8-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

October 25, 2006

Date of Report (Date of earliest event reported)

PCTEL, Inc.

(Exact Name of Registrant as Specified in Charter)

Delaware	000-27115	77-0364943
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification Number)

8725 W. Higgins Road, Suite 400
Chicago, Illinois 60631

(Address of principal executive offices)

(773) 243-3000

(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12(b) under the Exchange Act (17 CFR 240.14a-12(b))

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

Press Release

Section 2 – Financial Information

Item 2.02 Results of Operations and Financial Condition

          The following information is intended to be furnished under Item 2.02 of Form 8-K, “Results of Operations and Financial Condition.” This information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

          On October 25, 2006, PCTEL, Inc. issued a press release regarding its financial results for its third fiscal quarter ended September 30, 2006. The full text of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Section 9 – Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

          The following exhibit is furnished herewith:

99.1 Press Release, dated October 25, 2006, of PCTEL, Inc. announcing its financial results for its third fiscal quarter ended September 30, 2006.

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SIGNATURE

          Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: October 25, 2006

PCTEL, INC.
By:	/s/ John Schoen
	John W. Schoen, Chief Financial Officer

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Exhibit Index

Exhibit
Number	Description
99.1	Press Release, dated October 25, 2006, of PCTEL, Inc. announcing its financial results for its third fiscal quarter ended September 30, 2006.

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EX-99.1

EXHIBIT 99.1

For Immediate Release

For further information contact:

John Schoen	Jack Seller
COO/CFO	Public Relations
PCTEL, Inc.	PCTEL, Inc.
(773) 243-3000	(773) 243-3016
	jack.seller@pctel.com

PCTEL Posts $20.5 Million In Revenue

Software and Scanner Sales Combine For An Aggregate 30 Percent Increase

Chicago, October 25, 2006 — PCTEL, Inc. (NASDAQ: PCTI), a leader in wireless broadband solutions, announced results for the third quarter ended September 30, 2006. Financial highlights of the quarter were:

• $20.5 million in revenue for the quarter, a decrease of 5 percent over the same period last year. Excluding a one time $7.0 million intellectual property settlement in the second quarter this year, revenue was up 4 percent sequentially.

• $2.4 million in revenue for the quarter from the Mobility Solutions Group. This is an increase of 17 percent over the third quarter last year. Revenue for the nine months ended September 30, 2006 was up 60 percent from the same period a year ago.

• $12.6 million in revenue for the quarter from the Antenna Products Group. This is a decrease of 17 percent from the third quarter last year. Revenue for the nine months ended September 30, 2006 was lower by 3 percent from the same period a year ago.

• $5.1 million in revenue for the quarter from the RF Solutions Group. This is a 37 percent increase over the third quarter of last year. Revenue for the nine months ended September 30, 2006 was up 27 percent from the same period a year ago.

• $0.4 million in licensing revenue for the quarter, a decrease of $0.2 million from the third quarter last year. Revenue for the nine months ended September 30, 2006 is up 477 percent from the same period a year ago. The second quarter this year included a $7.0 million one time intellectual property settlement.

• $1.1 million restructuring expense related to the closure of the Company’s Dublin Factory.

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• $20.3 million non-cash impairment of goodwill and intangible assets related to a reassessment of the long-term economic value of the Sigma Wireless Technologies, Ltd. acquisition, located in Dublin, Ireland. The company made its reassessment in conjunction with the restructuring of the Dublin, Ireland operations and outsourcing of manufacturing for that product line as previously announced.

• GAAP net loss of $(20.7) million for the quarter, or $(0.99) per diluted share, compared to $(0.9) million net loss, or $(0.05) per share for the same period in 2005.

• Non-GAAP net income of $2.6 million for the quarter, or $0.12 per diluted share compared to $1.6 million of net income, or $0.08 per share for the same period in 2005. The Company’s reporting of non-GAAP income excludes expenses for restructuring, stock based compensation, and amortization and impairment of intangible assets and goodwill related to the Company’s acquisitions.

• $70.6 million of cash at September 30, 2006.

“We continue to benefit from the global increase in wireless data subscribers, IMS trials, and the deployment of broadband wireless networks,” said Marty Singer, PCTEL’s Chairman and CEO. “We are also generating greater profits on slightly lower antenna revenues. We made significant investments in new product developments that will address WiMAX, TD-SCDMA, and other 4G technologies and we continue to move forward with our investments in penetrating new, global markets,” added Singer.

PCTEL’s management team will discuss the company’s results and its recent reorganization during its scheduled earnings teleconference today at 6:15 PM EDT.

