UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (date of earliest event reported)
August 4, 2015
PCTEL, Inc.
(Exact name of registrant as specified in its charter)
Delaware | 000-27115 | 77-0364943 | ||
(State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
471 Brighton Drive
Bloomingdale, Illinois 60108
(Address of Principal Executive Offices, including Zip Code)
(630) 372-6800
(Registrants telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12(b)) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 Results of Operations and Financial Condition
The following information is intended to be furnished under Item 2.02 of Form 8-K, Results of Operations and Financial Condition. This information shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
On August 4, 2015, PCTEL, Inc. issued a press release regarding its financial results for its second fiscal quarter ended June 30, 2015. The full text of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits
(d) | Exhibits. |
99.1 | Press release, dated August 4, 2015, of PCTEL, Inc. announcing its financial results for its second fiscal quarter ended June 30, 2015. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: August 4, 2015
PCTEL, INC.
| ||
By: | /s/ John W. Schoen | |
John W. Schoen, Chief Financial Officer |
EXHIBIT INDEX
Exhibit Number |
Description | |
Exhibit 99.1 | Press release, dated August 4, 2015, of PCTEL, Inc. announcing its financial results for its second fiscal quarter ended June 30, 2015. |
Exhibit 99.1
PCTEL Achieves $27.6 Million in Second Quarter Revenue
An Increase of Six Percent from the Same Period Last Year
BLOOMINGDALE, IL. August 4, 2015 PCTEL, Inc. (NASDAQ:PCTI), a leader in Performance Critical Telecom solutions, announced its 2015 second quarter results.
First Quarter Highlights
$27.6 million in revenue for the quarter, an increase of six percent from the same period last year.
Gross profit margin of 35 percent in the quarter, compared to 41 percent for the same period last year.
GAAP operating margin of negative six percent for the quarter, compared to operating margin of two percent for the same period last year.
GAAP net income of $347,000 for the quarter, or $0.02 per diluted share, compared to net income of $545,000, or $0.03 per diluted share for the same period last year.
Non-GAAP operating profit and net income are measures the company uses to reflect the results of its core earnings. The Companys reporting of non-GAAP net income excludes expenses for restructuring, gain or loss on sale of assets, stock based compensation, amortization and impairment of intangible assets and goodwill related to the Companys acquisitions, and non-cash related income tax expense.
Non-GAAP operating margin of one percent in the quarter, compared to nine percent in the same period last year.
Non-GAAP net income of $295,000 or $0.02 per diluted share in the quarter, compared to $2.0 million or $0.11 per diluted share in the same period last year.
$41.3 million of cash and short-term investments at June 30, 2015, an increase of approximately $2.4 million from the preceding quarter. Free cash flow in the quarter was $6.0 million, comprised of $6.9 million in cash flow from operations and $933,000 of capital spending. During the quarter the Company repurchased 380,000 shares of its common stock for approximately $2.8 million, paid a regular quarterly dividend of $929,000.
As we have opened up new markets in China and expanded our field of play with network analytics and services, we have also been exposed to additional risks, said Marty Singer, PCTELs Chairman and CEO. Challenges are not new to us and we are confident in our growth in both business operations, added Singer.
CONFERENCE CALL / WEBCAST
PCTELs management team will discuss the Companys results today at 5:15 PM ET. The call can be accessed by dialing (877) 734-5369 (U.S. / Canada) or (706) 679-6397 (International), conference ID: 13775111. The call will also be webcast at http://investor.pctel.com/events.cfm.
REPLAY: A replay will be available for two weeks after the call on either the website listed above or by calling (855) 859-2056 (U.S./Canada), or International (404) 537-3406, conference ID: 13775111.
About PCTEL
PCTEL delivers Performance Critical Telecom solutions. The industry relies upon PCTEL to benchmark network performance, analyze trends, and optimize wireless networks. PCTELs antennas and site solutions are vital elements for SCADA, oil and gas, utilities, fleet management, health care, public safety, education, small cell, and network timing.
PCTELs RF Solutions products and services improve the performance of wireless networks globally. PCTELs performance critical products include its MXflex®, IBflex®, and EXflex® SeeGull® scanning receivers and related SeeHawk® and SeeWave tools. PCTELs sophisticated engineering services utilize these products as well as the Meridian network analytics portfolio (Map IQ, Network IQ, and Subscriber IQ).
