PCTEL, Inc. (Nasdaq: PCTI) announced its results for the second
quarter ended June 30, 2019.
Highlights
- Revenue of $23.5 million in the quarter, 9% higher
compared to the prior year. The second quarter revenue was higher
by 82% for the test and measurement product line and lower by 8%
for the antenna product line compared to the second quarter
2018.
- Gross profit margin of 45.5% in the quarter, up 9.4%
compared to gross profit margin in the prior year. The increase in
the second quarter is a result of higher revenues for test and
measurement products and improved profitability for antenna
products.
- GAAP net income per share of $0.05 in the quarter
compared to a GAAP loss of $0.07 per share in the second 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 GAAP financial
statements is provided later in the press release.
- Non-GAAP net income per share of $0.13 in the quarter
compared to a break-even in the second quarter last year.
- Adjusted EBITDA margin as a percent of revenue of 13% in the
quarter compared to 2% in the second quarter last year.
- $36.8 million of cash and short-term investments at June 30,
2019 and no debt.
- The Company will incur restructuring expense in the second
half of fiscal year 2019 related to the transition plan for China
manufacturing.
“We are pleased with the sequential revenue and gross margin
growth driven by 5G scanning receiver demand and significant
Industrial IoT antenna project wins and facilitated by the cost
reduction and realignment actions we took over the past year,” said
David Neumann, PCTEL’s CEO. “We are in the early stages of 5G and
the deployment of Industrial IoT systems. PCTEL has the
capabilities and resources to grow with these markets and increase
value for all stakeholders.”
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:
5497038. 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:
5497038.
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 transition plan for manufacturing in China and our
2018 cost reduction actions, the anticipated demand for certain
products including those related to public safety, 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) June
30, December 31,
2019
2018
ASSETS Cash and cash equivalents
$
4,066
$
4,329
Short-term investment securities
32,694
30,870
Accounts receivable, net of allowances of $99 and $63 at June 30,
2019 andDecember 31, 2018, respectively
16,108
15,864
Inventories, net
13,140
12,848
Prepaid expenses and other assets
1,412
1,416
Total current assets
67,420
65,327
Property and equipment, net
11,536
12,138
Goodwill
3,332
3,332
Intangible assets, net
574
1,029
Other noncurrent assets
1,291
45
TOTAL ASSETS
$
84,153
$
81,871
LIABILITIES AND STOCKHOLDERS’ EQUITY Accounts payable
$
5,881
$
6,083
Accrued liabilities
7,384
5,801
Total current liabilities
13,265
11,884
Long-term liabilities
759
381
Total liabilities
14,024
12,265
Stockholders’ equity: Common stock, $0.001 par value, 100,000,000
shares authorized, 18,417,701 and 18,271,249shares issued and
outstanding at June 30, 2019 and December 31, 2018, respectively
18
18
Additional paid-in capital
133,753
133,859
Accumulated deficit
(63,431
)
(64,055
)
Accumulated other comprehensive loss
(211
)
(216
)
Total stockholders’ equity
70,129
69,606
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$
84,153
$
81,871
PCTEL, INC. CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (unaudited) (in thousands, except per share
data) Three Months Ended Six Months
Ended June 30, June 30,
2019
2018
2019
2018
REVENUES
$
23,499
$
21,582
$
44,090
$
43,313
COST OF REVENUES
12,805
13,783
24,737
27,650
GROSS PROFIT
10,694
7,799
19,353
15,663
OPERATING EXPENSES: Research and development
3,006
3,053
6,009
5,993
Sales and marketing
3,097
3,075
5,895
6,102
General and administrative
3,914
3,149
7,167
6,143
Amortization of intangible assets
48
124
122
248
Restructuring expenses
0
0
0
0
Total operating expenses
10,065
9,401
19,193
18,486
OPERATING INCOME (LOSS)
629
(1,602
)
160
(2,823
)
Other income, net
320
209
481
260
INCOME (LOSS) BEFORE INCOME TAXES
949
(1,393
)
641
(2,563
)
Expense (benefit) for income taxes
8
(167
)
17
(479
)
NET INCOME (LOSS)
$
941
$
(1,226
)
$
624
$
(2,084
)
Net Income (Loss) per Share: Basic
$
0.05
$
(0.07
)
$
0.04
$
(0.12
)
Diluted
$
0.05
$
(0.07
)
$
0.03
$
(0.12
)
Weighted Average Shares: Basic
17,828
17,142
17,725
17,099
Diluted
17,934
17,142
17,916
17,099
Cash dividend per share
$
0.055
$
0.055
$
0.110
$
0.110
PCTEL, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS (unaudited, in thousands) Six
Months Ended June 30, .
