PC Tel (PCTI) 8-K PCTEL Achieves $26.7 Million in Fourth Quarter Revenue

Exhibit 99.1

 

PCTEL Achieves $26.7 Million in Fourth Quarter Revenue

$96.7 Million for the Year

BLOOMINGDALE, Ill. – March 8, 2017 – PCTEL, Inc. (Nasdaq:PCTI), a leader in Performance Critical TELecom solutions, announced its 2016 fourth quarter and full year results.

Highlights

• Revenue of $26.7 million in the quarter, a 2% increase over the same period last year. $96.7 million in revenue for the year, a decrease of 9% as compared to 2015.

• Gross profit margin of 37.4% in the quarter compared to 35.5%for the same period last year. Gross profit margin of 36.4% for the year, compared to 34.9% in 2015.

• Net loss of $0.33 per sharein the quarter, compared to a net loss of $0.05 per share in the same period last year. Net loss of $1.09 per share for the year, compared to a net loss of $0.09 last year. 2016 results include non-cash expenses for intangible asset impairments and the establishment of a deferred tax asset valuation allowance which cost $0.35 per share in the quarter and $1.00 per share for the 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 financial statements is provided later in the press release.

• Non-GAAP net income of $0.08 per share in the quarter compared to $0.04 for the same period last year, and $0.20 per share for the year compared to $0.11 in 2015. The non-cash expenses for intangible asset impairments and the establishment of a deferred tax asset valuation allowance are responsible for most of difference between GAAP & non-GAAP results.

• Adjusted EBITDA margin as a percent of revenue in the quarter of 9% compared to 6% for the same period last year, and 7% for the year compared to 5% in 2015.

• $33.3 million of cash and short-term investments at December 31, 2016, an increase of approximately $2.1 million from the preceding quarter. The Company generated free cash flow of approximately $3.0 million for the quarter (11% of revenue) and $8.5 million for the year (9% of revenue).

“Strong small cell antenna demand coupled with scanning receiver sales contributed to improved revenue and gross profit margin for the quarter,” said David Neumann, PCTEL’s CEO. “The densification of wireless networks and expanding applications across IoT will continue to provide opportunities for PCTEL antennas and test and measurement solutions.”

Exhibit 99.1

CONFERENCE CALL / WEBCAST  

PCTEL’s management team will discuss the Company’s results today at 8:15 a.m. ET.The call can be accessed by dialing (888) 782-2072 (U.S. / Canada) or (706) 679-6397 (International), conference ID: 47845844. 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: 47845844.

About PCTEL

PCTEL delivers Performance Critical TELecom technology solutions to the wireless industry. We are the leading global supplier of antennas and wireless network testing solutions. PCTEL Connected Solutions designs and manufactures precision antennas. PCTEL 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). PCTEL RF Solutions provides test tools and engineering services that improve the performance of wireless networks globally. Mobile operators, neutral hosts, and equipment manufacturers rely on PCTEL to analyze, design, and optimize next generation wireless networks.

For more information, please visit the following websites.

PCTEL Corporate: http://www.pctel.com/

PCTEL Connected Solutions: http://www.antenna.com/

PCTEL RF Solutions: http://rfsolutions.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, new products and features, growth of our Connected Solutions and RF Solutions businesses, and anticipated demand for our small cell, broadband, and test and measurement solutions 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 actual growth in the APAC region, impact of IoT on capacity and coverage demand, customer demand for these types of products and services generally, growth and continuity in PCTEL’s vertical markets, 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.

# # #

Exhibit 99.1

For further information contact:

John Schoen	Michael Rosenberg
CFO	Director of Marketing
PCTEL, Inc.	PCTEL, Inc.
(630) 372-6800	(301) 444-2046
	public.relations@pctel.com

Exhibit 99.1

PCTEL, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
	December 31,			December 31,
	2016			2015
ASSETS
Cash and cash equivalents	$	14,855		$	7,055
Short-term investment securities		18,456			24,728
Accounts receivable, net of allowance for doubtful accounts of $273 and $314 at    December 31, 2016 and December 31, 2015, respectively		19,101			21,001
Inventories, net		14,442			17,596
Prepaid expenses and other assets		1,548			1,586
Total current assets		68,402			71,966
Property and equipment, net		12,609			13,839
Goodwill		3,332			3,332
Intangible assets, net		3,275			11,378
Deferred tax assets, net		4,558			13,155
Other noncurrent assets		36			40
TOTAL ASSETS	$	92,212		$	113,710
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable	$	6,073		$	6,735
Accrued liabilities		7,177			6,190
Total current liabilities		13,250			12,925
Other long-term liabilities		391			388
Total liabilities		13,641			13,313
Stockholders’ equity:
Common stock, $0.001 par value, 100,000,000 shares authorized, 17,335,122 and    17,654,236 shares issued and outstanding at December 31, 2016 and December 31, 2015,    respectively		17			18
Additional paid-in capital		134,480			135,714
Accumulated deficit		(55,544	)		(35,320	)
Accumulated other comprehensive loss		(382	)		(15	)
Total stockholders’ equity		78,571			100,397
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	92,212		$	113,710