PCTEL Connected Solutions designs and delivers performance critical antennas and site solutions for wireless networks globally. PCTELs performance critical MAXRAD® and Bluewave antenna solutions include high rejection and high performance GPS and GNSS products, the industry leading Yagi portfolio, mobile and indoor LTE, broadband, and LMR antennas and PIM-rated antennas for transit, in-building, and small cell applications. We leverage our design, logistics, and support capabilities to deliver performance critical site solutions into carrier, railroad, and utility applications.
PCTELs products are sold worldwide through direct and indirect channels. For more information, please visit the companys web sites: www.pctel.com, www.antenna.com, or www.rfsolutions.pctel.com.
PCTEL Safe Harbor Statement
This press release and our related comments in our second quarter earnings conference call contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Specifically, the statements regarding the our future financial performance, new products and features, expectations regarding the future growth of our antenna and wireless RF businesses, and demand for engineering services are forward-looking statements within the meaning of the safe harbor. These statements are based on managements current expectations and actual results may differ materially from those projected as a result of certain risks and uncertainties, including the customer demand for these types of products and services generally, PCTELs ability to successfully grow the wireless products business, and its ability to implement new technologies and obtain protection for the related intellectual property. These and other risks and uncertainties are detailed in PCTELs Securities and Exchange Commission filings. These forward-looking statements are made only as of the date hereof, and PCTEL disclaims any obligation to update or revise the information contained in any forward-looking statement, whether as a result of new information, future events or otherwise.
# # #
For further information contact:
John Schoen | Jack Seller | |||||
CFO | Public Relations | |||||
PCTEL, Inc. | PCTEL, Inc. | |||||
(630) 372-6800 | (630)372-6800 | |||||
Jack.seller@pctel.com |
PCTEL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(unaudited) | ||||||||
June 30, | December 31, | |||||||
2015 | 2014 | |||||||
ASSETS | ||||||||
Cash and cash equivalents |
$ | 16,184 | $ | 20,432 | ||||
Short-term investment securities |
25,075 | 39,577 | ||||||
Accounts receivable, net of allowance for doubtful accounts of $108 and $121 at June 30, 2015 and December 31, 2014, respectively |
21,667 | 23,874 | ||||||
Inventories, net |
17,696 | 16,358 | ||||||
Deferred tax assets, net |
2,149 | 2,281 | ||||||
Prepaid expenses and other assets |
2,131 | 1,757 | ||||||
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Total current assets |
84,902 | 104,279 | ||||||
Property and equipment, net |
14,628 | 14,842 | ||||||
Goodwill |
4,123 | 161 | ||||||
Intangible assets, net |
12,929 | 2,637 | ||||||
Deferred tax assets, net |
9,710 | 9,710 | ||||||
Other noncurrent assets |
36 | 40 | ||||||
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TOTAL ASSETS |
$ | 126,328 | $ | 131,669 | ||||
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LIABILITIES AND STOCKHOLDERS EQUITY | ||||||||
Accounts payable |
$ | 5,811 | $ | 5,495 | ||||
Accrued liabilities |
6,961 | 10,211 | ||||||
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Total current liabilities |
12,772 | 15,706 | ||||||
Other long-term liabilities |
1,426 | 448 | ||||||
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Total liabilities |
14,198 | 16,154 | ||||||
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Stockholders equity: |
