EX-99.1 2 pcti-ex991_6.htm EX-99.1 pcti-ex991_6.htm

EXHIBIT 99.1

  

PCTEL Reports Third Quarter Financial Results

BLOOMINGDALE, Illinois – November 5, 2020 – PCTEL, Inc. (Nasdaq: PCTI) announced its results for the third quarter ended September 30, 2020.

 

Highlights

 

 

•

Revenue of $18.9 million in the quarter, 20% lower compared to the third quarter 2019. Revenue was lower by 6% for the test and measurement product line, and lower by 25% for the antenna product line compared to the third quarter 2019.

 

 

•

Gross profit margin of 50.6% in the third quarter, up 5.5% compared to the gross profit margin in the third quarter 2019. The percentage increase in the third quarter is a result of higher mix of higher margin test and measurement products, and higher gross margin percentages for both test & measurement products and antenna products.

 

 

•

GAAP net income per share of $0.06 in the third quarter compared to GAAP net income per share of $0.07 in the third quarter 2019.  

 

 

•

Non-GAAP net income and adjusted EBITDA are metrics the Company uses to measure its core earnings. A reconciliation of those non-GAAP measures to our GAAP financial statements is provided later in the press release.

 

 

•

Non-GAAP net income per diluted share of $0.08 in the third quarter compared to Non-GAAP net income per diluted share of $0.14 in the third quarter 2019.

 

 

•

Adjusted EBITDA as a percent of revenue of 12.4% in the third quarter compared to 13.1% in the third quarter 2019.

 

 

•

$41.3 million of cash and investments (including long-term investments) and no debt at September 30, 2020 compared to $39.6 million and no debt at June 30, 2020.

 

“We’re pleased with another strong quarter and incremental revenue growth for our test and measurement products driven by 5G global deployments. Our antenna product lines have been significantly impacted by the pandemic induced recession, but we are encouraged to see an increase in total incoming orders for the quarter,” said David Neumann, PCTEL’s CEO. “We continue to invest in our scanner and antenna product lines focusing on 5G, industrial IoT and intelligent transportation markets. We are confident that our long-term growth strategies will be successful as market conditions improve.”

 

 

 

 

 

CONFERENCE CALL / WEBCAST  

 

PCTEL’s management team will discuss the Company’s results today at 4:30 p.m. ET. The call can be accessed by dialing (888) 669-0687 (United States/Canada) or (862) 298-0702 (International). The call will also be webcast at https://investor.pctel.com/news-events/webcasts-events.

 

REPLAY: A replay will be available for two weeks after the call on either the website listed above or by calling (877) 481-4010 (United States /Canada), or (919) 882-2331 (International), PIN number: 38214.

About PCTEL

PCTEL is a leading global provider of wireless technology, including purpose-built Industrial IoT devices, antenna systems, and test and measurement solutions. Trusted by our customers for over 25 years, we solve complex wireless challenges to help organizations stay connected, transform, and grow.

 

For more information, please visit our website at https://www.pctel.com/.

 

PCTEL Safe Harbor Statement

 

This press release and our related comments in our earnings conference call contain “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Specifically, the statements about the Company’s expectations regarding the impact of the COVID-19 pandemic; our future financial performance; growth of our antenna solutions and test and measurement businesses; the impact of our transition plan for manufacturing inside and outside China; the impact of the uncertainty regarding renewal of our lease of our Tianjin, China manufacturing premises; the anticipated demand for certain products including those related to public safety, Industrial IoT, 5G and intelligent transportation; the impact of tariffs on certain imports from China; and the anticipated growth of public and private wireless systems are forward-looking statements within the meaning of the safe harbor. These statements are based on management’s current expectations and actual results may differ materially from those projected as a result of certain risks and uncertainties, including the disruptions to the Company’s workforce, operations, supply chain and customer demand caused by the COVID-19 pandemic and impact of the pandemic on the Company’s results of operations, financial condition and stock price; the impact of data densification and IoT on capacity and coverage demand; the impact of 5G; customer demand and growth generally in the Company’s defined market segments, including demand from customers in China; and the Company’s ability to grow its business and create, protect and implement new technologies and solutions. These and other risks and uncertainties are detailed in PCTEL's Securities and Exchange Commission filings. These forward-looking statements are made only as of the date hereof, and PCTEL disclaims any obligation to update or revise the information contained in any forward-looking statement, whether as a result of new information, future events or otherwise.

# # #

 

PCTEL is a registered trademark of PCTEL, Inc. © 2020 PCTEL, Inc. All rights reserved.

 

For further information contact:

 

Kevin McGowanSuzanne Cafferty

CFOVice President, Global Marketing

PCTEL, Inc.PCTEL, Inc.

