10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

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

For the quarterly period ended June 30, 2013

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

For the transition period from                      to                     

Commission File Number 000-27115

PCTEL, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Delaware	77-0364943
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification Number)
471 Brighton Drive, Bloomingdale, IL	60108
(Address of Principal Executive Office)	(Zip Code)

(630) 372-6800

(Registrant’s Telephone Number, Including Area Code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and on its corporate Web site, if any, every Interactive Date File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “accelerated filer” “large accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act:

¨    Large accelerated filer		x    Accelerated filer
¨    Non-accelerated filer	(do not check if a smaller reporting company)	¨    Smaller reporting company

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes  ¨    No  x

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.

Title	Outstanding
Common Stock, par value $.001 per share	18,465,275 as of August 6, 2013

PCTEL, INC.

Form 10-Q

For the Quarterly Period Ended June 30, 2013

TABLE OF CONTENTS

		Page
PART I	FINANCIAL INFORMATION		3
Item 1	Financial Statements (unaudited)		3
	Condensed Consolidated Balance Sheets		3
	Condensed Consolidated Statements of Operations		4
	Condensed Consolidated Statements of Comprehensive Income (Loss)		5
	Condensed Consolidated Statement of Stockholders’ Equity		6
	Condensed Consolidated Statements of Cash Flows		7
	Notes to the Condensed Consolidated Financial Statements		8
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations		33
Item 3	Quantitative and Qualitative Disclosures about Market Risk		41
Item 4	Controls and Procedures		42
PART II	OTHER INFORMATION		43
Item 1	Legal Proceedings		43
Item 1A	Risk Factors		43
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds		44
Item 3	Defaults Upon Senior Securities		44
Item 4	Mine Safety Disclosures		44
Item 5	Other Information		44
Item 6	Exhibits		45
Signatures			46

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PART I – FINANCIAL INFORMATION

Item 1: Financial Statements (unaudited)

PCTEL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

	(unaudited)
	June 30,			December 31,
	2013			2012
ASSETS
Cash and cash equivalents	$	18,330		$	17,543
Short-term investment securities		33,151			33,596
Accounts receivable, net of allowance for doubtful accounts of $239 and $222 at June 30, 2013 and December 31, 2012, respectively		18,337			18,586
Inventories, net		16,108			17,573
Deferred tax assets, net		1,484			1,484
Prepaid expenses and other assets		1,164			2,160
Total current assets		88,574			90,942
Property and equipment, net		14,671			14,775
Goodwill		161			161
Intangible assets, net		5,795			7,004
Deferred tax assets, net		12,989			14,034
Other noncurrent assets		1,727			1,636
Assets of discontinued operations		0			18
TOTAL ASSETS	$	123,917		$	128,570
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable	$	5,752		$	10,557
Accrued liabilities		5,751			5,899
Total current liabilities		11,503			16,456
Contingent consideration		0			1,130
Other long-term liabilities		2,781			2,736
Liabilities of discontinued operations		0			103
		2,781			3,969
Total liabilities		14,284			20,425
Stockholders’ equity:
Common stock, $0.001 par value, 100,000,000 shares authorized, 18,445,099 and 18,514,809 shares issued and outstanding at June 30, 2013 and December 31, 2012, respectively		18			19
Additional paid-in capital		141,122			140,388
Accumulated deficit		(31,675	)		(32,410	)
Accumulated other comprehensive income		168			148
Total equity		109,633			108,145
TOTAL LIABILITIES AND EQUITY	$	123,917		$	128,570

The accompanying notes are an integral part of these condensed consolidated financial statements.

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PCTEL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

(in thousands, except per share data)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2013			2012			2013			2012
REVENUES	$	26,746		$	19,993		$	51,818		$	37,154
COST OF REVENUES		16,198			11,323			31,672			21,306
GROSS PROFIT		10,548			8,670			20,146			15,848
OPERATING EXPENSES:
Research and development		2,683			2,215			5,233			4,531
Sales and marketing		3,054			2,573			6,075			5,082
General and administrative		3,825			2,656			8,456			5,389
Amortization of intangible assets		604			542			1,209			1,084
Restructuring charges		124			0			225			0
Total operating expenses		10,290			7,986			21,198			16,086
OPERATING INCOME (LOSS)		258			684			(1,052	)		(238	)
Other income, net		57			39			4,389			73
INCOME (LOSS) BEFORE INCOME TAXES		315			723			3,337			(165	)
Expense (benefit) for income taxes		128			278			1,198			(54	)
NET INCOME (LOSS) FROM CONTINUING OPERATIONS		187			445			2,139			(111	)
NET LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX BENEFIT		(22	)		(774	)		(109	)		(1,098	)
NET INCOME (LOSS)	$	165		($	329	)	$	2,030		($	1,209	)
Earnings (Loss) per Share from Continuing Operations:
Basic	$	0.01		$	0.03		$	0.12		($	0.01	)
Diluted	$	0.01		$	0.03		$	0.12		($	0.01	)
Earnings (Loss) per Share from Discontinued Operations:
Basic	$	0.00		($	0.04	)	($	0.01	)	($	0.06	)
Diluted	$	0.00		($	0.04	)	($	0.01	)	($	0.06	)
Earnings (Loss) per Share:
Basic	$	0.01		($	0.02	)	$	0.11		($	0.07	)
Diluted	$	0.01		($	0.02	)	$	0.11		($	0.07	)
Weighed Average Shares:
Basic		17,790			17,404			17,731			17,317
Diluted		18,075			17,404			17,973			17,317
Cash dividend per share	$	0.035		$	0.030		$	0.070		$	0.060

The accompanying notes are an integral part of these condensed consolidated financial statements.

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PCTEL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (unaudited)

(in thousands, except per share data)

	Three Months Ended June 30,					Six Months Ended June 30,
	2013		2012			2013		2012
NET INCOME (LOSS)	$	165	($	329	)	$	2,030	($	1,209	)
OTHER COMPREHENSIVE INCOME (LOSS):
Foreign Currency Translation Adjustments		25		(15	)		20		(12	)
COMPREHENSIVE INCOME (LOSS)	$	190	($	344	)	$	2,050	($	1,221	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

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PCTEL, INC.

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

(unaudited, in thousands)

	Common Stock			Additional Paid-In Capital			Retained Deficit			Accumulated Other Comprehensive Income (Loss)		Total Stockholders’ Equity
BALANCE, JANUARY 1, 2013	$	19		$	140,388		($	32,410	)	$	148	$	108,145
Stock-based compensation		0			1,722			0			0		1,722
Issuance of shares for stock purchase and option plans		0			383			0			0		383
Cancellation of shares for payment of withholding tax		(1	)		(942	)		0			0		(943	)
Repurchase of common stock		0			(435	)		0			0		(435	)
Dividend		0			6			(1,295	)		0		(1,289	)
Net income		0			0			2,030			0		2,030
Change in cumulative translation adjustment, net		0			0			0			20		20
BALANCE, JUNE 30, 2013	$	18		$	141,122		($	31,675	)	$	168	$	109,633

The accompanying notes are an integral part of these consolidated financial statements

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PCTEL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in thousands)

	Six Months Ended June 30,
	2013			2012
Operating Activities:
Net income (loss)	$	2,030		($	1,209	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Loss from discontinued operations		109			1,098
Depreciation and amortization		2,554			2,217
Stock-based compensation		1,721			1,638
(Gain) loss on disposal/sale of property and equipment		(1	)		4
Restructuring costs		126			0
Payment of withholding tax on stock based compensation		(943	)		(1,190	)
Deferred tax provision		1,045			0
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable		255			(240	)
Inventories		1,501			166
Prepaid expenses and other assets		913			804
Accounts payable		(4,833	)		439
Income taxes payable		4			306
Other accrued liabilities		(1,609	)		(2,592	)
Deferred revenue		99			38
Net cash provided by operating activities		2,971			1,479
Investing Activities:
Capital expenditures		(1,281	)		(1,669	)
Proceeds from disposal of property and equipment		1			0
Purchases of investments		(38,830	)		(26,319	)
Redemptions/maturities of short-term investments		39,275			37,478
Purchase of assets/businesses, net of cash acquired		0			(931	)
Net cash provided by (used in) investing activities		(835	)		8,559
Financing Activities:
Proceeds from issuance of common stock		383			294
Payments for repurchase of common stock		(435	)		0
Cash dividends		(1,289	)		(1,097	)
Net cash used in financing activities		(1,341	)		(803	)
Cash flows from discontinued operations:
Net cash (used in) provided by operating activities		(17	)		(864	)
Net cash provided by investing activities		1			1
Net cash provided by financing activities		0			0
Net decrease in cash and cash equivalents		779			8,372
Effect of exchange rate changes on cash		(8	)		0
Cash and cash equivalents, beginning of year		17,559			19,418
Cash and Cash Equivalents, End of Period	$	18,330		$	27,790

The accompanying notes are an integral part of these condensed consolidated financial statements.

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PCTEL, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three and Six months Ended June 30, 2013 (Unaudited)

(in thousands except per share data and as otherwise noted)

1. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. For further information, refer to the audited consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.

Nature of Operations

PCTEL is a global leader in propagation and optimization solutions for the wireless industry. The Company develops and distributes innovative antenna and engineered site solutions and designs and develops software-based radios (scanning receivers) and provides related RF engineering services for wireless network optimization.

PCTEL was incorporated in California in 1994 and reincorporated in Delaware in 1998. Our principal executive offices are located at 471 Brighton Drive, Bloomingdale, Illinois 60108. Our telephone number at that address is (630) 372-6800 and our website is www.pctel.com. The information within, or that can be accessed, through our website is not part of this report.

Segment Reporting

Effective January 1, 2013, PCTEL operates in two new segments for reporting purposes. The Company’s Connected Solutions segment includes its antenna and engineered site solutions. Its RF Solutions segment includes its scanning receivers and related RF engineering services. Each of the segments has its own segment manager as well as its own engineering, sales and marketing, and operational general and administrative functions. All of the Company’s accounting and finance, human resources, IT and legal functions are provided on a centralized basis through the corporate function. The Company manages its balance sheet and cash flows centrally at the corporate level, with the exception of trade accounts receivable and inventory which is managed at the segment level. Each of the segment managers reports to and maintains regular contact with the chief operating decision maker to discuss operating activities, financial results, forecasts, or plans for the segment. As of January 1, 2013, the Company’s chief operating decision maker uses the profit and loss results through operating profit and identified assets for the Connected Solutions and RF Solutions segments to make operating decisions. The 2012 segment information presented in the financial statements has been presented on a retrospective basis reflecting the new Connected Solutions and RF Solution segments on a consistent basis with the current period.

For the year ended December 31, 2012, the Company operated in two different segments, PCTEL Secure, and the rest of the Company. The Company’s chief operating decision maker used the profit and loss results and the assets to make operating decisions.

Connected Solutions Segment

PCTEL is a leading supplier of antennas for private network, public safety and government applications, and site solutions for both private and public network, data, and communications applications. PCTEL’s MAXRAD^®, Bluewave™ and Wi-Sys™ antenna solutions include high-value YAGI, land mobile radio (“LMR”), Wi-Fi, GPS, In Tunnel, Subway, and Broadband antennas (parabolic and flat panel). PCTEL’s Connected Solutions™ products include specialized towers, enclosures, fiber optic panels, and fiber jumper cables that are engineered into site solutions. The vertical markets into which the antenna and site solutions are sold include supervisory control and data acquisition (“SCADA”), health care, energy, smart grid, precision agriculture, indoor wireless, telemetry, offloading, and wireless backhaul. Growth for antenna and engineered site solutions is primarily driven by the increased use of wireless communications in these vertical markets. PCTEL’s antenna and site solution products are primarily sold through distributors, value added reseller, and original equipment manufacturer (“OEM”) providers.

The Company established its current antenna and site solutions product portfolio with a series of acquisitions. In 2004, the Company acquired MAXRAD, Inc. (“MAXRAD”), as well as certain product lines from Andrew Corporation (“Andrew”), which established its core product offerings in Wi-Fi, LMR and GPS. Over the next several years we added additional capabilities within those product lines and additional

8

served markets with the acquisition of certain assets from Bluewave Antenna Systems, Ltd (“Bluewave”) in 2008, and the acquisitions of Wi-Sys Communications, Inc (“Wi-Sys”) in 2009, Sparco Technologies, Inc. (“Sparco”) in 2010, and certain assets of TelWorx Communications LLC, TelWorx U.K. Limited, TowerWorx LLC, and TowerWorx International, Inc., in July 2012.

There are many competitors for antenna products, as the market is highly fragmented. Competitors include such names as Laird (Cushcraft, Centurion, and Antennex brands), Mobile Mark, Radiall/Larsen, Comtelco, Wilson, Commscope (Andrew products), Kathrein, and others. We seek out product applications that command a premium for product performance and customer service, and avoid commodity markets.

PCTEL maintains expertise in several technology areas in order to be competitive in the antenna engineered site solutions market. These include radio frequency engineering, mobile antenna design and manufacturing, mechanical engineering, product quality and testing, and wireless network engineering.

RF Solutions Segment

PCTEL is a leading supplier of high-speed, multi-standard, demodulating receivers and test and measurement solutions to the wireless industry worldwide. Our SeeGull® scanning receivers, receiver-based products and CLARIFY® interference management solutions are used to measure, monitor and optimize cellular networks. PCTEL’s network engineering services (“NES”) Group provides value-added analysis of measured data collected during the optimization process. Revenue growth for these products and services is driven by the deployment of products based on new wireless technology and the need for wireless networks to be tuned and reconfigured on a regular basis. PCTEL develops and supports scanning receivers for LTE, EVDO, CDMA, WCDMA, GSM, TD-SCDMA, and WiMAX networks. Our scanning receiver products are sold primarily through test and measurement value added resellers and to a lesser extent directly to network operators. The engineering services are sold primarily to network infrastructure providers and cellular carriers. Competitors for these products are OEMs such as JDS Uniphase, Rohde and Schwarz, Anritsu, and Berkley Varitronics.

The Company established its scanning receiver product portfolio in 2003 with the acquisition of certain assets of Dynamic Telecommunications, Inc. (“DTI”). In 2009, we acquired the scanning receiver business from Ascom Network Testing, Inc. (“Ascom”) as well as the exclusive distribution rights and patented technology for Wider Network LLC (“Wider”) network interference products. In 2011, we purchased certain assets from Envision Wireless Inc. (“Envision”), an engineering services business based in Melbourne, Florida. The NES business focuses on the radio frequency (“RF”) issues pertaining to in-building coverage and capacity and its target market is relevant to our antenna and scanning receiver businesses. NES provides value-added analysis of collected data to public cellular carriers, network infrastructure providers, and real estate companies.

PCTEL maintains expertise in several technology areas in order to be competitive in the scanning receiver and related engineering services market. These include radio frequency engineering, DSP engineering, manufacturing, mechanical engineering, product quality and testing, and wireless network engineering

Basis of Consolidation

The condensed consolidated balance sheet as of June 30, 2013 and the condensed consolidated statements of operations, statements of comprehensive loss, and cash flows for the three and six months ended June 30, 2013 and 2012, respectively, are unaudited and reflect all adjustments of a normal recurring nature that are, in the opinion of management, necessary for a fair presentation of the interim period financial statements. The interim condensed consolidated financial statements are derived from the audited financial statements as of December 31, 2012.

On April 30, 2013, the Company divested all material assets associated with PCTEL Secure’s ProsettaCore™ technology to Redwall Technologies, LLC (“Redwall”), a development organization that specializes in mobile security, military and defense projects and systems, and critical national infrastructure. Under the terms of the agreement, Redwall acquired the server and device software (the “Software”), the underlying IP, and complete development responsibility for the security products. At the closing of the divestiture, the Company received no upfront cash payment, but has the right to receive a royalty of 7% of the net sale price of each future sale or license of the Software and each provision of services related to the Software, if any. Under the agreement, royalties will not exceed $10 million in the aggregate. In accordance with accounting for discontinued operations, the consolidated financial statements separately reflect the results of PCTEL Secure as discontinued operations for all periods presented. The prior period results have been restated to reflect this accounting treatment.

The unaudited interim condensed consolidated financial statements of the Company have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the U.S. have been condensed or omitted. The significant accounting policies followed by the Company are set forth within the Company’s Annual Report on Form 10-K for the year ended

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December 31, 2012 (“the 2012 Form 10-K”). There were no changes in the Company’s significant accounting policies during the six months ended June 30, 2013. In addition, the Company reaffirms the use of estimates in the preparation of the financial statements as set forth in the 2012 Form 10-K. These interim condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the 2012 Form 10-K. The results for the operations for the period ended June 30, 2013 may not be indicative of the results for the period ending December 31, 2013.

Foreign Currency Translation

The Company is exposed to foreign currency fluctuations due to its foreign operations and because products are sold internationally. The functional currency for the Company’s foreign operations is predominantly the applicable local currency. Accounts of foreign operations are translated into U.S. dollars using the exchange rate in effect at the applicable balance sheet date for assets and liabilities and average monthly rates prevailing during the period for revenue and expense accounts. Adjustments resulting from translation are included in accumulated other comprehensive income, a separate component of shareholders’ equity. Gains and losses resulting from other transactions originally in foreign currencies and then translated into U.S. dollars are included in the condensed consolidated statement of operations. Net foreign exchange losses resulting from foreign currency transactions included in other income, net were $5 and $7 for the three months ended June 30, 2013 and 2012, respectively. Net foreign exchange losses resulting from foreign currency transactions included in other income, net were $16 and $17 for the six months ended June 30, 2013 and 2012, respectively.

Recent Accounting Guidance

In February 2013, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2013-02, “Comprehensive Income (Topic 220) – Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income.” The objective of this update is to improve the reporting of reclassifications out of accumulated other comprehensive income. The amendments in the update require an entity to report the effect of significant respective line items in net income if the amount being reclassified is required to be reclassified in its entirety to net income. For amounts that are not required to be reclassified in their entirety to net income, an entity is required to cross-reference other disclosures. The amendments in this update are effective prospectively for reporting periods after December 15, 2012. The adoption of this update did not have a material effect on our financial position, results of operations or cash flows.

2. Fair Value of Financial Instruments

The Company follows accounting pronouncements for Fair Value Measurements and Disclosures , which establishes a fair value hierarchy that requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instruments categorization within the hierarchy is based on the lowest level of input that is significant to the fair value measurement. ASC 820 establishes three levels of inputs that may be used to measure fair value:

Level 1: inputs are unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2: inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets and liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of assets or liabilities.

Level 3: unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Cash equivalents are measured at fair value and investments are recognized at amortized cost in the Company’s financial statements. Accounts receivable and other investments are financial assets with carrying values that approximate fair value due to the short-term nature of these assets. Accounts payable is a financial liability with a carrying value that approximates fair value due to the short-term nature of these liabilities.

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3. Earnings per Share

The following table is the computation of basic and diluted earnings per share:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2013			2012			2013			2012
Basic Earnings Per Share computation:
Numerator:
Net income (loss) from continuing operations	$	187		$	445		$	2,139		($	111	)
Net loss from discontinued operations		(22	)		(774	)		(109	)		(1,098	)
Net income (loss)		165			(329	)		2,030			(1,209	)
Denominator:
Common shares outstanding		17,790			17,404			17,731			17,317
Earnings per common share - basic
Net income (loss) from continuing operations	$	0.01		$	0.03		$	0.12		($	0.01	)
Net loss from discontinued operations	($	0.00	)	($	0.04	)	($	0.01	)	($	0.06	)
Net income (loss)	$	0.01		($	0.02	)	$	0.11		($	0.07	)
Diluted Earnings Per Share computation:
Denominator:
Common shares outstanding		17,790			17,404			17,731			17,317
Restricted shares subject to vesting		213				*		170				*
Common stock option grants		72				*		72				*
Total shares		18,075			17,404			17,973			17,317
Earnings per common share - diluted
Net income (loss) from continuing operations	$	0.01		$	0.03		$	0.12		($	0.01	)
Net loss from discontinued operations	($	0.00	)	($	0.04	)	($	0.01	)	($	0.06	)
Net income (loss)	$	0.01		($	0.02	)	$	0.11		($	0.07	)

* As denoted by “*” in the table above, the weighted average common stock option grants, performance shares and restricted shares of 229,000 and 389,000 for the three and six months ended June 30, 2012, respectively, were excluded from the calculations of diluted net loss per share since their effects are anti-dilutive.

4. Cash, Cash Equivalents and Investments

The Company’s cash and investments consist of the following:

	June 30,		December 31,
	2013		2012
Cash	$	13,349	$	13,043
Cash equivalents		4,981		4,500
Short-term investments		33,151		33,596
	$	51,481	$	51,139

Cash and Cash equivalents

At June 30, 2013, cash and cash equivalents included bank balances and investments with original maturities less than 90 days. At June 30, 2013 and December 31, 2012, the Company’s cash equivalents were invested in highly liquid AAA rated money market funds that are required to comply with Rule 2a-7 of the Investment Company Act of 1940. Such funds utilize the amortized cost method of accounting, seek to maintain a constant $1.00 per share price, and are redeemable upon demand. The Company restricts its investments in AAA rated money market funds to those invested 100% in either short-term U.S. Government Agency securities or bank repurchase agreements collateralized by these same securities. The fair values of these money market funds are established through quoted prices in active markets for identical assets (Level 1 inputs). The cash in the Company’s U.S. banks is insured by the Federal Deposit Insurance Corporation up to the insurable amount of $250,000.

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At June 30, 2013, the Company had $13.3 million in cash and $2.4 million in cash equivalents and at December 31, 2012, the Company had $13.0 million in cash and $4.5 million in cash equivalents. The Company had $0.8 million of cash and cash equivalents in foreign bank accounts at June 30, 2013 and December 31, 2012, respectively. As of June 30, 2013, the Company has no intentions of repatriating the cash in its foreign bank accounts. If the Company decides to repatriate the cash in the foreign bank accounts, it may experience difficulty in doing so in a timely manner and it may also be exposed to foreign currency fluctuations and taxes.

Investments

At June 30, 2013 and December 31, 2012, the Company’s short-term investments consisted of pre-refunded municipal bonds, U.S. government agency bonds, and AA or higher rated corporate bonds all classified as held-to-maturity.

At June 30, 2013 the Company had invested $11.4 million in pre-refunded municipal bonds, $11.0 million in AA rated or higher corporate bonds, $8.3 million in U.S. government agency bonds, and $2.4 million in certificates of deposit. The income and principal from the pre-refunded municipal bonds are secured by an irrevocable trust of U.S. Treasury securities. The bonds, classified as short-term investments, have original maturities greater than 90 days and mature in less than one year. At June 30, 2013, the Company had no investments classified as long-term investment securities. The Company’s bonds are recorded at the purchase price and carried at amortized cost. The net unrealized gains were $6 at June 30, 2013. Approximately 14% of the Company’s bonds were protected by bond default insurance at June 30, 2013.

At December 31, 2012, the Company had invested $10.1 million in pre-refunded municipal bonds and taxable bond funds, $9.9 million in AA rated or higher corporate bond funds, $8.5 million in U.S. government agency bonds, and $5.1 million in certificates of deposit.

The Company categorizes its financial instruments within a fair value hierarchy established in accounting and disclosures for fair value measurements. The fair value hierarchy is described under the Fair Value of Financial Instruments in Note 2. For the Level 2 investments, the Company uses quoted prices of similar assets in active markets.

Cash equivalents, Level 1 and Level 2 investments measured at fair value were as follows at June 30, 2013 and December 31, 2012:

	June 30, 2013								December 31, 2012
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Cash equivalents:
Money market funds and other cash equivalents	$	4,981	$	0	$	0	$	4,981	$	4,500	$	0	$	0	$	4,500
Investments:
Certificates of deposit		2,393		0		0		2,393		5,062		0		0		5,062
US government agency bonds		0		8,291		0		8,291		0		8,498		0		8,498
Municipal bonds		0		11,450		0		11,450		0		10,162		0		10,162
Corporate debt securities		0		11,023		0		11,023		0		9,880		0		9,880
Total	$	7,374	$	30,764	$	0	$	38,138	$	9,562	$	28,540	$	0	$	38,102

5. Goodwill and Intangible Assets

Goodwill

The Company had goodwill of $0.2 million at June 30, 2013 and December 31, 2012, respectively. In July 2012, the Company recorded goodwill of $12.5 million with the acquisition of assets related to the TelWorx business. In conjunction with the annual evaluation of goodwill in the fourth quarter 2012, the Company recorded an impairment of goodwill of $12.5 million with respect to the TelWorx acquisition.

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Intangible Assets

The Company amortizes intangible assets with finite lives on a straight-line basis over the estimated useful lives, which range from one to eight years. The summary of other intangible assets, net as of June 30, 2013 and December 31, 2012 are as follows:

	June 30,						December 31,
	2013						2012
			Accumulated		Net Book				Accumulated		Net Book
	Cost		Amortization		Value		Cost		Amortization		Value
Customer contracts and relationships	$	17,381	$	13,425	$	3,956	$	17,381	$	12,463	$	4,918
Patents and technology		7,878		7,452		426		7,878		7,378		500
Trademarks and trade names		3,988		2,720		1,268		3,988		2,575		1,413
Other		3,301		3,156		145		3,301		3,128		173
	$	32,548	$	26,753	$	5,795	$	32,548	$	25,544	$	7,004

The $1.2 million decrease in the net book value of intangible assets at June 30, 2013 compared to December 31, 2012 reflects amortization expense of $1.2 million recorded for the six months ended June 30, 2013. For the year ended December 31, 2012, intangible assets decreased $2.3 million, which consisted of amortization expense of $3.2 million and impairment charges of $1.0 million for PCTEL Secure, net of the addition of $1.9 million of intangible assets acquired from TelWorx in July 2012,

The assigned lives and weighted average amortization periods by intangible asset category is summarized below:

Intangible Assets	Assigned Life	Weighted Average Amortization Period
Customer contracts and relationships	4 to 6 years		5.1
Patents and technology	1 to 6 years		5.2
Trademarks and trade names	3 to 8 years		7.4
Other	1 to 6 years		5.6

The Company’s scheduled amortization expense for 2013 and the next five years is as follows:

Fiscal Year	Amount
2013	$	2,400
2014	$	1,967
2015	$	1,737
2016	$	468
2017	$	288
Thereafter	$	144

6. Balance Sheet Information

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are recorded at invoiced amount with standard net terms that range between 30 and 60 days. The Company extends credit to its customers based on an evaluation of a customer’s financial condition and collateral is generally not required. The Company maintains an allowance for doubtful accounts for estimated uncollectible accounts receivable. The allowance is based on the Company’s assessment of known delinquent accounts, historical experience, and other currently available evidence of the collectability and the aging of accounts receivable. The Company’s allowance for doubtful accounts was $0.2 million at June 30, 2013 and at December 31, 2012. The provision for doubtful accounts is included in sales and marketing expense in the condensed consolidated statements of operations.

Inventories

Inventories are stated at the lower of cost or market and include material, labor and overhead costs using the first-in, first-out (“FIFO”) method of costing. Inventories as of June 30, 2013 and December 31, 2012 were composed of raw materials, sub-assemblies, finished goods

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and work-in-process. The Company had consigned inventory with customers of $1.2 million at June 30, 2013 and at December 31, 2012, respectively. The Company records allowances to reduce the value of inventory to the lower of cost or market, including allowances for excess and obsolete inventory. The allowance for inventory losses was $2.0 million at June 30, 2013 and December 31, 2012, respectively.

Inventories consisted of the following at June 30, 2013 and December 31, 2012:

	June 30,		December 31,
	2013		2012
Raw materials	$	9,627	$	12,226
Work in process		1,025		789
Finished goods		5,456		4,558
Inventories, net	$	16,108	$	17,573

Prepaid and Other Current Assets

Prepaid assets are stated at cost and are amortized over the useful lives (up to one year) of the assets.

Property and Equipment

Property and equipment are stated at cost and are depreciated using the straight-line method over the estimated useful lives of the assets. The Company depreciates computer equipment over three to five years, office equipment, manufacturing and test equipment, and motor vehicles over five years, furniture and fixtures over seven years, and buildings over 30 years. Leasehold improvements are amortized over the shorter of the corresponding lease term or useful life. Depreciation expense and gains and losses on the disposal of property and equipment are included in cost of sales and operating expenses in the condensed consolidated statements of operations. Maintenance and repairs are expensed as incurred.

Property and equipment consists of the following at June 30, 2013 and December 31, 2012:

	June 30,			December 31,
	2013			2012
Building	$	6,207		$	6,207
Computers and office equipment		10,434			9,968
Manufacturing and test equipment		10,181			9,495
Furniture and fixtures		1,209			1,256
Leasehold improvements		600			519
Motor vehicles		150			150
Total property and equipment		28,781			27,595
Less: Accumulated depreciation and amortization		(15,880	)		(14,590	)
Land		1,770			1,770
Property and equipment, net	$	14,671		$	14,775

Depreciation and amortization expense was approximately $0.7 Million and $0.5 million for the three months ended June 30, 2013 and 2012 and $1.3 million and $1.1 million for the six months ended June 30, 2013 and 2012, respectively.

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Liabilities

Accrued liabilities consist of the following at June 30, 2013 and December 31, 2012:

	June 30,		December 31,
	2013		2012
Inventory receipts	$	1,419	$	2,191
Payroll, bonuses, and other employee benefits		1,245		859
Paid time off		1,164		1,067
Employee stock purchase plan		293		276
Warranties		244		270
Deferred liabilities		226		127
Professional fees		177		268
Real estate taxes		165		170
Restructuring		75		0
Sales tax		69		156
Other		674		515
Total	$	5,751	$	5,899

Long-term liabilities consist of the following:

	June 30,		December 31,
	2013		2012
Executive deferred compensation plan	$	1,718	$	1,652
Reserve for uncertain tax positions		842		842
Deferred rent		166		166
Deferred revenues		54		74
Long-term obligations under capital leases		1		2
	$	2,781	$	2,736

7. PCTEL Secure – discontinued operations

On January 5, 2011, the Company formed PCTEL Secure LLC (“PCTEL Secure”), a joint venture limited liability company, with Eclipse Design Technologies, Inc. (“Eclipse”). PCTEL Secure designed Android-based, secure communication products. The Company contributed $2.5 million in cash on the formation of the joint venture in return for 51% ownership of the joint venture. In return for 49% ownership of the joint venture, Eclipse contributed $2.4 million of intangible assets in the form of intellectual property and a services agreement, including an assembled workforce, to provide services. At the date of formation the weighted average amortization period of the intangible assets acquired was 2.4 years. The Company estimated the fair value and remaining useful lives of the assets.

The limited liability company agreement of PCTEL Secure, as amended, provided several mechanisms for the orderly transition of the Company’s ownership from 51% to 100%. The Company purchased an additional 19% of the membership interests for $0.9 million on May 29, 2012 and the remaining 30% of the membership interests for $0.8 million on July 2, 2012. During the periods that the Company did not own 100% of the membership interests, Eclipse’s membership interests were recorded as non-controlling interest.

The Company learned through its marketing efforts for PCTEL Secure baseline product that its current distribution channels had limited access to the target software markets, primarily U.S. government agencies. The Company was in active discussions with a number of potential distribution entities with U.S. government agency access through December 31, 2012, and in January 2013 the Company engaged Wunderlich Securities, Inc. to evaluate strategic alternatives for PCTEL Secure, including a further search for a distribution entity that could take its baseline product to market. Based on the lack of success of such efforts, the Company concluded, as of December 31, 2012, that the future potential revenue was indeterminate, resulting in management’s forecast of future undiscounted cash flow to be in a range at or below zero. Based on these revised forecast cash flows, the Company concluded that the intangible assets of PCTEL Secure were impaired at December 31, 2012. The Company recorded intangible asset impairment expense of $1.1 million in December 2012.

On April 30, 2013, the Company divested all material assets associated with PCTEL Secure’s ProsettaCore™ technology to Redwall Technologies, LLC (“Redwall”), a development organization that specializes in mobile security, military and defense projects and systems, and critical national infrastructure. Under the terms of the agreement, Redwall acquired the server and device software (the “Software”), the underlying intellectual property, and complete development responsibility for the related products. At the closing of the divestiture, the Company received no upfront cash payment, but has the right to receive a royalty of 7% of the net sale price of each future sale or license of the Software and each provision of services related to the Software, if any. Under the agreement, royalties are capped at $10 million in the aggregate.

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The consolidated financial statements separately reflect the PCTEL Secure operations as discontinued operations for all periods presented. Summary results of operations for the discontinued operations included in the condensed consolidated statement of operations for the three and six months ended June 30, 2013 and 2012 are as follows:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2013			2012			2013			2012
Operating expenses	$	71		$	783		$	191		$	1,503
Other income, net		0			0			0			(41	)
Net loss attributable to noncontrolling interests		0			(334	)		0			(686	)
Adjustments to redemption value of noncontrolling interests		0			526			0			647
Loss from discontinued operations, before income taxes		(71	)		(975	)		(191	)		(1,423	)
Benefit for income tax		(49	)		(201	)		(82	)		(325	)
Loss from discontinued operations, net of tax	($	22	)	($	774	)	($	109	)	($	1,098	)
Income (loss) from discontinued operations per common share:
Basic	($	0.00	)	($	0.04	)	($	0.01	)	($	0.06	)
Diluted	($	0.00	)	($	0.04	)	($	0.01	)	($	0.06	)
Weighted average shares:
Basic		17,790			17,404			17,731			17,317
Diluted		18,075			17,404			17,973			17,317

Assets and liabilities classified as discontinued operations held for sale on the condensed consolidated balances sheets as of June 30, 2013 and December 31, 2012 include the following:

	June 30, 2013		December 31, 2012
Cash and cash equivalents	$	0	$	16
Fixed assets		0		2
Total assets	$	0	$	18
Accounts payable	$	0	$	86
Accrued liabilities		0		17
Total liabilities	$	0	$	103

8. Acquisition of TelWorx Communications LLC

The Company, through its wholly-owned subsidiary PCTelWorx, Inc. (“PCTelWorx”), completed the acquisition of substantially all of the assets and the assumption of certain specified liabilities of TelWorx Communications LLC, TelWorx U.K. Limited, TowerWorx LLC and TowerWorx International, Inc. (“collectively “TelWorx”), pursuant to an Asset Purchase Agreement dated as of July 9, 2012 among the Company, PCTelWorx, TelWorx and Tim and Brenda Scronce, the principal owners of TelWorx. The business operations associated with these purchased assets are collectively referred to as “TelWorx” in this Form 10-Q. The acquired business is primarily a North Carolina-based business with expertise in delivering wireless and fiber optic solutions into the enterprise, defense, transportation, and the carrier market. The acquired business excels at global procurement, custom engineering of RF solutions, rapid delivery and deployment of systems, and value-added reselling of antennas, related RF components, and other communication elements. The acquisition includes TowerWorx, a provider of mobile towers for defense, industrial wireless, and other applications. The acquisition expands the Company’s products and markets addressed by its antenna and Connected Solutions™ product line. The fair value purchase price for TelWorx was $16.1 million, consisting of $16.0 million in cash paid at closing, $1.1 million of contingent consideration related to an indemnity holdback escrow and potential earn-out at fair value, net of $1.0 million cash recovered from Tim and Brenda Scronce in March 2013 pursuant to the working capital adjustment provisions of the Asset Purchase Agreement and the legal settlement described below.

