PCTEL Reports $23.5 Million in Second Quarter Revenue

By: PCTEL, Inc. via Business Wire News Releases

August 08, 2019 at 16:01 PM EDT

PCTEL, Inc. (Nasdaq: PCTI) announced its results for the second quarter ended June 30, 2019.

Highlights

Revenue of $23.5 million in the quarter, 9% higher compared to the prior year. The second quarter revenue was higher by 82% for the test and measurement product line and lower by 8% for the antenna product line compared to the second quarter 2018.

Gross profit margin of 45.5% in the quarter, up 9.4% compared to gross profit margin in the prior year. The increase in the second quarter is a result of higher revenues for test and measurement products and improved profitability for antenna products.

GAAP net income per share of $0.05 in the quarter compared to a GAAP loss of $0.07 per share in the second quarter last 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 GAAP financial statements is provided later in the press release.
- Non-GAAP net income per share of $0.13 in the quarter compared to a break-even in the second quarter last year.
- Adjusted EBITDA margin as a percent of revenue of 13% in the quarter compared to 2% in the second quarter last year.

$36.8 million of cash and short-term investments at June 30, 2019 and no debt.

The Company will incur restructuring expense in the second half of fiscal year 2019 related to the transition plan for China manufacturing.

“We are pleased with the sequential revenue and gross margin growth driven by 5G scanning receiver demand and significant Industrial IoT antenna project wins and facilitated by the cost reduction and realignment actions we took over the past year,” said David Neumann, PCTEL’s CEO. “We are in the early stages of 5G and the deployment of Industrial IoT systems. PCTEL has the capabilities and resources to grow with these markets and increase value for all stakeholders.”

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: 5497038. 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: 5497038.

About PCTEL

PCTEL, Inc. is a leading global supplier of antennas and wireless network testing solutions. Founded in 1994, we are currently celebrating our 25th anniversary. PCTEL’s precision 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). We offer in-house design, testing, radio integration, and manufacturing capabilities for our customers. PCTEL’s test and measurement tools improve the performance of wireless networks globally, with a focus on LTE, public safety, and emerging 5G technologies. Network operators, neutral hosts, and equipment manufacturers rely on our scanning receivers and testing solutions to analyze, design, and optimize their networks.

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, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)


	June 30,			December 31,
	2019			2018
ASSETS
Cash and cash equivalents	$	4,066		$	4,329
Short-term investment securities		32,694			30,870
Accounts receivable, net of allowances of $99 and $63 at June 30, 2019 and December 31, 2018, respectively		16,108			15,864
Inventories, net		13,140			12,848
Prepaid expenses and other assets		1,412			1,416
Total current assets		67,420			65,327

Property and equipment, net		11,536			12,138
Goodwill		3,332			3,332
Intangible assets, net		574			1,029
Other noncurrent assets		1,291			45
TOTAL ASSETS	$	84,153		$	81,871
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable	$	5,881		$	6,083
Accrued liabilities		7,384			5,801
Total current liabilities		13,265			11,884
Long-term liabilities		759			381
Total liabilities		14,024			12,265
Stockholders’ equity:
Common stock, $0.001 par value, 100,000,000 shares authorized, 18,417,701 and 18,271,249 shares issued and outstanding at June 30, 2019 and December 31, 2018, respectively		18			18
Additional paid-in capital		133,753			133,859
Accumulated deficit		(63,431	)		(64,055	)
Accumulated other comprehensive loss		(211	)		(216	)
Total stockholders’ equity		70,129			69,606
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	84,153		$	81,871

PCTEL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
(in thousands, except per share data)


		Three Months Ended					Six Months Ended
		June 30,					June 30,
		2019		2018			2019		2018

	REVENUES	$	23,499	$	21,582		$	44,090	$	43,313
	COST OF REVENUES		12,805		13,783			24,737		27,650
	GROSS PROFIT		10,694		7,799			19,353		15,663
	OPERATING EXPENSES:
	Research and development		3,006		3,053			6,009		5,993
	Sales and marketing		3,097		3,075			5,895		6,102
	General and administrative		3,914		3,149			7,167		6,143
	Amortization of intangible assets		48		124			122		248
	Restructuring expenses		0		0			0		0
	Total operating expenses		10,065		9,401			19,193		18,486
	OPERATING INCOME (LOSS)		629		(1,602	)		160		(2,823	)
	Other income, net		320		209			481		260
	INCOME (LOSS) BEFORE INCOME TAXES		949		(1,393	)		641		(2,563	)
	Expense (benefit) for income taxes		8		(167	)		17		(479	)
	NET INCOME (LOSS)	$	941	$	(1,226	)	$	624	$	(2,084	)

	Net Income (Loss) per Share:
	Basic	$	0.05	$	(0.07	)	$	0.04	$	(0.12	)
	Diluted	$	0.05	$	(0.07	)	$	0.03	$	(0.12	)
	Weighted Average Shares:
	Basic		17,828		17,142			17,725		17,099
	Diluted		17,934		17,142			17,916		17,099

