August 8, 2017

PCTEL Reports $21.5 Million in Second Quarter Revenue

BLOOMINGDALE, Ill.--(BUSINESS WIRE)-- PCTEL, Inc. (NASDAQ: PCTI), a leader in Performance Critical TELecom solutions, announced its results for the second quarter and first half ended June 30, 2017.

The Company sold its engineering services operations in July. At June 30, 2017 the assets sold were classified as assets held for sale and the services operations are accounted for as discontinued operations.

Highlights From Continuing Operations

  • Revenue of $21.5 million in the second quarter and $44.5 million in the first half, a 1% increase in the quarter and a 10% increase in the half compared to last year. Connected Solutions revenue was up 7% in the quarter and 12% in the half. RF Solutions was down 16% in the quarter and up 3% in the half.
  • Gross profit margin of 41.7% in the second quarter and 41.4% in the first half, down 20 basis points in the quarter and up 90 basis points in the half compared to last year.
  • Net loss per share of $0.01 in the second quarter and break even in the first half, compared to a net loss of $0.49 per share in the quarter and $0.52 in the half last year.
  • Non-GAAP net income and adjusted EBITDA are measures the company uses to reflect the results of its core earnings. A reconciliation of those non-GAAP measures to our financial statements is provided later in the press release.
  • Non-GAAP net income of $0.05 per share in the second quarter and $0.10 in the first half compared to net income of $0.08 in the quarter and the half last year.
  • Adjusted EBITDA margin as a percent of revenue of 8% in the second quarter and the first half compared to 10% in the quarter and 7% in the half last year.
  • $34.2 million of cash and short-term investments at June 30, 2017. The Company generated free cash flow (cash flow from operations less capital spending) of approximately $2.0 million in the quarter and $2.9 million in the half.

"We are pleased to see continued antenna revenue growth in small cell, fleet, and utilities markets. Consistent with the Company's investment thesis, antennas drove growth while RF Test tools generated profitable revenue," said David Neumann, PCTEL's CEO. "The recent sale of our non-core engineering services operation allows us to concentrate on our mission of being a best in class RF products company."

CONFERENCE CALL / WEBCAST

PCTEL's management team will discuss the Company's results today at 5:15 p.m. ET. The call can be accessed by dialing (888) 782-2072 (U.S. / Canada) or (706) 679-6397 (International), conference ID: 47850677. 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: 47850677.

About PCTEL

PCTEL delivers Performance Critical TELecom technology solutions to the wireless industry. We are a leading global supplier of antennas and wireless network testing solutions. PCTEL Connected Solutions designs and manufactures precision antennas. PCTEL antennas are deployed in small cells, enterprise Wi-Fi access points, fleet management and transit systems, and in equipment and devices for the Industrial Internet of Things (IIoT). PCTEL RF Solutions provides test tools that improve the performance of wireless networks globally. Mobile operators, neutral hosts, and equipment manufacturers rely on PCTEL's scanning receivers and testing solutions to analyze, design, and optimize next generation wireless networks.

For more information, please visit the following websites.
PCTEL Corporate: http://www.pctel.com/
PCTEL Connected Solutions: http://www.antenna.com/
PCTEL RF Solutions: http://rfsolutions.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 regarding our future financial performance, growth of our Connected Solutions and RF Solutions businesses, anticipated demand for certain products, including antennas for small cell, enterprise WiFi, IoT and FirstNet applications, and the impact of the divestiture of our engineering services assets 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 actual growth in the APAC region, impact of data densification and IoT on capacity and coverage demand, impact of 5G, customer demand for these types of products and services generally, growth and continuity in PCTEL's vertical markets, and PCTEL's ability to grow its wireless products 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, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
   
(unaudited)
June 30, December 31,
2017 2016
ASSETS
 
Cash and cash equivalents $ 11,875 $ 14,855
Short-term investment securities 22,340 18,456
Accounts receivable, net of allowance for doubtful accounts of $257 and $273 at
June 30, 2017 and December 31, 2016, respectively 17,735 19,101
Inventories, net 13,783 14,442
Prepaid expenses and other assets 1,365 1,498
Current assets held for sale   694     50  
Total current assets 67,792 68,402
Property and equipment, net 12,310 11,796
Goodwill 3,332 3,332
Intangible assets, net 2,694 3,275
Deferred tax assets, net 5,647 4,512
Other noncurrent assets 83 36
Non-current assets held for sale   0     813  
TOTAL ASSETS $ 91,858   $ 92,166  
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
Accounts payable $ 6,009 $ 6,073
Accrued liabilities   6,300     7,177  
Total current liabilities 12,309 13,250
 
