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Press release content from Business Wire. The AP news staff was not involved in its creation.
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Press release content from Business Wire. The AP news staff was not involved in its creation.

PCTEL Reports Third Quarter Financial Results

November 4, 2021 GMT

BLOOMINGDALE, Ill.--(BUSINESS WIRE)--Nov 4, 2021--

PCTEL, Inc. (Nasdaq: PCTI) announced its results for the third quarter ended September 30, 2021.

Highlights

  • Revenue of $22.4 million in the third quarter, 18.4% higher compared to the third quarter 2020 and $0.7 million higher compared to the second quarter 2021.
  • Gross profit margin of 45.8% in the third quarter compared to 50.6% in the third quarter 2020 and 45.9% in the second quarter 2021. The decline from the third quarter of 2020 is primarily due to a higher mix of antennas and Industrial IoT devices.
  • GAAP net income per diluted share of $0.04 in the third quarter compared to $0.06 in the third quarter 2020 and ($0.01) in the second quarter 2021.
  • Non-GAAP net income and adjusted EBITDA are metrics the Company uses to measure its core earnings.
    • Non-GAAP net income per diluted share of $0.08 in the third quarter compared to Non-GAAP net income per diluted share of $0.08 in the third quarter 2020 and $0.07 in the second quarter 2021.
    • Adjusted EBITDA as a percent of revenue of 10.4% in the third quarter compared to 12.4% in the third quarter 2020 and 10.2% in the second quarter 2021.
  • $32.5 million of cash and investments and $0.1 million of debt at September 30, 2021 compared to $41.0 million and no debt at December 31, 2020.

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“Despite the significant supply chain issues that impacted our revenues, we’re encouraged that our earnings were within our guidance and our revenue was modestly below guidance,” said David Neumann, PCTEL’s CEO. “Demand for our products remains strong as evidenced by another sequential increase in orders. We continue to invest in exciting new 5G products, including the G flex ™ scanning receiver, new 5G/IoT antenna platforms and industrial IoT devices. The G flex scanning receiver opens new opportunities in the government signal intelligence market and we believe market demand for our 5G, vehicular and IIoT products will remain high through next year.”

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 (877) 545-0320 (United States/Canada) or (973) 528-0002 (International), PIN number: 570294. The call will also be webcast at https://investor.pctel.com/news-events/webcasts-events.

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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: 43360.

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 Industrial IoT business and our test and measurement business; the impact of the acquisition of Smarteq on the Company’s ability to offer additional products, expand in the European market, and generate revenue; the impact of our transition plan for manufacturing inside and outside China; the anticipated demand for certain products, including those related to public safety, Industrial IoT, 5G (e.g., the G flex scanning receiver) and intelligent transportation; and the anticipated growth of public and private wireless systems are forward-looking statements. 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 and ensuing supply chain disruption 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; the Company’s ability to access the government market and create demand for its products; the Company’s ability to integrate Smarteq, expand its European presence and benefit from additional antenna and Industrial IoT product offerings; the impact of the uncertainty regarding renewal of our lease of our Tianjin, China manufacturing premises; the impact of tariffs on certain imports from 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. © 2021 PCTEL, Inc. All rights reserved.

PCTEL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
(in thousands, except share data)
 
 
September 30,December 31,

2021

2020

ASSETS
Cash and cash equivalents

$

9,772

 

$

5,761

 

Short-term investment securities

 

22,680

 

 

30,582

 

Accounts receivable, net of allowances of $62 and $113 at September 30, 2021 and December 31, 2020, respectively

 

15,846

 

 

16,601

 

Inventories, net

 

12,983

 

 

9,984

 

Prepaid expenses and other assets

 

1,282

 

 

1,685

 

Total current assets

 

62,563

 

 

64,613

 

 
Property and equipment, net

 

12,369

 

 

12,505

 

Long-term investment securities

 

0

 

 

4,640

 

Goodwill

 

6,429

 

 

3,332

 

Intangible assets, net

 

1,727

 

 

0

 