CONFERENCE CALL / WEBCAST
The company will hold a conference call at 6:15 PM EDT (5:15 PM CDT) today, Wednesday, October 25, 2006 with Marty Singer, Chairman and Chief Executive Officer, and John Schoen, Chief Financial Officer. PCTEL will not be responding to inquiries regarding its financial results until the conference call. The session can be accessed by calling (800) 289-0508 (U.S. / Canada) or (913) 981-5550 (international).

To listen via the Internet, please visit, www.pctel.com, or
http://www.shareholder.com/pctel/MediaRegisterpost.cfm?MediaID=22170

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REPLAY: A replay will be available for two weeks after the call on PCTEL’s web site at www.pctel.com or by calling (888) 203-1112 (U.S. / Canada) or (719) 457-0820 (international) access code: 7846916.

About PCTEL
PCTEL, Inc. (Nasdaq:PCTI), which is headquartered in Chicago, is a global leader in wireless broadband solutions. The company’s Broadband Technology Group (BTG) includes the Antenna Products Group and the RF Solutions Group. PCTEL’s Antenna Products Group (http://antenna.pctel.com) designs, distributes, and supports innovative antenna solutions for public safety applications, unlicensed and licensed wireless broadband, fleet management, network timing, and other GPS applications. PCTEL’s RF Solutions’ (http://rfsolutions.pctel.com) portfolio of OEM receivers, receiver based products and interference management solutions are used to measure, monitor and optimize cellular networks. PCTEL’s Mobility Solutions’ (http://mobilitysolutions.pctel.com) software tools provide secure, access independent, remote connectivity to the Internet and IMS services for converged handsets.

The company’s products are sold or licensed to wireless carriers, wireless ISPs, distributors, system integrators, wireless test and measurement companies, wireless network equipment, handset manufacturers, and government agencies. PCTEL protects its technology with a strong intellectual property portfolio and broad cross-licensing agreements. For more information, please visit the company’s 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 broadband wireless products and the discontinuance of the manufacturing operations in Dublin, Ireland, 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, the ability to realize product and manufacturing efficiencies and the ability to achieve reductions in costs as a result of the discontinuance of manufacturing operations. 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.

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PCTEL, Inc.

Consolidated Condensed Statements of Operations
(unaudited, in thousands, except per share information)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2006			2005			2006			2005
REVENUES	$	20,526		$	21,632		$	65,850		$	54,952
COST OF REVENUES		10,618			11,593			30,164			28,772
GROSS PROFIT		9,908			10,039			35,686			26,180
OPERATING EXPENSES:
Research and development		3,578			2,562			9,831			7,467
Sales and marketing		3,226			3,637			9,964			9,686
General and administrative		3,393			4,105			10,867			12,136
Amortization of other intangible assets		749			1,231			2,842			2,967
Impairment of intangible assets		20,349			—			20,349			—
Restructuring charges (benefit)		1,141			—			424			(70	)
Gain on sale of assets and related royalties		(250	)		(600	)		(750	)		(1,600	)
Total operating expenses		32,186			10,935			53,527			30,586
LOSS FROM OPERATIONS		(22,278	)		(896	)		(17,841	)		(4,406	)
OTHER INCOME, NET		990			74			2,358			1,045
LOSS BEFORE PROVISION (BENEFIT) FOR INCOME TAXES		(21,288	)		(822	)		(15,483	)		(3,361	)
PROVISION (BENEFIT) FOR INCOME TAXES		(541	)		95			1,135			196
NET LOSS	$	(20,747	)	$	(917	)	$	(16,618	)	$	(3,557	)
Basic loss per share	$	(0.99	)	$	(0.05	)	$	(0.80	)	$	(0.18	)
Shares used in computing basic loss per share		20,941			20,163			20,753			20,111
Diluted loss per share	$	(0.99	)	$	(0.05	)	$	(0.80	)	$	(0.18	)
Shares used in computing diluted loss per share		20,941			20,163			20,753			20,111

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PCTEL Inc.

Consolidated Condensed Balance Sheets
(unaudited, in thousands)

	September 30,			December 31,
	2006			2005
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	70,442		$	58,307
Restricted cash		208			208
Accounts receivable, net		13,518			13,725
Inventories , net		6,957			9,547
Prepaid expenses and other assets		1,412			3,109
Total current assets		92,537			84,896
PROPERTY AND EQUIPMENT, net		11,361			11,190
GOODWILL		17,457			31,020
OTHER INTANGIBLE ASSETS, net		8,144			16,457
OTHER ASSETS		1,687			941
TOTAL ASSETS	$	131,186		$	144,504
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable		950			2,251
Income taxes payable		5,337			5,297
Deferred revenue		1,338			1,944
Accrued liabilities		4,809			5,595
Short Term Debt		1,245			—
Total current liabilities		13,679			15,087
Pension liabilities		—			3,046
LONG-TERM LIABILITIES		2,266			2,344
Total liabilities		15,945			20,477
STOCKHOLDERS’ EQUITY:
Common stock		22			22
Additional paid-in capital		166,868			160,825
Accumulated deficit		(53,270	)		(36,652	)
Accumulated other comprehensive income		1,621			(168	)
Total stockholders’ equity		115,241			124,027
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	131,186		$	144,504

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PCTEL, Inc.

