EX-99.1 2 c12562exv99w1.htm PRESS RELEASE exv99w1
 

Exhibit 99.1
For Immediate Release
         
    For further information contact:
 
 
  John Schoen   Jack Seller
 
  CFO   Public Relations
 
  PCTEL, Inc.   PCTEL, Inc.
 
  (773) 243-3000   (773) 243-3016
 
       jack.seller@pctel.com
PCTEL Posts $20.7 Million in Fourth Quarter Revenue
$86.6 Million in 2006 Revenue
Chicago, February 21, 2007 — PCTEL, Inc. (NASDAQ: PCTI), a leader in wireless broadband solutions, announced results for the fourth quarter ended December 31, 2006 and for the entire year. Financial highlights of the quarter were:
  •   $86.6 million in 2006 revenue compared to $77.7 million in 2005. 2006 revenues include a one-time intellectual property settlement of $7.0 million.
 
  •   $20.7 million in revenue for the quarter, a decrease of 9 percent over the same period last year. Sales of scanners and software experienced strong growth, while antenna products declined.
 
  •   $17.6 million in revenue for the quarter from the Broadband Technology Group. An increase in scanner sales was offset by lower antenna revenue resulting in a decrease of 10 percent compared to the fourth quarter last year. Revenue for the year was down 1 percent from 2005.
 
  •   $2.6 million in revenue for the quarter from the Mobility Solutions Group. This is an increase of 7 percent over the fourth quarter last year. Revenue for the year was up 41 percent over 2005.
 
  •   $0.5 million in licensing revenue for the quarter, a decrease of $0.4 million from the fourth quarter last year. Licensing revenue for the year was $8.7 million, included a $7.0 million one-time intellectual property settlement, compared to $2.3 million in the prior year.
 
  •   GAAP net loss of $(10.0) million for the year, or $(0.48) per diluted share. This compares to a $(3.7) million net loss or $(0.18) per share in 2005. 2006 included $20.7 million of intangible impairments and restructuring expenses both related to the closure of its manufacturing operations in Ireland.

 

 

  •   GAAP net income of $6.6 million for the quarter, or $0.30 per diluted share, compared to $(0.2) million net loss, or $(0.01) per share for the same period in 2005. The fourth quarter 2006 and the year included a one time favorable non cash adjustment of $5.2 million to the company’s income tax accrual.
 
  •   Non-GAAP net income for the year was $13.6 million or $0.63 per diluted share compared to $4.4 million or $0.21 per diluted share in the prior year. The Company’s reporting of non-GAAP income excludes expenses for restructuring, stock based compensation, amortization and impairment of intangible assets and goodwill related to the Company’s acquisitions, and the reversal of a non cash income tax accrual.
 
  •   Non-GAAP net income of $3.3 million for the quarter, or $0.15 per diluted share compared to $2.2 million of net income, or $0.11 per share for the same period in 2005.
 
  •   $69.9 million of cash net of debt at December 31, 2006, an increase of $0.5 million from the third quarter this year. The company repurchased 0.2 million shares in the quarter for $2.1 million under its share repurchase plan. The shares were purchased at an average price of $9.40.
“Our operating results reflect stronger gross margins out of the Broadband Technology Group, continued growth of the Mobility Solutions Group software business, and the success of our scanning receivers in the carrier market,” said Marty Singer, PCTEL’s Chairman and CEO. “In 2007, we anticipate that stronger antenna sales will complement our growth in scanners and software. We are excited about the traction that the Mobility Solutions Group has achieved globally and the dominance of our scanning solutions in the OEM test and measurement market. PCTEL should benefit from the deployment of high-bandwidth wireless networks and an increase in worldwide cellular data and IMS subscribers,” 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 EST.
CONFERENCE CALL / WEBCAST
The company will hold a conference call at 6:15 PM EST (5:15 PM CST) today, Wednesday, February 21, 2007 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) 289-0533 (U.S. / Canada) or (913) 981-5525 (international).
To listen via the Internet, please visit, www.pctel.com, or http://investor.pctel.com/eventdetail.cfm?eventid=34784
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: 2126423.