Other noncurrent assets

 

2,479

 

 

2,441

 

TOTAL ASSETS

$

85,567

 

$

87,531

 

LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable

$

4,615

 

$

4,430

 

Accrued liabilities

 

10,269

 

 

7,316

 

Total current liabilities

 

14,884

 

 

11,746

 

Long-term liabilities

 

4,238

 

 

4,387

 

Total liabilities

 

19,122

 

 

16,133

 

Stockholders’ equity:
Common stock, $0.001 par value, 50,000,000 shares authorized at September 30, 2021 and December 31, 2020, respectively, and 18,159,628 and 18,429,350 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively

 

18

 

 

18

 

Additional paid-in capital

 

123,702

 

 

128,250

 

Accumulated deficit

 

(57,055

)

 

(56,888

)

Accumulated other comprehensive income

 

(220

)

 

18

 

Total stockholders’ equity

 

66,445

 

 

71,398

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

85,567

 

$

87,531

 

 
PCTEL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
(in thousands, except per share data)
 
Three Months EndedNine Months Ended
September 30,September 30,

2021

2020

2021

2020

 
REVENUES

$

22,411

 

$

18,923

 

$

61,799

 

$

56,271

COST OF REVENUES

 

12,157

 

 

9,348

 

 

33,266

 

 

28,960

GROSS PROFIT

 

10,254

 

 

9,575

 

 

28,533

 

 

27,311

OPERATING EXPENSES:
Research and development

 

3,338

 

 

3,216

 

 

9,754

 

 

9,315

Sales and marketing

 

3,347

 

 

2,640

 

 

9,497

 

 

8,179

General and administrative

 

2,817

 

 

2,559

 

 

9,228

 

 

8,306

Amortization of intangible assets

 

80

 

 

0

 

 

135

 

 

32

Restructuring benefits (expenses)

 

(1

)

 

25

 

 

59

 

 

124

Total operating expenses

 

9,581

 

 

8,440

 

 

28,673

 

 

25,956

OPERATING INCOME (LOSS)

 

673

 

 

1,135

 

 

(140

)

 

1,355

Other (expense) income, net

 

(4

)

 

(84

)

 

(10

)

 

216

INCOME (LOSS) BEFORE INCOME TAXES

 

669

 

 

1,051

 

 

(150

)

 

1,571

Expense for income taxes

 

5

 

 

9

 

 

17

 

 

25

NET INCOME (LOSS)

$

664

 

$

1,042

 

$

(167

)

$

1,546

 
Net Income (Loss) per Share:
Basic

$

0.04

 

$

0.06

 

$

(0.01

)

$

0.09

Diluted

$

0.04

 

$

0.06

 

$

(0.01

)

$

0.08

 
Weighted Average Shares:
Basic

 

17,945

 

 

18,199

 

 

18,078

 

 

18,184

Diluted

 

17,962

 

 

18,311

 

 

18,078

 

 

18,382

 
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,
.

2021

2020

 
Operating Activities:
Net (loss) income

$

(167

)

$

1,546

 

Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization

 

2,257

 

 

2,260

 

Intangible asset amortization

 

171

 

 

144

 

Stock-based compensation

 

2,029

 

 

1,996

 

Loss on disposal of property and equipment

 

3

 

 

7

 

Restructuring costs

 

(15

)

 

(40

)

Bad debt provision

 

(39

)

 

(164

)

Changes in operating assets and liabilities:
Accounts receivable

 

2,162

 

 

3,599

 

Inventories

 

(1,734

)

 

1,691

 

Prepaid expenses and other assets

 

932

 

 

1,058

 

Accounts payable

 

(700

)

 

(1,210

)

Income taxes payable

 

(15

)

 

(12

)

Other accrued liabilities

 

1,405

 

 

(269

)

Deferred revenue

 

82

 

 

13

 

Net cash provided by operating activities

 

6,371

 

 

10,619

 

Investing Activities:
Capital expenditures

 

(2,006

)

 

(3,373

)

Purchase of investments

 