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Following the closing of the acquisition, the Company’s management became aware of accounting irregularities with respect to the TelWorx financial statements, in part through an internal review conducted in connection with the calculation of post-closing purchase price adjustments and in part due to an anonymous tip received after the internal review began. With the oversight of the Audit Committee, management expanded its review into an internal investigation regarding these financial irregularities and outside counsel was retained to assist in the investigation. The Company’s outside counsel then retained a Big Four accounting firm to perform an independent forensic accounting investigation under counsel’s direction. The accounting irregularities in the TelWorx financial statements identified as a result of this investigation are believed to have been directed and/or permitted by management of the TelWorx Entities, principally Tim Scronce and those acting at his direction. The correction of the pre-acquisition accounting misstatements discovered in the investigation are reflected in the pro-forma adjustments in Footnote 4 – Acquisition of TelWorx Communications LLC in the Company’s annual report filed on Form 10-K for the fiscal year ended December 31, 2012 as well as this footnote.

The Company determined the amount of the corrections and the period in which they occurred through the forensic audit performed, which included tracing sales transactions to customer commitments and proof of delivery documents as well as reviewing the cost of sales records and aging of inventory at the acquisition date. The Company was authorized by the Board of Directors to seek restitution from the Scronces and other responsible parties. On March 27, 2013, the Company and the Scronces entered into a legal settlement over claims by the Company relating to the value of the acquisition and the accounting issues summarized above. The Company is still pursuing additional restitution from the other responsible parties. See Footnote 11 – TelWorx Legal Settlement for full details.

The Company, through PCTelWorx, offered employment to all former employees of TelWorx. The key managers entered into employment arrangements that include a non-competition covenant during their employment and for twelve months thereafter. The Company entered into a five-year lease agreement for the continued use of the operating facility and offices in Lexington, North Carolina and a two-year lease for an office facility in Pryor, Oklahoma. In May 2013, the Company gave notice of early termination of the facility lease in Lexington, North Carolina. The termination is effective October 2013. In July 2013, the Company signed a new lease for office space in Lexington, North Carolina. The new five-year lease is effective August 1, 2013.

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The following is the allocation of the purchase price for the assets acquired from TelWorx at the date of the acquisition.

	Estimated Fair Value July 9, 2012 as reported at September 30, 2012		Provisional Adjustments Subsequent to September 30, 2012			Estimated Fair Value July 9, 2012
Tangible assets:
Accounts receivable	$	1,575	($	205	)	$	1,370
Inventory		1,843		(465	)		1,378
Prepaid expenses		9		0			9
Fixed assets		248		0			248
Total tangible assets		3,675		(670	)		3,005
Intangible assets:
Goodwill		9,491		3,059			12,550
Trade names		1,527		(268	)		1,259
Technology		458		12			470
Customer relationships		2,898		(2,781	)		117
Backlog		91		(58	)		33
Non-compete		262		(248	)		14
Total intangible assets		14,727		(284	)		14,443
Total assets		18,402		(954	)		17,448
Capital leases		57		(20	)		37
Accounts payable		1,113		100			1,213
Accrued liabilities		85		33			118
Total liabilities		1,255		113			1,368
Net assets acquired	$	17,147	($	1,067	)	$	16,080

In the fourth quarter of 2012, the Company subsequently recorded a goodwill impairment of $12.5 million related to its TelWorx acquisition based on the results from our annual test of goodwill impairment conducted as of October 31, 2012. This amount represented the total goodwill associated with the acquisition. The Company considers its purchase accounting for the TelWorx acquisition to have been complete as of the quarter ended December 31, 2012. The chronology of the Company’s change purchase accounting fair value of $16.1 million on July 9, 2012 to a $12.5 million goodwill impairment in the quarter ended December 31, 2012 is as follows:

The Company based its purchase accounting fair value of intangible assets on future projections using the revenue and margin profile of TelWorx’ historical financial statements for 2010, 2011 and the six months ended June 30, 2012. They presented a profile of a business that yielded goodwill of $9.5 million, primarily attributed to the synergies expected to arise for the acquired TelWorx business after the Company’s acquisition of the business and the assembled workforce of the acquired business. The two primary synergies that the Company expected to accrue to the TelWorx business that the Company concluded were not typically available to a market participant were: (1) Increased TelWorx revenue as a result of customer confidence resulting from being part of a public company with significant cash and investments available for working capital with no debt. The vast majority of the competitors in the antenna and site solution market are smaller private companies with limited working capital and financial resources. (2) Lower raw material costs for TelWorx products as a result of having access to PCTEL’s supply chain for certain products. PCTEL has access through several of its large key customers, with which it has a preferred supplier relationship, to their supply chain and profits from the volume discounts that come with our customer’s significantly larger volume. There were no synergies identified that accrued to PCTEL.

The accounting irregularities discovered in the historical financial statements lowered the historical pre-acquisition sales and margins as well as the post-acquisition sales in the quarter ended September 30, 2012, the quarter in which the acquisition closed. The Company recalculated the allocation of the purchase price using future projections which have a new lower revenue and margin profile. The result was a $3.1 million increase of goodwill up to $12.5 million. At this time the Company remained confident that the acquisition would yield the synergies expected to arise after the acquisition , to which the goodwill was attributed.

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The Company performs an annual impairment test of goodwill as of the end of the first month of the fiscal fourth quarter (October 31st), or at an interim date if an event occurs or if circumstances change that would indicate that an impairment loss may have been incurred. In performing our annual impairment test, the Company first performs a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value, including goodwill. If our qualitative assessment is indicative of possible impairment, then a two-step quantitative fair value assessment is performed at the reporting unit level. In the first step, the fair value of each reporting unit is compared with its carrying value. If the fair value exceeds the carrying value, then goodwill is not impaired and no further testing is performed. The second step is performed if the carrying value exceeds the fair value. The implied fair value of goodwill is then compared against the carrying value of goodwill to determine the amount of impairment.

During the quarter ended December 31, 2012, the Company observed that the orders in the 2013 sales projections used in the purchase accounting allocation for TelWorx were not converting to sales backlog at a pace that would support the projected 2013 base revenue used in the purchase accounting fair value of the TelWorx business at the acquisition date. Due to the Company’s short order to shipment cycles, such a variance would not become apparent until 60-90 days before 2013 began. Additionally, at the date of the acquisition the Company was not seeing funnel conversion variances in its antenna and site solutions products that operate in similar markets and therefore did not suspect that the site solution products would experience a dissimilar path. Specifically, 2013 base revenue and gross profit used in the Company’s purchase accounting was $18.5 million and $3.2 million (18% of revenue), respectively. At October 31, 2012, based on the Company’s historical order to ship cycle and historical rate of sales funnel conversion to actual sales (50%), there should have been approximately $1.0 million of Q1 2013 deliverable order backlog and a sales funnel of Q1 deliverable sales orders being tracked totaling at least $7.5 million. At October 31, 2012 the backlog was half the target, the sales funnel was 17% below the target, and the gross profit margin on the backlog and funnel were at 16% instead of 18%. All of these were indicators that the business was deteriorating from the projections used at the acquisition date for the purchase accounting. The Company reevaluated the projections and determined that they supported 2013 revenue of $15.0 million, at 16% margin, which was used in the goodwill test calculations, and adopted by the Board of Directors as TelWorx’ contribution to the 2013 Company financial plan. Management concluded the decline in projected revenue and gross margin levels were of a long-term nature. The decline was across a broad range of customers and products. Additionally, the decline in revenue was sufficiently large to not be recoverable in the short term based on historical revenue growth rates for the markets in which the Company’s antenna and site solutions products are sold. The Company considered this significant revenue decline at the annual goodwill test date to be an indicator of goodwill impairment requiring the performance of the two step quantitative fair value assessment, which resulted in a net present value of future cash flows that did not support a goodwill carrying value for this reporting unit. It is not as a result of the accounting irregularities previously discussed.

The following pro forma financial information gives effect to the acquisition of the TelWorx business as if the acquisition had taken place on January 1, 2012. The pro forma financial information for TelWorx was derived from the unaudited historical accounting records of TelWorx.

	(unaudited)		(unaudited)
	Three Months Ended		Six Months Ended
	June 30, 2012		June 30, 2012
REVENUES	$	23,841	$	44,482
LOSS BEFORE INCOME TAXES	$	290	($	575	)

The Company made pro forma adjustments to the historical TelWorx revenue and earnings before income taxes that reduced revenue by $0.1 million and total combined earnings by $0.2 million for the three months ended June 30, 2012, and that reduced revenue by $0.4 million and total combined earnings by $0.5 million for the six months ended June 30, 2012.

The adjustments were made to apply a correction to the misstatements to revenue and profit before tax contained in the historical pre-acquisition TelWorx financial statements that were discovered in the course of the Company’s internal investigation by the forensic auditors. The forensic auditing procedures that identified the misstatements included the tracing of all significant sales transactions from the TelWorx operation back to customer commitment and proof of delivery documentation. The forensic audit dollar coverage obtained is approximately 50% of the operations’ revenue. Additionally there is also an adjustment to the costs associated with excess and obsolete inventory not used for a year or more at the acquisition date to the appropriate pre-acquisition period, consistent with the policy used by the Company after the acquisition. The forensic accounting procedures included the tracing of all significant inventory items at the date of the acquisition back to historical costing and usage records.

The pro forma information is presented for illustrative purposes only and may not be indicative of the results that would have been obtained had the acquisition actually occurred on January 1, 2012, nor is it necessarily indicative of the Company’s future consolidated results of operations or financial position.

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9. Stock-Based Compensation

The condensed consolidated statements of operations include $1.1 million and $1.7 million of stock compensation expense for the three and six months ended June 30, 2013, respectively. Stock compensation expense for the three months ended June 30, 2013 consists of $0.8 million for restricted stock awards, and $0.3 million for stock option and stock purchase plan expenses. Stock compensation expense for the six months ended June 30, 2013 consists of $1.3 million for restricted stock awards, and $0.4 million for stock option and stock purchase plan expenses.

The condensed consolidated statements of operations include $0.9 million and $1.6 million of stock compensation expense for the three and six months ended June 30, 2012, respectively. Stock compensation expense for the three months ended June 30, 2012 consists of $0.8 million for restricted stock awards, and $0.1 million for stock option and stock purchase plan expenses. Stock compensation expense for the six months ended June 30, 2012 consists of $1.5 million for restricted stock awards, and $0.1 million for stock option and stock purchase plan expenses.

The Company did not capitalize any stock compensation expense during the three and six months ended June 30, 2013 or 2012.

Total stock-based compensation is reflected in the condensed consolidated statements of operations as follows:

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2013			2012		2013		2012
Cost of revenues	$	107		$	99	$	191	$	203
Research and development		178			147		322		287
Sales and marketing		154			128		261		257
General and administrative		660			567		947		891
Total continuing operations		1,099			941		1,721		1,638
Discontinued operations		(1	)		2		1		2
Total	$	1,098		$	943	$	1,722	$	1,640

Restricted Stock – Service Based

The Company grants shares of restricted stock as employee incentives as permitted under the Company’s 1997 Stock Plan, as amended and restated (“1997 Stock Plan”). In connection with the grant of restricted stock to employees, the Company records deferred stock compensation representing the fair value of the common stock on the date the restricted stock is granted. Stock-based compensation expense is recorded ratably over the vesting period of the applicable shares. These grants vest over various periods, but typically vest over four years.

For the three months ended June 30, 2013, the Company issued 13,402 restricted stock awards with grant date fair value of $0.1 million and recorded cancellations of 6,861 shares with grant date fair value of $45. For the six months ended June 30, 2013, the Company issued 13,402 restricted stock awards with grant date fair value of $0.1 million and recorded cancellations of 9,361 shares with grant date fair value of $62.

For the three months ended June 30, 2013, 13,012 restricted shares vested with grant date fair value and intrinsic value of $0.1 million, respectively. For the six months ended June 30, 2013, 352,565 restricted shares vested with grant date fair value of $2.0 million and intrinsic value of $2.6 million.

For the three months ended June 30, 2012, the Company did not issue any restricted stock awards and recorded cancellations of 46,668 shares with grant date fair value of $0.3 million. For the six months ended June 30, 2012, the Company issued 229,950 shares of restricted stock with grant date fair value of $1.6 million and recorded cancellations of 52,656 shares with grant date fair value of $0.4 million.

For the three months ended June 30, 2012, 14,025 restricted shares vested with grant date fair value and intrinsic value of $0.1 million, respectively. For the six months ended June 30, 2012, 466,255 restricted shares vested with grant date fair value of $2.7 million and intrinsic value of $3.5 million.

At June 30, 2013, total unrecognized compensation expense related to restricted stock was approximately $1.9 million, net of forfeitures to be recognized through 2016 over a weighted average period of 1.4 years.

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The following table summarizes restricted stock activity for the six months ended June 30, 2013:

				Weighted
				Average
				Grant Date
	Shares			Fair Value
Unvested Restricted Stock Awards - December 31, 2012		940,685		$	6.24
Shares awarded		13,402			7.83
Shares vested		(352,565	)		5.79
Shares cancelled		(9,361	)		6.60
Unvested Restricted Stock Awards - June 30, 2013		592,161		$	6.54

Stock Options

The Company may grant stock options to purchase common stock. The Company issues stock options with exercise prices no less than the fair value of the Company’s stock on the grant date. Employee stock options contain gradual vesting provisions, whereby 25% vest one year from the date of grant and thereafter in monthly increments over the remaining three years. Stock options may be exercised at any time prior to their expiration date or within ninety days of termination of employment, or such shorter time as may be provided in the related stock option agreement. Historically, the Company has granted stock options with a ten year life. Beginning with options granted in July 2010, the Company granted stock options with a seven year life. During 2012 and the first quarter 2013, the Company awarded stock options to eligible new employees for incentive purposes. The Company issued stock options to employees for long-term incentive purposes in April 2013.

The fair value of each unvested stock option was estimated on the date of grant using the Black-Scholes option valuation model. The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options, which have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility and expected option life. Because the Company’s employee stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, the existing models may not necessarily provide a reliable single measure of the fair value of the employee stock options.

During the three months ended June 30, 2013 the Company issued 688,050 stock options with a weighted average grant date value of $2.88. During the six months ended June 30, 2013 the Company issued 689,550 stock options with a weighted average grant date value of $2.88. The Company received proceeds of $13 from the exercise of 1,647 options during the three months ended June 30, 2013. The intrinsic value of these options exercised was $3. The Company received proceeds of $91 from the exercise of 11,841 options during the six months ended June 30, 2013. The intrinsic value of these options exercised was $7. During the three and six months ended June 30, 2013, 19,664 and 111,201 options, respectively, were cancelled or expired.

During the three months and six months ended June 30, 2012 the Company issued 4,500 stock options with a weighted average grant date value of $2.77. The Company received proceeds of $25 from the exercise of 3,719 options during the three and six months ended June 30, 2012. The intrinsic value of these options exercised was $3. During the three and six months ended June 30, 2012, 96,802 and 216,350 options were cancelled or expired.

As of June 30, 2013, the unrecognized compensation expense related to the unvested portion of the Company’s stock options was approximately $2.4 million, net of estimated forfeitures to be recognized through 2017 over a weighted average period of 1.6 years.

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The range of exercise prices for options outstanding and exercisable at June 30, 2013 was $5.50 to $11.84. The following table summarizes information about stock options outstanding under all stock plans at June 30, 2013:

	Options Outstanding						Options Exercisable
Range of Exercise Prices	Number Outstanding		Weighted Average Contractual Life (Years)		Weighted- Average Exercise Price		Number Exercisable		Weighted Average Exercise Price
$5.50   -   $6.86		115,500		5.02	$	6.55		81,954	$	6.64
6.87   -     7.93		772,660		6.23		7.26		81,923		7.71
8.07   -     8.63		104,037		2.30		8.55		104,037		8.55
8.76   -     8.76		44,000		2.64		8.76		44,000		8.76
9.09   -     9.09		100,000		2.09		9.09		100,000		9.09
9.11   -     9.12		14,627		2.59		9.12		14,627		9.12
9.16   -     9.16		132,000		3.09		9.16		132,000		9.16
9.19   -   10.25		121,780		2.70		9.70		121,780		9.70
10.46 -   11.00		100,960		1.46		10.72		100,960		10.72
11.01 -   11.84		160,050		0.84		11.49		160,050		11.49
$5.50   - $11.84		1,665,614		4.21	$	8.40		941,331	$	9.35

The Company calculated the fair value of each option grant on the date of grant using the Black-Scholes option-pricing model using the following assumptions:

	June 30,
	2013			2012
Dividend yield		1.7	%		1.8	%
Risk-free interest rate		0.2	%		0.4	%
Expected volatility		52	%		52	%
Expected life (in years)		5.6			5.4

The dividend yield rate was calculated by dividing the Company’s annual dividend by the closing price on the grant date. The risk-free interest rate was based on the U.S. Treasury yields with remaining term that approximates the expected life of the options granted. The Company calculates the volatility based on a five-year historical period of the Company’s stock price. The Company incorporates a forfeiture rate based on historical data in the expense calculation. The expected life used for options granted is based on historical data of employee exercise performance.

The intrinsic value and contractual life of the options outstanding and exercisable at June 30, 2013 were as follows:

	Weighted Average Contractual Life (years)		Intrinsic Value
Options Outstanding		4.21	$	1,168
Options Exercisable		2.27	$	216

The intrinsic value is based on the share price of $8.48 at June 30, 2013.

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The following table summarizes the stock option activity for the six months ended June 30, 2013:

				Weighted
				Average
	Options			Exercise
	Outstanding			Price
Outstanding at December 31, 2012		1,099,106		$	9.06
Granted		689,550			7.20
Exercised		(11,841	)		7.11
Expired or Cancelled		(88,568	)		7.90
Forfeited		(22,633	)		6.45
Outstanding at June 30, 2013		1,665,614		$	8.40
Exercisable at June 30, 2013		941,331		$	9.35

Retention Stock Options

In April 2013, the Company awarded 182,500 retention stock options to executive officers with a weighted average grant date value of $2.83. The actual number of stock options awarded will be based on performance goals for 2013. The options will vest between two and four years beginning in 2014. The Company records expense for these retention stock options based on estimated achievement of the performance goals. The assumptions used for the valuation of these stock options were consistent with the stock options awarded to employees in April 2013.

The following table summarizes the retention stock option activity for the six months ended June 30, 2013:

			Weighted
	Retention		Average
	Options		Exercise
	Outstanding		Price
Outstanding at December 31, 2012		—	$	0.00
Granted		182,500		7.16
Outstanding at June 30, 2013		182,500	$	7.16
Exercisable at June 30, 2013		—		—

Performance Units

The Company grants performance units to certain executive officers. Shares are earned upon achievement of defined performance goals such as revenue and earnings. Certain performance units granted are subject to a service period before vesting. The fair value of the performance units issued is based on the Company’s stock price on the date the performance units are granted. The Company records expense for the performance units based on estimated achievement of the performance goals.

During the three and six months ended June 30, 2013, the Company did not grant any performance units and cancelled 147,250 performance units with a grant date fair value of $1.0 million.

During the six months ended June 30, 2012, the Company granted 169,650 performance units with a grant date fair value of $1.2 million and cancelled 11,320 performance units with a grant date fair value of $79. During the six months ended June 30, 2012, 4,836 performance units vested with a grant date fair value of $33 and intrinsic value of $36. During the six months ended June 30, 2012, 139,150 performance units were converted to time-based restricted stock awards. The Company did not record expense for performance share awards during the six months ended June 30, 2012 because the Company does not expect the 2012 fiscal year targets associated with the performance shares to be met.

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As of June 30, 2013, there are no unvested performance units. The following table summarizes the performance share activity during the six months ended June 30, 2013:

				Weighted
				Average
				Grant Date
	Shares			Fair Value
Unvested Performance Units - December 31, 2012		147,250		$	7.04
Units cancelled		(147,250	)		7.04
Unvested Performance Units - June 30, 2013		—		$	0.00

Restricted Stock Units

The Company grants restricted stock units as employee incentives as permitted under the Company’s 1997 Stock Plan. Employee restricted stock units are time-based awards and are amortized over the vesting period. At the vesting date, these units are converted to shares of common stock. These units vest over various periods, but typically vest over four years. The fair value of the restricted stock units issued is based on the Company’s stock price on the date the restricted stock units are granted.

The Company did not issue any time-based restricted stock units and cancelled 1,125 shares with a grant date fair value of $8 during the three and six months ended June 30, 2013. During the three and six months ended June 30, 2013, 3,850 restricted stock units vested with a grant date fair value of $25 and intrinsic value of $28.

The Company issued 5,000 time-based restricted stock units with a fair value of $35 to employees during the six months ended June 30, 2012. During the six months ended June 30, 2012, 2,600 restricted stock units vested with a grant date fair value of $16 and intrinsic value of $20.

As of June 30, 2013, the unrecognized compensation expense related to the unvested portion of the Company’s restricted stock units was approximately $29, to be recognized through 2016 over a weighted average period of 1.5 years.

The following table summarizes the restricted stock unit activity during the six months ended June 30, 2013:

				Weighted
				Average
				Grant Date
	Shares			Fair Value
Unvested Restricted Stock Units - December 31, 2012		11,925		$	6.61
Units vested		(3,850	)		6.56
Units cancelled		(1,125	)		6.77
Unvested Restricted Stock Units - June 30, 2013		6,950		$	6.62

Employee Stock Purchase Plan (“ESPP”)

The ESPP enables eligible employees to purchase common stock at the lower of 85% of the fair market value of the common stock on the first or last day of each offering period. Each offering period is six months. The Company received proceeds of $0.3 million from the issuance of 61,230 shares under the ESPP in February 2013 and received proceeds of $0.3 million from the issuance of 48,032 shares under the ESPP in February 2012.

Based on the 15% discount and the fair value of the option feature of this plan, the ESPP is considered compensatory. Compensation expense is calculated using the fair value of the employees’ purchase rights under the Black-Scholes model.

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The Company calculated the fair value of each employee stock purchase grant on the date of grant using the Black-Scholes option-pricing model using the following assumptions:

	June 30,
	2013			2012
Dividend yield		1.9	%		1.8	%
Risk-free interest rate		0.2	%		0.2	%
Expected volatility		52	%		51	%
Expected life (in years)		0.5			0.5

The dividend yield rate was calculated by dividing the Company’s annual dividend by the closing price on the grant date. The risk-free interest rate was based on the U.S. Treasury yields with a remaining term that approximates the expected life of the options granted. The dividend yield rate is calculated by dividing the Company’s annual dividend by the closing price on the grant date. The Company calculates the volatility based on a five-year historical period of the Company’s stock price. The expected life used is based on the offering period.

Employee Withholding Taxes on Stock Awards

For ease in administering the issuance of stock awards, the Company holds back shares of vested restricted stock awards and short-term incentive plan stock awards for the value of the statutory withholding taxes. For each individual receiving a share award, the Company redeems the shares it computes as the value for the withholding tax and remits this amount to the appropriate tax authority. The Company paid $0.9 million and $1.2 million for withholding taxes related to stock awards during the six months ended June 30, 2013 and 2012, respectively.

Stock Repurchases

All share repurchase programs are authorized by the Company’s Board of Directors and are announced publicly. On March 18, 2013, the Company’s Board of Directors approved a new share repurchase program of $5.0 million. The Company repurchased 59,510 shares at an average price of $7.31 during the three months ended June 30, 2013. At June 30, 2013, the Company had $4.6 million in share value that could still be repurchased under this program.

10. Benefit Plans

Employee Benefit Plans

The Company’s 401(k) plan covers all of the eligible U.S. employees beginning the first of the month following the month they begin their employment. Under this plan, employees may elect to contribute up to 15% of their current compensation, up to the statutorily prescribed annual limit. The Company may make discretionary contributions to the 401(k) plan. The Company made employer contributions of $148 and $133 to the 401(k) plan for the three months ended June 30, 2013 and 2012, respectively. The Company made employer contributions of $293 and $302 to the 401(k) plan for the six months ended June 30, 2013 and 2012, respectively.

The Company also contributes to various retirement plans for foreign employees. The Company made contributions to these plans of $63 and $52 for the three months ended June 30, 2013 and 2012 respectively. The Company made contributions to these plans of $123 and $103 for the six months ended June 30, 2013 and 2012, respectively.

Executive Deferred Compensation Plan

The Company provides an Executive Deferred Compensation Plan (“EDCP”) for executive officers, senior managers and directors. Under this plan, the executives may defer up to 50% of salary and up to 100% of cash bonuses. In addition, the Company provides a 4% matching cash contribution which vests depending upon the number of completed years of participation in the EDCP. The executive has a choice of investment alternatives from a menu of mutual funds offered by an insurance company. The plan is administered by the Compensation Committee and an outside party tracks investments and provides the Company’s executives with quarterly statements showing relevant contribution and investment data. Upon termination of employment, death, disability or retirement, the executive will receive the value of his or her account in accordance with the provisions of the plan. Upon retirement, the executive may request to receive either a lump sum payment, or payments in annual installments over 15 years or over the lifetime of the participant with 20 annual payments guaranteed. At June 30, 2013 and December 31, 2012, the deferred compensation obligation was $1.7 million, respectively, included in long-term liabilities in the consolidated balance sheets. The Company funds the obligation related to the EDCP with corporate-owned life insurance policies. At June 30, 2013 and December 31, 2012, the cash surrender value of such policies was $1.7 million and $1.6 million, respectively, included in other noncurrent assets in the consolidated balance sheets. In November 2012, the Company’s Board of Directors authorized the termination of the EDCP. The Company expects the plan to terminate in 2013.

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11. Commitments and Contingencies

Leases

The Company has operating leases for office facilities through 2020 and office equipment through 2014. The future minimum rental payments under these leases at June 30, 2013, are as follows:

Year	Amount
2013	$	468
2014		760
2015		711
2016		593
2017		478
Thereafter		1,047
Future minimum lease payments	$	4,057

The Company has capital leases for office equipment. The office equipment had a cost of $3, accumulated depreciation of $1, and a net book value of $2 as of June 30, 2013.

The following table presents future minimum lease payments under capital leases together with the present value of the net minimum lease payments due in each year:

Year	Amount
2013	$	1
2014		2
Total minimum payments required:		3
Less amount representing interest:		0
Present value of net minimum lease payments:	$	3

Warranty Reserve and Sales Returns

The Company allows its major distributors and certain other customers to return unused product under specified terms and conditions. The Company accrues for product returns based on historical sales and return trends. The Company’s allowance for sales returns was $0.2 million at June 30, 2013 and $0.1 million at December 31, 2012, respectively.

The Company offers repair and replacement warranties of typically two years for antenna products and one year for scanning receiver products. The Company’s warranty reserve is based on historical sales and costs of repair and replacement trends. The warranty reserve was $0.2 million at June 30, 2013 and $0.3 million at December 31, 2012 and is included in other accrued liabilities in the accompanying condensed consolidated balance sheets.

Changes in the warranty reserves during the six months ended June 30, 2013 and 2012, were as follows:

	Six Months Ended June 30,
	2013			2012
Beginning balance	$	270		$	249
Provisions for warranty		38			105
Consumption of reserves		(64	)		(77	)
Ending balance	$	244		$	277

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Restructuring

The Company is integrating the TelWorx business with its Connected Solutions segment. The Company has moved kitting operations and order fulfillment to its Bloomingdale, Illinois facility from the Lexington, North Carolina facility. The Company will move to a smaller Lexington office facility for its sales, procurement, and administrative functions. The Company recorded $0.2 million as restructuring expense during the six months ended June 30, 2013, consisting of employee related costs and asset disposals. As part of the integration, the Company announced the separation of seventeen PCTelWorx employees in March 2013 and one additional employee in June 2013. Through June 30, 2013, fifteen of these employees have been separated. The remaining employees will be separated by September 30, 2013. The Company also recorded $0.3 million in cost of sales for the disposal of TelWorx inventory that was not compatible with the Company’s Bloomingdale facility or Bloomingdale operations.

The following table summarizes the restructuring activity during the six months ended June 30, 2013 and the status of the reserves at June 30, 2013:

	Accrual							Accrual
	Balance at							Balance at
	December 31,		Restructuring		Payments/			June 30,
	2012		Expense		Charges			2013
2013 TelWorx integration:
Employee related costs	$	0	$	167	($	92	)	$	75
Asset disposals		0		58		(58	)		0
Subtotal		0		225		(150	)		75
2012 Bloomingdale manufacturing:		1		0		(1	)		0
Totals	$	1	$	225	($	151	)	$	75

There was no restructuring activity during the three and six months ended June 30, 2012.

TelWorx Settlement

On March 27, 2013, the Company, its wholly-owned subsidiary PCTelWorx, Inc. (“PCTelWorx”), and the TelWorx Parties (as defined below) entered into an Amendment (the “Amendment”) to the Asset Purchase Agreement dated July 9, 2012 (the “Original Agreement), among the Company, PCTelWorx, Ciao Enterprises, LLC f/k/a TelWorx Communications, LLC and certain of its affiliated entities (collectively, the “TelWorx Entities”) and Tim and Brenda Scronce (“Sellers” and collectively with the TelWorx Entities, the “TelWorx Parties”), as part of a settlement arrangement relative to PCTelWorx’s acquisition of substantially all of the assets of and the assumption of certain specified liabilities of the TelWorx Entities on July 9, 2012 (the “Acquisition”).

As part of the Acquisition, PCTelWorx previously executed a 5 year lease with Scronce Real Estate, LLC for the continued use of an operating facility and offices in Lexington, North Carolina, which provided for annual rental payments of approximately $200,000.

As disclosed in the Company’s Form 8-K/A filed with the Securities and Exchange Commission (the “Commission”) on March 13, 2013, after completion of the Acquisition, the Company became aware of certain accounting irregularities with respect to the TelWorx Entities and the Company’s Board of Directors directed management to conduct an internal investigation. Based on the results of the Company’s investigation, the Company’s Board of Directors directed management to seek restitution from the TelWorx Parties, and after protracted negotiations and concurrent litigation, the parties entered into the Amendment and related settlement agreements to resolve their dispute.

The following is a summary of the material terms of the Amendment:

• the TelWorx Parties paid the Company a cash payment of $4.3 million, which included $1.0 million pursuant to the working capital adjustment provisions of the Original Agreement;

• the TelWorx Parties forfeited all $1.5 million of the potential contingent consideration earnable under the Original Agreement, which had a fair value of $0.6 million, and which, if earned, would have been payable in the form of common stock of the Company;

• the TelWorx Parties forfeited the holdback escrow under the Original Agreement and released the $0.5 million holdback escrow to the Company;

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• the parties agreed to the elimination of all indemnification obligations provided for under the Original Agreement;

• the Company, PCTelWorx and Sellers each agreed to execute mutual releases of all claims arising in connection with the dispute; and

• PCTelWorx acquired an option to terminate its current facility lease in Lexington, North Carolina with Scronce Real Estate, LLC (which is controlled by Sellers) upon 180 days written notice.

The settlement has an aggregate fair value of $5.4 million, consisting of $4.3 million cash received, $0.6 million for the contingent consideration forfeited, and $0.5 million for the holdback escrow balance released. Approximately $1.0 million of the cash received was pursuant to the working capital adjustment provisions of the Original Agreement and settle the miscellaneous accounts receivable recorded in prepaid expenses and other assets at December 31, 2012. The remaining $4.3 million settlement amount, consisting of $3.2 million cash and the release of the $0.6 million contingent consideration fair value and the $0.5 million release of the holdback escrow, was recorded as income in the quarter ended March 31, 2013, consistent with accounting for legal settlements.

The Company recorded a $12.5 million impairment of goodwill related to the TelWorx Entities in the fourth quarter of 2012. See Footnote 8 -Acquisition of TelWorx Communications LLC for full details. The Company is also engaged in efforts to seek further restitution from the independent accountants that provided the 2010 and 2011 audited financial statements for TelWorx and the investment banking firm used by the TelWorx Parties. The Company cannot predict the total amount of restitution it will eventually obtain. In settling with the TelWorx parties, management considered the risks and expenses associated with protracted litigation as well as the consumption of Company resources that would otherwise be applied to operating activities.

In May 2013, the Company gave notice of early termination of its Lexington facility lease, which becomes effective October 31, 2013.

12. Income Taxes

The Company recorded an income tax expense for continuing operations of $1.2 million for the six months ended June 30, 2013. The tax expense for the six months ended June 30, 2013 differs from the statutory rate of 34% primarily because of state income taxes.

The Company recorded an income tax benefit of $0.1 million for the six months ended June 30, 2012. The tax benefit for the six months ended June 30, 2012 differs from the statutory rate of 34% because of state income taxes.

The Company’s valuation allowance against its deferred tax assets was $0.7 million at June 30, 2013 and December 31, 2012. On a regular basis, the Company evaluates the recoverability of deferred tax assets and the need for a valuation allowance. Such evaluations involve the application of significant judgment. The Company considers multiple factors in its evaluation of the need for a valuation allowance. The Company’s long-term forecasts continue to support the realization of its deferred tax assets. The Company’s domestic deferred tax assets have a ratable reversal pattern over 15 years. The carryforward rules allow for up to a 20 year carryforward of net operating losses (“NOL”) to future income that is available to realize the deferred tax assets. The combination of the deferred tax asset reversal pattern and carryforward period yields a 27.5 year average period over which future income can be utilized to realize the deferred tax assets.

The Company’s gross unrecognized tax benefit was $1.4 million both at June 30, 2013 and December 31, 2012. The Company does not expect any of the potential benefits will be settled within the next twelve months. The Company is unaware of any positions for which it is reasonably possible that the unrecognized tax benefits will significantly increase or decrease within the next twelve months.

The Company files a consolidated federal income tax return, income tax returns with various states, and foreign income tax returns in various foreign jurisdictions. The Company’s federal and state income tax years, with limited exceptions, are closed through 2007.

The Company recorded a tax gain of $0.7 million related to the sale of PCTEL Secure. The income tax gain was based on the fair market value of the intangible assets sold minus the tax basis of the intangible assets.

The Company has no plans to repatriate foreign income from its subsidiaries.

