Strong Sequential Revenue and Operating Margin Growth

BLOOMINGDALE, Ill.--(BUSINESS WIRE)-- PCTEL, Inc. (NASDAQ:PCTI), a leader in Performance Critical Telecom solutions, announced its 2014 third quarter results.

Third Quarter Highlights

$27.9 million in revenue for the quarter, an increase of six percent from the same period last year and an increase of $1.8 million over the second quarter of this year.

Gross profit margin of 41 percent in the quarter, unchanged from the same period last year.

GAAP operating margin from continuing operations of eight percent for the quarter, compared to operating margin of four percent for the same period last year.

GAAP net income from continuing operations of $2.2 million for the quarter, or $0.12 per diluted share, compared to net income of $751,000 from continuing operations, or $0.04 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, one-time gains or losses, 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 from continuing operations of 12 percent in the quarter, compared to 11 percent from the same period last year.

Non-GAAP net income from continuing operations of $2.9 million or $0.16 per diluted share in the quarter, compared to $2.3 million or $0.13 per diluted share from the same period last year representing a 26 percent increase.

$58.9 million of cash, short-term investments at September 30, 2014, an increase of approximately $5.0 million from the preceding quarter. During the quarter the company paid $750,000 in dividends, and generated approximately $5.75 million of cash and investments from all other sources.

"We enjoyed a strong quarter in network engineering, IBflex™ scanning receivers, new OEM antenna design wins, mobile towers and small cell site solution deployment," said Marty Singer, PCTEL's Chairman and CEO. "We anticipate continued demand from China's LTE carriers, execution against our strong small cell site solution backlog, expansion of our broadband wireless antenna business and new applications for our industry-leading GNSS antennas. The demand for in-building, ODAS, and wireless capacity in dense venues should drive continued growth of our network engineering services operation and in-building solutions," 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: 13775108. 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: 13775108.

About PCTEL

PCTEL delivers Performance Critical Telecom solutions. RF Solutions develops and provides test equipment, software, and engineering services for wireless networks. Engineers rely upon PCTEL to visualize, benchmark, and optimize wireless networks. Connected Solutions™ designs and delivers performance critical antennas and site solutions for wireless networks globally. Our antennas support evolving wireless standards for cellular, private, and broadband networks. PCTEL antennas and site solutions support networks worldwide, including SCADA for oil, gas and utilities, fleet management, industrial operations, health care, small cell and network timing deployment, defense, public safety, education, and broadband access.

PCTEL's performance critical products include its SeeGull® scanning receivers and CW Transmitter, SeeHawk® and SeeHawk® Touch™ analytic software, and its SeeWave™ interference locating system. PCTEL is recognized globally for its industry leading-edge IBflex™, EXflex™, and MX scanning receivers and its sophisticated in-building Network Engineering Services (NES).

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 growth of PCTEL's in-building engineering services and scanning receiver sales, the performance of the Connected Solutions business and the anticipated success of our new antenna and scanning receiver products, 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 ability to successfully grow the wireless products business and the 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)
			September 30,			December 31,
			2014			2013
ASSETS
Cash and cash equivalents			$19,345			$21,790
Short-term investment securities			39,546			36,105
Accounts receivable, net of allowance for doubtful accounts
of $145 and $130 at September 30, 2014 and December 31, 2013, respectively			20,236			18,603
Inventories, net			16,367			14,535
Deferred tax assets, net			2,303			1,629
Prepaid expenses and other assets			1,444			3,166
Total current assets			99,241			95,828
Property and equipment, net			14,898			14,971
Goodwill			161			161
Intangible assets, net			3,102			4,604
Deferred tax assets, net			10,685			11,827
Other noncurrent assets			39			41
TOTAL ASSETS			$128,126			$127,432
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable			$5,436			$4,440
Accrued liabilities			8,495			7,803
Total current liabilities			13,931			12,243
Other long-term liabilities			551			3,137
Total liabilities			14,482			15,380
Stockholders' equity:
Common stock, $0.001 par value, 100,000,000 shares
authorized, 18,503,259 and 18,566,119 shares issued and
outstanding at September 30, 2014 and December 31, 2013, respectively			19			19
Additional paid-in capital			144,804			143,572
Accumulated deficit			(31,355	)		(31,748	)
Accumulated other comprehensive income			176			209
Total stockholders' equity			113,644			112,052
TOTAL LIABILITIES AND EQUITY			$128,126			$127,432