(21,124

)

 

(40,038

)

Redemptions/maturities of short-term investments

 

33,666

 

 

35,756

 

Cash paid for acquisition, net of cash acquired

 

(6,277

)

 

0

 

Net cash provided by (used in) investing activities

 

4,259

 

 

(7,655

)

Financing Activities:
Proceeds from issuance of common stock

 

418

 

 

504

 

Proceeds from Paycheck Protection Program Loan

 

0

 

 

3,500

 

Repayment of Paycheck Protection Program Loan

 

0

 

 

(3,500

)

Payment of withholding tax on stock-based compensation

 

(782

)

 

(1,108

)

Principle payments on finance leases

 

(54

)

 

(59

)

Purchase of common stock from repurchase program

 

(3,193

)

 

(2,000

)

Cash dividends

 

(3,020

)

 

(3,079

)

Net cash used in financing activities

 

(6,631

)

 

(5,742

)

 
Net increase (decrease) in cash and cash equivalents

 

3,999

 

 

(2,778

)

Effect of exchange rate changes on cash

 

12

 

 

113

 

Cash and cash equivalents, beginning of period

 

5,761

 

 

7,094

 

Cash and Cash Equivalents, End of Period

$

9,772

 

$

4,429

 

 
PCTEL, INC.
REVENUE AND GROSS PROFIT BY PRODUCT LINE (unaudited)
Reconciliation of GAAP Gross Margin percentage to Non-GAAP Gross Margin Percentage
($'s in thousands)
 
Three Months Ended September 30, 2021Nine Months Ended September 30, 2021
Antennas and Industrial IoT DevicesTest & Measurement ProductsCorporateTotalAntennas and Industrial IoT DevicesTest & Measurement ProductsCorporateTotal
REVENUES

$16,686

$5,921

($196)

$22,411

$43,971

$18,540

($712)

$61,799

 
GROSS PROFIT

$5,655

$4,635

($36)

$10,254

$14,578

$14,057

($102)

$28,533

 
GAAP GROSS PROFIT %

33.9%

78.3%

45.8%

33.2%

75.8%

46.2%

 
Non-GAAP adjustments:
Amortization of inventory step-up

0.8%

0.0%

0.6%

0.9%

0.0%

0.7%

Amortization of intangible assets

0.1%

0.0%

0.1%

0.1%

0.0%

0.1%

Stock compensation expenses

0.1%

0.5%

0.2%

0.0%

0.5%

0.3%

Non-GAAP GROSS PROFIT %

34.9%

78.8%

46.7%

34.2%

76.3%

47.2%

 
Three Months Ended September 30, 2020Nine Months Ended September 30, 2020
 
Antennas and Industrial IoT DevicesTest & Measurement ProductsCorporateTotalAntennas and Industrial IoT DevicesTest & Measurement ProductsCorporateTotal
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%

 
Non-GAAP adjustments:
Amortization of intangible assets

0.0%

0.0%

0.0%

0.0%

0.6%

0.2%

Stock compensation expenses

0.2%

0.5%

0.3%

0.3%

0.6%

0.4%

Non-GAAP GROSS PROFIT %

35.4%

76.9%

50.9%

35.4%

75.4%

49.1%

 

The Corporate column includes the elimination of intercompany revenues between Antennas and Industrial IoT Devices and Test & Measurement Products and other licensing revenues.

This schedule reconciles the Company's GAAP gross margin percentage to its Non-GAAP gross margin percentage. 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 adjustments on this schedule consist of amortization of intangible assets, stock compensation expenses, and the amortization of the inventory step-up to fair value related to the acquisition of Smarteq.
Reconciliation of GAAP to non-GAAP Results (unaudited)
(in thousands except per share information)
 
Reconciliation of GAAP operating income (loss) to non-GAAP operating loss
 
Three Months Ended September 30,Nine Months Ended September 30,

2021

2020

2021

2020

Operating Income (Loss)

$673

 

$1,135

 

($140

)

$1,355

 

