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| 8-K - FORM 8-K - PC TEL INC | d435633d8k.htm |
Exhibit 99.1
PCTEL Achieves $25.9 Million in Third Quarter Revenue
Bloomingdale, IL November 5, 2012 — PCTEL, Inc. (NASDAQ: PCTI), a leader in simplifying wireless and site solutions for private and public networks, announced results for the third quarter ended September 30, 2012.
Third Quarter Highlights
| • | $25.9 million in revenue for the quarter, an increase of 33 percent from the same period last year. The acquisitions of Envision Wireless in October 2011 and TelWorx in July 2012 accounted for 25% growth, with the remaining 8% growth from our existing pre-acquisition products. |
| • | Gross profit margin of 39 percent in the quarter, compared to 48 percent in the same period last year. The change in gross profit margin reflects the change in the Company’s revenue mix arising from our acquisitions of Envision Wireless in October 2011 and TelWorx in July 2012. |
| • | GAAP operating margin of two percent for the quarter, compared to two percent for the same period last year. |
| • | GAAP net income available to common shareholders of $272,000 for the quarter, or $0.02 per diluted share, compared to a net income of $386,000, or $0.02 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 operating profit of 9 percent in the quarter, as compared to 10 percent operating profit in the same period last year.
Non-GAAP net income of $2.0 million or $0.11 per diluted share in the quarter, as compared to $1.8 million or $0.10 per diluted share in the same period last year.
| • | $48.0 million of cash, short-term investments, and long-term investments at September 30, 2012, a decrease of approximately $18.0 million from the preceding quarter. During the quarter the Company used $16.5 million of cash for the acquisition of Telworx, $800,000 for the acquisition of the remaining 30% percent membership interest in PCTEL Secure, $552,000 for the regular quarterly dividend, and used approximately $150,000 of cash and investments for all other activities. The Company noted that accounts receivable increased by $6.6 million in the quarter. The increase reflected $5.0 million in late quarter revenue and $1.6 million from the acquisition of TelWorx. |
“We were pleased with the progress in all of our product groups. Each of our established businesses grew quarter over quarter and, with the addition of our Connected Solutions, we have the momentum to generate over $100 million in 2013,” said Marty Singer, PCTEL’s Chairman and CEO. “Our focus on vertical markets, indoor wireless, the growth in LTE, and the capability to deliver solutions that include towers and backhaul components distinguish us in private wireless networks and specialized carrier applications,” 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
(877) 734-5369 (U.S. / Canada) or (706) 679-6397 (International), conference ID: 33748581. 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: 33748581.
About PCTEL
PCTEL, Inc. (NASDAQ: PCTI),
develops antenna, scanning receiver, and engineered site solutions for public and private networks. The Company’s SeeGull® scanning receivers, SeeHawk® visualization tool, and Clarify® system measure and analyze wireless signals for
efficient cellular network planning, deployment, and optimization. PCTEL develops and supports scanning receivers for
LTE, TD-LTE, EVDO, CDMA, WCDMA, TD-SCDMA, GSM, and WiMAX networks.
PCTEL’s MAXRAD®, Bluewave™ and Wi-Sys™ antenna solutions address private network, public safety, and government applications. PCTEL develops and delivers high-value YAGI, Land Mobile Radio, WiFi, GPS, In-Tunnel, Subway, and broadband antennas (parabolic and flat panel). The Company’s vertical markets include SCADA, Health Care, Smart Grid, Precision Agriculture, Indoor Wireless, Telemetry, Off-loading, and Wireless Backhaul. PCTEL Connected Solutions™ designs and delivers Site Solutions for private and public wireless, data, and communication applications. PCTEL Connected Solutions™ utilizes specialized towers, enclosures, fiber optic panels, fiber jumper cables and a wide array of its TowerWorx™ and TelWorx™ products to deliver engineered site solutions. PCTEL Secure focuses on Android mobile platform security. PCTEL’s products are sold worldwide through direct and indirect channels. For more information, please visit the Company’s web sites www.pctel.com, www.antenna.com, www.antenna.pctel.com, www.rfsolutions.pctel.com, www.telworx.net, www.towerworx.net or www.pctelsecure.com
PCTEL Safe Harbor Statement
This press release contains “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Specifically, the statements regarding PCTEL’s future financial performance and expectations regarding growth and expansion 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 ability to successfully grow the wireless products business and the 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.
