PCTI
$5.60
Pc-Tel
$.04
.72%
Earnings Details
4th Quarter December 2016
Wednesday, March 08, 2017 7:30:00 AM
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Summary

Pc-Tel (PCTI) Recent Earnings

Pc-Tel (PCTI) reported 4th Quarter December 2016 earnings of $0.05 per share on revenue of $26.7 million. The consensus earnings estimate was $0.01 per share on revenue of $24.9 million. Revenue grew 2.2% 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
$0.05
Earnings Whisper
-
Consensus Estimate
$0.01
Reported Revenue
$26.7 Mil
Revenue Estimate
$24.9 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

PCTEL Achieves $26.7 Million in Fourth Quarter Revenue

PCTEL, Inc. (PCTI), a leader in Performance Critical TELecom solutions, announced its 2016 fourth quarter and full year results.

Highlights

Revenue of $26.7 million in the quarter, a 2% increase over the same period last year. $96.7 million in revenue for the year, a decrease of 9% as compared to 2015.

Gross profit margin of 37.4% in the quarter compared to 35.5% for the same period last year. Gross profit margin of 36.4% for the year, compared to 34.9% in 2015.

Net loss of $0.33 per share in the quarter, compared to a net loss of $0.05 per share in the same period last year. Net loss of $1.09 per share for the year, compared to a net loss of $0.09 last year. 2016 results include non-cash expenses for intangible asset impairments and the establishment of a deferred tax asset valuation allowance which cost $0.35 per share in the quarter and $1.00 per share for the year.

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 financial statements is provided later in the press release.

Non-GAAP net income of $0.08 per share in the quarter compared to $0.04 for the same period last year, and $0.20 per share for the year compared to $0.11 in 2015. The non-cash expenses for intangible asset impairments and the establishment of a deferred tax asset valuation allowance are responsible for most of difference between GAAP & non-GAAP results.

Adjusted EBITDA margin as a percent of revenue in the quarter of 9% compared to 6% for the same period last year, and 7% for the year compared to 5% in 2015.

$33.3 million of cash and short-term investments at December 31, 2016, an increase of approximately $2.1 million from the preceding quarter. The Company generated free cash flow of approximately $3.0 million for the quarter (11% of revenue) and $8.5 million for the year (9% of revenue).

"Strong small cell antenna demand coupled with scanning receiver sales contributed to improved revenue and gross profit margin for the quarter," said David Neumann, PCTEL’s CEO. "The densification of wireless networks and expanding applications across IoT will continue to provide opportunities for PCTEL antennas and test and measurement solutions."

CONFERENCE CALL / WEBCAST

PCTEL’s management team will discuss the Company’s results today at 8:15 a.m. ET. The call can be accessed by dialing (888) 782-2072 (U.S. / Canada) or (706) 679-6397 (International), conference ID: 47845844. 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: 47845844.

About PCTEL

PCTEL delivers Performance Critical TELecom technology solutions to the wireless industry. We are the leading global supplier of antennas and wireless network testing solutions. PCTEL Connected Solutions designs and manufactures precision antennas. PCTEL antennas are deployed in small cells, enterprise Wi-Fi access points, fleet management and transit systems, and in equipment and devices for the Industrial Internet of Things (IIoT). PCTEL RF Solutions provides test tools and engineering services that improve the performance of wireless networks globally. Mobile operators, neutral hosts, and equipment manufacturers rely on PCTEL to analyze, design, and optimize next generation wireless networks.

For more information, please visit the following websites.