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Common stock, $0.001 par value, 100,000,000 shares authorized, 18,555,427 and 18,571,419 shares issued and outstanding at June 30, 2015 and December 31, 2014, respectively |
19 | 19 | ||||||
Additional paid-in capital |
143,616 | 145,462 | ||||||
Accumulated deficit |
(31,646 | ) | (30,101 | ) | ||||
Accumulated other comprehensive income |
141 | 135 | ||||||
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Total stockholders equity |
112,130 | 115,515 | ||||||
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TOTAL LIABILITIES AND STOCKHOLDERS EQUITY |
$ | 126,328 | $ | 131,669 | ||||
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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, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
REVENUES |
$ | 27,625 | $ | 26,182 | $ | 53,951 | $ | 49,837 | ||||||||
COST OF REVENUES |
18,034 | 15,331 | 34,171 | 29,405 | ||||||||||||
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GROSS PROFIT |
9,591 | 10,851 | 19,780 | 20,432 | ||||||||||||
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OPERATING EXPENSES: |
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Research and development |
2,904 | 3,069 | 5,642 | 6,311 | ||||||||||||
Sales and marketing |
3,425 | 3,303 | 6,955 | 6,258 | ||||||||||||
General and administrative |
3,302 | 3,470 | 6,665 | 6,702 | ||||||||||||
Amortization of intangible assets |
1,185 | 464 | 1,839 | 1,038 | ||||||||||||
Restructuring charges |
440 | 0 | 440 | 0 | ||||||||||||
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Total operating expenses |
11,256 | 10,306 | 21,541 | 20,309 | ||||||||||||
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OPERATING INCOME (LOSS) |
(1,665 | ) | 545 | (1,761 | ) | 123 | ||||||||||
Other income, net |
2,205 | 334 | 2,249 | 531 | ||||||||||||
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INCOME BEFORE INCOME TAXES |
540 | 879 | 488 | 654 | ||||||||||||
Expense for income taxes |
193 | 334 | 174 | 255 | ||||||||||||
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NET INCOME |
$ | 347 | $ | 545 | $ | 314 | $ | 399 | ||||||||
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Net Income per Share: |
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Basic |
$ | 0.02 | $ | 0.03 | $ | 0.02 | $ | 0.02 | ||||||||
Diluted |
$ | 0.02 | $ | 0.03 | $ | 0.02 | $ | 0.02 | ||||||||
Weighed Average Shares: |
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Basic |
18,257 | 18,165 | 18,284 | 18,166 | ||||||||||||
Diluted |
18,408 | 18,291 | 18,498 | 18,350 | ||||||||||||
Cash dividend per share |
$ | 0.05 | $ | 0.04 | $ | 0.10 | $ | 0.08 |
PCTEL, INC.
P&L INFORMATION BY SEGMENT (unaudited)
(in thousands)
Three Months Ended June 30, 2015 | Six Months Ended June 30, 2015 | |||||||||||||||||||||||||||||||
Connected Solutions |
RF Solutions |
Corporate | Total | Connected Solutions |
RF Solutions | Corporate | Total | |||||||||||||||||||||||||
REVENUES |
$ | 18,100 | $ | 9,583 | ($ | 58 | ) | $ | 27,625 | $ | 35,454 | $ | 18,634 | ($ | 137 | ) | $ | 53,951 | ||||||||||||||
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GROSS PROFIT |
5,417 | 4,173 | 1 | 9,591 | 10,861 | 8,908 | 11 | 19,780 | ||||||||||||||||||||||||
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OPERATING INCOME (LOSS) |
$ | 1,498 | ($ | 347 | ) | ($ | 2,816 | ) | ($ | 1,665 | ) | $ | 3,187 | $ | 786 | ($ | 5,734 | ) | ($ | 1,761 | ) | |||||||||||
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Three Months Ended June 30, 2014 | Six Months Ended June 30, 2014 | |||||||||||||||||||||||||||||||
Connected Solutions |
RF Solutions |
Corporate | Total | Connected Solutions |
RF Solutions | Corporate | Total | |||||||||||||||||||||||||
REVENUES |
$ | 17,715 | $ | 8,574 | ($ | 107 | ) | $ | 26,182 | $ | 33,712 | $ | 16,295 | ($ | 170 | ) | $ | 49,837 | ||||||||||||||
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GROSS PROFIT |
