PCTEL, Inc. (Nasdaq: PCTI) announced its results for the first
quarter ended March 31, 2022.
Highlights
- Revenue of $22.5 million in the first quarter, 27.3%
higher compared to the first quarter 2021.
- Gross profit margin of 41.4% in the first quarter
compared to 47.1% in the first quarter 2021. The decline from the
first quarter of 2021 is primarily due to a higher mix of antennas
and Industrial IoT devices.
- GAAP net loss per diluted share of $0.09 in the first
quarter compared to net loss of $0.04 in the first quarter
2021. Restructuring expenses related to the manufacturing
transition in China were $0.05 per share in the first quarter
2022.
- Non-GAAP net income and adjusted EBITDA are metrics the
Company uses to measure its core earnings.
- Non-GAAP net income per diluted share of $0.02 in the first
quarter compared to Non-GAAP net income per diluted share of
$0.01 in the first quarter 2021.
- Adjusted EBITDA as a percent of revenue of 4.9% in the first
quarter compared to 4.8% in the first quarter 2021.
- $27.7 million of cash and investments and $0.1 million of
debt at March 31, 2022 compared to $30.8 million and $0.1 million
of debt at December 31, 2021. Payments for restructuring expenses
were $1.4 million in the first quarter 2022.
“We are pleased with our results in Q1 with 27% year-over-year
growth in revenue, an increase in non-GAAP earnings per share, and
a strong backlog. Our high quality and high-performance wireless
products are necessary for critical applications that demand
reliable connectivity,” said David Neumann, PCTEL’s CEO. “PCTEL has
one of the broadest antenna and test and measurement portfolios to
serve public safety, wireless carriers, rail, utility, agriculture
and government customers. Our products combined with our
engineering focus, strong distribution channels, and excellent
customer service drive long term growth 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 (877) 545-0523
(United States/Canada) or (973) 528-0016 (International), access
code: 880538. 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), access
code: 45313.
About PCTEL
PCTEL is a leading global provider of wireless technology
solutions, including purpose-built Industrial IoT devices, antenna
systems, and test and measurement products. 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 our
future financial performance; growth of our antenna solutions and
Industrial IoT business and our test and measurement business; the
impact of the acquisition of Smarteq on the Company’s ability to
offer additional products, expand in the European market, and
generate revenue; 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 (e.g., the Gflex scanning receiver) and
intelligent transportation; and the anticipated growth of public
and private wireless systems are forward-looking statements. 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
the ongoing COVID-19 pandemic, the disruptions to the Company’s
workforce, operations, supply chain and customer demand caused by
the COVID-19 pandemic and impact of the pandemic and ensuing supply
chain disruption 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; the
Company’s ability to access the government market and create demand
for its products; the Company’s ability to integrate Smarteq,
expand its European presence and benefit from additional antenna
and Industrial IoT product offerings; 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. © 2022 PCTEL,
Inc. All rights reserved.
