PCTEL, Inc. (Nasdaq: PCTI) announced its results for the fourth
quarter and full year ended December 31, 2020.
Highlights
- Revenue of $21.2 million in the quarter and $77.5 million
for the year, 7.5% lower compared to the fourth quarter 2019
and 14.5% lower in the year compared to 2019. Revenue was higher by
9.5% for the test and measurement product line, and lower by 15.2%
for the antenna product line compared to the fourth quarter 2019.
For the year, revenue was lower by 2.0% for the test and
measurement product line and lower by 19.4% for the antenna product
line.
- Gross profit margin of 50.1% in the fourth quarter and 49.0%
for the year, down 0.2% compared to the gross profit margin in
the fourth quarter 2019 and up 3.2% in the year compared to 2019.
The gross profit percentage in the fourth quarter reflects a higher
mix of higher margin test and measurement products, offsetting
lower gross margin percentages for both test and measurement
products and antenna products.
- GAAP net income per diluted share of $0.10 in the fourth
quarter and $0.18 in the year compared to GAAP net income per
share of $0.10 in the fourth quarter 2019 and $0.21 for the year in
2019.
- Non-GAAP net income and adjusted EBITDA are metrics the
Company uses to measure its core earnings. A reconciliation of
those non-GAAP measures to our GAAP financial statements is
provided later in the press release.
- $41.0 million of cash and investments (including long-term
investments) and no debt at December 31, 2020 compared to $41.3
million and no debt at September 30, 2020.
“We’re pleased with the strong performance for both our antenna
and scanning receiver product lines in the fourth quarter. We saw
improvements in revenue and earnings in the second half of the year
and incoming orders were at the highest level since the second
quarter of 2019,” said David Neumann, PCTEL’s CEO. “We expect
demand to increase for our antennas, IoT devices and 5G solutions
through the year as market conditions improve.”
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) 506-0062
(United States/Canada) or (973) 528-0011 (International), PIN
number: 528059. The call will also be webcast at
https://investor.pctel.com/news-events/webcasts-events.
REPLAY: A replay will be available for two weeks after the call
on either the website listed above or by calling (877) 481-4010
(United States /Canada), or (919) 882-2331 (International), PIN
number: 40038.
About PCTEL
PCTEL is a leading global provider of wireless technology,
including purpose-built Industrial IoT devices, antenna systems,
and test and measurement solutions. Trusted by our customers for
over 25 years, we solve complex wireless challenges to help
organizations stay connected, transform, and grow.
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 about the Company’s expectations regarding the
impact of the COVID-19 pandemic; our future financial performance;
growth of our antenna solutions and test and measurement
businesses; the impact of our transition plan for manufacturing
inside and outside China; the anticipated demand for certain
products including those related to public safety, Industrial IoT,
5G and intelligent transportation; 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 disruptions to the Company’s
workforce, operations, supply chain and customer demand caused by
the COVID-19 pandemic and impact of the pandemic on the Company’s
results of operations, financial condition and stock price; the
impact of data densification and IoT on capacity and coverage
demand; the impact of 5G; customer demand and growth generally in
the Company’s defined market segments, including demand from
customers in China; the impact of the uncertainty regarding renewal
of our lease of our Tianjin, China manufacturing premises; the
impact of tariffs on certain imports from China; and the Company’s
ability to grow its 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. © 2021 PCTEL,
Inc. All rights reserved.
