An Increase of Six Percent from the Same Period Last Year

BLOOMINGDALE, Ill.--(BUSINESS WIRE)-- 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 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 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, PCTEL's 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

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: 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. 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®®, IBflex®®, 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™).

PCTELConnected 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 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 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 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 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'sSecurities 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)
			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
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
TOTAL ASSETS			$126,328			$131,669
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable			$5,811			$5,495
Accrued liabilities			6,961			10,211
Total current liabilities			12,772			15,706
Other long-term liabilities			1,426			448
Total liabilities			14,198			16,154
Stockholders' equity:
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
Total stockholders' equity			112,130			115,515
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY			$126,328			$131,669

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
GROSS PROFIT			9,591			10,851			19,780			20,432
OPERATING EXPENSES:
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
Total operating expenses			11,256			10,306			21,541			20,309
OPERATING INCOME (LOSS)			(1,665	)		545			(1,761	)		123
Other income, net			2,205			334			2,249			531
INCOME BEFORE INCOME TAXES			540			879			488			654
Expense for income taxes			193			334			174			255
NET INCOME			$347			$545			$314			$399
Net Income per Share:
Basic			$0.02			$0.03			$0.02			$0.02
Diluted			$0.02			$0.03			$0.02			$0.02
Weighed Average Shares:
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		RF										Connected
			Solutions		Solutions			Corporate			Total				Solutions		RF Solutions		Corporate			Total
REVENUES			$18,100		$9,583			($58	)		$27,625				$35,454		$18,634		($137	)		$53,951
GROSS PROFIT			5,417		4,173			1			9,591				10,861		8,908		11			19,780
OPERATING INCOME (LOSS)			$1,498		($347	)		($2,816	)		($1,665	)			$3,187		$786		($5,734	)		($1,761	)
			Three Months Ended June 30, 2014												Six Months Ended June 30, 2014
			Connected		RF										Connected
			Solutions		Solutions			Corporate			Total				Solutions		RF Solutions		Corporate			Total
REVENUES			$17,715		$8,574			($107	)		$26,182				$33,712		$16,295		($170	)		$49,837
GROSS PROFIT			5,716		5,129			6			10,851				10,832		9,587		13			20,432
OPERATING INCOME (LOSS)			$1,845		$1,645			($2,945	)		$545				$3,015		$2,659		($5,551	)		$123

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:
		Amortization of intangible assets			1,185			464				1,839			1,038
		Restructuring:
		-Cost of Goods Sold			114			0				114			0
		-Restructuring			440			0				440			0
		TelWorx investigation:
		-General & Administrative			54			263				91			498
		Legal settlement:
		-General & Administrative			0			75				0			75
		Stock Compensation:
		-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
					2,034			1,898				3,226			3,458
		Non-GAAP Operating Income			$369			$2,443				$1,465			$3,581
		% 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:
(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	)
					(52	)		1,464				886			2,524
		Non-GAAP Net Income			$295			$2,009				$1,200			$2,923
		Non-GAAP Earning per Share:
		Basic			$0.02			$0.11				$0.07			$0.16
		Diluted			$0.02			$0.11				$0.06			$0.16
		Weighed Average Shares:
		Basic			18,257			18,165				18,284			18,166
		Diluted			18,408			18,291				18,498			18,350

	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, 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			RF										Connected
			Solutions			Solutions			Corporate			Total				Solutions			RF Solutions			Corporate			Total
Operating Income (Loss)			$1,498			($347	)		($2,816	)		($1,665	)			$3,187			$786			($5,734	)		($1,761	)
Add:
Amortization of intangible assets			230			955			0			1,185				460			1,379			0			1,839
TelWorx investigation:
-General & Administrative			0			0			54			54				0			0			91			91
Restructuring:
-Cost of Goods Sold			114			0			0			114				114			0			0			114
-Restructuring charges			426			14			0			440				426			14			0			440
Stock Compensation:
-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
			709			1,042			283			2,034				1,149			1,647			430			3,226
Non-GAAP Operating Income (Loss)			$2,207			$695			($2,533	)		$369				$4,336			$2,433			($5,304	)		$1,465
			Three Months Ended June 30, 2014													Six Months Ended June 30, 2014
			Connected			RF										Connected
			Solutions			Solutions			Corporate			Total				Solutions			RF Solutions			Corporate			Total
Operating Income (Loss)			$1,845			$1,645			($2,945	)		$545				$3,015			$2,659			($5,551	)		$123
Add:
Amortization of intangible assets			260			204			0			464				630			408			0			1,038
TelWorx investigation:
-General & Administrative			0			0			263			263				0			0			498			498
Legal settlement:
-General & Administrative			0			0			75			75				0			0			75			75
Stock Compensation:
-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
			613			443			842			1,898				1,323			830			1,305			3,458
Non-GAAP Operating Income (Loss)			$2,458			$2,088			($2,103	)		$2,443				$4,338			$3,489			($4,246	)		$3,581

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.

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PCTEL, Inc.
John Schoen
CFO
(630) 372-6800
or
Jack Seller
Public Relations
(630)372-6800
Jack.seller@pctel.com

Source: PCTEL, Inc.

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