PCTEL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
(in thousands, except per share data)
				Three Months Ended				Nine Months Ended
				September 30,				September 30,
				2014		2013		2014		2013
	REVENUES			$27,932		$26,471		$77,769		$78,290
	COST OF REVENUES			16,538		15,695		45,943		47,373
	GROSS PROFIT			11,394		10,776		31,826		30,917
	OPERATING EXPENSES:
	Research and development			2,659		2,735		8,970		7,963
	Sales and marketing			3,054		2,912		9,312		8,986
	General and administrative			3,120		3,576		9,822		12,034
	Amortization of intangible assets			465		596		1,503		1,804
	Restructuring charges			0		29		0		254
	Total operating expenses			9,298		9,848		29,607		31,041
	OPERATING INCOME (LOSS)			2,096		928		2,219		(124	)
	Other income, net			207		389		738		4,778
	INCOME BEFORE INCOME TAXES			2,303		1,317		2,957		4,654
	Expense for income taxes			85		566		340		1,764
	NET INCOME FROM CONTINUING OPERATIONS			2,218		751		2,617		2,890
	LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX BENEFIT			0		0		0		(109	)
	NET INCOME			$2,218		$751		$2,617		$2,781
	Earnings per Share from Continuing Operations:
	Basic			$0.12		$0.04		$0.14		$0.16
	Diluted			$0.12		$0.04		$0.14		$0.16
	Loss per Share from Discontinued Operations:
	Basic			$0.00		$0.00		$0.00		($0.01	)
	Diluted			$0.00		$0.00		$0.00		($0.01	)
	Earnings per Share:
	Basic			$0.12		$0.04		$0.14		$0.16
	Diluted			$0.12		$0.04		$0.14		$0.15
	Weighed Average Shares:
	Basic			18,112		17,841		18,155		17,766
	Diluted			18,271		18,354		18,346		18,093
	Cash dividend per share			$0.040		$0.035		$0.120		$0.105

PCTEL, INC.
P&L INFORMATION BY SEGMENT - Continuing Operations
(in thousands)
		Three Months Ended September 30, 2014									Nine Months Ended September 30, 2014
		Connected									Connected
		Solutions		RF Solutions		Corporate			Total		Solutions		RF Solutions		Corporate			Total
REVENUES		$18,697		$9,283		($48	)		$27,932		$52,409		$25,578		($218	)		$77,769
GROSS PROFIT		5,803		5,584		7			11,394		16,635		15,171		20			31,826
OPERATING INCOME (LOSS)		$2,262		$2,492		($2,658	)		$2,096		$5,278		$5,150		($8,209	)		$2,219
		Three Months Ended September 30, 2013									Nine Months Ended September 30, 2013
		Connected									Connected
		Solutions		RF Solutions		Corporate			Total		Solutions		RF Solutions		Corporate			Total
REVENUES		$18,318		$8,243		($90	)		$26,471		$56,874		$21,617		($201	)		$78,290
GROSS PROFIT		5,684		5,090		2			10,776		17,352		13,547		18			30,917
OPERATING INCOME (LOSS)		$1,738		$2,098		($2,908	)		$928		$4,872		$5,139		($10,135	)		($124	)

