||||
COST OF REVENUES | 18,034 | 15,331 | 34,171 | 29,405 | ||||||||||||
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GROSS PROFIT | 9,591 | 10,851 | 19,780 | 20,432 | ||||||||||||
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OPERATING EXPENSES: | ||||||||||||||||
Research and development | 2,904 | 3,069 | 5,642 | 6,311 | ||||||||||||
Sales and marketing | 3,425 | 3,303 | 6,955 | 6,258 | ||||||||||||
General and administrative | 3,302 | 3,470 | 6,665 | 6,702 | ||||||||||||
Amortization of intangible assets | 1,185 | 464 | 1,839 | 1,038 | ||||||||||||
Restructuring charges | 440 | 0 | 440 | 0 | ||||||||||||
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Total operating expenses | 11,256 | 10,306 | 21,541 | 20,309 | ||||||||||||
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OPERATING INCOME (LOSS) | (1,665 | ) | 545 | (1,761 | ) | 123 | ||||||||||
Other income, net | 2,205 | 334 | 2,249 | 531 | ||||||||||||
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INCOME BEFORE INCOME TAXES | 540 | 879 | 488 | 654 | ||||||||||||
Expense for income taxes | 193 | 334 | 174 | 255 | ||||||||||||
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NET INCOME | $ | 347 | $ | 545 | $ | 314 | $ | 399 | ||||||||
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Net Income per Share: | ||||||||||||||||
Basic | $ | 0.02 | $ | 0.03 | $ | 0.02 | $ | 0.02 | ||||||||
Diluted | $ | 0.02 | $ | 0.03 | $ | 0.02 | $ | 0.02 | ||||||||
Weighed Average Shares: | ||||||||||||||||
Basic | 18,257 | 18,165 | 18,284 | 18,166 | ||||||||||||
Diluted | 18,408 | 18,291 | 18,498 | 18,350 | ||||||||||||
Cash dividend per share | $ | 0.05 | $ | 0.04 | $ | 0.10 | $ | 0.08 |
PCTEL, INC.
P&L INFORMATION BY SEGMENT (unaudited)
(in thousands)
Three Months Ended June 30, 2015 | Six Months Ended June 30, 2015 | |||||||||||||||||||||||||||||||
Connected Solutions | RF Solutions | Corporate | Total | Connected Solutions | RF Solutions | Corporate | Total | |||||||||||||||||||||||||
REVENUES | $ | 18,100 | $ | 9,583 | ($ | 58 | ) | $ | 27,625 | $ | 35,454 | $ | 18,634 | ($ | 137 | ) | $ | 53,951 | ||||||||||||||
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GROSS PROFIT | 5,417 | 4,173 | 1 | 9,591 | 10,861 | 8,908 | 11 | 19,780 | ||||||||||||||||||||||||
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OPERATING INCOME (LOSS) | $ | 1,498 | ($ | 347 | ) | ($ | 2,816 | ) | ($ | 1,665 | ) | $ | 3,187 | $ | 786 | ($ | 5,734 | ) | ($ | 1,761 | ) | |||||||||||
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Three Months Ended June 30, 2014 | Six Months Ended June 30, 2014 | |||||||||||||||||||||||||||||||
Connected Solutions | RF Solutions | Corporate | Total | Connected Solutions | RF Solutions | Corporate | Total | |||||||||||||||||||||||||
REVENUES | $ | 17,715 | $ | 8,574 | ($ | 107 | ) | $ | 26,182 | $ | 33,712 | $ | 16,295 | ($ | 170 | ) | $ | 49,837 | ||||||||||||||
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GROSS PROFIT | 5,716 | 5,129 | 6 | 10,851 | 10,832 | 9,587 | 13 | 20,432 | ||||||||||||||||||||||||