(630) 339-2051(630) 339-2107

public.relations@pctel.com

 

 

 

 

 

PCTEL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

(in thousands, except share data)

 

 

 

(unaudited)

 

 

 

 

 

 

 

September 30,

 

 

December 31,

 

 

 

2020

 

 

2019

 

ASSETS

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

4,429

 

 

$

7,094

 

Short-term investment securities

 

 

33,103

 

 

 

32,556

 

Accounts receivable, net of allowances of $111 and $104 at September 30, 2020 and

   December 31, 2019, respectively

 

 

13,955

 

 

 

17,380

 

Inventories, net

 

 

10,290

 

 

 

11,935

 

Prepaid expenses and other assets

 

 

1,207

 

 

 

1,842

 

Total current assets

 

 

62,984

 

 

 

70,807

 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

12,728

 

 

 

11,985

 

Long-term investment securities

 

 

3,735

 

 

 

0

 

Goodwill

 

 

3,332

 

 

 

3,332

 

Intangible assets, net

 

 

0

 

 

 

144

 

Other noncurrent assets

 

 

2,492

 

 

 

2,969

 

TOTAL ASSETS

 

$

85,271

 

 

$

89,237

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

Accounts payable

 

$

2,279

 

 

$

3,190

 

Accrued liabilities

 

 

7,094

 

 

 

9,382

 

Total current liabilities

 

 

9,373

 

 

 

12,572

 

Long-term liabilities

 

 

4,557

 

 

 

3,315

 

Total liabilities

 

 

13,930

 

 

 

15,887

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Common stock, $0.001 par value, 50,000,000 and 100,000,000 shares authorized at

 

 

 

 

 

 

 

 

September 30, 2020 and December 31, 2019, respectively, and 18,639,364 and 18,611,289

 

 

 

 

 

 

 

 

shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively

 

 

19

 

 

 

19

 

Additional paid-in capital

 

 

130,267

 

 

 

133,954

 

Accumulated deficit

 

 

(58,759

)

 

 

(60,305

)

Accumulated other comprehensive loss

 

 

(186

)

 

 

(318

)

Total stockholders’ equity

 

 

71,341

 

 

 

73,350

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 

$

85,271

 

 

$

89,237

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PCTEL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

(in thousands, except per share data)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

REVENUES

 

$

18,923

 

 

$

23,630

 

 

$

56,271

 

 

$

67,720

 

COST OF REVENUES

 

 

9,348

 

 

 

12,983

 

 

 

28,960

 

 

 

37,720

 

GROSS PROFIT

 

 

9,575

 

 

 

10,647

 

 

 

27,311

 

 

 

30,000

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

3,216

 

 

 

3,214

 

 

 

9,315

 

 

 

9,223

 

Sales and marketing

 

 

2,640

 

 

 

2,935

 

 

 

8,179

 

 

 

8,830

 

General and administrative

 

 

2,559

 

 

 

3,214

 

 

 

8,306

 

 

 

10,381

 

Amortization of intangible assets

 

 

0

 

 

 

48

 

 

 

32

 

 

 

170

 

Restructuring expenses

 

 

25

 

 

 

295

 

 

 

124

 

 

 

295

 

Total operating expenses

 

 

8,440

 

 

 

9,706

 

 

 

25,956

 

 

 

28,899

 

OPERATING INCOME

 

 

1,135

 

 

 

941

 

 

 

1,355

 

 

 

1,101

 

Other (expense) income, net

 

 

(84

)

 

 

393

 

 

 

216

 

 

 

874

 

INCOME BEFORE INCOME TAXES

 

 

1,051

 

 

 

1,334

 

 

 

1,571

 

 

 

1,975

 

Expense for income taxes

 

 

9

 

 

 

6

 

 

 

25

 

 

 

23

 

NET INCOME

 

$

1,042

 

 

$

1,328

 

 

$

1,546

 

 

$

1,952

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income per Share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.06

 

 

$

0.07

 

 

$

0.09

 

 

$

0.11

 

Diluted

 

$

0.06

 

 

$

0.07

 

 

$

0.08

 

 

$

0.11

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Shares:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

18,199

 

 

 

17,922

 

 

 

18,184

 

 

 

17,792

 

Diluted

 

 

18,311

 

 

 

18,181

 

 

 

18,382

 

 

 

18,105

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash dividend per share

 

$

0.055

 

 

$

0.055

 

 

$

0.165

 

 

$

0.165

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PCTEL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in thousands)

 

 

 

Nine Months Ended September 30,

 

.

