PCTI PCTEL Inc

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (date of earliest event reported)

August 4, 2015

 

 

PCTEL, Inc.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware		000-27115		77-0364943
(State or Other Jurisdiction of Incorporation)		(Commission File Number)		(IRS Employer Identification No.)

471 Brighton Drive

Bloomingdale, Illinois 60108

(Address of Principal Executive Offices, including Zip Code)

(630) 372-6800

(Registrant’s telephone number, including area code)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12(b))

 

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

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Item 2.02 Results of Operations and Financial Condition

The following information is intended to be furnished under Item 2.02 of Form 8-K, “Results of Operations and Financial Condition.” This information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

On August 4, 2015, PCTEL, Inc. issued a press release regarding its financial results for its second fiscal quarter ended June 30, 2015. The full text of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits

 

(d)

Exhibits.

 

99.1		Press release, dated August 4, 2015, of PCTEL, Inc. announcing its financial results for its second fiscal quarter ended June 30, 2015.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: August 4, 2015

 

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EXHIBIT INDEX

 

Exhibit Number		Description
Exhibit 99.1		Press release, dated August 4, 2015, of PCTEL, Inc. announcing its financial results for its second fiscal quarter ended June 30, 2015.

Exhibit 99.1

 

PCTEL Achieves $27.6 Million in Second Quarter Revenue

An Increase of Six Percent from the Same Period Last Year

BLOOMINGDALE, IL. – August 4, 2015 — PCTEL, Inc. (NASDAQ:PCTI), a leader in Performance Critical Telecom solutions, announced its 2015 second quarter results.

First Quarter Highlights

$27.6 million in revenue for the quarter, an increase of six percent from the same period last year.

Gross profit margin of 35 percent in the quarter, compared to 41 percent for the same period last year.

GAAP operating margin of negative six percent for the quarter, compared to operating margin of two percent for the same period last year.

GAAP net income of $347,000 for the quarter, or $0.02 per diluted share, compared to net income of $545,000, or $0.03 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 margin of one percent in the quarter, compared to nine percent in the same period last year.

Non-GAAP net income of $295,000 or $0.02 per diluted share in the quarter, compared to $2.0 million or $0.11 per diluted share in the same period last year.

$41.3 million of cash and short-term investments at June 30, 2015, an increase of approximately $2.4 million from the preceding quarter. Free cash flow in the quarter was $6.0 million, comprised of $6.9 million in cash flow from operations and $933,000 of capital spending. During the quarter the Company repurchased 380,000 shares of its common stock for approximately $2.8 million, paid a regular quarterly dividend of $929,000.

“As we have opened up new markets in China and expanded our field of play with network analytics and services, we have also been exposed to additional risks,” said Marty Singer, PCTEL’s Chairman and CEO. “Challenges are not new to us and we are confident in our growth in both business operations,” added Singer.

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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: 13775111. 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: 13775111.

About PCTEL

PCTEL delivers Performance Critical Telecom solutions. The industry relies upon PCTEL to benchmark network performance, analyze trends, and optimize wireless networks. PCTEL’s antennas and site solutions are vital elements for SCADA, oil and gas, utilities, fleet management, health care, public safety, education, small cell, and network timing.

PCTEL’s RF Solutions products and services improve the performance of wireless networks globally. PCTEL’s performance critical products include its MXflex^®, IBflex^®, and EXflex^® SeeGull® scanning receivers and related SeeHawk^® and SeeWave™ tools. PCTEL’s sophisticated engineering services utilize these products as well as the Meridian™ network analytics portfolio (Map IQ™, Network IQ™, and Subscriber IQ™).

PCTEL Connected Solutions™ designs and delivers performance critical antennas and site solutions for wireless networks globally. PCTEL’s performance critical MAXRAD® and Bluewave™ antenna solutions include high rejection and high performance GPS and GNSS products, the industry leading Yagi portfolio, mobile and indoor LTE, broadband, and LMR antennas and PIM-rated antennas for transit, in-building, and small cell applications. We leverage our design, logistics, and support capabilities to deliver performance critical site solutions into carrier, railroad, and utility applications.

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, or www.rfsolutions.pctel.com.