PCTEL, INC. CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited) (in thousands, except share data)
(unaudited) December 31, 2020 December 31,
2019 ASSETS Cash and cash equivalents
$
5,761
$
7,094
Short-term investment securities
30,582
32,556
Accounts receivable, net of allowances of $113 and $104 at December
31, 2020 and December 31, 2019, respectively
16,601
17,380
Inventories, net
9,984
11,935
Prepaid expenses and other assets
1,685
1,842
Total current assets
64,613
70,807
Property and equipment, net
12,505
11,985
Long-term investment securities
4,640
0
Goodwill
3,332
3,332
Intangible assets, net
0
144
Other noncurrent assets
2,441
2,969
TOTAL ASSETS
$
87,531
$
89,237
LIABILITIES AND STOCKHOLDERS’ EQUITY Accounts payable
$
4,430
$
3,190
Accrued liabilities
7,316
9,382
Total current liabilities
11,746
12,572
Long-term liabilities
4,387
3,315
Total liabilities
16,133
15,887
Stockholders’ equity: Common stock, $0.001 par value, 50,000,000
and 100,000,000 shares authorized at December 31, 2020 and December
31, 2019, respectively, and 18,429,350 and 18,611,289 shares issued
and outstanding at December 31, 2020 and December 31, 2019,
respectively
18
19
Additional paid-in capital
128,269
133,954
Accumulated deficit
(56,907
)
(60,305
)
Accumulated other comprehensive income (loss)
18
(318
)
Total stockholders’ equity
71,398
73,350
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$
87,531
$
89,237
PCTEL, INC. CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (unaudited) (in thousands, except per share
data) Three Months EndedDecember 31,
Years EndedDecember 31,
2020
2019
2020
2019
REVENUES
$
21,185
$
22,898
$
77,456
$
90,617
COST OF REVENUES
10,569
11,385
39,529
49,105
GROSS PROFIT
10,616
11,513
37,927
41,512
OPERATING EXPENSES: Research and development
3,204
3,048
12,519
12,272
Sales and marketing
2,924
3,424
11,103
12,254
General and administrative
2,522
3,072
10,828
13,452
Amortization of intangible assets
0
49
32
219
Restructuring expenses
0
213
124
507
Total operating expenses
8,650
9,806
34,606
38,704
OPERATING INCOME
1,966
1,707
3,321
2,808
Other (expense) income, net
(110
)
107
106
982
INCOME BEFORE INCOME TAXES
1,856
1,814
3,427
3,790
Expense for income taxes
4
16
29
40
NET INCOME
$
1,852
$
1,798
$
3,398
$
3,750
Net Income per Share: Basic
$
0.10
$
0.10
$
0.19
$
0.21
Diluted
$
0.10
$
0.10
$
0.18
$
0.21
Weighted Average Shares: Basic
18,149
18,034
18,207
17,853
Diluted
18,297
18,461
18,399
18,159
Cash dividend per share
$
0.055
$
0.055
$
0.220
$
0.220
PCTEL, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS (unaudited) (unaudited, in thousands)
Years Ended December 31,
2020
2019
Operating Activities: Net income
$
3,398
$
3,750
Adjustments to reconcile net income to net cash provided by
operating activities: Depreciation and amortization
3,019
2,870
Intangible asset amortization
144
885
Stock-based compensation
2,479
4,133
Loss on disposal of property and equipment
21
97
Restructuring costs
(29
)
(33
)
Bad debt recovery
(151
)
(2
)
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable
960
(1,532
)
Inventories
2,076
873
Prepaid expenses and other assets
638
385
Accounts payable
1,086
(2,841
)
Income taxes payable
(10
)
(22
)
Other accrued liabilities
(231
)
2,263
Deferred revenue
1
92
Net cash provided by operating activities
13,401
10,918
Investing Activities: Capital expenditures
(4,093
)
(2,263
)
Purchase of investments
(49,701
)
(48,245
)
Redemptions/maturities of short-term investments
47,035
46,559
Net cash used in investing activities
(6,759
)
(3,949
)
Financing Activities: Proceeds from issuance of common stock
870
1,183
Proceeds from Paycheck Protection Program Loan
3,500
0
Repayment of Paycheck Protection Program Loan
(3,500
)
0
Payment of withholding tax on stock-based compensation
