EX-99.1 2 c17042exv99w1.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 $19.0 Million in Second Quarter Revenue
Chicago, July 25, 2007 — PCTEL, Inc. (NASDAQ: PCTI), a leader in wireless broadband solutions, announced results for the second quarter ended June 30, 2007. Financial highlights of the quarter were:
  •   $19.0 million in revenue for the quarter compared to $26.8 million in the same quarter last year. Last year’s revenue included a one time $7.0 million intellectual property licensing settlement with Agere.
 
  •   $16.2 million in revenue for the quarter from the Broadband Technology Group, down three percent from the same quarter last year. The company saw year over year growth in its scanning receiver product line and a decline in its antenna product revenue. The decline in antenna product revenue reflects the company’s decision to exit the UMTS antenna market and the continued pruning of low margin product lines. Gross profit improved to 44 percent, compared to 43 percent in the second quarter of last year. The gross profit improvement reflected a greater contribution from our scanning receiver product line and the elimination of low cost antenna products.
 
  •   $2.5 million in revenue for the quarter from the Mobility Solutions Group, compared to $2.7 million in the same quarter last year. This is a decrease of eight percent over the second quarter last year. The second quarter last year included a heavy concentration of software customization fees related to a large carrier win.
 
  •   $0.3 million in licensing revenue for the quarter, compared to $7.4 million in the second quarter last year. Last year’s second quarter results included a one time $7.0 million licensing settlement with Agere.
 
  •   GAAP net loss of $(3.2) million for the quarter, or $(0.15) per basic share, compared to net income of $6.3 million, or $0.29 per diluted share for the same period in 2006. The second quarter this year included a $2.1 million restructuring charge related to the exiting of UMTS antenna operations. Last year’s GAAP net income included the one-time $7.0 million IP settlement.
 
  •   Non-GAAP net income of $1.0 million for the quarter, or $0.05 per diluted share compared to net income of $7.2 million, or $0.33 per diluted share for the same period in 2006. 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 non cash income tax expense. Last year’s non-GAAP results also included the previously mentioned IP settlement.
 
  •   $68.6 million of cash and short-term investments at June 30, 2007, as compared to $67.7 million at the end of the first quarter 2007. The company repurchased 146,000 shares in the quarter for $1.5 million under its share repurchase plan. The shares were purchased at an average price of $9.91.
“We took several decisive actions in the quarter to improve our long term results, specifically shutting down our operation in Ireland which was not meeting our financial objectives and focusing on sales growth by hiring a seasoned Vice President of Global Sales and Marketing,” said Marty Singer, PCTEL’s Chairman and CEO. “We now have a sharper focus and great opportunities to leverage a strong customer base and our technology investments as we move forward,” added Singer.
PCTEL’s management team will discuss the company’s results 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, July 25, 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 (866) 454-4208 (U.S. / Canada) or (913) 312-1238 (international).
To listen via the Internet, please visit, www.pctel.com, or http://investor.pctel.com/events.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 (888) 203-1112 (U.S. / Canada) or (719) 457-0820 (international) access code: 2112449.
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 software 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 sales growth and leveraging its customer base and technology investments 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     Six Months Ended  
    June 30,     June 30,  
    2007     2006     2007     2006  
REVENUES
   $ 18,962     $ 26,758     $ 37,913     $ 45,324  
COST OF REVENUES
     9,169       9,702       18,368       19,546  
 
                        
GROSS PROFIT
     9,793       17,056       19,545       25,778  
 
                        
OPERATING EXPENSES:
                                
Research and development
     4,031       3,336       8,006       6,253  
Sales and marketing
     3,412       3,196       6,879       6,738  
General and administrative
     3,373       3,725       7,121       7,473  
Amortization of other intangible assets
     476       1,056       1,172       2,093  
Restructuring charges
     2,074       (1,269 )     2,074       (716 )
Gain on sale of assets and related royalties
     (250 )     (250 )     (500 )     (500 )
 
                        
Total operating expenses
     13,116       9,794       24,752       21,341  
 
                        
INCOME (LOSS) FROM OPERATIONS
     (3,323 )     7,262       (5,207 )     4,437  
OTHER INCOME, NET
     847       747       1,800       1,368  
 
                        
INCOME (LOSS) BEFORE INCOME TAXES
     (2,476 )     8,009       (3,407 )     5,805  
PROVISION FOR INCOME TAXES
     731       1,683       558       1,676  
 
