PCTEL, Inc. (Nasdaq: PCTI) announced its results for the first
quarter ended March 31, 2019.
Highlights
- Revenue of $20.6 million in the
quarter, 5% lower compared to the prior year. Compared to the
first quarter 2018, the first quarter revenue was higher by 38% for
the test and measurement product line and lower by 15% for the
antenna product line.
- Gross profit margin of 42.0% in the
quarter, up 5.8% compared to gross profit margin in the prior
year. The increase in the quarter is a result of improved
profitability for scanning receivers and antennas.
- GAAP net loss per share of $0.02 in
the quarter compared to a GAAP loss of $0.05 per share in the
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 financial statements is provided later in the press
release.
- Non-GAAP net income per share of
$0.04 in the quarter compared to a net loss of $0.01 in the
first quarter last year.
- Adjusted EBITDA margin as a percent
of revenue of 7% in the quarter compared to 2% in the prior
year.
- $35.0 million of cash and short-term
investments at March 31, 2019 and no debt.
“We are pleased that early demand for 5G test and measurement
tools continues to drive revenue growth and profitability for
scanning receivers. We expect this to continue as wireless
operators deploy 5G networks in the US, Europe and Asia,” said
David Neumann, PCTEL’s CEO. “In addition, 5G and enterprise Wi-Fi
networks require engineered antenna and radio systems to enable
industrial IoT for both public and private applications. We are
positioned well to provide our antenna solutions for these
applications in enterprise wireless, intelligent transportation and
industrial IoT markets.”
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:
1689797. 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:
1689797.
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 redefined market segments and our 2018 cost reduction
actions, the anticipated demand for certain products including
those related to antennas, 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) March
31, December 31, 2019 2018 ASSETS
Cash and cash equivalents $ 4,455 $ 4,329 Short-term investment
securities 30,586 30,870 Accounts receivable, net of allowances of
$86 and $63 at March 31, 2019 and December 31, 2018, respectively
16,427 15,864 Inventories, net 12,919 12,848 Prepaid expenses and
other assets 1,541 1,416 Total current
assets 65,928 65,327 Property and equipment, net 11,740
12,138 Goodwill 3,332 3,332 Intangible assets, net 789 1,029 Other
noncurrent assets 1,531 45
TOTAL
ASSETS $ 83,320 $ 81,871
LIABILITIES AND STOCKHOLDERS’ EQUITY Accounts payable
$ 6,881 $ 6,083 Accrued liabilities 6,668
5,801 Total current liabilities 13,549 11,884 Long-term
liabilities 868 381 Total liabilities
14,417 12,265 Stockholders’ equity:
Common stock, $0.001 par value, 100,000,000 shares authorized,
18,417,701 and 18,271,249 shares issued and outstanding at March
31, 2019 and December 31, 2018, respectively 18 18 Additional
paid-in capital 133,320 133,859 Accumulated deficit (64,372 )
(64,055 ) Accumulated other comprehensive loss (63 )
(216 ) Total stockholders’ equity 68,903
69,606
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$ 83,320 $ 81,871
PCTEL, INC. CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (unaudited) (in thousands, except per share
data) Three Months Ended March 31,
2019 2018
REVENUES $ 20,590 $ 21,731
COST OF REVENUES
11,932 13,867
GROSS PROFIT 8,658
7,864
OPERATING EXPENSES: Research and
development 3,003 2,940 Sales and marketing 2,798 3,028 General and
administrative 3,253 2,993 Amortization of intangible assets
73 124 Total operating expenses 9,127
9,085
OPERATING LOSS (469 ) (1,221 )
Other income, net 162 51
LOSS BEFORE
INCOME TAXES (307 ) (1,170 ) Expense (benefit) for income taxes
10 (312 )
NET LOSS $ (317 ) $ (858 )
Net Loss per Share: Basic $ (0.02 ) $ (0.05 ) Diluted
$ (0.02 ) $ (0.05 )
Weighted Average Shares: Basic 17,617
17,056 Diluted 17,617 17,056
Cash dividend per share
$ 0.055 $ 0.055
PCTEL, INC. CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited, in
thousands) Three Months Ended March 31, .
