PCTI
$5.17
Pc-Tel
($.06)
(1.15%)
Earnings Details
2nd Quarter June 2016
Tuesday, August 02, 2016 4:30:00 PM
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Summary

Pc-Tel (PCTI) Recent Earnings

Pc-Tel (PCTI) reported 2nd Quarter June 2016 earnings of $0.03 per share on revenue of $24.2 million. The consensus earnings estimate was $0.02 per share on revenue of $23.8 million. Revenue fell 12.2% 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
$0.02
Reported Revenue
$24.2 Mil
Revenue Estimate
$23.8 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

PCTEL Achieves $24.2 Million in Second Quarter Revenue

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

Quarter Highlights

$24.2 million in revenue for the quarter, a decrease of 12 percent from the same period last year. The Company saw a 15 percent sequential quarterly increase in revenue from the first quarter.

GAAP gross profit margin of 38 percent in the quarter compared to 34 percent for the same period last year.

GAAP operating margin of negative 22 percent for the quarter compared to operating margin of negative six percent for the same period last year. During the quarter the company recorded a non-cash impairment of its acquired intangible assets related to its engineering services of $4.7 million, or 19 percent of revenue.

GAAP net loss of $11.1 million for the quarter, or $(0.69) per diluted share compared to net income of $347,000, or $0.02 per diluted share for the same period last year. In addition to the $4.7 million impairment of intangible assets, the Company recorded expense for the establishment of a $7.6 million valuation allowance on the Company’s U.S. based deferred tax assets to address a growing shift in the Company’s income outside of the United States that began this quarter. The after tax impact of the charges aggregate to $0.66 per diluted share.

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 39 percent in the quarter, compared to 34 percent for the same period last year.

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

Non-GAAP net income of $1.3 million, or $0.08 per diluted share in the quarter, compared to $295,000 or $0.02 per diluted share in the same period last year.

$29.3 million of cash and short-term investments at June 30, 2016, an increase of approximately $1.4 million from the preceding quarter. During the quarter the Company generated free cash flow of approximately $2.4 million and paid a dividend of $853,000.

"Scanning receiver sales, engineering and staffing services, and core antenna products all posted sequential quarterly gains this past quarter," said Marty Singer, PCTEL’s Chairman and CEO. "This growth, combined with our success in reducing operating expenses to 2013 levels, resulted in an eleven cent improvement in non-GAAP earnings compared to our first quarter. We also made strong progress in reducing our inventory across both businesses and launching new products, including our new SeeHawk Engage(TM) product. We look forward to a strong second half," 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) 782-7027 (U.S. / Canada) or (706) 679-6397 (International), conference ID: 47815074. 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: 47815074.