PCTEL Safe Harbor Statement

This press release and our related comments in our second quarter earnings conference call contain “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Specifically, the statements regarding the our future financial performance, new products and features, expectations regarding the future growth of our antenna and wireless RF businesses, and demand for 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, PCTEL’s ability to successfully grow the wireless products business, 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.

# # #

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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

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PCTEL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

 

		(unaudited)
		June 30,				December 31,
		2015				2014
ASSETS
Cash and cash equivalents		$	16,184			$	20,432
Short-term investment securities			25,075				39,577
Accounts receivable, net of allowance for doubtful accounts of $108 and $121 at June 30, 2015 and December 31, 2014, respectively			21,667				23,874
Inventories, net			17,696				16,358
Deferred tax assets, net			2,149				2,281
Prepaid expenses and other assets			2,131				1,757
Total current assets			84,902				104,279
Property and equipment, net			14,628				14,842
Goodwill			4,123				161
Intangible assets, net			12,929				2,637
Deferred tax assets, net			9,710				9,710
Other noncurrent assets			36				40
TOTAL ASSETS		$	126,328			$	131,669
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable		$	5,811			$	5,495
Accrued liabilities			6,961				10,211
Total current liabilities			12,772				15,706
Other long-term liabilities			1,426				448
Total liabilities			14,198				16,154
Stockholders’ equity:
Common stock, $0.001 par value, 100,000,000 shares authorized, 18,555,427 and 18,571,419 shares issued and outstanding at June 30, 2015 and December 31, 2014, respectively			19				19
Additional paid-in capital			143,616				145,462
Accumulated deficit			(31,646	)			(30,101	)
Accumulated other comprehensive income			141				135
Total stockholders’ equity			112,130				115,515
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		$	126,328			$	131,669

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PCTEL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

(in thousands, except per share data)

 

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2015				2014				2015				2014
REVENUES		$	27,625			$	26,182			$	53,951			$	49,837
COST OF REVENUES			18,034				15,331				34,171				29,405
GROSS PROFIT			9,591				10,851				19,780				20,432
OPERATING EXPENSES:
Research and development			2,904				3,069				5,642				6,311
Sales and marketing			3,425				3,303				6,955				6,258
General and administrative			3,302				3,470				6,665				6,702
Amortization of intangible assets			1,185				464				1,839				1,038
Restructuring charges			440				0				440				0
Total operating expenses			11,256				10,306				21,541				20,309
OPERATING INCOME (LOSS)			(1,665	)			545				(1,761	)			123
Other income, net			2,205				334				2,249				531
INCOME BEFORE INCOME TAXES			540				879				488				654
Expense for income taxes			193				334				174				255
NET INCOME		$	347			$	545			$	314			$	399
Net Income per Share:
Basic		$	0.02			$	0.03			$	0.02			$	0.02
Diluted		$	0.02			$	0.03			$	0.02			$	0.02
Weighed Average Shares:
Basic			18,257				18,165				18,284				18,166
Diluted			18,408				18,291				18,498				18,350
Cash dividend per share		$	0.05			$	0.04			$	0.10			$	0.08

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PCTEL, INC.

P&L INFORMATION BY SEGMENT (unaudited)

(in thousands)

 

		Three Months Ended June 30, 2015																Six Months Ended June 30, 2015
		Connected Solutions				RF Solutions				Corporate				Total				Connected Solutions				RF Solutions				Corporate				Total
REVENUES		$	18,100			$	9,583			($	58	)		$	27,625			$	35,454			$	18,634			($	137	)		$	53,951
GROSS PROFIT			5,417				4,173				1				9,591				10,861				8,908				11				19,780
OPERATING INCOME (LOSS)		$	1,498			($	347	)		($	2,816	)		($	1,665	)		$	3,187			$	786			($	5,734	)		($	1,761	)
		Three Months Ended June 30, 2014																Six Months Ended June 30, 2014
		Connected Solutions				RF Solutions				Corporate				Total				Connected Solutions				RF Solutions				Corporate				Total
REVENUES		$	17,715			$	8,574			($	107	)		$	26,182			$	33,712			$	16,295			($	170	)		$	49,837
GROSS PROFIT			5,716				5,129				6				10,851				10,832				9,587				13				20,432
OPERATING INCOME (LOSS)		$	1,845			$	1,645			($	2,945	)		$	545			$	3,015			$	2,659			($	5,551	)		$	123