Other long-term liabilities 472 391
   
Total liabilities   12,781     13,641  
 
Stockholders' equity:
Common stock, $0.001 par value, 100,000,000 shares authorized, 17,791,498 and 17,335,122
shares issued and outstanding at June 30, 2017 and December 31, 2016, respectively 18 17
Additional paid-in capital 134,748 134,480
Accumulated deficit (55,463 ) (55,590 )
Accumulated other comprehensive loss   (226 )   (382 )
Total stockholders' equity   79,077     78,525  
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 91,858   $ 92,166  
 
PCTEL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
(in thousands, except per share data)
         
Three Months Ended Six Months Ended
June 30, June 30,
2017 2016 2017 2016
 
REVENUES $ 21,501 $ 21,308 $ 44,471 $ 40,491
COST OF REVENUES   12,539     12,374     26,055     24,097  
GROSS PROFIT   8,962     8,934     18,416     16,394  
OPERATING EXPENSES:
Research and development 2,667 2,523 5,383 5,130
Sales and marketing 2,912 3,090 6,165 5,954
General and administrative 3,598 3,256 6,937 6,185
Amortization of intangible assets 124 129 248 284
Restructuring expenses   0     22     0     216  
Total operating expenses   9,301     9,020     18,733     17,769  
OPERATING LOSS (339 ) (86 ) (317 ) (1,375 )
Other income, net   14     8     42     14  
LOSS BEFORE INCOME TAXES (325 ) (78 ) (275 ) (1,361 )
(Benefit) expense for income taxes   (140 )   7,703     (274 )   6,957  
NET LOSS FROM CONTINUING OPERATIONS (185 ) (7,781 ) (1 ) (8,318 )
NET LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX BENEFIT   (168 )   (3,292 )   (382 )   (4,211 )
NET LOSS $ (353 ) $ (11,073 )   (383 ) $ (12,529 )
 
Net Loss per Share From Continuing Operations:
Basic $ (0.01 ) $ (0.49 ) $ (0.00 ) $ (0.52 )
Diluted $ (0.01 ) $ (0.49 ) $ (0.00 ) $ (0.52 )
 
Net Loss per Share From Discontinued Operations:
Basic $ (0.01 ) $ (0.21 ) $ (0.02 ) $ (0.26 )
Diluted $ (0.01 ) $ (0.21 ) $ (0.02 ) $ (0.26 )
 
Net Loss per Share:
Basic $ (0.02 ) $ (0.69 ) $ (0.02 ) $ (0.78 )
Diluted $ (0.02 ) $ (0.69 ) $ (0.02 ) $ (0.78 )
 
Weighted Average Shares:
Basic 16,534 15,979 16,437 16,149
Diluted 16,534 15,979 16,437 16,149
 
Cash dividend per share $ 0.05 $ 0.05 $ 0.10 $ 0.10
 
PCTEL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
   
Six Months Ended June 30,

 

2017 2016
 
Operating Activities:
Net loss from continuing operations $ (1 ) $ (8,318 )
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation 1,262 1,319
Intangible asset amortization 581 618
Stock-based compensation 1,797 2,090
Loss on disposal/sale of property and equipment 3 5
Restructuring costs (58 ) 109
Deferred tax provision (423 ) 6,700
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable 1,451 2,770
Inventories 779 2,325
Prepaid expenses and other assets 96 157
Accounts payable (232 ) (1,907 )
Income taxes payable (186 ) (54 )
Other accrued liabilities (694 ) (576 )
Deferred revenue   20     41  
Net cash provided by operating activities   4,395     5,279  
 
Investing Activities:
Capital expenditures (1,544 ) (1,268 )
Proceeds from disposal of property and equipment 0 1
Purchases of investments (23,071 ) (28,519 )
Redemptions/maturities of short-term investments   19,187     31,274  
Net cash (used in) provided by investing activities   (5,428 )   1,488  
 