 

 

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 Antenna Products and RF Solutions. PCTEL’s BTG designs, distributes, and supports innovative antenna solutions for public safety applications, unlicensed and licensed wireless broadband, fleet management, network timing, and other GPS applications. Its portfolio of OEM receivers, receiver based products and interference management solutions are used to measure, monitor and optimize cellular networks. PCTEL’s Mobility Solutions’ 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 software solutions 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 and the ability to implement new technologies and obtain protection for the related intellectual property. 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.
Consolidated Condensed Statements of Operations
(unaudited, in thousands, except per share information)
                                 
    Three Months Ended     Twelve Months Ended  
    December 31,     December 31,  
    2006     2005     2006     2005  
REVENUES
   $ 20,712     $ 22,794     $ 86,562     $ 77,746  
COST OF REVENUES
     9,827       12,107       39,990       40,878  
 
                        
GROSS PROFIT
     10,885       10,687       46,572       36,868  
 
                        
OPERATING EXPENSES:
                                
Research and development
     3,932       2,548       13,762       10,015  
Sales and marketing
     3,322       3,388       13,287       13,074  
General and administrative
     3,259       4,700       14,127       16,836  
Amortization of other intangible assets
     751       1,170       3,593       4,137  
Impairment of goodwill and intangible assets
     —       —       20,349       —  
Restructuring charges (benefit)
     (35 )     —       389       (70 )
Gain on sale of assets and related royalties
     (250 )     (500 )     (1,000 )     (2,100 )
 
                        
Total operating expenses
     10,979       11,306       64,507       41,892  
 
                        
LOSS FROM OPERATIONS
     (94 )     (619 )     (17,935 )     (5,024 )
OTHER INCOME, NET
     945       502       3,303       1,546  
 
                        
INCOME (LOSS) BEFORE PROVISION (BENEFIT) BEFORE INCOME TAXES
     851       (117 )     (14,632 )     (3,478 )
PROVISION (BENEFIT) FOR INCOME TAXES
     (5,748 )     39       (4,613 )     235  
 
                        
NET INCOME (LOSS)
   $ 6,599     $ (156 )   $ (10,019 )   $ (3,713 )
 
                        
 
                                
Basic income (loss) per share
   $ 0.31     $ (0.01 )   $ (0.48 )   $ (0.18 )
Shares used in computing basic income (loss) per share
     20,976       20,257       20,810       20,146  
Diluted income (loss) per share
   $ 0.30     $ (0.01 )   $ (0.48 )   $ (0.18 )
Shares used in computing diluted income (loss)
     21,637       20,257       20,810       20,146  

 

 

PCTEL Inc.
Consolidated Condensed Balance Sheets
(in thousands)
                 
    December 31,     December 31,  
    2006     2005  
ASSETS
                
CURRENT ASSETS:
                
Cash and cash equivalents
   $ 70,771     $ 58,307  
Restricted cash
     —       208  
Accounts receivable, net
     14,034       13,725  
Inventories, net
     7,258       9,547  
Prepaid expenses and other assets
     2,059       3,109  
 
            
Total current assets
     94,122       84,896  
PROPERTY AND EQUIPMENT, net
     12,357       11,190  
GOODWILL
     17,569       31,020  
OTHER INTANGIBLE ASSETS, net
     7,451       16,457  
OTHER ASSETS
     1,221       941  
 
            
TOTAL ASSETS
   $ 132,720     $ 144,504  
 
            
 
                
LIABILITIES AND STOCKHOLDERS’ EQUITY
                
CURRENT LIABILITIES:
                
Accounts payable
     885       2,251  
Income taxes payable
     59       5,297  
Deferred revenue
     1,025       1,944  
Accrued liabilities
     6,905       5,595  
Short term debt
     869       —  
 