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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,
		2015				2014				2015				2014
Operating Income (Loss)		($	1,665	)		$	545			($	1,761	)		$	123
(a)    Add:
Amortization of intangible assets			1,185				464				1,839				1,038
Restructuring:
-Cost of Goods Sold			114				0				114				0
-Restructuring			440				0				440				0
TelWorx investigation:
-General & Administrative			54				263				91				498
Legal settlement:
-General & Administrative			0				75				0				75
Stock Compensation:
-Cost of Goods Sold			56				117				129				203
-Engineering			30				187				145				360
-Sales & Marketing			(18	)			189				140				336
-General & Administrative			173				603				328				948
			2,034				1,898				3,226				3,458
Non-GAAP Operating Income		$	369			$	2,443			$	1,465			$	3,581
% of revenue			1.3	%			9.3	%			2.7	%			7.2	%

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

 

		Three Months Ended June 30,								Six Months Ended June 30,
		2015				2014				2015				2014
Net Income		$	347			$	545			$	314			$	399
Adjustments:
(a)    Non-GAAP adjustment to operating income			2,034				1,898				3,226				3,458
(b)    Other income related to SEC investigation of TelWorx			(54	)			(252	)			(90	)			(472	)
(b)    Legal Settlement - Amendment to Nexgen APA			(2,160	)			0				(2,160	)			0
(b)    Legal Settlement - other			0				(75	)			0				(75	)
(b)    Income Taxes			128				(107	)			(90	)			(387	)
			(52	)			1,464				886				2,524
Non-GAAP Net Income		$	295			$	2,009			$	1,200			$	2,923
Non-GAAP Earning per Share:
Basic		$	0.02			$	0.11			$	0.07			$	0.16
Diluted		$	0.02			$	0.11			$	0.06			$	0.16
Weighed Average Shares:
Basic			18,257				18,165				18,284				18,166
Diluted			18,408				18,291				18,498				18,350

This schedule reconciles the Company’s GAAP operating loss and GAAP net loss 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, 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.

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Reconciliation of GAAP To non-GAAP SEGMENT INFORMATION (unaudited) (a)

(in thousands except per share information)

 

		Three Months Ended June 30, 2015																Six Months Ended June 30, 2015
		Connected Solutions				RF Solutions				Corporate				Total				Connected Solutions				RF Solutions				Corporate				Total
Operating Income (Loss)		$	1,498			($	347	)		($	2,816	)		($	1,665	)		$	3,187			$	786			($	5,734	)		($	1,761	)
Add:
Amortization of intangible assets			230				955				0				1,185				460				1,379				0				1,839
TelWorx investigation:
-General & Administrative			0				0				54				54				0				0				91				91
Restructuring:
-Cost of Goods Sold			114				0				0				114				114				0				0				114
-Restructuring charges			426				14				0				440				426				14				0				440
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
			709				1,042				283				2,034				1,149				1,647				430				3,226
Non-GAAP Operating Income (Loss)		$	2,207			$	695			($	2,533	)		$	369			$	4,336			$	2,433			($	5,304	)		$	1,465
		Three Months Ended June 30, 2014																Six Months Ended June 30, 2014
		Connected Solutions				RF Solutions				Corporate				Total				Connected Solutions				RF Solutions				Corporate				Total
Operating Income (Loss)		$	1,845			$	1,645			($	2,945	)		$	545			$	3,015			$	2,659			($	5,551	)		$	123
Add:
Amortization of intangible assets			260				204				0				464				630				408				0				1,038
TelWorx investigation:
-General & Administrative			0				0				263				263				0				0				498				498
Legal settlement:
-General & Administrative			0				0				75				75				0				0				75				75
Stock Compensation:
-Cost of Goods Sold			54				63				0				117				99				104				0				203
-Engineering			86				101				0				187				166				194				0				360
-Sales & Marketing			150				39				0				189				279				57				0				336
-General & Administrative			63				36				504				603				149				67				732				948
			613				443				842				1,898				1,323				830				1,305				3,458
Non-GAAP Operating Income (Loss)		$	2,458			$	2,088			($	2,103	)		$	2,443			$	4,338			$	3,489			($	4,246	)		$	3,581

This schedule reconciles the Company’s GAAP operating income (loss) by segment to its non-GAAP operating 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.