PCTEL, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS (unaudited)
(in thousands, except share
data)
March 31,
December 31,
2022
2021
ASSETS Cash and cash equivalents
$
5,107
$
8,192
Short-term investment securities
22,569
22,562
Accounts receivable, net of allowances of $49 and $64 at March 31,
2022 andDecember 31, 2021, respectively
17,329
18,905
Inventories, net
12,852
13,691
Prepaid expenses and other assets
1,956
1,747
Total current assets
59,813
65,097
Property and equipment, net
11,490
11,949
Goodwill
6,220
6,334
Intangible assets, net
1,429
1,579
Other noncurrent assets
2,346
2,438
TOTAL ASSETS
$
81,298
$
87,397
LIABILITIES AND STOCKHOLDERS’ EQUITY Accounts payable
$
4,013
$
5,360
Accrued liabilities
8,953
11,117
Total current liabilities
12,966
16,477
Long-term liabilities
3,820
3,999
Total liabilities
16,786
20,476
Stockholders’ equity:
Common stock, $0.001 par value, 50,000,000
shares authorized at
March 31, 2022 and December 31, 2021,
respectively, and 18,453,698 and 18,238,030
shares issued and outstanding at March 31,
2022 and December 31, 2021, respectively
18
18
Additional paid-in capital
123,379
123,998
Accumulated deficit
(58,299
)
(56,735
)
Accumulated other comprehensive loss
(586
)
(360
)
Total stockholders’ equity
64,512
66,921
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$
81,298
$
87,397
PCTEL, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (unaudited)
(in thousands, except per
share data)
Three Months Ended
March 31,
2022
2021
REVENUES
$
22,542
$
17,707
COST OF REVENUES
13,209
9,369
GROSS PROFIT
9,333
8,338
OPERATING EXPENSES: Research and development
3,250
3,194
Sales and marketing
3,402
2,763
General and administrative
3,242
3,076
Amortization of intangible assets
71
0
Restructuring expenses
935
0
Total operating expenses
10,900
9,033
OPERATING LOSS
(1,567
)
(695
)
Other income, net
11
39
LOSS BEFORE INCOME TAXES
(1,556
)
(656
)
Expense for income taxes
8
6
NET LOSS
$
(1,564
)
$
(662
)
Net Loss per Share: Basic
$
(0.09
)
$
(0.04
)
Diluted
$
(0.09
)
$
(0.04
)
Weighted Average Shares: Basic
17,972
18,070
Diluted
17,972
18,070
PCTEL, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS (Unaudited)
(in thousands)
Three Months Ended March
31,
.
2022
2021
Operating Activities: Net loss
$
(1,564
)
$
(662
)
Adjustments to reconcile net loss to net cash provided by operating
activities: Depreciation and amortization
781
742
Intangible asset amortization
91
0
Stock-based compensation
774
618
Loss on disposal of property and equipment
0
3
Restructuring costs
(368
)
(15
)
Bad debt provision
(3
)
(11
)
Changes in operating assets and liabilities: Accounts receivable
1,530
1,999
Inventories
772
259
Prepaid expenses and other assets
(145
)
215
Accounts payable
(1,299
)
(2,061
)
Income taxes payable
41
6
Other accrued liabilities
(2,027
)
554
Deferred revenue
87
7
Net cash (used in) provided by operating activities
(1,330
)
1,654
Investing Activities: Capital expenditures
(320
)
(354
)
Purchase of short-term investments
(8,194
)
(5,953
)
Redemptions/maturities of short-term investments
8,187
13,407
Net cash (used in) provided by investing activities
(327
)
7,100
Financing Activities: Proceeds from issuance of common stock
0
8
Payment of withholding tax on stock-based compensation
(392
)
(659
)
Principal payments on finance leases
(19
)
(16
)
Purchase of common stock from repurchase program
0
(31
)
Cash dividends
(1,001
)
(1,011
)
Net cash used in financing activities
(1,412
)
(1,709
)
Net (decrease) increase in cash and cash equivalents
(3,069
)
7,045
Effect of exchange rate changes on cash
(16
)
(10
)
Cash and cash equivalents, beginning of period
8,192
5,761
Cash and Cash Equivalents, End of Period
$
5,107
$
12,796
REVENUE AND GROSS PROFIT BY
PRODUCT LINE (unaudited)
Reconciliation of GAAP Gross
Profit percentage to Non-GAAP Gross Profit percentage
(in thousands)
Three Months Ended March 31,
2022
Antennas and
Industrial IoT
Devices
Test &
Measurement
Products
Corporate
Total
REVENUES
$
17,102
$
5,583
($143
)
$
22,542
GROSS PROFIT
$
5,247
$
4,162
($76
)
$
9,333
GAAP GROSS PROFIT %
30.7
%
74.5
%
41.4
%
Non-GAAP adjustments: Amortization of intangible
assets
0.1
%
0.0
%
0.1
%
Stock compensation expenses
0.2
%
0.6
%
0.3
%
Non-GAAP GROSS PROFIT %
31.0
%
75.2
%
41.8
%
Three Months Ended March 31, 2021
Antennas and
Industrial IoT
Devices
Test &
Measurement
Products
Corporate
Total
REVENUES
$
11,723
$
6,205
($221
)
$
17,707
GROSS PROFIT
$
3,747
$
4,588
$3
$
8,338
GROSS PROFIT %
32.0
%
73.9
%
47.1
%
Non-GAAP adjustments: Amortization of intangible
assets
0.0
%
0.0
%
0.0
%
Stock compensation expenses
0.3
%
0.6
%
0.4
%
Non-GAAP GROSS PROFIT %
32.3
%
74.5
%
47.5
%
The Corporate column includes the elimination of intercompany
revenues between Antennas and Industrial IoT Devices and Test &
Measurement Products and other licensing revenues.
