PCTI
$5.10
Pc-Tel
$.13
2.62%
Earnings Details
3rd Quarter September 2016
Thursday, October 27, 2016 4:30:01 PM
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Summary

Pc-Tel (PCTI) Recent Earnings

Pc-Tel (PCTI) reported 3rd Quarter September 2016 earnings of $0.03 per share on revenue of $24.7 million. The consensus earnings estimate was $0.01 per share on revenue of $24.3 million. Revenue fell 6.9% compared to the same quarter a year ago.

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
$0.03
Earnings Whisper
-
Consensus Estimate
$0.01
Reported Revenue
$24.7 Mil
Revenue Estimate
$24.3 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

PCTEL Achieves $24.7 Million in Third Quarter Revenue

PCTEL, Inc. (PCTI), a leader in Performance Critical Telecom solutions, announced its 2016 third quarter results.

Quarter Highlights

$24.7 million in revenue for the quarter, a decrease of seven percent from the same period last year. The Company saw a two percent sequential quarterly increase in revenue from the second quarter.

GAAP gross profit margin of 36 percent in the quarter compared to 32 percent for the same period last year.

GAAP operating margin of negative one percent for the quarter compared to operating margin of negative eight percent for the same period last year.

GAAP net income of $0.01 per diluted share compared to a net loss of $(0.06) per diluted share for the same period last year.

Non-GAAP operating profit and net income are measures the company uses to reflect the results of its core earnings. The Company’s reporting of Non-GAAP net income excludes expenses for restructuring, gain or loss on sale of assets, stock based compensation, amortization and impairment of intangible assets and goodwill related to the Company’s acquisitions, and non-cash related income tax expense.

Non-GAAP gross margin of 37 percent in the quarter, compared to 33 percent for the same period last year.

Non-GAAP operating margin of five percent in the quarter, compared to less than one percent for the same period last year.

Non-GAAP net income of $1.1 million, or $0.07 per diluted share in the quarter, compared to $108,000 or $0.01 per diluted share in the same period last year.

$31.2 million of cash and short-term investments at September 30, 2016, an increase of approximately $1.9 million from the preceding quarter. During the quarter the Company generated free cash flow of approximately $2.5 million.

"We made great progress this past quarter in our Connected Solutions business. Small cell, indoor and outdoor broadband, and the Internet of Things (IoT) continue to drive our engineering and sales investments," said Marty Singer, PCTEL’s Chairman and CEO. "We saw growing strength in our China and APAC markets and we anticipate continued interest in our IBflex(R) and test and measurement solutions as the IoT demands greater capacity and coverage," added Singer.

CONFERENCE CALL / WEBCAST

PCTEL’s management team will discuss the Company’s results today at 5:15 PM ET. The call can be accessed by dialing (888) 782-2072 (U.S. / Canada) or (706) 679-6397 (International), conference ID: 96080850. 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: 96080850.

About PCTEL

PCTEL, a global provider of RF expertise, delivers Performance Critical Telecom solutions to the wireless industry. PCTEL benchmarks and optimizes wireless networks with its data tools, engineering services, and RF products. PCTEL’s antennas and site solutions are vital elements for networks serving SCADA, fleet management, health care, public safety, and education.

PCTEL’s RF Solutions products and services improve the performance of wireless networks globally. PCTEL’s performance critical products include its SeeGull MXflex(R), IBflex(R), and EXflex(R) scanning receivers. PCTEL tools also include CW transmitters, signal analyzers, and the SeeWave(R) interference locating system. PCTEL’s SeeHawk(R) software portfolio includes SeeHawk(R) Touch, SeeHawk(R) Collect, SeeHawk Engage(TM), SeeHawk Engage+(TM), SeeHawk Engage(TM) Lite, SeeHawk(TM) Studio, and SeeHawk(TM) Analytics. PCTEL provides specialized staffing, interference management and performance critical RF engineering services for wireless networks.

PCTEL Connected Solutions designs and delivers performance critical antennas and site solutions for public and private wireless networks globally. PCTEL’s performance critical antenna solutions include high rejection and high performance GNSS products and innovative broadband LTE and Wi-Fi solutions for fixed and mobile applications, including transit, in-building, and small cell networks. In addition, PCTEL provides a broad portfolio of LMR and Yagi antennas. We leverage our design, logistics, and support capabilities to deliver performance critical antenna and site solutions into carrier, railroad, utility applications, oil and gas, and other vertical markets.