                        
NET INCOME (LOSS)
   $ (3,207 )   $ 6,326     $ (3,965 )   $ 4,129  
 
                        
 
                                
Basic income (loss) per share
   $ (0.15 )   $ 0.30     $ (0.19 )   $ 0.20  
Shares used in computing basic income (loss) per share
     21,092       20,837       21,078       20,656  
 
                                
Diluted income (loss) per share
   $ (0.15 )   $ 0.29     $ (0.19 )   $ 0.19  
Shares used in computing diluted income (loss) per share
     21,092       21,586       21,078       21,371  

 

 

PCTEL Inc.
Consolidated Condensed Balance Sheets
(unaudited, in thousands)
                 
    June 30,     December 31,  
    2007     2006  
ASSETS
                
CURRENT ASSETS:
                
Cash and cash equivalents
   $ 68,644     $ 59,148  
Short-term investments
     —       11,623  
Accounts receivable, net
     15,887       14,034  
Inventories, net
     9,350       7,258  
Prepaid expenses and other assets
     1,936       2,059  
 
            
Total current assets
     95,817       94,122  
PROPERTY AND EQUIPMENT, net
     12,488       12,357  
GOODWILL
     17,641       17,569  
OTHER INTANGIBLE ASSETS, net
     5,182       7,451  
OTHER ASSETS
     1,183       1,221  
 
            
TOTAL ASSETS
   $ 132,311     $ 132,720  
 
            
 
                
LIABILITIES AND STOCKHOLDERS’ EQUITY
                
CURRENT LIABILITIES:
                
Accounts payable
     4,774       885  
Deferred revenue
     1,399       1,025  
Accrued liabilities
     6,941       6,964  
Short term debt
     770       869  
 
            
Total current liabilities
     13,884       9,743  
LONG-TERM LIABILITIES
     2,355       2,284  
 
            
Total liabilities
     16,239       12,027  
 
            
 
                
STOCKHOLDERS’ EQUITY:
                
Common stock
     22       22  
Additional paid-in capital
     166,654       165,556  
Accumulated deficit
     (50,636 )     (46,671 )
Accumulated other comprehensive income
     32       1,786  
 
            
Total stockholders’ equity
     116,072       120,693  
 
            
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
   $ 132,311     $ 132,720  
 
            

 

 

PCTEL, Inc.
Revenue & Gross Profit by Segment
(unaudited, in thousands)
                                 
    Three Months Ended     Six Months Ended  
    June 30,     June 30,  
    2007     2006     2007     2006  
REVENUES:
                                
Broadband Technology Group
   $ 16,175     $ 16,708     $ 32,516     $ 32,768  
Mobility Solutions Group
     2,463       2,668       4,798       4,784  
Licensing
     324       7,382       599       7,772  
 
                        
TOTAL REVENUES
     18,962       26,758       37,913       45,324  
 
                                
GROSS PROFIT:
                                
Broadband Technology Group
   $ 7,056     $ 7,024     $ 14,248     $ 13,259  
Mobility Solutions Group
     2,417       2,653       4,705       4,755  
Licensing
     320       7,379       592       7,764  
 
                        
TOTAL GROSS PROFIT
     9,793       17,056       19,545       25,778  
 
                                
GROSS PROFIT %:
                                
Broadband Technology Group
     43.6 %     42.0 %     43.8 %     40.5 %
Mobility Solutions Group
     98.1 %     99.4 %     98.1 %     99.4 %
Licensing
     98.8 %     100.0 %     98.8 %     99.9 %
 
                        
TOTAL GROSS PROFIT %
     51.6 %     63.7 %     51.6 %     56.9 %
 
                        

 

 

PCTEL, Inc.
Reconciliation of Non-GAAP to GAAP Revenue & Gross Profit by Segment
(unaudited, in thousands)
                                                 
    Three Months Ended June 30, 2007     Three Months Ended June 30, 2006  
    As     Non-GAAP     Non     As     Non-GAAP     Non  
    Reported     Adjustments (a)
 
   GAAP     Reported     Adjustments (a)
 
   GAAP  
REVENUES:
                                                
Broadband Technology Group
     16,175               16,175       16,708               16,708  
Mobility Solutions Group
     2,463               2,463       2,668               2,668  
Licensing
     324               324       7,382               7,382  
 
                                    
TOTAL REVENUES
     18,962               18,962       26,758               26,758  
 
                                    
 
