PCTEL achieved 2022 revenues of $99.4 million,
up 13%, and gross profit margin of 46%
Strong expansion in net income and Adjusted
EBITDA in the fourth quarter and fiscal year 2022
PCTEL, Inc. (Nasdaq: PCTI) (“PCTEL” or the “Company”), a leading
global provider of wireless technology solutions, today reported
results for the fourth quarter and full year ended December 31,
2022.
Fourth Quarter 2022
Highlights
- Revenues of $25.9 million, equivalent to the fourth quarter
2021
- GAAP gross profit margin of 50.3%
- GAAP net income of $2.1 million or $0.11 per diluted share
- Non-GAAP net income of $3.0 million or $0.16 per diluted
share
- Adjusted EBITDA increased 21.7% year-over-year to $3.7
million
- Launched new features in the SeeHawk™ Central cloud platform
which simplifies the tracking, review and approval of public safety
network coverage testing
Full Year 2022
Highlights
- Revenues of $99.4 million were 13.2% higher compared to the
prior year
- GAAP gross profit margin of 46.0%
- GAAP net income of $2.9 million or $0.15 per diluted share
- Non-GAAP net income of $7.7 million or $0.41 per diluted
share
- Adjusted EBITDA increased 26.8% year-over-year to $10.7
million
- Released multiple mission critical application products
throughout the year, targeting diverse end markets including rail,
electric vehicles and agriculture applications
- Streamlined sales organization to gain scale as well as support
global distribution networks
David Neumann, Chief Executive Officer, commented, “I am very
proud of our team’s performance in 2022, which reflected a year of
sales growth driven by demand strength and strong execution through
challenging macroeconomic conditions. We enjoyed numerous successes
over the course of the year supported by the ongoing execution of
our three-pronged growth strategy, including the launch of
innovative products, expansion of our sales channels globally, and
an increase in our market share by strong adoption of our
integrated solutions by our customers. We released a major update
to the SeeHawk™ Central cloud-based software platform to improve
support for public safety testing, along with multiple new,
high-reliability and mission critical products including our
MultiFin 7-in-1 antenna, and CMTA antenna portfolio. Additionally,
we have grown our international customer base and distribution
network, particularly in the European market, expanding PCTEL’s
customer reach and end market opportunities. In 2023, we look
forward to growing our Company while remaining on the forefront of
innovation in the wireless technology space.”
Fourth Quarter & Full Year 2022
Financial Summary
Summary Financials
Q4’22
Q4’21
Change
FY’22
FY’21
Change
Revenue (000’s)
$25,922
$26,008
(0.3%)
$99,428
$87,807
13.2%
Gross Profit Margin %
50.3%
45.9%
440 bps
46.0%
46.1%
(10 bps)
Adjusted EBITDA (000’s)
$3,741
$3,074
21.7%
$10,725
$8,458
26.8%
GAAP Diluted EPS
$0.11
$0.02
$0.09
$0.15
$0.01
$0.14
Non-GAAP Diluted EPS
$0.16
$0.12
$0.04
$0.41
$0.27
$0.14
Fourth quarter 2022 revenues were $25.9 million, equivalent to
the fourth quarter 2021. Fourth quarter 2022 antennas and
industrial IoT device revenue was $16.4 million, a decrease of
14.2% year-over-year, partially due to high customer inventory
levels. Fourth quarter 2022 Test & Measurement revenue was $9.9
million, an increase of 37.7% year-over-year due to higher revenues
for 5G products in the U.S. Fiscal 2022 revenues were $99.4
million, an increase of 13.2% compared to $87.8 million in fiscal
2021. The increase in revenue for fiscal 2022 was driven by
double-digit growth in both segments. Fiscal 2022 Antennas and IIoT
Devices revenue was $69.7 million, an increase of 10.5%
year-over-year. Fiscal 2022 Test & Measurement revenue was
$30.6 million, an increase of 18.9% year-over-year.
Fourth quarter 2022 GAAP gross profit margin was 50.3%, compared
to 45.9% in the fourth quarter of 2021. The higher gross profit
margin was due to a higher mix of Test & Measurement products.
Fiscal 2022 gross profit margin was 46.0%, compared to 46.1% in
fiscal 2021.
