$96.7 Million for the Year
PCTEL, Inc. (Nasdaq:PCTI), a leader in Performance
Critical TELecom solutions, announced its 2016 fourth
quarter and full year results.
Highlights
- Revenue of $26.7 million in the
quarter, a 2% increase over the same period last year. $96.7
million in revenue for the year, a decrease of 9% as compared to
2015.
- Gross profit margin of 37.4% in the
quarter compared to 35.5% for the same period last year. Gross
profit margin of 36.4% for the year, compared to 34.9% in
2015.
- Net loss of $0.33 per share
in the quarter, compared to a net loss of $0.05 per share in
the same period last year. Net loss of $1.09 per share for the
year, compared to a net loss of $0.09 last year. 2016 results
include non-cash expenses for intangible asset impairments and the
establishment of a deferred tax asset valuation allowance which
cost $0.35 per share in the quarter and $1.00 per share for the
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 of $0.08 per
share in the quarter compared to $0.04 for the same period last
year, and $0.20 per share for the year compared to $0.11 in 2015.
The non-cash expenses for intangible asset impairments and the
establishment of a deferred tax asset valuation allowance are
responsible for most of difference between GAAP & non-GAAP
results.
- Adjusted EBITDA margin as a percent
of revenue in the quarter of 9% compared to 6% for the same
period last year, and 7% for the year compared to 5% in 2015.
- $33.3 million of cash and short-term
investments at December 31, 2016, an increase of approximately
$2.1 million from the preceding quarter. The Company generated free
cash flow of approximately $3.0 million for the quarter (11% of
revenue) and $8.5 million for the year (9% of revenue).
“Strong small cell antenna demand coupled with scanning receiver
sales contributed to improved revenue and gross profit margin for
the quarter,” said David Neumann, PCTEL’s CEO. “The densification
of wireless networks and expanding applications across IoT will
continue to provide opportunities for PCTEL antennas and test and
measurement solutions.”
CONFERENCE CALL / WEBCAST
PCTEL’s management team will discuss the Company’s results today
at 8:15 a.m. ET. The call can be accessed by dialing (888) 782-2072
(U.S. / Canada) or (706) 679-6397 (International), conference ID:
47845844. 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:
47845844.
About PCTEL
PCTEL
delivers Performance Critical TELecom
technology solutions to the wireless industry. We are the leading
global supplier of antennas and wireless network testing solutions.
PCTEL Connected Solutions designs and manufactures precision
antennas. PCTEL 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).
PCTEL RF Solutions provides test tools and engineering services
that improve the performance of wireless networks globally. Mobile
operators, neutral hosts, and equipment manufacturers rely on PCTEL
to analyze, design, and optimize next generation wireless
networks.
For more information, please visit the following websites.
PCTEL Corporate: http://www.pctel.com/
PCTEL Connected Solutions: http://www.antenna.com/
PCTEL RF Solutions: http://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 small cell,
broadband, and test and measurement solutions 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 actual growth in the APAC
region, impact of IoT on capacity and coverage demand, customer
demand for these types of products and services generally, growth
and continuity in PCTEL’s vertical markets, 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. CONSOLIDATED BALANCE SHEETS (in
thousands, except share data) December 31,
December 31, 2016 2015 ASSETS
Cash and cash equivalents $ 14,855 $ 7,055 Short-term investment
securities 18,456 24,728 Accounts receivable, net of allowance for
doubtful accounts of $273 and $314 at
December 31, 2016 and December 31, 2015,
respectively