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 network analytics, subject matter expert staffing and in-building engineering services 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 customer demand for these types of products and services generally, growth and continuity in the utilities, fleet, and public safety markets and small cell deployments, PCTEL’s ability to successfully grow Engage and its wireless products business generally, and its ability to implement new technologies and obtain protection for the related intellectual property. 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)
June 30,
December 31,
2016
2015
ASSETS
Cash and cash equivalents
$
7,305
$
7,055
Short-term investment securities
21,973
24,728
Accounts receivable, net of allowance for doubtful accounts of $264
18,191
21,001
and $314 at
June 30, 2016 and December 31, 2015, respectively
Inventories, net
15,190
17,596
Prepaid expenses and other assets
1,448
1,586
Total current assets
64,107
71,966
Property and equipment, net
13,615
13,839
Goodwill
3,332
3,332
Intangible assets, net
5,141
11,378
Deferred tax assets, net
8,949
13,155
Other noncurrent assets
38
40
TOTAL ASSETS
$
95,182
$ 113,710
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable
$
4,719
$
6,735
Accrued liabilities
5,792
6,190
Total current liabilities
10,511
12,925
Other long-term liabilities
473
388
Total liabilities
10,984
13,313
Stockholders’ equity:
Common stock, $0.001 par value, 100,000,000 shares authorized,
17
18
17,324,506 and
17,654,236 shares issued and outstanding at June 30, 2016 and
December 31, 2015,
respectively
Additional paid-in capital
133,880
135,714
Accumulated deficit
(49,572 )
(35,320 )
Accumulated other comprehensive loss
(127 )
(15 )
Total stockholders’ equity
84,198
100,397
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
$
95,182
$ 113,710
PCTEL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
(in thousands, except per share data)
Three Months Ended
Six Months Ended
June 30,
June 30,
2016
2015
2016
2015
REVENUES
$
24,243
$ 27,625
$
45,317
$ 53,951
COST OF REVENUES
15,006
18,276
29,029
34,432
GROSS PROFIT
9,237
9,349
16,288
19,519
OPERATING EXPENSES:
Research and development
2,523
2,904
5,130
5,642
Sales and marketing
3,414
3,425
6,529
6,955
General and administrative
3,305
3,302
6,267
6,665
Amortization of intangible assets
577
943
1,180
1,578
Impairment of intangible assets
4,724
0
4,724
0
Restructuring expenses
24
440
541
440
Total operating expenses
14,567
11,014
24,371
21,280
OPERATING LOSS
(5,330 )
(1,665 )
(8,083 )
(1,761 )
Other income, net
8
2,205
14
2,249
(LOSS) INCOME BEFORE INCOME TAXES
(5,322 )
540
(8,069 )
488
Expense for income taxes
5,751
193
4,460
174
NET (LOSS) INCOME
$ (11,073 )
$
347
$ (12,529 )
$
314
Net (Loss) Income per Share:
Basic
$
(0.69 )
$
0.02
$
(0.78 )
$
0.02
Diluted
$
(0.69 )
$
0.02
$
(0.78 )
$
0.02
Weighted Average Shares:
Basic
15,979
18,257
16,149
18,284
Diluted
15,979
18,408
16,149
18,498
Cash dividend per share
$
0.05
$
0.05
$
0.10
$
0.10
PCTEL, INC.
P&L INFORMATION BY SEGMENT (unaudited)
(in thousands)
Three Months Ended June 30, 2016
Six Months Ended June 30, 2016
Connected
Connected
Solutions
RF Solutions
Corporate
Total
Solutions
RF Solutions
Corporate
Total
REVENUES
$
15,781
$
8,507
($45 )
$
24,243
$
30,480
$
14,942
($105 )
$
45,317
GROSS PROFIT
4,941
4,286
10
9,237
9,265
7,016
7
16,288
OPERATING (LOSS) INCOME
$
1,792
($4,372 )
($2,750 )
($5,330 )
$
3,099
($5,901 )
($5,281 )
($8,083 )
Three Months Ended June 30, 2015
Six Months Ended June 30, 2015
Connected
Connected
Solutions
RF Solutions
Corporate
Total
Solutions
RF Solutions
Corporate
Total
REVENUES
$
18,100
$
9,583
($58 )
$
27,625
$
35,454
$
18,634
($137 )
$
53,951
