EX-99.1 3 c80422exv99w1.txt PRESS RELEASE EXHIBIT 99.1 For further information contact: John Schoen Jack Seller COO/CFO Director, Marketing & PR PCTEL, Inc. PCTEL, Inc. (773) 243-3000 (773) 243-3016 john_schoen@pctel.com jack_seller@pctel.com PCTEL WIRELESS AND LICENSING REVENUES GROW 38 PERCENT OVER SECOND QUARTER; 200 PERCENT OVER THIRD QUARTER LAST YEAR NEW WIRELESS AND LICENSING BUSINESSES CONTINUE STRONG GROWTH AFTER HSP PRODUCT LINE DIVESTITURE CHICAGO, IL - OCTOBER 28, 2003 - PCTEL, Inc. (NASDAQ: PCTI), a leading provider of wireless solutions and access technology, today announced financial results for the third quarter ended September 30, 2003. This was the first full quarter of operating results following the company's sale of its legacy HSP modem product line to Conexant (NASDAQ: CNXT) in May 2003 as part of PCTEL's previously announced wireless transition plan. Total revenue was $4.0 million for the third quarter of 2003 compared to $12.5 million reported in the third quarter of 2002. Net loss for the third quarter of 2003 was $(2.3) million, or $(0.12) per diluted share, compared to net income of $3.2 million, or $0.16 per diluted share reported in the third quarter of 2002. All of the revenue in the recently completed quarter was related to wireless and licensing products. For the quarter ended September 30, 2002, the company had $1.3 million of wireless and licensing revenue and $11.2 million in HSP modem product revenue. The third quarter last year was also positively impacted by a $3.8 million inventory reserve recovery in cost of goods sold that related to HSP products. "We are on track with our wireless transition plan," said Marty Singer, PCTEL's Chairman and CEO. "We introduced four new wireless products during the third quarter and we continued to grow revenues from our new products. DTI continues to expand, with stronger sales into both government and commercial cellular markets. Our publicly announced relationships with carriers and chipset manufacturers indicate that we are achieving real traction for Segue and DTI products." During the third quarter, PCTEL introduced four new products: the Segue(TM) Analyzer; a highly secure version of its Segue(TM) Roaming Client; the Segue(TM) SAM or Soft Access Point, and claRiFy(TM), a sophisticated test and measurement tool for enhancing the performance of cellular networks. The Segue(TM) Analyzer was the first product resulting from the cooperation between the Segue and DTI development teams, which was acquired in March 2003. Cash and short-term investments ended the quarter at $108.9 million, a decrease of $2.9 million from the second quarter of 2003. The company anticipates receiving an additional $4 million in cash from the HSP modem product line divestiture in the fourth quarter ending December 31, 2003. As of September 30, 2003, the company has repurchased 1.54 million out of the 2.0 million shares authorized by the board of directors under its two share buyback programs. During the third quarter, 257,400 shares were repurchased under these programs. CONFERENCE CALL / WEBCAST The company will hold a conference call at 4:00 PM CST (5:00 PM EST) with Marty Singer, chairman and chief executive officer, and John Schoen, chief operating officer and chief financial officer. The session will include brief remarks, and can be accessed by calling (800) 545-9583 (U.S. / Canada) or (973) 317-5317 (international). To listen via the Internet, please visit, www.pctel.com, or http://www.shareholder.com/pctel/MediaList.cfm REPLAY: A replay will be available for two weeks after the call on PCTEL's web site at www.pctel.com or by calling (800) 428-6051 (U.S. / Canada) or (973) 709-2089 (international) access code: 306001. ABOUT PCTEL PCTEL, founded in March 1994, is a leading provider of wireless solutions and access technology. PCTEL's products include WLAN software products (Segue(TM) Product Line) that simplify installation, roaming, Internet access and billing. Through its subsidiary, DTI, the company designs, develops and distributes OEM receivers and receiver-based products that measure and monitor cellular networks. The company maintains a portfolio of more than 115 analog and broadband communications and wireless patents, issued or pending, including key and essential