PCTI
$5.57
Pc-Tel
Earnings Details
Quarter December 2019
Thursday, March 5, 2020 4:01:00 PM
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Summary

Pc-Tel (PCTI) Recent Earnings

Pc-Tel (PCTI) reported Quarter December 2019 earnings of $0.12 per share on revenue of $22.9 million. The consensus earnings estimate was $0.07 per share on revenue of $24.0 million. Revenue grew 7.8% on a year-over-year basis.

PCTEL, Inc., provides propagation and optimization solutions for the wireless industry. It designs and develops software-based radios for wireless network optimization and develops and distributes innovative antenna solutions.

Results
Reported Earnings
$0.12
Earnings Whisper
-
Consensus Estimate
$0.07
Reported Revenue
$22.9 Mil
Revenue Estimate
$24.0 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

PCTEL Reports Fourth Quarter and Full Year Financial Results

BLOOMINGDALE, Ill.--(BUSINESS WIRE)--PCTEL, Inc. (Nasdaq: PCTI) announced its results for the fourth quarter ended December 31, 2019.

Highlights

  • Revenue of $22.9 million in the quarter and $90.6 million for the year, 8% higher in the quarter and 9% higher for the year compared to 2018. For the fourth quarter, revenue was higher by 55% for the test and measurement product line and lower by 7% for the antenna product line compared to 2018. For the year, revenue was higher by 68% for the test and measurement product line and lower by 5% for the antenna product line.
  • Gross profit margin of 50.3% in the quarter and 45.8% for the year, up 9.4% in the quarter and 8.3% for the year compared to the gross profit margin in 2018. The increase in the both the fourth quarter and the year is a result of higher revenues for test and measurement products and a favorable mix within antenna products.
  • GAAP net income per share of $0.10 in the quarter and $0.21 for the year compared to a GAAP loss of $0.53 per share in the quarter and a GAAP loss of $0.75 for the year in 2018. The 2019 GAAP results include a restructuring charge of approximately $0.01 per share in the quarter and $0.03 per share for the year related to the transition plan for China manufacturing. In 2018, approximately $0.51 per share of the GAAP net loss in the quarter and $0.54 of the GAAP net loss for the year were attributable to non-cash income tax expense related to the Company’s valuation allowance for deferred tax assets.
  • Non-GAAP net income and adjusted EBITDA are measures the Company uses to measure 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 diluted share of $0.16 in the quarter and $0.47 for the year compared to Non-GAAP net income per diluted share of $0.03 in the quarter and negative $0.04 for the year in 2018.
    • Adjusted EBITDA as a percent of revenue of 16.3% in the quarter and 12.4% for the year compared to 5.8% in the quarter and 1.8% for the year in 2018.
  • $39.7 million of cash and short-term investments and no debt at December 31, 2019 compared to $35.2 million and no debt at December 31, 2018.

“We are pleased with our performance in 2019 and year over year growth driven mainly by the success of our 5G testing solutions,” said David Neumann, PCTEL’s CEO. “Antennas and radio solutions in our intelligent transportation and industrial IoT market segments are expected to drive growth over the long term as customers demand ultra-reliable connectivity for their IoT business critical systems.”

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 (844) 407-9500 (United States/Canada) or (862) 298-0850 (International). 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 (877) 481-4010 (United States /Canada), or (919) 882-2331 (International), PIN number: 33268.

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 inside and outside China , the anticipated demand for certain products including those related to public safety, the Industrial IoT, 5G and intelligent transportation, 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. In addition, there is uncertainty about the spread of the COVID19 virus and the impact it will have on PCTEL’s operations, the demand for PCTEL’s products, global supply chains and economic activity in general. 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. © 2020 PCTEL, Inc. All rights reserved.

 

PCTEL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

(in thousands, except share data)

 

December 31,

December 31,

2019

2018

ASSETS

Cash and cash equivalents

$

7,094

 

$

4,329

 

Short-term investment securities

 

32,556

 

 

30,870

 

Accounts receivable, net of allowances of $104 and $63 at December 31, 2019 and
December 31, 2018, respectively

 

17,380

 

 

15,864

 

Inventories, net

 

11,935

 

 

12,848

 

Prepaid expenses and other assets

 

1,842

 

 

1,416

 

Total current assets

 

70,807

 

 

65,327

 

 
Property and equipment, net

 

11,985

 

 

12,138

 

Goodwill

 

3,332

 

 

3,332

 

Intangible assets, net

 

144

 

 

1,029

 

Other noncurrent assets

 

2,969

 

 

45

 

TOTAL ASSETS

$

89,237

 

$

81,871

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

Accounts payable

$

3,190

 

$

6,083

 

Accrued liabilities

 

9,382

 

 

5,801

 

Total current liabilities

 