Financing Activities:
Proceeds from issuance of common stock 867 350
Payments for repurchase of common stock 0 (4,095 )
Payment of withholding tax on stock-based compensation (692 ) (187 )
Principle payments on capital leases (41 ) (9 )
Cash dividends   (1,752 )   (1,723 )
Net cash used in financing activities   (1,618 )   (5,664 )
 
Cash flows from discontinued operations:
Net cash used in operating activities (349 ) (690 )
Net cash used in investing activities (16 ) (124 )
 
Net (decrease) increase in cash and cash equivalents (3,016 ) 289
Effect of exchange rate changes on cash 36 (39 )
Cash and cash equivalents, beginning of year   14,855     7,055  
Cash and Cash Equivalents, End of Period $ 11,875   $ 7,305  
 
PCTEL, INC.
P&L INFORMATION BY SEGMENT - Continuing Operations (unaudited)
(in thousands)
               
 
Three Months Ended June 30, 2017 Six Months Ended June 30, 2017

Connected
Solutions

RF Solutions Corporate Total

Connected
Solutions

RF Solutions Corporate Total
 
REVENUES $16,866 $4,661 ($26 ) $21,501 $34,137 $10,418 ($84 ) $44,471
               
GROSS PROFIT 5,731 3,223 8 8,962 11,135 7,270 11 18,416
               
OPERATING (LOSS) INCOME $2,349 $411 ($3,099 ) ($339 ) $4,095 $1,432 ($5,844 ) ($317 )
 
 
Three Months Ended June 30, 2016 Six Months Ended June 30, 2016

Connected
Solutions

RF Solutions Corporate Total

Connected
Solutions

RF Solutions Corporate Total
 
REVENUES $15,781 $5,572 ($45 ) $21,308 $30,480 $10,116 ($105 ) $40,491
               
GROSS PROFIT 4,941 3,983 10 8,934 9,265 7,122 7 16,394
               
OPERATING (LOSS) INCOME $1,792 $859 ($2,737 ) ($86 ) $3,094 $786 ($5,255 ) ($1,375 )
 

Reconciliation of GAAP to non-GAAP Results - Continuing Operations (unaudited)

(in thousands except per share information)
       

Reconciliation of GAAP operating loss to non-GAAP operating income - Continuing Operations (a)

 
Three Months Ended June 30, Six Months Ended June 30,

2017

2016

2017

2016

 
Operating Loss ($339 ) ($86 ) ($317 ) ($1,375 )
 
(a) Add:
Amortization of intangible assets
-Cost of revenues 167 167 333 333
-Operating expenses 124 129 248 284
Restructuring 0 22 0 216
TelWorx investigation:
-General & Administrative 0 (1 ) 0 5
Stock Compensation:
-Cost of revenues 72 73 133 141
-Engineering 120 175 266 342
-Sales & Marketing 126 161 246 301
-General & Administrative 770   892   1,152   1,306  
1,379   1,618   2,378   2,928  
Non-GAAP Operating Income $1,040   $1,532   $2,061   $1,553  
% of revenue 4.8 % 7.2 % 4.6 % 3.8 %
 

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

 
Three Months Ended June 30, Six Months Ended June 30,

2017

2016

2017

2016

 
Net Loss ($185 ) ($7,781 ) ($1 ) ($8,318 )
 
Adjustments:
(a) Non-GAAP adjustment to operating loss 1,379 1,618 2,378 2,928
(b) Other income related to SEC investigation of TelWorx 0 1 0 (5 )
(b) Income Taxes (330 ) 7,426   (653 ) 6,676  
1,049   9,045   1,725   9,599  
Non-GAAP Net Income $864   $1,264   $1,724   $1,281  
 
Non-GAAP Earning per Share:
Basic $0.05 $0.08 $0.10 $0.08
Diluted $0.05 $0.08 $0.10 $0.08
 
Weighed Average Shares:
Basic 16,534 15,979 16,437 16,149
Diluted 17,015 15,979 16,921 16,312
 

This schedule reconciles the Company's GAAP operating loss and GAAP net loss to its non-GAAP operating (loss) income and non-GAAP net (loss) 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, legal settlements, and non-cash income tax expense.