2019 2018 Operating Activities: Net
loss $ (317 ) $ (858 ) Adjustments to reconcile net loss to net
cash provided by (used in) operating activities: Depreciation 711
674 Intangible asset amortization 240 290 Stock-based compensation
882 668 Loss on disposal of property and equipment 0 10
Restructuring costs (3 ) (11 ) Bad debt provision 7 15 Deferred tax
provision 0 (236 ) Changes in operating assets and liabilities:
Accounts receivable (512 ) (350 ) Inventories 38 321 Prepaid
expenses and other assets 23 (250 ) Accounts payable 554 (64 )
Income taxes payable (22 ) (3 ) Other accrued liabilities (39 )
(1,808 ) Deferred revenue (23 ) 14 Net cash
provided by (used in) operating activities 1,539
(1,588 )
Investing Activities: Capital expenditures
(311 ) (884 ) Proceeds from disposal of property and equipment 0 14
Purchases of investments (13,893 ) (7,266 ) Redemptions/maturities
of short-term investments 14,177 17,480
Net cash (used in) provided by investing activities (27 )
9,344
Financing Activities: Proceeds from
issuance of common stock 338 364 Payment of withholding tax on
stock-based compensation (743 ) (289 ) Principle payments on
capital leases (26 ) (24 ) Cash dividends (1,016 )
(995 ) Net cash used in financing activities (1,447 )
(944 ) Net increase in cash and cash equivalents 65 6,812
Effect of exchange rate changes on cash 61 81 Cash and cash
equivalents, beginning of period 4,329 5,559
Cash and Cash Equivalents, End of Period $ 4,455
$ 12,452
PCTEL, INC. REVENUE
AND GROSS PROFIT BY PRODUCT LINE (unaudited) (in
thousands) Three Months
Ended March 31, 2019 Test & Antenna
Measurement Products Products Corporate
Total REVENUES $15,088 $5,535 ($33 ) $20,590
GROSS PROFIT $4,861 $3,785 $12 $8,658
GROSS PROFIT
% 32.2 % 68.4 % 42.0 %
Three Months Ended March 31,
2018 Test & Antenna Measurement
Products Products Corporate Total
REVENUES $17,764 $3,999 ($32 ) $21,731
GROSS
PROFIT $5,198 $2,670 ($4 ) $7,864
GROSS PROFIT %
29.3 % 66.8 % 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 March 31, 2019
2018 Operating Loss ($469
) ($1,221 ) (a)
Add: Amortization of intangible
assets -Cost of revenues 167 167 -Operating expenses 73 124 Stock
Compensation: -Cost of revenues 103 88 -Engineering 172 138 -Sales
& marketing 180 131 -General & administrative 427
311 1,122 959
Non-GAAP Operating Income
(Loss) $654 ($262 ) % of revenue 3.2 % -1.2 %
Reconciliation of
GAAP net loss to non-GAAP net income (loss)
Three Months Ended March 31, 2019
2018 Net Loss ($317 ) ($858 )
Adjustments: (a) Non-GAAP adjustment to operating
loss 1,122 959 Income Taxes (56 ) (295 ) 1,067 664
Non-GAAP Net (Loss) Income $750 ($194 )
Non-GAAP (Loss) Income per Share: Basic $0.04 ($0.01 )
Diluted $0.04 ($0.01 )
Weighed Average Shares: Basic
17,617 17,056 Diluted 17,660 17,056 This schedule reconciles
the Company's GAAP operating 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 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
(unaudited, in thousands) Three
Months Ended March 31, 2019
2018 Operating Loss ($469)
($1,221)
Add: Depreciation and amortization 711 674
Intangible amortization 240 291 Stock compensation expenses 882 668
Adjusted EBITDA $1,365 $412
% of revenue 6.6% 1.9%
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/20190507005883/en/
For further information contact:Kevin McGowanCFOPCTEL,
Inc.(630) 372-6800Michael RosenbergDirector of MarketingPCTEL,
Inc.(301) 444-2046public.relations@pctel.com
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