            
Total current liabilities
     9,743       15,087  
Pension liabilities
     —       3,046  
LONG-TERM LIABILITIES
     2,284       2,344  
 
            
Total liabilities
     12,027       20,477  
 
            
 
                
STOCKHOLDERS’ EQUITY:
                
Common stock
     22       22  
Additional paid-in capital
     165,556       160,825  
Accumulated deficit
     (46,671 )     (36,652 )
Accumulated other comprehensive income
     1,786       (168 )
 
            
Total stockholders’ equity
     120,693       124,027  
 
            
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
   $ 132,720     $ 144,504  
 
            

 

 

PCTEL, Inc.
Revenue & Gross Profit by Segment
(in thousands)
                                 
    Three Months Ended     Twelve Months Ended  
    December 31,     December 31,  
    2006     2005     2006     2005  
REVENUES:
                                
Broadband Technology Group
   $ 17,648     $ 19,514     $ 68,195     $ 68,592  
Mobility Solutions Group
     2,602       2,432       9,793       6,922  
Licensing
     472       868       8,681       2,289  
Eliminations
     (10 )     (20 )     (107 )     (57 )
 
                        
TOTAL REVENUES
     20,712       22,794       86,562       77,746  
 
                                
GROSS PROFIT:
                                
Broadband Technology Group
   $ 7,823     $ 7,405     $ 28,173     $ 27,827  
Mobility Solutions Group
     2,586       2,424       9,739       6,834  
Licensing
     469       864       8,658       2,207  
Eliminations
     7       (6 )     2       —  
 
                        
TOTAL GROSS PROFIT
     10,885       10,687       46,572       36,868  
 
                                
GROSS PROFIT %:
                                
Broadband Technology Group
     44.3 %     37.9 %     41.3 %     40.6 %
Mobility Solutions Group
     99.4 %     99.7 %     99.4 %     98.7 %
Licensing
     99.4 %     99.5 %     99.7 %     96.4 %
Eliminations
     —       —       —       —  
 
                        
TOTAL GROSS PROFIT %
     52.6 %     46.9 %     53.8 %     47.4 %

 

 

PCTEL, Inc.
Reconciliation of Non-GAAP to GAAP Revenue & Gross Profit by Segment
(unaudited, in thousands)
                                                 
    Three Month Ended December 31, 2006   Three Month Ended December 31, 2005
    As   Non-GAAP   Non   As   Non-GAAP   Non
    Reported   Adjustments (a)   GAAP   Reported   Adjustments (a)   GAAP
REVENUES:
                                                
Broadband Technology Group
     17,648               17,648       19,514               19,514  
Mobility Solutions Group
     2,602               2,602       2,432               2,432  
Licensing
     472               472       868               868  
Eliminations
     (10 )             (10 )     (20 )             (20 )
 
                                                
TOTAL REVENUES
     20,712               20,712       22,794               22,794  
 
                                                
 
                                                
GROSS PROFIT:
                                                
Broadband Technology Group
     7,823       73       7,896       7,405       81       7,486  
Mobility Solutions Group
     2,586               2,586       2,424               2,424  
Licensing
     469               469       864               864  
Eliminations
     7               7       (6 )             (6 )
 
                                                
TOTAL GROSS PROFIT
     10,885       73       10,958       10,687       81       10,768  
 
                                                
 
                                                
GROSS PROFIT %:
                                                
Broadband Technology Group
     44.3 %             44.7 %     37.9 %             38.4 %
Mobility Solutions Group
     99.4 %             99.4 %     99.7 %             99.7 %
Licensing
     99.4 %             99.4 %     99.5 %             99.5 %
Eliminations
     —               —       —               —  
 
                                                
TOTAL GROSS PROFIT %
     52.6 %             52.9 %     46.9 %             47.2 %
 
                                                
 
(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 December 31, 2006 also includes non-cash stock based compensation expense for stock options in accordance with SFAS No. 123R.

