PCTEL, Inc. (Nasdaq: PCTI), a leader in Performance
Critical TELecom solutions, announced its results for
the third quarter ended September 30, 2018.
Highlights from Continuing
Operations
- Revenue of $18.4 million in the
quarter and $61.7 million year to date, 22% lower in the
quarter and 9% lower year-to-date compared to last year. Revenue
was lower in both the antenna and test & measurement product
lines in the quarter and year to date.
- Gross profit margin of 36.5% in the
quarter and 36.3% year to date, down 6.4% in the quarter and
5.6% year-to-date compared to last year. The two primary reasons
for the decrease in both the quarter and year-to-date are lower
test & measurement product revenue which has higher margin
compared to antenna products, and price erosion in the small cell
antenna market.
- Net loss per share of $0.10 in the
quarter and $0.22 year to date, compared to net income of $0.04
per share in the quarter and year-to-date 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 financial statements is provided later in the press release.
- Non-GAAP net loss per share of $0.06
in the quarter and a net loss of $0.07 year to date compared to
net income of $0.09 in the quarter and $0.20 year-to-date last
year. The third quarter of this year included $0.04 non-GAAP
restructuring charges related to the Company’s recent
reorganization.
- Adjusted EBITDA margin as a percent
of revenue of negative 3% in the quarter and positive 1% year to
date compared to 11% in the quarter and 9% year-to-date last
year.
- $37.1 million of cash and short-term
investments at September 30, 2018 and no debt.
“Our small cell revenue has stabilized with wins in China, North
American and Europe, and we are encouraged with the early 5G
deployment activity,” said David Neumann, PCTEL’s CEO. “However,
carrier spending was down on legacy networks and several antenna
projects were completed in Q2, which negatively affected the
quarter and 2018 year to date results. We believe that improving
market conditions and our recent reorganization to improve business
development will position PCTEL to take advantage of the long-term
growth opportunities in 5G, antennas, and industrial IoT.”
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:
1369318. 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:
1369318.
About PCTEL
PCTEL, Inc. provides Performance Critical
TELecom technology solutions. We are a leading global
supplier of antennas and wireless network testing solutions. Our
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,
anticipated demand for certain products including those related to
antennas, the industrial IoT and the rollout of 5G, our
expectations regarding increasing capital expenditures in 2019 by
wireless operators, 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 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. CONDENSED CONSOLIDATED BALANCE
SHEETS (in thousands, except share data)
(Unaudited) September 30, December 31,
2018 2017 ASSETS Cash and cash equivalents $
5,377 $ 5,559 Short-term investment securities 31,770 32,499
Accounts receivable, net of allowances of
$278 and $319 at September 30, 2018 andDecember 31, 2017,
respectively
13,261 18,624 Inventories, net 12,691 12,756 Prepaid expenses and
other assets 1,185 1,605 Total current
assets 64,284 71,043 Property and equipment, net 12,491
12,369 Goodwill 3,332 3,332 Intangible assets, net 1,280 2,113
Deferred tax assets, net 8,685 7,734 Other noncurrent assets
52 72
TOTAL ASSETS $
90,124 $ 96,663 LIABILITIES
AND STOCKHOLDERS’ EQUITY Accounts payable $ 5,392 $ 5,471
Accrued liabilities 5,069 7,481 Total
current liabilities 10,461 12,952 Long-term liabilities 383