 
(a)Add:
Amortization of inventory step-up to fair value

133

 

0

 

415

 

0

 

Amortization of intangible assets:
-Cost of revenues

21

 

0

 

36

 

111

 

-Operating expenses

80

 

0

 

135

 

33

 

Restructuring

(1

)

25

 

59

 

124

 

Stock compensation expenses:
-Cost of revenues

51

 

61

 

185

 

207

 

-Research and development

102

 

121

 

384

 

403

 

-Sales & marketing

73

 

115

 

458

 

429

 

-General & administrative

146

 

136

 

1,002

 

957

 

Acquisition related expenses

289

 

0

 

593

 

0

 

894

 

458

 

3,267

 

2,264

 

Non-GAAP Operating Income

$1,567

 

$1,593

 

$3,127

 

$3,619

 

% of revenue

7.0

%

8.4

%

5.1

%

6.4

%

 
Reconciliation of GAAP net loss to non-GAAP net (loss) income
 
Three Months Ended September 30,Nine Months Ended September 30,

2021

2020

2021

2020

Net Income (Loss)

$664

 

$1,042

 

($167

)

$1,546

 

 
Adjustments:
(a)Non-GAAP adjustments to operating income (loss)

894

 

458

 

3,267

 

2,264

 

(b)Income Taxes

(120

)

(112

)

(232

)

(282

)

774

 

346

 

3,035

 

1,982

 

Non-GAAP Net Income

$1,438

 

$1,388

 

$2,868

 

$3,528

 

 
Non-GAAP Income per Share:
Basic

$0.08

 

$0.08

 

$0.16

 

$0.19

 

Diluted

$0.08

 

$0.08

 

$0.16

 

$0.19

 

 
Weighed Average Shares:
Basic

17,945

 

18,199

 

18,078

 

18,184

 

Diluted

17,962

 

18,311

 

18,170

 

18,382

 

 
This schedule reconciles the Company's GAAP operating income (loss) 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 (loss) (a) consist of stock compensation expense, amortization of intangible assets, amortization of the step-up to fair value of the inventory for Smarteq, and acquisition related expenses. The adjustments to GAAP net income (loss) include the non-GAAP adjustments to operating income (loss) as well as adjustments for (b) non-cash income tax expense.
 
 
PCTEL, INC.
Reconciliation of GAAP Operating Expenses to Non-GAAP Operating expenses (unaudited)
(in thousands)
 
Three Months Ended September 30,Nine Months Ended September 30,

2021

2020

2021

2020

 
GAAP Operating expenses

$9,581

 

$8,440

 

$28,673

 

$25,956

 

Stock compensation expenses

(321

)

(433

)

(1,844

)

(1,996

)

Amortization of intangible assets

(80

)

0

 

(135

)

(32

)

Restructuring benefits (expenses)

1

 

(25

)

(59

)

(124

)

Acquisition related expenses

(289

)

0

 

(593

)

0

 

Non-GAAP Operating expenses

$8,892

 

$7,982

 

$26,042

 

$23,804

 

 
This schedule reconciles the Company's GAAP operating expenses to its Non-GAAP operating expenses. 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 adjustments on this schedule consist of amortization of intangible assets, stock compensation expenses, restructuring expenses, and acquisition related expenses.

 

View source version on businesswire.com:https://www.businesswire.com/news/home/20211104006168/en/

CONTACT: Kevin McGowan

CFO

PCTEL, Inc.

(630) 339-2051

Suzanne Cafferty

Vice President, Global Marketing

PCTEL, Inc.

(630) 339-2107

public.relations@pctel.com

KEYWORD: ILLINOIS UNITED STATES NORTH AMERICA

INDUSTRY KEYWORD: TECHNOLOGY MOBILE/WIRELESS SOFTWARE NETWORKS INTERNET HARDWARE

SOURCE: PCTEL, Inc.

Copyright Business Wire 2021.

PUB: 11/04/2021 04:01 PM/DISC: 11/04/2021 04:02 PM

http://www.businesswire.com/news/home/20211104006168/en