May 8, 2019   SOURCE: BusinessWire

PCTEL Reports $20.6 Million in First Quarter Revenue

PCTEL, Inc. (Nasdaq: PCTI) announced its results for the first quarter ended March 31, 2019.

Highlights

  • Revenue of $20.6 million in the quarter, 5% lower compared to the prior year. Compared to the first quarter 2018, the first quarter revenue was higher by 38% for the test and measurement product line and lower by 15% for the antenna product line.
  • Gross profit margin of 42.0% in the quarter, up 5.8% compared to gross profit margin in the prior year. The increase in the quarter is a result of improved profitability for scanning receivers and antennas.
  • GAAP net loss per share of $0.02 in the quarter compared to a GAAP loss of $0.05 per share in the 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 financial statements is provided later in the press release.
  • Non-GAAP net income per share of $0.04 in the quarter compared to a net loss of $0.01 in the first quarter last year.
  • Adjusted EBITDA margin as a percent of revenue of 7% in the quarter compared to 2% in the prior year.
  • $35.0 million of cash and short-term investments at March 31, 2019 and no debt.

“We are pleased that early demand for 5G test and measurement tools continues to drive revenue growth and profitability for scanning receivers. We expect this to continue as wireless operators deploy 5G networks in the US, Europe and Asia,” said David Neumann, PCTEL’s CEO. “In addition, 5G and enterprise Wi-Fi networks require engineered antenna and radio systems to enable industrial IoT for both public and private applications. We are positioned well to provide our antenna solutions for these applications in enterprise wireless, intelligent transportation and industrial IoT markets.”

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: 1689797. 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: 1689797.

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 redefined market segments and our 2018 cost reduction actions, the anticipated demand for certain products including those related to antennas, 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 is a registered trademark of PCTEL, Inc. © 2019 PCTEL, Inc. All rights reserved.

   
PCTEL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
 
March 31, December 31,
2019 2018
ASSETS
Cash and cash equivalents $ 4,455 $ 4,329
Short-term investment securities 30,586 30,870
Accounts receivable, net of allowances of $86 and $63 at March 31, 2019 and
December 31, 2018, respectively 16,427 15,864
Inventories, net 12,919 12,848
Prepaid expenses and other assets   1,541     1,416  
Total current assets 65,928 65,327
 
Property and equipment, net 11,740 12,138
Goodwill 3,332 3,332
Intangible assets, net 789 1,029
Other noncurrent assets   1,531     45  
TOTAL ASSETS $ 83,320   $ 81,871  
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable $ 6,881 $ 6,083
Accrued liabilities   6,668     5,801  
Total current liabilities 13,549 11,884
Long-term liabilities   868     381  
Total liabilities   14,417     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 March 31, 2019 and December 31, 2018, respectively 18 18
Additional paid-in capital 133,320 133,859
Accumulated deficit (64,372 ) (64,055 )
Accumulated other comprehensive loss   (63 )   (216 )
Total stockholders’ equity   68,903     69,606  
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 83,320   $ 81,871  
 
 
PCTEL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
(in thousands, except per share data)
   
Three Months Ended
March 31,
  2019     2018  
 
REVENUES $ 20,590 $ 21,731
COST OF REVENUES   11,932     13,867  
GROSS PROFIT   8,658     7,864  
OPERATING EXPENSES:
Research and development 3,003 2,940
Sales and marketing 2,798 3,028
General and administrative 3,253 2,993
Amortization of intangible assets   73     124  
Total operating expenses   9,127     9,085  
OPERATING LOSS (469 ) (1,221 )
Other income, net   162     51  
LOSS BEFORE INCOME TAXES (307 ) (1,170 )
Expense (benefit) for income taxes   10     (312 )
NET LOSS $ (317 ) $ (858 )
 
Net Loss per Share:
Basic $ (0.02 ) $ (0.05 )
Diluted $ (0.02 ) $ (0.05 )
Weighted Average Shares:
Basic 17,617 17,056
Diluted 17,617 17,056
 
