$107.2 Million in 2014 Revenue
PCTEL, Inc. (NASDAQ:PCTI), a leader in Performance
Critical Telecom solutions, announced its 2014 fourth
quarter and annual results.
Fourth Quarter and Annual
Highlights
- $29.4 million in revenue for the
quarter, an increase of 13 percent from the same period last
year. $107.2 million in revenue for the year, an increase of three
percent over 2013.
- Gross profit margin of 40 percent in
the quarter, compared to 42 percent for the same period last
year. Gross profit margin of 41 percent for the year, compared to
40 percent in 2013.
- GAAP operating margin from
continuing operations of six percent for the quarter, compared
to operating margin of two percent for the same period last year.
Operating margin for the year of four percent as compared to break
even in 2013.
- GAAP net income from continuing
operations of $2.0 million for the quarter, or $0.11 per diluted
share, compared to net income of $453,000, or $0.02 per diluted
share for the same period last year. $4.6 million of net income
from continuing operations for the year, or $0.25 per diluted
share, as compared to net income of $3.3 million, or $0.18 per
diluted share in 2013.
- 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 from
continuing operations of 12 percent in the quarter, compared to
10 percent in the same period last year. Non-GAAP operating margin
for the year was 10 percent as compared to nine percent in
2013.
- Non-GAAP net income from continuing
operations of $3.0 million or $0.16 per diluted share in the
quarter, as compared to $2.1 million or $0.12 per diluted share
in the same period last year. Non-GAAP net income from continuing
operations of $8.8 million or $0.48 per diluted share for the year,
as compared to $7.6 million or $0.42 per diluted share in 2013. The
2014 Non-GAAP earnings represent a 4X increase over the last five
years.
- $60.0 million of cash and short-term
investments at December 31, 2014, an increase of approximately
$1.1 million from the preceding quarter. This quarterly change
includes approximately $2.6 million of cash flow from operations
and approximately $700,000 of capital expenditures.
“Continued demand for in-building and small cell solutions drove
our revenue growth, generating demand for our engineering services,
scanning receivers, in-building antenna solutions, and our site
solutions,” said Marty Singer, PCTEL’s Chairman and CEO. “We
believe that we are off to a good start to 2015 with our recent
announcement of an industry-leading five year warranty and our
innovative VenU™ product line. We are preparing for the release of
additional products during the Mobile World Congress this week,”
added Singer.
CONFERENCE CALL / WEBCAST
PCTEL’s management team will discuss the Company’s results today
at 8:30 AM ET. The call can be accessed by dialing (877) 734-5369
(U.S. / Canada) or (706) 679-6397 (International), conference ID:
13775109. 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:
13775109.
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 tool.
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 provide performance critical mobile towers
for demanding emergency and oil and gas network applications and
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 contains “forward-looking statements” as
defined in the Private Securities Litigation Reform Act of 1995.
Specifically, the statements regarding the demand for in-building
and small cell solutions generating growth in PCTEL’s in-building
engineering services and scanning receiver sales, the impact of the
five-year warranty, and the anticipated success of the Company’s
new VenU™ and other products, 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 in-building and
small cell solutions, 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.