 

Reconciliation of GAAP to non-GAAP SEGMENT INFORMATION - Continuing Operations (unaudited) (a)

(in thousands)
                 
Three Months Ended June 30, 2017 Six Months Ended June 30, 2017

Connected
Solutions

RF
Solutions

Corporate Total

Connected
Solutions

RF
Solutions

Corporate Total
 
Operating (Loss) Income $2,349 $411 ($3,099 ) ($339 ) $4,095 $1,432 ($5,844 ) ($317 )
Add:
Amortization of intangible assets:
-Cost of revenues 0 167 0 167 0 333 0 333
-Operating expenses 39 85 0 124 78 170 0 248
Stock Compensation:
-Cost of revenues 43 29 0 72 82 51 0 133
-Engineering 62 58 0 120 117 149 0 266
-Sales & Marketing 79 47 0 126 164 82 0 246
-General & Administrative 46   17   707     770   89   31   1,032     1,152  
269 403 707   1,379   530 816 1,032   2,378  
Non-GAAP Operating (Loss) Income $2,618 $814 ($2,392 ) $1,040   $4,625 $2,248 ($4,812 ) $2,061  
 
Three Months Ended June 30, 2016 Six Months Ended June 30, 2016

Connected
Solutions

RF
Solutions

Corporate Total

Connected
Solutions

RF
Solutions

Corporate Total
 
Operating (Loss) Income $1,792 $859 ($2,737 ) ($86 ) $3,094 $786 ($5,255 ) ($1,375 )
Add:
Amortization of intangible assets:
-Cost of revenues 0 167 0 167 0 333 0 333
-Operating expenses 44 85 0 129 114 170 0 284
Restructuring expenses 0 5 17 22 44 99 73 216
TelWorx investigation:
-General & Administrative 0 0 (1 ) (1 ) 0 0 5 5
Stock Compensation:
-Cost of Goods Sold 43 30 0 73 84 57 0 141
-Engineering 30 145 0 175 72 270 0 342
-Sales & Marketing 113 48 0 161 200 101 0 301
-General & Administrative 52   95 745   892   92   165 1,049   1,306  
282 575 761   1,618   606 1,195 1,127   2,928  
Non-GAAP Operating (Loss) Income $2,074 $1,434 ($1,976 ) $1,532   $3,700 $1,981 ($4,128 ) $1,553  
 

This schedule reconciles the Company's GAAP operating income (loss) by segment to its non-GAAP operating (loss) 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.

 

PCTEL, Inc.

Reconciliation of GAAP operating loss to Adjusted EBITDA - Continuing Operations (a)

(in thousands)
           
 
Three Months Ended June 30, Six Months Ended June 30,

2017

2016

2017

2016

 
Operating Loss ($339 ) ($86 ) ($317 ) ($1,375 )
 
(a) Add:
Depreciation and amortization 633 659 1,262 1,319
Intangible amortization 291 296 581 617
Stock compensation expenses 1,088 1,301 1,797 2,090
Restructuring - operating expenses 0 22 0 216
TelWorx investigation- operating expenses 0   (1 ) 0   5  
Adjusted EBITDA $1,673   $2,191   $3,323   $2,872  
% of revenue 7.8 % 10.3 % 7.5 % 7.1 %
 

This schedule reconciles the Company's GAAP operating loss 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.

 

(a) Adjusted EBITDA is defined as net income before interest, income taxes, depreciation and amortization. These adjustments reflect depreciation, amortization of intangible assets, stock compensation expenses, restructuring expenses, and general and administrative expenses associated with the SEC investigation of TelWorx.

