UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (date of earliest event reported)
August 8, 2018
PCTEL, Inc.
(Exact name of registrant as specified in its charter)
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Delaware |
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000-27115 |
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77-0364943 |
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(State or Other Jurisdiction of Incorporation) |
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(Commission File Number) |
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(IRS Employer Identification No.) |
471 Brighton Drive
Bloomingdale, Illinois 60108
(Address of Principal Executive Offices, including Zip Code)
(630) 372-6800
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
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☐ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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☐ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12(b)) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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☐ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
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Item 2.02 Results of Operations and Financial Condition
The following information is intended to be furnished under Item 2.02 of Form 8-K, “Results of Operations and Financial Condition.” This information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
On August 8, 2018, PCTEL, Inc. issued a press release regarding its financial results for the second quarter ended June 30, 2018. The full text of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: August 9, 2018
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PCTEL, INC. |
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By: |
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/s/ John W. Schoen |
John W. Schoen, Chief Financial Officer
EXHIBIT 99.1
PCTEL Reports $21.6 Million in Second Quarter Revenue
BLOOMINGDALE, Ill. – August 8, 2018 – PCTEL, Inc. (Nasdaq: PCTI), a leader in Performance Critical TELecom solutions, announced its results for the second quarter ended June 30, 2018.
Highlights from Continuing Operations
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Revenue of $21.6 million in the second quarter and $43.3 million in the first half, unchanged in the quarter and down 3% in the first half compared to last year. Connected Solutions revenue was up 4% in the quarter and 3% in the half. RF Solutions revenue was down 11% in the quarter and 22% in the half. |
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Gross profit margin of 36.1% in the second quarter and 36.2% in the first half, down 560 basis points in the quarter and 520 basis points in the half compared to last year. The two primary reasons for the decrease are lower revenue in the RF Solutions segment which has higher margin from its scanner products compared to antenna products, and price erosion in the small cell antenna market. |
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Net loss per share of $0.07 in the second quarter and $0.12 in the first half, compared to a net loss of $0.01 per share in the quarter and break even in the half last year. |
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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. |
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Non-GAAP EPS of break-even in the second quarter and a net loss of $0.01 in the first half compared to net income of $0.05 in the quarter and $0.10 in the half last year. |
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Adjusted EBITDA margin as a percent of revenue of 2% in the second quarter and the first half compared to 8% in the quarter and the half last year. |
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$36.5 million of cash and short-term investments at June 30, 2018 and no debt. |
“The Company saw revenue growth for its Connected Solutions products in the enterprise Wi-Fi market during the quarter and the half but fell short of our expectations. RF Solutions revenue was down in the North American market in the quarter and the half, due to capital budget reductions by several U.S. carriers,” said David Neumann, PCTEL’s CEO. “We believe the carriers have reduced capital spending on legacy networks to prepare for more aggressive 5G deployments in 2019. Although this will negatively affect our 2018 results, PCTEL is positioned to take advantage of the long-term growth opportunities in our targeted markets, which require both performance critical testing solutions and antennas.”
PCTEL’s management team will discuss the Company’s results today at 4:30 p.m. ET. The call can be accessed by dialing (888) 782-2072 (U.S. / Canada) or (706) 679-6397 (International), conference ID: 47850740. The call will also be webcast at http://investor.pctel.com/news-events/webcasts-presentations.
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: 47850740.
About PCTEL
PCTEL, Inc. provides Performance Critical TELecom technology solutions. We are a leading global supplier of antennas and wireless network testing solutions. Our precision 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). We offer in-house design, testing, radio integration, and manufacturing capabilities for our customers. PCTEL’s test and measurement tools improve the performance of wireless networks globally, with a focus on LTE, public safety, and emerging 5G technologies. Network operators, neutral hosts, and equipment manufacturers rely on our scanning receivers and testing solutions to analyze, design, and optimize their networks.
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 regarding our future financial performance, growth of our Connected Solutions and RF Solutions businesses, anticipated demand for certain products, our expectations regarding capital expenditures by wireless operators, the impact of tariffs on certain imports from China, and the anticipated growth of public and private wireless systems 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 impact of data densification and IoT on capacity and coverage demand, impact of 5G, customer demand for these types of products and services generally including demand from customers in China, 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.
# # #
For further information contact:
John SchoenMichael Rosenberg
CFODirector of Marketing
PCTEL, Inc.PCTEL, Inc.