PCTEL, INC. CONSOLIDATED BALANCE SHEETS
(unaudited) (in thousands, except share data)
December 31, December 31,
2014 2013 ASSETS Cash and cash
equivalents $20,432 $21,790 Short-term investment securities 39,577
36,105 Accounts receivable, net of allowance for doubtful accounts
of $121 and $130 at December 31, 2014 and December 31, 2013,
respectively 23,874 18,603 Inventories, net 16,358 14,535 Deferred
tax assets, net 2,281 1,629 Prepaid expenses and other assets 1,757
3,166 Total current assets 104,279 95,828 Property and
equipment, net 14,842 14,971 Goodwill 161 161 Intangible assets,
net 2,637 4,604 Deferred tax assets, net 9,710 11,827 Other
noncurrent assets 40 41
TOTAL ASSETS $131,669
$127,432 LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable $5,495 $4,440 Accrued liabilities 10,211
7,803 Total current liabilities 15,706 12,243 Other
long-term liabilities 448 3,137 Total liabilities
16,154 15,380 Stockholders’ equity: Common stock, $0.001 par
value, 100,000,000 shares authorized, 18,571,419 and 18,566,119
shares issued and outstanding at December 31, 2014 and December 31,
2013, respectively 19 19 Additional paid-in capital 145,462 143,572
Accumulated deficit (30,101) (31,748) Accumulated other
comprehensive income 135 209 Total stockholders’ equity 115,515
112,052
TOTAL LIABILITIES AND EQUITY $131,669
$127,432 PCTEL, INC. CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (unaudited) (in thousands, except
per share data) Three Months Ended
Year Ended December 31, December
31, 2014 2013 2014
2013 REVENUES $29,395 $25,963 $107,164
$104,253
COST OF REVENUES 17,634 15,120 63,577 62,493
GROSS PROFIT 11,761 10,843 43,587 41,760
OPERATING
EXPENSES: Research and development 2,766 3,102 11,736 11,064
Sales and marketing 3,649 3,134 12,961 12,121 General and
administrative 2,997 3,589 12,819 15,623 Amortization of intangible
assets 464 596 1,967 2,400 Restructuring charges 0 2 0 256 Total
operating expenses 9,876 10,423 39,483 41,464
OPERATING
INCOME 1,885 420 4,104 296 Other income, net 927 600 1,666
5,378
INCOME BEFORE INCOME TAXES 2,812 1,020 5,770 5,674
Expense for income taxes 817 567 1,158 2,332
NET INCOME FROM
CONTINUING OPERATIONS 1,995 453 4,612 3,342
INCOME (LOSS)
FROM DISCONTINUED OPERATIONS, NET OF TAX EXPENSE (BENEFIT) 0 17
0 (91)
NET INCOME $1,995 $470 $4,612 $3,251
Earnings per Share from Continuing Operations: Basic $0.11
$0.03 $0.25 $0.19 Diluted $0.11 $0.03 $0.25 $0.18
Earnings (Loss) per Share from Discontinued Operations:
Basic $0.00 $0.00 $0.00 ($0.01) Diluted $0.00 $0.00 $0.00 $0.00
Earnings per Share: Basic $0.11 $0.03 $0.25 $0.18
Diluted $0.11 $0.03 $0.25 $0.18
Weighed Average
Shares: Basic 18,154 17,916 18,159 17,797 Diluted 18,412 18,508
18,389 18,184 Cash dividend per share $0.040 $0.035 $0.160
$0.140
PCTEL, INC. P&L INFORMATION BY SEGMENT
(unaudited) (in thousands)
Three Months Ended
December 31, 2014 Year Ended December 31, 2014 Connected Connected
Solutions RF Solutions Corporate Total Solutions RF Solutions
Corporate Total
REVENUES $19,924 $9,535 ($64) $29,395
$72,333 $35,113 ($282) $107,164
GROSS PROFIT 6,183 5,572 6 11,761
22,818 20,743 26 43,587
OPERATING INCOME (LOSS) $2,078 $2,184 ($2,377)
$1,885 $7,357 $7,333 ($10,586) $4,104 Three Months
Ended December 31, 2013 Year Ended December 30, 2013 Connected
Connected Solutions RF Solutions Corporate Total Solutions RF
Solutions Corporate Total
REVENUES $17,349 $8,693
($79) $25,963 $74,223 $30,310 ($280) $104,253
GROSS PROFIT 5,368 5,471
4 10,843 22,720 19,018 22 41,760
OPERATING INCOME (LOSS) $1,140 $2,109
($2,829) $420 $6,012 $7,248 ($12,964) $296
Reconciliation
GAAP To non-GAAP Results Of Continuing Operations
(unaudited)
(in thousands except per share information)
Reconciliation of
GAAP operating income to non-GAAP operating income (a) from
Continuing Operations
Three Months Ended December 31, Year Ended
December 31,
2014
2013
2014
2013
