EXHIBIT 99.1
PCTEL Reports $23.6 Million in Third Quarter Revenue
BLOOMINGDALE, Illinois – November 7, 2019 – PCTEL, Inc. (Nasdaq: PCTI) announced its results for the third quarter ended September 30, 2019.
Highlights
| • | Revenue of $23.6 million in the quarter, 28% higher compared to the prior year. The third quarter revenue was higher by 104% for the test and measurement product line and higher by 11% for the antenna product line compared to the third quarter 2018. |
| • | Gross profit margin of 45.1% in the quarter, up 8.6% compared to gross profit margin in the prior year. The increase in the third quarter is a result of higher revenues for test and measurement products and improved profitability for antenna products. |
| • | GAAP net income per share of $0.07 in the quarter compared to a GAAP loss of $0.10 per share in the third quarter last year. In the quarter, the Company recorded restructuring expense of $0.3 million related to the transition plan for China manufacturing, which was approximately $0.02 per share. |
| • | 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 $0.14 in the quarter compared to a net loss per share of $0.06 in the third quarter last year. |
| • | Adjusted EBITDA margin as a percent of revenue of 13.1% in the quarter compared to negative 3.4% in the third quarter last year. |
| • | $38.1 million of cash and short-term investments at September 30, 2019 and no debt. |
| • | The Board of Directors approved a share repurchase program pursuant to which the Company may repurchase up to $7.0 million of its common stock, effective immediately through the end of 2020. Such purchases may be made from time to time at prevailing prices in the open market, by block purchases, in private transactions or otherwise. The repurchases will be funded with cash on hand. |
“We are pleased with our fourth consecutive quarter of solid performance with significant improvement in revenue and earnings per share compared to a year ago,” said David Neumann, PCTEL’s CEO. “Our 5G scanning receiver business continues to drive revenue growth and gross margins in a market that is in its early stages. We
are also encouraged by the number of industrial IoT applications and the need for our antenna solutions which will drive long term growth for PCTEL.”
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: 3691969. 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: 3691969.
About PCTEL
PCTEL is a leading global provider of wireless technology, including purpose-built antenna systems, Industrial IoT devices, and test and measurement solutions. Trusted by our customers for over 25 years, we solve complex wireless challenges to help organizations stay connected, transform, and grow.
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.
For further information contact:
Kevin McGowanSuzanne Cafferty
CFOSenior Director, Corporate Marketing
PCTEL, Inc.PCTEL, Inc.
(630) 339-2051(301) 339-2105
public.relations@pctel.com
PCTEL, INC. |
CONDENSED CONSOLIDATED BALANCE SHEETS |
(in thousands, except share data) |
|
| (unaudited) |
|
|
|
|
| |
|
| September 30, |
|
| December 31, |
| ||
|
| 2019 |
|
| 2018 |
| ||
ASSETS |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
| $ | 5,647 |
|
| $ | 4,329 |
|
Short-term investment securities |
|
| 32,419 |
|
|
| 30,870 |
|
Accounts receivable, net of allowances of $95 and $63 at September 30, 2019 and December 31, 2018, respectively |
|
| 17,117 |
|
|
| 15,864 |
|
Inventories, net |
|
| 13,577 |
|
|
| 12,848 |
|
Prepaid expenses and other assets |
|
| 1,087 |
|
|
| 1,416 |
|
Total current assets |
|
| 69,847 |
|
|
| 65,327 |
|
|
|
|
|
|
|
|
|
|
Property and equipment, net |
|
| 11,109 |
|
|
| 12,138 |
|
Goodwill |
|
| 3,332 |
|
|
| 3,332 |
|
Intangible assets, net |
|
| 359 |
|
|
| 1,029 |
|
Other noncurrent assets |
|
| 3,220 |
|
|
| 45 |
|
TOTAL ASSETS |
| $ | 87,867 |
|
| $ | 81,871 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
Accounts payable |
| $ | 4,992 |
|
| $ | 6,083 |
|
Accrued liabilities |
|
| 8,427 |
|
|
| 5,801 |
|
Total current liabilities |
|
| 13,419 |
|
|
| 11,884 |
|
Long-term liabilities |
|
| 2,970 |
|
|
| 381 |
|
Total liabilities |
|
| 16,389 |
|
|
| 12,265 |
|
Stockholders’ equity: |
|
|
|
|
|
|
|
|
Common stock, $0.001 par value, 100,000,000 shares authorized, 18,572,493 and 18,271,249 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively |
|
| 19 |
|
|
| 18 |
|
Additional paid-in capital |
|
| 134,034 |
|
|
| 133,859 |
|
Accumulated deficit |
|
| (62,103 | ) |
|
| (64,055 | ) |
Accumulated other comprehensive loss |
|
| (472 | ) |
|
| (216 | ) |
Total stockholders’ equity |