Reconciliation GAAP To non-GAAP Results Of Continuing Operations (unaudited)
(in thousands except per share information)
Reconciliation of GAAP operating income to non-GAAP operating income (a) from Continuing Operations
				Three Months Ended September 30,						Nine Months Ended September 30,
				2014			2013			2014			2013
		Operating Income (Loss)		$2,096			$928			$2,219			($124	)
(a)		Add:
		Amortization of intangible assets		465			596			1,503			1,804
		TelWorx restructuring:
		-Restructuring charges		0			29			0			254
		-Cost of Goods Sold		0			0			0			284
		TelWorx investigation:
		-General & Administrative		188			389			686			1,880
		Legal settlement
		-General & Administrative		0			0			75			0
		Stock Compensation:
		-Cost of Goods Sold		112			104			315			295
		-Engineering		149			182			509			505
		-Sales & Marketing		155			174			491			435
		-General & Administrative		315			438			1,263			1,384
				1,384			1,912			4,842			6,841
		Non-GAAP Operating Income		$3,480			$2,840			$7,061			$6,717
		% of revenue		12.5	%		10.7	%		9.1	%		8.6	%
Reconciliation of GAAP net income to non-GAAP net income (b) from Continuing Operations
				Three Months Ended September 30,						Nine Months Ended September 30,
				2014			2013			2014			2013
		Net Income from Continuing Operations		$2,218			$751			$2,617			$2,890
		Adjustments:
(a)		Non-GAAP adjustment to operating income		1,384			1,912			4,842			6,841
		Other income related to the TelWorx settlement and TelWorx SEC investigation		(188	)		(389	)		(660	)		(4,768	)
		Other legal settlements		0			0			(75	)		0
(b)		Income Taxes		(545	)		55			(932	)		553
				651			1,578			3,175			2,626
		Non-GAAP Net Income from Continuing Operations		$2,869			$2,329			$5,792			$5,516
		Non-GAAP Earning per Share:
		Basic		$0.16			$0.13			$0.32			$0.31
		Diluted		$0.16			$0.13			$0.32			$0.30
		Weighed Average Shares:
		Basic		18,112			17,841			18,155			17,766
		Diluted		18,271			18,354			18,346			18,093

		This schedule reconciles the Company's GAAP operating income and GAAP net income 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 TelWorx investigation.
		(b) These adjustments include the items described in footnote (a) as well as other income for the TelWorx legal settlement and
		insurance claims related to the TelWorx investigation, and non-cash income tax expense.

Reconciliation GAAP To non-GAAP SEGMENT INFORMATION (unaudited) (a) - Continuing Operations
(in thousands except per share information)
			Three Months Ended September 30, 2014									Nine Months Ended September 30, 2014
			Connected									Connected
			Solutions		RF Solutions		Corporate			Total		Solutions		RF Solutions		Corporate			Total
	Operating Income (Loss)		$2,262		$2,492		($2,658	)		$2,096		$5,278		$5,150		($8,209	)		$2,219
	Add:
	Amortization of intangible assets		261		204		0			465		891		612		0			1,503
	TelWorx restructuring:
	-Restructuring charges		0		0		0			0		0		0		0			0
	-Cost of Goods Sold		0		0		0			0		0		0		0			0
	TelWorx investigation:
	-General & Administrative		0		0		188			188		0		0		686			686
	Legal settlement
	-General & Administrative		0		0		0			0		0		0		75			75
	Stock Compensation:
	-Cost of Goods Sold		58		54		0			112		157		158		0			315
	-Engineering		63		86		0			149		229		280		0			509
	-Sales & Marketing		122		33		0			155		401		90		0			491
	-General & Administrative		54		31		230			315		202		98		963			1,263
			558		408		418			1,384		1,880		1,238		1,724			4,842
	Non-GAAP Operating Income (Loss)		$2,820		$2,900		($2,240	)		$3,480		$7,158		$6,388		($6,485	)		$7,061
			Three Months Ended September 30, 2013									Nine Months Ended September 30, 2013
			Connected									Connected
			Solutions		RF Solutions		Corporate			Total		Solutions		RF Solutions		Corporate			Total
	Operating Income (Loss)		$1,738		$2,098		($2,908	)		$928		$4,872		$5,139		($10,135	)		($124	)
	Add:
	Amortization of intangible assets		392		204		0			596		1,181		623		0			1,804
	TelWorx restructuring:
	-Restructuring charges		29		0		0			29		254		0		0			254
	-Cost of Goods Sold		0		0		0			0		284		0		0			284
	TelWorx investigation:
	-General & Administrative		0		0		389			389		0		0		1,880			1,880
	Stock Compensation:
	-Cost of Goods Sold		44		60		0			104		109		186		0			295
	-Engineering		77		105		0			182		207		298		0			505
	-Sales & Marketing		127		47		0			174		328		107		0			435
	-General & Administrative		95		34		309			438		249		76		1,059			1,384
			764		450		698			1,912		2,612		1,290		2,939			6,841
	Non-GAAP Operating Income (Loss)		$2,502		$2,548		($2,210	)		$2,840		$7,484		$6,429		($7,196	)		$6,717

	This schedule reconciles the Company's GAAP operating income by segment 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 TelWorx investigation.

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

Source: PCTEL, Inc.

News Provided by Acquire Media