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13. Segment, Customer and Geographic Information

PCTEL operates in two new segments for reporting purposes as of January 1, 2013. The Company’s Connected Solutions segment includes its antenna and engineered site solutions. Its RF Solutions segment includes its scanning receivers and RF engineering services. Each of the segments has its own segment manager as well as its own engineering, sales and marketing, and operational general and administrative functions. All of the Company’s accounting and finance, human resources, IT and legal functions are provided on a centralized basis through the corporate function. The Company manages its balance sheet and cash flows centrally at the corporate level, with the exception of trade accounts receivable and inventory which is managed at the segment level. Each of the segment managers reports to and maintains regular contact with the chief operating decision maker to discuss operating activities, financial results, forecasts, or plans for the segment. As of January 1, 2013 the Company’s chief operating decision maker uses the profit and loss results through operating profit and identified assets for Connected Solutions and RF Solutions segments to make operating decisions. The segment information presented in the financial statements restates history for the new Connected Solutions and RF Solution segments on a consistent basis with the current period.

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The following tables are the segment operating profits for the three and six months ended June 30, 2013 and June 30, 2012, respectively, and the segment balance sheet information as of June 30, 2013 and December 31, 2012:

	Three Months Ended June 30, 2013
	Connected Solutions		RF Solutions		Consolidating			Total
REVENUES	$	19,199	$	7,602	($	55	)	$	26,746
COST OF REVENUES		13,537		2,726		(65	)		16,198
GROSS PROFIT		5,662		4,876		10			10,548
OPERATING EXPENSES:
Research and development		1,166		1,517		0			2,683
Sales and marketing		2,147		907		0			3,054
General and administrative		457		170		3,198			3,825
Amortization of intangible assets		394		210		0			604
Restructuring charges		124		0		0			124
Total operating expenses		4,288		2,804		3,198			10,290
OPERATING INCOME (LOSS)	$	1,374	$	2,072	($	3,188	)	$	258

	Six Months Ended June 30, 2013
	Connected Solutions		RF Solutions		Consolidating			Total
REVENUES	$	38,555	$	13,374	($	111	)	$	51,818
COST OF REVENUES		26,882		4,917		(127	)		31,672
GROSS PROFIT		11,673		8,457		16			20,146
OPERATING EXPENSES:
Research and development		2,302		2,931		0			5,233
Sales and marketing		4,339		1,736		0			6,075
General and administrative		885		329		7,242			8,456
Amortization of intangible assets		790		419		0			1,209
Restructuring charges		225		0		0			225
Total operating expenses		8,541		5,415		7,242			21,198
OPERATING INCOME (LOSS)	$	3,132	$	3,042	($	7,226	)	($	1,052	)

	As of June 30, 2013
	Connected Solutions		RF Solutions		Consolidating		Total
Accounts receivable	$	12,136	$	6,201	$	0	$	18,337
Inventories	$	13,957	$	2,151	$	0	$	16,108
Long-lived assets:
Property and equipment, net	$	11,541	$	1,933	$	1,197	$	14,671
Long-term investment securities	$	0	$	0	$	0	$	0
Goodwill	$	0	$	161	$	0	$	161
Intangible assets, net	$	3,614	$	2,181	$	0	$	5,795
Deferred tax assets, net	$	0	$	0	$	12,989	$	12,989
Other noncurrent assets	$	0	$	0	$	1,727	$	1,727

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	Three Months Ended June 30, 2012
	Connected Solutions		RF Solutions		Consolidating			Total
REVENUES	$	14,821	$	5,206	($	34	)	$	19,993
COST OF REVENUES		9,717		1,650		(44	)		11,323
GROSS PROFIT		5,104		3,556		10			8,670
OPERATING EXPENSES:
Research and development		1,042		1,173		0			2,215
Sales and marketing		1,543		1,030		0			2,573
General and administrative		244		118		2,294			2,656
Amortization of intangible assets		321		221		0			542
Restructuring charges		0		0		0			0
Total operating expenses		3,150		2,542		2,294			7,986
OPERATING INCOME (LOSS)	$	1,954	$	1,014	($	2,284	)	$	684

	Six Months Ended June 30, 2012
	Connected Solutions		RF Solutions		Consolidating			Total
REVENUES	$	27,988	$	9,204	($	38	)	$	37,154
COST OF REVENUES		18,485		2,886		(65	)		21,306
GROSS PROFIT		9,503		6,318		27			15,848
OPERATING EXPENSES:
Research and development		2,119		2,412		0			4,531
Sales and marketing		3,099		1,983		0			5,082
General and administrative		470		259		4,660			5,389
Amortization of intangible assets		643		441		0			1,084
Restructuring charges		0		0		0			0
Total operating expenses		6,331		5,095		4,660			16,086
OPERATING INCOME (LOSS)	$	3,172	$	1,223	($	4,633	)	($	238	)

	As of December 31, 2012
	Connected Solutions		RF Solutions		Consolidating		Total
Accounts receivable	$	11,885	$	6,701	$	0	$	18,586
Inventories	$	14,283	$	3,290	$	0	$	17,573
Long-lived assets:
Property and equipment, net	$	11,868	$	1,746	$	1,161	$	14,775
Goodwill	$	0	$	161	$	0	$	161
Intangible assets, net	$	4,404	$	2,600	$	0	$	7,004
Deferred tax assets, net	$	0	$	0	$	14,034	$	14,034
Other noncurrent assets	$	0	$	0	$	1,636	$	1,636

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The Company’s revenues to customers outside of the United States, as a percent of total revenues for the three and six months ended June 30, 2013 and 2012, respectively were as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
Region	2013			2012			2013			2012
Europe, Middle East, & Africa		11	%		13	%		10	%		14	%
Asia Pacific		11	%		9	%		9	%		10	%
Other Americas		7	%		8	%		6	%		7	%
Total Foreign sales		29	%		30	%		25	%		31	%

No customers accounted for 10% or greater of revenues or receivables during the three and six months ended June 30, 2013 or the three and six months ended June 30, 2012.

14. Related Parties

The Company’s lease for its Lexington, North Carolina facility is with Scronce Real Estate LLC. Scronce Real Estate, LLC is owned by Tim and Brenda Scronce, the wife of Tim Scronce. Tim and/or Brenda Scronce were the majority owners of the TelWorx entities as defined in Note 11 – Commitments and Contingencies above. The Company, through its wholly-owned subsidiary PCTelWorx, Inc. (“PCTelWorx”), purchased the assets of TelWorx in July 2012. Tim Scronce worked for the Company until his resignation in December 2012 and Brenda Scronce never worked for the Company. As of June 30, 2013, a total of $0.2 million has been paid under this lease. In May 2013, the Company gave notice of early termination of the lease which becomes effective in October 2013. The Company signed a new lease for an office facility in Lexington effective August 1, 2013. The new lease is not with a related party.

The Company’s lease for its Melbourne, Florida office is with 3dB, LLC, a real estate entity co-owned by Robert Joslin, Scott Clay, and Greg Akin. As co-owners of Envision Wireless, Joslin, Clay and Akin sold the assets of Envision Wireless to the Company in October 2011. Joslin, Clay, and Akin continue to work for the Company. The Company will not renew the lease when it expires in October 2013, but will move to a new office facility. The new lease will not be with a related party.

15. Subsequent Events

The Company evaluates subsequent events occurring between the most recent balance sheet date and the date that the financial statements are available to be issued in order to determine whether the subsequent events are to be recorded in and/or disclosed in the Company’s financial statements and footnotes. The financial statements are considered to be available to be issued at the time that they are filed with the SEC. There are no subsequent events to report that would have a material impact on the Company’s financial statements.

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Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following information should be read in conjunction with the condensed consolidated financial statements and the notes thereto included in Item 1 of this Quarterly Report on Form 10-Q and in conjunction with the consolidated financial statements for the year ended December 31, 2012 contained in our Annual Report on Form 10-K filed on April 2, 2013. Except for historical information, the following discussion contains forward looking statements that involve risks and uncertainties, including statements regarding our anticipated revenues, profits, costs and expenses and revenue mix. These forward-looking statements include, among others, those statements including the words “may,” “will,” “plans,” “seeks,” “expects,” “anticipates,” “intends,” “believes” and words of similar meaning. Such statements constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. You should not place undue reliance on these forward-looking statements. Our actual results could differ materially from those projected in these forward-looking statements.

Our second quarter 2013 revenues increased by $6.7 million, or 34%, to $26.7 million compared the same period in 2012, due to the acquisition of TelWorx in July 2012, and increased revenue across all established product lines. We recorded an operating income of $0.3 million compared to operating income of $0.7 million in the same period last year. This quarter’s results include a $0.4 million restructuring charge related to the integration and consolidation of the TelWorx operations.

The Company’s TelWorx operations are in the process of being integrated into our operations as well as our total control and evaluation process. The integration is expected to be complete by September 30, 2013. The TelWorx acquisition has been challenging. Subsequent to the acquisition, accounting irregularities in the operations were discovered which we believe were either at the direction of or with the knowledge of senior management of the TelWorx operations. We conducted an investigation and as a result, accepted the resignation of the general manager of the TelWorx operations and separated other personnel involved in the accounting irregularities from the Company, declared that the historical pre-acquisition TelWorx financial statements filed pursuant to Regulation S-X should not be relied upon, and concluded, as of December 31, 2012, that we had a material weakness in our disclosure controls related to the Telworx accounting irregularities. Additionally, unrelated to the accounting irregularities, we determined that the projected revenue, anticipated margins, and future cash flows of the TelWorx business were significantly lower at the annual goodwill test date of October 31, 2012 than at the acquisition date. The decline resulted in the impairment in the fourth quarter of 2012 of all of the $12.5 million of goodwill associated with the business. Before the effect of restructuring costs, the June 30, 2013 year to date operating results for the TelWorx reporting unit are consistent with the forecast of cash flows used in the annual goodwill test date of October 31, 2012. On a year to date basis, the reporting unit, which is contained in the Connected Solutions segment, has contributed slightly above breakeven operating results before restructuring charges of $0.2 million. The kitting and order fulfillment operations in North Carolina are being consolidated into our Bloomingdale, Illinois facility. That decision was made in March 2013. Compared to the beginning of 2013, the restructuring is expected to yield operating cost savings of approximately $0.4 million per quarter going forward when completed in September 2013. At that point in time the operation will cease to be an identifiable reporting unit as all of its operating results and cash flows will be completely integrated and comingled with the rest of the Connected Solutions segment operations.

See Footnote 8 related to the acquisition of TelWorx Communications LLC, and Footnote 11 related to restructuring, and Item 4: Controls and Procedures, and management’s discussion and analysis of liquidity and working capital resources for more details.

Introduction

PCTEL is a global leader in propagation and optimization solutions for the wireless industry. PCTEL develops and distributes innovative antenna and engineered site solutions and designs and develops software-based radios (scanning receivers) and provides related RF engineering services for wireless network optimization.

Revenue growth for antenna products and engineered site solutions is driven by emerging wireless applications in the following markets: public safety, military, and government applications; supervisory control and data acquisition (“SCADA”), health care, energy, smart grid and agricultural applications; indoor wireless, wireless backhaul, and cellular applications. Revenue growth for scanning receiver products, interference management products, and optimization services is driven by the deployment of new wireless technology and the need for wireless networks to be tuned and reconfigured on a regular basis.

We have an intellectual property portfolio related to antennas, the mounting of antennas, and scanning receivers. These patents are being held for defensive purposes and are not part of an active licensing program.

Effective January 1, 2013, we operate in two new segments for reporting purposes. Our Connected Solutions segment includes our antenna and engineered site solutions. Our RF Solutions segment includes our scanning receivers and RF engineering services. Each of our segments has its own segment manager as well as its own engineering, sales and marketing, and operational general and administrative functions. All of our accounting and finance, human resources, IT and legal functions are provided on a centralized basis through the corporate function.

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We manage our balance sheet and cash flows centrally at the corporate level, with the exception of trade accounts receivable and inventory which is managed at the segment level. Each of the segment managers reports to and maintains regular contact with the chief operating decision maker to discuss operating activities, financial results, forecasts, or plans for the segment. As of January 1, 2013 our chief operating decision maker uses the profit and loss results through operating profit and identified assets for the Connected Solutions and RF Solutions segments to make operating decisions. The segment information presented in the financial statements restates history for the new Connected Solutions and RF Solution segments on a consistent basis with the current period.

On April 30, 2013, the Company divested all of the assets associated with PCTEL Secure’s ProsettaCore™ technology to Redwall Technologies, LLC (“Redwall”), a development organization that specializes in mobile security, military and defense projects and systems, and critical national infrastructure. Under the terms of the agreement, Redwall acquired the server and device software (the “Software”), the underlying intellectual property, and complete development responsibility for the security products. At the closing of the divestiture, we received no upfront cash payment, but we have the right to receive a royalty of 7% of the net sale price of each future sale or license of the Software and each provision of services related to the Software. Under the agreement, royalties are capped at $10.0 million in the aggregate. In accordance with accounting rules for discontinued operations, the consolidated financial statements separately reflect the results of PCTEL Secure as discontinued operations for all periods presented. The prior period results have been retrospectively restated to reflect this accounting treatment.

Results of Operations for Continuing Operations

Three and six months Ended June 30, 2013 and 2012

(in thousands)

Revenues

	Three Months Ended June 30,
	2013			2012			$ Change			% Change
Connected Solutions	$	19,199		$	14,821		$	4,378			29.5	%
RF Solutions	$	7,602		$	5,206			2,396			46.0	%
Consolidating	($	55	)	($	34	)		(21	)		not meaningful
Total	$	26,746		$	19,993		$	6,753			33.8	%

	Six Months Ended June 30,
	2013			2012			$ Change			% Change
Connected Solutions	$	38,555		$	27,988		$	10,567			37.8	%
RF Solutions	$	13,374		$	9,204			4,170			45.3	%
Consolidating	($	111	)	($	38	)		(73	)		not meaningful
Total	$	51,818		$	37,154		$	14,664			39.5	%

Revenues increased 33.8% for the three months ended June 30, 2013 and increased 39.5% for the six months ended June 30, 2013 compared to the same periods in 2012. For the three and six months ended June 30, 2013, the addition of revenues from the TelWorx acquisition accounted for approximately 22% and 23% of the percentage increase, respectively.

For the three months ended June 30, 2013, Connected Solutions revenues increased 29.5% due to the addition of revenues from the TelWorx acquisition. For the six months ended June 30, 2013, Connected Solutions revenues increased 37.8% primarily due to the addition of revenues from the TelWorx acquisition and also because of higher antenna product revenues. Revenues for RF Solutions increased 46.0% and 45.3% for the three and six months ended June 30, 2013, respectively compared to the same periods in 2012 due to higher revenues for both services and scanning receiver products. The increase in RF Solutions revenue is attributed to carrier spending increasing from a low point in 2012. The services revenue growth is attributed to the rapid growth of in-building wireless network expansion.

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Gross Profit

	Three Months Ended June 30,
	2013		% of Revenues			2012		% of Revenues
Connected Solutions	$	5,662		29.5	%	$	5,104		34.4	%
RF Solutions		4,876		64.1	%		3,556		68.3	%
Consolidating		10		not meaningful			10		not meaningful
Total	$	10,548		39.4	%	$	8,670		43.4	%

	Six Months Ended June 30,
	2013		% of Revenues			2012		% of Revenues
Connected Solutions	$	11,673		30.3	%	$	9,503		34.0	%
RF Solutions		8,457		63.2	%		6,318		68.6	%
Consolidating		16		not meaningful			27		not meaningful
Total	$	20,146		38.9	%	$	15,848		42.7	%

The gross profit percentage of 39.4% for the three months ended June 30, 2013 was 3.3% lower than the comparable period in fiscal 2012, and the gross profit percentage of 38.9% for the six months ended June 30, 2013 was 3.8% lower than the comparable period in fiscal 2012, primarily because of the addition of lower margin revenues from the TelWorx business. For the three and six months ended June 30, 2013, the gross margins percentage for Connected Solutions declined due to the addition of lower margin revenues from the TelWorx business and due to the expense for inventory disposals related to the restructuring of the TelWorx business. During the three months ended June 30, 2013, we disposed of $0.3 million of TelWorx inventory that was not compatible with our Bloomingdale facility or Bloomingdale operations. For the three and six months ended June 30, 2013, the gross margin percentage for RF Solutions declined primarily because of higher mix of lower margin service business.

Research and Development

	Three Months Ended June 30,
	2013			2012			$ Change		% Change
Connected Solutions	$	1,166		$	1,042		$	124		11.9	%
RF Solutions		1,517			1,173			344		29.3	%
Total	$	2,683		$	2,215		$	468		21.1	%
Research and Development expense as % of Revenues		10	%		11	%

	Six Months Ended June 30,
	2013			2012			$ Change		% Change
Connected Solutions	$	2,302		$	2,119		$	183		8.6	%
RF Solutions		2,931			2,412			519		21.5	%
Total	$	5,233		$	4,531		$	702		15.5	%
Research and Development expense as % of Revenues		10	%		12	%

Research and development expenses increased approximately $0.5 million and $0.7 million for the three and six months ended June 30, 2013, respectively, compared to the same periods in 2012. Research and development expenses increased by $0.3 million and $0.5 million for RF Solutions in the three and six months ended June 30, 2013, respectively compared to the prior periods primarily due to development expense for new scanning receiver products. Research and development expenses increased by $0.1 million and $0.2 million for Connected Solutions in the three and six months ended June 30, 2013, respectively compared to the prior periods primarily due to expenses for the TelWorx business.

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Sales and Marketing

	Three Months Ended June 30,
	2013			2012			$ Change			% Change
Connected Solutions	$	2,147		$	1,543		$	604			39.1	%
RF Solutions		907			1,030			(123	)		-11.9	%
Total	$	3,054		$	2,573		$	481			18.7	%
Sales and Marketing expense as % of Revenues		11	%		13	%

	Six Months Ended June 30,
	2013			2012			$ Change			% Change
Connected Solutions	$	4,339		$	3,099		$	1,240			40.0	%
RF Solutions		1,736			1,983			(247	)		-12.5	%
Total	$	6,075		$	5,082		$	993			19.5	%
Sales and Marketing expense as % of Revenues		12	%		14	%

Sales and marketing expenses include costs associated with the sales and marketing employees, sales agents, product line management, and trade show expenses.

Sales and marketing expenses increased approximately $0.5 million and $1.0 million for the three and six months ended June 30, 2013, respectively compared to the same periods in 2012. Sales and marketing expenses increased $0.6 million and $1.2 million for Connected Solutions for the three and six months ended June 30, 2013, respectively, compared to the same period in fiscal 2012 primarily due to expenses related to the TelWorx business. Sales and marketing expenses for RF Solutions decreased $0.1 million and $0.2 million for the three and six months ended June 30 2013, respectively, compared to the prior periods primarily because of lower sales headcount.

General and Administrative

	Three Months Ended June 30,
	2013			2012			$ Change		% Change
Connected Solutions	$	457		$	244		$	213		87.3	%
RF Solutions		170			118			52		44.1	%
Centralized expenses		3,198			2,294			904		39.4	%
Total	$	3,825		$	2,656		$	1,169		44.0	%
General and administrative expense as % of Revenues		14	%		13	%

	Six Months Ended June 30,
	2013			2012			$ Change		% Change
Connected Solutions	$	885		$	470		$	415		88.3	%
RF Solutions		329			259			70		27.0	%
Centralized expenses		7,242			4,660			2,582		55.4	%
Total	$	8,456		$	5,389		$	3,067		56.9	%
General and administrative expense as % of Revenues		16	%		15	%

General and administrative expenses include costs associated with the general management, finance, human resources, information technology, legal, insurance, public company costs, and other operating expenses to the extent not otherwise allocated to other functions.

General and administrative expenses increased $1.2 million for the three months ended June 30, 2013 and increased $3.1 million for the six months ended June 30, 2013 compared to the same period in fiscal 2012. General and administrative expenses for Connected Solutions increased $0.2 million and $0.4 million for the three and six months ended June 30, 2013 compared to the prior periods in 2012 primarily due to the addition of expenses for the TelWorx business acquired in July 2012. Within our centralized expenses, the increase of $2.6 million is primarily because we incurred $1.8 million of professional fees associated with the TelWorx investigation. See Footnote 11 to the consolidated financial statements for more information related to the TelWorx investigation.

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Amortization of Other Intangible Assets

	Three Months Ended June 30,
	2013			2012			$ Change			% Change
Connected Solutions	$	394		$	321		$	73			22.7	%
RF Solutions		210			221			(11	)		-5.0	%
Total	$	604		$	542		$	62			11.4	%
Amortization expense of intangible assets as % of Revenues		2	%		3	%

	Six Months Ended June 30,
	2013			2012			$ Change			% Change
Connected Solutions	$	790		$	643		$	147			22.9	%
RF Solutions		419			441			(22	)		-5.0	%
Total	$	1,209		$	1,084		$	125			11.5	%
Amortization expense of intangible assets as % of Revenues		2	%		3	%

Amortization increased $0.1 million during the three and six months ended June 30, 2013 compared to the same period in 2012, primarily because of higher amortization for intangible assets attributed to the Connected Solutions segment. Amortization expense increased for Connected Solutions due to the acquisition of the TelWorx assets in July 2012.

Restructuring Charges

	Three Months Ended June 30,
	2013			2012			$ Change
Connected Solutions	$	124		$	0		$	124
RF Solutions		0			0			0
Total	$	124		$	0		$	124
Restructuring expense as % of Revenues		0	%		0	%

	Six Months Ended June 30,
	2013			2012			$ Change
Connected Solutions	$	225		$	0		$	225
RF Solutions		0			0			0
Total	$	225		$	0		$	225
Restructuring expense as % of Revenues		0	%		0	%

We are in process of integrating the TelWorx business with the antenna products business in our Connected Solutions segment. The kitting and order fulfillment operations in North Carolina are being consolidated into our Bloomingdale, Illinois facility. As part of the integration, we announced the separation of 17 PCTelWorx employees in March 2013 and one additional employee in June 2013. Fifteen employees were separated during the six months ended June 30, 2013 and three additional employees will be separated by September 30, 2013. The restructuring expense of $0.2 million during the three and six months ended June 30, 2013 consisted of employee related costs and asset disposals. We disposed of assets that were not compatible with our Bloomingdale facility or our Bloomingdale operations. We anticipate that the restructuring will be complete by September 30, 2013 and we will record additional restructuring expense of $0.1 million during the three months ended September 30, 2013.

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Other Income, Net

	Three Months Ended June 30, 2013			Three Months Ended June 30, 2012			Six Months Ended June 30, 2013			Six Months Ended June 30, 2012
Other income, net	$	57		$	39		$	4,389		$	73
Percentage of revenues		0.2	%		0.2	%		8.5	%		0.2	%

Other income, net consists of interest income, foreign exchange gains and losses, and other income. In the six months ended June 30, 2013 we recorded other income of $4.3 million which represents the net gain related to the TelWorx settlement. In the three months ended June 30, 2013 and 2012, we recorded interest income of $20 and $40, respectively. In the six months ended June 30, 2013 and 2012, we recorded interest income of $39 and $83, respectively. In the three months ended June 30, 2013 and 2012, we recorded foreign exchange losses of $5 and $7, respectively. In the six months ended June 30, 2013 and 2012, we recorded foreign exchange losses of $16 and $17, respectively. During the six months ended June 30, 2013, we recorded $4.3 million in other income related to the Scronce settlement for the TelWorx acquisition.

Benefit for Income Taxes

	Three Months Ended June 30, 2013			Three Months Ended June 30, 2012			Six Months Ended June 30, 2013			Six Months Ended June 30, 2012
Expense (benefit) for income taxes	$	128		$	278		$	1,198		($	54	)
Effective tax rate		40.6	%		38.5	%		35.9	%		32.7	%

The effective tax rate for the six months ended June 30, 2013 differed from the statutory rate of 34% by approximately 1.9% primarily because of state income taxes.

The effective tax rate for the six months ended June 30, 2012 differed from the statutory rate of 34% by approximately 1.3%.

We maintain valuation allowances due to uncertainties regarding realizability. At June 30, 2013 and December 31, 2012, we had a $0.7 million valuation allowance on our deferred tax assets. The valuation allowance primarily relates to deferred tax assets in tax jurisdictions in which we no longer have significant operations. On a regular basis, management evaluates the recoverability of deferred tax assets and the need for a valuation allowance. Our long-term forecasts continue to support the realization of our deferred tax assets. Our domestic deferred tax assets have a ratable reversal pattern over 15 years. The carry forward rules allow for up to a 20 year carry forward of net operating losses (“NOL”) to future income that is available to realize the deferred tax assets. The combination of the deferred tax asset reversal pattern and carry forward period yields a 27.5 year average period over which future income can be utilized to realize the deferred tax assets.

We regularly evaluate our estimates and judgments related to uncertain tax positions and when necessary, establish contingency reserves to account for our uncertain tax positions. As we obtain more information via the settlement of tax audits and through other pertinent information, these projections and estimates are reassessed and may be adjusted accordingly. These adjustments may result in significant income tax provisions or provision reversals.

Discontinued Operations

	Three Months Ended June 30, 2013			Three Months Ended June 30, 2012			Six Months Ended June 30, 2013			Six Months Ended June 30, 2012
Net loss from discontinued operations	($	22	)	($	774	)	($	109	)	($	1,098	)

The net loss from discontinued operations for the three and six months ended June 30, 2013 includes operating expenses of PCTEL Secure, net of income taxes. The net loss for the three and six months ended June 30, 2012 includes operating expenses and the noncontrolling interest of PCTEL Secure, net of income taxes, as well as the adjustments to the redemption value of redeemable equity.

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Stock-based compensation expense

The condensed consolidated statements of operations include $1.1 million and $1.7 million of stock compensation expense for the three and six months ended June 30, 2013, respectively. Stock compensation expense for the three months ended June 30, 2013 consists of $0.8 million for restricted stock awards, and $0.3 million for stock option and stock purchase plan expenses. Stock compensation expense for the six months ended June 30, 2013 consists of $1.3 million for restricted stock awards, and $0.4 million for stock option and stock purchase plan expenses.

The condensed consolidated statements of operations include $0.9 million and $1.6 million of stock compensation expense for the three and six months ended June 30, 2012, respectively. Stock compensation expense for the three months ended June 30, 2012 consists of $0.8 million for restricted stock awards, and $0.1 million for stock option and stock purchase plan expenses. Stock compensation expense for the six months ended June 30, 2012 consists of $1.5 million for restricted stock awards, and $0.1 million for stock option and stock purchase plan expenses.

Total stock-based compensation is reflected in the condensed consolidated statements of operations as follows:

	Three Months Ended June 30,					Six Months Ended June 30,
	2013			2012		2013		2012
Cost of revenues	$	107		$	99	$	191	$	203
Research and development		178			147		322		287
Sales and marketing		154			128		261		257
General and administrative		660			567		947		891
Total continuing operations		1,099			941		1,721		1,638
Discontinued operations		(1	)		2		1		2
Total	$	1,098		$	943	$	1,722	$	1,640

Liquidity and Capital Resources

	Six Months Ended June 30,
	2013			2012
Net income (loss)	$	2,030		($	1,209	)
Charges for depreciation, amortization, stock-based compensation, and other non-cash items		4,611			3,767
Changes in operating assets and liabilities		(3,670	)		(1,079	)
Net cash provided by operating activities		2,971			1,479
Net cash provided by (used in) investing activities		(835	)		8,559
Net cash used in financing activities		(1,341	)		(803	)
Cash flows from discontinued operations		(16	)		(863	)

	June 30, 2013		December 31, 2012
Cash and cash equivalents at the end of period	$	18,330	$	17,543
Short-term investments at the end of period		33,151		33,596
Working capital at the end of period	$	77,071	$	74,486

Liquidity and Capital Resources Overview

At June 30, 2013, our cash and investments were approximately $51.5 million and we had working capital of $77.1 million. Our cash and investments were approximately $0.5 million lower at June 30, 2013 compared to December 31, 2012 because we received the $4.3 million settlement related to the TelWorx acquisition, offsetting cash used with the contraction of our current liabilities on our balance sheet, dividends, and stock buybacks, and capital expenditures. We used $1.3 million of cash for capital expenditures, $0.4 million for repurchase of stock and $1.3 million of cash for payment of dividends, offsetting $0.4 million from issuance of common stock.

39

Within operating activities, we are historically a net generator of operating funds from our income statement activities and a net user of operating funds for balance sheet expansion. Within investing activities, capital spending historically ranges between 3% and 5% of our revenues and the primary use of capital is for manufacturing and development engineering requirements. Our capital expenditures during the six months ended June 30, 2013 were approximately 2.5% of revenues. We historically have significant transfers between investments and cash as we rotate our large cash balances and short-term investment balances between money market funds, which are accounted for as cash equivalents, and other investment vehicles. We have a history of supplementing our organic revenue growth with acquisitions of product lines or companies, resulting in significant uses of our cash and short-term investment balance from time to time. We expect the historical trend for capital spending and the variability caused by moving money between cash and investments and periodic merger and acquisition activity to continue in the future.

Within financing activities, we have historically generated funds from the exercise of stock options and proceeds from the issuance of common stock through the ESPP and have historically used funds to repurchase shares of our common stock through our share repurchase programs. We are now paying quarterly dividends and have also reinstated a stock buyback program to be used later in 2013. Whether this activity results in our being a net user of funds versus a net generator of funds is largely dependent on our stock price during any given year.

On March 13, 2013 the Company disclosed on Form 8-K/A that it had discovered accounting irregularities in the TelWorx pre-acquisition audited financial statements for the years ended December 31, 2010 and 2011, as well as the unaudited pro-forma financial statements for the three month periods ending March 31, 2012 and June 30, 2012. The Company concluded that those financial statements could no longer be relied upon. The audited financial statements are required under Rule 3-05 of Regulation S-X and the pro-forma financial statements are required under Article 11 of Regulation S-X. Until such time as the Company is able to file restated pre-acquisition financial statements for the periods required, or through the passage of the appropriate period of time during which the TelWorx operations are included in the Company’s financial statements, the Company will not be in a position to have the SEC declare effective any new registration statements or post-effective amendments. It may take an extended period of time for the Company to comply with the requirements and during that time the Company would be unable to raise capital through the issuance of common stock to fund its operations and acquisitions. This inability could adversely affect the Company’s liquidity, results of operations and the funding of acquisitions using common shares.

The Company currently has open an S-8 registration statement covering its employee stock plan. There are no other open registration statements and management has no plans at this time to pursue a registration statement once the matter is resolved. Management believes that the Company’s current financial position, which includes $51.5 million in cash and investments, and no debt, combined with its historic ability to generated free cash flow (cash flow from operations less capital spending) provide adequate liquidity and working capital to support its operations as well as funding for potential acquisitions through at least 2014.

Operating Activities:

Operating activities provided $3.0 million of cash during the six months ended June 30, 2013 as we generated approximately $6.7 million of cash from our income statement but used $3.7 million of cash within our balance sheet. We used $0.9 million for payroll taxes related to stock-based compensation. The tax payments related to our stock issued for restricted stock awards and performance shares. On the balance sheet, we used cash of $4.8 million because of reductions in accounts payable. Payables declined due to reductions in inventories and due to the timing of vendor purchases in the quarter ended June 30, 2013 compared to the quarter ended December 31, 2012. We also used $1.6 million during the six months ended June 30, 2013 for payments for sales commissions and accrued inventory purchases. We generated cash of $1.5 million from reductions in RF Solutions inventories.

Operating activities provided $1.5 million of cash during the six months ended June 30, 2012 as we generated $2.6 million in cash from our income statement activities and used $1.1 million of cash from our balance sheet activities. We used $1.2 million for payroll taxes related to stock-based compensation. The tax payments related to the Company’s stock issued for restricted stock awards and performance shares. On the balance sheet, we used cash primarily due to payments for accrued liabilities. The $2.6 million decrease in other accruals consisted of payments for cash bonuses, sales commissions, and accrued inventory purchases. In March 2012, we used $2.2 million of cash for bonuses under the 2011 Short Term Incentive Plan (“STIP”). Cash bonuses were only $0.9 million for the same period in 2011. Cash bonuses paid in 2012 for the 2011 STIP were higher compared to cash bonuses paid in 2011 for the 2010 STIP because operating results were better in 2011 and because bonuses to executives under the 2010 STIP were paid 50% in cash and 50% in stock. During the six months ended June 30, 2012, cash was provided by a decrease in prepaid expenses and an increase in accounts payable. Prepaid expenses and other assets decreased $0.8 million during the six months ended June 30, 2012 primarily because we received income tax refunds. Our accounts payable increased $0.4 million during the six ended June 30, 2012 due to timing of inventory purchases.

40

Investing Activities:

Our investing activities used $0.8 million of cash during the six months ended June 30, 2013 as we generated $0.4 million of cash from net maturities of investments and used $1.3 million for capital expenditures. Redemptions and maturities of our investments in short-term bonds during the six months ended June 30, 2013 provided $39.2 million in funds. We rotated $38.8 million of cash into new short-term and long-term bonds during the six months ended June 30, 2013.

Our investing activities provided $8.6 million of cash during the six months ended June 30, 2012. Redemptions and maturities of our investments in short-term bonds during the six months ended June 30, 2012 provided $37.5 million in funds. We rotated $26.3 million of cash into new short-term and long-term bonds during the six months ended June 30, 2012. Beginning in the second quarter 2012, we invested the funds from maturing short-term investments into money market funds so that we had available cash for acquisitions. For the six months ended June 30, 2012, our capital expenditures were $1.7 million, including $1.1 million for our ERP project. We completed the ERP project in the third quarter 2012. We also purchased an additional 19% membership interest in PCTEL Secure for $0.9 million in May 2012. In July 2012, we purchased the remaining 30% of PCTEL Secure for $0.8 million.

Financing Activities:

We used $1.3 million in cash for financing activities during the six months ended June 30, 2013. We paid $1.3 million for a cash dividend paid in February 2013 and May 2013 and we received $0.4 million in proceeds from the purchase of shares through our ESPP and the exercise of stock options. We used $0.4 million to repurchase shares in the stock repurchase program.

We used $0.8 million in cash for financing activities during the six months ended June 30, 2012. We paid $1.1 million for cash dividends paid in February 2012 and May 2012 and we received $0.3 million in proceeds from the purchase of shares through our ESPP and the exercise of stock options.

Contractual Obligations and Commercial Commitments

As of June 30, 2013, we had operating lease obligations of approximately $4.1 million through 2020. Operating lease obligations consist of $4.0 million for facility lease obligations and $0.1 million for equipment leases. Our lease obligations were $4.9 million at December 31, 2012.

During the first quarter 2013, we extended the lease for our Pryor, Oklahoma facility through April 2015 and we extended the lease for our Beijing design center through June 2016.

In May 2013, we gave notice of early termination of our facility lease in Lexington, North Carolina. The termination is effective October 2013. In July 2013, we signed a new lease for office space in Lexington. The new five-year lease is effective August 1, 2013.

