PCTEL, Inc. (NASDAQ:PCTI), a leader in Performance Critical Telecom solutions, announced its 2015 first quarter results.

First Quarter Highlights

  • $26.3 million in revenue for the quarter, an increase of 11 percent from the same period last year. $1.2 million of the increase reflected revenue from our most recent acquisition. Organic growth was six percent.
  • Gross profit margin of 39 percent in the quarter, compared to 41 percent for the same period last year.
  • GAAP operating margin of just under break even for the quarter, compared to operating margin of negative two percent for the same period last year.
  • GAAP net loss of $33,000 for the quarter, or $(0.00) per diluted share, compared to a net loss of $146,000, or $(0.01) 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 Company’s 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 Company’s acquisitions, and non-cash related income tax expense.
    • Non-GAAP operating margin of four percent in the quarter, compared to five percent in the same period last year. The first quarter 2015 incurred expenses for the Nexgen acquisition totaling three percent of revenue.
    • Non-GAAP net income of $904,000 or $0.05 per diluted share in the quarter, compared to $914,000 or $0.05 per diluted share in the same period last year. The first quarter 2015 incurred expenses for the Nexgen acquisition totaling $0.03 per share.
  • $38.9 million of cash and short-term investments at March 31, 2015, a decrease of approximately $21.1 million from the preceding quarter. During the quarter the Company used $20.5 million of cash for the Nexgen acquisition and $929,000 for the regular quarterly dividend, and generated $278,000 of cash and investments from all other sources.

“While pleased with year-over-year-growth, we had anticipated stronger engineering services and continued strength in antenna and mobile tower sales into the oil and gas industry,” said Marty Singer, PCTEL’s Chairman and CEO. “Fortunately, we have seen a rebound in spending on engineering services, positive market reaction to the IBflex® and SeeWave™, and stronger broadband wireless antenna sales to our major OEMs, and the benefit of our recent acquisition. We anticipate a much stronger second quarter,” added Singer.

CONFERENCE CALL / WEBCAST

PCTEL’s management team will discuss the Company’s 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: 13775110. 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: 13775110.

About PCTEL

PCTEL delivers Performance Critical Telecom solutions. The industry relies upon PCTEL to benchmark network performance, analyze trends, and optimize wireless networks. PCTEL's 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.

PCTEL’s RF Solutions products and services improve the performance of wireless networks globally. PCTEL’s performance critical products include its MXflex™, IB flex®, and EXflex® SeeGull® scanning receivers and related SeeHawk® and SeeWave™ tools. PCTEL’s 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. PCTEL's 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 provide performance critical mobile towers for demanding emergency and oil and gas network applications and leverage our design, logistics, and support capabilities to deliver performance critical site solutions into carrier, railroad, and utility applications.

PCTEL's products are sold worldwide through direct and indirect channels. For more information, please visit the company's web sites: www.pctel.com, www.antenna.com, or www.rfsolutions.pctel.com.

PCTEL Safe Harbor Statement

This press release contains “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Specifically, the statements regarding the demand for engineering services, sales of certain RF Solutions products and the benefit of the most recent acquisition 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 customer demand for these types of products and services generally, PCTEL’s 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 PCTEL's Securities and Exchange Commission filings. These forward-looking statements are made only as of the date hereof, and PCTEL disclaims any obligation to update or revise the information contained in any forward-looking statement, whether as a result of new information, future events or otherwise.

PCTEL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
   
(unaudited)
March 31, December 31,
2015 2014
ASSETS
 
Cash and cash equivalents $7,917 $20,432
Short-term investment securities 30,941 39,577
Accounts receivable, net of allowance for doubtful accounts
of $107 and $121 at March 31, 2015 and December 31, 2014, respectively 24,318 23,874
Inventories, net 17,704 16,358
Deferred tax assets, net 2,301 2,281
Prepaid expenses and other assets 2,121 1,757
Total current assets 85,302 104,279
 
Property and equipment, net 14,655 14,842
Goodwill 5,598 161
Intangible assets, net 13,044 2,637
Deferred tax assets, net 9,710 9,710
Other noncurrent assets 38 40
TOTAL ASSETS $128,347 $131,669
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
Accounts payable $5,895 $5,495
Accrued liabilities 6,818 10,211
Total current liabilities 12,713 15,706
 