Cash dividend per share $ 0.055 $ 0.055
 
 
PCTEL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
   
Three Months Ended March 31,
. 2019 2018
 
Operating Activities:
Net loss $ (317 ) $ (858 )
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation 711 674
Intangible asset amortization 240 290
Stock-based compensation 882 668
Loss on disposal of property and equipment 0 10
Restructuring costs (3 ) (11 )
Bad debt provision 7 15
Deferred tax provision 0 (236 )
Changes in operating assets and liabilities:
Accounts receivable (512 ) (350 )
Inventories 38 321
Prepaid expenses and other assets 23 (250 )
Accounts payable 554 (64 )
Income taxes payable (22 ) (3 )
Other accrued liabilities (39 ) (1,808 )
Deferred revenue   (23 )   14  
Net cash provided by (used in) operating activities   1,539     (1,588 )
Investing Activities:
Capital expenditures (311 ) (884 )
Proceeds from disposal of property and equipment 0 14
Purchases of investments (13,893 ) (7,266 )
Redemptions/maturities of short-term investments   14,177     17,480  
Net cash (used in) provided by investing activities   (27 )   9,344  
Financing Activities:
Proceeds from issuance of common stock 338 364
Payment of withholding tax on stock-based compensation (743 ) (289 )
Principle payments on capital leases (26 ) (24 )
Cash dividends   (1,016 )   (995 )
Net cash used in financing activities   (1,447 )   (944 )
 
Net increase in cash and cash equivalents 65 6,812
Effect of exchange rate changes on cash 61 81
Cash and cash equivalents, beginning of period   4,329     5,559  
Cash and Cash Equivalents, End of Period $ 4,455   $ 12,452  
 
 
PCTEL, INC.
REVENUE AND GROSS PROFIT BY PRODUCT LINE (unaudited)
(in thousands)
       
 
Three Months Ended March 31, 2019
Test &
Antenna Measurement
Products Products Corporate Total
REVENUES $15,088 $5,535 ($33 ) $20,590
 
GROSS PROFIT $4,861 $3,785 $12 $8,658
 
GROSS PROFIT % 32.2 % 68.4 % 42.0 %
 
Three Months Ended March 31, 2018
Test &
Antenna Measurement
Products Products Corporate Total
REVENUES $17,764 $3,999 ($32 ) $21,731
 
GROSS PROFIT $5,198 $2,670 ($4 ) $7,864
 
GROSS PROFIT % 29.3 % 66.8 % 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 March 31,
2019 2018
 
 
Operating Loss ($469 ) ($1,221 )
 
(a) Add:
Amortization of intangible assets
-Cost of revenues 167 167
-Operating expenses 73 124
Stock Compensation:
-Cost of revenues 103 88
-Engineering 172 138
-Sales & marketing 180 131
-General & administrative 427   311  
1,122   959  
Non-GAAP Operating Income (Loss) $654   ($262 )
% of revenue 3.2 % -1.2 %
 

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

 
Three Months Ended March 31,
2019 2018
 
Net Loss ($317 ) ($858 )
 
Adjustments:
(a) Non-GAAP adjustment to operating loss 1,122 959
Income Taxes (56 ) (295 )
1,067   664  
Non-GAAP Net (Loss) Income $750   ($194 )
 
Non-GAAP (Loss) Income per Share:
Basic $0.04 ($0.01 )
Diluted $0.04 ($0.01 )
 
Weighed Average Shares:
Basic 17,617 17,056
Diluted 17,660 17,056
  This schedule reconciles the Company's GAAP operating 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 loss (a) consist of stock compensation expense and amortization of intangible assets. The adjustments to GAAP net loss include the non-GAAP adjustments to operating 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 March 31,
2019 2018
 
Operating Loss ($469) ($1,221)
 
Add:
Depreciation and amortization 711 674
Intangible amortization 240 291
Stock compensation expenses 882 668
Adjusted EBITDA $1,365 $412
% of revenue 6.6% 1.9%
  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.
 
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