For further information contact:
| John Schoen | Jack Seller | |
| CFO | Public Relations | |
| PCTEL, Inc. | PCTEL, Inc. | |
| (630) 372-6800 | (630) 372-6800 | |
| Jack.seller@pctel.com | ||
PCTEL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
| (unaudited) | ||||||||
| September 30, 2012 |
December 31, 2011 |
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| ASSETS | ||||||||
| Cash and cash equivalents |
$ | 17,061 | $ | 19,418 | ||||
| Short-term investment securities |
30,705 | 42,210 | ||||||
| Cash held in escrow |
500 | 0 | ||||||
| Accounts receivable, net of allowance for doubtful accounts of $120 and $132 at September 30, 2012 and December 31, 2011, respectively |
21,210 | 14,342 | ||||||
| Inventories, net |
16,060 | 13,911 | ||||||
| Deferred tax assets, net |
896 | 896 | ||||||
| Prepaid expenses and other assets |
1,054 | 2,277 | ||||||
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| Total current assets |
87,486 | 93,054 | ||||||
| Property and equipment, net |
14,702 | 13,590 | ||||||
| Long-term investment securities |
261 | 7,177 | ||||||
| Goodwill |
9,651 | 161 | ||||||
| Intangible assets, net |
11,959 | 9,332 | ||||||
| Deferred tax assets, net |
8,831 | 8,831 | ||||||
| Other noncurrent assets |
1,584 | 1,319 | ||||||
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| TOTAL ASSETS |
$ | 134,474 | $ | 133,464 | ||||
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| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Accounts payable |
$ | 8,028 | $ | 5,651 | ||||
| Accrued liabilities |
6,574 | 7,092 | ||||||
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| Total current liabilities |
14,602 | 12,743 | ||||||
| Contingent consideration |
1,147 | 0 | ||||||
| Other long-term liabilities |
2,695 | 2,144 | ||||||
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| 3,842 | 2,144 | |||||||
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| Total liabilities |
18,444 | 14,887 | ||||||
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| Redeemable equity |
0 | 1,731 | ||||||
| Stockholders’ equity: |
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| Common stock, $0.001 par value, 100,000,000 shares authorized, 18,515,538 and 18,218,537 shares issued and outstanding at September 30, 2012 and December 31, 2011, respectively |
18 | 18 | ||||||
| Additional paid-in capital |
139,416 | 137,117 | ||||||
| Accumulated deficit |
(23,533 | ) | (20,941 | ) | ||||
| Accumulated other comprehensive income |
129 | 121 | ||||||
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| Total stockholders’ equity of PCTEL, Inc. |
116,030 | 116,315 | ||||||
| Noncontrolling interest |
0 | 531 | ||||||
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| Total equity |
116,030 | 116,846 | ||||||
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| TOTAL LIABILITIES AND EQUITY |
$ | 134,474 | $ | 133,464 | ||||
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PCTEL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
(in thousands, except per share data)
| Three Months Ended September 30, |
Nine Months Ended September 30, |
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| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| REVENUES |
$ | 25,853 | $ | 19,494 | $ | 63,007 | $ | 56,837 | ||||||||
| COST OF REVENUES |
15,813 | 10,140 | 37,119 | 30,258 | ||||||||||||
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| GROSS PROFIT |
10,040 | 9,354 | 25,888 | 26,579 | ||||||||||||
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| OPERATING EXPENSES: |
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| Research and development |
2,858 | 3,035 | 8,454 | 8,991 | ||||||||||||
| Sales and marketing |
2,811 | 2,643 | 7,907 | 7,853 | ||||||||||||
| General and administrative |
2,647 | 2,520 | 8,054 | 8,236 | ||||||||||||
| Amortization of intangible assets |
1,120 | 661 | 2,610 | 1,995 | ||||||||||||
| Restructuring charges |
156 | 125 | 156 | 125 | ||||||||||||
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| Total operating expenses |
9,592 | 8,984 | 27,181 | 27,200 | ||||||||||||
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| OPERATING INCOME (LOSS) |
448 | 370 | (1,293 | ) | (621 | ) | ||||||||||
| Other income, net |
11 | 64 | 125 | 266 | ||||||||||||
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| INCOME (LOSS) BEFORE INCOME TAXES |
459 | 434 | (1,168 | ) | (355 | ) | ||||||||||
| Expense (benefit) for income taxes |
187 | 216 | (192 | ) | (13 | ) | ||||||||||
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| NET INCOME (LOSS) |
