Revenue increased 15% year-over-year and
achieved gross profit margin of 45.8%
Strong execution for both product lines through
significant orders for test & measurement products and the
launch of an innovative new antenna portfolio
PCTEL, Inc. (Nasdaq: PCTI), a leading global provider of
wireless technology solutions, announced its results for the second
quarter ended June 30, 2022.
Recent Highlights
- Revenues increased 15.2% year-over-year to $25.0 million
- GAAP gross profit margin of 45.8%
- GAAP net income of $0.4 million or $0.02 per diluted share
- Non-GAAP net income of $1.8 million or $0.10 per diluted
share
- Adjusted EBITDA increased 18% year-over-year to $2.6
million
- Launched new 5G, 10-in-1 combination antenna portfolio for
rail, fleet, and mass transit, supporting the Company’s commitment
to innovative product development
- Received multimillion dollar orders from two of its largest OEM
customers for the Gflex® and HBflex™ scanning receivers
David Neumann, Chief Executive Officer of PCTEL, Inc.,
commented, “We are pleased to have delivered strong results in the
quarter, driven by double-digit top-line expansion and operational
efficiencies, both of which contributed to our solid performance.
We expect positive momentum to continue and are keenly focused on
executing on our three key growth strategies: launching innovative
wireless products, increasing market share by providing more
components of the wireless ecosystem, and expanding and leveraging
distribution channels.”
Neumann continued, “We recently launched a 10-in-1 combination
antenna designed to perform in harsh conditions and therefore
useful in numerous end markets. We have also made great progress
within our test & measurement product line, securing
multimillion dollar OEM orders for our leading products, the Gflex
and HBflex, and launching a new product, SeeHawk™ Monitor, that
will continuously monitor public safety RF performance. Finally, we
have made significant advances in expanding our distribution
channels globally, building on our strong foundation in the
Americas with the acquisition of Smarteq, that is now contributing
products for distribution in both our European and American
channels. We have momentum in innovation, market penetration, and
distribution channel leverage, and will continue to execute on our
growth strategy in the coming quarters.”
Second Quarter Financial
Results
- Revenue increased 15.2% to $25.0 million, compared to $21.7
million in the second quarter of 2021.
- Antennas and IIoT Devices revenue was $17.6 million, an
increase of 12.8% year-over-year due to an increase in revenues
related to antennas for fleet applications and a full quarter of
revenue recognized from Smarteq, which was acquired at the end of
April 2021.
- Test & Measurement products revenue was $7.4 million, an
increase of 15.9% year-over-year due to higher revenues for 5G
products in the U.S.
- GAAP gross margin was 45.8% compared to 45.9% for the second
quarter of 2021. Non-GAAP gross margin was 46.0% compared to 47.5%
in the second quarter of 2021 due to lower gross margin for
antennas and devices.
- GAAP operating expenses were $11.1 million compared to $10.1
million in the second quarter of 2021. Non-GAAP operating expenses
were $9.7 million compared to $8.8 million in the second quarter of
2021. Operating expenses include a full quarter of expenses related
to Smarteq in the second quarter 2022 versus two months of expenses
in the second quarter 2021.
- GAAP net income was $0.4 million or diluted earnings per share
of $0.02 compared to GAAP net loss of $(0.2) million or $(0.01) per
share in the second quarter of 2021. Restructuring expenses related
to the manufacturing transition in China were $0.02 per share in
the second quarter 2022 compared to $0.00 in the second quarter
2021.
- Non-GAAP net income was $1.8 million or $0.10 diluted earnings
per share compared to $1.3 million or $0.07 in the second quarter
of 2021.
- Adjusted EBITDA increased by 18% to $2.6 million compared to
$2.2 million in the second quarter of 2021.
- Cash, cash equivalents and investments were $28.3 million, an
increase of approximately $0.6 million as compared to the first
quarter of 2022 as free cash flow of $1.6 million offset cash used
in financing activities of $0.6 million.
Third Quarter 2022
Outlook
The following ranges represent our current expectations for the
third quarter based upon available data and estimates.