|
| 71,478 |
|
|
| 69,606 |
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
| $ | 87,867 |
|
| $ | 81,871 |
|
|
|
|
|
|
|
|
|
|
PCTEL, INC. |
(in thousands, except per share data) |
|
| Three Months Ended |
|
| Nine Months Ended |
| ||||||||||
|
| September 30, |
|
| September 30, |
| ||||||||||
|
| 2019 |
|
| 2018 |
|
| 2019 |
|
| 2018 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUES |
| $ | 23,630 |
|
| $ | 18,426 |
|
| $ | 67,720 |
|
| $ | 61,739 |
|
COST OF REVENUES |
|
| 12,983 |
|
|
| 11,705 |
|
|
| 37,720 |
|
|
| 39,355 |
|
GROSS PROFIT |
|
| 10,647 |
|
|
| 6,721 |
|
|
| 30,000 |
|
|
| 22,384 |
|
OPERATING EXPENSES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
| 3,214 |
|
|
| 3,028 |
|
|
| 9,223 |
|
|
| 9,021 |
|
Sales and marketing |
|
| 2,935 |
|
|
| 2,957 |
|
|
| 8,830 |
|
|
| 9,059 |
|
General and administrative |
|
| 3,214 |
|
|
| 3,029 |
|
|
| 10,381 |
|
|
| 9,172 |
|
Amortization of intangible assets |
|
| 48 |
|
|
| 85 |
|
|
| 170 |
|
|
| 333 |
|
Restructuring expenses |
|
| 295 |
|
|
| 0 |
|
|
| 295 |
|
|
| 0 |
|
Total operating expenses |
|
| 9,706 |
|
|
| 9,099 |
|
|
| 28,899 |
|
|
| 27,585 |
|
OPERATING INCOME (LOSS) |
|
| 941 |
|
|
| (2,378 | ) |
|
| 1,101 |
|
|
| (5,201 | ) |
Other income, net |
|
| 393 |
|
|
| 226 |
|
|
| 874 |
|
|
| 486 |
|
INCOME (LOSS) BEFORE INCOME TAXES |
|
| 1,334 |
|
|
| (2,152 | ) |
|
| 1,975 |
|
|
| (4,715 | ) |
Expense (benefit) for income taxes |
|
| 6 |
|
|
| (482 | ) |
|
| 23 |
|
|
| (961 | ) |
NET INCOME (LOSS) |
| $ | 1,328 |
|
| $ | (1,670 | ) |
| $ | 1,952 |
|
| $ | (3,754 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss) per Share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
| $ | 0.07 |
|
| $ | (0.10 | ) |
| $ | 0.11 |
|
| $ | (0.22 | ) |
Diluted |
| $ | 0.07 |
|
| $ | (0.10 | ) |
| $ | 0.11 |
|
| $ | (0.22 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Shares: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
| 17,922 |
|
|
| 17,234 |
|
|
| 17,792 |
|
|
| 17,145 |
|
Diluted |
|
| 18,181 |
|
|
| 17,234 |
|
|
| 18,105 |
|
|
| 17,145 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividend per share |
| $ | 0.055 |
|
| $ | 0.055 |
|
| $ | 0.155 |
|
| $ | 0.155 |
|
|
| Nine Months Ended September 30, |
| |||||
. |
| 2019 |
|
| 2018 |
| ||
|
|
|
|
|
|
|
|
|
Operating Activities: |
|
|
|
|
|
|
|
|
Net income (loss) |
| $ | 1,952 |
|
| $ | (3,754 | ) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
| 2,152 |
|
|
| 2,088 |
|
Intangible asset amortization |
|
| 670 |
|
|
| 833 |
|
Stock-based compensation |
|
| 3,246 |
|
|
| 2,572 |
|
Loss on disposal of property and equipment |
|
| 91 |
|
|
| 11 |
|
Restructuring costs |
|
| 268 |
|
|
| (28 | ) |
Bad debt provision |
|
| (3 | ) |
|
| 248 |
|
Deferred tax provision |
|
| 0 |
|
|
| (868 | ) |
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
| (1,276 | ) |
|
| 4,968 |
|
Inventories |
|
| (838 | ) |
|
| (173 | ) |
Prepaid expenses and other assets |
|
| 902 |
|
|
| 425 |
|
Accounts payable |
|
| (1,019 | ) |
|
| 255 |
|
Income taxes payable |
|
| (40 | ) |
|
| (39 | ) |
Other accrued liabilities |
|
| 1,485 |
|
|
| (2,395 | ) |
Deferred revenue |
|
| 5 |
|
|
| (43 | ) |
Net cash provided by operating activities |
|
| 7,595 |
|
|
| 4,100 |
|
Investing Activities: |
|
|
|
|
|
|
|
|
Capital expenditures |
|
| (1,366 | ) |
|
| (2,205 | ) |
Proceeds from disposal of property and equipment |
|
| 0 |
|
|
| 14 |
|
Purchases of short-term investments |
|
| (38,393 | ) |
|
| (33,978 | ) |
Redemptions/maturities of short-term investments |
|
| 36,844 |
|
|
| 34,707 |
|
Net cash used in investing activities |
|
| (2,915 | ) |
|
| (1,462 | ) |
Financing Activities: |
|
|
|
|
|
|
|
|
Proceeds from issuance of common stock |
|
| 730 |
|
|
| 686 |
|
Payment of withholding tax on stock-based compensation |
|
| (754 | ) |
|
| (301 | ) |
Principle payments on finance leases |
|
| (79 | ) |
|
| (91 | ) |
Cash dividends |
|
| (3,046 | ) |
|
| (3,007 | ) |
Net cash used in financing activities |
|
| (3,149 | ) |
|
| (2,713 | ) |
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents |
|
| 1,530 |
|
|
| (75 | ) |
Effect of exchange rate changes on cash |
|
| (213 | ) |
|
| (107 | ) |
Cash and cash equivalents, beginning of period |
|
| 4,329 |
|
|
| 5,559 |
|
Cash and Cash Equivalents, End of Period |
| $ | 5,647 |
|
| $ | 5,377 |
|
|
|
|
|
|
|
|
|
|
|
| Three Months Ended September 30, 2019 |
|
| Nine Months Ended September 30, 2019 |
| ||||||||||||||||||||||||||
| Antenna Products |
|
| Test & Measurement Products |
|
| Corporate |
|
| Total |
|
| Antenna Products |
|
| Test & Measurement Products |
|