patents for modem technology. The company's products are sold or licensed to PC manufacturers, PC card and board manufacturers, wireless carriers, wireless ISPs, software distributors, wireless test and measurement companies, and system integrators. PCTEL headquarters are located at 8725 West Higgins Road, Suite 400, Chicago, IL 60631. Telephone: 773-243-3000. For more information, please visit our web site at: http://www.pctel.com. PCTEL SAFE HARBOR STATEMENT This press release contains "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Specifically, the statements regarding PCTEL's expectations regarding the future growth of its wireless and licensing businesses 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 ability to successfully grow the wireless products business, the ability to implement new technologies and obtain protection for the related intellectual property, and the risks inherent in potential acquisitions. 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 STATEMENTS OF OPERATIONS (UNAUDITED, IN THOUSANDS, EXCEPT PER SHARE INFORMATION)
Three Months Ended Nine Months Ended September 30, September 30, ------------------------ ------------------------ 2003 2002 2003 2002 ---------- ---------- ---------- ---------- REVENUES $ 4,030 $ 12,548 $ 27,288 $ 32,447 COST OF REVENUES 755 7,481 12,871 18,275 ---------- ---------- ---------- ---------- INVENTORY RECOVERY 0 (3,795) (1,800) (5,348) ---------- ---------- ---------- ---------- GROSS PROFIT 3,275 8,862 16,217 19,520 ---------- ---------- ---------- ---------- OPERATING EXPENSES (INCOME): Research and development 1,792 2,477 6,093 7,634 Sales and marketing 1,501 1,904 5,655 5,395 General and administrative 2,644 1,248 7,295 3,856 Amortization of goodwill and other intangible assets 343 50 781 50 Acquired in-process research and development -- -- 1,100 -- Restructuring charges 288 88 2,940 735 Gain on sale of assets and related royalties (644) -- (4,976) -- Amortization of deferred compensation 208 170 748 528 ---------- ---------- ---------- ---------- Total operating expenses 6,132 5,937 19,636 18,198 ---------- ---------- ---------- ---------- INCOME (LOSS) FROM OPERATIONS (2,857) 2,925 (3,419) 1,322 OTHER INCOME, NET: Other income, net 291 641 1,120 2,631 ---------- ---------- ---------- ---------- INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES (2,566) 3,566 (2,299) 3,953 PROVISION (BENEFIT) FOR INCOME TAXES (248) 352 (155) 415 ---------- ---------- ---------- ---------- NET INCOME (LOSS) $ (2,318) $ 3,214 $ (2,144) $ 3,538 ========== ========== ========== ========== Basic earnings (loss) per share $ (0.12) $ 0.16 $ (0.11) $ 0.18 Shares used in computing basic earnings per share 19,663 19,972 19,913 19,876 Diluted earnings (loss) per share $ (0.12) $ 0.16 $ (0.11) $ 0.18 Shares used in computing diluted earnings per share 19,663 20,139 19,913 20,101
PCTEL, INC. CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED, IN THOUSANDS)
September 30, December 31, 2003 2002 ------------- ------------ ASSETS CURRENT ASSETS: Cash and cash equivalents $ 89,587 $ 52,986 Restricted cash 278 347 Short-term investments 19,037 58,405 Accounts receivable, net 2,631 5,379 Inventories, net 1,281 1,115 Non-Trade Receivable 4,000 -- Prepaid expenses and other assets 2,225 5,144 ------------ ------------ Total current assets 119,039 123,376 PROPERTY AND EQUIPMENT, net 1,013 1,532 GOODWILL, net 4,261 1,255 OTHER INTANGIBLE ASSETS, net 4,483 365 OTHER ASSETS 378 2,898 ------------ ------------ TOTAL ASSETS $ 129,174 $ 129,426 ============ ============ CURRENT LIABILITIES: Accounts payable $ 894 $ 1,498 Accrued royalties 3,208 3,658 Income taxes payable 5,621 6,289 Accrued liabilities 4,983 5,313 ------------ ------------ Total current liabilities 14,706 16,758 LONG-TERM LIABILITIES 784 115 ------------ ------------ Total liabilities 15,490 16,873 ------------ ------------ STOCKHOLDERS' EQUITY: Common stock 20 20 Additional paid-in capital 154,515 152,272 Deferred compensation (2,722) (3,958) Retained earnings (deficit) (38,223) (36,079) Accumulated other comprehensive income 94 298 ------------ ------------ Total stockholders' equity 113,684 112,553 ------------ ------------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 129,174 $ 129,426 ============ ============