EXHIBIT 99.1
FOR IMMEDIATE RELEASE
For further information contact:
John Schoen Jack Seller
COO/CFO Director, Marketing & PR
PCTEL, Inc. PCTEL, Inc.
(773) 243-3000 (773) 243-3016
jack_seller@pctel.com
PCTEL POSTS $15.3 MILLION IN FOURTH QUARTER REVENUE
WIRELESS REVENUE UP 305% OVER FOURTH QUARTER LAST YEAR
2004 REVENUE CLIMBS TO $48.2 MILLION
CHICAGO, IL - FEBRUARY 22, 2004 - PCTEL, Inc. (NASDAQ: PCTI), a global leader in
simplifying mobility, today announced financial results for the fourth quarter
ended December 31, 2004. Total revenue was $15.3 million for the fourth quarter
of 2004, including $14.2 million of wireless product revenue and $1.1 million of
licensing revenue. This compares to $18.3 million of revenue in the fourth
quarter 2003, which included $3.5 million of wireless revenue and $14.8 million
of licensing revenue. The increase in wireless revenue was primarily due to the
acquisition of MAXRAD in the first quarter 2004 and several antenna product
lines from Andrew Corporation (NASDAQ: ANDW) in the fourth quarter 2004.
Net income for the fourth quarter of 2004 was $1.1 million, or $0.05 per diluted
share, compared to net income of $8.0 million, or $0.39 per diluted share
reported in the fourth quarter of 2003. Both the fourth quarter of 2004 and 2003
contained significant one-time items that positively impacted net income. The
fourth quarter of 2004 included a $3.2 million reversal of a modem royalty
expense reserve made possible by the settlement of the company's patent
litigation with 3Com. The fourth quarter of 2003 included $13.5 million in net
licensing revenue and gross profit related to an intellectual property
settlement with Intel.
The company previously announced the acquisition of several antenna product
lines from Andrew Corporation (NASDAQ: ANDW). That transaction closed on October
29, 2004 and the results from these operations for November and December are
reported in the fourth quarter 2004 results.
The company realized strong sales for its Wi-Fi Antennas and its new CLARIFY(TM)
Interference Management System (IMS). During the quarter, the company released
its
secure Roaming Client for wireless connectivity and realized software licensing
revenue through carrier sales.
For the year ended December 31, 2004, the company's total revenue was $48.2
million, comprised of $42.3 million of wireless revenue and $5.9 million of
licensing revenue. In 2003 the company had $45.6 million of total revenue,
comprised of $9.6 million of wireless revenue, $18.1 million of licensing
revenue and $17.9 million of HSP modem revenue. The HSP modem product line was
sold to Conexant in May of 2003. Net loss for 2004 was $(2.7) million, or
$(0.14) per diluted share, compared to net income of $5.9 million, or $0.28
cents per diluted share in 2003.
"We are excited about our strong fourth quarter results," said Marty Singer,
PCTEL's Chairman and CEO. "We achieved consistency in our software sales,
established CLARIFY as a leading cellular optimization tool, and immediately
integrated our recent antenna product acquisitions into our core operations. Our
efforts to simplify mobility now extend to both RFID and satellite radio as we
continue to expand our antenna product line. We look forward to continuing our
corporate development activities and increasing revenue in 2005," added Singer.
Cash and short-term investments on December 31, 2004 were $84.1 million, a
decrease of $18.2 million from the third quarter of 2004. The decrease is
primarily attributed to the purchase of the Andrew product lines, the purchase
of a new building for the Antenna Product Group, and the stock buyback program.
The company repurchased 135,400 of its shares during the quarter just ended. As
of December 31, 2004, the company has repurchased 2.0 million out of the 2.5
million shares authorized by the Board of Directors under its share buyback
program.
In connection with its evaluation and testing activities under Section 404 of
the Sarbanes Oxley Act of 2002, the company has concluded that a control
deficiency in its internal controls over financial reporting as of December 31,
2004 constitutes a "material weakness" within the meaning of the Public Company
Accounting Oversight Board Auditing Standard No. 2. The material weakness
relates to the company's accounting for income taxes in the fourth quarter as
part of the year-end reporting process. The financial statements presented have
been appropriately adjusted and reflect the correct income tax expense and
income tax accrual. Because the error relates to our tax accounting, it has no
effect on our business or customers, and has no impact on our revenues, our cash
flows or our financial condition. To remediate the deficiency, the company has
engaged an outside tax consultant and is implementing an internal training
program to enhance the capabilities of its internal tax personnel. Management
will disclose the material weakness in internal controls in its 2004 annual Form
10-K and indicate that the company's internal controls over financial reporting
were not effective as of year-end. In addition, the company expects that the
material
weakness will result in an adverse opinion by the company's independent
registered public accountants on the effectiveness of the company's internal
controls.
CONFERENCE CALL / WEBCAST
The company will hold a conference call at 4:00 PM CST (5:00 PM EST) today with
Marty Singer, chairman and chief executive officer, and John Schoen, chief
operating officer and chief financial officer. The session will include brief
remarks, and can be accessed by calling (800) 545-9583 (U.S./Canada) or (913)
981-4910 (international).
To listen via the Internet, please visit, www.pctel.com, or
http://www.shareholder.com/pctel/MediaList.cfm
REPLAY: A replay will be available for two weeks after the call on PCTEL's web
site at www.pctel.com or by calling (888) 203-1112 (U.S./Canada) or (719)
457-0820 (international) access code: 3254384.