12,572

 

 

11,884

 

Long-term liabilities

 

3,315

 

 

381

 

Total liabilities

 

15,887

 

 

12,265

 

Stockholders’ equity:
Common stock, $0.001 par value, 100,000,000 shares authorized, 18,611,289 and 18,271,249
shares issued and outstanding at December 31, 2019 and December 31, 2018, respectively

 

19

 

 

18

 

Additional paid-in capital

 

133,954

 

 

133,859

 

Accumulated deficit

 

(60,305

)

 

(64,055

)

Accumulated other comprehensive loss

 

(318

)

 

(216

)

Total stockholders’ equity

 

73,350

 

 

69,606

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

89,237

 

$

81,871

 

 

PCTEL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

(in thousands, except per share data)

 

Three Months Ended

Year Ended

December 31,

December 31,

2019

2018

2019

2018

 
REVENUES

$

22,897

$

21,241

 

$

90,617

$

82,979

 

COST OF REVENUES

 

11,385

 

12,543

 

 

49,105

 

51,898

 

GROSS PROFIT

 

11,512

 

8,698

 

 

41,512

 

31,081

 

OPERATING EXPENSES:
Research and development

 

3,048

 

2,830

 

 

12,272

 

11,851

 

Sales and marketing

 

3,424

 

3,024

 

 

12,254

 

12,083

 

General and administrative

 

3,071

 

3,184

 

 

13,452

 

12,355

 

Amortization of intangible assets

 

49

 

85

 

 

219

 

418

 

Restructuring expenses

 

213

 

0

 

 

507

 

0

 

Total operating expenses

 

9,805

 

9,123

 

 

38,704

 

36,707

 

OPERATING INCOME (LOSS)

 

1,707

 

(425

)

 

2,808

 

(5,626

)

Other income, net

 

108

 

78

 

 

982

 

564

 

INCOME (LOSS) BEFORE INCOME TAXES

 

1,815

 

(347

)

 

3,790

 

(5,062

)

Expense (benefit) for income taxes

 

17

 

8,788

 

 

40

 

7,827

 

NET INCOME (LOSS)

$

1,798

$

(9,135

)

$

3,750

$

(12,889

)

 
Net Income (Loss) per Share:
 
Basic

$

0.10

$

(0.53

)

$

0.21

$

(0.75

)

Diluted

$

0.10

$

(0.53

)

$

0.21

$

(0.75

)

 
Weighted Average Shares:
Basic

 

18,034

 

17,361

 

 

17,853

 

17,186

 

Diluted

 

18,461

 

17,361

 

 

18,159

 

17,186

 

 
Cash dividend per share

$

0.055

$

0.055

 

$

0.220

$

0.220

 

 

PCTEL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

(unaudited, in thousands)

 

Year Ended December 31,

.

2019

2018

 
Operating Activities:
Net income (loss) from continuing operations

$

3,750

 

$

(12,889

)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation

 

2,870

 

 

2,806

 

Intangible asset amortization

 

885

 

 

1,084

 

Stock-based compensation

 

4,133

 

 

3,261

 

Loss on disposal/sale of property and equipment

 

97

 

 

19

 

Restructuring costs

 

(33

)

 

(39

)

Bad debt provision

 

(2

)

 

265

 

Deferred tax provision

 

0

 

 

7,817

 

Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable

 

(1,532

)

 

2,362

 

Inventories

 

873

 

 

(336

)

Prepaid expenses and other assets

 

385

 

 

198

 

Accounts payable

 

(2,841

)

 

1,095

 

Income taxes payable

 

(22

)

 

(3

)

Other accrued liabilities

 

2,263

 

 

(1,657

)

Deferred revenue

 

92

 

 

(40

)

Net cash provided by operating activities

 

10,918

 

 

3,943

 

Investing Activities:
Capital expenditures

 

(2,263

)

 

(2,754

)

Proceeds from disposal of property and equipment

 

0

 

 

15

 

Purchase of investments

 

(48,245

)

 

(44,591

)

Redemptions/maturities of short-term investments

 

46,559

 

 

46,220

 

Net cash used in finance activities

 

(3,949

)

 

(1,110

)

Financing Activities:
Proceeds from issuance of common stock

 

1,183

 

 

686

 

Payment of withholding tax on stock-based compensation

 

(1,152

)

 

(578

)

Principle payments on finance leases

 

(99

)

 

(125

)

Cash dividends

 

(4,068

)

 

(4,015

)

Net cash used in financing activities

 

(4,136

)

 

(4,032

)

 
Net increase (decrease) in cash and cash equivalents

 

2,833

 

 

(1,199

)

Effect of exchange rate changes on cash

 

(68

)

 

(31

)

Cash and cash equivalents, beginning of period

 

4,329

 