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OPERATING INCOME (LOSS) | $ | 1,845 | $ | 1,645 | ($ | 2,945 | ) | $ | 545 | $ | 3,015 | $ | 2,659 | ($ | 5,551 | ) | $ | 123 | ||||||||||||||
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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 June 30, | Six Months Ended June 30, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Operating Income (Loss) | ($ | 1,665 | ) | $ | 545 | ($ | 1,761 | ) | $ | 123 | ||||||
(a) Add: | ||||||||||||||||
Amortization of intangible assets | 1,185 | 464 | 1,839 | 1,038 | ||||||||||||
Restructuring: | ||||||||||||||||
-Cost of Goods Sold | 114 | 0 | 114 | 0 | ||||||||||||
-Restructuring | 440 | 0 | 440 | 0 | ||||||||||||
TelWorx investigation: | ||||||||||||||||
-General & Administrative | 54 | 263 | 91 | 498 | ||||||||||||
Legal settlement: | ||||||||||||||||
-General & Administrative | 0 | 75 | 0 | 75 | ||||||||||||
Stock Compensation: | ||||||||||||||||
-Cost of Goods Sold | 56 | 117 | 129 | 203 | ||||||||||||
-Engineering | 30 | 187 | 145 | 360 | ||||||||||||
-Sales & Marketing | (18 | ) | 189 | 140 | 336 | |||||||||||
-General & Administrative | 173 | 603 | 328 | 948 | ||||||||||||
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2,034 | 1,898 | 3,226 | 3,458 | |||||||||||||
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Non-GAAP Operating Income | $ | 369 | $ | 2,443 | $ | 1,465 | $ | 3,581 | ||||||||
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% of revenue | 1.3 | % | 9.3 | % | 2.7 | % | 7.2 | % |
Reconciliation of GAAP net loss to non-GAAP net income (b)
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Net Income | $ | 347 | $ | 545 | $ | 314 | $ | 399 | ||||||||
Adjustments: | ||||||||||||||||
(a) Non-GAAP adjustment to operating income | 2,034 | 1,898 | 3,226 | 3,458 | ||||||||||||
(b) Other income related to SEC investigation of TelWorx | (54 | ) | (252 | ) | (90 | ) | (472 | ) | ||||||||
(b) Legal Settlement - Amendment to Nexgen APA | (2,160 | ) | 0 | (2,160 | ) | 0 | ||||||||||
(b) Legal Settlement - other | 0 | (75 | ) | 0 | (75 | ) | ||||||||||
(b) Income Taxes | 128 | (107 | ) | (90 | ) | (387 | ) | |||||||||
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(52 | ) | 1,464 | 886 | 2,524 | ||||||||||||
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Non-GAAP Net Income | $ | 295 | $ | 2,009 | $ | 1,200 | $ | 2,923 | ||||||||
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Non-GAAP Earning per Share: | ||||||||||||||||
Basic | $ | 0.02 | $ | 0.11 | $ | 0.07 | $ | 0.16 | ||||||||
Diluted | $ | 0.02 | $ | 0.11 | $ | 0.06 | $ | 0.16 | ||||||||
Weighed Average Shares: | ||||||||||||||||
Basic | 18,257 | 18,165 | 18,284 | 18,166 | ||||||||||||
Diluted | 18,408 | 18,291 | 18,498 | 18,350 |
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 June 30, 2015 | Six Months Ended June 30, 2015 | |||||||||||||||||||||||||||||||
Connected Solutions | RF Solutions | Corporate | Total | Connected Solutions | RF Solutions | Corporate | Total | |||||||||||||||||||||||||
Operating Income (Loss) | $ | 1,498 | ($ | 347 | ) | ($ | 2,816 | ) | ($ | 1,665 | ) | $ | 3,187 | $ | 786 | ($ | 5,734 | ) | ($ | 1,761 | ) | |||||||||||