Exhibit 99.1

PCTEL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
(in thousands, except per share data)
		Three Months Ended						Year Ended
		December 31,						December 31,
		2016			2015			2016			2015
	REVENUES	$	26,709		$	26,138		$	96,713		$	106,615
	COST OF REVENUES		16,728			16,859			61,507			69,354
	GROSS PROFIT		9,981			9,279			35,206			37,261
	OPERATING EXPENSES:
	Research and development		2,577			2,699			10,158			11,205
	Sales and marketing		3,885			3,639			13,810			14,196
	General and administrative		2,893			2,887			12,051			12,399
	Amortization of intangible assets		222			889			1,651			3,426
	Impairment of goodwill and other intangible assets		1,061			161			5,785			161
	Restructuring expenses		10			778			664			1,630
	Total operating expenses		10,648			11,053			44,119			43,017
	OPERATING LOSS		(667	)		(1,774	)		(8,913	)		(5,756	)
	Other income, net		63			504			112			3,287
	LOSS BEFORE INCOME TAXES		(604	)		(1,270	)		(8,801	)		(2,469	)
	Expense (benefit) for income taxes		4,677			(450	)		8,834			(901	)
	NET LOSS	$	(5,281	)	$	(820	)	$	(17,635	)	$	(1,568	)
	Net Loss per Share:
	Basic	$	(0.33	)	$	(0.05	)	$	(1.09	)	$	(0.09	)
	Diluted	$	(0.33	)	$	(0.05	)	$	(1.09	)	$	(0.09	)
	Weighted Average Shares:
	Basic		16,194			16,820			16,151			17,737
	Diluted		16,194			16,820			16,151			17,737
	Cash dividend per share	$	0.05		$	0.05		$	0.20		$	0.20

Exhibit 99.1

PCTEL, INC.
P&L INFORMATION BY SEGMENT (unaudited)
(in thousands)
	Three Months Ended December 31, 2016											Year Ended December 31, 2016
	Connected Solutions		RF Solutions			Corporate			Total			Connected Solutions		RF Solutions			Corporate			Total
REVENUES	$	18,147	$	8,574		$	(12	)	$	26,709		$	65,763	$	31,126		$	(176	)	$	96,713
GROSS PROFIT		5,671		4,288			22			9,981			20,706		14,485			15			35,206
OPERATING (LOSS) INCOME	$	2,177	$	(509	)	$	(2,335	)	$	(667	)	$	7,804	$	(6,738	)	$	(9,979	)	$	(8,913	)
	Three Months Ended December 31, 2015											Year Ended December 31, 2015
	Connected Solutions		RF Solutions			Corporate			Total			Connected Solutions		RF Solutions			Corporate			Total
REVENUES	$	16,675	$	9,506		$	(43	)	$	26,138		$	69,579	$	37,255		$	(219	)	$	106,615
GROSS PROFIT		4,877		4,389			13			9,279			20,426		16,803			32			37,261
OPERATING (LOSS) INCOME	$	675	$	(8	)	$	(2,441	)	$	(1,774	)	$	5,040	$	(298	)	$	(10,498	)	$	(5,756	)

Exhibit 99.1

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 December 31,						Year Ended December 31,
		2016			2015			2016			2015
	Operating Loss	$	(667	)	$	(1,774	)	$	(8,913	)	$	(5,756	)
(a)	Add:
	Amortization of intangible assets
	-Cost of revenues		167			167			666			595
	-Operating expenses		222			889			1,651			3,426
	Impairment of goodwill and other intangible assets		1,061			161			5,785			161
	Restructuring:
	-Cost of revenues		0			42			0			288
	-Operating expenses		10			778			664			1,630
	TelWorx investigation:
	-General & Administrative		0			7			5			107
	Stock Compensation:
	-Cost of revenues		86			125			411			369
	-Engineering		125			175			650			419
	-Sales & Marketing		142			(132	)		627			238
	-General & Administrative		446			304			2,297			838
			2,259			2,516			12,756			8,071
	Non-GAAP Operating Income	$	1,592		$	742		$	3,843		$	2,315
	% of revenue		6.0	%		2.8	%		4.0	%		2.2	%
Reconciliation of GAAP net loss to non-GAAP net (loss) income (b)
		Three Months Ended December 31,						Year Ended December 31,
		2016			2015			2016			2015
	Net Loss	$	(5,281	)	$	(820	)	$	(17,635	)	$	(1,568	)
	Adjustments:
(a)	Non-GAAP adjustment to operating loss		2,259			2,516			12,756			8,071
(b)	Other income related to SEC investigation of TelWorx		0			(1	)		(5	)		(102	)
(b)	Legal Settlement - Amendment to Nexgen APA		0			(500	)		0			(3,160	)
(b)	Income Taxes		4,379			(584	)		8,123			(1,322	)
			6,638			1,431			20,874			3,487
	Non-GAAP Net Income	$	1,357		$	611		$	3,239		$	1,919
	Non-GAAP Earning per Share:
	Basic	$	0.08		$	0.04		$	0.20		$	0.11
	Diluted	$	0.08		$	0.04		$	0.20		$	0.11

Exhibit 99.1

Weighed Average Shares:
Basic	16,194	16,820	16,151	17,737
Diluted	16,439	16,969	16,325	18,257
This schedule reconciles the Company's GAAP operating loss and GAAP net loss to its non-GAAP operating (loss) income and
non-GAAP net (loss) 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.