392 Total liabilities 10,844
13,344 Stockholders’ equity:
Common stock, $0.001 par value,
100,000,000 shares authorized, 18,318,141 and 17,806,792shares
issued and outstanding at September 30, 2018 and December 31, 2017,
respectively
18 18 Additional paid-in capital 134,455 134,505 Accumulated
deficit (54,920 ) (51,258 ) Accumulated other comprehensive (loss)
income (273 ) 54 Total stockholders’ equity
79,280 83,319
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 90,124 $
96,663 PCTEL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
(in thousands, except per share data) Three
Months Ended Nine Months Ended September 30,
September 30, 2018 2017
2018 2017
REVENUES $ 18,426 $ 23,665 $ 61,739 $ 68,136
COST OF
REVENUES 11,705 13,515 39,355
39,570
GROSS PROFIT 6,721
10,150 22,384 28,566
OPERATING EXPENSES: Research and development 3,028 2,757
9,021 8,141 Sales and marketing 2,957 3,230 9,059 9,394 General and
administrative 3,029 3,146 9,172 10,081 Amortization of intangible
assets 85 124 333 372
Total operating expenses 9,099 9,257
27,585 27,988
OPERATING (LOSS)
INCOME (2,378 ) 893 (5,201 ) 578 Other income, net 226
32 486 74
(LOSS)
INCOME BEFORE INCOME TAXES (2,152 ) 925 (4,715 ) 652 (Benefit)
expense for income taxes (482 ) 206 (961 )
(68 )
(LOSS) INCOME FROM CONTINUING OPERATIONS (1,670
) 719 (3,754 ) 720
NET INCOME (LOSS) FROM DISCONTINUED
OPERATIONS, NET OF TAX BENEFIT 0 236
0 (148 )
NET (LOSS) INCOME $ (1,670 ) $
955 $ (3,754 ) $ 572
Net (Loss) Income per Share
from Continuing Operations: Basic $ (0.10 ) $ 0.04 $ (0.22 ) $
0.04 Diluted $ (0.10 ) $ 0.04 $ (0.22 ) $ 0.04
Net Income
(Loss) per Share from Discontinued Operations: Basic $ 0.00 $
0.01 $ 0.00 $ (0.01 ) Diluted $ 0.00 $ 0.01 $ 0.00 $ (0.01 )
Net (Loss) Income per Share: Basic $ (0.10 ) $ 0.06 $ (0.22
) $ 0.03 Diluted $ (0.10 ) $ 0.06 $ (0.22 ) $ 0.03
Weighted Average Shares: Basic 17,234 16,757 17,145 16,526
Diluted 17,234 17,065 17,145 16,830 Cash dividend per share
$ 0.055 $ 0.055 $ 0.155 $ 0.155
PCTEL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands) Nine Months Ended
September 30, .
2018 2017
Operating Activities: Net (loss) income from
continuing operations $ (3,754 ) $ 720 Adjustments to reconcile net
(loss) income to net cash provided by operating activities:
Depreciation 2,088 1,913 Intangible asset amortization 833 872
Stock-based compensation 2,572 2,458 Loss on disposal of property
and equipment 11 18 Restructuring costs (28 ) (88 ) Bad debt
provision 248 38 Deferred tax provision (868 ) (282 ) Changes in
operating assets and liabilities: Accounts receivable 4,968 672
Inventories (173 ) 1,809 Prepaid expenses and other assets 425 509
Accounts payable 255 (1,078 ) Income taxes payable (39 ) (154 )
Other accrued liabilities (2,395 ) (426 ) Deferred revenue
(43 ) 95 Net cash provided by operating activities
4,100 7,076
Investing
Activities: Capital expenditures (2,205 ) (2,097 ) Proceeds
from disposal of property and equipment 14 1 Purchases of
investments (33,978 ) (37,579 ) Redemptions/maturities of
short-term investments 34,707 26,056
Net cash used in investing activities (1,462 )
(13,619 )
Financing Activities: Proceeds from issuance of
common stock 686 1,375 Payment of withholding tax on stock-based
compensation (301 ) (1,190 ) Principle payments on capital leases
(91 ) (64 ) Cash dividends (3,007 ) (2,730 ) Net cash
used in financing activities (2,713 ) (2,609 )
Cash flows from discontinued operations: Net cash used in
operating activities 0 (697 ) Net cash provided by investing
activities 0 1,434 Net cash flows
provided by discontinued operations 0 737
Net decrease in cash and cash equivalents (75 )
(8,415 ) Effect of exchange rate changes on cash (107 ) 87 Cash and