 

Restated GAAP Results - Continuing Operations (unaudited)

(in thousands except per share information)
                         
 
FY2015 FY2016 FY2017

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

 
 
REVENUES $23,158 $23,032 $22,393 $21,950 $19,183 $21,308 $20,892 $23,623 $22,970 $21,501
COST OF REVENUES 13,535 14,272 14,211 13,388 11,724 12,374 12,637 13,860 13,516 12,539
GROSS PROFIT 9,623 8,760 8,182 8,562 7,459 8,934 8,255 9,763 9,454 8,962
OPERATING EXPENSES:
Research and development 2,738 2,904 2,863 2,699 2,607 2,523 2,451 2,577 2,716 2,667
Sales and marketing 3,273 3,108 3,307 3,285 2,864 3,090 3,116 3,646 3,253 2,912
General and administrative 3,321 3,108 2,682 2,809 2,928 3,256 2,847 2,873 3,339 3,598
Amortization of intangible assets 435 558 470 441 155 129 124 124 124 124
Restructuring expenses 0     432     411     767   194     22     17     -   0     0  
Total operating expenses 9,767 10,110 9,733 10,001 8,748 9,020 8,555 9,220 9,432 9,301
OPERATING (LOSS) INCOME (144 ) (1,350 ) (1,551 ) (1,439 ) (1,289 ) (86 ) (300 ) 543 22 (339 )
Other income, net 44 2,205 534 504 6 8 35 63 28 14
(LOSS) INCOME BEFORE INCOME TAXES (100 ) 855 (1,017 ) (935 ) (1,283 )

 

(78 )

 

(265 ) 606 50

 

(325 )
Expense (benefit) for income taxes (36 )   303     (391 )   (333 ) (746 )   7,703     (354 )   5,173   (134 )   (140 )
NET (LOSS) INCOME FROM CONTINUING OPERATIONS (64 )   552     (626 )   (602 ) (537 )   (7,781 )   89     (4,567 ) 184     (185 )
NET (LOSS) INCOME FROM DISCONTINUED OPERATIONS 31   171   203   304   (919 ) (3,292 ) 86   (760 ) (214 ) (168 )
NET (LOSS) INCOME ($33 ) $723   ($423 ) ($298 ) ($1,456 )

($11,073

)

$175   ($5,327 ) ($30 ) ($353 )
 
Earning per Share - Continuing Operations:
Basic ($0.00 ) $0.03 ($0.04 ) ($0.04 ) ($0.03 ) ($0.49 ) $0.01 ($0.28 ) $0.01 ($0.01 )
Diluted ($0.00 ) $0.03 ($0.04 ) ($0.04 ) ($0.03 ) ($0.49 ) $0.01 ($0.28 ) $0.01 ($0.01 )
 
Earning per Share - Discontinued Operations:
Basic $0.00 $0.01 $0.01 $0.02 ($0.06 ) ($0.21 ) $0.01 ($0.05 ) ($0.01 ) ($0.01 )
Diluted $0.00 $0.01 $0.01 $0.02 ($0.06 ) ($0.21 ) $0.01 ($0.05 ) ($0.01 ) ($0.01 )
 
Earning per Share:
Basic ($0.00 ) $0.04 ($0.02 ) ($0.02 ) ($0.09 ) ($0.69 ) $0.01 ($0.33 ) ($0.00 ) ($0.02 )
Diluted ($0.00 ) $0.04 ($0.02 ) ($0.02 ) ($0.09 ) ($0.69 ) $0.01 ($0.32 ) ($0.00 ) ($0.02 )
 
Weighed Average Shares:
Basic 18,312 18,257 17,626 16,820 16,324 15,979 16,106 16,194 16,340 16,534
Diluted 18,525 18,408 17,809 16,969 16,324 15,979 16,245 16,194 16,715 16,534
 

Reconciliation of GAAP to non-GAAP Results - Continuing Operations (unaudited)

(in thousands except per share information)
                       

Reconciliation of GAAP operating loss to non-GAAP operating income - Continuing Operations (a)

 
FY2015 FY2016 FY2017

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

 
Operating Income (Loss) ($100 ) ($1,350 ) ($1,017 ) ($1,439 ) ($1,289 ) ($86 ) ($300 ) $543 $22 ($339 )
 