	Cash dividend per share	$	0.055	$	0.055		$	0.110	$	0.110

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


	Six Months Ended June 30,
.	2019			2018

Operating Activities:
Net income (loss)	$	624		$	(2,084	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and Amortization		1,425			1,381
Intangible asset amortization		455			581
Stock-based compensation		2,328			1,786
Loss on disposal of property and equipment		30			(5	)
Restructuring costs		(14	)		(20	)
Bad debt provision		11			124
Deferred tax provision		0			(390	)
Changes in operating assets and liabilities:
Accounts receivable		(234	)		473
Inventories		(268	)		(813	)
Prepaid expenses and other assets		354			330
Accounts payable		(231	)		2,743
Income taxes payable		(46	)		(38	)
Other accrued liabilities		675			(2,107	)
Deferred revenue		(40	)		16
Net cash provided by operating activities		5,069			1,977
Investing Activities:
Capital expenditures		(986	)		(1,519	)
Proceeds from disposal of property and equipment		0			14
Purchases of investments		(26,823	)		(22,712	)
Redemptions/maturities of short-term investments		24,999			26,307
Net cash (used in) provided by investing activities		(2,810	)		2,090
Financing Activities:
Proceeds from issuance of common stock		338			364
Payment of withholding tax on stock-based compensation		(743	)		(289	)
Principle payments on finance leases		(52	)		(57	)
Cash dividends		(2,029	)		(1,999	)
Net cash used in financing activities		(2,486	)		(1,981	)

Net (decrease) increase in cash and cash equivalents		(227	)		2,086
Effect of exchange rate changes on cash		(36	)		(42	)
Cash and cash equivalents, beginning of period		4,329			5,559
Cash and Cash Equivalents, End of Period	$	4,066		$	7,603


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



	Three Months Ended June 30, 2019				Six Months Ended June 30, 2019
	Antenna Products	Test & Measurement Products	Corporate	Total	Antenna Products	Test & Measurement Products	Corporate	Total
REVENUES	$16,014	$7,526	($41)	$23,499	$31,102	$13,062	($74)	$44,090

GROSS PROFIT	$5,569	$5,112	$13	$10,694	$10,430	$8,898	$25	$19,353

GROSS PROFIT %	34.8%	67.9%		45.5%	33.5%	68.1%		43.9%

	Three Months Ended June 30, 2018				Six Months Ended June 30, 2018
	Antenna Products	Test & Measurement Products	Corporate	Total	Antenna Products	Test & Measurement Products	Corporate	Total
REVENUES	$17,478	$4,135	($31)	$21,582	$35,243	$8,134	($64)	$43,313

GROSS PROFIT	$5,031	$2,755	$13	$7,799	$10,229	$5,426	$8	$15,663

GROSS PROFIT %	28.8%	66.6%		36.1%	29.0%	66.7%		36.2%


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 June 30,		Six Months Ended June 30,
		2019	2018	2019	2018


	Operating Income (Loss)	$629	($1,602)	$160	($2,823)

(a)	Add:
	Amortization of intangible assets
	-Cost of revenues	167	167	333	333
	-Operating expenses	48	124	122	248
	Restructuring	0	0	0	0

	Stock Compensation:
	-Cost of revenues	102	93	205	181
	-Engineering	177	159	350	297
	-Sales & marketing	182	157	363	288
	-General & administrative	983	710	1,410	1,021
		1,659	1,410	2,783	2,368
	Non-GAAP Operating Income (Loss)	$2,288	($192)	$2,943	($455)
	% of revenue	9.7%	-0.9%	6.7%	-1.1%

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

		Three Months Ended June 30,		Six Months Ended June 30,
		2019	2018	2019	2018

	Net Income (Loss)	$941	($1,226)	$624	($2,084)

	Adjustments:
(a)	Non-GAAP adjustment to operating income (loss)	1,659	1,410	2,783	2,368
	Income Taxes	(201)	(168)	(257)	(463)
		1,458	1,242	2,526	1,905
	Non-GAAP Net Income (Loss)	$2,399	$16	$3,150	($179)

	Non-GAAP Income (Loss) per Share:
	Basic	$0.13	$0.00	$0.18	($0.01)
	Diluted	$0.13	$0.00	$0.18	($0.01)

	Weighed Average Shares:
	Basic	17,828	17,142	17,725	17,099
	Diluted	17,934	17,554	17,916	17,099

	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 June 30,		Year Ended June 30,
		2019	2018	2019	2018

	Operating Income (Loss)	$629	($1,602)	$160	($2,823)

	Add:
	Depreciation and amortization	713	707	1,425	1,381
	Intangible amortization	215	291	455	581
	Stock compensation expenses	1,444	1,119	2,328	1,787
	Adjusted EBITDA	$3,001	$515	$4,368	$926
	% of revenue	12.8%	2.4%	9.9%	2.1%


	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

View source version on businesswire.com: https://www.businesswire.com/news/home/20190808005769/en/

Contacts:

Kevin McGowan
CFO
PCTEL, Inc.
(630) 372-6800

Please Enable Cookies

PCTEL Reports $23.5 Million in Second Quarter Revenue