PCTEL’s products are sold worldwide through direct and indirect channels. For more information, please visit the company’s web sites: pctel.com, antenna.com, or 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, PCTEL’s ability to successfully grow its network analytics and network engineering services and its wireless products business generally, and its ability to 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, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(unaudited)
September 30,
December 31,
2016
2015
ASSETS
Cash and cash equivalents
$
13,105
$
7,055
Short-term investment securities
18,099
24,728
Accounts receivable, net of allowance for doubtful accounts of $252
17,997
21,001
and $314 at
September 30, 2016 and December 31, 2015, respectively
Inventories, net
14,705
17,596
Prepaid expenses and other assets
1,300
1,586
Total current assets
65,206
71,966
Property and equipment, net
13,123
13,839
Goodwill
3,332
3,332
Intangible assets, net
4,724
11,378
Deferred tax assets, net
9,264
13,155
Other noncurrent assets
38
40
TOTAL ASSETS
$
95,687
$ 113,710
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable
$
5,307
$
6,735
Accrued liabilities
5,542
6,190
Total current liabilities
10,849
12,925
Other long-term liabilities
447
388
Total liabilities
11,296
13,313
Stockholders’ equity:
Common stock, $0.001 par value, 100,000,000 shares authorized,
17
18
17,350,796 and
17,654,236 shares issued and outstanding at September 30, 2016 and
December 31, 2015,
respectively
Additional paid-in capital
134,778
135,714
Accumulated deficit
(50,263 )
(35,320 )
Accumulated other comprehensive loss
(141 )
(15 )
Total stockholders’ equity
84,391
100,397
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
$
95,687
$ 113,710
PCTEL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
(in thousands, except per share data)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2016
2015
2016
2015
REVENUES
$ 24,687
$ 26,526
$
70,004
$ 80,477
COST OF REVENUES
15,750
18,063
44,779
52,495
GROSS PROFIT
8,937
8,463
25,225
27,982
OPERATING EXPENSES:
Research and development
2,451
2,863
7,581
8,506
Sales and marketing
3,396
3,603
9,925
10,558
General and administrative
2,890
2,847
9,157
9,513
Amortization of intangible assets
250
958
1,430
2,535
Impairment of intangible assets
0
0
4,724
0
Restructuring expenses
113
413
654
852
Total operating expenses
9,100
10,684
33,471
31,964
OPERATING LOSS
(163 )
(2,221 )
(8,246 )
(3,982 )
Other income, net
35
534
49
2,783
LOSS BEFORE INCOME TAXES
(128 )
(1,687 )
(8,197 )
(1,199 )
(Benefit) expense for income taxes
(303 )
(625 )
4,157
(451 )
NET INCOME (LOSS)
$
175
$ (1,062 )
$ (12,354 )
$
(748 )
Net Income (Loss) per Share:
Basic
$
0.01
$
(0.06 )
$
(0.77 )
$
(0.04 )
Diluted
$
0.01
$
(0.06 )
$
(0.77 )
$
(0.04 )
Weighted Average Shares:
Basic
16,106
17,626
16,136
18,059
Diluted
16,245
17,626
16,136
18,059
Cash dividend per share
$
0.05
$
0.05
$
0.15
$
0.15
PCTEL, INC.
P&L INFORMATION BY SEGMENT (unaudited)
(in thousands)
Three Months Ended September 30, 2016
Nine Months Ended September 30, 2016
Connected
Connected
Solutions
RF Solutions
Corporate
Total
Solutions
RF Solutions
Corporate
Total
REVENUES
$
17,136
$
7,609
($58 )
$
24,687
$
47,616
$
22,552
($164 )
$
70,004
GROSS PROFIT
5,771
3,179
(13 )
8,937
15,035
10,197
(7 )
25,225
OPERATING (LOSS) INCOME
$
2,530
($330 )
($2,363 )
($163 )
$
5,625
($6,227 )
($7,644 )
($8,246 )
Three Months Ended September 30, 2015
Nine Months Ended September 30, 2015
Connected
Connected
Solutions
RF Solutions
Corporate
Total
Solutions
RF Solutions
Corporate
Total
REVENUES
$
17,450
$
9,115
($39 )
$
26,526
$
52,903
$
27,749
($175 )
$
80,477
GROSS PROFIT
4,729
3,727
7
8,463
15,549
12,413
20
27,982
OPERATING (LOSS) INCOME
$
1,160
($1,058 )
($2,323 )
($2,221 )
$
4,255
($181 )
($8,056 )
($3,982 )
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 September 30,
Nine Months Ended September 30,
2016
2015
2016
2015
Operating Loss
($163 )
($2,221 )
($8,246 )
($3,982 )
(a) Add:
Amortization of intangible assets
-Cost of revenues
167
167
500
428
-Operating expenses
250
958
1,430
2,535
Impairment of intangible assets
0
0
4,724
0
Restructuring:
-Cost of revenues
0
132
0
246
-Operating expenses
113
413
654
852
TelWorx investigation:
-General & Administrative
0
9
5
100
