PCTI
$8.84
Pc-Tel
$.02
.23%
Earnings Details
3rd Quarter September 2019
Thursday, November 07, 2019 4:01:00 PM
Tweet Share Watch
Summary

Pc-Tel (PCTI) Recent Earnings

Pc-Tel (PCTI) reported 3rd Quarter September 2019 earnings of $0.06 per share on revenue of $23.6 million. The consensus earnings estimate was $0.05 per share on revenue of $23.7 million. Revenue grew 28.2% 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
$0.06
Earnings Whisper
-
Consensus Estimate
$0.05
Reported Revenue
$23.6 Mil
Revenue Estimate
$23.7 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

PCTEL Reports $23.6 Million in Third Quarter Revenue

BLOOMINGDALE, Ill.--(BUSINESS WIRE)--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.

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.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
(in thousands, except per share data)
 
Three Months EndedNine 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

 

PCTEL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
 
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

 

 
PCTEL, INC.
REVENUE AND GROSS PROFIT BY PRODUCT LINE (unaudited)
(in thousands)
 
Three Months Ended September 30, 2019Nine Months Ended September 30, 2019
Antenna
Products
Test &
Measurement
Products
CorporateTotalAntenna
Products
Test &
Measurement
Products
CorporateTotal
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, 2019Nine 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,

2019

2018

2019

2018

 
Net Income (Loss)

$1,328

($1,670)

$1,952

($3,754)

 
Adjustments:
(a)Non-GAAP adjustment to operating income (loss)

1,427

1,037

4,211

3,405

Income Taxes

(215)

(393)

(472)

(856)

1,212

644

3,739

2,549

Non-GAAP Net Income (Loss)

$2,540

($1,026)

$5,691

($1,205)

 
Non-GAAP Income (Loss) per Share:
Basic

$0.14

($0.06)

$0.32

($0.07)

Diluted

$0.14

($0.06)

$0.31

($0.07)

 
Weighed Average Shares:
Basic

17,922

17,234

17,792

17,145

Diluted

18,181

17,234

18,105

17,145

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 September 30, Nine Months Ended September 30,

2019

2018

2019

2018

 
Operating Income (Loss)

$941

($2,378)

$1,101

($5,201)

 
Add:
Depreciation and amortization

727

708

2,151

2,088

Intangible amortization

215

252

670

833

Restructuring expenses

295

0

295

0

Stock compensation expenses

917

785

3,246

2,572

Adjusted EBITDA

$3,095

($633)

$7,463

$292

% of revenue

13.1%

-3.4%

11.0%

0.5%

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.