EX-99.1 2 c33304exv99w1.htm EXHIBIT 99.1 Exhibit 99.1
Exhibit 99.1
(PCTEL SIMPLIFYING MOBILITY LOGO)
PCTEL Posts $20.3 Million in Second Quarter Revenue from Continuing Operations
23 Percent Increase Over Same Period Last Year
Continued Growth In Operating Profit
Bloomingdale, IL July 24, 2008 — PCTEL, Inc. (NASDAQ: PCTI), a leader in propagation and optimization solutions for the wireless industry, announced results for the second quarter ended June 30, 2008.
The Company completed the sale of its Mobility Solutions Group (MSG) on January 4, 2008. The Company’s financial statements reflect MSG as a discontinued operation.
Second Quarter Financial Highlights — Continuing Operations (excludes MSG)
    $20.3 million in revenue from continuing operations for the quarter, an increase of 23 percent over the same period last year and an increase of 11% over the first quarter of this year.
 
    Gross Profit from continuing operations of 48% versus 45% in the same period last year.
 
    GAAP Operating Profit from continuing operations of 4% as compared to a loss of (21)% in the same period last year.
 
    Non-GAAP Operating Profit from continuing operations of 14% versus 1% in the same period last year. The Company’s reporting of non-GAAP operating profit excludes expenses for restructuring, stock based compensation, amortization and impairment of intangible assets and goodwill related to the Company’s acquisitions.
 
    GAAP net income from continuing operations of $0.5 million for the quarter, or $0.03 per diluted share, compared to a net loss of $(3.2) million, or $(0.15) per share for the same period in 2007.
 
    Non-GAAP net income from continuing operations of $3.0 million for the quarter, or $0.15 per diluted share compared to $0.8 million of net income, or $0.04 per diluted share for the same period in 2007. 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 related income tax expense.

 


 

    $85 million of cash and investments at June 30, 2008, of which $15 million is classified as long term. The Company completed its previously announced 3.0 million share buyback during the quarter with the repurchase of 1.88 million shares for $17.0 million at an average price of $9.04. The company also paid out $10.3 million in a one-time cash dividend to shareholders during the quarter.
“The global transition to spread spectrum wireless technologies is creating strong opportunities for our scanning receivers and for specific antenna product families,” said Marty Singer, PCTEL’s Chairman and CEO. “We continue to benefit as well from the focus that we achieved with the divestiture of the software business.”
Second Quarter Financial Highlights — Discontinued Operations (MSG)
    GAAP net income from discontinued operations of $187,000 in the second quarter 2008 represents an adjustment to accrued income tax related to the gain on sale of the Mobility Solutions Group recorded in the first quarter 2008. The Company excludes discontinued operations from its non-GAAP earnings.
PCTEL’s management team will discuss the Company’s results during its scheduled earnings teleconference today at 5:15 PM EDT. Management will host the call from their corporate headquarters in Bloomingdale, Illinois.
CONFERENCE CALL / WEBCAST
The company will hold a conference call at 5:15 PM ET (4:15 PM CT) today, Thursday July 24, 2008 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) 289-0726 (U.S. / Canada) or (913) 312-0391 (International).
To listen via the Internet, please visit 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: 3004106.
About PCTEL
PCTEL, Inc. (NASDAQ: PCTI), is a global leader in propagation and optimization solutions for the wireless industry. The company designs and develops software-based radios for wireless network optimization and develops and distributes innovative antenna solutions. PCTEL’s MAXRAD® antenna solutions address public safety applications, unlicensed and licensed wireless broadband, fleet management, and network timing. Its portfolio includes a broad range of antennas for WiMAX, Land Mobile Radio, GPS, telemetry, RFID, WiFi, indoor cellular, and mesh networks. The company’s SeeGull® scanning receivers, receiver-based products and CLARIFY® interference management solutions are used to measure, monitor and optimize cellular networks. PCTEL’s products are sold worldwide through direct and indirect channels. For more information, please visit the company’s web site at: 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 progress in growing its wireless RF business and improving operational effectiveness, the sufficiency of working capital to grow its business and accelerate growth through acquisitions, and its revenue forecast for the third quarter and the year 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.
For further information contact:
         
John Schoen
  Jack Seller   Mary McGowan
CFO
  Public Relations   Investor Relations
PCTEL, Inc.
  PCTEL, Inc.   Summit IR Group
(630) 372-6800
  (630)372-6800   (408) 404-5401
 
  jack.seller@pctel.com   mary@summitirgroup.com

 