Adjusted EBITDA in the fourth quarter increased to $3.7 million
compared to $3.1 million in the fourth quarter of 2021. Adjusted
EBITDA in fiscal 2022 increased to $10.7 million compared to $8.5
million in fiscal 2021.
Fourth quarter 2022 GAAP net income was $2.1 million or diluted
earnings per share of $0.11 compared to GAAP net income of $0.3
million or $0.02 per share in the fourth quarter of 2021. A
reversal of allowances related to deferred income taxes contributed
$0.02 per share during the fourth quarter 2022. Non-GAAP net income
was $3.0 million, or $0.16 diluted earnings per share, compared to
$2.1 million or $0.12 per share in the fourth quarter of 2021.
Fiscal 2022 GAAP net income was $2.9 million or diluted earnings
per share of $0.15 compared to GAAP net income of $0.2 million or
$0.01 per share during fiscal 2021. A reversal of allowances
related to deferred income taxes contributed $0.04 per share during
the full year 2022. Non-GAAP net income was $7.7 million, or $0.41
diluted earnings per share, compared to $5.0 million or $0.27 per
share during fiscal 2021.
Cash, cash equivalents and investments were $30.0 million as of
December 31, 2022, a decrease of approximately $0.8 million as
compared to December 31, 2021.
First Quarter 2023
Outlook
The following ranges represent PCTEL’s current expectations for
the first quarter 2023 based upon available data and estimates.
- Revenue: $22.0 million to $23.0 million
- Non-GAAP Gross Margin: 47% to 48%
- Non-GAAP EPS: $0.05 to $0.07
Kevin McGowan, Chief Financial Officer, explained, “We are
pleased with the underlying strength with which we exited the
fourth quarter and progress into 2023. Our leading wireless
technology solutions enable us to serve customers in the utilities,
rail, 5G and public safety sectors, supporting critical
applications that require reliable connectivity. For the first
quarter of 2023, we anticipate lower sequential revenue due to
typical seasonality effects; however, we maintain a positive
outlook for the remainder of the year. Our healthy balance sheet
provides us with the financial flexibility to support the growth of
our business and execution of our strategy.”
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 (888) 506-0062 (United
States/Canada) or (973) 528-0011 (International), access code:
209567.
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: 47628.
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 29 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 product line and our test & measurement product line
through execution of our three growth strategies; the ability of
the Company to continue to innovate new products for its product
lines; the impact of development and adoption of wireless solutions
in the public safety, rail, logistics, agriculture, utilities, and
electric vehicle markets on our revenue generation; our ability to
expand our product lines in the European market and through
distribution channels; the anticipated demand for certain products,
including those related to public safety, industrial IoT, 5G (e.g.,
the Gflex); 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 disruptions
to the Company’s workforce, operations, supply chain and customer
demand caused by the 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® and SeeHawk are trademarks or registered
trademarks of PCTEL, Inc. © 2023 PCTEL, Inc. All rights
reserved.