| Corporate |
|
| Total |
| |||||||||
REVENUES |
| $ | 16,463 |
|
| $ | 7,240 |
|
| $ | (73 | ) |
| $ | 23,630 |
|
| $ | 47,565 |
|
| $ | 20,301 |
|
| $ | (146 | ) |
| $ | 67,720 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS PROFIT |
| $ | 5,712 |
|
| $ | 4,937 |
|
| $ | (2 | ) |
| $ | 10,647 |
|
| $ | 16,142 |
|
| $ | 13,834 |
|
| $ | 24 |
|
| $ | 30,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS PROFIT % |
|
| 34.7 | % |
|
| 68.2 | % |
|
|
|
|
|
| 45.1 | % |
|
| 33.9 | % |
|
| 68.1 | % |
|
|
|
|
|
| 44.3 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Three Months Ended September 30, 2019 |
|
| Nine Months Ended September 30, 2019 |
| ||||||||||||||||||||||||||
|
| Antenna Products |
|
| Test & Measurement Products |
|
| Corporate |
|
| Total |
|
| Antenna Products |
|
| Test & Measurement Products |
|
| Corporate |
|
| Total |
| ||||||||
REVENUES |
| $ | 14,877 |
|
| $ | 3,556 |
|
| $ | (7 | ) |
| $ | 18,426 |
|
| $ | 50,120 |
|
| $ | 11,691 |
|
| $ | (72 | ) |
| $ | 61,739 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS PROFIT |
| $ | 4,504 |
|
| $ | 2,201 |
|
| $ | 16 |
|
| $ | 6,721 |
|
| $ | 14,734 |
|
| $ | 7,627 |
|
| $ | 23 |
|
| $ | 22,384 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS PROFIT % |
|
| 30.3 | % |
|
| 61.9 | % |
|
|
|
|
|
| 36.5 | % |
|
| 29.4 | % |
|
| 65.2 | % |
|
|
|
|
|
| 36.3 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 September 30, |
|
| Nine Months Ended September 30, |
| |||||||||||||||||
|
|
| 2019 |
|
| 2018 |
|
| 2019 |
|
| 2018 |
| |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
| Operating Income (Loss) |
| $ | 941 |
|
| $ | (2,378 | ) |
| $ | 1,101 |
|
| $ | (5,201 | ) | |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
(a) | Add: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
| Amortization of intangible assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
| -Cost of revenues |
|
| 167 |
|
|
| 167 |
|
|
| 500 |
|
|
| 500 |
| |||||||
| -Operating expenses |
|
| 48 |
|
|
| 85 |
|
|
| 170 |
|
|
| 333 |
| |||||||
| Restructuring |
|
| 295 |
|
|
| 0 |
|
|
| 295 |
|
|
| 0 |
| |||||||
| Stock Compensation: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
| -Cost of revenues |
|
| 87 |
|
|
| (50 | ) |
|
| 292 |
|
|
| 131 |
| |||||||
| -Engineering |
|
| 157 |
|
|
| 165 |
|
|
| 507 |
|
|
| 462 |
| |||||||
| -Sales & marketing |
|
| 158 |
|
|
| 174 |
|
|
| 521 |
|
|
| 462 |
| |||||||
| -General & administrative |
|
| 515 |
|
|
| 496 |
|
|
| 1,926 |
|
|
| 1,517 |
| |||||||
|
|
|
| 1,427 |
|
|
| 1,037 |
|
|
| 4,211 |
|
|
| 3,405 |
| |||||||
| Non-GAAP Operating Income (Loss) |
| $ | 2,368 |
|
| $ | (1,341 | ) |
| $ | 5,312 |
|
| $ | (1,796 | ) | |||||||
| % of revenue |
|
| 10.0 | % |
|
| -7.3 | % |
|
| 7.8 | % |
|
| -2.9 | % | |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Reconciliation of GAAP net loss to non-GAAP net income (loss) |
| |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
|
|
| Three Months Ended September 30, |
|
| Nine Months Ended September 30, |
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| 2019 |
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| 2018 |
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| 2019 |
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| 2018 |
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| Net Income (Loss) |
| $ | 1,328 |
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| $ | (1,670 | ) |
| $ | 1,952 |
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| $ | (3,754 | ) | |||||||
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| Adjustments: |
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(a) | Non-GAAP adjustment to operating income (loss) |
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| 1,427 |
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| 1,037 |
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| 4,211 |
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| 3,405 |
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| Income Taxes |
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| (215 | ) |
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| (393 | ) |
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| (472 | ) |
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| (856 | ) | |||||||
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| 1,212 |
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| 644 |
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| 3,739 |
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| 2,549 |
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| Non-GAAP Net Income (Loss) |