 

PCTEL, Inc.
Consolidated Condensed Statements of Operations
(unaudited, in thousands, except per share information)
                                 
    Three Months Ended     Six Months Ended  
    June 30,     June 30,  
    2008     2007     2008     2007  
CONTINUING OPERATIONS
                               
REVENUES
  $ 20,274     $ 16,500     $ 38,574     $ 33,117  
COST OF REVENUES
    10,566       9,158       20,099       18,346  
 
                       
GROSS PROFIT
    9,708       7,342       18,475       14,771  
 
                       
OPERATING EXPENSES:
                               
Research and development
    2,609       2,646       4,795       5,225  
Sales and marketing
    2,874       2,670       5,637       5,408  
General and administrative
    2,981       3,128       5,753       6,570  
Amortization of other intangible assets
    552       476       992       1,172  
Restructuring charges
    (13 )     2,074       364       2,074  
Gain on sale of assets and related royalties
    (200 )     (250 )     (400 )     (500 )
 
                       
Total operating expenses
    8,803       10,744       17,141       19,949  
 
                       
OPERATING INCOME (LOSS) FROM CONTINUING OPERATIONS
    905       (3,402 )     1,334       (5,178 )
OTHER INCOME, NET
    652       847       1,437       1,800  
 
                       
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND DISCONTINUED OPERATIONS
    1,557       (2,555 )     2,771       (3,378 )
PROVISION FOR INCOME TAXES
    1,027       676       1,764       578  
 
                       
NET INCOME (LOSS) FROM CONTINUING OPERATIONS
    530       (3,231 )     1,007       (3,956 )
 
                       
DISCONTINUED OPERATIONS
                               
NET INCOME (LOSS) FROM DISCONTINUED OPERATIONS, NET OF TAX
    187       24       36,878       (9 )
 
                       
NET INCOME (LOSS)
  $ 717       ($3,207 )   $ 37,885       ($3,965 )
 
                       
 
                               
Basic Earnings per Share:
                               
Income (Loss) from Continuing Operations
  $ 0.03       ($0.15 )   $ 0.05       ($0.19 )
Income from Discontinued Operations
  $ 0.01     $ 0.00     $ 1.87     $ 0.00  
Net Income (Loss)
  $ 0.04       ($0.15 )   $ 1.92       ($0.19 )
 
                               
Diluted Earnings per Share:
                               
Income (Loss) from Continuing Operations
  $ 0.03       ($0.15 )   $ 0.05       ($0.19 )
Income from Discontinued Operations
  $ 0.01     $ 0.00     $ 1.86     $ 0.00  
Net Income (Loss)
  $ 0.04       ($0.15 )   $ 1.91       ($0.19 )
 
                               
Weighted average shares — Basic
    19,089       21,092       19,762       21,078  
Weighted average shares — Diluted
    19,413       21,092       19,862       21,078  
The accompanying notes are an integral part of these consolidated financial statements.

 


 

PCTEL Inc.
Consolidated Condensed Balance Sheets
(unaudited, in thousands)
                 
    June 30,     December 31,  
    2008     2007  
 
               
ASSETS
               
CURRENT ASSETS:
               
Cash and cash equivalents
  $ 58,157     $ 26,632  
Short-term investment securities
    11,609       38,943  
Accounts receivable, net
    13,516       16,082  
Inventories, net
    9,843       9,867  
Deferred tax assets, net
    1,591       1,591  
Prepaid expenses and other assets
    1,197       1,800  
 
           
Total current assets
    95,913       94,915  
PROPERTY AND EQUIPMENT, net
    12,256       12,136  
LONG-TERM INVESTMENT SECURITIES
    14,873        
GOODWILL
    17,336       16,770  
OTHER INTANGIBLE ASSETS, net
    6,634       4,366  
DEFERRED TAX ASSETS, net
    4,863       4,863  
OTHER ASSETS
    913       1,022  
ASSETS OF DISCONTINUED OPERATIONS
          1,807  
 
           
TOTAL ASSETS
  $ 152,788     $ 135,879  
 
           
 
               
LIABILITIES AND STOCKHOLDERS’ EQUITY
               
CURRENT LIABILITIES:
               
Accounts payable
  $ 1,984     $ 956  
Accrued liabilities
    5,744       8,395  
Short term debt
          107  
Income tax liabilities
    12,177       8  
 