 

5,559

 

Cash and Cash Equivalents, End of Period

$

7,094

 

$

4,329

 

 
PCTEL, INC.
REVENUE AND GROSS PROFIT BY PRODUCT LINE (unaudited)
(in thousands)
 

Three Months Ended December 31, 2019

Year Ended December 31, 2019

Antenna

Products

Test &

Measurement

Products

Corporate

Total

Antenna

Products

Test &

Measurement

Products

Corporate

Total

REVENUES

$15,143

$7,814

($60)

$22,897

$62,708

$28,115

($206)

$90,617

 
GROSS PROFIT

$5,699

$5,806

$7

$11,512

$21,841

$19,640

$31

$41,512

 
GROSS PROFIT %

37.6%

74.3%

50.3%

34.8%

69.9%

45.8%

 

Three Months Ended December 31, 2018

Year Ended December 31, 2018

Antenna

Products

Test &

Measurement

Products

Corporate

Total

Antenna

Products

Test &

Measurement

Products

Corporate

Total

REVENUES

$16,209

$5,042

($10)

$21,241

$66,328

$16,733

($82)

$82,979

 
GROSS PROFIT

$5,423

$3,257

$18

$8,698

$20,157

$10,883

$41

$31,081

 
GROSS PROFIT %

33.5%

64.6%

40.9%

30.4%

65.0%

37.5%

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 December 31,

Year Ended December 31,

 

2019

2018

 

2019

2018

 
 
Operating Income (Loss)

$

1,707

 

($425

)

$

2,808

 

($5,626

)

 
(a)Add:
Amortization of intangible assets
-Cost of revenues

 

167

 

167

 

 

666

 

666

 

-Operating expenses

 

49

 

85

 

 

219

 

418

 

Restructuring

 

213

 

0

 

 

507

 

0

 

Stock Compensation:
-Cost of revenues

 

116

 

93

 

 

408

 

224

 

-Engineering

 

145

 

158

 

 

652

 

620

 

-Sales & marketing

 

151

 

114

 

 

673

 

576

 

-General & administrative

 

475

 

324

 

 

2,401

 

1,841

 

 

1,316

 

941

 

 

5,526

 

4,345

 

Non-GAAP Operating Income (Loss)

$

3,023

 

$516

 

$

8,334

 

($1,281

)

% of revenue

 

13.2

%

2.4

%

 

9.2

%

-1.5

%

 

Reconciliation of GAAP net loss to non-GAAP net income (loss)

 

Three Months Ended December 31,

Year Ended December 31,

 

2019

2018

 

2019

2018

 
Net Income (Loss)

$

1,798

 

($9,135

)

$

3,750

 

($12,889

)

 
Adjustments:

(a)

Non-GAAP adjustment to operating income (loss)

 

1,316

 

941

 

 

5,526

 

4,345

 

Income Taxes

 

(233

)

8,740

 

 

(705

)

7,884

 

 

1,083

 

9,681

 

 

4,821

 

12,229

 

Non-GAAP Net Income (Loss)

$

2,881

 

$546

 

$

8,571

 

($660

)

 
Non-GAAP Income (Loss) per Share:
Basic

$

0.16

 

$0.03

 

$

0.48

 

($0.04

)

Diluted

$

0.16

 

$0.03

 

$

0.47

 

($0.04

)

 
Weighed Average Shares:
Basic

 

18,034

 

17,361

 

 

17,853

 

17,186

 

Diluted

 

18,461

 

17,361

 

 

18,159

 

17,186

 

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.

 

PCTEL, Inc.

Reconciliation of GAAP operating loss to Adjusted EBITDA

(unaudited, in thousands)

 

Three Months Ended December 31,

Year Ended December 31,

 

2019

 

2018

 

 

2019

 

2018

 

 
Operating Income (Loss)

$

1,707

 

($425

)

$

2,808

 

($5,626

)

 
Add:
Depreciation and amortization

 

719

 

718

 

 

2,870

 

2,806

 

Intangible amortization

 

216

 

252

 

 

885

 

1,084

 

Restructuring expenses

 

213

 

0

 

 

507

 

0

 

Stock compensation expenses

 

887

 

689

 

 

4,134

 

3,261

 

Adjusted EBITDA

$

3,742

 

$1,234

 

$

11,204

 

$1,525

 

% of revenue

 

16.3

%

5.8

%

 

12.4

%

1.8

%

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. The adjustments on this schedule consist of depreciation, amortization of intangible assets, and stock compensation expenses

Kevin McGowan
CFO
PCTEL, Inc.
(630) 339-2051

Suzanne Cafferty
Senior Director, Corporate Marketing
PCTEL, Inc.
(301) 339-2105
public.relations@pctel.com

Source: PCTEL, Inc.