2019
2018
Operating Activities: Net income (loss)
$
624
$
(2,084
)
Adjustments to reconcile net income (loss) to net cash provided by
operating activities: Depreciation and Amortization
1,425
1,381
Intangible asset amortization
455
581
Stock-based compensation
2,328
1,786
Loss on disposal of property and equipment
30
(5
)
Restructuring costs
(14
)
(20
)
Bad debt provision
11
124
Deferred tax provision
0
(390
)
Changes in operating assets and liabilities: Accounts receivable
(234
)
473
Inventories
(268
)
(813
)
Prepaid expenses and other assets
354
330
Accounts payable
(231
)
2,743
Income taxes payable
(46
)
(38
)
Other accrued liabilities
675
(2,107
)
Deferred revenue
(40
)
16
Net cash provided by operating activities
5,069
1,977
Investing Activities: Capital expenditures
(986
)
(1,519
)
Proceeds from disposal of property and equipment
0
14
Purchases of investments
(26,823
)
(22,712
)
Redemptions/maturities of short-term investments
24,999
26,307
Net cash (used in) provided by investing activities
(2,810
)
2,090
Financing Activities: Proceeds from issuance of common stock
338
364
Payment of withholding tax on stock-based compensation
(743
)
(289
)
Principle payments on finance leases
(52
)
(57
)
Cash dividends
(2,029
)
(1,999
)
Net cash used in financing activities
(2,486
)
(1,981
)
Net (decrease) increase in cash and cash equivalents
(227
)
2,086
Effect of exchange rate changes on cash
(36
)
(42
)
Cash and cash equivalents, beginning of period
4,329
5,559
Cash and Cash Equivalents, End of Period
$
4,066
$
7,603
PCTEL, INC. REVENUE AND GROSS PROFIT BY
PRODUCT LINE (unaudited) (in thousands)
Three Months Ended June 30, 2019 Six Months Ended
June 30, 2019
Antenna Products
Test & Measurement
Products
Corporate
Total
Antenna Products
Test & Measurement
Products
Corporate
Total
REVENUES
$16,014
$7,526
($41)
$23,499
$31,102
$13,062
($74)
$44,090
GROSS PROFIT
$5,569
$5,112
$13
$10,694
$10,430
$8,898
$25
$19,353
GROSS PROFIT %
34.8%
67.9%
45.5%
33.5%
68.1%
43.9%
Three Months Ended June 30, 2018 Six Months Ended
June 30, 2018
Antenna Products
Test & Measurement
Products
Corporate
Total
Antenna Products
Test & Measurement
Products
Corporate
Total
REVENUES
$17,478
$4,135
($31)
$21,582
$35,243
$8,134
($64)
$43,313
GROSS PROFIT
$5,031
$2,755
$13
$7,799
$10,229
$5,426
$8
$15,663
GROSS PROFIT %
28.8%
66.6%
36.1%
29.0%
66.7%
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 June 30, Six Months Ended June
30,
2019
2018
2019
2018
Operating Income (Loss)
$629
($1,602)
$160
($2,823)
(a)
Add: Amortization of intangible assets -Cost of
revenues
167
167
333
333
-Operating expenses
48
124
122
248
Restructuring
0
0
0
0
Stock Compensation: -Cost of revenues
102
93
205
181
-Engineering
177
159
350
297
-Sales & marketing
182
157
363
288
-General & administrative
983
710
1,410
1,021
1,659
1,410
2,783
2,368
Non-GAAP Operating Income (Loss)
$2,288
($192)
$2,943
($455)
% of revenue
9.7%
-0.9%
6.7%
-1.1%
Reconciliation of GAAP net loss to
non-GAAP net income (loss) Three Months Ended
June 30, Six Months Ended June 30,
2019
2018
2019
2018
Net Income (Loss)
$941
($1,226)
$624
($2,084)
Adjustments: (a) Non-GAAP adjustment to operating
income (loss)
1,659
1,410
2,783
2,368
Income Taxes
(201)
(168)
(257)
(463)
1,458
1,242
2,526
1,905
Non-GAAP Net Income (Loss)
$2,399
$16
$3,150
($179)
Non-GAAP Income (Loss) per Share: Basic
$0.13
$0.00
$0.18
($0.01)
Diluted
$0.13
$0.00
$0.18
($0.01)
Weighed Average Shares: Basic
17,828
17,142
17,725
17,099
Diluted
17,934
17,554
17,916
17,099
This schedule reconciles the Company's GAAP operating income
(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 income (loss) (a) consist of stock compensation
expense and amortization of intangible assets. The adjustments to
GAAP net income (loss) include the non-GAAP adjustments to
operating income (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 June
30, Year Ended June 30,
2019
2018
2019
2018
Operating Income (Loss)
$629
($1,602)
$160
($2,823)
Add: Depreciation and amortization
713
707
1,425
1,381
Intangible amortization
215
291
455
581
Stock compensation expenses
1,444
1,119
2,328
1,787
Adjusted EBITDA
$3,001
$515
$4,368
$926
% of revenue
12.8%
2.4%
9.9%
2.1%
This schedule reconciles the Company's GAAP operating
income (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
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190808005769/en/
Kevin McGowan CFO PCTEL, Inc. (630) 372-6800
Michael Rosenberg Director of Marketing PCTEL, Inc. (301)
444-2046 public.relations@pctel.com
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