Add: | ||||||||||||||||||||||||||||||||
Amortization of intangible assets | 230 | 955 | 0 | 1,185 | 460 | 1,379 | 0 | 1,839 | ||||||||||||||||||||||||
TelWorx investigation: | ||||||||||||||||||||||||||||||||
-General & Administrative | 0 | 0 | 54 | 54 | 0 | 0 | 91 | 91 | ||||||||||||||||||||||||
Restructuring: | ||||||||||||||||||||||||||||||||
-Cost of Goods Sold | 114 | 0 | 0 | 114 | 114 | 0 | 0 | 114 | ||||||||||||||||||||||||
-Restructuring charges | 426 | 14 | 0 | 440 | 426 | 14 | 0 | 440 | ||||||||||||||||||||||||
Stock Compensation: | ||||||||||||||||||||||||||||||||
-Cost of Goods Sold | (22 | ) | 78 | 0 | 56 | 14 | 115 | 0 | 129 | |||||||||||||||||||||||
-Engineering | 14 | 16 | 0 | 30 | 60 | 85 | 0 | 145 | ||||||||||||||||||||||||
-Sales & Marketing | (18 | ) | 0 | 0 | (18 | ) | 85 | 55 | 0 | 140 | ||||||||||||||||||||||
-General & Administrative | (35 | ) | (21 | ) | 229 | 173 | (10 | ) | (1 | ) | 339 | 328 | ||||||||||||||||||||
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709 | 1,042 | 283 | 2,034 | 1,149 | 1,647 | 430 | 3,226 | |||||||||||||||||||||||||
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Non-GAAP Operating Income (Loss) | $ | 2,207 | $ | 695 | ($ | 2,533 | ) | $ | 369 | $ | 4,336 | $ | 2,433 | ($ | 5,304 | ) | $ | 1,465 | ||||||||||||||
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Three Months Ended June 30, 2014 | Six Months Ended June 30, 2014 | |||||||||||||||||||||||||||||||
Connected Solutions | RF Solutions | Corporate | Total | Connected Solutions | RF Solutions | Corporate | Total | |||||||||||||||||||||||||
Operating Income (Loss) | $ | 1,845 | $ | 1,645 | ($ | 2,945 | ) | $ | 545 | $ | 3,015 | $ | 2,659 | ($ | 5,551 | ) | $ | 123 | ||||||||||||||
Add: | ||||||||||||||||||||||||||||||||
Amortization of intangible assets | 260 | 204 | 0 | 464 | 630 | 408 | 0 | 1,038 | ||||||||||||||||||||||||
TelWorx investigation: | ||||||||||||||||||||||||||||||||
-General & Administrative | 0 | 0 | 263 | 263 | 0 | 0 | 498 | 498 | ||||||||||||||||||||||||
Legal settlement: | ||||||||||||||||||||||||||||||||
-General & Administrative | 0 | 0 | 75 | 75 | 0 | 0 | 75 | 75 | ||||||||||||||||||||||||
Stock Compensation: | ||||||||||||||||||||||||||||||||
-Cost of Goods Sold | 54 | 63 | 0 | 117 | 99 | 104 | 0 | 203 | ||||||||||||||||||||||||
-Engineering | 86 | 101 | 0 | 187 | 166 | 194 | 0 | 360 | ||||||||||||||||||||||||
-Sales & Marketing | 150 | 39 | 0 | 189 | 279 | 57 | 0 | 336 | ||||||||||||||||||||||||
-General & Administrative | 63 | 36 | 504 | 603 | 149 | 67 | 732 | 948 | ||||||||||||||||||||||||
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613 | 443 | 842 | 1,898 | 1,323 | 830 | 1,305 | 3,458 | |||||||||||||||||||||||||
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Non-GAAP Operating Income (Loss) | $ | 2,458 | $ | 2,088 | ($ | 2,103 | ) | $ | 2,443 | $ | 4,338 | $ | 3,489 | ($ | 4,246 | ) | $ | 3,581 | ||||||||||||||
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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. |