We had purchase obligations of $9.2 million and $9.9 million at June 30, 2013 and December 31, 2012, respectively. These obligations are for the purchase of inventory, as well as for other goods and services in the ordinary course of business, and exclude the balances for purchases currently recognized as liabilities on the balance sheet. We had a liability of $1.4 million related to income tax uncertainties at June 30, 2013 and December 31, 2012, respectively. We do not know when this liability will be satisfied.

Critical Accounting Policies and Estimates

We use certain critical accounting policies as described in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Estimates” of our Annual Report on Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 2012 (the “2012 Annual Report on Form 10-K”). There have been no material changes in any of our critical accounting policies since December 31, 2012. See Note 2 in the Notes to the Condensed Consolidated Financial Statements for discussion on recent accounting pronouncements.

Item 3: Quantitative and Qualitative Disclosures about Market Risk

See our 2012 Annual Report on Form 10-K (Item 7A). As of August 9, 2013, there have been no material changes in this information.

41

Item 4: Controls and Procedures

Changes in Internal Controls:

There was a material weakness in internal controls described in Item 9A of the Company’s December 31, 2012 10-K filed on April 2, 2013. Following the closing of the TelWorx acquisition, the Company’s management became aware of irregularities with respect to TelWorx’ pre-acquisition financial statements that impacted the Company’s financial statements subsequent to the acquisition. In addition, we discovered accounting irregularities reported in the financial statements reported subsequent to the acquisition. These irregularities were first disclosed on Form 8-K/A, Item 8.01, filed March 13, 2013. They were discovered in part through an internal review conducted in connection with the calculation of post-closing purchase price adjustments and in part due to an anonymous tip received after the internal review began. Specifically, the detection of accounting irregularities reported in the financial statements reported subsequent to the acquisition, primarily affecting the recording of revenue, by senior management of the Company’s TelWorx operation, and our inability to detect these post acquisition irregularities in a timely manner represented a material weakness in our internal controls. The Company acquired TelWorx on July 9, 2012 and expects to complete the process of integrating the operation into its financial reporting systems during the quarter ending September 30, 2013.

Remediation Plan:

As a result of the TelWorx investigation, the general manager of TelWorx operation and other personnel involved in the accounting irregularities were separated from the Company on December 20, 2012 and in January 2013. Effective with the quarter ended December 31, 2012, the Company had instituted a process of performing substantive tests on sales transactions in its TelWorx operation and all future acquisitions. These procedures are in addition to the segregation of duties that are in place over the operational and financial systems. Specifically, the Company performs an internal audit of all significant sales transactions from the TelWorx operation by tracing them back to customer commitment and proof of delivery documentation. The audit dollar coverage obtained is approximately 60% of the operation’s revenue. No further irregularities have been detected. The cost incurred to perform these internal audit procedures is not material. These substantive procedures will be in effect until the TelWorx operation, and any future acquisitions, are integrated into the Company’s total control and evaluation process and becomes subject to the Company’s assertion under Section 404 of the Sarbanes-Oxley Act of 2002. These procedures were repeated in the six months ended June 30, 2013. The Company will not consider the material weakness to be remediated until such time as the TelWorx operations are integrated into the Company’s total control and evaluation process, which is expected to occur no later than the quarter ending September 30, 2013. The controls integration is being done in conjunction with the operational integration of the TelWorx operations into the Company’s Connected Solutions segment. See Footnote 11 – Restructuring for further information on the timing and cost of the integration. The separate cost of the controls integration is not expected to be material.

Evaluation of Disclosure Controls and Procedures:

Our management evaluated, with the participation of our Chief Executive Officer and our Chief Financial Officer, the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q. In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can only provide reasonable assurance of achieving the desired control objectives. Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that as of the end of the period covered by this report, that the material weakness in internal controls described in Item 9A of the Company’s December 31, 2012 Annual Report Form 10-K related to its TelWorx operations is not remediated as of the end of the period covered by this Quarterly Report on Form 10-Q. As a result of this material weakness, management has concluded that our disclosure controls and procedures were not effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Securities Exchange Act of 1934 is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure, and that such information is recorded, processed, summarized, and reported within time periods specified in the Securities and Exchange Commission rules and forms.

42

PART II Other Information

Item 1: Legal Proceedings

TelWorx Acquisition

As further described in Note 11 to the consolidated financial statements, following the closing of the Telworx acquisition, the Company became aware of accounting irregularities with respect to the acquired Telworx business and the Company self-reported to the SEC. Since our self-report, the SEC has notified the Company that the SEC has commenced a formal investigation into the TelWorx matters. We have been cooperating fully with the SEC.

Item 1A: Risk Factors

Factors That May Affect Our Business, Financial Condition and Future Operating Results

There has been one material change with respect to the risk factors as previously disclosed in our Annual Report on Form 10-K for our fiscal year ended December 31, 2012.

Risks Related to Our Business

The Company is not currently in a position to have an effective registration statement or post-effective amendment through which it can issue new common shares to the public which could have an adverse impact on our business, liquidity, and results of operations.

On March 13, 2013 the Company disclosed on Form 8-K/A that it had discovered accounting misstatements in the TelWorx pre-acquisition audited financial statements for the years ended December 31, 2010 and 2011, as well as the unaudited pro-forma financial statements for the three month periods ending March 31, 2012 and June 30, 2012. The Company concluded that those financial statements could no longer be relied upon. The audited financial statements are required under Rule 3-05 of Regulation S-X and the pro-forma financial statements are required under Article 11 of Regulation S-X. Until such time as the Company is able to file restated pre-acquisition financial statements for the periods required, or, through the passage of the appropriate period of time during which the TelWorx operations are included in the Company’s financial statements, the Company will not be in a position to have the SEC declare effective any new registration statements or post-effective amendments. It may take an extended period of time for the Company to comply with the requirements and during that time the Company would be unable to raise capital through the issuance of common stock to fund its operations and acquisitions. This inability could adversely affect the Company’s liquidity, results of operations and the funding of acquisitions using common shares.

The Company currently has open an S-8 registration statement covering its employee stock plan from which the Company believes it may issue or employees may exercise options covered by that effective registration statement. There is significant management judgment involved in making this determination. The Company issues securities under its employee stock plan as a form of long term employee compensation. The inability to issue securities or exercise options under that plan could adversely affect the Company’s ability to recruit and retain the employee talent required to effectively operate the business.

There are no other open registration statements and management has no plans at this time to pursue a new registration statement once the matter is resolved. Management believes that the Company’s current financial position, which includes $51.5 million in cash and investments, and no debt, combined with its historic ability to generate free cash flow (cash flow from operations less capital spending) provide adequate liquidity and working capital to support its operations as well as funding for potential acquisitions through at least 2014.

Management believes that there is adequate public information available to shareholders to evaluate the value of outstanding and to be issued securities under the S-8. The TelWorx operations have been included in the Company’s financial statements for the fiscal year ended December 31, 2012 filed on Form 10-K, and the financial statements for the fiscal quarters ended March 31, 2013 and June 30, 2013 filed under forms 10-Q. Stock options issued in 2013 pursuant to the effective S-8 registration statement are subject to service-based vesting restrictions where 25% of the grant vests on each of the annual anniversary dates of the grant over four years. The first vesting date is not until after the TelWorx operations will have been included in the Company’s financial statements for the fiscal years ended December 31, 2012 and December 31, 2013 filed as a part of the Company’s Annual Report on Form 10-K.

43

Item 2: Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3: Defaults Upon Senior Securities

None.

Item 4: Mine Safety Disclosures

Not applicable.

Item 5: Other Information

Issuer Purchases of Equity Securities

Period	Total Number of Shares Purchased		Average Price per Share		Total Number of Shares Purchased as Part of Publicly Announced  Programs		Approximate Dollar Value of Shares That May Yet be  Purchased Under the Programs
April 1, 2013 - April 30, 2013		0	$	0.00		0	$	5,000,000
May 1, 2013 - May 31, 2013		59,510	$	7.31		59,510	$	4,565,186
June 1, 2013 - June 30, 2013		0	$	0.00		0	$	4,565,186

All share repurchase programs are authorized by the Company’s Board of Directors and are announced publicly. On March 18, 2013, the Company’s Board of Directors approved a share repurchase program of $5.0 million. The Company repurchased 59,510 shares at an average price of $7.31 during the three months ended June 30, 2013. At June 30, 2013, the Company had $4.6 million in share value that could still be repurchased under this program.

44

Item 6: Exhibits

Exhibit No.	Description	Reference
31.1	Certification of Chief Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002		Filed herewith
31.2	Certification of Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002		Filed herewith
32.1	Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002		Filed herewith
101	The following materials from PCTEL, Inc.‘s Quarterly Report on Form 10-Q for the quarter ended March 31, 2013 formatted in XBRL (eXtensible Business Reporting Language): (i) the Unaudited Condensed Consolidated Statement of Operations, (ii) the Unaudited Condensed Consolidated Balance Sheet, (iii) the Unaudited Condensed Consolidated Statement of Stockholders’ Equity, (iv) the Unaudited Condensed Consolidated Statement of Cash Flows, and (v) Notes to the Unaudited Condensed Consolidated Financial Statements. In accordance with Rule 406T of Regulation S-T, the XBRL related information shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be part of any registration statement or other document filed under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

45

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 thereunto duly authorized:

PCTEL, Inc.

a Delaware corporation

/s/ Martin H. Singer

Martin H. Singer

Chief Executive Officer

Date: August 9, 2013

46

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO EXCHANGE ACT RULES 13A-14(A) and 15(D)-14(A), AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Martin H. Singer, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of PCTEL, Inc.:

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 9, 2013

/s/ Martin H. Singer

Martin H. Singer

Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO ACT RULES 13A-14(A) and 15(D)-14(A), AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, John Schoen, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of PCTEL, Inc.:

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 9, 2013

/s/ John Schoen

John Schoen

Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATIONS OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL

OFFICER PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Martin H. Singer, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report on Form 10-Q of PCTEL, Inc. for the quarterly period ended June 30, 2013 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Quarterly Report on Form 10-Q fairly presents in all material respects the financial condition and results of operations of PCTEL, Inc. A signed original of this written statement required by Section 906 has been provided to PCTEL, Inc. and will be retained by PCTEL, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

	By:	/s/ Martin H. Singer
DATE: August 9, 2013	NAME:	MARTIN H. SINGER
	Title:	Chief Executive Officer

I, John Schoen, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report on Form 10-Q of PCTEL, Inc. for the quarterly period ended June 30, 2013 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Quarterly Report on Form 10-Q fairly presents in all material respects the financial condition and results of operations of PCTEL, Inc. A signed original of this written statement required by Section 906 has been provided to PCTEL, Inc. and will be retained by PCTEL, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

	By:	/s/ John Schoen
DATE: August 9, 2013	NAME:	JOHN SCHOEN
	Title:	Chief Financial Officer

XML

Related Parties - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2013
Related Party Transactions [Abstract]
Total lease Payment	$ 0.2
Effective date of early termination of lease	October 2013
Effective date of new lease agreement	Aug. 01, 2013

XML

Benefit Plans

6 Months Ended

Jun. 30, 2013

Compensation And Retirement Disclosure [Abstract]

Benefit Plans

10. Benefit Plans

Employee Benefit Plans

The Company’s 401(k) plan covers all of the eligible U.S. employees beginning the first of the month following the month they begin their employment. Under this plan, employees may elect to contribute up to 15% of their current compensation, up to the statutorily prescribed annual limit. The Company may make discretionary contributions to the 401(k) plan. The Company made employer contributions of $148 and $133 to the 401(k) plan for the three months ended June 30, 2013 and 2012, respectively. The Company made employer contributions of $293 and $302 to the 401(k) plan for the six months ended June 30, 2013 and 2012, respectively.

The Company also contributes to various retirement plans for foreign employees. The Company made contributions to these plans of $63 and $52 for the three months ended June 30, 2013 and 2012 respectively. The Company made contributions to these plans of $123 and $103 for the six months ended June 30, 2013 and 2012, respectively.

Executive Deferred Compensation Plan

The Company provides an Executive Deferred Compensation Plan (“EDCP”) for executive officers, senior managers and directors. Under this plan, the executives may defer up to 50% of salary and up to 100% of cash bonuses. In addition, the Company provides a 4% matching cash contribution which vests depending upon the number of completed years of participation in the EDCP. The executive has a choice of investment alternatives from a menu of mutual funds offered by an insurance company. The plan is administered by the Compensation Committee and an outside party tracks investments and provides the Company’s executives with quarterly statements showing relevant contribution and investment data. Upon termination of employment, death, disability or retirement, the executive will receive the value of his or her account in accordance with the provisions of the plan. Upon retirement, the executive may request to receive either a lump sum payment, or payments in annual installments over 15 years or over the lifetime of the participant with 20 annual payments guaranteed. At June 30, 2013 and December 31, 2012, the deferred compensation obligation was $1.7 million, respectively, included in long-term liabilities in the consolidated balance sheets. The Company funds the obligation related to the EDCP with corporate-owned life insurance policies. At June 30, 2013 and December 31, 2012, the cash surrender value of such policies was $1.7 million and $1.6 million, respectively, included in other noncurrent assets in the consolidated balance sheets. In November 2012, the Company’s Board of Directors authorized the termination of the EDCP. The Company expects the plan to terminate in 2013.

XML

Acquisition of TelWorx Communications LLC - Pro Forma Financial Information for TelWorx (Detail) (TelWorx Communications LLC [Member], Pro Forma [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2012
TelWorx Communications LLC [Member] | Pro Forma [Member]
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items]
REVENUES	$ 23,841	$ 44,482
LOSS BEFORE INCOME TAXES	$ 290	$ (575)

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Income Statement [Abstract]
REVENUES	$ 26,746	$ 19,993	$ 51,818	$ 37,154
COST OF REVENUES	16,198	11,323	31,672	21,306
GROSS PROFIT	10,548	8,670	20,146	15,848
OPERATING EXPENSES:
Research and development	2,683	2,215	5,233	4,531
Sales and marketing	3,054	2,573	6,075	5,082
General and administrative	3,825	2,656	8,456	5,389
Amortization of intangible assets	604	542	1,209	1,084
Restructuring charges	124	0	225	0
Total operating expenses	10,290	7,986	21,198	16,086
OPERATING INCOME (LOSS)	258	684	(1,052)	(238)
Other income, net	57	39	4,389	73
INCOME (LOSS) BEFORE INCOME TAXES	315	723	3,337	(165)
Expense (benefit) for income taxes	128	278	1,198	(54)
NET INCOME (LOSS) FROM CONTINUING OPERATIONS	187	445	2,139	(111)
NET LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX BENEFIT	(22)	(774)	(109)	(1,098)
NET INCOME (LOSS)	$ 165	$ (329)	$ 2,030	$ (1,209)
Earnings (Loss) per Share from Continuing Operations:
Basic	$ 0.01	$ 0.03	$ 0.12	$ (0.01)
Diluted	$ 0.01	$ 0.03	$ 0.12	$ (0.01)
Earnings (Loss) per Share from Discontinued Operations:
Basic	$ 0.00	$ (0.04)	$ (0.01)	$ (0.06)
Diluted	$ 0.00	$ (0.04)	$ (0.01)	$ (0.06)
Earnings (Loss) per Share:
Basic	$ 0.01	$ (0.02)	$ 0.11	$ (0.07)
Diluted	$ 0.01	$ (0.02)	$ 0.11	$ (0.07)
Weighed Average Shares:
Basic	17,790	17,404	17,731	17,317
Diluted	18,075	17,404	17,973	17,317
Cash dividend per share	$ 0.035	$ 0.030	$ 0.070	$ 0.060

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Earnings per Share

6 Months Ended

Jun. 30, 2013

Earnings Per Share [Abstract]

Earnings per Share

3. Earnings per Share

The following table is the computation of basic and diluted earnings per share:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2013			2012			2013			2012
Basic Earnings Per Share computation:
Numerator:
Net income (loss) from continuing operations	$	187		$	445		$	2,139		($	111	)
Net loss from discontinued operations		(22	)		(774	)		(109	)		(1,098	)
Net income (loss)		165			(329	)		2,030			(1,209	)
Denominator:
Common shares outstanding		17,790			17,404			17,731			17,317
Earnings per common share - basic
Net income (loss) from continuing operations	$	0.01		$	0.03		$	0.12		($	0.01	)
Net loss from discontinued operations	($	0.00	)	($	0.04	)	($	0.01	)	($	0.06	)
Net income (loss)	$	0.01		($	0.02	)	$	0.11		($	0.07	)
Diluted Earnings Per Share computation:
Denominator:
Common shares outstanding		17,790			17,404			17,731			17,317
Restricted shares subject to vesting		213				*		170				*
Common stock option grants		72				*		72				*
Total shares		18,075			17,404			17,973			17,317
Earnings per common share - diluted
Net income (loss) from continuing operations	$	0.01		$	0.03		$	0.12		($	0.01	)
Net loss from discontinued operations	($	0.00	)	($	0.04	)	($	0.01	)	($	0.06	)
Net income (loss)	$	0.01		($	0.02	)	$	0.11		($	0.07	)

* As denoted by “*” in the table above, the weighted average common stock option grants, performance shares and restricted shares of 229,000 and 389,000 for the three and six months ended June 30, 2012, respectively, were excluded from the calculations of diluted net loss per share since their effects are anti-dilutive.

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Earnings per Share (Tables)

6 Months Ended

Jun. 30, 2013

Earnings Per Share [Abstract]

Computation of basic and diluted earnings per share

The following table is the computation of basic and diluted earnings per share:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2013			2012			2013			2012
Basic Earnings Per Share computation:
Numerator:
Net income (loss) from continuing operations	$	187		$	445		$	2,139		($	111	)
Net loss from discontinued operations		(22	)		(774	)		(109	)		(1,098	)
Net income (loss)		165			(329	)		2,030			(1,209	)
Denominator:
Common shares outstanding		17,790			17,404			17,731			17,317
Earnings per common share - basic
Net income (loss) from continuing operations	$	0.01		$	0.03		$	0.12		($	0.01	)
Net loss from discontinued operations	($	0.00	)	($	0.04	)	($	0.01	)	($	0.06	)
Net income (loss)	$	0.01		($	0.02	)	$	0.11		($	0.07	)
Diluted Earnings Per Share computation:
Denominator:
Common shares outstanding		17,790			17,404			17,731			17,317
Restricted shares subject to vesting		213				*		170				*
Common stock option grants		72				*		72				*
Total shares		18,075			17,404			17,973			17,317
Earnings per common share - diluted
Net income (loss) from continuing operations	$	0.01		$	0.03		$	0.12		($	0.01	)
Net loss from discontinued operations	($	0.00	)	($	0.04	)	($	0.01	)	($	0.06	)
Net income (loss)	$	0.01		($	0.02	)	$	0.11		($	0.07	)

* As denoted by “*” in the table above, the weighted average common stock option grants, performance shares and restricted shares of 229,000 and 389,000 for the three and six months ended June 30, 2012, respectively, were excluded from the calculations of diluted net loss per share since their effects are anti-dilutive.

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Commitments and Contingencies - Additional Information (Detail) (USD $)	3 Months Ended	6 Months Ended				6 Months Ended				1 Months Ended	3 Months Ended	12 Months Ended
	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Mar. 31, 2013	Dec. 31, 2012	Jun. 30, 2013 Antenna [Member]	Jun. 30, 2013 Scanning [Member]	Jun. 30, 2013 Disposal of TelWorx Inventory [Member]	Jun. 30, 2013 Office equipment [Member]	Jul. 31, 2012 TelWorx Communications LLC [Member]	Dec. 31, 2012 TelWorx Communications LLC [Member]	Dec. 31, 2012 TelWorx Communications LLC [Member]
Restructuring Cost and Reserve [Line Items]
Office equipment									$ 3,000
Accumulated depreciation		15,880,000			14,590,000				1,000
Office equipment, net		14,671,000			14,775,000				2,000
Allowance for sales returns		200,000			100,000
Repair and replacement warranty						2 years	1 year
Warranty reserve		200,000			300,000
Restructuring expenses	0	126,000	0					300,000
Lease expiration period		5 years
Rental payments		200,000,000
Cash payments		4,300,000
Working capital adjustment provisions		1,000,000
Potential contingent consideration earnable under the Original Agreement		1,500,000
Fair value in the form common stock		600,000
Parties agreed to the elimination of the holdback		500,000
Notice period for termination of leaves under option		180 days
Settlement agreement fair value				5,400,000
Settlement agreement remaining consideration				4,300,000
Cash agreed to be paid to company under agreement				3,200,000
Asset purchase agreement contingent consideration				600,000
Asset purchase agreement escrow deposit				500,000
Goodwill impairment										$ 16,100,000	$ 12,500,000	$ 12,500,000

XML

Stock-Based Compensation - Summary of Restricted Stock Activity (Detail) (Restricted Stock [Member], USD $) In Thousands, except Per Share data, unless otherwise specified	6 Months Ended
	Jun. 30, 2013
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Beginning balance, shares	940,685
Shares awarded	13,402
Shares vested	(352,565)
Shares cancelled	(9,361)
Ending balance, shares	592,161
Beginning balance, Weighted average grant date fair value	$ 6.24
Units awarded, Weighted average grant date fair value	$ 7.83
Units vested, Weighted average grant date fair value	$ 5.79
Units cancelled, Weighted average grant date fair value	$ 6.60
Ending balance, Weighted average grant date fair value	$ 6.54

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2013

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

11. Commitments and Contingencies

Leases

The Company has operating leases for office facilities through 2020 and office equipment through 2014. The future minimum rental payments under these leases at June 30, 2013, are as follows:

Year	Amount
2013	$	468
2014		760
2015		711
2016		593
2017		478
Thereafter		1,047
Future minimum lease payments	$	4,057

The Company has capital leases for office equipment. The office equipment had a cost of $3, accumulated depreciation of $1, and a net book value of $2 as of June 30, 2013.

The following table presents future minimum lease payments under capital leases together with the present value of the net minimum lease payments due in each year:

Year	Amount
2013	$	1
2014		2
Total minimum payments required:		3
Less amount representing interest:		0
Present value of net minimum lease payments:	$	3

Warranty Reserve and Sales Returns

The Company allows its major distributors and certain other customers to return unused product under specified terms and conditions. The Company accrues for product returns based on historical sales and return trends. The Company’s allowance for sales returns was $0.2 million at June 30, 2013 and $0.1 million at December 31, 2012, respectively.

The Company offers repair and replacement warranties of typically two years for antenna products and one year for scanning receiver products. The Company’s warranty reserve is based on historical sales and costs of repair and replacement trends. The warranty reserve was $0.2 million at June 30, 2013 and $0.3 million at December 31, 2012 and is included in other accrued liabilities in the accompanying condensed consolidated balance sheets.

Changes in the warranty reserves during the six months ended June 30, 2013 and 2012, were as follows:

	Six Months Ended June 30,
	2013			2012
Beginning balance	$	270		$	249
Provisions for warranty		38			105
Consumption of reserves		(64	)		(77	)
Ending balance	$	244		$	277

Restructuring

The Company is integrating the TelWorx business with its Connected Solutions segment. The Company has moved kitting operations and order fulfillment to its Bloomingdale, Illinois facility from the Lexington, North Carolina facility. The Company will move to a smaller Lexington office facility for its sales, procurement, and administrative functions. The Company recorded $0.2 million as restructuring expense during the six months ended June 30, 2013, consisting of employee related costs and asset disposals. As part of the integration, the Company announced the separation of seventeen PCTelWorx employees in March 2013 and one additional employee in June 2013. Through June 30, 2013, fifteen of these employees have been separated. The remaining employees will be separated by September 30, 2013. The Company also recorded $0.3 million in cost of sales for the disposal of TelWorx inventory that was not compatible with the Company’s Bloomingdale facility or Bloomingdale operations.

The following table summarizes the restructuring activity during the six months ended June 30, 2013 and the status of the reserves at June 30, 2013:

	Accrual							Accrual
	Balance at							Balance at
	December 31,		Restructuring		Payments/			June 30,
	2012		Expense		Charges			2013
2013 TelWorx integration:
Employee related costs	$	0	$	167	($	92	)	$	75
Asset disposals		0		58		(58	)		0
Subtotal		0		225		(150	)		75
2012 Bloomingdale manufacturing:		1		0		(1	)		0
Totals	$	1	$	225	($	151	)	$	75

There was no restructuring activity during the three and six months ended June 30, 2012.

TelWorx Settlement

On March 27, 2013, the Company, its wholly-owned subsidiary PCTelWorx, Inc. (“PCTelWorx”), and the TelWorx Parties (as defined below) entered into an Amendment (the “Amendment”) to the Asset Purchase Agreement dated July 9, 2012 (the “Original Agreement), among the Company, PCTelWorx, Ciao Enterprises, LLC f/k/a TelWorx Communications, LLC and certain of its affiliated entities (collectively, the “TelWorx Entities”) and Tim and Brenda Scronce (“Sellers” and collectively with the TelWorx Entities, the “TelWorx Parties”), as part of a settlement arrangement relative to PCTelWorx’s acquisition of substantially all of the assets of and the assumption of certain specified liabilities of the TelWorx Entities on July 9, 2012 (the “Acquisition”).

As part of the Acquisition, PCTelWorx previously executed a 5 year lease with Scronce Real Estate, LLC for the continued use of an operating facility and offices in Lexington, North Carolina, which provided for annual rental payments of approximately $200,000.

As disclosed in the Company’s Form 8-K/A filed with the Securities and Exchange Commission (the “Commission”) on March 13, 2013, after completion of the Acquisition, the Company became aware of certain accounting irregularities with respect to the TelWorx Entities and the Company’s Board of Directors directed management to conduct an internal investigation. Based on the results of the Company’s investigation, the Company’s Board of Directors directed management to seek restitution from the TelWorx Parties, and after protracted negotiations and concurrent litigation, the parties entered into the Amendment and related settlement agreements to resolve their dispute.

The following is a summary of the material terms of the Amendment:

• the TelWorx Parties paid the Company a cash payment of $4.3 million, which included $1.0 million pursuant to the working capital adjustment provisions of the Original Agreement;

• the TelWorx Parties forfeited all $1.5 million of the potential contingent consideration earnable under the Original Agreement, which had a fair value of $0.6 million, and which, if earned, would have been payable in the form of common stock of the Company;

• the TelWorx Parties forfeited the holdback escrow under the Original Agreement and released the $0.5 million holdback escrow to the Company;

• the parties agreed to the elimination of all indemnification obligations provided for under the Original Agreement;

• the Company, PCTelWorx and Sellers each agreed to execute mutual releases of all claims arising in connection with the dispute; and

• PCTelWorx acquired an option to terminate its current facility lease in Lexington, North Carolina with Scronce Real Estate, LLC (which is controlled by Sellers) upon 180 days written notice.

The settlement has an aggregate fair value of $5.4 million, consisting of $4.3 million cash received, $0.6 million for the contingent consideration forfeited, and $0.5 million for the holdback escrow balance released. Approximately $1.0 million of the cash received was pursuant to the working capital adjustment provisions of the Original Agreement and settle the miscellaneous accounts receivable recorded in prepaid expenses and other assets at December 31, 2012. The remaining $4.3 million settlement amount, consisting of $3.2 million cash and the release of the $0.6 million contingent consideration fair value and the $0.5 million release of the holdback escrow, was recorded as income in the quarter ended March 31, 2013, consistent with accounting for legal settlements.

The Company recorded a $12.5 million impairment of goodwill related to the TelWorx Entities in the fourth quarter of 2012. See Footnote 8 -Acquisition of TelWorx Communications LLC for full details. The Company is also engaged in efforts to seek further restitution from the independent accountants that provided the 2010 and 2011 audited financial statements for TelWorx and the investment banking firm used by the TelWorx Parties. The Company cannot predict the total amount of restitution it will eventually obtain. In settling with the TelWorx parties, management considered the risks and expenses associated with protracted litigation as well as the consumption of Company resources that would otherwise be applied to operating activities.

In May 2013, the Company gave notice of early termination of its Lexington facility lease, which becomes effective October 31, 2013.

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PCTEL Secure - discontinued operations - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2013	Jul. 02, 2012	May 29, 2012	Jan. 05, 2011
Business Acquisition [Line Items]
Contribution of cash in return of ownership of the joint venture		$ 0.8	$ 0.9	$ 2.5
Ownership percentage in the joint venture		30.00%	19.00%	51.00%
Weighted average amortization period of the intangible assets acquired	2 years 4 months 24 days
Ownership, prior transition	51.00%
Ownership, after transition	100.00%
Percentage of membership interests company did not owned	100.00%
Intangible asset impairment expense	1.1
Pctel Secure [Member]
Business Acquisition [Line Items]
Royalty receivable as percentage of net sale price	7.00%
Maximum royalty rate	10
Eclipse [Member]
Business Acquisition [Line Items]
Ownership percentage in the joint venture				49.00%
Contribution of intangible asset in return for ownership of the joint venture				$ 2.4

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Stock-Based Compensation - Information about Stock Options Outstanding under All Stock Plans (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	6 Months Ended
	Jun. 30, 2013
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Lower range of exercise prices	$ 5.50
Upper range of exercise prices	$ 11.84
Options Outstanding, Number	1,665,614
Options Outstanding, Weighted Average Contractual Life (Years)	4 years 2 months 16 days
Options Outstanding, Weighted Average Exercise Price	$ 8.40
Options Exercisable, Number	941,331
Options Exercisable, Weighted Average Exercise Price	$ 9.35
Range One [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Lower range of exercise prices	$ 5.50
Upper range of exercise prices	$ 6.86
Options Outstanding, Number	115,500
Options Outstanding, Weighted Average Contractual Life (Years)	5 years 7 days
Options Outstanding, Weighted Average Exercise Price	$ 6.55
Options Exercisable, Number	81,954
Options Exercisable, Weighted Average Exercise Price	$ 6.64
Range Two [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Lower range of exercise prices	$ 6.87
Upper range of exercise prices	$ 7.93
Options Outstanding, Number	772,660
Options Outstanding, Weighted Average Contractual Life (Years)	6 years 2 months 23 days
Options Outstanding, Weighted Average Exercise Price	$ 7.26
Options Exercisable, Number	81,923
Options Exercisable, Weighted Average Exercise Price	$ 7.71
Range Three [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Lower range of exercise prices	$ 8.07
Upper range of exercise prices	$ 8.63
Options Outstanding, Number	104,037
Options Outstanding, Weighted Average Contractual Life (Years)	2 years 3 months 18 days
Options Outstanding, Weighted Average Exercise Price	$ 8.55
Options Exercisable, Number	104,037
Options Exercisable, Weighted Average Exercise Price	$ 8.55
Range Four [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Lower range of exercise prices	$ 8.76
Upper range of exercise prices	$ 8.76
Options Outstanding, Number	44,000
Options Outstanding, Weighted Average Contractual Life (Years)	2 years 7 months 21 days
Options Outstanding, Weighted Average Exercise Price	$ 8.76
Options Exercisable, Number	44,000
Options Exercisable, Weighted Average Exercise Price	$ 8.76
Range Five [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Lower range of exercise prices	$ 9.09
Upper range of exercise prices	$ 9.09
Options Outstanding, Number	100,000
Options Outstanding, Weighted Average Contractual Life (Years)	2 years 1 month 2 days
Options Outstanding, Weighted Average Exercise Price	$ 9.09
Options Exercisable, Number	100,000
Options Exercisable, Weighted Average Exercise Price	$ 9.09
Range Six [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Lower range of exercise prices	$ 9.11
Upper range of exercise prices	$ 9.12
Options Outstanding, Number	14,627
Options Outstanding, Weighted Average Contractual Life (Years)	2 years 7 months 2 days
Options Outstanding, Weighted Average Exercise Price	$ 9.12
Options Exercisable, Number	14,627
Options Exercisable, Weighted Average Exercise Price	$ 9.12
Range Seven [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Lower range of exercise prices	$ 9.16
Upper range of exercise prices	$ 9.16
Options Outstanding, Number	132,000
Options Outstanding, Weighted Average Contractual Life (Years)	3 years 1 month 2 days
Options Outstanding, Weighted Average Exercise Price	$ 9.16
Options Exercisable, Number	132,000
Options Exercisable, Weighted Average Exercise Price	$ 9.16
Range Eight [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Lower range of exercise prices	$ 9.19
Upper range of exercise prices	$ 10.25
Options Outstanding, Number	121,780
Options Outstanding, Weighted Average Contractual Life (Years)	2 years 8 months 12 days
Options Outstanding, Weighted Average Exercise Price	$ 9.70
Options Exercisable, Number	121,780
Options Exercisable, Weighted Average Exercise Price	$ 9.70
Range Nine [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Lower range of exercise prices	$ 10.46
Upper range of exercise prices	$ 11.00
Options Outstanding, Number	100,960
Options Outstanding, Weighted Average Contractual Life (Years)	1 year 5 months 16 days
Options Outstanding, Weighted Average Exercise Price	$ 10.72
Options Exercisable, Number	100,960
Options Exercisable, Weighted Average Exercise Price	$ 10.72
Range Ten [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Lower range of exercise prices	$ 11.01
Upper range of exercise prices	$ 11.84
Options Outstanding, Number	160,050
Options Outstanding, Weighted Average Contractual Life (Years)	10 months 2 days
Options Outstanding, Weighted Average Exercise Price	$ 11.49
Options Exercisable, Number	160,050
Options Exercisable, Weighted Average Exercise Price	$ 11.49

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Cash, Cash Equivalents and Investments - Cash Equivalents and Level 1 Investments Measured at Fair Value (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total	$ 38,138	$ 38,102
Money market funds and other cash equivalents [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash equivalents	4,981	4,500
Certificates of deposit [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Investments	2,393	5,062
U.S. government agency bonds [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Investments	8,291	8,498
Municipal bonds [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Investments	11,450	10,162
Corporate debt securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Investments	11,023	9,880
Level 1 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total	7,374	9,562
Level 1 [Member] | Money market funds and other cash equivalents [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash equivalents	4,981	4,500
Level 1 [Member] | Certificates of deposit [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Investments	2,393	5,062
Level 1 [Member] | U.S. government agency bonds [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Investments	0	0
Level 1 [Member] | Municipal bonds [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Investments	0	0
Level 1 [Member] | Corporate debt securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Investments	0	0
Level 2 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total	30,764	28,540
Level 2 [Member] | Money market funds and other cash equivalents [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash equivalents	0	0
Level 2 [Member] | Certificates of deposit [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Investments	0	0
Level 2 [Member] | U.S. government agency bonds [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Investments	8,291	8,498
Level 2 [Member] | Municipal bonds [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Investments	11,450	10,162
Level 2 [Member] | Corporate debt securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Investments	11,023	9,880
Level 3 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total	0	0
Level 3 [Member] | Money market funds and other cash equivalents [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash equivalents	0	0
Level 3 [Member] | Certificates of deposit [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Investments	0	0
Level 3 [Member] | U.S. government agency bonds [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Investments	0	0
Level 3 [Member] | Municipal bonds [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Investments	0	0
Level 3 [Member] | Corporate debt securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Investments	$ 0	$ 0