(a) Add:
Amortization of intangible assets:
-Cost of revenues 20 241 167 167 167 167 167 167 166 167
-Operating expenses 435 558 470 441 155 129 124 124 124 124
Restructuring:
-Cost of revenues 0 114 132 42 0 0 0 0 0 0
-Operating expenses 0 432 411 767 194 22 17 0 0 0
TelWorx investigation:
-General & Administrative 38 54 9 7 5 (1 ) 0 0 0 0
Stock Compensation:
-Cost of revenues 52 80 64 54 68 73 78 63 61 72
-Engineering 115 31 99 175 167 175 183 125 147 120
-Sales & Marketing 151 (17 ) 220 (142 ) 140 161 176 140 119 126
-General & Administrative 153   171   203   304   414   892   541   451   382   770  
964   1,664   1,775   1,815   1,310   1,618   1,286   1,070   999   1,379  
Non-GAAP Operating Income $864   $314   $758   $376   $21   $1,532   $986   $1,613   $1,021   $1,040  
% of revenue 3.7 % 1.4 % 3.4 % 1.7 % 0.1 % 7.2 % 4.7 % 6.8 % 4.4 % 4.8 %
 

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

 
FY2015 FY2016 FY2017

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

 
Net Income (Loss) ($64 ) $552 ($626 ) ($602 ) ($537 ) ($7,781 ) $89 ($4,567 ) $184 ($185 )
 
Adjustments:
(a) Non-GAAP adjustment to operating loss 964 1,664 1,775 $ 1,815 1,310 1,618 1,286 1,070 999 1,379
(b) Other income related to SEC investigation of TelWorx (38 ) (54 ) (10 ) $ (1 ) (5 ) 1 0 0 0 0
Legal Settlement - Amendment to Nexgen APA 0 (2,160 ) (500 ) $ (500 ) 0 0 0 0 0 0
(b) Income Taxes (185 ) 248   (450 ) $ (401 ) (750 ) 7,426   (538 ) 4,871   (424 ) (330 )
741   (302 ) 815   $ 913   555   9,045   748   5,941   575   1,049  
Non-GAAP Net Income (Loss) $677   $250   $189   $ 311   $18   $1,264   $837   $1,374   $759   $864  
 
Non-GAAP Earning per Share:
Basic $0.04 $0.01 $0.01 $0.02 $0.00 $0.08 $0.05 $0.08 $0.05 $0.05
Diluted $0.04 $0.01 $0.01 $0.02 $0.00 $0.08 $0.05 $0.08 $0.05 $0.05
 
Weighed Average Shares:
Basic 18,312 18,257 17,626 16,820 16,324 15,979 16,106 16,194 16,340 16,340
Diluted 18,525 18,408 17,809 16,969 16,324 15,979 16,245 16,439 16,715 16,715
 

This schedule reconciles the Company's GAAP operating loss and GAAP net loss to its non-GAAP operating (loss) income and non-GAAP net (loss) 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, legal settlements, and non-cash income tax expense.

 

PCTEL, Inc.

Reconciliation of GAAP operating loss to Adjusted EBITDA - Continuing Operations (a)

(in thousands)
                       
 
FY2015 FY2016 FY2017

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

 
Operating (Loss) Income ($144 )

($1,350

)

($1,551 ) ($1,439 ) ($1,289 ) ($86 ) ($300 ) $543 $22 ($339 )
 
(a) Add:
Depreciation and amortization 634 656 660 660 660 659 675 635 628 633
Intangible amortization 455 799 637 608 322 296 291 291 290 291
Stock compensation expenses 471 265 586 391 789 1,301 978 779 709 1,088
Restructuring - operating expenses 0 432 411 767 194 22 17 0 0 0
TelWorx investigation- operating expenses 38   54   9   7   5   (1 ) 0   0   0   0  
Adjusted EBITDA $1,454   $856   $752   $994   $681  

$2,191

  $1,661   $2,248   $1,649  

$1,673

 
% of revenue 6.3 % 3.7 % 3.4 % 4.5 % 3.6 % 10.3 % 8.0 % 9.5 % 7.2 % 7.3 %
 

This schedule reconciles the Company's GAAP operating loss 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.

 

(a) Adjusted EBITDA is defined as net income before interest, income taxes, depreciation and amortization. These adjustments reflect depreciation, amortization of intangible assets, stock compensation expenses, restructuring expenses, and general and administrative expenses associated with the SEC investigation of TelWorx.

 

John Schoen
CFO
PCTEL, Inc.
(630) 372-6800
or
Michael Rosenberg
Director of Marketing
PCTEL, Inc.
(301) 444-2046
public.relations@pctel.com

Source: PCTEL, Inc.

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