Revenue & Gross Profit by Segment
(unaudited, in thousands)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2006			2005			2006			2005
REVENUES:
APG	$	12,605		$	15,261		$	37,746		$	38,967
RFS		5,104			3,729			12,801			10,111
MSG		2,407			2,057			7,191			4,490
LICENSING		437			598			8,209			1,421
Eliminations		(27	)		(13	)		(97	)		(37	)
TOTAL REVENUES		20,526			21,632			65,850			54,952
GROSS PROFIT:
APG	$	3,571		$	4,861		$	11,430		$	13,245
RFS		3,516			2,585			8,920			7,175
MSG		2,398			2,056			7,152			4,412
LICENSING		425			528			8,189			1,343
Eliminations		(2	)		9			(5	)		5
TOTAL GROSS PROFIT		9,908			10,039			35,686			26,180

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PCTEL, Inc.

Reconciliation of Non-GAAP to GAAP Revenue & Gross Profit by Segment
(unaudited, in thousands)

	Three Month Ended September 30, 2006									Three Month Ended September 30, 2005
	As			Non-GAAP			Non			As			Non-GAAP			Non
	Reported			Adjustments		(a)	GAAP			Reported			Adjustments		(a)	GAAP
REVENUES:
APG		12,605						12,605			15,261						15,261
RFS		5,104						5,104			3,729						3,729
MSG		2,407						2,407			2,057						2,057
LICENSING		437						437			598						598
Eliminations		(27	)					(27	)		(13	)					(13	)
TOTAL REVENUES		20,526						20,526			21,632						21,632
GROSS PROFIT:
APG		3,571			58			3,629			4,861			72			4,933
RFS		3,516			37			3,553			2,585			3			2,588
MSG		2,398						2,398			2,056						2,056
LICENSING		425						425			528						528
Eliminations		(2	)					(2	)		9						9
TOTAL GROSS PROFIT		9,908			95			10,003			10,039			75			10,114

(a) This adjustment reflects the non-cash stock based compensation expense for restricted grants and stock bonuses awarded to the Company’s employees. The adjustment for the three months ended September 30, 2006 also includes non-cash stock based compensation expense for stock options in accordance with SFAS No. 123R.

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PCTEL, Inc.

Reconciliation of Non-GAAP to GAAP Revenue & Gross Profit by Segment
(unaudited, in thousands)

	Nine Months Ended September 30, 2006									Nine Months September 30, 2005
	As			Non-GAAP			Non			As			Non-GAAP			Non
	Reported			Adjustments		(a)	GAAP			Reported			Adjustments		(a)	GAAP
REVENUES:
APG		37,746						37,746			38,967						38,967
RFS		12,801						12,801			10,111						10,111
MSG		7,191						7,191			4,490						4,490
LICENSING		8,209						8,209			1,421						1,421
Eliminations		(97	)					(97	)		(37	)					(37	)
TOTAL REVENUES		65,850						65,850			54,952						54,952
GROSS PROFIT:
APG		11,430			150			11,580			13,245			77			13,322
RFS		8,920			108			9,028			7,175			6			7,181
MSG		7,152						7,152			4,412						4,412
LICENSING		8,189						8,189			1,343						1,343
Eliminations		(5	)					(5	)		5						5
TOTAL GROSS PROFIT		35,686			258			35,944			26,180			83			26,263

(a) This adjustment reflects the non-cash stock based compensation expense for restricted grants and stock bonuses awarded to the Company’s employees. The adjustment for the nine months ended September 30, 2006 also includes non-cash stock based compensation expense for stock options in accordance with SFAS No. 123R.

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PCTEL, Inc.

Reconciliation Of Non GAAP To GAAP Results Of Operations (a)
(unaudited, in thousands)