5,716 | 5,129 | 6 | 10,851 | 10,832 | 9,587 | 13 | 20,432 | ||||||||||||||||||||||||
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OPERATING INCOME (LOSS) |
$ | 1,845 | $ | 1,645 | ($ | 2,945 | ) | $ | 545 | $ | 3,015 | $ | 2,659 | ($ | 5,551 | ) | $ | 123 | ||||||||||||||
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Reconciliation of GAAP to non-GAAP Results (unaudited)
(in thousands except per share information)
Reconciliation of GAAP operating loss to non-GAAP operating income (a)
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Operating Income (Loss) |
($ | 1,665 | ) | $ | 545 | ($ | 1,761 | ) | $ | 123 | ||||||
(a) Add: |
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Amortization of intangible assets |
1,185 | 464 | 1,839 | 1,038 | ||||||||||||
Restructuring: |
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-Cost of Goods Sold |
114 | 0 | 114 | 0 | ||||||||||||
-Restructuring |
440 | 0 | 440 | 0 | ||||||||||||
TelWorx investigation: |
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-General & Administrative |
54 | 263 | 91 | 498 | ||||||||||||
Legal settlement: |
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-General & Administrative |
0 | 75 | 0 | 75 | ||||||||||||
Stock Compensation: |
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-Cost of Goods Sold |
56 | 117 | 129 | 203 | ||||||||||||
-Engineering |
30 | 187 | 145 | 360 | ||||||||||||
-Sales & Marketing |
(18 | ) | 189 | 140 | 336 | |||||||||||
-General & Administrative |
173 | 603 | 328 | 948 | ||||||||||||
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2,034 | 1,898 | 3,226 | 3,458 | |||||||||||||
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Non-GAAP Operating Income |
$ | 369 | $ | 2,443 | $ | 1,465 | $ | 3,581 | ||||||||
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% of revenue |
1.3 | % | 9.3 | % | 2.7 | % | 7.2 | % |
Reconciliation of GAAP net loss to non-GAAP net income (b)
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Net Income |
$ | 347 | $ | 545 | $ | 314 | $ | 399 | ||||||||
Adjustments: |
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(a) Non-GAAP adjustment to operating income |
2,034 | 1,898 | 3,226 | 3,458 | ||||||||||||
(b) Other income related to SEC investigation of TelWorx |
(54 | ) | (252 | ) | (90 | ) | (472 | ) | ||||||||
(b) Legal Settlement - Amendment to Nexgen APA |
(2,160 | ) | 0 | (2,160 | ) | 0 | ||||||||||
(b) Legal Settlement - other |
0 | (75 | ) | 0 | (75 | ) | ||||||||||
(b) Income Taxes |
128 | (107 | ) | (90 | ) | (387 | ) | |||||||||
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(52 | ) | 1,464 | 886 | 2,524 | ||||||||||||
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Non-GAAP Net Income |
$ | 295 | $ | 2,009 | $ | 1,200 | $ | 2,923 | ||||||||
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Non-GAAP Earning per Share: |
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Basic |
$ | 0.02 | $ | 0.11 | $ | 0.07 | $ | 0.16 | ||||||||
Diluted |
$ | 0.02 | $ | 0.11 | $ | 0.06 | $ | 0.16 | ||||||||
Weighed Average Shares: |
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Basic |
18,257 | 18,165 | 18,284 | 18,166 | ||||||||||||
Diluted |
18,408 | 18,291 | 18,498 | 18,350 |
This schedule reconciles the Companys GAAP operating loss and GAAP net loss to its non-GAAP operating income and non-GAAP net income. The Company believes that presentation of this schedule provides meaningful supplemental information to both management and investors that is indicative of the Companys core operating results and facilitates comparison of operating results across reporting periods. The Company uses these non-GAAP measures when evaluating its financial results as well as for internal planning and forecasting purposes. These non-GAAP measures should not be viewed as a substitute for the Companys GAAP results.