(1,119
)
(1,152
)
Principle payments on finance leases
(78
)
(99
)
Purchase of common stock from repurchase program
(3,808
)
0
Cash dividends
(4,108
)
(4,068
)
Net cash used in financing activities
(8,243
)
(4,136
)
Net (decrease) increase in cash and cash equivalents
(1,601
)
2,833
Effect of exchange rate changes on cash
268
(68
)
Cash and cash equivalents, beginning of period
7,094
4,329
Cash and Cash Equivalents, End of Period
$
5,761
$
7,094
PCTEL, INC. REVENUE AND GROSS PROFIT BY PRODUCT LINE
(unaudited) (in thousands) Three Months Ended
December 31, 2020 Year Ended December 31, 2020
AntennaProducts Test &MeasurementProducts
Corporate Total AntennaProducts Test
&MeasurementProducts Corporate Total
REVENUES
$12,844
$8,554
($213
)
$21,185
$50,540
$27,565
($649
)
$77,456
GROSS PROFIT
$4,437
$6,135
$44
$10,616
$17,665
$20,244
$18
$37,927
GROSS PROFIT %
34.5
%
71.7
%
50.1
%
35.0
%
73.4
%
49.0
%
Three Months Ended December 31, 2019 Year Ended
December 31, 2019 AntennaProducts Test
&MeasurementProducts Corporate Total
AntennaProducts Test &MeasurementProducts
Corporate Total REVENUES
$15,144
$7,814
($60
)
$22,898
$62,708
$28,115
($206
)
$90,617
GROSS PROFIT
$5,700
$5,806
$7
$11,513
$21,841
$19,640
$31
$41,512
GROSS PROFIT %
37.6
%
74.3
%
50.3
%
34.8
%
69.9
%
45.8
%
Reconciliation of GAAP to non-GAAP
Results (unaudited) (in thousands except per share
information) Reconciliation of
GAAP operating income to non-GAAP operating income
Three Months Ended December 31, Year Ended
December 31,
2020
2019
2020
2019
Operating Income
$
1,966
$
1,707
$
3,321
$
2,808
(a)
Add: Amortization of intangible assets -Cost of
revenues
0
167
111
666
-Operating expenses
0
49
32
219
Restructuring
0
213
124
507
Stock Compensation: -Cost of revenues
65
116
272
408
-Engineering
128
145
530
652
-Sales & marketing
130
151
559
673
-General & administrative
161
475
1,119
2,401
484
1,316
2,747
5,526
Non-GAAP Operating Income
$
2,450
$
3,023
$
6,068
$
8,334
% of revenue
11.6
%
13.2
%
7.8
%
9.2
%
Reconciliation of GAAP net income
to non-GAAP net income Three Months Ended
December 31, Year Ended December 31,
2020
2019
2020
2019
Net Income
$
1,852
$
1,798
$
3,398
$
3,750
Adjustments: (a) Non-GAAP adjustments to operating
income
484
1,316
2,747
5,526
Income Taxes
(183
)
(233
)
(465
)
(705
)
301
1,083
2,282
4,821
Non-GAAP Net Income
$
2,153
$
2,881
$
5,680
$
8,571
Non-GAAP Income per Share: Basic
$
0.12
$
0.16
$
0.31
$
0.48
Diluted
$
0.12
$
0.16
$
0.31
$
0.47
Weighted Average Shares: Basic
18,149
18,034
18,207
17,853
Diluted
18,297
18,461
18,399
18,159
This schedule reconciles the Company's
GAAP operating income 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.
The adjustments to GAAP operating income
(a) consist of stock compensation expense and amortization of
intangible assets. The adjustments to GAAP net income include the
non-GAAP adjustments to operating income as well as adjustments for
(b) non-cash income tax expense.
PCTEL, Inc. Reconciliation of GAAP operating income to Adjusted
EBITDA (unaudited, in thousands) Three
Months Ended December 31, Year Ended December 31,
2020
2019
2020
2019
Operating Income
$
1,966
$
1,707
$
3,321
$
2,808
Add: Depreciation and amortization
759
719
3,019
2,870
Intangible amortization
0
216
143
885
Restructuring expenses
0
213
124
507
Stock compensation expenses
484
887
2,480
4,134
Adjusted EBITDA
$
3,209
$
3,742
$
9,087
$
11,204
% of revenue
15.1
%
16.3
%
11.7
%
12.4
%
This schedule reconciles the Company's
GAAP operating income 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/20210225006095/en/
Kevin McGowan CFO PCTEL, Inc. (630) 339-2051
Suzanne Cafferty Vice President, Global Marketing PCTEL, Inc.
(630) 339-2107 public.relations@pctel.com
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