XML

Balance Sheet Information (Tables)

6 Months Ended

Jun. 30, 2013

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Summary of inventories

Inventories consisted of the following at June 30, 2013 and December 31, 2012:

	June 30,		December 31,
	2013		2012
Raw materials	$	9,627	$	12,226
Work in process		1,025		789
Finished goods		5,456		4,558
Inventories, net	$	16,108	$	17,573

Summary of property and equipment

Property and equipment consists of the following at June 30, 2013 and December 31, 2012:

	June 30,			December 31,
	2013			2012
Building	$	6,207		$	6,207
Computers and office equipment		10,434			9,968
Manufacturing and test equipment		10,181			9,495
Furniture and fixtures		1,209			1,256
Leasehold improvements		600			519
Motor vehicles		150			150
Total property and equipment		28,781			27,595
Less: Accumulated depreciation and amortization		(15,880	)		(14,590	)
Land		1,770			1,770
Property and equipment, net	$	14,671		$	14,775

Summary of accrued liabilities

Accrued liabilities consist of the following at June 30, 2013 and December 31, 2012:

	June 30,		December 31,
	2013		2012
Inventory receipts	$	1,419	$	2,191
Payroll, bonuses, and other employee benefits		1,245		859
Paid time off		1,164		1,067
Employee stock purchase plan		293		276
Warranties		244		270
Deferred liabilities		226		127
Professional fees		177		268
Real estate taxes		165		170
Restructuring		75		0
Sales tax		69		156
Other		674		515
Total	$	5,751	$	5,899

Summary of long-term liabilities

Long-term liabilities consist of the following:

	June 30,		December 31,
	2013		2012
Executive deferred compensation plan	$	1,718	$	1,652
Reserve for uncertain tax positions		842		842
Deferred rent		166		166
Deferred revenues		54		74
Long-term obligations under capital leases		1		2
	$	2,781	$	2,736

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Goodwill and Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2013

Goodwill And Intangible Assets Disclosure [Abstract]

Summary of other intangible assets

The summary of other intangible assets, net as of June 30, 2013 and December 31, 2012 are as follows:

	June 30, 2013						December 31, 2012
			Accumulated		Net Book				Accumulated		Net Book
	Cost		Amortization		Value		Cost		Amortization		Value
Customer contracts and relationships	$	17,381	$	13,425	$	3,956	$	17,381	$	12,463	$	4,918
Patents and technology		7,878		7,452		426		7,878		7,378		500
Trademarks and trade names		3,988		2,720		1,268		3,988		2,575		1,413
Other		3,301		3,156		145		3,301		3,128		173
	$	32,548	$	26,753	$	5,795	$	32,548	$	25,544	$	7,004

Summary of assigned lives and weighted average amortization periods by intangible asset category

The assigned lives and weighted average amortization periods by intangible asset category is summarized below:

Intangible Assets	Assigned Life	Weighted Average Amortization Period
Customer contracts and relationships	4 to 6 years		5.1
Patents and technology	1 to 6 years		5.2
Trademarks and trade names	3 to 8 years		7.4
Other	1 to 6 years		5.6

Schedule of expected amortization expense

The Company’s scheduled amortization expense for 2013 and the next five years is as follows:

Fiscal Year	Amount
2013	$	2,400
2014	$	1,967
2015	$	1,737
2016	$	468
2017	$	288
Thereafter	$	144

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Balance Sheet Information - Summary of Accrued Liabilities (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Payables And Accruals [Abstract]
Inventory receipts	$ 1,419	$ 2,191
Payroll, bonuses, and other employee benefits	1,245	859
Paid time off	1,164	1,067
Employee stock purchase plan	293	276
Warranties	244	270
Deferred liabilities	226	127
Professional fees	177	268
Real estate taxes	165	170
Restructuring	75	0
Sales tax	69	156
Other	674	515
Total	$ 5,751	$ 5,899

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Earnings per Share - Computation of Basic and Diluted Earnings Per Share (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Numerator:
Net income (loss) from continuing operations	$ 187	$ 445	$ 2,139	$ (111)
Net loss from discontinued operations	(22)	(774)	(109)	(1,098)
Net income (loss)	$ 165	$ (329)	$ 2,030	$ (1,209)
Denominator:
Common shares outstanding	17,790	17,404	17,731	17,317
Earnings per common share - basic
Net income (loss) from continuing operations	$ 0.01	$ 0.03	$ 0.12	$ (0.01)
Net loss from discontinued operations	$ 0.00	$ (0.04)	$ (0.01)	$ (0.06)
Net income (loss)	$ 0.01	$ (0.02)	$ 0.11	$ (0.07)
Denominator:
Common shares outstanding	17,790	17,404	17,731	17,317
Restricted shares subject to vesting	213		170
Common stock option grants	72		72
Total shares	18,075	17,404	17,973	17,317
Earnings per common share - diluted
Net income (loss) from continuing operations	$ 0.01	$ 0.03	$ 0.12	$ (0.01)
Net loss from discontinued operations	$ 0.00	$ (0.04)	$ (0.01)	$ (0.06)
Net income (loss)	$ 0.01	$ (0.02)	$ 0.11	$ (0.07)

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Goodwill and Intangible Assets - Summary of Other Intangible Assets (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Finite-Lived Intangible Assets [Line Items]
Cost	$ 32,548	$ 32,548
Accumulated Amortization	26,753	25,544
Net Book Value	5,795	7,004
Customer contracts and relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Cost	17,381	17,381
Accumulated Amortization	13,425	12,463
Net Book Value	3,956	4,918
Patents and technology [Member]
Finite-Lived Intangible Assets [Line Items]
Cost	7,878	7,878
Accumulated Amortization	7,452	7,378
Net Book Value	426	500
Trademarks and trade names [Member]
Finite-Lived Intangible Assets [Line Items]
Cost	3,988	3,988
Accumulated Amortization	2,720	2,575
Net Book Value	1,268	1,413
Other [Member]
Finite-Lived Intangible Assets [Line Items]
Cost	3,301	3,301
Accumulated Amortization	3,156	3,128
Net Book Value	$ 145	$ 173

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PCTEL Secure - discontinued operations - Summary of Operations for Discontinued Operations Included in Condensed Consolidated Statement or Operations (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Business Combinations [Abstract]
Operating expenses	$ 71	$ 783	$ 191	$ 1,503
Other income, net	0	0	0	(41)
Net loss attributable to noncontrolling interests	0	(334)	0	(686)
Adjustments to redemption value of noncontrolling interests	0	526	0	647
Loss from discontinued operations, before income taxes	(71)	(975)	(191)	(1,423)
Benefit for income tax	(49)	(201)	(82)	(325)
Loss from discontinued operations, net of tax	$ (22)	$ (774)	$ (109)	$ (1,098)
Income (loss) from discontinued operations per common share:
Basic	$ 0.00	$ (0.04)	$ (0.01)	$ (0.06)
Diluted	$ 0.00	$ (0.04)	$ (0.01)	$ (0.06)
Weighted average shares:
Basic	17,790	17,404	17,731	17,317
Diluted	18,075	17,404	17,973	17,317

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Commitments and Contingencies (Tables)

6 Months Ended

Jun. 30, 2013

Commitments And Contingencies Disclosure [Abstract]

Future minimum rental payments

The future minimum rental payments under these leases at June 30, 2013, are as follows:

Year	Amount
2013	$	468
2014		760
2015		711
2016		593
2017		478
Thereafter		1,047
Future minimum lease payments	$	4,057

Present value of net minimum lease payments, capital leases

The following table presents future minimum lease payments under capital leases together with the present value of the net minimum lease payments due in each year:

Year	Amount
2013	$	1
2014		2
Total minimum payments required:		3
Less amount representing interest:		0
Present value of net minimum lease payments:	$	3

Changes in warranty reserves

Changes in the warranty reserves during the six months ended June 30, 2013 and 2012, were as follows:

	Six Months Ended June 30,
	2013			2012
Beginning balance	$	270		$	249
Provisions for warranty		38			105
Consumption of reserves		(64	)		(77	)
Ending balance	$	244		$	277

Summary of restructuring activity and status of reserves

The following table summarizes the restructuring activity during the six months ended June 30, 2013 and the status of the reserves at June 30, 2013:

	Accrual							Accrual
	Balance at							Balance at
	December 31,		Restructuring		Payments/			June 30,
	2012		Expense		Charges			2013
2013 TelWorx integration:
Employee related costs	$	0	$	167	($	92	)	$	75
Asset disposals		0		58		(58	)		0
Subtotal		0		225		(150	)		75
2012 Bloomingdale manufacturing:		1		0		(1	)		0
Totals	$	1	$	225	($	151	)	$	75

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Stock-Based Compensation - Calculation of Fair Value of Each Employee Stock Purchase Grant Using the Black-Scholes Option-Pricing Model (Detail) (Employee Stock Purchase Plan ("ESPP") [Member])	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Employee Stock Purchase Plan ("ESPP") [Member]
Calculation of fair value of each employee stock purchase grant using the Black-Scholes option-pricing model
Dividend yield	1.90%	1.80%
Risk-free interest rate	0.20%	0.20%
Expected volatility	52.00%	51.00%
Expected life (in years)	6 months	6 months

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Segment, Customer and Geographic Information - Additional Information (Detail)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Revenues from External Customers and Long-Lived Assets [Line Items]
Number of Reporting segments			2
Number of customers accounted for more than ten percentage of revenue	0	0	0	0
Sales [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Entity Wide Revenue Major Customer Percentage	10.00%	10.00%	10.00%	10.00%

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Stock-Based Compensation - Summary of Restricted Stock Units Activity (Detail) (Restricted Stock Units [Member], USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2013	Jun. 30, 2012
Restricted Stock Units [Member]
Shares
Beginning balance, shares		11,925
Units vested	(3,850)	(3,850)	(2,600)
Units cancelled		(1,125)
Ending balance, shares	6,950	6,950
Beginning balance, Weighted average grant date fair value		$ 6.61
Units vested, Weighted average grant date fair value		$ 6.56
Units cancelled, Weighted average grant date fair value		$ 6.77
Ending balance, Weighted average grant date fair value	$ 6.62	$ 6.62

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Balance Sheet Information - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Dec. 31, 2012
Property, Plant and Equipment [Line Items]
Allowance for doubtful accounts	$ 0.2		$ 0.2		$ 0.2
Consigned inventory with customers	1.2		1.2		1.2
Allowance for inventory losses	2.0		2.0		2.0
Depreciation and amortization expense	$ 0.7	$ 0.5	$ 1.3	$ 1.1
Building [Member]
Property, Plant and Equipment [Line Items]
Useful lives of the assets			30 years
Office equipment [Member]
Property, Plant and Equipment [Line Items]
Period over which assets are deprecated			5 years
Manufacturing and test equipment [Member]
Property, Plant and Equipment [Line Items]
Period over which assets are deprecated			5 years
Motor vehicles [Member]
Property, Plant and Equipment [Line Items]
Period over which assets are deprecated			5 years
Furniture and fixtures [Member]
Property, Plant and Equipment [Line Items]
Period over which assets are deprecated			7 years
Maximum [Member]
Property, Plant and Equipment [Line Items]
Standard term of accounts receivable			60 days
Useful lives of the assets			1 year
Maximum [Member] | Computer equipment [Member]
Property, Plant and Equipment [Line Items]
Period over which assets are deprecated			5 years
Minimum [Member]
Property, Plant and Equipment [Line Items]
Standard term of accounts receivable			30 days
Minimum [Member] | Computer equipment [Member]
Property, Plant and Equipment [Line Items]
Period over which assets are deprecated			3 years

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Commitments and Contingencies - Changes in Warranty Reserves (Detail) (USD $) In Thousands, unless otherwise specified			6 Months Ended
	Jun. 30, 2013	Dec. 31, 2012	Jun. 30, 2013 Warranty reserves [Member]	Jun. 30, 2012 Warranty reserves [Member]
Changes in warranty reserves
Beginning balance	$ 200	$ 300	$ 270	$ 249
Provisions for warranty			38	105
Consumption of reserves			(64)	(77)
Ending balance	$ 200	$ 300	$ 244	$ 277

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Cash, Cash Equivalents and Investments (Tables)

6 Months Ended

Jun. 30, 2013

Cash And Cash Equivalents [Abstract]

Cash and investments

The Company’s cash and investments consist of the following:

	June 30,		December 31,
	2013		2012
Cash	$	13,349	$	13,043
Cash equivalents		4,981		4,500
Short-term investments		33,151		33,596
	$	51,481	$	51,139

Cash equivalents and Level 1 investments measured at fair value

Cash equivalents, Level 1 and Level 2 investments measured at fair value were as follows at June 30, 2013 and December 31, 2012:

	June 30, 2013								December 31, 2012
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Cash equivalents:
Money market funds and other cash equivalents	$	4,981	$	0	$	0	$	4,981	$	4,500	$	0	$	0	$	4,500
Investments:
Certificates of deposit		2,393		0		0		2,393		5,062		0		0		5,062
US government agency bonds		0		8,291		0		8,291		0		8,498		0		8,498
Municipal bonds		0		11,450		0		11,450		0		10,162		0		10,162
Corporate debt securities		0		11,023		0		11,023		0		9,880		0		9,880
Total	$	7,374	$	30,764	$	0	$	38,138	$	9,562	$	28,540	$	0	$	38,102

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CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (USD $) In Thousands	Total	Common Stock [Member]	Additional Paid - In Capital [Member]	Retained Deficit [Member]	Accumulated Other Comprehensive Income (Loss) [Member]
BALANCE at Dec. 31, 2012	$ 108,145	$ 19	$ 140,388	$ (32,410)	$ 148
Stock-based compensation	1,722	0	1,722	0	0
Issuance of shares for stock purchase and option plans	383	0	383	0	0
Cancellation of shares for payment of withholding tax	(943)	(1)	(942)	0	0
Repurchase of common stock	(435)	0	(435)	0	0
Dividend	(1,289)	0	6	(1,295)	0
Net income	2,030	0	0	2,030	0
Change in cumulative translation adjustment, net	20	0	0	0	20
BALANCE at Jun. 30, 2013	$ 109,633	$ 18	$ 141,122	$ (31,675)	$ 168

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Basis of Presentation

6 Months Ended

Jun. 30, 2013

Accounting Policies [Abstract]

Basis of Presentation

1. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. For further information, refer to the audited consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.

Nature of Operations

PCTEL is a global leader in propagation and optimization solutions for the wireless industry. The Company develops and distributes innovative antenna and engineered site solutions and designs and develops software-based radios (scanning receivers) and provides related RF engineering services for wireless network optimization.

PCTEL was incorporated in California in 1994 and reincorporated in Delaware in 1998. Our principal executive offices are located at 471 Brighton Drive, Bloomingdale, Illinois 60108. Our telephone number at that address is (630) 372-6800 and our website is www.pctel.com. The information within, or that can be accessed, through our website is not part of this report.

Segment Reporting

Effective January 1, 2013, PCTEL operates in two new segments for reporting purposes. The Company’s Connected Solutions segment includes its antenna and engineered site solutions. Its RF Solutions segment includes its scanning receivers and related RF engineering services. Each of the segments has its own segment manager as well as its own engineering, sales and marketing, and operational general and administrative functions. All of the Company’s accounting and finance, human resources, IT and legal functions are provided on a centralized basis through the corporate function. The Company manages its balance sheet and cash flows centrally at the corporate level, with the exception of trade accounts receivable and inventory which is managed at the segment level. Each of the segment managers reports to and maintains regular contact with the chief operating decision maker to discuss operating activities, financial results, forecasts, or plans for the segment. As of January 1, 2013, the Company’s chief operating decision maker uses the profit and loss results through operating profit and identified assets for the Connected Solutions and RF Solutions segments to make operating decisions. The 2012 segment information presented in the financial statements has been presented on a retrospective basis reflecting the new Connected Solutions and RF Solution segments on a consistent basis with the current period.

For the year ended December 31, 2012, the Company operated in two different segments, PCTEL Secure, and the rest of the Company. The Company’s chief operating decision maker used the profit and loss results and the assets to make operating decisions.

Connected Solutions Segment

PCTEL is a leading supplier of antennas for private network, public safety and government applications, and site solutions for both private and public network, data, and communications applications. PCTEL’s MAXRAD^®, Bluewave™ and Wi-Sys™ antenna solutions include high-value YAGI, land mobile radio (“LMR”), Wi-Fi, GPS, In Tunnel, Subway, and Broadband antennas (parabolic and flat panel). PCTEL’s Connected Solutions™ products include specialized towers, enclosures, fiber optic panels, and fiber jumper cables that are engineered into site solutions. The vertical markets into which the antenna and site solutions are sold include supervisory control and data acquisition (“SCADA”), health care, energy, smart grid, precision agriculture, indoor wireless, telemetry, offloading, and wireless backhaul. Growth for antenna and engineered site solutions is primarily driven by the increased use of wireless communications in these vertical markets. PCTEL’s antenna and site solution products are primarily sold through distributors, value added reseller, and original equipment manufacturer (“OEM”) providers.

The Company established its current antenna and site solutions product portfolio with a series of acquisitions. In 2004, the Company acquired MAXRAD, Inc. (“MAXRAD”), as well as certain product lines from Andrew Corporation (“Andrew”), which established its core product offerings in Wi-Fi, LMR and GPS. Over the next several years we added additional capabilities within those product lines and additional served markets with the acquisition of certain assets from Bluewave Antenna Systems, Ltd (“Bluewave”) in 2008, and the acquisitions of Wi-Sys Communications, Inc (“Wi-Sys”) in 2009, Sparco Technologies, Inc. (“Sparco”) in 2010, and certain assets of TelWorx Communications LLC, TelWorx U.K. Limited, TowerWorx LLC, and TowerWorx International, Inc., in July 2012.

There are many competitors for antenna products, as the market is highly fragmented. Competitors include such names as Laird (Cushcraft, Centurion, and Antennex brands), Mobile Mark, Radiall/Larsen, Comtelco, Wilson, Commscope (Andrew products), Kathrein, and others. We seek out product applications that command a premium for product performance and customer service, and avoid commodity markets.

PCTEL maintains expertise in several technology areas in order to be competitive in the antenna engineered site solutions market. These include radio frequency engineering, mobile antenna design and manufacturing, mechanical engineering, product quality and testing, and wireless network engineering.

RF Solutions Segment

PCTEL is a leading supplier of high-speed, multi-standard, demodulating receivers and test and measurement solutions to the wireless industry worldwide. Our SeeGull® scanning receivers, receiver-based products and CLARIFY® interference management solutions are used to measure, monitor and optimize cellular networks. PCTEL’s network engineering services (“NES”) Group provides value-added analysis of measured data collected during the optimization process. Revenue growth for these products and services is driven by the deployment of products based on new wireless technology and the need for wireless networks to be tuned and reconfigured on a regular basis. PCTEL develops and supports scanning receivers for LTE, EVDO, CDMA, WCDMA, GSM, TD-SCDMA, and WiMAX networks. Our scanning receiver products are sold primarily through test and measurement value added resellers and to a lesser extent directly to network operators. The engineering services are sold primarily to network infrastructure providers and cellular carriers. Competitors for these products are OEMs such as JDS Uniphase, Rohde and Schwarz, Anritsu, and Berkley Varitronics.

The Company established its scanning receiver product portfolio in 2003 with the acquisition of certain assets of Dynamic Telecommunications, Inc. (“DTI”). In 2009, we acquired the scanning receiver business from Ascom Network Testing, Inc. (“Ascom”) as well as the exclusive distribution rights and patented technology for Wider Network LLC (“Wider”) network interference products. In 2011, we purchased certain assets from Envision Wireless Inc. (“Envision”), an engineering services business based in Melbourne, Florida. The NES business focuses on the radio frequency (“RF”) issues pertaining to in-building coverage and capacity and its target market is relevant to our antenna and scanning receiver businesses. NES provides value-added analysis of collected data to public cellular carriers, network infrastructure providers, and real estate companies.

PCTEL maintains expertise in several technology areas in order to be competitive in the scanning receiver and related engineering services market. These include radio frequency engineering, DSP engineering, manufacturing, mechanical engineering, product quality and testing, and wireless network engineering

Basis of Consolidation

The condensed consolidated balance sheet as of June 30, 2013 and the condensed consolidated statements of operations, statements of comprehensive loss, and cash flows for the three and six months ended June 30, 2013 and 2012, respectively, are unaudited and reflect all adjustments of a normal recurring nature that are, in the opinion of management, necessary for a fair presentation of the interim period financial statements. The interim condensed consolidated financial statements are derived from the audited financial statements as of December 31, 2012.

On April 30, 2013, the Company divested all material assets associated with PCTEL Secure’s ProsettaCore™ technology to Redwall Technologies, LLC (“Redwall”), a development organization that specializes in mobile security, military and defense projects and systems, and critical national infrastructure. Under the terms of the agreement, Redwall acquired the server and device software (the “Software”), the underlying IP, and complete development responsibility for the security products. At the closing of the divestiture, the Company received no upfront cash payment, but has the right to receive a royalty of 7% of the net sale price of each future sale or license of the Software and each provision of services related to the Software, if any. Under the agreement, royalties will not exceed $10 million in the aggregate. In accordance with accounting for discontinued operations, the consolidated financial statements separately reflect the results of PCTEL Secure as discontinued operations for all periods presented. The prior period results have been restated to reflect this accounting treatment.

The unaudited interim condensed consolidated financial statements of the Company have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the U.S. have been condensed or omitted. The significant accounting policies followed by the Company are set forth within the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 (“the 2012 Form 10-K”). There were no changes in the Company’s significant accounting policies during the six months ended June 30, 2013. In addition, the Company reaffirms the use of estimates in the preparation of the financial statements as set forth in the 2012 Form 10-K. These interim condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the 2012 Form 10-K. The results for the operations for the period ended June 30, 2013 may not be indicative of the results for the period ending December 31, 2013.

Foreign Currency Translation

The Company is exposed to foreign currency fluctuations due to its foreign operations and because products are sold internationally. The functional currency for the Company’s foreign operations is predominantly the applicable local currency. Accounts of foreign operations are translated into U.S. dollars using the exchange rate in effect at the applicable balance sheet date for assets and liabilities and average monthly rates prevailing during the period for revenue and expense accounts. Adjustments resulting from translation are included in accumulated other comprehensive income, a separate component of shareholders’ equity. Gains and losses resulting from other transactions originally in foreign currencies and then translated into U.S. dollars are included in the condensed consolidated statement of operations. Net foreign exchange losses resulting from foreign currency transactions included in other income, net were $5 and $7 for the three months ended June 30, 2013 and 2012, respectively. Net foreign exchange losses resulting from foreign currency transactions included in other income, net were $16 and $17 for the six months ended June 30, 2013 and 2012, respectively.

Recent Accounting Guidance

In February 2013, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2013-02, “Comprehensive Income (Topic 220) – Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income.” The objective of this update is to improve the reporting of reclassifications out of accumulated other comprehensive income. The amendments in the update require an entity to report the effect of significant respective line items in net income if the amount being reclassified is required to be reclassified in its entirety to net income. For amounts that are not required to be reclassified in their entirety to net income, an entity is required to cross-reference other disclosures. The amendments in this update are effective prospectively for reporting periods after December 15, 2012. The adoption of this update did not have a material effect on our financial position, results of operations or cash flows.

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Cash, Cash Equivalents and Investments

6 Months Ended

Jun. 30, 2013

Cash And Cash Equivalents [Abstract]

Cash, Cash Equivalents and Investments

4. Cash, Cash Equivalents and Investments

The Company’s cash and investments consist of the following:

	June 30,		December 31,
	2013		2012
Cash	$	13,349	$	13,043
Cash equivalents		4,981		4,500
Short-term investments		33,151		33,596
	$	51,481	$	51,139

Cash and Cash equivalents

At June 30, 2013, cash and cash equivalents included bank balances and investments with original maturities less than 90 days. At June 30, 2013 and December 31, 2012, the Company’s cash equivalents were invested in highly liquid AAA rated money market funds that are required to comply with Rule 2a-7 of the Investment Company Act of 1940. Such funds utilize the amortized cost method of accounting, seek to maintain a constant $1.00 per share price, and are redeemable upon demand. The Company restricts its investments in AAA rated money market funds to those invested 100% in either short-term U.S. Government Agency securities or bank repurchase agreements collateralized by these same securities. The fair values of these money market funds are established through quoted prices in active markets for identical assets (Level 1 inputs). The cash in the Company’s U.S. banks is insured by the Federal Deposit Insurance Corporation up to the insurable amount of $250,000.

At June 30, 2013, the Company had $13.3 million in cash and $2.4 million in cash equivalents and at December 31, 2012, the Company had $13.0 million in cash and $4.5 million in cash equivalents. The Company had $0.8 million of cash and cash equivalents in foreign bank accounts at June 30, 2013 and December 31, 2012, respectively. As of June 30, 2013, the Company has no intentions of repatriating the cash in its foreign bank accounts. If the Company decides to repatriate the cash in the foreign bank accounts, it may experience difficulty in doing so in a timely manner and it may also be exposed to foreign currency fluctuations and taxes.

Investments

At June 30, 2013 and December 31, 2012, the Company’s short-term investments consisted of pre-refunded municipal bonds, U.S. government agency bonds, and AA or higher rated corporate bonds all classified as held-to-maturity.

At June 30, 2013 the Company had invested $11.4 million in pre-refunded municipal bonds, $11.0 million in AA rated or higher corporate bonds, $8.3 million in U.S. government agency bonds, and $2.4 million in certificates of deposit. The income and principal from the pre-refunded municipal bonds are secured by an irrevocable trust of U.S. Treasury securities. The bonds, classified as short-term investments, have original maturities greater than 90 days and mature in less than one year. At June 30, 2013, the Company had no investments classified as long-term investment securities. The Company’s bonds are recorded at the purchase price and carried at amortized cost. The net unrealized gains were $6 at June 30, 2013. Approximately 14% of the Company’s bonds were protected by bond default insurance at June 30, 2013.

At December 31, 2012, the Company had invested $10.1 million in pre-refunded municipal bonds and taxable bond funds, $9.9 million in AA rated or higher corporate bond funds, $8.5 million in U.S. government agency bonds, and $5.1 million in certificates of deposit.

The Company categorizes its financial instruments within a fair value hierarchy established in accounting and disclosures for fair value measurements. The fair value hierarchy is described under the Fair Value of Financial Instruments in Note 2. For the Level 2 investments, the Company uses quoted prices of similar assets in active markets.

Cash equivalents, Level 1 and Level 2 investments measured at fair value were as follows at June 30, 2013 and December 31, 2012:

	June 30, 2013								December 31, 2012
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Cash equivalents:
Money market funds and other cash equivalents	$	4,981	$	0	$	0	$	4,981	$	4,500	$	0	$	0	$	4,500
Investments:
Certificates of deposit		2,393		0		0		2,393		5,062		0		0		5,062
US government agency bonds		0		8,291		0		8,291		0		8,498		0		8,498
Municipal bonds		0		11,450		0		11,450		0		10,162		0		10,162
Corporate debt securities		0		11,023		0		11,023		0		9,880		0		9,880
Total	$	7,374	$	30,764	$	0	$	38,138	$	9,562	$	28,540	$	0	$	38,102

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Segment, Customer and Geographic Information - Assets by Segment (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Segment Reporting, Asset Reconciling Item [Line Items]
Accounts receivable	$ 18,337	$ 18,586
Inventories	16,108	17,573
Property and equipment, net	14,671	14,775
Long-term investment securities	0
Goodwill	161	161
Intangible assets, net	5,795	7,004
Deferred tax assets, net	12,989	14,034
Other noncurrent assets	1,727	1,636
Operating Segments [Member] | Connected Solutions [Member]
Segment Reporting, Asset Reconciling Item [Line Items]
Accounts receivable	12,136	11,885
Inventories	13,957	14,283
Property and equipment, net	11,541	11,868
Long-term investment securities	0
Goodwill	0	0
Intangible assets, net	3,614	4,404
Deferred tax assets, net	0	0
Other noncurrent assets	0	0
Operating Segments [Member] | RF Solutions [Member]
Segment Reporting, Asset Reconciling Item [Line Items]
Accounts receivable	6,201	6,701
Inventories	2,151	3,290
Property and equipment, net	1,933	1,746
Long-term investment securities	0
Goodwill	161	161
Intangible assets, net	2,181	2,600
Deferred tax assets, net	0	0
Other noncurrent assets	0	0
Consolidating [Member]
Segment Reporting, Asset Reconciling Item [Line Items]
Accounts receivable	0	0
Inventories	0	0
Property and equipment, net	1,197	1,161
Long-term investment securities	0
Goodwill	0	0
Intangible assets, net	0	0
Deferred tax assets, net	12,989	14,034
Other noncurrent assets	$ 1,727	$ 1,636

XML

Fair Value of Financial Instruments

6 Months Ended

Jun. 30, 2013

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

2. Fair Value of Financial Instruments

The Company follows accounting pronouncements for Fair Value Measurements and Disclosures , which establishes a fair value hierarchy that requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instruments categorization within the hierarchy is based on the lowest level of input that is significant to the fair value measurement. ASC 820 establishes three levels of inputs that may be used to measure fair value:

Level 1: inputs are unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2: inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets and liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of assets or liabilities.

Level 3: unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Cash equivalents are measured at fair value and investments are recognized at amortized cost in the Company’s financial statements. Accounts receivable and other investments are financial assets with carrying values that approximate fair value due to the short-term nature of these assets. Accounts payable is a financial liability with a carrying value that approximates fair value due to the short-term nature of these liabilities.