 

 

PCTEL, Inc.
Reconciliation of Non-GAAP to GAAP Revenue & Gross Profit by Segment
(unaudited, in thousands)
                                                 
    Twelve Months Ended December 31, 2006   Twelve Months December 31, 2005
    As   Non-GAAP   Non   As   Non-GAAP   Non
    Reported   Adjustments (a)   GAAP   Reported   Adjustments (a)   GAAP
REVENUES:
                                                
Broadband Technology Group
     68,195               68,195       68,592               68,592  
Mobility Solutions Group
     9,793               9,793       6,922               6,922  
Licensing
     8,681               8,681       2,289               2,289  
Eliminations
     (107 )             (107 )     (57 )             (57 )
 
                                                
TOTAL REVENUES
     86,562               86,562       77,746               77,746  
 
                                                
 
                                                
GROSS PROFIT:
                                                
Broadband Technology Group
     28,173       331       28,504       27,827       164       27,991  
Mobility Solutions Group
     9,739               9,739       6,834               6,834  
Licensing
     8,658               8,658       2,207               2,207  
Eliminations
     2               2       —               —  
 
                                                
TOTAL GROSS PROFIT
     46,572       331       46,903       36,868       164       37,032  
 
                                                
 
                                                
GROSS PROFIT %:
                                                
Broadband Technology Group
     41.3 %             41.8 %     40.6 %             40.8 %
Mobility Solutions Group
     99.4 %             99.4 %     98.7 %             98.7 %
Licensing
     99.7 %             99.7 %     96.4 %             96.4 %
Eliminations
     —               —       —               —  
 
                                                
TOTAL GROSS PROFIT %
     53.8 %             54.2 %     47.4 %             47.6 %
 
                                                
 
(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 twelve months ended December 31, 2006 also includes non-cash stock based compensation expense for stock options in accordance with SFAS No. 123R.

 

 

PCTEL, Inc.
Reconciliation Of Non GAAP To GAAP Results Of Operations (a)
(unaudited, in thousands)
                                                 
    Three Month Ended December 31, 2006     Three Month Ended December 31, 2005  
    As     Non-GAAP     Non     As     Non-GAAP     Non  
    Reported     Adjustments (a)     GAAP     Reported     Adjustments (a)     GAAP  
REVENUES
   $ 20,712             $ 20,712     $ 22,794             $ 22,794  
COST OF REVENUES
     9,827       (73 ) (b)     9,754       12,107       (81 ) (b)     12,026  
 
                                    
GROSS PROFIT
     10,885       73       10,958       10,687       81       10,768  
OPERATING EXPENSES:
                                                
Research and development
     3,932       (158 ) (b)     3,774       2,548       (97 ) (b)     2,451  
Sales and marketing
     3,322       (227 ) (b)     3,095       3,388       (240 ) (b)     3,148  
General and administrative
     3,259       (720 ) (b)     2,539       4,700       (768 )     3,932  
Amortization of other intangible assets
     751       (751 )     —       1,170       (1,170 )     —  
Impairment of intangible assets
     —       —       —       —               —  
Restructuring charges
     (35 )     35       —       —               —  
Gain on sale of assets and related royalties
     (250 )             (250 )     (500 )             (500 )
 
                                    
Total operating expenses
     10,979       (1,821 )     9,158       11,306       (2,275 )     9,031  
 
                                    
INCOME (LOSS) FROM OPERATIONS
     (94 )     1,894       1,800       (619 )     2,356       1,737  
OTHER INCOME, NET
     945               945       502               502  
 
                                    
INCOME (LOSS) BEFORE INCOME TAXES
     851       1,894       2,745       (117 )     2,356       2,239  
PROVISION (BENEFIT) FOR INCOME TAXES
     (5,748 )     5,235  (c)     (513 )     39               39  
 