(630) 372-6800(301) 444-2046
public.relations@pctel.com
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(Unaudited) |
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June 30, |
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December 31, |
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2018 |
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2017 |
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ASSETS |
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Cash and cash equivalents |
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$ |
7,603 |
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$ |
5,559 |
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Short-term investment securities |
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28,904 |
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32,499 |
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Accounts receivable, net of allowances of $164 and $319 at June 30, 2018 and December 31, 2017, respectively |
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17,929 |
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18,624 |
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Inventories, net |
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13,470 |
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12,756 |
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Prepaid expenses and other assets |
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1,285 |
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1,605 |
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Total current assets |
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69,191 |
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71,043 |
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Property and equipment, net |
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12,844 |
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12,369 |
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Goodwill |
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3,332 |
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3,332 |
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Intangible assets, net |
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1,532 |
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2,113 |
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Deferred tax assets, net |
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8,213 |
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7,734 |
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Other noncurrent assets |
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58 |
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72 |
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TOTAL ASSETS |
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$ |
95,170 |
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$ |
96,663 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Accounts payable |
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$ |
8,219 |
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$ |
5,471 |
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Accrued liabilities |
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5,413 |
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7,481 |
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Total current liabilities |
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13,632 |
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12,952 |
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Long-term liabilities |
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453 |
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392 |
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Total liabilities |
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14,085 |
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13,344 |
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Stockholders’ equity: |
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Common stock, $0.001 par value, 100,000,000 shares authorized, 18,318,141 and 17,806,792 shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively |
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18 |
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18 |
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Additional paid-in capital |
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134,367 |
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134,505 |
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Accumulated deficit |
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(53,250 |
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(51,258 |
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Accumulated other comprehensive (loss) income |
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(50 |
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54 |
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Total stockholders’ equity |
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81,085 |
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83,319 |
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
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$ |
95,170 |
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$ |
96,663 |
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) |
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(in thousands, except per share data) |
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Three Months Ended |
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Six Months Ended |
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June 30, |
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June 30, |
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2018 |
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2017 |
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2018 |
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2017 |
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REVENUES |
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$ |
21,582 |
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$ |
21,501 |
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$ |
43,313 |
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$ |
44,471 |
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COST OF REVENUES |
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13,783 |
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12,539 |
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27,650 |
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26,055 |
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GROSS PROFIT |
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7,799 |
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8,962 |
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15,663 |
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18,416 |
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OPERATING EXPENSES: |
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Research and development |
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3,053 |
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2,667 |
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5,993 |
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5,383 |
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Sales and marketing |
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3,075 |
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2,912 |
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6,102 |
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6,165 |
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General and administrative |
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3,149 |
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3,598 |
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6,143 |
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6,937 |
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Amortization of intangible assets |
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124 |
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124 |
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248 |
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248 |
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Total operating expenses |
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9,401 |
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9,301 |
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18,486 |
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18,733 |
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OPERATING LOSS |
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(1,602 |
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(339 |
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(2,823 |
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(317 |