(a) | These adjustments reflect stock based compensation expense, amortization of intangible assets, restructuring charges, and general and administrative expenses associated with the SEC investigation of TelWorx. |
(b) | These adjustments include the items described in footnote (a) as well as other income for insurance claims related to the SEC investigation of TelWorx, legal settlements, and non-cash income tax expense. |
Reconciliation of GAAP To non-GAAP SEGMENT INFORMATION (unaudited) (a)
(in thousands except per share information)
Three Months Ended June 30, 2015 | Six Months Ended June 30, 2015 | |||||||||||||||||||||||||||||||
Connected Solutions |
RF Solutions |
Corporate | Total | Connected Solutions |
RF Solutions | Corporate | Total | |||||||||||||||||||||||||
Operating Income (Loss) |
$ | 1,498 | ($ | 347 | ) | ($ | 2,816 | ) | ($ | 1,665 | ) | $ | 3,187 | $ | 786 | ($ | 5,734 | ) | ($ | 1,761 | ) | |||||||||||
Add: |
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Amortization of intangible assets |
230 | 955 | 0 | 1,185 | 460 | 1,379 | 0 | 1,839 | ||||||||||||||||||||||||
TelWorx investigation: |
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-General & Administrative |
0 | 0 | 54 | 54 | 0 | 0 | 91 | 91 | ||||||||||||||||||||||||
Restructuring: |
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-Cost of Goods Sold |
114 | 0 | 0 | 114 | 114 | 0 | 0 | 114 | ||||||||||||||||||||||||
-Restructuring charges |
426 | 14 | 0 | 440 | 426 | 14 | 0 | 440 | ||||||||||||||||||||||||
Stock Compensation: |
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-Cost of Goods Sold |
(22 | ) | 78 | 0 | 56 | 14 | 115 | 0 | 129 | |||||||||||||||||||||||
-Engineering |
14 | 16 | 0 | 30 | 60 | 85 | 0 | 145 | ||||||||||||||||||||||||
-Sales & Marketing |
(18 | ) | 0 | 0 | (18 | ) | 85 | 55 | 0 | 140 | ||||||||||||||||||||||
-General & Administrative |
(35 | ) | (21 | ) | 229 | 173 | (10 | ) | (1 | ) | 339 | 328 | ||||||||||||||||||||
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709 | 1,042 | 283 | 2,034 | 1,149 | 1,647 | 430 | 3,226 | |||||||||||||||||||||||||
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Non-GAAP Operating Income (Loss) |
$ | 2,207 | $ | 695 | ($ | 2,533 | ) | $ | 369 | $ | 4,336 | $ | 2,433 | ($ | 5,304 | ) | $ | 1,465 | ||||||||||||||
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Three Months Ended June 30, 2014 | Six Months Ended June 30, 2014 | |||||||||||||||||||||||||||||||
Connected Solutions |
RF Solutions |
Corporate | Total | Connected Solutions |
RF Solutions | Corporate | Total | |||||||||||||||||||||||||
Operating Income (Loss) |
$ | 1,845 | $ | 1,645 | ($ | 2,945 | ) | $ | 545 | $ | 3,015 | $ | 2,659 | ($ | 5,551 | ) | $ | 123 | ||||||||||||||
Add: |
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Amortization of intangible assets |
260 | 204 | 0 | 464 | 630 | 408 | 0 | 1,038 | ||||||||||||||||||||||||
TelWorx investigation: |
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-General & Administrative |
0 | 0 | 263 | 263 | 0 | 0 | 498 | 498 | ||||||||||||||||||||||||
Legal settlement: |
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-General & Administrative |
0 | 0 | 75 | 75 | 0 | 0 | 75 | 75 | ||||||||||||||||||||||||
Stock Compensation: |
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-Cost of Goods Sold |
54 | 63 | 0 | 117 | 99 | 104 | 0 | 203 | ||||||||||||||||||||||||
-Engineering |
86 | 101 | 0 | 187 | 166 | 194 | 0 | 360 | ||||||||||||||||||||||||
-Sales & Marketing |
150 | 39 | 0 | 189 | 279 | 57 | 0 | 336 | ||||||||||||||||||||||||
-General & Administrative |
63 | 36 | 504 | 603 | 149 | 67 | 732 | 948 | ||||||||||||||||||||||||
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613 | 443 | 842 | 1,898 | 1,323 | 830 | 1,305 | 3,458 | |||||||||||||||||||||||||
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Non-GAAP Operating Income (Loss) |
$ | 2,458 | $ | 2,088 | ($ | 2,103 | ) | $ | 2,443 | $ | 4,338 | $ | 3,489 | ($ | 4,246 | ) | $ | 3,581 | ||||||||||||||
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This schedule reconciles the Companys GAAP operating income (loss) by segment to its non-GAAP operating income. The Company believes that presentation of this schedule provides meaningful supplemental information to both management and investors that is indicative of the Companys core operating results and facilitates comparison of operating results across reporting periods. The Company uses these non-GAAP measures when evaluating its financial results as well as for internal planning and forecasting purposes. These non-GAAP measures should not be viewed as a substitute for the Companys GAAP results.
(a) | These adjustments reflect stock based compensation expense, amortization of intangible assets, restructuring charges, and general and administrative expenses associated with the SEC investigation of TelWorx. |
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