This schedule reconciles the Company's GAAP gross profit
percentage to its Non-GAAP gross profit percentage. 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 adjustments on this schedule consist of amortization of
intangible assets and stock compensation expenses.
Reconciliation of GAAP to Non-GAAP results
(unaudited)
(in thousands except per share
information)
Reconciliation of GAAP operating loss to Non-GAAP
operating income
Three Months Ended
March 31,
2022
2021
Operating Loss
($1,567
)
($695
)
(a)
Add: Amortization of intangible assets: -Cost of
revenues
20
0
-Operating expenses
71
0
Restructuring expenses
935
0
Stock compensation expenses: -Cost of revenues
65
69
-Research and development
136
142
-Sales & marketing
197
160
-General & administrative
376
247
Acquisition related expenses
86
183
1,886
801
Non-GAAP Operating Income
$319
$106
% of revenue
1.4
%
0.6
%
Reconciliation of GAAP net loss to Non-GAAP net
income
Three Months Ended
March 31,
2022
2021
Net Loss
($1,564
)
($662
)
Adjustments: (a) Non-GAAP adjustments to operating
income (loss)
1,886
801
(b) Income Taxes
(18
)
(6
)
1,868
795
Non-GAAP Net Income
$304
$133
Non-GAAP Income per Share: Basic
$0.02
$0.01
Diluted
$0.02
$0.01
Weighed Average Shares: Basic
17,972
18,070
Diluted
17,972
18,191
This schedule reconciles the Company's GAAP operating loss 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.
To present results consistently, the reconciliation related to
the three months ended March 31, 2021 was modified to include the
acquisition related expenses.
The adjustments to GAAP operating loss (a) consist of stock
compensation expense, amortization of intangible assets,
restructuring expenses, and acquisition related expenses. 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 expenses to
Non-GAAP operating expenses (unaudited) (in thousands)
Three Months Ended March 31,
2022
2021
GAAP operating expenses
$
10,900
$
9,033
Stock compensation expenses
(709
)
(549
)
Amortization of intangible assets
(71
)
0
Restructuring expenses
(935
)
0
Acquisition related expenses
(86
)
(183
)
Non-GAAP Operating expenses
$
9,099
$
8,301
This schedule reconciles the Company's GAAP operating expenses
to its Non-GAAP operating expenses. 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 adjustments on this schedule consist of amortization of
intangible assets, stock compensation expenses, restructuring
expenses, and acquisition related expenses.
PCTEL, Inc. Reconciliation of GAAP operating loss to adjusted EBITDA
(unaudited) (in thousands) Three Months
Ended March 31,
2022
2021
Operating Loss
($1,567
)
($695
)
Add: Depreciation and amortization
781
742
Intangible amortization
91
0
Restructuring expenses
935
0
Stock compensation expenses
774
618
Acquisition related expenses
86
183
Adjusted EBITDA
$1,100
$848
% of revenue
4.9
%
4.8
%
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.
To present results consistently, the reconciliation related to
the three months ended March 31, 2021 was modified to include the
acquisition related expenses.
Adjusted EBITDA is defined as net income before interest, income
taxes, depreciation and amortization and extraordinary expenses.
The adjustments on this schedule consist of depreciation,
amortization of intangible assets, stock compensation expenses,
restructuring expenses, and acquisition related expenses.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220510006284/en/
Kevin McGowan CFO PCTEL, Inc. (630) 339-2051
Suzanne Cafferty Vice President, Product Management & Global
Marketing PCTEL, Inc. (630) 339-2107 public.relations@pctel.com
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