Exhibit 99.1

Reconciliation of GAAP to non-GAAP SEGMENT INFORMATION (unaudited) (a)
(in thousands)
	Three Months Ended December 31, 2016												Year Ended December 31, 2016
	Connected Solutions			RF Solutions			Corporate			Total			Connected Solutions			RF Solutions			Corporate			Total
Operating (Loss) Income	$	2,177		$	(509	)	$	(2,335	)	$	(667	)	$	7,804		$	(6,738	)	$	(9,979	)	$	(8,913	)
Add:
Amortization of intangible assets:
-Cost of revenues		0			167			0			167			0			666			0			666
-Operating expenses		39			183			0			222			191			1,460			0			1,651
Impairment of intangible assets		0			1,061			0			1,061			0			5,785			0			5,785
Restructuring expenses		0			10			0			10			44			547			73			664
TelWorx investigation:
-General & Administrative		0			0			0			0			0			0			5			5
Stock Compensation:
-Cost of revenues		43			43			0			86			178			233			0			411
-Engineering		48			77			0			125			172			478			0			650
-Sales & Marketing		98			44			0			142			435			192			0			627
-General & Administrative		51			77			318			446			209			339			1,749			2,297
		279			1,662			318			2,259			1,229			9,700			1,827			12,756
Non-GAAP Operating (Loss) Income	$	2,456		$	1,153		$	(2,017	)	$	1,592		$	9,033		$	2,962		$	(8,152	)	$	3,843
	Three Months Ended December 31, 2015												Year Ended December 31, 2015
	Connected Solutions			RF Solutions			Corporate			Total			Connected Solutions			RF Solutions			Corporate			Total
Operating (Loss) Income	$	675		$	(8	)	$	(2,441	)	$	(1,774	)	$	5,040		$	(298	)	$	(10,498	)	$	(5,756	)
Add:
Amortization of intangible assets:
-Cost of revenues		0			167			0			167			39			556			0			595
-Operating expenses		195			694			0			889			811			2,615			0			3,426
Impairment of goodwill					161						161						161						161
Restructuring expenses
-Cost of revenues		42			0			0			42			288			0			0			288
-Restructuring charges		755			23			0			778			1,293			337			0			1,630
TelWorx investigation:
-General & Administrative		0			0			7			7			0			0			107			107
Stock Compensation:
-Cost of Goods Sold		28			97			0			125			82			287			0			369
-Engineering		49			126			0			175			104			315			0			419
-Sales & Marketing		88			(220	)		0			(132	)		261			(23	)		0			238
-General & Administrative		(18	)		70			252			304			(12	)		113			737			838

Exhibit 99.1

		1,139		1,118		259			2,516		2,866		4,361		844			8,071
Non-GAAP Operating (Loss) Income	$	1,814	$	1,110	$	(2,182	)	$	742	$	7,906	$	4,063	$	(9,654	)	$	2,315
This schedule reconciles the Company's GAAP operating income (loss) by segment to its non-GAAP operating (loss) 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.

Exhibit 99.1

PCTEL, Inc.
Reconciliation of GAAP operating loss to Adjusted EBITDA (a)
(in thousands)
		Three Months Ended December 31,						Year Ended December 31,
		2016			2015			2016			2015
	Operating Loss	$	(667	)	$	(1,774	)	$	(8,913	)	$	(5,756	)
(a)	Add:
	Depreciation and amortization		1,134			1,844			5,467			7,106
	Restructuring - cost of revenues		0			42			0			288
	Restructuring - operating expenses		10			778			664			1,630
	Stock compensation expenses		799			472			3,986			1,864
	Impairment of goodwill and other intangible assets		1,061			161			5,785			161
	TelWorx investigation- operating expenses		0			7			5			107
	Adjusted EBITDA	$	2,337		$	1,530		$	6,994		$	5,400
	% of revenue		8.7	%		5.9	%		7.2	%		5.1	%
	This schedule reconciles the Company's GAAP operating 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.
	(a) Adjusted EBITDA is defined as net income before interest, income taxes, depreciation and amortization.  These adjustments reflect
	depreciation, amortization of intangible assets, stock compensation expenses, restructuring expenses, and general and administrative
	expenses associated with the SEC investigation of TelWorx.