cash equivalents, beginning of period 5,559
14,855
Cash and Cash Equivalents, End of Period $
5,377 $ 6,527
PCTEL, INC. P&L INFORMATION BY
SEGMENT - Continuing Operations (unaudited) (in
thousands) Three Months Ended September 30,
2018 Nine Months Ended September 30, 2018 Test
& Test & Antenna Measurement
Antenna Measurement Products Products
Corporate Total Products Products
Corporate Total REVENUES $ 14,877 $ 3,556 ($7
) $ 18,426 $ 50,120 $ 11,691 ($72 ) $ 61,739
GROSS
PROFIT $ 4,504 $ 2,201 $ 16 $ 6,721 $ 14,734 $ 7,627 $ 23 $
22,384
GROSS PROFIT % 30.3 % 61.9 % 36.5 % 29.4 %
65.2 % 36.3 %
Three Months Ended September 30, 2017
Nine Months Ended September 30, 2017 Test &
Test & Antenna Measurement Antenna
Measurement Products Products Corporate
Total Products Products Corporate
Total REVENUES $ 17,988 $ 5,739 ($62 ) $ 23,665 $
52,125 $ 16,157 ($146 ) $ 68,136
GROSS PROFIT $ 6,148
$ 4,006 ($4 ) $ 10,150 $ 17,283 $ 11,275 $ 8 $ 28,566
GROSS PROFIT % 34.2 % 69.8 % 42.9 % 33.2 % 69.8 % 41.9 %
Reconciliation of
GAAP to non-GAAP Results - Continuing Operations
(unaudited)
(in thousands except per share information)
Reconciliation of
GAAP operating loss to non-GAAP operating (loss) income -
Continuing Operations
Three Months Ended September 30, Nine Months Ended
September 30, 2018 2017
2018 2017
Operating (Loss) Income ($2,378 ) $ 893 ($5,201 ) $ 578
(a)
Add: Amortization of intangible assets -Cost of
revenues 167 167 500 500 -Operating expenses 85 124 333 372 Stock
Compensation: -Cost of revenues (50 ) 68 131 200 -Engineering 165
128 462 394 -Sales & marketing 174 116 462 362 -General &
administrative 496 349 1,517
1,501 1,037 952 3,405
3,329
Non-GAAP Operating (Loss) Income ($1,341 ) $
1,845 ($1,796 ) $ 3,907 % of revenue -7.3 % 7.8 %
-2.9 % 5.7 %
Reconciliation of
GAAP net loss to non-GAAP net (loss) income - Continuing
Operations
Three Months Ended September 30, Nine
Months Ended September 30, 2018
2017 2018
2017 Net (Loss) Income ($1,670 )
$ 719 ($3,754 ) $ 720
Adjustments: (a) Non-GAAP
adjustment to operating loss 1,037 952 3,405 3,329 Income Taxes
(393 ) (132 ) (856 ) (785 ) 644 820
2,549 2,544
Non-GAAP Net (Loss)
Income ($1,026 ) $ 1,539 ($1,205 ) $ 3,264
Non-GAAP (Loss) Income per Share: Basic ($0.06 ) $ 0.09
($0.07 ) $ 0.20 Diluted ($0.06 ) $ 0.09 ($0.07 ) $ 0.19
Weighed Average Shares: Basic 17,234 16,757 17,145 16,526
Diluted 17,234 17,065 17,145 16,830 This schedule reconciles
the Company's GAAP operating loss 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.
The adjustments to GAAP operating loss (a)
consist of stock compensation expense and amortization of
intangible assets. The adjustments to GAAP net loss include the
non-GAAP adjustments to operating loss as well as adjustments for
(b) non-cash income tax expense.
PCTEL,
Inc.
Reconciliation of
GAAP operating loss to Adjusted EBITDA - Continuing
Operations
(unaudited, in thousands) Three Months
Ended September 30, Nine Months Ended September 30,
2018 2017
2018
2017 Operating (Loss)
Income ($2,378 ) $ 893 ($5,201 ) $ 578
Add:
Depreciation and amortization 708 652 2,088 1,913 Intangible
amortization 252 291 833 872 Stock compensation expenses 785
661 2,572 2,458
Adjusted EBITDA ($633 ) $ 2,497 $ 292 $ 5,821
% of revenue -3.4 % 10.6 % 0.5 % 8.5 % 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. 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/20181108005857/en/
John SchoenCFOPCTEL, Inc.(630) 372-6800orMichael
RosenbergDirector of MarketingPCTEL, Inc.(301)
444-2046public.relations@pctel.com
PCTEL (NASDAQ:PCTI)
Historical Stock Chart
From Aug 2024 to Sep 2024
PCTEL (NASDAQ:PCTI)
Historical Stock Chart
From Sep 2023 to Sep 2024