Stock Compensation:
-Cost of revenues
61
115
325
244
-Engineering
183
99
525
244
-Sales & Marketing
158
230
486
370
-General & Administrative
542
206
1,851
534
1,474
2,329
10,500
5,553
Non-GAAP Operating Income
$
1,311
$
108
$
2,254
$
1,571
% of revenue
5.3 %
0.4 %
3.2 %
2.0 %
Reconciliation of GAAP net loss to
non-GAAP net (loss) income (b)
Three Months Ended September 30,
Nine Months Ended September 30,
2016
2015
2016
2015
Net Loss (Income)
$
175
($1,062 )
($12,354 )
($748 )
Adjustments:
(a)
Non-GAAP adjustment to operating (loss) income
1,474
2,329
10,500
5,553
(b)
Other income related to SEC investigation of TelWorx
0
(10 )
(5 )
(99 )
(b)
Legal Settlement - Amendment to Nexgen APA
0
(500 )
0
(2,660 )
(b)
Income Taxes
(545 )
(649 )
3,743
(738 )
929
1,170
14,238
2,056
Non-GAAP Net Income
$
1,104
$
108
$
1,884
$
1,308
Non-GAAP Earning per Share:
Basic
$
0.07
$
0.01
$
0.12
$
0.07
Diluted
$
0.07
$
0.01
$
0.12
$
0.07
Weighed Average Shares:
Basic
16,106
17,626
16,136
18,059
Diluted
16,245
17,809
16,276
18,428
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.
Reconciliation of GAAP to non-GAAP
SEGMENT INFORMATION (unaudited) (a)
(in thousands)
Three Months Ended September 30, 2016
Nine Months Ended September 30, 2016
Connected
RF
Connected
RF
Solutions
Solutions
Corporate
Total
Solutions
Solutions
Corporate
Total
Operating (Loss) Income
$
2,530
($330 )
($2,363 )
($163 )
$
5,625
($6,227 )
($7,644 )
($8,246 )
Add:
Amortization of intangible assets:
-Cost of revenues
0
167
0
167
0
500
0
500
-Operating expenses
39
211
0
250
153
1,277
0
1,430
Impairment of intangible assets
0
0
0
0
0
4,724
0
4,724
Restructuring expenses
0
113
0
113
44
537
73
654
TelWorx investigation:
-General & Administrative
0
0
0
0
0
0
5
5
Stock Compensation:
-Cost of revenues
51
10
0
61
135
190
0
325
-Engineering
52
131
0
183
124
401
0
525
-Sales & Marketing
137
21
0
158
338
148
0
486
-General & Administrative
66
93
383
542
158
262
1,431
1,851
345
746
383
1,474
952
8,039
1,509
10,500
Non-GAAP Operating (Loss) Income
$
2,875
$
416
($1,980 )
$
1,311
$
6,577
$
1,812
($6,135 )
$
2,254
Three Months Ended September 30, 2015
Nine Months Ended September 30, 2015
Connected
RF
Connected
RF
Solutions
Solutions
Corporate
Total
Solutions
Solutions
Corporate
Total
Operating (Loss) Income
$
1,160
($1,058 )
($2,323 )
($2,221 )
$
4,255
($181 )
($8,056 )
($3,982 )
Add:
Amortization of intangible assets:
-Cost of revenues
0
167
0
167
39
389
0
428
-Operating expenses
195
763
0
958
616
1,919
0
2,535
Restructuring expenses
-Cost of revenues
132
0
0
132
246
0
0
246
-Restructuring charges
113
300
0
413
538
314
0
852
TelWorx investigation:
-General & Administrative
0
0
9
9
0
0
100
100
Stock Compensation:
-Cost of Goods Sold
40
75
0
115
54
190
0
244
-Engineering
(5 )
104
0
99
55
189
0
244
-Sales & Marketing
88
142
0
230
173
197
0
370
-General & Administrative
16
44
146
206
6
43
485
534
579
1,595
155
2,329
1,727
3,241
585
5,553
Non-GAAP Operating (Loss) Income
$
1,739
$
537
($2,168 )
$
108
$
5,982
$
3,060
($7,471 )
$
1,571
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.
PCTEL, Inc.
Reconciliation of GAAP operating loss to
EBITDA (a)
(in thousands)
Three Months Ended September 30,
Nine Months Ended September 30,
2016
2015
2016
2015
Operating Loss
($163 )
($2,221 )
($8,246 )
($3,982 )
(a) Add:
Depreciation and amortization
1,231
1,907
4,335
5,261
Restructuring - cost of revenues
0
132
0
246
Restructuring - operating expenses
113
413
654
852
Stock compensation expenses
944
650
3,187
1,392
Impairment of intangible assets
0
0
4,724
0
TelWorx investigation- operating expenses
0
9
5
100
EBITDA
$ 2,125
$
890
$
4,659
$
3,869
% of revenue
8.6 %
3.4 %
6.7 %
4.8 %
This schedule reconciles the Company’s GAAP operating loss to
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 EBITDA when evaluating
its financial results as well as for internal planning and
forecasting purposes. EBITDA should not be viewed as a substitute for
the Company’s GAAP results.
(a) 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.

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SOURCE: PCTEL, Inc."> <Property FormalName="PrimaryTwitterHandle" Value="@PCTEL_inc

John Schoen
CFO
PCTEL, Inc.
(630) 372-6800
or
Jack Seller
Public Relations
PCTEL, Inc.
(630) 372-6800
jack.seller@pctel.com