PCTEL, INC. CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited) (in thousands, except share data)
December 31, December 31,
2022
2021
ASSETS Cash and cash equivalents
$
7,736
$
8,192
Short-term investment securities
22,254
22,562
Accounts receivable, net of allowances of $132 and $64 at December
31, 2022 and December 31, 2021, respectively
18,853
18,905
Inventories, net
18,918
13,691
Prepaid expenses and other assets
1,861
1,747
Total current assets
69,622
65,097
Property and equipment, net
10,004
11,949
Goodwill
5,935
6,334
Intangible assets, net
1,045
1,579
Other noncurrent assets
3,269
2,438
TOTAL ASSETS
$
89,875
$
87,397
LIABILITIES AND STOCKHOLDERS’ EQUITY Accounts payable
$
4,648
$
5,360
Accrued liabilities
12,605
11,117
Total current liabilities
17,253
16,477
Long-term liabilities
3,624
3,999
Total liabilities
20,877
20,476
Stockholders’ equity: Common stock, $0.001 par value, 50,000,000
shares authorized at December 31, 2022 and December 31, 2021,
respectively, and 18,748,529 and 18,238,030 shares issued and
outstanding at December 31, 2022 and December 31, 2021
19
18
Additional paid-in capital
128,370
123,998
Accumulated deficit
(57,941
)
(56,735
)
Accumulated other comprehensive loss
(1,450
)
(360
)
Total stockholders’ equity
68,998
66,921
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$
89,875
$
87,397
PCTEL, INC. CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (unaudited) (in thousands, except per share
data) Three Months Ended Year Ended
December 31, December 31,
2022
2021
2022
2021
REVENUES
$
25,922
$
26,008
$
99,428
$
87,807
COST OF REVENUES
12,884
14,063
53,695
47,329
GROSS PROFIT
13,038
11,945
45,733
40,478
OPERATING EXPENSES: Research and development
3,050
3,604
12,833
13,358
Sales and marketing
3,837
3,829
14,747
13,327
General and administrative
4,119
3,216
14,517
12,444
Amortization of intangible assets
62
76
263
210
Restructuring expenses
0
841
1,309
900
Total operating expenses
11,068
11,566
43,669
40,239
OPERATING INCOME
1,970
379
2,064
239
Other income (expense), net
102
(37
)
431
(47
)
INCOME BEFORE INCOME TAXES
2,072
342
2,495
192
(Benefit) Expense for income taxes
22
22
(374
)
39
NET INCOME
$
2,050
$
320
$
2,869
$
153
Net Income per Share: Basic
0.11
0.02
0.16
0.01
Diluted
0.11
0.02
0.15
0.01
Weighted Average Shares: Basic
18,265
17,899
18,150
18,017
Diluted
18,576
17,930
18,529
18,122
PCTEL, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS (unaudited) (in thousands) Years Ended
December 31,
2022
2021
Operating Activities: Net income
$
2,869
$
153
Adjustments to reconcile net income to net cash provided by
operating activities: Depreciation and amortization
2,811
3,027
Intangible asset amortization
336
267
Stock-based compensation
3,988
2,921
Loss on disposal of property and equipment
1
113
Restructuring costs
(291
)
353
Bad debt provision
85
(44
)
Changes in operating assets and liabilities: Accounts receivable
(275
)
(896
)
Inventories
(5,533
)
(2,481
)
Prepaid expenses and other assets
153
531
Deferred tax assets
(909
)
0
Accounts payable
(605
)
14
Income taxes payable
430
3
Other accrued liabilities
1,127
1,417
Deferred revenue
(39
)
295
Net cash provided by operating activities
4,148
5,673
Investing Activities: Capital expenditures
(809
)
(2,330
)
Purchases of investments
(25,993
)
(25,928
)
Redemptions/maturities of short-term investments
26,301
38,588
Cash paid for acquisition, net of cash acquired
0
(6,277
)
Net cash (used in) provided by investing activities
(501
)
4,053
Financing Activities: Proceeds from issuance of common stock
797
840
Payment of withholding tax on stock-based compensation
(412
)
(786
)
Principal payments on finance leases
(61
)
(73
)
Purchase of common stock from repurchase program
0
(3,193
)
Cash dividends
(4,075
)
(4,034
)
Net cash used in financing activities
(3,751
)
(7,246
)
Net (decrease) increase in cash and cash equivalents
(104
)
2,480
Effect of exchange rate changes on cash
(352
)
(49
)
Cash and cash equivalents, beginning of period
8,192
5,761
Cash and Cash Equivalents, End of Period