ABOUT PCTEL
PCTEL (NASDAQ:PCTI), founded in March 1994, is a global leader in simplifying
mobility. PCTEL's Mobility Solution Group's (http://mobilitysolutions.pctel.com)
software tools provide secure, access independent, remote connectivity. PCTEL's
RF Solution Group's (http://rfsolutions.pctel.com) portfolio of OEM receivers
and receiver-based products are used to measure and monitor cellular networks.
PCTEL's Antenna Products Group (http://antenna.pctel.com) designs, distributes,
and supports innovative antenna solutions that facilitate and simplify wireless
communications. PCTEL protects its leadership position with a portfolio of more
than 130 analog and broadband communications and wireless patents, issued or
pending, including key and essential patents for modem technology. PCTEL's
products are sold or licensed to wireless carriers, wireless ISPs, distributors,
wireless test and measurement companies, system integrators, PC manufacturers
and PC card and board manufacturers. PCTEL headquarters are located at 8725 West
Higgins Road, Suite 400, Chicago, IL 60631. Telephone: 773-243-3000. For more
information, please visit our web site at: http://www.pctel.com.
PCTEL SAFE HARBOR STATEMENT
This press release contains "forward-looking statements" as defined in the
Private Securities Litigation Reform Act of 1995. Specifically, the statements
regarding PCTEL's expectations regarding its future business prospects and the
future growth of its wireless and licensing businesses 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 ability to successfully grow the wireless products
business, the ability to implement new technologies and obtain protection for
the related intellectual property, and the risks inherent in potential
acquisitions. In addition, there is no certainty that, in connection with the
required compliance activities under Section 404 of the Sarbanes-Oxley Act of
2002, PCTEL or its independent auditors will not identify additional control
deficiencies in the company's internal controls over financial reporting,
including deficiencies that constitute additional material weaknesses within the
meaning of the accounting requirements. 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, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED, IN THOUSANDS, EXCEPT PER SHARE INFORMATION)
Three Months Ended Twelve Months Ended
December 31, December 31,
---------------------- ----------------------
2004 2003 2004 2003
-------- -------- -------- --------
REVENUES $ 15,298 $ 18,311 $ 48,221 $ 45,600
COST OF REVENUES 7,335 592 19,786 13,464
MODEM INVENTORY AND ROYALTY EXPENSE RECOVERY (3,208) - (3,208) (1,800)
-------- -------- -------- --------
GROSS PROFIT 11,171 17,719 31,643 33,936
-------- -------- -------- --------
OPERATING EXPENSES:
Research and development 2,376 1,715 8,506 7,808
Sales and marketing 2,863 1,848 10,944 7,503
General and administrative 4,243 3,092 14,402 10,387
Amortization of other intangible assets 840 343 2,972 1,124
Acquired in-process research and development - - - 1,100
Restructuring charges 129 522 (66) 3,462
Gain on sale of assets and related royalties (500) (500) (2,000) (5,476)
Stock Based Payments 385 210 1,425 958
-------- -------- -------- --------
Total operating expenses 10,336 7,230 36,183 26,866
-------- -------- -------- --------
INCOME (LOSS) FROM OPERATIONS 835 10,489 (4,540) 7,070
OTHER INCOME, NET 402 263 1,261 1,383
-------- -------- -------- --------
INCOME (LOSS) BEFORE PROVISION (BENEFIT) FOR INCOME TAXES 1,237 10,752 (3,279) 8,453
PROVISION (BENEFIT) FOR INCOME TAXES 173 2,730 (541) 2,575
-------- -------- -------- --------
NET INCOME (LOSS) $ 1,064 $ 8,022 $ (2,738) $ 5,878
======== ======== ======== ========
Basic earnings (loss) per share $ 0.05 $ 0.41 $ (0.14) $ 0.29
Shares used in computing basic earnings (loss) per share 20,064 19,722 19,857 20,145
Diluted earnings (loss) per share $ 0.05 $ 0.39 $ (0.14) $ 0.28
Shares used in computing diluted earnings (loss) per share 20,408 20,403 19,857 20,975
PCTEL, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(UNAUDITED, IN THOUSANDS)
December 31, December 31,
2004 2003
------------ ------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 83,887 $ 106,007
Restricted cash 208 278
Short-term investments - 19,177
Accounts receivable, net 10,819 3,630
Inventories, net 8,554 1,267
Prepaid expenses and other assets 2,969 1,929
--------- ---------
Total current assets 106,437 132,288
PROPERTY AND EQUIPMENT, net 9,746 1,197
GOODWILL 14,114 5,561
OTHER INTANGIBLE ASSETS, net 11,628 4,140
OTHER ASSETS 180 55
--------- ---------
TOTAL ASSETS $ 142,105 $ 143,241
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 1,085 $ 333
Accrued royalties 11 3,208
Income taxes payable 5,692 7,359
Deferred revenue 1,920 2,960
Accrued liabilities 10,140 5,739
--------- ---------
Total current liabilities 18,848 19,599
LONG-TERM LIABILITIES 334 736
--------- ---------
Total liabilities 19,182 20,335
--------- ---------
STOCKHOLDERS' EQUITY:
Common stock 21 20
Additional paid-in capital 160,180 155,548
Deferred compensation (4,422) (2,552)
Accumulated deficit (32,938) (30,201)
Accumulated other comprehensive income 82 91
--------- ---------
Total stockholders' equity 122,923 122,906
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 142,105 $ 143,241
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