GROSS PROFIT
5,417
3,931
1
9,349
10,861
8,647
11
19,519
OPERATING (LOSS) INCOME
$
1,498
($347 )
($2,816 )
($1,665 )
$
3,187
$
786
($5,734 )
($1,761 )
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 June 30,
Six Months Ended June 30,
2016
2015
2016
2015
Operating Loss
($5,330 )
($1,665 )
($8,083 )
($1,761 )
(a)
Add:
Amortization of intangible assets
-Cost of revenues
167
242
333
261
-Operating expenses
577
943
1,180
1,578
Impairment of intangible assets
4,724
0
4,724
0
Restructuring:
-Cost of revenues
0
114
0
114
-Operating expenses
24
440
541
440
TelWorx investigation:
-General & Administrative
(1 )
54
5
91
Stock Compensation:
-Cost of revenues
133
56
264
129
-Engineering
175
30
342
145
-Sales & Marketing
183
(18 )
328
140
-General & Administrative
893
173
1,309
328
6,875
2,034
9,026
3,226
Non-GAAP Operating Income
$
1,545
$
369
$
943
$
1,465
% of revenue
6.4 %
1.3 %
2.1 %
2.7 %
Reconciliation of GAAP net loss to
non-GAAP net (loss) income (b)
Three Months Ended June 30,
Six Months Ended June 30,
2016
2015
2016
2015
Net Loss (Income)
($11,073 )
$
347
($12,529 )
$
314
Adjustments:
(a)
Non-GAAP adjustment to operating (loss) income
6,875
2,034
9,026
3,226
(b)
Other income related to SEC investigation of TelWorx
1
(54 )
(5 )
(90 )
(b)
Legal Settlement - Amendment to Nexgen APA
0
(2,160 )
0
(2,160 )
(b)
Income Taxes
5,471
128
4,289
(90 )
12,347
(52 )
13,310
886
Non-GAAP Net Income
$
1,274
$
295
$
781
$
1,200
Non-GAAP Earning per Share:
Basic
$
0.08
$
0.02
$
0.05
$
0.07
Diluted
$
0.08
$
0.02
$
0.05
$
0.06
Weighed Average Shares:
Basic
15,979
18,257
16,149
18,284
Diluted
15,979
18,408
16,312
18,498
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 except per share information)
Three Months Ended June 30, 2016
Six Months Ended June 30, 2016
Connected
RF
Connected
RF
Solutions
Solutions
Corporate
Total
Solutions
Solutions
Corporate
Total
Operating (Loss) Income
$
1,792
($4,372 )
($2,750 )
($5,330 )
$
3,099
($5,901 )
($5,281 )
($8,083 )
Add:
Amortization of intangible assets:
-Cost of revenues
0
167
0
167
0
333
0
333
-Operating expenses
44
533
0
577
114
1,066
0
1,180
Impairment of intangible assets
0
4,724
0
4,724
0
4,724
0
4,724
Restructuring expenses
0
7
17
24
44
424
73
541
TelWorx investigation:
-General & Administrative
0
0
(1 )
(1 )
0
0
5
5
Stock Compensation:
-Cost of revenues
43
90
0
133
84
180
0
264
-Engineering
30
145
0
175
72
270
0
342
-Sales & Marketing
113
70
0
183
200
128
0
328
-General & Administrative
52
96
745
893
92
168
1,049
1,309
282
5,832
761
6,875
606
7,293
1,127
9,026
Non-GAAP Operating (Loss) Income
$
2,074
$
1,460
($1,989 )
$
1,545
$
3,705
$
1,392
($4,154 )
$
943
Three Months Ended June 30, 2015
Six Months Ended June 30, 2015
Connected
RF
Connected
RF
Solutions
Solutions
Corporate
Total
Solutions
Solutions
Corporate
Total
Operating (Loss) Income
$
1,498
($347 )
($2,816 )
($1,665 )
$
3,187
$
786
($5,734 )
($1,761 )
Add:
Amortization of intangible assets:
-Cost of revenues
20
222
0
242
39
222
0
261
-Operating expenses
230
713
0
943
460
1,118
0
1,578
Restructuring expenses
-Cost of revenues
114
0
0
114
114
0
0
114
-Restructuring charges
426
14
0
440
426
14
0
440
TelWorx investigation:
-General & Administrative
0
0
54
54
0
0
91
91
Stock Compensation:
-Cost of Goods Sold
(22 )
78
0
56
14
115
0
129
-Engineering
14
16
0
30
60
85
0
145
-Sales & Marketing
(18 )
0
0
(18 )
85
55
0
140
-General & Administrative
(35 )
(21 )
229
173
(10 )
(1 )
339
328
729
1,022
283
2,034
1,188
1,608
430
3,226
Non-GAAP Operating (Loss) Income
$
2,227
$
675
($2,533 )
$
369
$
4,375
$
2,394
($5,304 )
$
1,465
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.

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

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