XML

Goodwill and Intangible Assets - Summary of Assigned Lives and Weighted Average Amortization Periods by Intangible Asset Category (Detail)	6 Months Ended
	Jun. 30, 2013
Minimum [Member]
Summary of assigned lives and weighted average amortization periods by intangible asset category
Assigned Life	1 year
Maximum [Member]
Summary of assigned lives and weighted average amortization periods by intangible asset category
Assigned Life	8 years
Customer contracts and relationships [Member]
Summary of assigned lives and weighted average amortization periods by intangible asset category
Weighted Average Amortization Period	5 years 1 month 6 days
Customer contracts and relationships [Member] | Minimum [Member]
Summary of assigned lives and weighted average amortization periods by intangible asset category
Assigned Life	4 years
Customer contracts and relationships [Member] | Maximum [Member]
Summary of assigned lives and weighted average amortization periods by intangible asset category
Assigned Life	6 years
Patents and technology [Member]
Summary of assigned lives and weighted average amortization periods by intangible asset category
Weighted Average Amortization Period	5 years 2 months 12 days
Patents and technology [Member] | Minimum [Member]
Summary of assigned lives and weighted average amortization periods by intangible asset category
Assigned Life	1 year
Patents and technology [Member] | Maximum [Member]
Summary of assigned lives and weighted average amortization periods by intangible asset category
Assigned Life	6 years
Trademarks and trade names [Member]
Summary of assigned lives and weighted average amortization periods by intangible asset category
Weighted Average Amortization Period	7 years 4 months 24 days
Trademarks and trade names [Member] | Minimum [Member]
Summary of assigned lives and weighted average amortization periods by intangible asset category
Assigned Life	3 years
Trademarks and trade names [Member] | Maximum [Member]
Summary of assigned lives and weighted average amortization periods by intangible asset category
Assigned Life	8 years
Other [Member]
Summary of assigned lives and weighted average amortization periods by intangible asset category
Weighted Average Amortization Period	5 years 7 months 6 days
Other [Member] | Minimum [Member]
Summary of assigned lives and weighted average amortization periods by intangible asset category
Assigned Life	1 year
Other [Member] | Maximum [Member]
Summary of assigned lives and weighted average amortization periods by intangible asset category
Assigned Life	6 years

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PCTEL Secure - discontinued operations (Tables)

6 Months Ended

Jun. 30, 2013

Assets and liabilities classified as discontinued operations held for sale on condensed consolidated balances sheets

Summary results of operations for the discontinued operations included in the condensed consolidated statement of operations for the three and six months ended June 30, 2013 and 2012 are as follows:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2013			2012			2013			2012
Operating expenses	$	71		$	783		$	191		$	1,503
Other income, net		0			0			0			(41	)
Net loss attributable to noncontrolling interests		0			(334	)		0			(686	)
Adjustments to redemption value of noncontrolling interests		0			526			0			647
Loss from discontinued operations, before income taxes		(71	)		(975	)		(191	)		(1,423	)
Benefit for income tax		(49	)		(201	)		(82	)		(325	)
Loss from discontinued operations, net of tax	($	22	)	($	774	)	($	109	)	($	1,098	)
Income (loss) from discontinued operations per common share:
Basic	($	0.00	)	($	0.04	)	($	0.01	)	($	0.06	)
Diluted	($	0.00	)	($	0.04	)	($	0.01	)	($	0.06	)
Weighted average shares:
Basic		17,790			17,404			17,731			17,317
Diluted		18,075			17,404			17,973			17,317

Balance Sheet [Member]

Assets and liabilities classified as discontinued operations held for sale on condensed consolidated balances sheets

Assets and liabilities classified as discontinued operations held for sale on the condensed consolidated balances sheets as of June 30, 2013 and December 31, 2012 include the following:

	June 30, 2013		December 31, 2012
Cash and cash equivalents	$	0	$	16
Fixed assets		0		2
Total assets	$	0	$	18
Accounts payable	$	0	$	86
Accrued liabilities		0		17
Total liabilities	$	0	$	103

XML

Segment, Customer and Geographic Information (Tables)

6 Months Ended

Jun. 30, 2013

Segment Reporting [Abstract]

Result of operations by segments

The following tables are the segment operating profits for the three and six months ended June 30, 2013 and June 30, 2012, respectively:

	Three Months Ended June 30, 2013
	Connected Solutions		RF Solutions		Consolidating			Total
REVENUES	$	19,199	$	7,602	($	55	)	$	26,746
COST OF REVENUES		13,537		2,726		(65	)		16,198
GROSS PROFIT		5,662		4,876		10			10,548
OPERATING EXPENSES:
Research and development		1,166		1,517		0			2,683
Sales and marketing		2,147		907		0			3,054
General and administrative		457		170		3,198			3,825
Amortization of intangible assets		394		210		0			604
Restructuring charges		124		0		0			124
Total operating expenses		4,288		2,804		3,198			10,290
OPERATING INCOME (LOSS)	$	1,374	$	2,072	($	3,188	)	$	258

	Six Months Ended June 30, 2013
	Connected Solutions		RF Solutions		Consolidating			Total
REVENUES	$	38,555	$	13,374	($	111	)	$	51,818
COST OF REVENUES		26,882		4,917		(127	)		31,672
GROSS PROFIT		11,673		8,457		16			20,146
OPERATING EXPENSES:
Research and development		2,302		2,931		0			5,233
Sales and marketing		4,339		1,736		0			6,075
General and administrative		885		329		7,242			8,456
Amortization of intangible assets		790		419		0			1,209
Restructuring charges		225		0		0			225
Total operating expenses		8,541		5,415		7,242			21,198
OPERATING INCOME (LOSS)	$	3,132	$	3,042	($	7,226	)	($	1,052	)

	Three Months Ended June 30, 2012
	Connected Solutions		RF Solutions		Consolidating			Total
REVENUES	$	14,821	$	5,206	($	34	)	$	19,993
COST OF REVENUES		9,717		1,650		(44	)		11,323
GROSS PROFIT		5,104		3,556		10			8,670
OPERATING EXPENSES:
Research and development		1,042		1,173		0			2,215
Sales and marketing		1,543		1,030		0			2,573
General and administrative		244		118		2,294			2,656
Amortization of intangible assets		321		221		0			542
Restructuring charges		0		0		0			0
Total operating expenses		3,150		2,542		2,294			7,986
OPERATING INCOME (LOSS)	$	1,954	$	1,014	($	2,284	)	$	684

	Six Months Ended June 30, 2012
	Connected Solutions		RF Solutions		Consolidating			Total
REVENUES	$	27,988	$	9,204	($	38	)	$	37,154
COST OF REVENUES		18,485		2,886		(65	)		21,306
GROSS PROFIT		9,503		6,318		27			15,848
OPERATING EXPENSES:
Research and development		2,119		2,412		0			4,531
Sales and marketing		3,099		1,983		0			5,082
General and administrative		470		259		4,660			5,389
Amortization of intangible assets		643		441		0			1,084
Restructuring charges		0		0		0			0
Total operating expenses		6,331		5,095		4,660			16,086
OPERATING INCOME (LOSS)	$	3,172	$	1,223	($	4,633	)	($	238	)

Assets by segment

As of June 30, 2013
	Connected Solutions		RF Solutions		Consolidating		Total
Accounts receivable	$	12,136	$	6,201	$	0	$	18,337
Inventories	$	13,957	$	2,151	$	0	$	16,108
Long-lived assets:
Property and equipment, net	$	11,541	$	1,933	$	1,197	$	14,671
Long-term investment securities	$	0	$	0	$	0	$	0
Goodwill	$	0	$	161	$	0	$	161
Intangible assets, net	$	3,614	$	2,181	$	0	$	5,795
Deferred tax assets, net	$	0	$	0	$	12,989	$	12,989
Other noncurrent assets	$	0	$	0	$	1,727	$	1,727

As of December 31, 2012
	Connected Solutions		RF Solutions		Consolidating		Total
Accounts receivable	$	11,885	$	6,701	$	0	$	18,586
Inventories	$	14,283	$	3,290	$	0	$	17,573
Long-lived assets:
Property and equipment, net	$	11,868	$	1,746	$	1,161	$	14,775
Goodwill	$	0	$	161	$	0	$	161
Intangible assets, net	$	4,404	$	2,600	$	0	$	7,004
Deferred tax assets, net	$	0	$	0	$	14,034	$	14,034
Other noncurrent assets	$	0	$	0	$	1,636	$	1,636

Customer accounted revenues

The Company’s revenues to customers outside of the United States, as a percent of total revenues for the three and six months ended June 30, 2013 and 2012, respectively were as follows:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
Region	2013			2012			2013			2012
Europe, Middle East, & Africa		11	%		13	%		10	%		14	%
Asia Pacific		11	%		9	%		9	%		10	%
Other Americas		7	%		8	%		6	%		7	%
Total Foreign sales		29	%		30	%		25	%		31	%

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Income Taxes - Additional Information (Detail) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Dec. 31, 2012
Income Taxes Disclosure [Line Items]
Income tax expense (benefit)	$ 128,000	$ 278,000	$ 1,198,000	$ (54,000)
Statutory rate			34.00%	34.00%
Valuation allowance	700,000		700,000		700,000
Domestic deferred tax assets ratable reversal pattern period			15 years
Operating loss carryforwards, Expiration period			The carry forward rules allow for up to a 20 year carry forward of net operating losses
Net operating loss carry forward period			20 years
Average period required to utilize future income			27 years 6 months
Gross unrecognized tax benefit	1,400,000		1,400,000		1,400,000
Period decrease in unrecognized tax benefits related to research credits			12 months
Pctel Secure [Member]
Income Taxes Disclosure [Line Items]
Tax gain related to sale			$ 700,000

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Cash, Cash Equivalents and Investments - Additional Information (Detail) (USD $)	6 Months Ended
	Jun. 30, 2013	Dec. 31, 2012
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents maturities	90 days
Investment of cash equivalents are redeemable upon demand using amortized cost method	$ 1.00
Investment in money market funds restricted by investment in short term securities, percentage	100.00%
Cash deposited in the US banks insured by the Federal Deposit Insurance Corporation	$ 250,000
Cash	13,349,000	13,043,000
Cash equivalents	4,981,000	4,500,000
Cash and cash equivalents in foreign bank	800,000	800,000
Short-term investments	33,151,000	33,596,000
Certificates of deposit	2,400,000	5,100,000
Net unrealized gains	6,000
Long-term investments	0
Percentage of investment in bond protected by bond default insurance	14.00%
Minimum [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Short-term investments, maturities	90 days
Maximum [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Short-term investments, maturities	1 year
Money market funds and other cash equivalents [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Short-term investments	11,400,000	10,100,000
Corporate debt securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Short-term investments	11,000,000	9,900,000
U.S. government agency bonds [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Short-term investments	$ 8,300,000	$ 8,500,000

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Commitments and Contingencies - Summary of Restructuring Activity and Status of the Reserves (Detail) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2013
Restructuring Cost and Reserve [Line Items]
Accrual Balance, Beginning Balance	$ 1
Restructuring Expense	225
Payments/Charges	(151)
Accrual Balance, Ending Balance	75
2013 Telworx integration [Member]
Restructuring Cost and Reserve [Line Items]
Accrual Balance, Beginning Balance	0
Restructuring Expense	225
Payments/Charges	(150)
Accrual Balance, Ending Balance	75
2013 Telworx integration [Member] | Employee Related Costs [Member]
Restructuring Cost and Reserve [Line Items]
Accrual Balance, Beginning Balance	0
Restructuring Expense	167
Payments/Charges	(92)
Accrual Balance, Ending Balance	75
2013 Telworx integration [Member] | Asset Disposals [Member]
Restructuring Cost and Reserve [Line Items]
Accrual Balance, Beginning Balance	0
Restructuring Expense	58
Payments/Charges	(58)
Accrual Balance, Ending Balance	0
2012 Bloomingdale manufacturing [Member]
Restructuring Cost and Reserve [Line Items]
Accrual Balance, Beginning Balance	1
Restructuring Expense	0
Payments/Charges	(1)
Accrual Balance, Ending Balance	$ 0

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Stock-Based Compensation - Total Stock-Based Compensation (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation	$ 1,098	$ 943	$ 1,722	$ 1,640
Cost of revenues [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation	107	99	191	203
Research and development [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation	178	147	322	287
Sales and marketing [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation	154	128	261	257
General and administrative [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation	660	567	947	891
Continuing Operations [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation	1,099	941	1,721	1,638
Discontinued Operations [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation	$ (1)	$ 2	$ 1	$ 2

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PCTEL Secure - discontinued operations - Assets and Liabilities Classified as Discontinued Operations Held for Sale on Condensed Consolidated Balances Sheets (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Business Combinations [Abstract]
Cash and cash equivalents	$ 0	$ 16
Fixed assets	0	18
Total assets	0	18
Accounts payable	0	86
Accrued liabilities	0	17
Total liabilities	$ 0	$ 103

XML

Balance Sheet Information - Summary of Property and Equipment (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Property, Plant and Equipment [Line Items]
Total property and equipment	$ 28,781	$ 27,595
Less: Accumulated depreciation and amortization	(15,880)	(14,590)
Land	1,770	1,770
Property and equipment, net	14,671	14,775
Building [Member]
Property, Plant and Equipment [Line Items]
Total property and equipment	6,207	6,207
Computers and office equipment [Member]
Property, Plant and Equipment [Line Items]
Total property and equipment	10,434	9,968
Manufacturing and test equipment [Member]
Property, Plant and Equipment [Line Items]
Total property and equipment	10,181	9,495
Furniture and fixtures [Member]
Property, Plant and Equipment [Line Items]
Total property and equipment	1,209	1,256
Leasehold improvements [Member]
Property, Plant and Equipment [Line Items]
Total property and equipment	600	519
Motor vehicles [Member]
Property, Plant and Equipment [Line Items]
Total property and equipment	$ 150	$ 150

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Statement Of Financial Position [Abstract]
Allowance for accounts receivable	$ 239	$ 222
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	18,445,099	18,514,809
Common stock, shares outstanding	18,445,099	18,514,809

XML

PCTEL Secure - discontinued operations

6 Months Ended

Jun. 30, 2013

Discontinued Operations And Disposal Groups [Abstract]

PCTEL Secure - discontinued operations

7. PCTEL Secure – discontinued operations

On January 5, 2011, the Company formed PCTEL Secure LLC (“PCTEL Secure”), a joint venture limited liability company, with Eclipse Design Technologies, Inc. (“Eclipse”). PCTEL Secure designed Android-based, secure communication products. The Company contributed $2.5 million in cash on the formation of the joint venture in return for 51% ownership of the joint venture. In return for 49% ownership of the joint venture, Eclipse contributed $2.4 million of intangible assets in the form of intellectual property and a services agreement, including an assembled workforce, to provide services. At the date of formation the weighted average amortization period of the intangible assets acquired was 2.4 years. The Company estimated the fair value and remaining useful lives of the assets.

The limited liability company agreement of PCTEL Secure, as amended, provided several mechanisms for the orderly transition of the Company’s ownership from 51% to 100%. The Company purchased an additional 19% of the membership interests for $0.9 million on May 29, 2012 and the remaining 30% of the membership interests for $0.8 million on July 2, 2012. During the periods that the Company did not own 100% of the membership interests, Eclipse’s membership interests were recorded as non-controlling interest.

The Company learned through its marketing efforts for PCTEL Secure baseline product that its current distribution channels had limited access to the target software markets, primarily U.S. government agencies. The Company was in active discussions with a number of potential distribution entities with U.S. government agency access through December 31, 2012, and in January 2013 the Company engaged Wunderlich Securities, Inc. to evaluate strategic alternatives for PCTEL Secure, including a further search for a distribution entity that could take its baseline product to market. Based on the lack of success of such efforts, the Company concluded, as of December 31, 2012, that the future potential revenue was indeterminate, resulting in management’s forecast of future undiscounted cash flow to be in a range at or below zero. Based on these revised forecast cash flows, the Company concluded that the intangible assets of PCTEL Secure were impaired at December 31, 2012. The Company recorded intangible asset impairment expense of $1.1 million in December 2012.

On April 30, 2013, the Company divested all material assets associated with PCTEL Secure’s ProsettaCore™ technology to Redwall Technologies, LLC (“Redwall”), a development organization that specializes in mobile security, military and defense projects and systems, and critical national infrastructure. Under the terms of the agreement, Redwall acquired the server and device software (the “Software”), the underlying intellectual property, and complete development responsibility for the related products. At the closing of the divestiture, the Company received no upfront cash payment, but has the right to receive a royalty of 7% of the net sale price of each future sale or license of the Software and each provision of services related to the Software, if any. Under the agreement, royalties are capped at $10 million in the aggregate.

The consolidated financial statements separately reflect the PCTEL Secure operations as discontinued operations for all periods presented. Summary results of operations for the discontinued operations included in the condensed consolidated statement of operations for the three and six months ended June 30, 2013 and 2012 are as follows:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2013			2012			2013			2012
Operating expenses	$	71		$	783		$	191		$	1,503
Other income, net		0			0			0			(41	)
Net loss attributable to noncontrolling interests		0			(334	)		0			(686	)
Adjustments to redemption value of noncontrolling interests		0			526			0			647
Loss from discontinued operations, before income taxes		(71	)		(975	)		(191	)		(1,423	)
Benefit for income tax		(49	)		(201	)		(82	)		(325	)
Loss from discontinued operations, net of tax	($	22	)	($	774	)	($	109	)	($	1,098	)
Income (loss) from discontinued operations per common share:
Basic	($	0.00	)	($	0.04	)	($	0.01	)	($	0.06	)
Diluted	($	0.00	)	($	0.04	)	($	0.01	)	($	0.06	)
Weighted average shares:
Basic		17,790			17,404			17,731			17,317
Diluted		18,075			17,404			17,973			17,317

Assets and liabilities classified as discontinued operations held for sale on the condensed consolidated balances sheets as of June 30, 2013 and December 31, 2012 include the following:

	June 30, 2013		December 31, 2012
Cash and cash equivalents	$	0	$	16
Fixed assets		0		2
Total assets	$	0	$	18
Accounts payable	$	0	$	86
Accrued liabilities		0		17
Total liabilities	$	0	$	103

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Statement Of Income And Comprehensive Income [Abstract]
NET INCOME (LOSS)	$ 165	$ (329)	$ 2,030	$ (1,209)
OTHER COMPREHENSIVE INCOME (LOSS):
Foreign Currency Translation Adjustments	25	(15)	20	(12)
COMPREHENSIVE INCOME (LOSS)	$ 190	$ (344)	$ 2,050	$ (1,221)

XML

Stock-Based Compensation - Fair Value of Date of Grant Using Black Scholes Option Pricing Model (Detail) (Stock Plans [Member])	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Stock Plans [Member]
Share Based Payment Award Stock Options Valuation Assumptions [Line Items]
Dividend yield	1.70%	1.80%
Risk-free interest rate	0.20%	0.40%
Expected volatility	52.00%	52.00%
Expected life (in years)	5 years 7 months 6 days	5 years 4 months 24 days

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CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
ASSETS
Cash and cash equivalents	$ 18,330	$ 17,543
Short-term investment securities	33,151	33,596
Accounts receivable, net of allowance for doubtful accounts of $239 and $222 at June 30, 2013 and December 31, 2012, respectively	18,337	18,586
Inventories, net	16,108	17,573
Deferred tax assets, net	1,484	1,484
Prepaid expenses and other assets	1,164	2,160
Total current assets	88,574	90,942
Property and equipment, net	14,671	14,775
Goodwill	161	161
Intangible assets, net	5,795	7,004
Deferred tax assets, net	12,989	14,034
Other noncurrent assets	1,727	1,636
Assets of discontinued operations	0	18
TOTAL ASSETS	123,917	128,570
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable	5,752	10,557
Accrued liabilities	5,751	5,899
Total current liabilities	11,503	16,456
Contingent consideration	0	1,130
Other long-term liabilities	2,781	2,736
Liabilities of discontinued operations	0	103
Total long-term liabilities	2,781	3,969
Total liabilities	14,284	20,425
Stockholders' equity:
Common stock, $0.001 par value, 100,000,000 shares authorized, 18,445,099 and 18,514,809 shares issued and outstanding at June 30, 2013 and December 31, 2012, respectively	18	19
Additional paid-in capital	141,122	140,388
Accumulated deficit	(31,675)	(32,410)
Accumulated other comprehensive income	168	148
Total equity	109,633	108,145
TOTAL LIABILITIES AND EQUITY	$ 123,917	$ 128,570

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Acquisition of TelWorx Communications LLC - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	1 Months Ended	3 Months Ended		6 Months Ended		12 Months Ended
	Jul. 31, 2012	Dec. 31, 2012	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Dec. 31, 2012	Mar. 31, 2013	Oct. 31, 2012
Business Acquisition [Line Items]
Legal settlement date				Mar. 27, 2013
Reduction in total combined earnings			$ 0.2		$ 0.4
Forensic audit dollar coverage percentage of operation's revenue			50.00%
TelWorx Communications LLC [Member]
Business Acquisition [Line Items]
Purchase price acquisition, fair value				16.1
Cash paid				16.0
Contingent consideration related to claims escrow				1.1
Potential earn-out at fair value							1.0
Goodwill impairment	16.1	12.5				12.5
Business acquisition estimated annual sales of acquired entity		18.5				18.5
Business acquisition estimated gross profit of acquired entity		3.2				3.2
Business acquisition estimated revenue gross profit percentage		18.00%				18.00%
Business acquisition estimated sales funnel conversion to actual sales percentage								50.00%
Business acquisition estimated first quarter sales funnel of acquired entity Business?Acquisition?Estimated?First?Quarter?Sales?Funnel?Of?Acquired?Entity 7.5								7.5
Percentage of reduction in project revenue due to impairment of goodwill								17.00%
Reduction in total combined earnings			0.1		0.5
TelWorx Communications LLC [Member] | Goodwill [Member]
Business Acquisition [Line Items]
Goodwill		12.5				12.5
TelWorx Communications LLC [Member] | Backlog [Member]
Business Acquisition [Line Items]
Business acquisition estimated first quarter sales of acquired entity								1.0
TelWorx Communications LLC [Member] | Backlog And Funnel [Member]
Business Acquisition [Line Items]
Business acquisition estimated revenue gross profit percentage								16.00%
TelWorx Communications LLC [Member] | After Devaluation [Member]
Business Acquisition [Line Items]
Business acquisition estimated annual sales of acquired entity								15.0
Business acquisition estimated revenue gross profit percentage								16.00%
TelWorx Communications LLC [Member] | Estimated Fair Value [Member] | Goodwill [Member]
Business Acquisition [Line Items]
Goodwill		9.5				9.5
TelWorx Communications LLC [Member] | Provisional Adjustments [Member] | Goodwill [Member]
Business Acquisition [Line Items]
Goodwill		$ 3.1				$ 3.1
TelWorx Communications LLC [Member] | Lexington, North Carolina [Member]
Business Acquisition [Line Items]
Period for continued use of operating facility				5 years
TelWorx Communications LLC [Member] | Pryor, Oklahoma [Member]
Business Acquisition [Line Items]
Period for continued use of operating facility				2 years

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Segment Customer and Geographic Information - Customer Accounted Revenues (Detail) (Sales [Member])	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Revenues from External Customers and Long-Lived Assets [Line Items]
Total Sales	10.00%	10.00%	10.00%	10.00%
Europe, Middle East, & Africa [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Total Sales	11.00%	13.00%	10.00%	14.00%
Asia Pacific [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Total Sales	11.00%	9.00%	9.00%	10.00%
Other Americas [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Total Sales	7.00%	8.00%	6.00%	7.00%
Foreign [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Total Sales	29.00%	30.00%	25.00%	31.00%

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Acquisition of TelWorx Communications LLC (Tables) (TelWorx Communications LLC [Member])

6 Months Ended

Jun. 30, 2013

TelWorx Communications LLC [Member]

Allocation of purchase price for assets from date of acquisition

The following is the allocation of the purchase price for the assets acquired from TelWorx at the date of the acquisition.

	Estimated Fair Value July 9, 2012 as reported at September 30, 2012		Provisional Adjustments Subsequent to September 30, 2012			Estimated Fair Value July 9, 2012
Tangible assets:
Accounts receivable	$	1,575	($	205	)	$	1,370
Inventory		1,843		(465	)		1,378
Prepaid expenses		9		0			9
Fixed assets		248		0			248
Total tangible assets		3,675		(670	)		3,005
Intangible assets:
Goodwill		9,491		3,059			12,550
Trade names		1,527		(268	)		1,259
Technology		458		12			470
Customer relationships		2,898		(2,781	)		117
Backlog		91		(58	)		33
Non-compete		262		(248	)		14
Total intangible assets		14,727		(284	)		14,443
Total assets		18,402		(954	)		17,448
Capital leases		57		(20	)		37
Accounts payable		1,113		100			1,213
Accrued liabilities		85		33			118
Total liabilities		1,255		113			1,368
Net assets acquired	$	17,147	($	1,067	)	$	16,080

Pro Forma Financial Information for TelWorx

The following pro forma financial information gives effect to the acquisition of the TelWorx business as if the acquisition had taken place on January 1, 2012. The pro forma financial information for TelWorx was derived from the unaudited historical accounting records of TelWorx.

	(unaudited)		(unaudited)
	Three Months Ended		Six Months Ended
	June 30, 2012		June 30, 2012
REVENUES	$	23,841	$	44,482
LOSS BEFORE INCOME TAXES	$	290	($	575	)

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Basis of Presentation (Policies)

6 Months Ended

Jun. 30, 2013

Accounting Policies [Abstract]

Nature of Operations

Nature of Operations

PCTEL is a global leader in propagation and optimization solutions for the wireless industry. The Company develops and distributes innovative antenna and engineered site solutions and designs and develops software-based radios (scanning receivers) and provides related RF engineering services for wireless network optimization.

PCTEL was incorporated in California in 1994 and reincorporated in Delaware in 1998. Our principal executive offices are located at 471 Brighton Drive, Bloomingdale, Illinois 60108. Our telephone number at that address is (630) 372-6800 and our website is www.pctel.com. The information within, or that can be accessed through our website, is not part of this report.

Basis of Presentation

Segment Reporting

Effective January 1, 2013, PCTEL operates in two new segments for reporting purposes. The Company’s Connected Solutions segment includes its antenna and engineered site solutions. Its RF Solutions segment includes its scanning receivers and related RF engineering services. Each of the segments has its own segment manager as well as its own engineering, sales and marketing, and operational general and administrative functions. All of the Company’s accounting and finance, human resources, IT and legal functions are provided on a centralized basis through the corporate function. The Company manages its balance sheet and cash flows centrally at the corporate level, with the exception of trade accounts receivable and inventory which is managed at the segment level. Each of the segment managers reports to and maintains regular contact with the chief operating decision maker to discuss operating activities, financial results, forecasts, or plans for the segment. As of January 1, 2013, the Company’s chief operating decision maker uses the profit and loss results through operating profit and identified assets for the Connected Solutions and RF Solutions segments to make operating decisions. The 2012 segment information presented in the financial statements has been presented on a retrospective basis reflecting the new Connected Solutions and RF Solution segments on a consistent basis with the current period.

For the year ended December 31, 2012, the Company operated in two different segments, PCTEL Secure, and the rest of the Company. The Company’s chief operating decision maker used the profit and loss results and the assets to make operating decisions.

Connected Solutions Segment

PCTEL is a leading supplier of antennas for private network, public safety and government applications, and site solutions for both private and public network, data, and communications applications. PCTEL’s MAXRAD^®, Bluewave™ and Wi-Sys™ antenna solutions include high-value YAGI, land mobile radio (“LMR”), Wi-Fi, GPS, In Tunnel, Subway, and Broadband antennas (parabolic and flat panel). PCTEL’s Connected Solutions™ products include specialized towers, enclosures, fiber optic panels, and fiber jumper cables that are engineered into site solutions. The vertical markets into which the antenna and site solutions are sold include supervisory control and data acquisition (“SCADA”), health care, energy, smart grid, precision agriculture, indoor wireless, telemetry, offloading, and wireless backhaul. Growth for antenna and engineered site solutions is primarily driven by the increased use of wireless communications in these vertical markets. PCTEL’s antenna and site solution products are primarily sold through distributors, value added reseller, and original equipment manufacturer (“OEM”) providers.

The Company established its current antenna and site solutions product portfolio with a series of acquisitions. In 2004, the Company acquired MAXRAD, Inc. (“MAXRAD”), as well as certain product lines from Andrew Corporation (“Andrew”), which established its core product offerings in Wi-Fi, LMR and GPS. Over the next several years we added additional capabilities within those product lines and additional served markets with the acquisition of certain assets from Bluewave Antenna Systems, Ltd (“Bluewave”) in 2008, and the acquisitions of Wi-Sys Communications, Inc (“Wi-Sys”) in 2009, Sparco Technologies, Inc. (“Sparco”) in 2010, and certain assets of TelWorx Communications LLC, TelWorx U.K. Limited, TowerWorx LLC, and TowerWorx International, Inc., in July 2012.

There are many competitors for antenna products, as the market is highly fragmented. Competitors include such names as Laird (Cushcraft, Centurion, and Antennex brands), Mobile Mark, Radiall/Larsen, Comtelco, Wilson, Commscope (Andrew products), Kathrein, and others. We seek out product applications that command a premium for product performance and customer service, and avoid commodity markets.

PCTEL maintains expertise in several technology areas in order to be competitive in the antenna engineered site solutions market. These include radio frequency engineering, mobile antenna design and manufacturing, mechanical engineering, product quality and testing, and wireless network engineering.

RF Solutions Segment

PCTEL is a leading supplier of high-speed, multi-standard, demodulating receivers and test and measurement solutions to the wireless industry worldwide. Our SeeGull® scanning receivers, receiver-based products and CLARIFY® interference management solutions are used to measure, monitor and optimize cellular networks. PCTEL’s network engineering services (“NES”) Group provides value-added analysis of measured data collected during the optimization process. Revenue growth for these products and services is driven by the deployment of products based on new wireless technology and the need for wireless networks to be tuned and reconfigured on a regular basis. PCTEL develops and supports scanning receivers for LTE, EVDO, CDMA, WCDMA, GSM, TD-SCDMA, and WiMAX networks. Our scanning receiver products are sold primarily through test and measurement value added resellers and to a lesser extent directly to network operators. The engineering services are sold primarily to network infrastructure providers and cellular carriers. Competitors for these products are OEMs such as JDS Uniphase, Rohde and Schwarz, Anritsu, and Berkley Varitronics.

The Company established its scanning receiver product portfolio in 2003 with the acquisition of certain assets of Dynamic Telecommunications, Inc. (“DTI”). In 2009, we acquired the scanning receiver business from Ascom Network Testing, Inc. (“Ascom”) as well as the exclusive distribution rights and patented technology for Wider Network LLC (“Wider”) network interference products. In 2011, we purchased certain assets from Envision Wireless Inc. (“Envision”), an engineering services business based in Melbourne, Florida. The NES business focuses on the radio frequency (“RF”) issues pertaining to in-building coverage and capacity and its target market is relevant to our antenna and scanning receiver businesses. NES provides value-added analysis of collected data to public cellular carriers, network infrastructure providers, and real estate companies.

PCTEL maintains expertise in several technology areas in order to be competitive in the scanning receiver and related engineering services market. These include radio frequency engineering, DSP engineering, manufacturing, mechanical engineering, product quality and testing, and wireless network engineering

Basis of Consolidation

Basis of Consolidation

The condensed consolidated balance sheet as of June 30, 2013 and the condensed consolidated statements of operations, statements of comprehensive loss, and cash flows for the three and six months ended June 30, 2013 and 2012, respectively, are unaudited and reflect all adjustments of a normal recurring nature that are, in the opinion of management, necessary for a fair presentation of the interim period financial statements. The interim condensed consolidated financial statements are derived from the audited financial statements as of December 31, 2012.

On April 30, 2013, the Company divested all material assets associated with PCTEL Secure’s ProsettaCore™ technology to Redwall Technologies, LLC (“Redwall”), a development organization that specializes in mobile security, military and defense projects and systems, and critical national infrastructure. Under the terms of the agreement, Redwall acquired the server and device software (the “Software”), the underlying IP, and complete development responsibility for the security products. At the closing of the divestiture, the Company received no upfront cash payment, but has the right to receive a royalty of 7% of the net sale price of each future sale or license of the Software and each provision of services related to the Software, if any. Under the agreement, royalties will not exceed $10 million in the aggregate. In accordance with accounting for discontinued operations, the consolidated financial statements separately reflect the results of PCTEL Secure as discontinued operations for all periods presented. The prior period results have been restated to reflect this accounting treatment.

The unaudited interim condensed consolidated financial statements of the Company have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the U.S. have been condensed or omitted. The significant accounting policies followed by the Company are set forth within the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 (“the 2012 Form 10-K”). There were no changes in the Company’s significant accounting policies during the six months ended June 30, 2013. In addition, the Company reaffirms the use of estimates in the preparation of the financial statements as set forth in the 2012 Form 10-K. These interim condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the 2012 Form 10-K. The results for the operations for the period ended June 30, 2013 may not be indicative of the results for the period ending December 31, 2013.

Foreign Currency Translation

Foreign Currency Translation

The Company is exposed to foreign currency fluctuations due to its foreign operations and because products are sold internationally. The functional currency for the Company’s foreign operations is predominantly the applicable local currency. Accounts of foreign operations are translated into U.S. dollars using the exchange rate in effect at the applicable balance sheet date for assets and liabilities and average monthly rates prevailing during the period for revenue and expense accounts. Adjustments resulting from translation are included in accumulated other comprehensive income, a separate component of shareholders’ equity. Gains and losses resulting from other transactions originally in foreign currencies and then translated into U.S. dollars are included in the condensed consolidated statement of operations. Net foreign exchange losses resulting from foreign currency transactions included in other income, net were $5 and $7 for the three months ended June 30, 2013 and 2012, respectively. Net foreign exchange losses resulting from foreign currency transactions included in other income, net were $16 and $17 for the six months ended June 30, 2013 and 2012, respectively.

Recent Accounting Guidance

Recent Accounting Guidance

In February 2013, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2013-02, “Comprehensive Income (Topic 220) - Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income.” The objective of this update is to improve the reporting of reclassifications out of accumulated other comprehensive income. The amendments in the update require an entity to report the effect of significant respective line items in net income if the amount being reclassified is required to be reclassified in its entirety to net income. For amounts that are not required to be reclassified in their entirety to net income, an entity is required to cross-reference other disclosures. The amendments in this update are effective prospectively for reporting periods after December 15, 2012. The adoption of this update did not have a material effect on our financial position, results of operations or cash flows.

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Balance Sheet Information - Summary of Inventories (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Inventory Net [Abstract]
Raw materials	$ 9,627	$ 12,226
Work in process	1,025	789
Finished goods	5,456	4,558
Inventories, net	$ 16,108	$ 17,573

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Stock-Based Compensation - Additional Information (Detail) (USD $) Share data in Thousands, except Per Share data, unless otherwise specified	1 Months Ended	3 Months Ended		6 Months Ended		1 Months Ended			6 Months Ended	12 Months Ended	3 Months Ended		6 Months Ended		1 Months Ended	3 Months Ended		6 Months Ended		3 Months Ended		6 Months Ended		3 Months Ended	6 Months Ended		3 Months Ended	6 Months Ended		3 Months Ended	6 Months Ended				1 Months Ended	6 Months Ended
	Mar. 31, 2013	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Feb. 28, 2013 Employee Stock Purchase Plan ("ESPP") [Member]	Feb. 29, 2012 Employee Stock Purchase Plan ("ESPP") [Member]	May 31, 1998 Employee Stock Purchase Plan ("ESPP") [Member]	Jun. 30, 2013 Employee Stock Purchase Plan ("ESPP") [Member]	Dec. 31, 2012 Employee Stock Purchase Plan ("ESPP") [Member]	Jun. 30, 2013 Restricted Stock [Member]	Jun. 30, 2012 Restricted Stock [Member]	Jun. 30, 2013 Restricted Stock [Member]	Jun. 30, 2012 Restricted Stock [Member]	Jul. 31, 2010 Stock Plans [Member]	Jun. 30, 2013 Stock Plans [Member]	Jun. 30, 2012 Stock Plans [Member]	Jun. 30, 2013 Stock Plans [Member]	Jun. 30, 2012 Stock Plans [Member]	Jun. 30, 2013 Service Based Restricted Stock Units [Member]	Jun. 30, 2012 Service Based Restricted Stock Units [Member]	Jun. 30, 2013 Service Based Restricted Stock Units [Member]	Jun. 30, 2012 Service Based Restricted Stock Units [Member]	Jun. 30, 2013 Performance Units [Member]	Jun. 30, 2013 Performance Units [Member]	Jun. 30, 2012 Performance Units [Member]	Jun. 30, 2013 Time Based Restricted Stock Units [Member]	Jun. 30, 2013 Time Based Restricted Stock Units [Member]	Jun. 30, 2012 Time Based Restricted Stock Units [Member]	Jun. 30, 2013 Restricted Stock Units [Member]	Jun. 30, 2013 Restricted Stock Units [Member]	Jun. 30, 2012 Restricted Stock Units [Member]	Jun. 30, 2013 Employee Withholding Taxes on Stock Awards [Member]	Jun. 30, 2012 Employee Withholding Taxes on Stock Awards [Member]	Apr. 30, 2013 Retention Stock Options [Member] Executive Officer [Member]	Jun. 30, 2013 Retention Stock Options [Member] Executive Officer [Member]	Jun. 30, 2013 Retention Stock Options [Member] Minimum [Member] Executive Officer [Member]	Jun. 30, 2013 Retention Stock Options [Member] Maximum [Member] Executive Officer [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based expense		$ 1,100,000	$ 900,000	$ 1,700,000	$ 1,600,000						$ 800,000	$ 800,000	$ 1,300,000	$ 1,500,000
Compensation expense for share-based payments		1,098,000	943,000	1,722,000	1,640,000											300,000	100,000	400,000	100,000
Grants vesting period													4 years									4 years															2 years	4 years
Restricted stock awards issued													13,402							13,402		13,402	229,950				0	0	5,000
Fair value of options issued																				100,000		100,000	1,600,000						35,000
Restricted stock awards cancellation													9,361							6,861	46,668	9,361	52,656	147,250	147,250	11,320	1,125	1,125			1,125
Grant date fair value of restricted stock cancelled																				45,000	300,000	62,000	400,000	1,000,000	1,000,000	79,000	8,000	8,000		25,000	25,000
Shares, other than options, vested													352,565							13,012	14,025	352,565	466,255			4,836				3,850	3,850	2,600
Grant date fair value of restricted stock vested																				100,000	100,000	2,000,000	2,700,000
Restricted shares vested grant date intrinsic value																				100,000	100,000	2,600,000	3,500,000			36,000				28,000	28,000	20,000
Unrecognized compensation expense											1,900,000		1,900,000			2,400,000		2,400,000												29,000	29,000
Weighted average period													1 year 4 months 24 days					1 year 7 months 6 days													1 year 6 months
Percent of options vested																		25.00%
Employee stock options vesting provisions, description																		25% vest one year from the date of grant and thereafter in monthly increments over the remaining three years.
Options vested in remaining period																		3 years
Period of termination of employment																		90 days
Stock options granted period															7 years			10 years
Options granted				689,550												688,050	4,500	689,550	4,500							169,650									182,500	182,500
Weighted average exercise price granted																2,880,000		2,880,000
Proceeds from options exercised																13,000	25,000	91,000	25,000
Option exercised				11,841												1,647	3,719	11,841	3,719
Intrinsic value																3,000	3,000	7,000	3,000
Shares expired				88,568												19,664	96,802	111,201	216,350
Weighted average exercise price granted																	$ 2.77		$ 2.77
Lower range of exercise prices				$ 5.50
Upper range of exercise prices				$ 11.84
Intrinsic value based on share price		$ 8.48		$ 8.48
Weighted average grant date fair value																																			$ 2.83
Grant date fair value of options granted																										1,200,000
Grant date fair value of restricted stock vested																										33,000						16,000
Performance share units converted to restricted stock awards																										139,150
Percentage of fair market value to determine purchase price								85.00%
Offering period										6 months
Proceeds of from issuance of shares under ESPP						300,000	300,000
Options issued						61,230	48,032
Rate of discount on fair market value of common stock under ESPP									15.00%
Period of expected life, options granted									5 years
Payment of withholding taxes related to stock awards																																	900,000	1,200,000
Repurchase of shares		59,510
Repurchase of shares, Amount	5,000,000			435,000
Average price of repurchased share		$ 7.31
Repurchase of shares, outstanding amount		$ 4,600,000

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Benefit Plans - Additional Information (Detail) (USD $)	3 Months Ended		6 Months Ended		3 Months Ended	6 Months Ended
	Jun. 30, 2013 Employee Benefit Plans [Member]	Jun. 30, 2012 Employee Benefit Plans [Member]	Jun. 30, 2013 Employee Benefit Plans [Member]	Jun. 30, 2012 Employee Benefit Plans [Member]	Jun. 30, 2013 Executive Deferred Compensation Plan [Member] Installment	Jun. 30, 2013 Executive Deferred Compensation Plan [Member]	Dec. 31, 2012 Executive Deferred Compensation Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Maximum percentage of current compensation of employee to contribute in plan			15.00%
Amount of company contribution in compensation	$ 148,000	$ 133,000	$ 293,000	$ 302,000
Company contributes to various retirement plans for foreign employees	63,000	52,000	123,000	103,000
Maximum percentage of salary for contribution in compensation plan						50.00%
Maximum percentage of cash bonuses for contribution in compensation plan						100.00%
Percent of matching cash						4.00%
Executive's continued service period						over three years
Period for receiving payments in annual Installments					15 years
Number of guaranteed annual payments					20
Deferred compensation obligation					1,700,000	1,700,000	1,700,000
Cash surrender value of policies					$ 1,700,000	$ 1,700,000	$ 1,600,000

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Goodwill and Intangible Assets - Additional Information (Detail) (USD $)	3 Months Ended		6 Months Ended		12 Months Ended	1 Months Ended	3 Months Ended	12 Months Ended	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Dec. 31, 2012	Jul. 31, 2012 TelWorx Communications LLC [Member]	Dec. 31, 2012 TelWorx Communications LLC [Member]	Dec. 31, 2012 TelWorx Communications LLC [Member]	Jun. 30, 2013 Minimum [Member]	Jun. 30, 2013 Maximum [Member]
Finite-Lived Intangible Assets [Line Items]
Goodwill	$ 161,000		$ 161,000		$ 161,000
Goodwill acquired						12,500,000
Goodwill impairment (TelWorx)						16,100,000	12,500,000	12,500,000
Amortization of intangible assets basis over estimated useful lives									1 year	8 years
Increase (decrease) in cost of intangible assets			(1,200,000)		(2,300,000)
Amortization of intangible assets	604,000	542,000	1,209,000	1,084,000	3,200,000
Impairment charges of intangible assets						1,000,000
Additional intangible assets acquired					$ 1,900,000

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Earnings per Share - Computation of Basic and Diluted Earnings Per Share (Parenthetical) (Detail) In Thousands, unless otherwise specified	3 Months Ended	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2012
Earnings Per Share [Abstract]
Antidilutive shares excluded	229,000	389,000

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Cash, Cash Equivalents and Investments - Cash and Investments (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Cash And Cash Equivalents [Abstract]
Cash	$ 13,349	$ 13,043
Cash equivalents	4,981	4,500
Short-term investments	33,151	33,596
Cash and investment	$ 51,481	$ 51,139

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Balance Sheet Information

6 Months Ended

Jun. 30, 2013

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Balance Sheet Information

6. Balance Sheet Information

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are recorded at invoiced amount with standard net terms that range between 30 and 60 days. The Company extends credit to its customers based on an evaluation of a customer’s financial condition and collateral is generally not required. The Company maintains an allowance for doubtful accounts for estimated uncollectible accounts receivable. The allowance is based on the Company’s assessment of known delinquent accounts, historical experience, and other currently available evidence of the collectability and the aging of accounts receivable. The Company’s allowance for doubtful accounts was $0.2 million at June 30, 2013 and at December 31, 2012. The provision for doubtful accounts is included in sales and marketing expense in the condensed consolidated statements of operations.