Operating Income $1,885 $420 $4,104 $296 (a) Add:
Amortization of intangible assets 464 596 1,967 2,400 TelWorx
restructuring: -Restructuring charges 0 2 0 256 -Cost of Goods Sold
0 0 0 284 TelWorx investigation: -General & Administrative 580
747 1,266 2,626 Legal settlement -General & Administrative 0 0
75 0 Stock Compensation: -Cost of Goods Sold 111 95 426 390
-Engineering 150 185 658 689 -Sales & Marketing 170 140 661 575
-General & Administrative 267 402 1,530 1,786 1,742 2,167 6,583
9,006 Non-GAAP Operating Income $3,627
$2,587 $10,687 $9,302 % of revenue 12.3% 10.0% 10.0% 8.9%
Reconciliation of
GAAP net income to non-GAAP net income (b) from Continuing
Operations
Three Months Ended December 31, Year Ended
December 31,
2014
2013
2014
2013
Net Income from Continuing Operations $1,995 $453 $4,612
$3,342 Adjustments: (a) Non-GAAP adjustment to operating
income 1,742 2,167 6,583 9,006 Other income related to the TelWorx
settlement and TelWorx SEC investigation (908) (586) (1,568)
(5,353) Other legal settlements 0 0 (75) 0 (b) Income Taxes 161 99
(770) 653 995 1,680 4,170 4,306
Non-GAAP Net Income from Continuing Operations $2,990 $2,133 $8,782
$7,648
Non-GAAP Earning per Share: Basic $0.16 $0.12
$0.48 $0.43 Diluted $0.16 $0.12 $0.48 $0.42
Weighed
Average Shares: Basic 18,154 17,916 18,159 17,797 Diluted
18,412 18,508 18,389 18,184
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,
restructuring charges, and general and administrative expenses
associated with the TelWorx investigation.
(b) These adjustments include the items
described in footnote (a) as well as other income for the TelWorx
legal settlement and insurance claims related to the TelWorx
investigation, and non-cash income tax expense.
Reconciliation
GAAP To non-GAAP SEGMENT INFORMATION (unaudited) (a) - Continuing
Operations
(in thousands except per share information)
Three Months Ended December 31, 2014 Year Ended December 31, 2014
Connected Connected Solutions RF Solutions Corporate Total
Solutions RF Solutions Corporate Total
Operating
Income (Loss) $2,078 $2,184 ($2,377) $1,885 $7,357 $7,333
($10,586) $4,104 Add: Amortization of intangible assets 260
204 0 464 1,151 816 0 1,967 TelWorx restructuring: -Restructuring
charges 0 0 0 0 0 0 0 0 -Cost of Goods Sold 0 0 0 0 0 0 0 0 TelWorx
investigation: -General & Administrative 0 0 580 580 0 0 1,266
1,266 Legal settlement -General & Administrative 0 0 0 0 0 0 75
75 Stock Compensation: -Cost of Goods Sold 58 53 0 111 215 211 0
426 -Engineering 64 86 0 150 292 366 0 658 -Sales & Marketing
133 37 0 170 534 127 0 661 -General & Administrative 54 31 182
267 256 129 1,145 1,530 569 411 762 1,742 2,448 1,649 2,486 6,583
Non-GAAP
Operating Income (Loss) $2,647 $2,595 ($1,615) $3,627 $9,805
$8,982 ($8,100) $10,687 Three Months Ended December
31, 2013 Year Ended December 30, 2013 Connected Connected Solutions
RF Solutions Corporate Total Solutions RF Solutions Corporate Total
Operating Income (Loss) $1,140 $2,109 ($2,829)
$420 $6,012 $7,248 ($12,964) $296 Add: Amortization of
intangible assets 392 204 0 596 1,573 827 0 2,400 TelWorx
restructuring: -Restructuring charges 2 0 0 2 256 0 0 256 -Cost of
Goods Sold 0 0 0 0 284 0 0 284 TelWorx investigation: -General
& Administrative 0 0 747 747 0 0 2,626 2,626 Stock
Compensation: -Cost of Goods Sold 44 51 0 95 153 237 0 390
-Engineering 78 107 0 185 285 404 0 689 -Sales & Marketing 122
18 0 140 450 125 0 575 -General & Administrative 91 33 278 402
341 109 1,336 1,786 729 413 1,025 2,167 3,342 1,702 3,962 9,006
Non-GAAP
Operating Income (Loss) $1,869 $2,522 ($1,804) $2,587 $9,354
$8,950 ($9,002) $9,302 This schedule reconciles the
Company's GAAP operating income by segment 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 TelWorx investigation.
PCTEL, Inc.John SchoenCFO(630) 372-6800orJack SellerPublic
Relations(630)372-6800Jack.seller@pctel.com
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