- Revenue: $25.5 million to $26.5 million
- Non-GAAP Gross Margin: 44% to 45%
- Non-GAAP EPS: $0.09 to $0.11
Kevin McGowan, Chief Financial Officer of PCTEL, added, “We
remain confident in our ability to execute on our strategic growth
initiatives despite the impact of macro-environmental and supply
chain challenges, which our team continues to mitigate through
careful supply chain management. Our third quarter outlook reflects
our backlog across both our antenna and test & measurement
product lines and solid demand for our wireless products.”
CONFERENCE CALL / WEBCAST
PCTEL’s management team will discuss the Company’s results today
at 4:30 p.m. ET. The call will also be webcast at
https://investor.pctel.com/news-events/webcasts-events. The call
can also be accessed by dialing (877) 545-0523 (United
States/Canada) or (973) 528-0016 (International), access code:
556919.
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: 45956.
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 and Industrial
IoT business and our test & measurement business through
execution of our three growth strategies; the ability of the
Company to continue to innovate new products for its current
product lines; the impact of the Smarteq acquisition on the
Company’s ability to offer additional products, expand in the
European market and through distribution channels, and generate
revenue; the anticipated demand for certain products, including
those related to public safety, Industrial IoT, 5G (e.g., the
Gflex) 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
higher than expected inflation; an economic recession in the
Americas or globally; the impact of the ongoing COVID-19 or a
subsequent pandemic, the disruptions to the Company’s workforce,
operations, supply chain and customer demand caused by the COVID-19
pandemic and the 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 expand its European
presence and benefit from additional antenna and Industrial IoT
product offerings from Smarteq; 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, Gflex®, HBflex, and SeeHawk are trademarks or registered
trademarks of PCTEL, Inc. © 2022 PCTEL, Inc. All rights
reserved.
PCTEL, INC. CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited) (in thousands, except share data)
June 30, December 31,
2022
2021
ASSETS Cash and cash equivalents
$
5,797
$
8,192
Short-term investment securities
22,276
22,562
Accounts receivable, net of allowances of $79 and $64 at June 30,
2022 andDecember 31, 2021, respectively
19,311
18,905
Inventories, net
14,189
13,691
Prepaid expenses and other assets
1,774
1,747
Total current assets
63,347
65,097
Property and equipment, net
10,784
11,949
Long-term investment securities
250
0
Goodwill
5,986
6,334
Intangible assets, net
1,231
1,579
Other noncurrent assets
2,314
2,438
TOTAL ASSETS
$
83,912
$
87,397
LIABILITIES AND STOCKHOLDERS’ EQUITY Accounts payable
$
5,630
$
5,360
Accrued liabilities
9,867
11,117
Total current liabilities
15,497
16,477
Long-term liabilities
3,732
3,999
Total liabilities
19,229
20,476
Stockholders’ equity: Common stock, $0.001 par value, 50,000,000
shares authorized at June 30, 2022 and December 31, 2021,
respectively, and 18,677,851 and 18,238,030 shares issued and
outstanding at June 30, 2022 and December 31, 2021
19
18
Additional paid-in capital
123,844
123,998
Accumulated deficit
(57,888
)
(56,735
)
Accumulated other comprehensive loss
(1,292
)
(360
)
Total stockholders’ equity
64,683
66,921
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$
83,912
$
87,397
PCTEL, INC. CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (unaudited) (in thousands, except per share
data)
Three Months Ended
Six Months Ended
June 30,
June 30,
2022
2021
2022
2021
REVENUES
$
24,976
$
21,681
$
47,518
$
39,388
COST OF REVENUES
13,549
11,739
26,758
21,108
GROSS PROFIT
11,427
9,942
20,760
18,280
OPERATING EXPENSES: Research and development