Inventories

Inventories are stated at the lower of cost or market and include material, labor and overhead costs using the first-in, first-out (“FIFO”) method of costing. Inventories as of June 30, 2013 and December 31, 2012 were composed of raw materials, sub-assemblies, finished goods and work-in-process. The Company had consigned inventory with customers of $1.2 million at June 30, 2013 and at December 31, 2012, respectively. The Company records allowances to reduce the value of inventory to the lower of cost or market, including allowances for excess and obsolete inventory. The allowance for inventory losses was $2.0 million at June 30, 2013 and December 31, 2012, respectively.

Inventories consisted of the following at June 30, 2013 and December 31, 2012:

	June 30,		December 31,
	2013		2012
Raw materials	$	9,627	$	12,226
Work in process		1,025		789
Finished goods		5,456		4,558
Inventories, net	$	16,108	$	17,573

Prepaid and Other Current Assets

Prepaid assets are stated at cost and are amortized over the useful lives (up to one year) of the assets.

Property and Equipment

Property and equipment are stated at cost and are depreciated using the straight-line method over the estimated useful lives of the assets. The Company depreciates computer equipment over three to five years, office equipment, manufacturing and test equipment, and motor vehicles over five years, furniture and fixtures over seven years, and buildings over 30 years. Leasehold improvements are amortized over the shorter of the corresponding lease term or useful life. Depreciation expense and gains and losses on the disposal of property and equipment are included in cost of sales and operating expenses in the condensed consolidated statements of operations. Maintenance and repairs are expensed as incurred.

Property and equipment consists of the following at June 30, 2013 and December 31, 2012:

	June 30,			December 31,
	2013			2012
Building	$	6,207		$	6,207
Computers and office equipment		10,434			9,968
Manufacturing and test equipment		10,181			9,495
Furniture and fixtures		1,209			1,256
Leasehold improvements		600			519
Motor vehicles		150			150
Total property and equipment		28,781			27,595
Less: Accumulated depreciation and amortization		(15,880	)		(14,590	)
Land		1,770			1,770
Property and equipment, net	$	14,671		$	14,775

Depreciation and amortization expense was approximately $0.7 Million and $0.5 million for the three months ended June 30, 2013 and 2012 and $1.3 million and $1.1 million for the six months ended June 30, 2013 and 2012, respectively.

Liabilities

Accrued liabilities consist of the following at June 30, 2013 and December 31, 2012:

	June 30,		December 31,
	2013		2012
Inventory receipts	$	1,419	$	2,191
Payroll, bonuses, and other employee benefits		1,245		859
Paid time off		1,164		1,067
Employee stock purchase plan		293		276
Warranties		244		270
Deferred liabilities		226		127
Professional fees		177		268
Real estate taxes		165		170
Restructuring		75		0
Sales tax		69		156
Other		674		515
Total	$	5,751	$	5,899

Long-term liabilities consist of the following:

	June 30,		December 31,
	2013		2012
Executive deferred compensation plan	$	1,718	$	1,652
Reserve for uncertain tax positions		842		842
Deferred rent		166		166
Deferred revenues		54		74
Long-term obligations under capital leases		1		2
	$	2,781	$	2,736

XML

Stock-Based Compensation - Summary of Performance Share Activity (Detail) (Performance Units [Member], USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2013	Jun. 30, 2012
Performance Units [Member]
Shares
Beginning balance, shares		147,250
Units cancelled	(147,250)	(147,250)	(11,320)
Ending balance, shares
Beginning balance, Weighted average grant date fair value		$ 7.04
Units cancelled, Weighted average grant date fair value		$ 7.04
Ending balance, Weighted average grant date fair value	$ 0.00	$ 0.00

XML

Stock-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2013

Total stock-based compensation

Total stock-based compensation is reflected in the condensed consolidated statements of operations as follows:

	Three Months Ended June 30,					Six Months Ended June 30,
	2013			2012		2013		2012
Cost of revenues	$	107		$	99	$	191	$	203
Research and development		178			147		322		287
Sales and marketing		154			128		261		257
General and administrative		660			567		947		891
Total continuing operations		1,099			941		1,721		1,638
Discontinued operations		(1	)		2		1		2
Total	$	1,098		$	943	$	1,722	$	1,640

Information about stock options outstanding under all stock plans

The following table summarizes information about stock options outstanding under all stock plans at June 30, 2013:

	Options Outstanding						Options Exercisable
Range of Exercise Prices	Number Outstanding		Weighted Average Contractual Life (Years)		Weighted- Average Exercise Price		Number Exercisable		Weighted Average Exercise Price
$5.50   -   $6.86		115,500		5.02	$	6.55		81,954	$	6.64
6.87   -     7.93		772,660		6.23		7.26		81,923		7.71
8.07   -     8.63		104,037		2.30		8.55		104,037		8.55
8.76   -     8.76		44,000		2.64		8.76		44,000		8.76
9.09   -     9.09		100,000		2.09		9.09		100,000		9.09
9.11   -     9.12		14,627		2.59		9.12		14,627		9.12
9.16   -     9.16		132,000		3.09		9.16		132,000		9.16
9.19   -   10.25		121,780		2.70		9.70		121,780		9.70
10.46 -   11.00		100,960		1.46		10.72		100,960		10.72
11.01 -   11.84		160,050		0.84		11.49		160,050		11.49
$5.50   - $11.84		1,665,614		4.21	$	8.40		941,331	$	9.35

Fair value of date of grant using black scholes option pricing model

The Company calculated the fair value of each option grant on the date of grant using the Black-Scholes option-pricing model using the following assumptions:

	June 30,
	2013			2012
Dividend yield		1.7	%		1.8	%
Risk-free interest rate		0.2	%		0.4	%
Expected volatility		52	%		52	%
Expected life (in years)		5.6			5.4

Weighted average contractual life and intrinsic value of options outstanding

The intrinsic value and contractual life of the options outstanding and exercisable at June 30, 2013 were as follows:

	Weighted Average Contractual Life (years)		Intrinsic Value
Options Outstanding		4.21	$	1,168
Options Exercisable		2.27	$	216

Summary of stock option activity

The following table summarizes the stock option activity for the six months ended June 30, 2013:

	Options Outstanding			Weighted Average Exercise Price
Outstanding at December 31, 2012		1,099,106		$	9.06
Granted		689,550			7.20
Exercised		(11,841	)		7.11
Expired or Cancelled		(88,568	)		7.90
Forfeited		(22,633	)		6.45
Outstanding at June 30, 2013		1,665,614		$	8.40
Exercisable at June 30, 2013		941,331		$	9.35

Summary of retention stock option activity

The following table summarizes the retention stock option activity for the six months ended June 30, 2013:

	Retention Options Outstanding		Weighted Average Exercise Price
Outstanding at December 31, 2012		—	$	0.00
Granted		182,500		7.16
Outstanding at June 30, 2013		182,500	$	7.16
Exercisable at June 30, 2013		—		—

Summary of performance share activity

The following table summarizes the performance share activity during the six months ended June 30, 2013:

	Shares			Weighted Average Grant Date Fair Value
Unvested Performance Units - December 31, 2012		147,250		$	7.04
Units cancelled		(147,250	)		7.04
Unvested Performance Units - June 30, 2013		—		$	0.00

Calculation of fair value of each employee stock purchase grant using Black-Scholes option-pricing model

The Company calculated the fair value of each employee stock purchase grant on the date of grant using the Black-Scholes option-pricing model using the following assumptions:

	June 30,
	2013			2012
Dividend yield		1.9	%		1.8	%
Risk-free interest rate		0.2	%		0.2	%
Expected volatility		52	%		51	%
Expected life (in years)		0.5			0.5

Restricted Stock Units [Member]

Summary of restricted stock activity

The following table summarizes the restricted stock unit activity during the six months ended June 30, 2013:

	Shares			Weighted Average Grant Date Fair Value
Unvested Restricted Stock Units - December 31, 2012		11,925		$	6.61
Units vested		(3,850	)		6.56
Units cancelled		(1,125	)		6.77
Unvested Restricted Stock Units - June 30, 2013		6,950		$	6.62

Restricted Stock [Member]

Summary of restricted stock activity

The following table summarizes restricted stock activity for the six months ended June 30, 2013:

	Shares			Weighted Average Grant Date Fair Value
Unvested Restricted Stock Awards - December 31, 2012		940,685		$	6.24
Shares awarded		13,402			7.83
Shares vested		(352,565	)		5.79
Shares cancelled		(9,361	)		6.60
Unvested Restricted Stock Awards - June 30, 2013		592,161		$	6.54

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Goodwill and Intangible Assets - Schedule of Expected Amortization Expense (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013
Finite Lived Intangible Assets Future Amortization Expense [Abstract]
2013	$ 2,400
2014	1,967
2015	1,737
2016	468
2017	288
Thereafter	$ 144

XML

Stock-Based Compensation

6 Months Ended

Jun. 30, 2013

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock-Based Compensation

9. Stock-Based Compensation

The condensed consolidated statements of operations include $1.1 million and $1.7 million of stock compensation expense for the three and six months ended June 30, 2013, respectively. Stock compensation expense for the three months ended June 30, 2013 consists of $0.8 million for restricted stock awards, and $0.3 million for stock option and stock purchase plan expenses. Stock compensation expense for the six months ended June 30, 2013 consists of $1.3 million for restricted stock awards, and $0.4 million for stock option and stock purchase plan expenses.

The condensed consolidated statements of operations include $0.9 million and $1.6 million of stock compensation expense for the three and six months ended June 30, 2012, respectively. Stock compensation expense for the three months ended June 30, 2012 consists of $0.8 million for restricted stock awards, and $0.1 million for stock option and stock purchase plan expenses. Stock compensation expense for the six months ended June 30, 2012 consists of $1.5 million for restricted stock awards, and $0.1 million for stock option and stock purchase plan expenses.

The Company did not capitalize any stock compensation expense during the three and six months ended June 30, 2013 or 2012.

Total stock-based compensation is reflected in the condensed consolidated statements of operations as follows:

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2013			2012		2013		2012
Cost of revenues	$	107		$	99	$	191	$	203
Research and development		178			147		322		287
Sales and marketing		154			128		261		257
General and administrative		660			567		947		891
Total continuing operations		1,099			941		1,721		1,638
Discontinued operations		(1	)		2		1		2
Total	$	1,098		$	943	$	1,722	$	1,640

Restricted Stock – Service Based

The Company grants shares of restricted stock as employee incentives as permitted under the Company’s 1997 Stock Plan, as amended and restated (“1997 Stock Plan”). In connection with the grant of restricted stock to employees, the Company records deferred stock compensation representing the fair value of the common stock on the date the restricted stock is granted. Stock-based compensation expense is recorded ratably over the vesting period of the applicable shares. These grants vest over various periods, but typically vest over four years.

For the three months ended June 30, 2013, the Company issued 13,402 restricted stock awards with grant date fair value of $0.1 million and recorded cancellations of 6,861 shares with grant date fair value of $45. For the six months ended June 30, 2013, the Company issued 13,402 restricted stock awards with grant date fair value of $0.1 million and recorded cancellations of 9,361 shares with grant date fair value of $62.

For the three months ended June 30, 2013, 13,012 restricted shares vested with grant date fair value and intrinsic value of $0.1 million, respectively. For the six months ended June 30, 2013, 352,565 restricted shares vested with grant date fair value of $2.0 million and intrinsic value of $2.6 million.

For the three months ended June 30, 2012, the Company did not issue any restricted stock awards and recorded cancellations of 46,668 shares with grant date fair value of $0.3 million. For the six months ended June 30, 2012, the Company issued 229,950 shares of restricted stock with grant date fair value of $1.6 million and recorded cancellations of 52,656 shares with grant date fair value of $0.4 million.

For the three months ended June 30, 2012, 14,025 restricted shares vested with grant date fair value and intrinsic value of $0.1 million, respectively. For the six months ended June 30, 2012, 466,255 restricted shares vested with grant date fair value of $2.7 million and intrinsic value of $3.5 million.

At June 30, 2013, total unrecognized compensation expense related to restricted stock was approximately $1.9 million, net of forfeitures to be recognized through 2016 over a weighted average period of 1.4 years.

The following table summarizes restricted stock activity for the six months ended June 30, 2013:

				Weighted
				Average
				Grant Date
	Shares			Fair Value
Unvested Restricted Stock Awards - December 31, 2012		940,685		$	6.24
Shares awarded		13,402			7.83
Shares vested		(352,565	)		5.79
Shares cancelled		(9,361	)		6.60
Unvested Restricted Stock Awards - June 30, 2013		592,161		$	6.54

Stock Options

The Company may grant stock options to purchase common stock. The Company issues stock options with exercise prices no less than the fair value of the Company’s stock on the grant date. Employee stock options contain gradual vesting provisions, whereby 25% vest one year from the date of grant and thereafter in monthly increments over the remaining three years. Stock options may be exercised at any time prior to their expiration date or within ninety days of termination of employment, or such shorter time as may be provided in the related stock option agreement. Historically, the Company has granted stock options with a ten year life. Beginning with options granted in July 2010, the Company granted stock options with a seven year life. During 2012 and the first quarter 2013, the Company awarded stock options to eligible new employees for incentive purposes. The Company issued stock options to employees for long-term incentive purposes in April 2013.

The fair value of each unvested stock option was estimated on the date of grant using the Black-Scholes option valuation model. The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options, which have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility and expected option life. Because the Company’s employee stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, the existing models may not necessarily provide a reliable single measure of the fair value of the employee stock options.

During the three months ended June 30, 2013 the Company issued 688,050 stock options with a weighted average grant date value of $2.88. During the six months ended June 30, 2013 the Company issued 689,550 stock options with a weighted average grant date value of $2.88. The Company received proceeds of $13 from the exercise of 1,647 options during the three months ended June 30, 2013. The intrinsic value of these options exercised was $3. The Company received proceeds of $91 from the exercise of 11,841 options during the six months ended June 30, 2013. The intrinsic value of these options exercised was $7. During the three and six months ended June 30, 2013, 19,664 and 111,201 options, respectively, were cancelled or expired.

During the three months and six months ended June 30, 2012 the Company issued 4,500 stock options with a weighted average grant date value of $2.77. The Company received proceeds of $25 from the exercise of 3,719 options during the three and six months ended June 30, 2012. The intrinsic value of these options exercised was $3. During the three and six months ended June 30, 2012, 96,802 and 216,350 options were cancelled or expired.

As of June 30, 2013, the unrecognized compensation expense related to the unvested portion of the Company’s stock options was approximately $2.4 million, net of estimated forfeitures to be recognized through 2017 over a weighted average period of 1.6 years.

The range of exercise prices for options outstanding and exercisable at June 30, 2013 was $5.50 to $11.84. The following table summarizes information about stock options outstanding under all stock plans at June 30, 2013:

	Options Outstanding						Options Exercisable
Range of Exercise Prices	Number Outstanding		Weighted Average Contractual Life (Years)		Weighted- Average Exercise Price		Number Exercisable		Weighted Average Exercise Price
$5.50   -   $6.86		115,500		5.02	$	6.55		81,954	$	6.64
6.87   -     7.93		772,660		6.23		7.26		81,923		7.71
8.07   -     8.63		104,037		2.30		8.55		104,037		8.55
8.76   -     8.76		44,000		2.64		8.76		44,000		8.76
9.09   -     9.09		100,000		2.09		9.09		100,000		9.09
9.11   -     9.12		14,627		2.59		9.12		14,627		9.12
9.16   -     9.16		132,000		3.09		9.16		132,000		9.16
9.19   -   10.25		121,780		2.70		9.70		121,780		9.70
10.46 -   11.00		100,960		1.46		10.72		100,960		10.72
11.01 -   11.84		160,050		0.84		11.49		160,050		11.49
$5.50   - $11.84		1,665,614		4.21	$	8.40		941,331	$	9.35

The Company calculated the fair value of each option grant on the date of grant using the Black-Scholes option-pricing model using the following assumptions:

	June 30,
	2013			2012
Dividend yield		1.7	%		1.8	%
Risk-free interest rate		0.2	%		0.4	%
Expected volatility		52	%		52	%
Expected life (in years)		5.6			5.4

The dividend yield rate was calculated by dividing the Company’s annual dividend by the closing price on the grant date. The risk-free interest rate was based on the U.S. Treasury yields with remaining term that approximates the expected life of the options granted. The Company calculates the volatility based on a five-year historical period of the Company’s stock price. The Company incorporates a forfeiture rate based on historical data in the expense calculation. The expected life used for options granted is based on historical data of employee exercise performance.

The intrinsic value and contractual life of the options outstanding and exercisable at June 30, 2013 were as follows:

	Weighted Average Contractual Life (years)		Intrinsic Value
Options Outstanding		4.21	$	1,168
Options Exercisable		2.27	$	216

The intrinsic value is based on the share price of $8.48 at June 30, 2013.

The following table summarizes the stock option activity for the six months ended June 30, 2013:

				Weighted
				Average
	Options			Exercise
	Outstanding			Price
Outstanding at December 31, 2012		1,099,106		$	9.06
Granted		689,550			7.20
Exercised		(11,841	)		7.11
Expired or Cancelled		(88,568	)		7.90
Forfeited		(22,633	)		6.45
Outstanding at June 30, 2013		1,665,614		$	8.40
Exercisable at June 30, 2013		941,331		$	9.35

Retention Stock Options

In April 2013, the Company awarded 182,500 retention stock options to executive officers with a weighted average grant date value of $2.83. The actual number of stock options awarded will be based on performance goals for 2013. The options will vest between two and four years beginning in 2014. The Company records expense for these retention stock options based on estimated achievement of the performance goals. The assumptions used for the valuation of these stock options were consistent with the stock options awarded to employees in April 2013.

The following table summarizes the retention stock option activity for the six months ended June 30, 2013:

			Weighted
	Retention		Average
	Options		Exercise
	Outstanding		Price
Outstanding at December 31, 2012		—	$	0.00
Granted		182,500		7.16
Outstanding at June 30, 2013		182,500	$	7.16
Exercisable at June 30, 2013		—		—

Performance Units

The Company grants performance units to certain executive officers. Shares are earned upon achievement of defined performance goals such as revenue and earnings. Certain performance units granted are subject to a service period before vesting. The fair value of the performance units issued is based on the Company’s stock price on the date the performance units are granted. The Company records expense for the performance units based on estimated achievement of the performance goals.

During the three and six months ended June 30, 2013, the Company did not grant any performance units and cancelled 147,250 performance units with a grant date fair value of $1.0 million.

During the six months ended June 30, 2012, the Company granted 169,650 performance units with a grant date fair value of $1.2 million and cancelled 11,320 performance units with a grant date fair value of $79. During the six months ended June 30, 2012, 4,836 performance units vested with a grant date fair value of $33 and intrinsic value of $36. During the six months ended June 30, 2012, 139,150 performance units were converted to time-based restricted stock awards. The Company did not record expense for performance share awards during the six months ended June 30, 2012 because the Company does not expect the 2012 fiscal year targets associated with the performance shares to be met.

As of June 30, 2013, there are no unvested performance units. The following table summarizes the performance share activity during the six months ended June 30, 2013:

				Weighted
				Average
				Grant Date
	Shares			Fair Value
Unvested Performance Units - December 31, 2012		147,250		$	7.04
Units cancelled		(147,250	)		7.04
Unvested Performance Units - June 30, 2013		—		$	0.00

Restricted Stock Units

The Company grants restricted stock units as employee incentives as permitted under the Company’s 1997 Stock Plan. Employee restricted stock units are time-based awards and are amortized over the vesting period. At the vesting date, these units are converted to shares of common stock. These units vest over various periods, but typically vest over four years. The fair value of the restricted stock units issued is based on the Company’s stock price on the date the restricted stock units are granted.

The Company did not issue any time-based restricted stock units and cancelled 1,125 shares with a grant date fair value of $8 during the three and six months ended June 30, 2013. During the three and six months ended June 30, 2013, 3,850 restricted stock units vested with a grant date fair value of $25 and intrinsic value of $28.

The Company issued 5,000 time-based restricted stock units with a fair value of $35 to employees during the six months ended June 30, 2012. During the six months ended June 30, 2012, 2,600 restricted stock units vested with a grant date fair value of $16 and intrinsic value of $20.

As of June 30, 2013, the unrecognized compensation expense related to the unvested portion of the Company’s restricted stock units was approximately $29, to be recognized through 2016 over a weighted average period of 1.5 years.

The following table summarizes the restricted stock unit activity during the six months ended June 30, 2013:

				Weighted
				Average
				Grant Date
	Shares			Fair Value
Unvested Restricted Stock Units - December 31, 2012		11,925		$	6.61
Units vested		(3,850	)		6.56
Units cancelled		(1,125	)		6.77
Unvested Restricted Stock Units - June 30, 2013		6,950		$	6.62

Employee Stock Purchase Plan (“ESPP”)

The ESPP enables eligible employees to purchase common stock at the lower of 85% of the fair market value of the common stock on the first or last day of each offering period. Each offering period is six months. The Company received proceeds of $0.3 million from the issuance of 61,230 shares under the ESPP in February 2013 and received proceeds of $0.3 million from the issuance of 48,032 shares under the ESPP in February 2012.

Based on the 15% discount and the fair value of the option feature of this plan, the ESPP is considered compensatory. Compensation expense is calculated using the fair value of the employees’ purchase rights under the Black-Scholes model.

The Company calculated the fair value of each employee stock purchase grant on the date of grant using the Black-Scholes option-pricing model using the following assumptions:

	June 30,
	2013			2012
Dividend yield		1.9	%		1.8	%
Risk-free interest rate		0.2	%		0.2	%
Expected volatility		52	%		51	%
Expected life (in years)		0.5			0.5

The dividend yield rate was calculated by dividing the Company’s annual dividend by the closing price on the grant date. The risk-free interest rate was based on the U.S. Treasury yields with a remaining term that approximates the expected life of the options granted. The dividend yield rate is calculated by dividing the Company’s annual dividend by the closing price on the grant date. The Company calculates the volatility based on a five-year historical period of the Company’s stock price. The expected life used is based on the offering period.

Employee Withholding Taxes on Stock Awards

For ease in administering the issuance of stock awards, the Company holds back shares of vested restricted stock awards and short-term incentive plan stock awards for the value of the statutory withholding taxes. For each individual receiving a share award, the Company redeems the shares it computes as the value for the withholding tax and remits this amount to the appropriate tax authority. The Company paid $0.9 million and $1.2 million for withholding taxes related to stock awards during the six months ended June 30, 2013 and 2012, respectively.

Stock Repurchases

All share repurchase programs are authorized by the Company’s Board of Directors and are announced publicly. On March 18, 2013, the Company’s Board of Directors approved a new share repurchase program of $5.0 million. The Company repurchased 59,510 shares at an average price of $7.31 during the three months ended June 30, 2013. At June 30, 2013, the Company had $4.6 million in share value that could still be repurchased under this program.

XML

Segment, Customer and Geographic Information - Result of Operations by Segments (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Dec. 31, 2012
Results of operations by segments
REVENUES	$ 26,746	$ 19,993	$ 51,818	$ 37,154
COST OF REVENUES	16,198	11,323	31,672	21,306
GROSS PROFIT	10,548	8,670	20,146	15,848
OPERATING EXPENSES:
Research and development	2,683	2,215	5,233	4,531
Sales and marketing	3,054	2,573	6,075	5,082
General and administrative	3,825	2,656	8,456	5,389
Amortization of intangible assets	604	542	1,209	1,084	3,200
Restructuring charges	124	0	225	0
Total operating expenses	10,290	7,986	21,198	16,086
OPERATING INCOME (LOSS)	258	684	(1,052)	(238)
Operating Segments [Member] | Connected Solutions [Member]
Results of operations by segments
REVENUES	19,199	14,821	38,555	27,988
COST OF REVENUES	13,537	9,717	26,882	18,485
GROSS PROFIT	5,662	5,104	11,673	9,503
OPERATING EXPENSES:
Research and development	1,166	1,042	2,302	2,119
Sales and marketing	2,147	1,543	4,339	3,099
General and administrative	457	244	885	470
Amortization of intangible assets	394	321	790	643
Restructuring charges	124	0	225	0
Total operating expenses	4,288	3,150	8,541	6,331
OPERATING INCOME (LOSS)	1,374	1,954	3,132	3,172
Operating Segments [Member] | RF Solutions [Member]
Results of operations by segments
REVENUES	7,602	5,206	13,374	9,204
COST OF REVENUES	2,726	1,650	4,917	2,886
GROSS PROFIT	4,876	3,556	8,457	6,318
OPERATING EXPENSES:
Research and development	1,517	1,173	2,931	2,412
Sales and marketing	907	1,030	1,736	1,983
General and administrative	170	118	329	259
Amortization of intangible assets	210	221	419	441
Restructuring charges	0	0	0	0
Total operating expenses	2,804	2,542	5,415	5,095
OPERATING INCOME (LOSS)	2,072	1,014	3,042	1,223
Consolidating [Member]
Results of operations by segments
REVENUES	(55)	(34)	(111)	(38)
COST OF REVENUES	(65)	(44)	(127)	(65)
GROSS PROFIT	10	10	16	27
OPERATING EXPENSES:
Research and development	0	0	0	0
Sales and marketing	0	0	0	0
General and administrative	3,198	2,294	7,242	4,660
Amortization of intangible assets	0	0	0	0
Restructuring charges	0	0	0	0
Total operating expenses	3,198	2,294	7,242	4,660
OPERATING INCOME (LOSS)	$ (3,188)	$ (2,284)	$ (7,226)	$ (4,633)

XML

Goodwill and Intangible Assets

6 Months Ended

Jun. 30, 2013

Goodwill And Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

5. Goodwill and Intangible Assets

Goodwill

The Company had goodwill of $0.2 million at June 30, 2013 and December 31, 2012, respectively. In July 2012, the Company recorded goodwill of $12.5 million with the acquisition of assets related to the TelWorx business. In conjunction with the annual evaluation of goodwill in the fourth quarter 2012, the Company recorded an impairment of goodwill of $12.5 million with respect to the TelWorx acquisition.