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Other income, net |
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209 |
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14 |
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260 |
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42 |
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LOSS BEFORE INCOME TAXES |
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(1,393 |
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(325 |
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(2,563 |
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(275 |
) |
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Benefit for income taxes |
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(167 |
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(140 |
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(479 |
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(274 |
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LOSS FROM CONTINUING OPERATIONS |
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(1,226 |
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(185 |
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(2,084 |
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(1 |
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NET LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX BENEFIT |
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0 |
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(168 |
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0 |
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(382 |
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NET LOSS |
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$ |
(1,226 |
) |
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$ |
(353 |
) |
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$ |
(2,084 |
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$ |
(383 |
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Net Loss per Share from Continuing Operations: |
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Basic |
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$ |
(0.07 |
) |
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$ |
(0.01 |
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$ |
(0.12 |
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$ |
0.00 |
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Diluted |
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$ |
(0.07 |
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$ |
(0.01 |
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$ |
(0.12 |
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$ |
0.00 |
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Net Loss per Share from Discontinued Operations: |
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Basic |
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$ |
0.00 |
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$ |
(0.01 |
) |
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$ |
0.00 |
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$ |
(0.02 |
) |
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Diluted |
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$ |
0.00 |
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$ |
(0.01 |
) |
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$ |
0.00 |
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$ |
(0.02 |
) |
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Net Loss per Share: |
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Basic |
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$ |
(0.07 |
) |
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$ |
(0.02 |
) |
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$ |
(0.12 |
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$ |
(0.02 |
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Diluted |
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$ |
(0.07 |
) |
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$ |
(0.02 |
) |
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$ |
(0.12 |
) |
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$ |
(0.02 |
) |
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Weighted Average Shares: |
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Basic |
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17,142 |
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16,534 |
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17,099 |
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16,437 |
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Diluted |
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17,142 |
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16,534 |
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17,099 |
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16,437 |
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Cash dividend per share |
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$ |
0.055 |
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$ |
0.05 |
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$ |
0.11 |
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$ |
0.10 |
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Six Months Ended June 30, |
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. |
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2018 |
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2017 |
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Operating Activities: |
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Net loss from continuing operations |
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$ |
(2,084 |
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$ |
(1 |
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Adjustments to reconcile net loss to net cash provided by operating activities: |
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Depreciation |
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1,381 |
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1,262 |
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Intangible asset amortization |
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|
581 |
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|
581 |
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Stock-based compensation |
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1,786 |
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|
1,797 |
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(Gain) loss on disposal of property and equipment |
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(5 |
) |
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|
3 |
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Restructuring costs |
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(20 |
) |
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|
(58 |
) |
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Bad debt provision |
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|
124 |
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|
|
(7 |
) |
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Deferred tax provision |
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(390 |
) |
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|
(423 |
) |
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Changes in operating assets and liabilities: |
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|
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Accounts receivable |
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|
473 |
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|
1,458 |
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Inventories |
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(813 |
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|
779 |
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Prepaid expenses and other assets |
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|
330 |
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|
96 |
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Accounts payable |
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|
2,743 |
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|
(232 |
) |
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Income taxes payable |
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|
(38 |
) |
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|
(186 |
) |
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Other accrued liabilities |
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|
(2,107 |
) |
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|
(694 |
) |
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Deferred revenue |
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|
16 |
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|