                                    
NET INCOME (LOSS)
   $ 6,599     $ (3,341 )   $ 3,258     $ (156 )   $ 2,356     $ 2,200  
 
                                    
 
                                                
Earnings (loss) per share
                                                
Basic
   $ 0.31             $ 0.16     $ (0.01 )           $ 0.11  
Diluted
   $ 0.30             $ 0.15     $ (0.01 )           $ 0.11  
Shares used in computing EPS
(in thousands)
                                                
Basic
     20,976               20,976       20,257               20,257  
Diluted
     21,637               21,637       20,257               20,854  
 
(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, restructuring expense, and other one-time adjustments 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.
 
(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 December 31, 2006 also includes non-cash stock based compensation expense for stock options in accordance with SFAS No. 123R.
 
(c)   This adjustment reflects a one-time non-cash adjustment to the company’s income tax accruals.

 

 

PCTEL, Inc.
Reconciliation Of Non GAAP To GAAP Results Of Operations (a)
(unaudited, in thousands)
                                                 
    Twelve Months Ended December 31, 2006     Twelve Months December 31, 2005  
    As     Non-GAAP     Non     As     Non-GAAP     Non  
    Reported     Adjustments (a)     GAAP     Reported     Adjustments (a)     GAAP  
REVENUES
   $ 86,562             $ 86,562     $ 77,746             $ 77,746  
COST OF REVENUES
     39,990       (331 ) (b)     39,659       40,878       (164 ) (b)     40,714  
 
                                    
GROSS PROFIT
     46,572       331       46,903       36,868       164       37,032  
OPERATING EXPENSES:
                                                
Research and development
     13,762       (630 ) (b)     13,132       10,015       (309 ) (b)     9,706  
Sales and marketing
     13,287       (873 ) (b)     12,414       13,074       (812 ) (b)     12,262  
General and administrative
     14,127       (2,668 ) (b)     11,459       16,836       (2,766 ) (b)     14,070  
Amortization of other intangible assets
     3,593       (3,593 )     —       4,137       (4,137 )     —  
Impairment of intangible assets
     20,349       (20,349 )     —       —               —  
Restructuring charges (benefit)
     389       (389 )     —       (70 )     70       —  
Gain on sale of assets and related royalties
     (1,000 )             (1,000 )     (2,100 )             (2,100 )
 
                                    
Total operating expenses
     64,507       (28,502 )     36,005       41,892       (7,954 )     33,938  
 
                                    
INCOME (LOSS) FROM OPERATIONS
     (17,935 )     28,833       10,898       (5,024 )     8,118       3,094  
OTHER INCOME, NET
     3,303               3,303       1,546               1,546  
 
                                    
INCOME (LOSS) BEFORE INCOME TAXES
     (14,632 )     28,833       14,201       (3,478 )     8,118       4,640  
PROVISION (BENEFIT) FOR INCOME TAXES
     (4,613 )     5,235  (c)     622       235               235  
 
                                    
NET INCOME (LOSS)
   $ (10,019 )   $ 23,598     $ 13,579     $ (3,713 )   $ 8,118     $ 4,405  
 
                                    
 
                                                
Earnings (loss) per share
                                                
Basic
   $ (0.48 )           $ 0.65     $ (0.18 )           $ 0.22  
Diluted
   $ (0.48 )           $ 0.63     $ (0.18 )           $ 0.21  
Shares used in computing EPS (in thousands)
                                                
Basic
     20,810               20,810       20,146               20,146  
Diluted
     20,810               21,512       20,146               20,701  
 
(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, restructuring expense, and other one-time adjustments 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.
 
(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 twelve months ended December 31, 2006 also includes non-cash stock based compensation expense for stock options in accordance with SFAS No. 123R.
 
(c)   This adjustment reflects a one-time non-cash adjustment to the company’s income tax accruals.