19,101 21,001 Inventories, net 14,442 17,596 Prepaid expenses and
other assets 1,548 1,586 Total current
assets 68,402 71,966 Property and equipment, net 12,609
13,839 Goodwill 3,332 3,332 Intangible assets, net 3,275 11,378
Deferred tax assets, net 4,558 13,155 Other noncurrent assets
36 40
TOTAL ASSETS $
92,212 $ 113,710
LIABILITIES AND STOCKHOLDERS’ EQUITY Accounts payable
$ 6,073 $ 6,735 Accrued liabilities 7,177
6,190 Total current liabilities 13,250 12,925 Other
long-term liabilities 391 388 Total
liabilities 13,641 13,313
Stockholders’ equity: Common stock, $0.001 par value, 100,000,000
shares authorized, 17,335,122 and
17,654,236 shares issued and outstanding
at December 31, 2016 and December 31, 2015,
respectively
17 18 Additional paid-in capital 134,480 135,714 Accumulated
deficit (55,544 ) (35,320 ) Accumulated other comprehensive loss
(382 ) (15 ) Total stockholders’ equity 78,571
100,397
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 92,212 $ 113,710
PCTEL, INC. CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (unaudited) (in thousands, except per share
data) Three Months
Ended Year Ended December 31, December 31,
2016 2015 2016 2015
REVENUES $ 26,709 $ 26,138 $ 96,713 $ 106,615
COST OF
REVENUES 16,728 16,859
61,507 69,354
GROSS PROFIT 9,981
9,279 35,206 37,261
OPERATING EXPENSES: Research and development 2,577
2,699 10,158 11,205 Sales and marketing 3,885 3,639 13,810 14,196
General and administrative 2,893 2,887 12,051 12,399 Amortization
of intangible assets 222 889 1,651 3,426 Impairment of goodwill and
other intangible assets 1,061 161 5,785 161 Restructuring expenses
10 778 664 1,630
Total operating expenses 10,648 11,053
44,119 43,017
OPERATING
LOSS (667 ) (1,774 ) (8,913 ) (5,756 ) Other income, net
63 504 112 3,287
LOSS BEFORE INCOME TAXES (604 ) (1,270 ) (8,801 ) (2,469 )
Expense (benefit) for income taxes 4,677 (450
) 8,834 (901 )
NET LOSS $ (5,281 ) $
(820 ) $ (17,635 ) $ (1,568 )
Net Loss per Share:
Basic $ (0.33 ) $ (0.05 ) $ (1.09 ) $ (0.09 ) Diluted $ (0.33 ) $
(0.05 ) $ (1.09 ) $ (0.09 )
Weighted Average Shares:
Basic 16,194 16,820 16,151 17,737 Diluted 16,194 16,820 16,151
17,737 Cash dividend per share $ 0.05 $ 0.05 $ 0.20 $ 0.20
PCTEL, INC. P&L INFORMATION BY SEGMENT
(unaudited) (in thousands)
Three Months Ended December 31,
2016 Year Ended December 31, 2016 Connected
Connected Solutions RF Solutions
Corporate Total Solutions RF Solutions
Corporate Total REVENUES $ 18,147 $
8,574 ($12 ) $ 26,709 $ 65,763 $ 31,126 ($176 ) $ 96,713
GROSS
PROFIT 5,671 4,288 22 9,981 20,706 14,485 15 35,206
OPERATING
(LOSS) INCOME $ 2,177 ($509 ) ($2,335 ) ($667 ) $
7,804 ($6,738 ) ($9,979 ) ($8,913 )
Three Months Ended December 31, 2015 Year Ended December
31, 2015 Connected Connected Solutions
RF Solutions Corporate Total Solutions
RF Solutions Corporate
Total
REVENUES $ 16,675 $ 9,506 ($43 ) $ 26,138 $ 69,579 $
37,255 ($219 ) $ 106,615
GROSS PROFIT 4,877 4,389 13 9,279 20,426
16,803 32 37,261
OPERATING (LOSS) INCOME $ 675 ($8 ) ($2,441 )
($1,774 ) $ 5,040 ($298 ) ($10,498 ) ($5,756 )
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 December 31, Year Ended
December 31,
2016
2015
2016
2015
Operating Loss ($667 ) ($1,774 ) ($8,913 ) ($5,756 )
(a) Add: Amortization of intangible assets -Cost of revenues
167 167 666 595 -Operating expenses 222 889 1,651 3,426 Impairment
of goodwill and other intangible assets 1,061 161 5,785 161
Restructuring: -Cost of revenues 0 42 0 288 -Operating expenses 10
778 664 1,630 TelWorx investigation: -General & Administrative
0 7 5 107 Stock Compensation: -Cost of revenues 86 125 411 369
-Engineering 125 175 650 419 -Sales & Marketing 142 (132 ) 627
238 -General & Administrative 446 304
2,297 838 2,259 2,516 12,756
8,071
Non-GAAP Operating Income
$ 1,592 $ 742 $ 3,843 $ 2,315 % of
revenue 6.0 % 2.8 % 4.0 % 2.2 %
Reconciliation of
GAAP net loss to non-GAAP net (loss) income (b)