 

2020

 

 

2019

 

 

 

 

 

 

 

 

 

 

Operating Activities:

 

 

 

 

 

 

 

 

Net income

 

$

1,546

 

 

$

1,952

 

   Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

    Depreciation and amortization

 

 

2,260

 

 

 

2,152

 

    Intangible asset amortization

 

 

144

 

 

 

670

 

    Stock-based compensation

 

 

1,996

 

 

 

3,246

 

    Loss on disposal of property and equipment

 

 

7

 

 

 

91

 

    Restructuring costs

 

 

(40

)

 

 

268

 

    Bad debt (recoveries) provision

 

 

(164

)

 

 

(3

)

  Changes in operating assets and liabilities, net of acquisitions:

 

 

 

 

 

 

 

 

    Accounts receivable

 

 

3,599

 

 

 

(1,276

)

    Inventories

 

 

1,691

 

 

 

(838

)

    Prepaid expenses and other assets

 

 

1,058

 

 

 

902

 

    Accounts payable

 

 

(1,210

)

 

 

(1,019

)

    Income taxes payable

 

 

(12

)

 

 

(40

)

    Other accrued liabilities

 

 

(269

)

 

 

1,485

 

    Deferred revenue

 

 

13

 

 

 

5

 

      Net cash provided by operating activities

 

 

10,619

 

 

 

7,595

 

Investing Activities:

 

 

 

 

 

 

 

 

  Capital expenditures

 

 

(3,373

)

 

 

(1,366

)

  Purchase of investments

 

 

(40,038

)

 

 

(38,393

)

  Redemptions/maturities of short-term investments

 

 

35,756

 

 

 

36,844

 

      Net cash used in investing activities

 

 

(7,655

)

 

 

(2,915

)

Financing Activities:

 

 

 

 

 

 

 

 

  Proceeds from issuance of common stock

 

 

504

 

 

 

730

 

  Proceeds from Paycheck Protection Program Loan

 

 

3,500

 

 

 

0

 

  Repayment of Paycheck Protection Program Loan

 

 

(3,500

)

 

 

0

 

  Payment of withholding tax on stock-based compensation

 

 

(1,108

)

 

 

(754

)

  Principle payments on finance leases

 

 

(59

)

 

 

(79

)

  Purchase of common stock from repurchase program

 

 

(2,000

)

 

 

0

 

  Cash dividends

 

 

(3,079

)

 

 

(3,046

)

      Net cash used in financing activities

 

 

(5,742

)

 

 

(3,149

)

 

 

 

 

 

 

 

 

 

Net (decrease) increase in cash and cash equivalents

 

 

(2,778

)

 

 

1,531

 

Effect of exchange rate changes on cash

 

 

113

 

 

 

(213

)

Cash and cash equivalents, beginning of period

 

 

7,094

 

 

 

4,329

 

Cash and Cash Equivalents, End of Period

 

$

4,429

 

 

$

5,647

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PCTEL, INC.

P&L INFORMATION BY PRODUCT LINE - Continuing Operations (unaudited)

(in thousands)

 

 

 

Three Months Ended September 30, 2020

 

 

Nine Months Ended September 30, 2020

 

 

 

Antenna Products

 

 

Test & Measurement Products

 

 

Corporate

 

 

Total

 

 

Antenna Products

 

 

Test & Measurement Products

 

 

Corporate

 

 

Total

 

REVENUES

 

$

12,326

 

 

$

6,810

 

 

$

(213

)

 

$

18,923

 

 

$

37,696

 

 

$

19,011

 

 

$

(436

)

 

$

56,271

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GROSS PROFIT

 

$

4,336

 

 

$

5,203

 

 

$

36

 

 

$

9,575

 

 

$

13,228

 

 

$

14,109

 

 

$

(26

)

 

$

27,311

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GROSS PROFIT %

 

 

35.2

%

 

 

76.4

%

 

 

 

 

 

 

50.6

%

 

 

35.1

%

 

 

74.2

%

 

 

 

 

 

 

48.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30, 2019

 

 

Nine Months Ended September 30, 2019

 

 

 

Antenna Products

 

 

Test & Measurement Products

 

 

Corporate

 

 

Total

 

 

Antenna Products

 

 

Test & Measurement Products

 

 

Corporate

 

 

Total

 

REVENUES

 

$

16,463

 

 

$

7,240

 

 

$

(73

)

 

$

23,630

 

 

$

47,565

 

 

$

20,301

 

 

$

(146

)

 

$

67,720

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GROSS PROFIT

 

$

5,712

 

 

$

4,937

 

 

$

(2

)

 

$

10,647

 

 

$

16,142

 

 

$

13,834

 

 

$

24

 

 

$

30,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GROSS PROFIT %

 

 

34.7

%

 

 

68.2

%

 

 

 

 

 

 

45.1

%

 

 

33.9

%

 

 

68.1

%

 

 

 

 