272 | 218 | (976 | ) | (342 | ) | ||||||||||
| Less: Net loss attributable to noncontrolling interests |
0 | (274 | ) | (687 | ) | (740 | ) | |||||||||
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| NET INCOME (LOSS) ATTRIBUTABLE TO PCTEL, INC. |
272 | 492 | (289 | ) | 398 | |||||||||||
| Less: adjustments to redemption value of noncontrolling interests |
0 | (106 | ) | (648 | ) | (762 | ) | |||||||||
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| NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS |
$ | 272 | $ | 386 | ($ | 937 | ) | ($ | 364 | ) | ||||||
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| Basic Earnings per Share: |
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| Net income (loss) available to common shareholders |
$ | 0.02 | $ | 0.02 | ($ | 0.05 | ) | ($ | 0.02 | ) | ||||||
| Diluted Earnings per Share: |
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| Net income (loss) available to common shareholders |
$ | 0.02 | $ | 0.02 | ($ | 0.05 | ) | ($ | 0.02 | ) | ||||||
| Weighted average shares - Basic |
17,493 | 17,238 | 17,368 | 17,239 | ||||||||||||
| Weighted average shares - Diluted |
17,779 | 17,640 | 17,368 | 17,239 | ||||||||||||
| Cash dividend per share |
$ | 0.03 | $ | 0.00 | $ | 0.09 | $ | 0.00 | ||||||||
Reconciliation GAAP To non-GAAP Results Of Operations (unaudited)
(in thousands except per share information)
Reconciliation of GAAP operating income to non-GAAP operating income (a)
| Three Months September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| Operating Income (Loss) |
$ | 448 | $ | 370 | ($ | 1,293 | ) | ($ | 621 | ) | ||||||
| (a) Add: |
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| Amortization of intangible assets |
1,120 | 661 | 2,610 | 1,995 | ||||||||||||
| Restructuring charges |
156 | 125 | 156 | 125 | ||||||||||||
| Share based payment - PCTEL Secure: |
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| -Engineering |
061 | 80 | 183 | |||||||||||||
| Stock Compensation: |
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| -Cost of Goods Sold |
99 | 67 | 302 | 204 | ||||||||||||
| -Engineering |
153 | 139 | 442 | 451 | ||||||||||||
| -Sales & Marketing |
141 | 155 | 398 | 494 | ||||||||||||
| -General & Administrative |
302 | 351 | 1,194 | 1,374 | ||||||||||||
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| 1,971 | 1,559 | 5,182 | 4,826 | |||||||||||||
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| Non-GAAP Operating Income |
$ | 2,419 | $ | 1,929 | $ | 3,889 | $ | 4,205 | ||||||||
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| % of revenue |
9.4 | % | 9.9 | % | 6.2 | % | 7.4 | % | ||||||||
| Reconciliation of GAAP net income to non-GAAP net income (b) | ||||||||||||||||
| Three Months September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| Net Income (Loss) attributable to PCTEL, Inc. |
$ | 272 | $ | 492 | ($ | 289 | ) | $ | 398 | |||||||
| Adjustments: |
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| (a) Non-GAAP adjustment to operating income (loss) |
1,971 | 1,559 | 5,182 | 4,826 | ||||||||||||
| (b) Noncontrolling interest related to Non-GAAP adjustments to operating income (loss) |
0 | (86 | ) | (225 | ) | (258 | ) | |||||||||
| (b) Investment income related to share based payment for PCTEL Secure |
0 | (31 | ) | (41 | ) | (93 | ) | |||||||||
| (b) Income Taxes |
(250 | ) | (171 | ) | (990 | ) | (888 | ) | ||||||||
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| 1,721 | 1,271 | 3,926 | 3,587 | |||||||||||||
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| Non-GAAP Net Income |
$ | 1,993 | $ | 1,763 | $ | 3,637 | $ | 3,985 | ||||||||
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| Basic Earnings per Share: |
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| Non-GAAP Net Income |
$ | 0.11 | $ | 0.10 | $ | 0.21 | $ | 0.23 | ||||||||
| Diluted Earnings per Share: |
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| Non-GAAP Net Income |
$ | 0.11 | $ | 0.10 | $ | 0.20 | $ | 0.23 | ||||||||
| Weighted average shares - Basic |
17,493 | 17,238 | 17,368 | 17,239 | ||||||||||||
| Weighted average shares - Diluted |
17,779 | 17,640 | 17,751 | 17,705 | ||||||||||||
This schedule reconciles the Company’s GAAP operating income and GAAP net income to its non-GAAP operating income and non-GAAP net 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, and restructuring charges. |
| (b) | These adjustments include the items described in footnote (a) as well as the non-cash income tax expense, noncontrolling interest, and investment income related to noncontrolling interest. |