| $ | 2,540 |
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| $ | (1,026 | ) |
| $ | 5,691 |
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| $ | (1,205 | ) | |||||||
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| Non-GAAP Income (Loss) per Share: |
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| Basic |
| $ | 0.14 |
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| $ | (0.06 | ) |
| $ | 0.32 |
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| $ | (0.07 | ) | |||||||
| Diluted |
| $ | 0.14 |
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| $ | (0.06 | ) |
| $ | 0.31 |
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| $ | (0.07 | ) | |||||||
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| Weighed Average Shares: |
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| Basic |
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| 17,922 |
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| 17,234 |
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| 17,792 |
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| 17,145 |
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| Diluted |
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| 18,181 |
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| 17,234 |
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| 18,105 |
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| 17,145 |
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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.
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PCTEL, Inc. |
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Reconciliation of GAAP operating loss to Adjusted EBITDA |
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(unaudited, in thousands) |
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| Three Months Ended September 30, |
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| Nine Months Ended September 30, |
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| 2019 |
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| 2018 |
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| 2019 |
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| 2018 |
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| Operating Income (Loss) |
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| $ | 941 |
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| $ | (2,378 | ) |
| $ | 1,101 |
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| $ | (5,201 | ) |
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| Add: |
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| Depreciation and amortization |
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| 727 |
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| 708 |
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| 2,151 |
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| 2,088 |
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| Intangible amortization |
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| 215 |
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| 252 |
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| 670 |
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| 833 |
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| Restructuring expenses |
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| 295 |
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| 0 |
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| 295 |
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| 0 |
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| Stock compensation expenses |
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| 917 |
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| 785 |
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| 3,246 |
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| 2,572 |
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| Adjusted EBITDA |
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| $ | 3,095 |
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| $ | (633 | ) |
| $ | 7,463 |
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| $ | 292 |
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| % of revenue |
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| 13.1 | % |
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| -3.4 | % |
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| 11.0 | % |
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| 0.5 | % |
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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.