PCTEL Corporate: http://www.pctel.com/

PCTEL Connected Solutions: http://www.antenna.com/

PCTEL RF Solutions: http://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, 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, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
December 31,
December 31,
2016
2015
ASSETS
Cash and cash equivalents
$
14,855
$
7,055
Short-term investment securities
18,456
24,728
Accounts receivable, net of allowance for doubtful accounts of $273
19,101
21,001
and $314 at
December 31, 2016 and December 31, 2015, respectively
Inventories, net
14,442
17,596
Prepaid expenses and other assets
1,548
1,586
Total current assets
68,402
71,966
Property and equipment, net
12,609
13,839
Goodwill
3,332
3,332
Intangible assets, net
3,275
11,378
Deferred tax assets, net
4,558
13,155
Other noncurrent assets
36
40
TOTAL ASSETS
$
92,212
$ 113,710
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable
$
6,073
$
6,735
Accrued liabilities
7,177
6,190
Total current liabilities
13,250
12,925
Other long-term liabilities
391
388
Total liabilities
13,641
13,313
Stockholders’ equity:
Common stock, $0.001 par value, 100,000,000 shares authorized,
17
18
17,335,122 and
17,654,236 shares issued and outstanding at December 31, 2016 and
December 31, 2015,
respectively
Additional paid-in capital
134,480
135,714
Accumulated deficit
(55,544 )
(35,320 )
Accumulated other comprehensive loss
(382 )
(15 )
Total stockholders’ equity
78,571
100,397
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
$
92,212
$ 113,710
PCTEL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
(in thousands, except per share data)
Three Months Ended
Year Ended
December 31,
December 31,
2016
2015
2016
2015
REVENUES
$ 26,709
$ 26,138
$
96,713
$ 106,615
COST OF REVENUES
16,728
16,859
61,507
69,354
GROSS PROFIT
9,981
9,279
35,206
37,261
OPERATING EXPENSES:
Research and development
2,577
2,699
10,158
11,205
Sales and marketing
3,885
3,639
13,810
14,196
General and administrative
2,893
2,887
12,051
12,399
Amortization of intangible assets
222
889
1,651
3,426
Impairment of goodwill and other intangible assets
1,061
161
5,785
161
Restructuring expenses
10
778
664
1,630
Total operating expenses
10,648
11,053
44,119
43,017
OPERATING LOSS
(667 )
(1,774 )
(8,913 )
(5,756 )
Other income, net
63
504
112
3,287
LOSS BEFORE INCOME TAXES
(604 )
(1,270 )
(8,801 )
(2,469 )
Expense (benefit) for income taxes
4,677
(450 )
8,834
(901 )
NET LOSS
$ (5,281 )
$
(820 )
$ (17,635 )
$
(1,568 )
Net Loss per Share:
Basic
$
(0.33 )
$
(0.05 )
$
(1.09 )
$
(0.09 )
Diluted
$
(0.33 )
$
(0.05 )
$
(1.09 )
$
(0.09 )
Weighted Average Shares:
Basic
16,194
16,820
16,151
17,737
Diluted
16,194
16,820
16,151
17,737
Cash dividend per share
$
0.05
$
0.05
$
0.20
$
0.20
PCTEL, INC.
P&L INFORMATION BY SEGMENT (unaudited)
(in thousands)
Three Months Ended December 31, 2016
Year Ended December 31, 2016
Connected
Connected
Solutions
RF Solutions
Corporate
Total
Solutions
RF Solutions
Corporate
Total
REVENUES
$
18,147
$
8,574
($12 )
$
26,709
$
65,763
$
31,126
($176 )
$
96,713
GROSS PROFIT
5,671
4,288
22
9,981
20,706
14,485
15
35,206
OPERATING (LOSS) INCOME
$
2,177
($509 )
($2,335 )
($667 )
$
7,804
($6,738 )
($9,979 )
($8,913 )
Three Months Ended December 31, 2015
Year Ended December 31, 2015
Connected
Connected
Solutions
RF Solutions
Corporate
Total
Solutions
RF Solutions
Corporate
Total
REVENUES
$
16,675
$
9,506
($43 )
$
26,138
$
69,579
$
37,255
($219 )
$ 106,615
GROSS PROFIT
4,877
4,389
13
9,279
20,426
16,803
32
37,261
OPERATING (LOSS) INCOME
$
675
($8 )
($2,441 )
($1,774 )
$
5,040
($298 )
($10,498 )
($5,756 )
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 December 31,
Year Ended December 31,
2016
2015
2016
2015
Operating Loss
($667 )
($1,774 )
($8,913 )
($5,756 )
(a)
Add:
Amortization of intangible assets
-Cost of revenues
167
167
666
595
-Operating expenses
222
889
1,651
3,426
Impairment of goodwill and other intangible assets
1,061
161
5,785
161
Restructuring:
-Cost of revenues
0
42
0
288
-Operating expenses
10
778
664
1,630
TelWorx investigation:
-General & Administrative
0
7
5
107
Stock Compensation:
-Cost of revenues
86
125
411
369
-Engineering
125
175
650
419
-Sales & Marketing
142
(132 )
627
238
-General & Administrative
446
304
2,297
838
2,259
2,516
12,756
8,071
Non-GAAP Operating Income
$
1,592
$
742
$
3,843
$
2,315
% of revenue
6.0 %
2.8 %
4.0 %
2.2 %
Reconciliation of GAAP net loss to
non-GAAP net (loss) income (b)
Three Months Ended December 31,
Year Ended December 31,
2016
2015
2016
2015
Net Loss
($5,281 )
($820 )
($17,635 )
($1,568 )
Adjustments:
(a)
Non-GAAP adjustment to operating loss
2,259
2,516
12,756
8,071
(b)
Other income related to SEC investigation of TelWorx
0
(1 )
(5 )
(102 )
(b)
Legal Settlement - Amendment to Nexgen APA
0
(500 )
0
(3,160 )
(b)
Income Taxes
4,379
(584 )
8,123
(1,322 )
6,638
1,431
20,874
3,487
Non-GAAP Net Income
$
1,357
$
611
$
3,239
$
1,919
Non-GAAP Earning per Share:
Basic
$
0.08
$
0.04
$
0.20
$
0.11
Diluted
$
0.08
$
0.04
$
0.20
$
0.11
Weighed Average Shares:
Basic
16,194
16,820
16,151
17,737
Diluted
16,439
16,969
16,325
18,257
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 December 31, 2016
Year Ended December 31, 2016
Connected
RF
Connected
RF
Solutions
Solutions
Corporate
Total
Solutions
Solutions
Corporate
Total
Operating (Loss) Income
$
2,177
($509 )
($2,335 )
($667 )
$
7,804
($6,738 )
($9,979 )
($8,913 )
Add:
Amortization of intangible assets:
-Cost of revenues
0
167
0
167
0
666
0
666
-Operating expenses
39
183
0
222
191
1,460
0
1,651
Impairment of intangible assets
0
1,061
0
1,061
0
5,785
0
5,785
Restructuring expenses
0
10
0
10
44
547
73
664
TelWorx investigation:
-General & Administrative
0
0
0
0
0
0
5
5
Stock Compensation:
-Cost of revenues
43
43
0
86
178
233
0
411
-Engineering
48
77
0
125
172
478
0
650
-Sales & Marketing
98
44
0
142
435
192
0
627
-General & Administrative
51
77
318
446
209
339
1,749
2,297
279
1,662
318
2,259
1,229
9,700
1,827
12,756
Non-GAAP Operating (Loss) Income
$
2,456
$
1,153
($2,017 )
$
1,592
$
9,033
$
2,962
($8,152 )
$
3,843
Three Months Ended December 31, 2015
Year Ended December 31, 2015
Connected
RF
Connected
RF
Solutions
Solutions
Corporate
Total
Solutions
Solutions
Corporate
Total
Operating (Loss) Income
$
675
($8 )
($2,441 )
($1,774 )
$
5,040
($298 )
($10,498 )
($5,756 )
Add:
Amortization of intangible assets:
-Cost of revenues
0
167
0
167
39
556
0
595
-Operating expenses
195
694
0
889
811
2,615
0
3,426
Impairment of goodwill
161
161
161
161
Restructuring expenses
-Cost of revenues
42
0
0
42
288
0
0
288
-Restructuring charges
755
23
0
778
1,293
337
0
1,630
TelWorx investigation:
-General & Administrative
0
0
7
7
0
0
107
107
Stock Compensation:
-Cost of Goods Sold
28
97
0
125
82
287
0
369
-Engineering
49
126
0
175
104
315
0
419
-Sales & Marketing
88
(220 )
0
(132 )
261
(23 )
0
238
-General & Administrative
(18 )
70
252
304
(12 )
113
737
838
1,139
1,118
259
2,516
2,866
4,361
844
8,071
Non-GAAP Operating (Loss) Income
$
1,814
$
1,110
($2,182 )
$
742
$
7,906
$
4,063
($9,654 )
$
2,315
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
Adjusted EBITDA (a)
(in thousands)
Three Months Ended December 31,
Year Ended December 31,
2016
2015
2016
2015
Operating Loss
($667 )
($1,774 )
($8,913 )
($5,756 )
(a)
Add:
Depreciation and amortization
1,134
1,844
5,467
7,106
Restructuring - cost of revenues
0
42
0
288
Restructuring - operating expenses
10
778
664
1,630
Stock compensation expenses
799
472
3,986
1,864
Impairment of goodwill and other intangible assets
1,061
161
5,785
161
TelWorx investigation- operating expenses
0
7
5
107
Adjusted EBITDA
$ 2,337
$
1,530
$
6,994
$
5,400
% of revenue
8.7 %
5.9 %
7.2 %
5.1 %
This schedule reconciles the Company’s GAAP operating 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.
(a) Adjusted 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
Michael Rosenberg
Director of Marketing
PCTEL, Inc.
(301) 444-2046
public.relations@pctel.com