$
7,736
$
8,192
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 December 31, 2022 Year Ended
December 31, 2022 Antennas andIndustrial IoTDevices
Test &MeasurementProducts Corporate Total
Antennas andIndustrial IoTDevices Test
&MeasurementProducts Corporate Total
REVENUES
$16,352
$9,867
($297)
$25,922
$69,662
$30,565
($799)
$99,428
GROSS PROFIT
$5,858
$7,194
($15)
$13,037
$23,293
$22,660
($220)
$45,733
GAAP GROSS PROFIT %
35.8%
72.9%
50.3%
33.4%
74.1%
46.0%
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%
0.2%
0.2%
0.2%
0.2%
Non-GAAP GROSS PROFIT %
36.2%
73.1%
50.6%
33.8%
74.3%
46.3%
Three Months Ended December 31, 2021 Year Ended
December 31, 2022 Antennas andIndustrial IoTDevices
Test &MeasurementProducts Corporate Total
Antennas andIndustrial IoTDevices Test
&MeasurementProducts Corporate Total
REVENUES
$19,054
$7,164
($210)
$26,008
$63,025
$25,704
($922)
$87,807
GROSS PROFIT
$6,454
$5,535
($44)
$11,945
$21,031
$19,592
($145)
$40,478
GAAP GROSS PROFIT %
33.9%
77.3%
45.9%
33.4%
76.2%
46.1%
Non-GAAP adjustments: Amortization of inventory
step-up
0.4%
0.0%
0.3%
0.8%
0.0%
0.6%
Amortization of intangible assets
0.1%
0.0%
0.1%
0.1%
0.0%
0.1%
Stock compensation expenses
0.1%
0.4%
0.3%
0.2%
0.6%
0.3%
Non-GAAP GROSS PROFIT %
34.5%
77.7%
46.6%
34.4%
76.8%
47.0%
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 income to Non-GAAP operating income
Three Months Ended December 31, Year Ended
December 31,
2022
2021
2022
2021
Operating Income
$1,970
$379
$2,064
$239
(a)
Add: Amortization of inventory step-up to fair
value
0
78
0
493
Amortization of intangible assets -Cost of revenues
17
21
73
57
-Operating expenses
62
76
263
210
Restructuring expenses
0
841
1,309
900
Stock compensation expenses: -Cost of revenues
56
82
213
268
-Research and development
160
159
632
543
-Sales & marketing
152
199
845
658
-General & administrative
613
451
2,298
1,452
Acquisition related expenses
131
18
217
611
1,191
1,925
5,850
5,192
Non-GAAP Operating Income
$3,161
$2,304
$7,914
$5,431
% of revenue
12.2
%
8.9
%
8.0
%
6.2
%
Reconciliation of GAAP net income
to Non-GAAP net income Three Months Ended
December 31, Year Ended December 31,
2022
2021
2022
2021
Net Income
$2,050
$320
$2,869
$153
Adjustments: (a) Non-GAAP adjustments to operating
income
1,191
1,925
5,850
5,192
(b) Income Taxes
(239
)
(159
)
(1,042
)
(392
)
952
1,766
4,808
4,800
Non-GAAP Net Income
$3,002
$2,086
$7,677
$4,953
Non-GAAP Income per Share: Basic
$0.16
$0.12
$0.42
$0.27
Diluted
$0.16
$0.12
$0.41
$0.27
Weighed Average Shares: Basic
18,265
17,899
18,150
18,017
Diluted
18,576
17,930
18,529
18,122
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, 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 December 31,
Year Ended December 31,
2022
2021
2022
2021
GAAP operating expenses
$11,068
$11,566
$43,669
$40,239
Stock compensation expenses
(925)
(809)
(3,775)
(2,653)
Amortization of intangible assets
(62)
(76)
(263)
(210)
Restructuring expenses
0
(841)
(1,309)
(900)
Acquisition related expenses
(131)
(18)
(217)
(611)
Non-GAAP Operating expenses
$9,950
$9,822
$38,105
$35,865
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 income to
adjusted EBITDA (unaudited) (in thousands)
Three Months Ended December 31, Year Ended December
31,
2022
2021
2022
2021
Operating income
$1,970
$379
$2,064
$239
Add: Amortization of inventory step-up to fair value
0
78
0
493
Depreciation and amortization
580
770
2,811
3,027
Intangible amortization
79
97
336
267
Restructuring expenses
0
841
1,309
900
Stock compensation expenses
981
891
3,988
2,921
Acquisition related expenses
131
18
217
611
Adjusted EBITDA
$3,741
$3,074
$10,725
$8,458
% of revenue
14.4
%
11.8
%
10.8
%
9.6
%
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 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/20230307005917/en/
PCTEL Company Contact Kevin McGowan CFO PCTEL, Inc. (630)
339-2051
PCTEL Investor Relations Contact Lisa Fortuna or Ashley
Gruenberg Alpha IR Group 312-445-2870 PCTI@alpha-ir.com
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