3,356
3,221
6,605
6,416
Sales and marketing
3,908
3,388
7,310
6,151
General and administrative
3,451
3,335
6,694
6,411
Amortization of intangible assets
67
55
138
55
Restructuring expenses
317
60
1,252
60
Total operating expenses
11,099
10,059
21,999
19,093
OPERATING INCOME (LOSS)
328
(117
)
(1,239
)
(813
)
Other income (expense), net
114
(45
)
125
(6
)
INCOME (LOSS) BEFORE INCOME TAXES
442
(162
)
(1,114
)
(819
)
Expense for income taxes
31
7
39
12
NET INCOME (LOSS)
$
411
$
(169
)
$
(1,153
)
$
(831
)
Net Income (Loss) per Share: Basic
$
0.02
$
(0.01
)
$
(0.06
)
$
(0.05
)
Diluted
$
0.02
$
(0.01
)
$
(0.06
)
$
(0.05
)
Weighted Average Shares: Basic
18,157
18,241
18,065
18,158
Diluted
18,157
18,241
18,065
18,158
PCTEL, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS (unaudited) (in thousands)
Six Months Ended June
30,
2022
2021
Operating Activities: Net loss
$
(1,153
)
$
(831
)
Adjustments to reconcile net loss to net cash provided by operating
activities: Depreciation and amortization
1,562
1,493
Intangible asset amortization
177
70
Stock-based compensation
1,860
1,657
Loss on disposal of property and equipment
7
3
Restructuring costs
(328
)
45
Bad debt provision
17
(34
)
Changes in operating assets and liabilities: Accounts receivable
(614
)
1,260
Inventories
(715
)
(1,121
)
Prepaid expenses and other assets
100
532
Accounts payable
435
(630
)
Income taxes payable
(1
)
(18
)
Other accrued liabilities
(900
)
624
Deferred revenue
(126
)
63
Net cash provided by operating activities
321
3,113
Investing Activities: Capital expenditures
(420
)
(1,266
)
Purchases of investments
(15,587
)
(16,058
)
Redemptions/maturities of short-term investments
15,623
26,278
Cash paid for acquisition, net of cash acquired
0
(6,277
)
Net cash (used in) provided by investing activities
(384
)
2,677
Financing Activities: Proceeds from issuance of common stock
404
418
Payment of withholding tax on stock-based compensation
(396
)
(782
)
Principal payments on finance leases
(37
)
(35
)
Purchase of common stock from repurchase program
0
(733
)
Cash dividends
(2,021
)
(2,018
)
Net cash used in financing activities
(2,050
)
(3,150
)
Net (decrease) increase in cash and cash equivalents
(2,113
)
2,640
Effect of exchange rate changes on cash
(282
)
24
Cash and cash equivalents, beginning of period
8,192
5,761
Cash and Cash Equivalents, End of Period
$
5,797
$
8,425
Reconciliation of GAAP to Non-GAAP results
(unaudited) (in thousands except per share
information) Reconciliation of
GAAP operating income (loss) to Non-GAAP operating
income
Three Months Ended June
30,
Six Months Ended June
30,
2022
2021
2022
2021
Operating Income (Loss)
$328
($117
)
($1,239
)
($813
)
(a)
Add: Amortization of inventory step-up to fair
value
0
283
0
283
Amortization of intangible assets -Cost of revenues
19
15
39
15
-Operating expenses
67
55
138
55
Restructuring expenses
317
60
1,252
60
Stock compensation expenses: -Cost of revenues
31
65
96
134
-Research and development
172
140
308
282
-Sales & marketing
255
226
452
386
-General & administrative
628
608
1,004
855
Acquisition related expenses
0
121
86
304
1,489
1,573
3,375
2,374
Non-GAAP Operating Income
$1,817
$1,456
$2,136
$1,561
% of revenue
7.3
%
6.7
%
4.5
%
4.0
%
Reconciliation of GAAP net loss to
Non-GAAP net income
Three Months Ended March
31,
Six Months Ended March
31,
2022
2021
2022
2021
Net Income (Loss)
$411
($169
)
($1,153
)
($831
)
Adjustments: (a) Non-GAAP adjustments to operating
loss
1,489
1,573
3,375
2,374
(b) Income Taxes
(123
)
(106
)
(142
)
(112
)
1,366
1,467
3,233
2,262
Non-GAAP Net Income
$1,777
$1,298
$2,080
$1,431
Non-GAAP Income per Share: Basic
$0.10
$0.07
$0.12
$0.08
Diluted
$0.10
$0.07
$0.11
$0.08
Weighed Average Shares: Basic
18,157
18,241
18,065
18,158
Diluted
18,157
18,191
18,122
18,158
This schedule reconciles the Company's GAAP operating income
(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.