                                                
GROSS PROFIT:
                                                
Broadband Technology Group
     7,056       (88 ) (a)     7,144       7,024       (86 ) (a)     7,110  
Mobility Solutions Group
     2,417               2,417       2,653               2,653  
Licensing
     320               320       7,379               7,379  
 
                                    
TOTAL GROSS PROFIT
     9,793       (88 )     9,881       17,056       (86 )     17,142  
 
                                    
 
                                                
GROSS PROFIT %:
                                                
Broadband Technology Group
     43.6 %             44.2 %     42.0 %             42.6 %
Mobility Solutions Group
     98.1 %             98.1 %     99.4 %             99.4 %
Licensing
     98.8 %             98.8 %     100.0 %             100.0 %
 
                                        
TOTAL GROSS PROFIT %
     51.6 %             52.1 %     63.7 %             64.1 %
 
                                        
 
(a)   This adjustment reflects the non-cash stock based compensation expense for restricted grants, stock bonuses, and stock options awarded to the company’s employees.

 

 

PCTEL, Inc.
Reconciliation of Non-GAAP to GAAP Revenue & Gross Profit by Segment
(unaudited, in thousands)
                                                 
    Six Months Ended June 30, 2007     Six Months Ended June 30, 2006  
    As     Non-GAAP     Non     As     Non-GAAP     Non  
    Reported     Adjustments (a)
 
   GAAP     Reported     Adjustments (a)
 
   GAAP  
REVENUES:
                                                
Broadband Technology Group
     32,516               32,516       32,768               32,768  
Mobility Solutions Group
     4,798               4,798       4,784               4,784  
Licensing
     599               599       7,772               7,772  
 
                                    
TOTAL REVENUES
     37,913               37,913       45,324               45,324  
 
                                    
 
                                                
GROSS PROFIT:
                                                
Broadband Technology Group
     14,248       (187 ) (a)     14,435       13,259       (163 ) (a)     13,422  
Mobility Solutions Group
     4,705               4,705       4,755               4,755  
Licensing
     592               592       7,764               7,764  
 
                                    
TOTAL GROSS PROFIT
     19,545       (187 )     19,732       25,778       (163 )     25,941  
 
                                    
 
                                                
GROSS PROFIT %:
                                                
Broadband Technology Group
     43.8 %             44.4 %     40.5 %             41.0 %
Mobility Solutions Group
     98.1 %             98.1 %     99.4 %             99.4 %
Licensing
     98.8 %             98.8 %     99.9 %             99.9 %
 
                                        
TOTAL GROSS PROFIT %
     51.6 %             52.0 %     56.9 %             57.2 %
 
                                        
 
(a)   This adjustment reflects the non-cash stock based compensation expense for restricted grants, stock bonuses, and stock options awarded to the company’s employees.

 

 

Reconciliation Of Non GAAP To GAAP Results Of Operations (a)
(unaudited, in thousands)
                                                 
    Three Months Ended June 30, 2007     Three Months Ended June 30, 2006  
    As     Non-GAAP     Non     As     Non-GAAP     Non  
    Reported     Adjustments (a)   GAAP     Reported     Adjustments (a)   GAAP  
REVENUES
   $ 18,962             $ 18,962     $ 26,758             $ 26,758  
COST OF REVENUES
     9,169       (88 ) (b)     9,081       9,702       (86 ) (b)     9,616  
 
                                    
GROSS PROFIT
     9,793       88       9,881       17,056       86       17,142  
OPERATING EXPENSES:
                                                
Research and development
     4,031       (153 ) (b)     3,878       3,336       (161 ) (b)     3,175  
Sales and marketing
     3,412       (183 ) (b)     3,229       3,196       (215 ) (b)     2,981  
General and administrative
     3,373       (714 ) (b)     2,659       3,725       (603 ) (b)     3,122  
Amortization of other intangible assets
     476       (476 )     —       1,056       (1,056 )     —  
Restructuring charges
     2,074       (2,074 )     —       (1,269 )     1,269       —  
Gain on sale of assets and related royalties
     (250 )             (250 )     (250 )             (250 )
 
                                    
Total operating expenses
     13,116       (3,600 )     9,516       9,794       (766 )     9,028  
 
                                    
INCOME (LOSS) FROM OPERATIONS
     (3,323 )     3,688       365       7,262       852       8,114  
OTHER INCOME, NET
     847               847       747               747  
 