 

 

44.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of GAAP to non-GAAP Results (unaudited)

 

(in thousands except per share information)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of GAAP operating income to non-GAAP operating income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income

 

$

1,135

 

 

$

941

 

 

$

1,355

 

 

$

1,101

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a)

Add:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of intangible assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     -Cost of revenues

 

 

0

 

 

 

167

 

 

 

111

 

 

 

500

 

 

     -Operating expenses

 

 

0

 

 

 

48

 

 

 

33

 

 

 

170

 

 

Restructuring

 

 

25

 

 

 

295

 

 

 

124

 

 

 

295

 

 

Stock Compensation:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     -Cost of revenues

 

 

61

 

 

 

87

 

 

 

207

 

 

 

292

 

 

     -Engineering

 

 

121

 

 

 

158

 

 

 

403

 

 

 

507

 

 

-Sales & marketing

 

 

115

 

 

 

158

 

 

 

429

 

 

 

521

 

 

     -General & administrative

 

 

136

 

 

 

515

 

 

 

957

 

 

 

1,926

 

 

 

 

 

458

 

 

 

1,428

 

 

 

2,264

 

 

 

4,211

 

 

Non-GAAP Operating Income

 

$

1,593

 

 

$

2,369

 

 

$

3,619

 

 

$

5,312

 

 

% of revenue

 

 

8.4

%

 

 

10.0

%

 

 

6.4

%

 

 

7.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of GAAP net income to non-GAAP net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

Net Income

 

$

1,042

 

 

$

1,328

 

 

$

1,546

 

 

$

1,952

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a)

Non-GAAP adjustments to operating income

 

 

458

 

 

 

1,428

 

 

 

2,264

 

 

 

4,211

 

 

Income Taxes

 

 

(112

)

 

 

(215

)

 

 

(282

)

 

 

(472

)

 

 

 

 

346

 

 

 

1,213

 

 

 

1,982

 

 

 

3,739

 

 

Non-GAAP Net Income

 

$

1,388

 

 

$

2,541

 

 

$

3,528

 

 

$

5,691

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP Income per Share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.08

 

 

$

0.14

 

 

$

0.19

 

 

$

0.32

 

 

Diluted

 

$

0.08

 

 

$

0.14

 

 

$

0.19

 

 

$

0.31

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Shares:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

18,199

 

 

 

17,922

 

 

 

18,184

 

 

 

17,792

 

 

Diluted

 

 

18,311

 

 

 

18,181

 

 

 

18,382

 

 

 

18,105

 

 

This schedule reconciles the Company's GAAP operating income 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 Company's core operating results and facilitates comparison of operating results across reporting periods.  The Company uses these non-GAAP measures when evaluating its financial results as well as for internal planning and forecasting purposes.  These non-GAAP measures should not be viewed as a substitute for the Company's GAAP results.

 

The adjustments to GAAP operating income (a) consist of stock compensation expense and amortization of intangible assets.  The adjustments to GAAP net income include the non-GAAP adjustments to operating income as well as adjustments for (b) non-cash income tax expense.

 

 

 

PCTEL, Inc.

 

 

Reconciliation of GAAP operating income to Adjusted EBITDA

 

 

(unaudited, in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

 

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Income

 

 

 

$

1,135

 

 

$

941

 

 

$

1,355

 

 

$

1,101

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Add:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

 

 

759

 

 

 

726

 

 

 

2,260

 

 

 

2,152

 

 

 

Intangible amortization

 

 

 

 

0

 

 

 

215

 

 

 

144

 

 

 

670

 

 

 

Restructuring expenses

 

 

 

 

25

 

 

 

295

 

 

 

124

 

 

 

295

 

 

 

Stock compensation expenses

 

 

 

 

433

 

 

 

918

 

 

 

1,996

 

 

 

3,246

 

 

 

Adjusted EBITDA

 

 

 

$

2,352

 

 

$

3,095

 

 

$

5,879

 

 

$

7,464

 

 

 

% of revenue

 

 

 

 

12.4

%

 

 

13.1

%

 

 

10.4

%

 

 

11.0

%

 

 

This schedule reconciles the Company's GAAP operating income to Adjusted EBITDA.  The Company believes that this schedule provides meaningful supplemental information to both management and investors that is indicative of the Company's core operating results and facilitates comparison of operating results across reporting periods.  The Company uses Adjusted EBITDA when evaluating its financial results as well as for internal planning and forecasting purposes.  Adjusted EBITDA should not be viewed as a substitute for the Company's GAAP results.

 

Adjusted EBITDA is defined as net income before interest, income taxes, depreciation and amortization.  The adjustments on this schedule consist of depreciation, amortization of intangible assets, and stock compensation expenses.