           
Total current liabilities
    19,905       9,466  
LONG-TERM LIABILITIES
    1,119       1,192  
LIABILITIES OF DISCONTINUED OPERATIONS
          654  
 
           
Total liabilities
    21,024       11,312  
 
           
 
               
STOCKHOLDERS’ EQUITY:
               
Common stock
    19       22  
Additional paid-in capital
    144,726       165,108  
Accumulated deficit
    (13,050 )     (40,640 )
Accumulated other comprehensive income
    69       77  
 
           
Total stockholders’ equity
    131,764       124,567  
 
           
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
  $ 152,788     $ 135,879  
 
           

 


 

PCTEL, Inc.
Revenue & Gross Profit by Segment
(unaudited, in thousands)
                                 
    Three Months Ended     Six Months Ended  
    June 30,     June 30,  
    2008     2007     2008     2007  
REVENUES:
                               
Broadband Technology Group
  $ 20,240     $ 16,176     $ 38,434     $ 32,518  
Licensing
    34       324       140       599  
 
                       
TOTAL REVENUES
    20,274       16,500       38,574       33,117  
 
                               
GROSS PROFIT:
                               
Broadband Technology Group
    9,676       7,022       18,339       14,179  
Licensing
    32       320       136       592  
 
                       
TOTAL GROSS PROFIT
    9,708       7,342       18,475       14,771  
 
                               
GROSS PROFIT %:
                               
Broadband Technology Group
    47.8 %     43.4 %     47.7 %     43.6 %
Licensing
    94.1 %     98.8 %     97.1 %     98.8 %
 
                       
TOTAL GROSS PROFIT %
    47.9 %     44.5 %     47.9 %     44.6 %
 
                       

 


 

Reconciliation Of Non GAAP To GAAP Results Of Operations (a)
(unaudited, in thousands except per share information)
Reconciliation of GAAP operating income from continuing operations to non-GAAP operating income from continuing operations
                                 
    Three Months Ended June 30,     Six Months Ended June 30,  
    2008     2007     2008     2007  
 
                               
Operating Income (Loss) from Continuing Operations
  $ 905       ($3,402 )   $ 1,334       ($5,178 )
 
                               
(a) Add:
                               
Amortization of other intangible assets
    552       476       992       1,172  
Restructuring charges
    (13 )     2,074       364       2,074  
Stock Compensation:
                               
-Cost of Goods Sold
    124       88       216       187  
-Engineering
    148       84       302       224  
-Sales & Marketing
    237       162       392       301  
-General & Administrative
    904       645       1,652       1,416  
 
                       
 
    1,952       3,529       3,918       5,374  
 
                               
 
                       
Non-GAAP Operating Income
  $ 2,857     $ 127     $ 5,252     $ 196  
 
                       
% of revenue
    14.1 %     0.8 %     13.6 %     0.6 %
Reconciliation of GAAP net income from continuing operations to non-GAAP net income from continuing operations
                                 
    Three Months Ended June 30,     Six Months Ended June 30,  
    2008     2007     2008     2007  
 
                               
Net Income (Loss) from Continuing Operations
  $ 530       ($3,231 )   $ 1,007       ($3,956 )
 
                               
Add:
                               
(a) Non-GAAP adjustment to operating income (loss)
    1,952       3,529       3,918       5,374  
(b) Income Taxes
    492       492       714       567  
 
                       
 
    2,444       4,021       4,632       5,941  
 
                               
 
                       
Non-GAAP Net Income
  $ 2,974     $ 790     $ 5,639     $ 1,985  
 
                       
 
                               
Basic Earnings per Share:
                               
Income from Continuing Operations
  $ 0.16     $ 0.04     $ 0.29     $ 0.09  
 
                               
Diluted Earnings per Share:
                               
Income from Continuing Operations
  $ 0.15     $ 0.04     $ 0.28     $ 0.09  
 
                               
Weighted average shares — Basic
    19,089       21,092       19,762       21,078  
Weighted average shares — Diluted
    19,413       21,823       19,862       21,927  
This schedule reconciles the company’s GAAP operating income and GAAP net income from continuing operations to its non-GAAP operating income and non-GAAP net income from continuing operations. 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 when evaluating its financial results as well as for internal planning and forecasting purposes. These non-GAAP measuers should not be viewed as a substitute for the company’s GAAP results.
 
(a)   These adjustments reflect the stock based compensation expense, amortization of intangible assets, and restructuring charges
 
(b)   These adjustments reflect the non-cash income tax expense