Intangible Assets

The Company amortizes intangible assets with finite lives on a straight-line basis over the estimated useful lives, which range from one to eight years. The summary of other intangible assets, net as of June 30, 2013 and December 31, 2012 are as follows:

	June 30,						December 31,
	2013						2012
			Accumulated		Net Book				Accumulated		Net Book
	Cost		Amortization		Value		Cost		Amortization		Value
Customer contracts and relationships	$	17,381	$	13,425	$	3,956	$	17,381	$	12,463	$	4,918
Patents and technology		7,878		7,452		426		7,878		7,378		500
Trademarks and trade names		3,988		2,720		1,268		3,988		2,575		1,413
Other		3,301		3,156		145		3,301		3,128		173
	$	32,548	$	26,753	$	5,795	$	32,548	$	25,544	$	7,004

The $1.2 million decrease in the net book value of intangible assets at June 30, 2013 compared to December 31, 2012 reflects amortization expense of $1.2 million recorded for the six months ended June 30, 2013. For the year ended December 31, 2012, intangible assets decreased $2.3 million, which consisted of amortization expense of $3.2 million and impairment charges of $1.0 million for PCTEL Secure, net of the addition of $1.9 million of intangible assets acquired from TelWorx in July 2012,

The assigned lives and weighted average amortization periods by intangible asset category is summarized below:

Intangible Assets	Assigned Life	Weighted Average Amortization Period
Customer contracts and relationships	4 to 6 years		5.1
Patents and technology	1 to 6 years		5.2
Trademarks and trade names	3 to 8 years		7.4
Other	1 to 6 years		5.6

The Company’s scheduled amortization expense for 2013 and the next five years is as follows:

Fiscal Year	Amount
2013	$	2,400
2014	$	1,967
2015	$	1,737
2016	$	468
2017	$	288
Thereafter	$	144

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Operating Activities:
NET INCOME (LOSS)	$ 2,030	$ (1,209)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Loss from discontinued operations	109	1,098
Depreciation and amortization	2,554	2,217
Stock-based compensation	1,721	1,638
(Gain) loss on disposal/sale of property and equipment	(1)	4
Restructuring costs	126	0
Payment of withholding tax on stock based compensation	(943)	(1,190)
Deferred tax provision	1,045	0
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable	255	(240)
Inventories	1,501	166
Prepaid expenses and other assets	913	804
Accounts payable	(4,833)	439
Income taxes payable	4	306
Other accrued liabilities	(1,609)	(2,592)
Deferred revenue	99	38
Net cash provided by operating activities	2,971	1,479
Investing Activities:
Capital expenditures	(1,281)	(1,669)
Proceeds from disposal of property and equipment	1	0
Purchases of investments	(38,830)	(26,319)
Redemptions/maturities of short-term investments	39,275	37,478
Purchase of assets/businesses, net of cash acquired	0	(931)
Net cash provided by (used in) investing activities	(835)	8,559
Financing Activities:
Proceeds from issuance of common stock	383	294
Payments for repurchase of common stock	(435)	0
Cash dividends	(1,289)	(1,097)
Net cash used in financing activities	(1,341)	(803)
Cash flows from discontinued operations:
Net cash (used in) provided by operating activities	(17)	(864)
Net cash provided by investing activities	1	1
Net cash provided by financing activities	0	0
Net decrease in cash and cash equivalents	779	8,372
Effect of exchange rate changes on cash	(8)	0
Cash and cash equivalents, beginning of year	17,543	19,418
Cash and Cash Equivalents, End of Period	$ 18,330	$ 27,790

XML

Acquisition of TelWorx Communications LLC - Allocation of Purchase Price for Assets from Date of Acquisition (Detail) (TelWorx Communications LLC [Member], USD $) In Thousands, unless otherwise specified	Dec. 31, 2012
Tangible assets:
Purchase price allocation, Assets	$ 17,448
Intangible assets:
Purchase price allocation, Assets	17,448
Purchase price allocation, Assets	17,448
Purchase price allocation, Liabilities	1,368
Purchase price allocation Assets and Liabilities Assumed, Net	16,080
Accounts Receivable [Member]
Tangible assets:
Purchase price allocation, Assets	1,370
Intangible assets:
Purchase price allocation, Assets	1,370
Purchase price allocation, Assets	1,370
Inventories [Member]
Tangible assets:
Purchase price allocation, Assets	1,378
Intangible assets:
Purchase price allocation, Assets	1,378
Purchase price allocation, Assets	1,378
Prepaid Expenses and Other Current Assets [Member]
Tangible assets:
Purchase price allocation, Assets	9
Intangible assets:
Purchase price allocation, Assets	9
Purchase price allocation, Assets	9
Assets [Member]
Tangible assets:
Purchase price allocation, Assets	248
Intangible assets:
Purchase price allocation, Assets	248
Purchase price allocation, Assets	248
Tangible Assets [Member]
Tangible assets:
Purchase price allocation, Assets	3,005
Intangible assets:
Purchase price allocation, Assets	3,005
Purchase price allocation, Assets	3,005
Goodwill [Member]
Tangible assets:
Purchase price allocation, Assets	12,550
Intangible assets:
Purchase price allocation, Assets	12,550
Purchase price allocation, Assets	12,550
Trade names [Member]
Tangible assets:
Purchase price allocation, Assets	1,259
Intangible assets:
Purchase price allocation, Assets	1,259
Purchase price allocation, Assets	1,259
Technology-Based Intangible Assets [Member]
Tangible assets:
Purchase price allocation, Assets	470
Intangible assets:
Purchase price allocation, Assets	470
Purchase price allocation, Assets	470
Customer relationships [Member]
Tangible assets:
Purchase price allocation, Assets	117
Intangible assets:
Purchase price allocation, Assets	117
Purchase price allocation, Assets	117
Order or Production Backlog [Member]
Tangible assets:
Purchase price allocation, Assets	33
Intangible assets:
Purchase price allocation, Assets	33
Purchase price allocation, Assets	33
Non-compete [Member]
Tangible assets:
Purchase price allocation, Assets	14
Intangible assets:
Purchase price allocation, Assets	14
Purchase price allocation, Assets	14
Intangible Assets [Member]
Tangible assets:
Purchase price allocation, Assets	14,443
Intangible assets:
Purchase price allocation, Assets	14,443
Purchase price allocation, Assets	14,443
Assets Held under Capital Leases [Member]
Intangible assets:
Purchase price allocation, Liabilities	(37)
Accounts Payable [Member]
Intangible assets:
Purchase price allocation, Liabilities	(1,213)
Accrued Liabilities [Member]
Intangible assets:
Purchase price allocation, Liabilities	(118)
Estimated Fair Value [Member]
Tangible assets:
Purchase price allocation, Assets	18,402
Intangible assets:
Purchase price allocation, Assets	18,402
Purchase price allocation, Assets	18,402
Purchase price allocation, Liabilities	1,255
Purchase price allocation Assets and Liabilities Assumed, Net	17,147
Estimated Fair Value [Member] | Accounts Receivable [Member]
Tangible assets:
Purchase price allocation, Assets	1,575
Intangible assets:
Purchase price allocation, Assets	1,575
Purchase price allocation, Assets	1,575
Estimated Fair Value [Member] | Inventories [Member]
Tangible assets:
Purchase price allocation, Assets	1,843
Intangible assets:
Purchase price allocation, Assets	1,843
Purchase price allocation, Assets	1,843
Estimated Fair Value [Member] | Prepaid Expenses and Other Current Assets [Member]
Tangible assets:
Purchase price allocation, Assets	9
Intangible assets:
Purchase price allocation, Assets	9
Purchase price allocation, Assets	9
Estimated Fair Value [Member] | Assets [Member]
Tangible assets:
Purchase price allocation, Assets	248
Intangible assets:
Purchase price allocation, Assets	248
Purchase price allocation, Assets	248
Estimated Fair Value [Member] | Tangible Assets [Member]
Tangible assets:
Purchase price allocation, Assets	3,675
Intangible assets:
Purchase price allocation, Assets	3,675
Purchase price allocation, Assets	3,675
Estimated Fair Value [Member] | Goodwill [Member]
Tangible assets:
Purchase price allocation, Assets	9,491
Intangible assets:
Purchase price allocation, Assets	9,491
Purchase price allocation, Assets	9,491
Estimated Fair Value [Member] | Trade names [Member]
Tangible assets:
Purchase price allocation, Assets	1,527
Intangible assets:
Purchase price allocation, Assets	1,527
Purchase price allocation, Assets	1,527
Estimated Fair Value [Member] | Technology-Based Intangible Assets [Member]
Tangible assets:
Purchase price allocation, Assets	458
Intangible assets:
Purchase price allocation, Assets	458
Purchase price allocation, Assets	458
Estimated Fair Value [Member] | Customer relationships [Member]
Tangible assets:
Purchase price allocation, Assets	2,898
Intangible assets:
Purchase price allocation, Assets	2,898
Purchase price allocation, Assets	2,898
Estimated Fair Value [Member] | Order or Production Backlog [Member]
Tangible assets:
Purchase price allocation, Assets	91
Intangible assets:
Purchase price allocation, Assets	91
Purchase price allocation, Assets	91
Estimated Fair Value [Member] | Non-compete [Member]
Tangible assets:
Purchase price allocation, Assets	262
Intangible assets:
Purchase price allocation, Assets	262
Purchase price allocation, Assets	262
Estimated Fair Value [Member] | Intangible Assets [Member]
Tangible assets:
Purchase price allocation, Assets	14,727
Intangible assets:
Purchase price allocation, Assets	14,727
Purchase price allocation, Assets	14,727
Estimated Fair Value [Member] | Assets Held under Capital Leases [Member]
Intangible assets:
Purchase price allocation, Liabilities	(57)
Estimated Fair Value [Member] | Accounts Payable [Member]
Intangible assets:
Purchase price allocation, Liabilities	(1,113)
Estimated Fair Value [Member] | Accrued Liabilities [Member]
Intangible assets:
Purchase price allocation, Liabilities	(85)
Provisional Adjustments [Member]
Tangible assets:
Purchase price allocation, Assets	(954)
Intangible assets:
Purchase price allocation, Assets	(954)
Purchase price allocation, Assets	(954)
Purchase price allocation, Liabilities	113
Purchase price allocation Assets and Liabilities Assumed, Net	(1,067)
Provisional Adjustments [Member] | Accounts Receivable [Member]
Tangible assets:
Purchase price allocation, Assets	(205)
Intangible assets:
Purchase price allocation, Assets	(205)
Purchase price allocation, Assets	(205)
Provisional Adjustments [Member] | Inventories [Member]
Tangible assets:
Purchase price allocation, Assets	(465)
Intangible assets:
Purchase price allocation, Assets	(465)
Purchase price allocation, Assets	(465)
Provisional Adjustments [Member] | Prepaid Expenses and Other Current Assets [Member]
Tangible assets:
Purchase price allocation, Assets	0
Intangible assets:
Purchase price allocation, Assets	0
Purchase price allocation, Assets	0
Provisional Adjustments [Member] | Assets [Member]
Tangible assets:
Purchase price allocation, Assets	0
Intangible assets:
Purchase price allocation, Assets	0
Purchase price allocation, Assets	0
Provisional Adjustments [Member] | Tangible Assets [Member]
Tangible assets:
Purchase price allocation, Assets	(670)
Intangible assets:
Purchase price allocation, Assets	(670)
Purchase price allocation, Assets	(670)
Provisional Adjustments [Member] | Goodwill [Member]
Tangible assets:
Purchase price allocation, Assets	3,059
Intangible assets:
Purchase price allocation, Assets	3,059
Purchase price allocation, Assets	3,059
Provisional Adjustments [Member] | Trade names [Member]
Tangible assets:
Purchase price allocation, Assets	(268)
Intangible assets:
Purchase price allocation, Assets	(268)
Purchase price allocation, Assets	(268)
Provisional Adjustments [Member] | Technology-Based Intangible Assets [Member]
Tangible assets:
Purchase price allocation, Assets	12
Intangible assets:
Purchase price allocation, Assets	12
Purchase price allocation, Assets	12
Provisional Adjustments [Member] | Customer relationships [Member]
Tangible assets:
Purchase price allocation, Assets	(2,781)
Intangible assets:
Purchase price allocation, Assets	(2,781)
Purchase price allocation, Assets	(2,781)
Provisional Adjustments [Member] | Order or Production Backlog [Member]
Tangible assets:
Purchase price allocation, Assets	(58)
Intangible assets:
Purchase price allocation, Assets	(58)
Purchase price allocation, Assets	(58)
Provisional Adjustments [Member] | Non-compete [Member]
Tangible assets:
Purchase price allocation, Assets	(248)
Intangible assets:
Purchase price allocation, Assets	(248)
Purchase price allocation, Assets	(248)
Provisional Adjustments [Member] | Intangible Assets [Member]
Tangible assets:
Purchase price allocation, Assets	(284)
Intangible assets:
Purchase price allocation, Assets	(284)
Purchase price allocation, Assets	(284)
Provisional Adjustments [Member] | Assets Held under Capital Leases [Member]
Intangible assets:
Purchase price allocation, Liabilities	20
Provisional Adjustments [Member] | Accounts Payable [Member]
Intangible assets:
Purchase price allocation, Liabilities	(100)
Provisional Adjustments [Member] | Accrued Liabilities [Member]
Intangible assets:
Purchase price allocation, Liabilities	$ (33)

XML

Balance Sheet Information - Summary of Long-term Liabilities (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Liabilities Noncurrent [Abstract]
Executive deferred compensation plan	$ 1,718	$ 1,652
Reserve for uncertain tax positions	842	842
Deferred rent	166	166
Deferred revenues	54	74
Long-term obligations under capital leases	1	2
Total long-term liabilities	$ 2,781	$ 2,736

XML

Basis of Presentation - Additional Information (Detail) (USD $)	1 Months Ended	3 Months Ended		6 Months Ended		12 Months Ended
	Jan. 31, 2013 Segment	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Dec. 31, 2012 Segment
Nature Of Operations [Line Items]
Number of operating segments	2					2
Net foreign exchange losses resulting from foreign currency transactions included in other income		$ 5,000	$ 7,000	$ 16,000	$ 17,000
Pctel Secure [Member]
Nature Of Operations [Line Items]
Royalty receivable as percentage of net sale price				7.00%
Maximum royalty rate				10,000,000
Pctel Secure [Member] | Maximum [Member]
Nature Of Operations [Line Items]
Maximum royalty rate				$ 10,000,000

XML

Commitments and Contingencies - Future Minimum Rental Payments (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013
Operating Leases Future Minimum Payments Due [Abstract]
2013	$ 468
2014	760
2015	711
2016	593
2017	478
Thereafter	1,047
Future minimum lease payments	$ 4,057

XML

Stock-Based Compensation - Weighted Average Contractual Life and Intrinsic Value of Options Outstanding (Detail) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2013
Share Based Compensation Arrangement By Share Based Payment Award Options Additional Disclosures [Abstract]
Options Outstanding Weighted Average Contractual Life (years)	4 years 2 months 16 days
Options Exercisable Weighted Average Contractual Life (years)	2 years 3 months 7 days
Options Outstanding Intrinsic Value	$ 1,168
Options Exercisable Intrinsic Value	$ 216

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Income Taxes

6 Months Ended

Jun. 30, 2013

Income Tax Disclosure [Abstract]

Income Taxes

12. Income Taxes

The Company recorded an income tax expense for continuing operations of $1.2 million for the six months ended June 30, 2013. The tax expense for the six months ended June 30, 2013 differs from the statutory rate of 34% primarily because of state income taxes.

The Company recorded an income tax benefit of $0.1 million for the six months ended June 30, 2012. The tax benefit for the six months ended June 30, 2012 differs from the statutory rate of 34% because of state income taxes.

The Company’s valuation allowance against its deferred tax assets was $0.7 million at June 30, 2013 and December 31, 2012. On a regular basis, the Company evaluates the recoverability of deferred tax assets and the need for a valuation allowance. Such evaluations involve the application of significant judgment. The Company considers multiple factors in its evaluation of the need for a valuation allowance. The Company’s long-term forecasts continue to support the realization of its deferred tax assets. The Company’s domestic deferred tax assets have a ratable reversal pattern over 15 years. The carryforward rules allow for up to a 20 year carryforward of net operating losses (“NOL”) to future income that is available to realize the deferred tax assets. The combination of the deferred tax asset reversal pattern and carryforward period yields a 27.5 year average period over which future income can be utilized to realize the deferred tax assets.

The Company’s gross unrecognized tax benefit was $1.4 million both at June 30, 2013 and December 31, 2012. The Company does not expect any of the potential benefits will be settled within the next twelve months. The Company is unaware of any positions for which it is reasonably possible that the unrecognized tax benefits will significantly increase or decrease within the next twelve months.

The Company files a consolidated federal income tax return, income tax returns with various states, and foreign income tax returns in various foreign jurisdictions. The Company’s federal and state income tax years, with limited exceptions, are closed through 2007.

The Company recorded a tax gain of $0.7 million related to the sale of PCTEL Secure. The income tax gain was based on the fair market value of the intangible assets sold minus the tax basis of the intangible assets.

The Company has no plans to repatriate foreign income from its subsidiaries.

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Acquisition of TelWorx Communications LLC

6 Months Ended

Jun. 30, 2013

Business Combinations [Abstract]

Acquisition of TelWorx Communications LLC

8. Acquisition of TelWorx Communications LLC

The Company, through its wholly-owned subsidiary PCTelWorx, Inc. (“PCTelWorx”), completed the acquisition of substantially all of the assets and the assumption of certain specified liabilities of TelWorx Communications LLC, TelWorx U.K. Limited, TowerWorx LLC and TowerWorx International, Inc. (“collectively “TelWorx”), pursuant to an Asset Purchase Agreement dated as of July 9, 2012 among the Company, PCTelWorx, TelWorx and Tim and Brenda Scronce, the principal owners of TelWorx. The business operations associated with these purchased assets are collectively referred to as “TelWorx” in this Form 10-Q. The acquired business is primarily a North Carolina-based business with expertise in delivering wireless and fiber optic solutions into the enterprise, defense, transportation, and the carrier market. The acquired business excels at global procurement, custom engineering of RF solutions, rapid delivery and deployment of systems, and value-added reselling of antennas, related RF components, and other communication elements. The acquisition includes TowerWorx, a provider of mobile towers for defense, industrial wireless, and other applications. The acquisition expands the Company’s products and markets addressed by its antenna and Connected Solutions™ product line. The fair value purchase price for TelWorx was $16.1 million, consisting of $16.0 million in cash paid at closing, $1.1 million of contingent consideration related to an indemnity holdback escrow and potential earn-out at fair value, net of $1.0 million cash recovered from Tim and Brenda Scronce in March 2013 pursuant to the working capital adjustment provisions of the Asset Purchase Agreement and the legal settlement described below.

Following the closing of the acquisition, the Company’s management became aware of accounting irregularities with respect to the TelWorx financial statements, in part through an internal review conducted in connection with the calculation of post-closing purchase price adjustments and in part due to an anonymous tip received after the internal review began. With the oversight of the Audit Committee, management expanded its review into an internal investigation regarding these financial irregularities and outside counsel was retained to assist in the investigation. The Company’s outside counsel then retained a Big Four accounting firm to perform an independent forensic accounting investigation under counsel’s direction. The accounting irregularities in the TelWorx financial statements identified as a result of this investigation are believed to have been directed and/or permitted by management of the TelWorx Entities, principally Tim Scronce and those acting at his direction. The correction of the pre-acquisition accounting misstatements discovered in the investigation are reflected in the pro-forma adjustments in Footnote 4 – Acquisition of TelWorx Communications LLC in the Company’s annual report filed on Form 10-K for the fiscal year ended December 31, 2012 as well as this footnote.

The Company determined the amount of the corrections and the period in which they occurred through the forensic audit performed, which included tracing sales transactions to customer commitments and proof of delivery documents as well as reviewing the cost of sales records and aging of inventory at the acquisition date. The Company was authorized by the Board of Directors to seek restitution from the Scronces and other responsible parties. On March 27, 2013, the Company and the Scronces entered into a legal settlement over claims by the Company relating to the value of the acquisition and the accounting issues summarized above. The Company is still pursuing additional restitution from the other responsible parties. See Footnote 11 – TelWorx Legal Settlement for full details.

The Company, through PCTelWorx, offered employment to all former employees of TelWorx. The key managers entered into employment arrangements that include a non-competition covenant during their employment and for twelve months thereafter. The Company entered into a five-year lease agreement for the continued use of the operating facility and offices in Lexington, North Carolina and a two-year lease for an office facility in Pryor, Oklahoma. In May 2013, the Company gave notice of early termination of the facility lease in Lexington, North Carolina. The termination is effective October 2013. In July 2013, the Company signed a new lease for office space in Lexington, North Carolina. The new five-year lease is effective August 1, 2013.

The following is the allocation of the purchase price for the assets acquired from TelWorx at the date of the acquisition.

	Estimated Fair Value July 9, 2012 as reported at September 30, 2012		Provisional Adjustments Subsequent to September 30, 2012			Estimated Fair Value July 9, 2012
Tangible assets:
Accounts receivable	$	1,575	($	205	)	$	1,370
Inventory		1,843		(465	)		1,378
Prepaid expenses		9		0			9
Fixed assets		248		0			248
Total tangible assets		3,675		(670	)		3,005
Intangible assets:
Goodwill		9,491		3,059			12,550
Trade names		1,527		(268	)		1,259
Technology		458		12			470
Customer relationships		2,898		(2,781	)		117
Backlog		91		(58	)		33
Non-compete		262		(248	)		14
Total intangible assets		14,727		(284	)		14,443
Total assets		18,402		(954	)		17,448
Capital leases		57		(20	)		37
Accounts payable		1,113		100			1,213
Accrued liabilities		85		33			118
Total liabilities		1,255		113			1,368
Net assets acquired	$	17,147	($	1,067	)	$	16,080

In the fourth quarter of 2012, the Company subsequently recorded a goodwill impairment of $12.5 million related to its TelWorx acquisition based on the results from our annual test of goodwill impairment conducted as of October 31, 2012. This amount represented the total goodwill associated with the acquisition. The Company considers its purchase accounting for the TelWorx acquisition to have been complete as of the quarter ended December 31, 2012. The chronology of the Company’s change purchase accounting fair value of $16.1 million on July 9, 2012 to a $12.5 million goodwill impairment in the quarter ended December 31, 2012 is as follows:

The Company based its purchase accounting fair value of intangible assets on future projections using the revenue and margin profile of TelWorx’ historical financial statements for 2010, 2011 and the six months ended June 30, 2012. They presented a profile of a business that yielded goodwill of $9.5 million, primarily attributed to the synergies expected to arise for the acquired TelWorx business after the Company’s acquisition of the business and the assembled workforce of the acquired business. The two primary synergies that the Company expected to accrue to the TelWorx business that the Company concluded were not typically available to a market participant were: (1) Increased TelWorx revenue as a result of customer confidence resulting from being part of a public company with significant cash and investments available for working capital with no debt. The vast majority of the competitors in the antenna and site solution market are smaller private companies with limited working capital and financial resources. (2) Lower raw material costs for TelWorx products as a result of having access to PCTEL’s supply chain for certain products. PCTEL has access through several of its large key customers, with which it has a preferred supplier relationship, to their supply chain and profits from the volume discounts that come with our customer’s significantly larger volume. There were no synergies identified that accrued to PCTEL.

The accounting irregularities discovered in the historical financial statements lowered the historical pre-acquisition sales and margins as well as the post-acquisition sales in the quarter ended September 30, 2012, the quarter in which the acquisition closed. The Company recalculated the allocation of the purchase price using future projections which have a new lower revenue and margin profile. The result was a $3.1 million increase of goodwill up to $12.5 million. At this time the Company remained confident that the acquisition would yield the synergies expected to arise after the acquisition , to which the goodwill was attributed.

The Company performs an annual impairment test of goodwill as of the end of the first month of the fiscal fourth quarter (October 31st), or at an interim date if an event occurs or if circumstances change that would indicate that an impairment loss may have been incurred. In performing our annual impairment test, the Company first performs a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value, including goodwill. If our qualitative assessment is indicative of possible impairment, then a two-step quantitative fair value assessment is performed at the reporting unit level. In the first step, the fair value of each reporting unit is compared with its carrying value. If the fair value exceeds the carrying value, then goodwill is not impaired and no further testing is performed. The second step is performed if the carrying value exceeds the fair value. The implied fair value of goodwill is then compared against the carrying value of goodwill to determine the amount of impairment.

During the quarter ended December 31, 2012, the Company observed that the orders in the 2013 sales projections used in the purchase accounting allocation for TelWorx were not converting to sales backlog at a pace that would support the projected 2013 base revenue used in the purchase accounting fair value of the TelWorx business at the acquisition date. Due to the Company’s short order to shipment cycles, such a variance would not become apparent until 60-90 days before 2013 began. Additionally, at the date of the acquisition the Company was not seeing funnel conversion variances in its antenna and site solutions products that operate in similar markets and therefore did not suspect that the site solution products would experience a dissimilar path. Specifically, 2013 base revenue and gross profit used in the Company’s purchase accounting was $18.5 million and $3.2 million (18% of revenue), respectively. At October 31, 2012, based on the Company’s historical order to ship cycle and historical rate of sales funnel conversion to actual sales (50%), there should have been approximately $1.0 million of Q1 2013 deliverable order backlog and a sales funnel of Q1 deliverable sales orders being tracked totaling at least $7.5 million. At October 31, 2012 the backlog was half the target, the sales funnel was 17% below the target, and the gross profit margin on the backlog and funnel were at 16% instead of 18%. All of these were indicators that the business was deteriorating from the projections used at the acquisition date for the purchase accounting. The Company reevaluated the projections and determined that they supported 2013 revenue of $15.0 million, at 16% margin, which was used in the goodwill test calculations, and adopted by the Board of Directors as TelWorx’ contribution to the 2013 Company financial plan. Management concluded the decline in projected revenue and gross margin levels were of a long-term nature. The decline was across a broad range of customers and products. Additionally, the decline in revenue was sufficiently large to not be recoverable in the short term based on historical revenue growth rates for the markets in which the Company’s antenna and site solutions products are sold. The Company considered this significant revenue decline at the annual goodwill test date to be an indicator of goodwill impairment requiring the performance of the two step quantitative fair value assessment, which resulted in a net present value of future cash flows that did not support a goodwill carrying value for this reporting unit. It is not as a result of the accounting irregularities previously discussed.

The following pro forma financial information gives effect to the acquisition of the TelWorx business as if the acquisition had taken place on January 1, 2012. The pro forma financial information for TelWorx was derived from the unaudited historical accounting records of TelWorx.

	(unaudited)		(unaudited)
	Three Months Ended		Six Months Ended
	June 30, 2012		June 30, 2012
REVENUES	$	23,841	$	44,482
LOSS BEFORE INCOME TAXES	$	290	($	575	)

The Company made pro forma adjustments to the historical TelWorx revenue and earnings before income taxes that reduced revenue by $0.1 million and total combined earnings by $0.2 million for the three months ended June 30, 2012, and that reduced revenue by $0.4 million and total combined earnings by $0.5 million for the six months ended June 30, 2012.

The adjustments were made to apply a correction to the misstatements to revenue and profit before tax contained in the historical pre-acquisition TelWorx financial statements that were discovered in the course of the Company’s internal investigation by the forensic auditors. The forensic auditing procedures that identified the misstatements included the tracing of all significant sales transactions from the TelWorx operation back to customer commitment and proof of delivery documentation. The forensic audit dollar coverage obtained is approximately 50% of the operations’ revenue. Additionally there is also an adjustment to the costs associated with excess and obsolete inventory not used for a year or more at the acquisition date to the appropriate pre-acquisition period, consistent with the policy used by the Company after the acquisition. The forensic accounting procedures included the tracing of all significant inventory items at the date of the acquisition back to historical costing and usage records.

The pro forma information is presented for illustrative purposes only and may not be indicative of the results that would have been obtained had the acquisition actually occurred on January 1, 2012, nor is it necessarily indicative of the Company’s future consolidated results of operations or financial position.

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Commitments and Contingencies - Present Value of Net Minimum Lease Payments, Capital Leases (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013
Commitments And Contingencies Disclosure [Abstract]
2013	$ 1
2014	2
Total minimum payments required:	3
Less amount representing interest:	0
Present value of net minimum lease payments:	$ 3

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Subsequent Events

6 Months Ended

Jun. 30, 2013

Subsequent Events [Abstract]

Subsequent Events

15. Subsequent Events

The Company evaluates subsequent events occurring between the most recent balance sheet date and the date that the financial statements are available to be issued in order to determine whether the subsequent events are to be recorded in and/or disclosed in the Company’s financial statements and footnotes. The financial statements are considered to be available to be issued at the time that they are filed with the SEC. There are no subsequent events to report that would have a material impact on the Company’s financial statements.

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Segment, Customer and Geographic Information

6 Months Ended

Jun. 30, 2013

Segment Reporting [Abstract]

Segment, Customer and Geographic Information

13. Segment, Customer and Geographic Information

PCTEL operates in two new segments for reporting purposes as of January 1, 2013. The Company’s Connected Solutions segment includes its antenna and engineered site solutions. Its RF Solutions segment includes its scanning receivers and RF engineering services. Each of the segments has its own segment manager as well as its own engineering, sales and marketing, and operational general and administrative functions. All of the Company’s accounting and finance, human resources, IT and legal functions are provided on a centralized basis through the corporate function. The Company manages its balance sheet and cash flows centrally at the corporate level, with the exception of trade accounts receivable and inventory which is managed at the segment level. Each of the segment managers reports to and maintains regular contact with the chief operating decision maker to discuss operating activities, financial results, forecasts, or plans for the segment. As of January 1, 2013 the Company’s chief operating decision maker uses the profit and loss results through operating profit and identified assets for Connected Solutions and RF Solutions segments to make operating decisions. The segment information presented in the financial statements restates history for the new Connected Solutions and RF Solution segments on a consistent basis with the current period.

The following tables are the segment operating profits for the three and six months ended June 30, 2013 and June 30, 2012, respectively, and the segment balance sheet information as of June 30, 2013 and December 31, 2012:

	Three Months Ended June 30, 2013
	Connected Solutions		RF Solutions		Consolidating			Total
REVENUES	$	19,199	$	7,602	($	55	)	$	26,746
COST OF REVENUES		13,537		2,726		(65	)		16,198
GROSS PROFIT		5,662		4,876		10			10,548
OPERATING EXPENSES:
Research and development		1,166		1,517		0			2,683
Sales and marketing		2,147		907		0			3,054
General and administrative		457		170		3,198			3,825
Amortization of intangible assets		394		210		0			604
Restructuring charges		124		0		0			124
Total operating expenses		4,288		2,804		3,198			10,290
OPERATING INCOME (LOSS)	$	1,374	$	2,072	($	3,188	)	$	258

	Six Months Ended June 30, 2013
	Connected Solutions		RF Solutions		Consolidating			Total
REVENUES	$	38,555	$	13,374	($	111	)	$	51,818
COST OF REVENUES		26,882		4,917		(127	)		31,672
GROSS PROFIT		11,673		8,457		16			20,146
OPERATING EXPENSES:
Research and development		2,302		2,931		0			5,233
Sales and marketing		4,339		1,736		0			6,075
General and administrative		885		329		7,242			8,456
Amortization of intangible assets		790		419		0			1,209
Restructuring charges		225		0		0			225
Total operating expenses		8,541		5,415		7,242			21,198
OPERATING INCOME (LOSS)	$	3,132	$	3,042	($	7,226	)	($	1,052	)

	As of June 30, 2013
	Connected Solutions		RF Solutions		Consolidating		Total
Accounts receivable	$	12,136	$	6,201	$	0	$	18,337
Inventories	$	13,957	$	2,151	$	0	$	16,108
Long-lived assets:
Property and equipment, net	$	11,541	$	1,933	$	1,197	$	14,671
Long-term investment securities	$	0	$	0	$	0	$	0
Goodwill	$	0	$	161	$	0	$	161
Intangible assets, net	$	3,614	$	2,181	$	0	$	5,795
Deferred tax assets, net	$	0	$	0	$	12,989	$	12,989
Other noncurrent assets	$	0	$	0	$	1,727	$	1,727

	Three Months Ended June 30, 2012
	Connected Solutions		RF Solutions		Consolidating			Total
REVENUES	$	14,821	$	5,206	($	34	)	$	19,993
COST OF REVENUES		9,717		1,650		(44	)		11,323
GROSS PROFIT		5,104		3,556		10			8,670
OPERATING EXPENSES:
Research and development		1,042		1,173		0			2,215
Sales and marketing		1,543		1,030		0			2,573
General and administrative		244		118		2,294			2,656
Amortization of intangible assets		321		221		0			542
Restructuring charges		0		0		0			0
Total operating expenses		3,150		2,542		2,294			7,986
OPERATING INCOME (LOSS)	$	1,954	$	1,014	($	2,284	)	$	684

	Six Months Ended June 30, 2012
	Connected Solutions		RF Solutions		Consolidating			Total
REVENUES	$	27,988	$	9,204	($	38	)	$	37,154
COST OF REVENUES		18,485		2,886		(65	)		21,306
GROSS PROFIT		9,503		6,318		27			15,848
OPERATING EXPENSES:
Research and development		2,119		2,412		0			4,531
Sales and marketing		3,099		1,983		0			5,082
General and administrative		470		259		4,660			5,389
Amortization of intangible assets		643		441		0			1,084
Restructuring charges		0		0		0			0
Total operating expenses		6,331		5,095		4,660			16,086
OPERATING INCOME (LOSS)	$	3,172	$	1,223	($	4,633	)	($	238	)

	As of December 31, 2012
	Connected Solutions		RF Solutions		Consolidating		Total
Accounts receivable	$	11,885	$	6,701	$	0	$	18,586
Inventories	$	14,283	$	3,290	$	0	$	17,573
Long-lived assets:
Property and equipment, net	$	11,868	$	1,746	$	1,161	$	14,775
Goodwill	$	0	$	161	$	0	$	161
Intangible assets, net	$	4,404	$	2,600	$	0	$	7,004
Deferred tax assets, net	$	0	$	0	$	14,034	$	14,034
Other noncurrent assets	$	0	$	0	$	1,636	$	1,636

The Company’s revenues to customers outside of the United States, as a percent of total revenues for the three and six months ended June 30, 2013 and 2012, respectively were as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
Region	2013			2012			2013			2012
Europe, Middle East, & Africa		11	%		13	%		10	%		14	%
Asia Pacific		11	%		9	%		9	%		10	%
Other Americas		7	%		8	%		6	%		7	%
Total Foreign sales		29	%		30	%		25	%		31	%

No customers accounted for 10% or greater of revenues or receivables during the three and six months ended June 30, 2013 or the three and six months ended June 30, 2012.

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Document and Entity Information	6 Months Ended
	Jun. 30, 2013	Aug. 06, 2013
Document Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q2
Trading Symbol	PCTI
Entity Registrant Name	PC TEL INC
Entity Central Index Key	0001057083
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		18,465,275

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Related Parties

6 Months Ended

Jun. 30, 2013

Related Party Transactions [Abstract]

Related Parties

14. Related Parties

The Company’s lease for its Lexington, North Carolina facility is with Scronce Real Estate LLC. Scronce Real Estate, LLC is owned by Tim and Brenda Scronce, the wife of Tim Scronce. Tim and/or Brenda Scronce were the majority owners of the TelWorx entities as defined in Note 11 – Commitments and Contingencies above. The Company, through its wholly-owned subsidiary PCTelWorx, Inc. (“PCTelWorx”), purchased the assets of TelWorx in July 2012. Tim Scronce worked for the Company until his resignation in December 2012 and Brenda Scronce never worked for the Company. As of June 30, 2013, a total of $0.2 million has been paid under this lease. In May 2013, the Company gave notice of early termination of the lease which becomes effective in October 2013. The Company signed a new lease for an office facility in Lexington effective August 1, 2013. The new lease is not with a related party.

The Company’s lease for its Melbourne, Florida office is with 3dB, LLC, a real estate entity co-owned by Robert Joslin, Scott Clay, and Greg Akin. As co-owners of Envision Wireless, Joslin, Clay and Akin sold the assets of Envision Wireless to the Company in October 2011. Joslin, Clay, and Akin continue to work for the Company. The Company will not renew the lease when it expires in October 2013, but will move to a new office facility. The new lease will not be with a related party.

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Stock-Based Compensation - Summary of Retention Stock Option Activity (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	1 Months Ended	6 Months Ended
	Apr. 30, 2013	Jun. 30, 2013
Schedule Of Stock Options [Line Items]
Options outstanding, beginning balance, shares		1,099,106
Retention Stock Options Granted, shares		689,550
Options outstanding, ending balance, shares		1,665,614
Retention Stock Options outstanding, Exercisable, Ending balance, shares		941,331
Options outstanding, beginning balance, Weighted Average Exercise Price		$ 9.06
Retention Stock Options Granted, Weighted Average Exercise Price		$ 7.20
Options outstanding, ending balance, Weighted Average Exercise Price		$ 8.40
Retention Stock Options outstanding, Exercisable, Ending balance, Weighted Average Exercise Price		$ 9.35
Executive Officer [Member] | Retention Stock Options [Member]
Schedule Of Stock Options [Line Items]
Options outstanding, beginning balance, shares
Retention Stock Options Granted, shares	182,500	182,500
Options outstanding, ending balance, shares		182,500
Retention Stock Options outstanding, Exercisable, Ending balance, shares
Options outstanding, beginning balance, Weighted Average Exercise Price		$ 0.00
Retention Stock Options Granted, Weighted Average Exercise Price		$ 7.16
Options outstanding, ending balance, Weighted Average Exercise Price		$ 7.16
Retention Stock Options outstanding, Exercisable, Ending balance, Weighted Average Exercise Price

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Stock-Based Compensation - Summary of Stock Option Activity (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	6 Months Ended
	Jun. 30, 2013
Share Based Compensation Arrangement By Share Based Payment Award Options Outstanding [Roll Forward]
Options outstanding, beginning balance, shares	1,099,106
Options Outstanding Granted	689,550
Options Outstanding Exercised	(11,841)
Options outstanding Expired or cancelled	(88,568)
Options outstanding Forfeited	(22,633)
Options outstanding, ending balance, shares	1,665,614
Options exercisable, ending balance, shares	941,331
Options outstanding, beginning balance, Weighted Average Exercise Price	$ 9.06
Weighted Average Exercise Price Granted	$ 7.20
Weighted Average Exercise Price Exercised	$ 7.11
Weighted Average Exercise Price Expired or Cancelled	$ 7.90
Weighted Average Exercise Price Forfeited	$ 6.45
Options outstanding, ending balance, Weighted Average Exercise Price	$ 8.40
Options outstanding, Exercisable at End of Year, Weighted Average Exercise Price	$ 9.35