Other long-term liabilities 437 448
   
Total liabilities 13,150 16,154
 
Stockholders’ equity:
Common stock, $0.001 par value, 100,000,000 shares
authorized, 18,714,202 and 18,571,419 shares issued and
outstanding at March 31, 2015 and December 31, 2014, respectively 19 19
Additional paid-in capital 146,110 145,462
Accumulated deficit (31,063) (30,101)
Accumulated other comprehensive income 131 135
Total stockholders’ equity 115,197 115,515
 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $128,347 $131,669
PCTEL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
(in thousands, except per share data)
   
 
Three Months Ended
March 31,
2015 2014
 
REVENUES $26,326 $23,656
COST OF REVENUES 16,137   14,074  
GROSS PROFIT 10,189   9,582  
OPERATING EXPENSES:
Research and development 2,738 3,242
Sales and marketing 3,530 2,956
General and administrative 3,363 3,232
Amortization of intangible assets 654   574  
Total operating expenses 10,285   10,004  
OPERATING LOSS (96 ) (422 )
Other income, net 44   197  
LOSS BEFORE INCOME TAXES (52 ) (225 )
Benefit for income taxes (19 ) (79 )
NET LOSS ($33 ) ($146 )
 
Loss per Share:
Basic ($0.00 ) ($0.01 )
Diluted ($0.00 ) ($0.01 )
 
Weighed Average Shares:
Basic 18,312 18,176
Diluted 18,312 18,176
 
Cash dividend per share $0.05 $0.04
  PCTEL, INC.
P&L INFORMATION BY SEGMENT (unaudited)
(in thousands)
       
 
Three Months Ended March 31, 2015
Connected RF
Solutions Solutions Corporate Total
 
REVENUES $17,354 $9,051 ($79 ) $26,326
       
GROSS PROFIT 5,444 4,736 9 10,189
       
OPERATING INCOME (LOSS) $1,613 $1,210 ($2,919 ) ($96 )
 
 
Three Months Ended March 31, 2014
Connected RF
Solutions Solutions Corporate Total
 
REVENUES $15,997 $7,722 ($63 ) $23,656
       
GROSS PROFIT 5,116 4,459 7 9,582
       
OPERATING INCOME (LOSS) $1,170 $1,014 ($2,606 ) ($422 )

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 March 31,

2015

2014

 
Operating Loss ($96 ) ($422 )
 
(a) Add:
Amortization of intangible assets 654 574
TelWorx investigation:
-General & Administrative 38 235
Stock Compensation:
-Cost of Goods Sold 73 86
-Engineering 115 173
-Sales & Marketing 158 147
-General & Administrative 155   345  
1,193 1,560
   
Non-GAAP Operating Income $1,097   $1,138  
% of revenue 4.2 % 4.8 %
 

Reconciliation of GAAP net loss to non-GAAP net income (b)

 
Three Months Ended March 31,

2015

2014

 
Net Loss ($33 ) ($146 )
 
Adjustments:
(a) Non-GAAP adjustment to operating income 1,193 1,560
Other income related to SEC investigation of TelWorx (38 ) (220 )
(b) Income Taxes (218 ) (280 )
937 1,060
   
Non-GAAP Net Income $904   $914  
 
Non-GAAP Earning per Share:
Basic $0.05 $0.05
Diluted $0.05 $0.05
 
Weighed Average Shares:
Basic 18,312 18,176
Diluted 18,525 18,379
  This schedule reconciles the Company's 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 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.
 
(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, 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 March 31, 2015
Connected RF
Solutions Solutions Corporate Total
 
 
Operating Income (Loss) $1,613 $1,210 ($2,919 ) ($96 )
 
Add:
Amortization of intangible assets 230 424 0 654
TelWorx investigation:
-General & Administrative 0 0 38 38
Stock Compensation:
-Cost of Goods Sold 36 37 0 73
-Engineering 46 69 0 115
-Sales & Marketing 103 55 0 158
-General & Administrative 25 19 111   155  
440 604 149 1,193
       
Non-GAAP Operating Income (Loss) $2,053 $1,814 ($2,770 ) $1,097  
 
 
Three Months Ended March 31, 2014
Connected RF
Solutions Solutions Corporate Total
 
 
Operating Income (Loss) $1,170 $1,014 ($2,606 ) ($422 )
 
Add:
Amortization of intangible assets 370 204 0 574
TelWorx investigation:
-General & Administrative 0 0 235 235
Stock Compensation:
-Cost of Goods Sold 46 40 0 86
-Engineering 80 93 0 173
-Sales & Marketing 128 19 0 147
-General & Administrative 86 30 229   345  
710 386 464 1,560
       
Non-GAAP Operating Income (Loss) $1,880 $1,400 ($2,142 ) $1,138  
  This schedule reconciles the Company's 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 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.
 
(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.