Three Months Ended December 31, Year Ended
December 31,
2016
2015
2016
2015
Net Loss ($5,281 ) ($820 ) ($17,635 ) ($1,568 )
Adjustments: (a) Non-GAAP adjustment to operating loss 2,259
2,516 12,756 8,071 (b) Other income related to SEC investigation of
TelWorx 0 (1 ) (5 ) (102 ) (b) Legal Settlement - Amendment to
Nexgen APA 0 (500 ) 0 (3,160 ) (b) Income Taxes 4,379
(584 ) 8,123 (1,322 ) 6,638
1,431 20,874 3,487
Non-GAAP Net Income $ 1,357 $ 611 $ 3,239
$ 1,919
Non-GAAP Earning per Share:
Basic $ 0.08 $ 0.04 $ 0.20 $ 0.11 Diluted $ 0.08 $ 0.04 $ 0.20 $
0.11
Weighed Average Shares: Basic 16,194 16,820
16,151 17,737 Diluted 16,439 16,969 16,325 18,257
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) Three Months Ended December 31,
2016 Year Ended December 31, 2016 Connected
RF Connected RF Solutions
Solutions Corporate Total Solutions
Solutions Corporate Total Operating
(Loss) Income $ 2,177 ($509 ) ($2,335 ) ($667 ) $ 7,804 ($6,738
) ($9,979 ) ($8,913 ) Add: Amortization of intangible
assets: -Cost of revenues 0 167 0 167 0 666 0 666 -Operating
expenses 39 183 0 222 191 1,460 0 1,651 Impairment of intangible
assets 0 1,061 0 1,061 0 5,785 0 5,785 Restructuring expenses 0 10
0 10 44 547 73 664 TelWorx investigation: -General &
Administrative 0 0 0 0 0 0 5 5 Stock Compensation: -Cost of
revenues 43 43 0 86 178 233 0 411 -Engineering 48 77 0 125 172 478
0 650 -Sales & Marketing 98 44 0 142 435 192 0 627 -General
& Administrative 51 77 318
446 209 339 1,749
2,297 279 1,662 318 2,259 1,229 9,700 1,827 12,756
Non-GAAP
Operating (Loss) Income $ 2,456 $ 1,153 ($2,017 )
$ 1,592 $ 9,033 $ 2,962 ($8,152 ) $ 3,843
Three Months Ended December 31, 2015
Year Ended December 31, 2015 Connected RF
Connected RF Solutions Solutions
Corporate Total Solutions Solutions
Corporate Total Operating (Loss) Income
$ 675 ($8 ) ($2,441 ) ($1,774 ) $ 5,040 ($298 ) ($10,498 ) ($5,756
) Add: Amortization of intangible assets: -Cost of revenues
0 167 0 167 39 556 0 595 -Operating expenses 195 694 0 889 811
2,615 0 3,426 Impairment of goodwill 161 161 161 161 Restructuring
expenses -Cost of revenues 42 0 0 42 288 0 0 288 -Restructuring
charges 755 23 0 778 1,293 337 0 1,630 TelWorx investigation:
-General & Administrative 0 0 7 7 0 0 107 107 Stock
Compensation: -Cost of Goods Sold 28 97 0 125 82 287 0 369
-Engineering 49 126 0 175 104 315 0 419 -Sales & Marketing 88
(220 ) 0 (132 ) 261 (23 ) 0 238 -General & Administrative
(18 ) 70 252 304
(12 ) 113 737 838 1,139 1,118
259 2,516 2,866 4,361 844 8,071
Non-GAAP Operating (Loss) Income $
1,814 $ 1,110 ($2,182 ) $ 742 $ 7,906 $
4,063 ($9,654 ) $ 2,315 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.
PCTEL,
Inc.
Reconciliation of
GAAP operating loss to Adjusted EBITDA (a)
(in thousands) Three
Months Ended December 31, Year Ended December 31,
2016
2015
2016
2015
Operating Loss ($667 ) ($1,774 ) ($8,913 ) ($5,756 )
(a)
Add: Depreciation and amortization 1,134 1,844
5,467 7,106 Restructuring - cost of revenues 0 42 0 288
Restructuring - operating expenses 10 778 664 1,630 Stock
compensation expenses 799 472 3,986 1,864 Impairment of goodwill
and other intangible assets 1,061 161 5,785 161 TelWorx
investigation- operating expenses 0 7
5 107
Adjusted EBITDA $ 2,337
$ 1,530 $ 6,994 $ 5,400
% of
revenue 8.7 % 5.9 % 7.2 % 5.1 % 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. (a) Adjusted EBITDA is defined as net income before
interest, income taxes, depreciation and amortization. These
adjustments reflect depreciation, amortization of intangible
assets, stock compensation expenses, restructuring expenses, and
general and administrative expenses associated with the SEC
investigation of TelWorx.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170308005157/en/
John SchoenCFOPCTEL, Inc.(630) 372-6800orMichael
RosenbergDirector of MarketingPCTEL, Inc.(301)
444-2046public.relations@pctel.com
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