The adjustments to GAAP operating income (loss) (a) consist of
stock compensation expense, amortization of intangible assets,
restructuring expenses, and acquisition related expenses. 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. 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 June 30, 2022 Six Months Ended
June 30, 2022 AntennasandIndustrialIoTDevices Test
&MeasurementProducts Corporate Total
AntennasandIndustrialIoTDevices Test
&MeasurementProducts Corporate Total
REVENUES
$17,555
$7,431
($10
)
$24,976
$34,657
$13,014
($153
)
$47,518
GROSS PROFIT
$5,626
$5,759
$42
$11,427
$10,873
$9,921
($34
)
$20,760
GAAP GROSS PROFIT %
32.0
%
77.5
%
45.8
%
31.4
%
76.2
%
43.7
%
Non-GAAP adjustments: Amortization of inventory
step-up
0.0
%
0.0
%
0.0
%
0.0
%
0.0
%
0.0
%
Amortization of intangible assets
0.1
%
0.0
%
0.1
%
0.1
%
0.0
%
0.1
%
Stock compensation expenses
0.3
%
-0.2
%
0.1
%
0.2
%
0.2
%
0.2
%
Non-GAAP GROSS PROFIT %
32.4
%
77.3
%
46.0
%
31.7
%
76.4
%
44.0
%
Three Months Ended June 30, 2021 Six Months Ended
June 30, 2021 AntennasandIndustrialIoTDevices
Test &MeasurementProducts Corporate Total
AntennasandIndustrialIoTDevices Test
&MeasurementProducts Corporate Total
REVENUES
$15,562
$6,414
($295
)
$21,681
$27,285
$12,619
($516
)
$39,388
GROSS PROFIT
$5,175
$4,834
($67
)
$9,942
$8,922
$9,422
($64
)
$18,280
GROSS PROFIT %
33.3
%
75.4
%
45.9
%
32.7
%
74.7
%
46.4
%
Non-GAAP adjustments: Amortization of inventory
step-up
1.8
%
0.0
%
1.2
%
1.0
%
0.0
%
0.7
%
Amortization of intangible assets
0.1
%
0.0
%
0.1
%
0.1
%
0.0
%
0.0
%
Stock compensation expenses
0.2
%
0.5
%
0.3
%
0.2
%
0.5
%
0.4
%
Non-GAAP GROSS PROFIT %
35.4
%
75.9
%
47.5
%
34.0
%
75.2
%
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.
PCTEL, Inc. Reconciliation of GAAP operating loss to adjusted EBITDA
(unaudited) (in thousands)
Three Months Ended June
30,
Six Months Ended June
30,
2022
2021
2022
2021
Operating income (loss)
$328
($117
)
($1,239
)
($813
)
Add: Amortization of inventory step-up to fair value
0
283
0
283
Depreciation and amortization
781
751
1,562
1,493
Intangible amortization
86
70
177
70
Restructuring expenses
317
60
1,252
60
Stock compensation expenses
1,086
1,039
1,860
1,657
Acquisition related expenses
0
121
86
304
Adjusted EBITDA
$2,598
$2,207
$3,698
$3,054
% of revenue
10.4
%
10.2
%
7.8
%
7.8
%
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 and extraordinary expenses. The
adjustments on this schedule consist of depreciation, amortization
of intangible assets, stock compensation expenses, restructuring
expenses, and acquisition related expenses.
PCTEL, INC.
Reconciliation of GAAP operating expenses to Non-GAAP operating
expenses (unaudited) (in thousands)
Three Months Ended June
30,
Six Months Ended June
30,
2022
2021
2022
2021
GAAP operating expenses
$11,099
$10,059
$21,999
$19,093
Stock compensation expenses
(1,055
)
(974
)
(1,764
)
(1,523
)
Amortization of intangible assets
(67
)
(55
)
(138
)
(55
)
Restructuring expenses
(317
)
(60
)
(1,252
)
(60
)
Acquisition related expenses
0
(121
)
(86
)
(304
)
Non-GAAP Operating expenses
$9,660
$8,849
$18,759
$17,151
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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220809005896/en/
PCTEL Company Contacts 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
PCTEL Investor Relations Contact Lisa Fortuna or Ashley
Gruenberg Alpha IR Group 312-445-2870 PCTI@alpha-ir.com
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