                                    
INCOME (LOSS) BEFORE INCOME TAXES
     (2,476 )     3,688       1,212       8,009       852       8,861  
PROVISION (BENEFIT) FOR INCOME TAXES
     731       (547 )     184       1,683               1,683  
 
                                      
NET INCOME (LOSS)
   $ (3,207 )   $ 4,235     $ 1,028     $ 6,326     $ 852     $ 7,178  
 
                                    
 
                                                
Earnings (loss) per share
                                                
Basic
   $ (0.15 )           $ 0.05     $ 0.30             $ 0.34  
Diluted
   $ (0.15 )           $ 0.05     $ 0.29             $ 0.33  
Shares used in computing EPS (in thousands)
                                                
Basic
     21,092               21,092       20,837               20,837  
Diluted
     21,092               21,823       21,586               21,586  
 
(a)   These adjustments reconcile the company’s GAAP net income to its non-GAAP net income. The company believes that presentation of net income excluding items such as non-cash compensation expense, amortization of intangible assets, restructuring charges, and non-cash income tax expense provides meaningful supplemental information to both management and investors that is indicative of the company’s core results and facilitates comparison of operating results across reporting periods. The company uses this non-GAAP measure when evaluating its financial results as well as for internal planning and forecasting purposes. This non-GAAP measure 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, stock bonuses, and stock options awarded to the company’s employees.

 

 

Reconciliation Of Non GAAP To GAAP Results Of Operations (a)
(unaudited, in thousands)
                                                 
    Six Months Ended June 30, 2007     Six Months Ended June 30, 2006  
    As     Non-GAAP     Non     As     Non-GAAP     Non  
    Reported     Adjustments (a)   GAAP     Reported     Adjustments (a)   GAAP  
REVENUES
   $ 37,913             $ 37,913     $ 45,324             $ 45,324  
COST OF REVENUES
     18,368       (187 ) (b)     18,181       19,546       (163 ) (b)     19,383  
 
                                    
GROSS PROFIT
     19,545       187       19,732       25,778       163       25,941  
OPERATING EXPENSES:
                                                
Research and development
     8,006       (387 ) (b)     7,619       6,253       (306 ) (b)     5,947  
Sales and marketing
     6,879       (363 ) (b)     6,516       6,738       (439 ) (b)     6,299  
General and administrative
     7,121       (1,598 ) (b)     5,523       7,473       (1,307 ) (b)     6,166  
Amortization of other intangible assets
     1,172       (1,172 )     —       2,093       (2,093 )     —  
Restructuring charges
     2,074       (2,074 )     —       (716 )     716       —  
Gain on sale of assets and related royalties
     (500 )             (500 )     (500 )             (500 )
 
                                    
Total operating expenses
     24,752       (5,594 )     19,158       21,341       (3,429 )     17,912  
 
                                    
INCOME (LOSS) FROM OPERATIONS
     (5,207 )     5,781       574       4,437       3,592       8,029  
OTHER INCOME, NET
     1,800               1,800       1,368               1,368  
 
                                    
INCOME (LOSS) BEFORE INCOME TAXES
     (3,407 )     5,781       2,374       5,805       3,592       9,397  
PROVISION FOR INCOME TAXES
     558       (547 )     11       1,676               1,676  
 
                                      
NET INCOME (LOSS)
   $ (3,965 )   $ 6,328     $ 2,363     $ 4,129     $ 3,592     $ 7,721  
 
                                    
 
                                                
Earnings (loss) per share
                                                
Basic
   $ (0.19 )           $ 0.11     $ 0.20             $ 0.37  
Diluted
   $ (0.19 )           $ 0.11     $ 0.19             $ 0.36  
Shares used in computing EPS (in thousands)
                                                
Basic
     21,078               21,078       20,656               20,656  
Diluted
     21,078               21,927       21,371               21,371  
 
(a)   These adjustments reconcile the company’s GAAP net income to its non-GAAP net income. The company believes that presentation of net income excluding items such as non-cash compensation expense, amortization of intangible assets, restructuring charges, and non-cash income tax expense provides meaningful supplemental information to both management and investors that is indicative of the company’s core results and facilitates comparison of operating results across reporting periods. The company uses this non-GAAP measure when evaluating its financial results as well as for internal planning and forecasting purposes. This non-GAAP measure 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, stock bonuses, and stock options awarded to the company’s employees.