	Three Months Ended September 30, 2006									Three Months Ended September 30, 2005
	As			Non-GAAP			Non			As			Non-GAAP			Non
	Reported			Adjustments		(a)	GAAP			Reported			Adjustments		(a)	GAAP
REVENUES	$	20,526					$	20,526		$	21,632					$	21,632
COST OF REVENUES		10,618			(95	) (b)		10,523			11,593			(75	) (b)		11,518
GROSS PROFIT		9,908			95			10,003			10,039			75			10,114
OPERATING EXPENSES:
Research and development		3,578			(165	) (b)		3,413			2,562			(92	) (b)		2,470
Sales and marketing		3,226			(207	) (b)		3,019			3,637			(256	) (b)		3,381
General and administrative		3,393			(642	) (b)		2,751			4,105			(858	) (b)		3,247
Amortization of other intangible assets		749			(749	)		—			1,231			(1,231	)		—
Impairment of intangible assets		20,349			(20,349	)		—			—						—
Restructuring charges		1,141			(1,141	)		—			—						—
Gain on sale of assets and related royalties		(250	)					(250	)		(600	)					(600	)
Total operating expenses		32,186			(23,253	)		8,933			10,935			(2,437	)		8,498
INCOME (LOSS) FROM OPERATIONS		(22,278	)		23,348			1,070			(896	)		2,512			1,616
OTHER INCOME, NET		990						990			74						74
INCOME (LOSS) BEFORE INCOME TAXES		(21,288	)		23,348			2,060			(822	)		2,512			1,690
PROVISION (BENEFIT) FOR INCOME TAXES		(541	)					(541	)		95						95
NET INCOME (LOSS)	$	(20,747	)	$	23,348		$	2,601		$	(917	)	$	2,512		$	1,595
Earnings (loss) per share
Basic	$	(0.99	)				$	0.12		$	(0.05	)				$	0.08
Diluted	$	(0.99	)				$	0.12		$	(0.05	)				$	0.08
Shares used in computing EPS (in thousands)
Basic		20,941						20,941			20,163						20,163
Diluted		20,941						21,678			20,163						20,743

(a)

These adjustments reconcile the Company’s GAAP results of operations to its non-GAAP results of operations. The Company believes that presentation of results excluding items such as non-cash compensation expense, amortization of intangible assets, impairment of intangible assets, and restructuring expense 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 meansures should not be viewed as a substitute for the Company’s GAAP results.

(b)

This adjustment reflects the non-cash stock based compensation expense for restricted grants and stock bonuses awarded to the Company’s employees. The adjustment for the three months ended September 30, 2006 also includes non-cash stock based compensation expense for stock options in accordance with SFAS No. 123R.

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PCTEL, Inc.

Reconciliation Of Non GAAP To GAAP Results Of Operations (a)
(unaudited, in thousands)

	Nine Months Ended September 30, 2006									Nine Months Ended September 30, 2005
	As			Non-GAAP			Non			As			Non-GAAP			Non
	Reported			Adjustments		(a)	GAAP			Reported			Adjustments		(a)	GAAP
REVENUES	$	65,850					$	65,850		$	54,952					$	54,952
COST OF REVENUES		30,164			(258	) (b)		29,906			28,772			(83	) (b)		28,689
GROSS PROFIT		35,686			258			35,944			26,180			83			26,263
OPERATING EXPENSES:
Research and development		9,831			(472	) (b)		9,359			7,467			(212	) (b)		7,255
Sales and marketing		9,964			(645	) (b)		9,319			9,686			(572	) (b)		9,114
General and administrative		10,867			(1,948	) (b)		8,919			12,136			(1,998	) (b)		10,138
Amortization of other intangible assets		2,842			(2,842	)		—			2,967			(2,967	)		—
Impairment of intangible assets		20,349			(20,349	)		—			—						—
Restructuring charges (benefit)		424			(424	)		—			(70	)		70			—
Gain on sale of assets and related royalties		(750	)					(750	)		(1,600	)					(1,600	)
Total operating expenses		53,527			(26,680	)		26,847			30,586			(5,679	)		24,907
INCOME (LOSS) FROM OPERATIONS		(17,841	)		26,938			9,097			(4,406	)		5,762			1,356
OTHER INCOME, NET		2,358						2,358			1,045						1,045
INCOME (LOSS) BEFORE INCOME TAXES		(15,483	)		26,938			11,455			(3,361	)		5,762			2,401
PROVISION (BENEFIT) FOR INCOME TAXES		1,135						1,135			196						196
NET INCOME (LOSS)	$	(16,618	)	$	26,938		$	10,320		$	(3,557	)	$	5,762		$	2,205
Earnings (loss) per share
Basic	$	(0.80	)				$	0.50		$	(0.18	)				$	0.11
Diluted	$	(0.80	)				$	0.48		$	(0.18	)				$	0.11
Shares used in computing EPS (in thousands)
Basic		20,753						20,753			20,111						20,111
Diluted		20,753						21,531			20,111						20,653

(a)

These adjustments reconcile the Company’s GAAP results of operations to its non-GAAP results of operations. The Company believes that presentation of results excluding items such as non-cash compensation expense, amortization of intangible assets, impairment of intangible assets, and restructuring expense 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 meansures should not be viewed as a substitute for the Company’s GAAP results.

(b)

This adjustment reflects the non-cash stock based compensation expense for restricted grants and stock bonuses awarded to the Company’s employees. The adjustment for the nine months ended September 30, 2006 also includes non-cash stock based compensation expense for stock options in accordance with SFAS No. 123R.

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