20 |
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Net cash provided by operating activities |
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|
1,977 |
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|
4,395 |
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Investing Activities: |
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Capital expenditures |
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(1,519 |
) |
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|
(1,544 |
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Proceeds from disposal of property and equipment |
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14 |
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|
0 |
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Purchases of investments |
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(22,712 |
) |
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|
(23,071 |
) |
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Redemptions/maturities of short-term investments |
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|
26,307 |
|
|
|
19,187 |
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Net cash provided by (used in) investing activities |
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|
2,090 |
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|
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(5,428 |
) |
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Financing Activities: |
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|
|
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|
|
|
|
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Proceeds from issuance of common stock |
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|
364 |
|
|
|
867 |
|
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Payment of withholding tax on stock-based compensation |
|
|
(289 |
) |
|
|
(692 |
) |
|
Principle payments on capital leases |
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|
(57 |
) |
|
|
(41 |
) |
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Cash dividends |
|
|
(1,999 |
) |
|
|
(1,752 |
) |
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Net cash used in financing activities |
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|
(1,981 |
) |
|
|
(1,618 |
) |
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Cash flows from discontinued operations: |
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|
|
|
|
|
|
|
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Net cash used in operating activities |
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|
0 |
|
|
|
(349 |
) |
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Net cash used in investing activities |
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|
0 |
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|
|
(16 |
) |
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Net cash flows used in discontinued operations |
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0 |
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|
|
(365 |
) |
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|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents |
|
|
2,086 |
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|
|
(3,016 |
) |
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Effect of exchange rate changes on cash |
|
|
(42 |
) |
|
|
36 |
|
|
Cash and cash equivalents, beginning of period |
|
|
5,559 |
|
|
|
14,855 |
|
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Cash and Cash Equivalents, End of Period |
|
$ |
7,603 |
|
|
$ |
11,875 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2018 |
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|
Six Months Ended June 30, 2018 |
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||||||||||||||||||||||||||
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|
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Connected Solutions |
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RF Solutions |
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Corporate |
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Total |
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Connected Solutions |
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|
RF Solutions |
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|
Corporate |
|
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Total |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUES |
|
$ |
17,478 |
|
|
$ |
4,135 |
|
|
$ |
(31 |
) |
|
$ |
21,582 |
|
|
$ |
35,243 |
|
|
$ |
8,134 |
|
|
$ |
(64 |
) |
|
$ |
43,313 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS PROFIT |
|
|
5,031 |
|
|
|
2,755 |
|
|
|
13 |
|
|
|
7,799 |
|
|
|
10,229 |
|
|
|
5,426 |
|
|
|
8 |
|
|
|
15,663 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING (LOSS) INCOME |
|
$ |
1,530 |
|
|
$ |
(398 |
) |
|
$ |
(2,734 |
) |
|
$ |
(1,602 |
) |
|
$ |
3,134 |
|
|
$ |
(724 |
) |
|
$ |
(5,233 |
) |
|
$ |
(2,823 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 INCOME (LOSS) |
|
$ |
2,349 |
|
|
$ |
411 |
|
|
$ |
(3,099 |
) |
|
$ |
(339 |
) |
|
$ |
4,095 |
|
|
$ |
1,432 |
|
|
$ |
(5,844 |
) |
|
$ |
(317 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 (loss) income - Continuing Operations |
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Loss |
|
$ |
(1,602 |
) |
|
$ |
(339 |
) |
|
$ |
(2,823 |
) |
|
$ |
(317 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
Add: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-Cost of revenues |
|
|
167 |
|
|
|
167 |
|
|
|
333 |
|
|
|
333 |
|
|
|
-Operating expenses |
|
|
124 |
|
|
|
124 |
|
|
|
248 |
|
|
|
248 |
|
|
|
Stock Compensation: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-Cost of revenues |
|
|
93 |
|
|
|
72 |
|
|
|
181 |
|
|
|
133 |
|
|
|
-Engineering |
|
|
159 |
|
|
|
120 |
|
|
|
297 |
|
|
|
266 |
|
|
|
-Sales & marketing |
|
|
157 |
|
|
|
126 |
|
|
|
288 |
|
|
|
246 |
|
|
|
-General & administrative |
|
|
710 |
|
|
|
770 |
|
|
|
1,021 |
|
|
|
1,152 |
|
|
|
|
|
|
1,410 |
|
|
|
1,379 |
|
|
|
2,368 |
|
|
|
2,378 |
|
|
|
Non-GAAP Operating (Loss) Income |
|
$ |
(192 |
) |
|
$ |
1,040 |
|
|
$ |
(455 |
) |
|
$ |
2,061 |
|
|
|
% of revenue |
|
|
-0.9 |
% |
|
|
4.8 |
% |
|
|
-1.1 |
% |
|
|
4.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP net loss to non-GAAP net (loss) income - Continuing Operations |
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss |
|
$ |
(1,226 |
) |
|
$ |
(185 |
) |
|
$ |
(2,084 |
) |
|
$ |
(1 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
Non-GAAP adjustment to operating loss |
|
|
1,410 |
|
|
|
1,379 |
|
|
|
2,368 |
|
|
|
2,378 |
|
|
|
Income Taxes |
|
|
(168 |
) |
|
|
(330 |
) |
|
|
(463 |
) |
|
|
(653 |
) |
|
|
|
|
|
1,242 |
|
|
|
1,049 |
|
|
|
1,905 |
|
|
|
1,725 |
|
|
|
Non-GAAP Net (Loss) Income |
|
$ |
16 |
|
|
$ |
864 |
|
|
$ |
(179 |
) |
|
$ |
1,724 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP (Loss) Income per Share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.00 |
|
|
$ |
0.05 |
|
|
$ |
(0.01 |
) |
|
$ |
0.10 |
|
|
|
Diluted |
|
$ |
0.00 |
|
|
$ |
0.05 |
|
|
$ |
(0.01 |
) |
|
$ |
0.10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighed Average Shares: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
17,142 |
|
|
|
16,534 |
|
|
|
17,099 |
|
|
|
16,437 |
|
|
|
Diluted |
|
|
17,554 |
|
|
|
17,015 |
|
|
|
17,099 |
|
|
|
16,921 |
|
|
This schedule reconciles the Company's GAAP operating loss 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.
The adjustments to GAAP operating loss (a) consist of stock compensation expense and amortization of intangible assets. The adjustments to GAAP net loss include the non-GAAP adjustments to operating loss as well as adjustments for (b) non-cash income tax expense.
|
|
Reconciliation of GAAP to non-GAAP SEGMENT INFORMATION - Continuing Operations (unaudited) |
|||||||||||||||||||||||||||||||||||
|
|
(in thousands) |
|
|
|
|||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2018 |
|
|
Six Months Ended June 30, 2018 |
|
|
|
||||||||||||||||||||||||||
|
|
|
|
Connected Solutions |
|
|
RF Solutions |
|
|
Corporate |
|
|
Total |
|
|
Connected Solutions |
|
|
RF Solutions |
|
|
Corporate |
|
|
Total |
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating (Loss) Income |
|
$ |
1,530 |
|
|
$ |
(398 |
) |
|
$ |
(2,734 |
) |
|
$ |
(1,602 |
) |
|
$ |
3,134 |
|
|
$ |
(724 |
) |
|
$ |
(5,233 |
) |
|
$ |
(2,823 |
) |
|
|
|
|
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 |
|
|
51 |
|
|
|
42 |
|
|
|
0 |
|
|
|
93 |
|
|
|
96 |
|
|
|
85 |
|
|
|
0 |
|
|
|
181 |
|
|
|
|
|
-Engineering |
|
|
81 |
|
|
|
78 |
|
|
|
0 |
|
|
|
159 |
|
|
|
155 |
|
|
|
142 |
|
|
|
0 |
|
|
|
297 |
|
|
|
|
|
-Sales & marketing |
|
|
85 |
|
|
|
72 |
|
|
|
0 |
|
|
|
157 |
|
|
|
167 |
|
|
|
121 |
|
|
|
0 |
|
|
|
288 |
|
|
|
|
|
-General & administrative |
|
|
45 |
|
|
|
30 |
|
|
|
635 |
|
|
|
710 |
|
|
|
105 |
|
|
|
53 |
|
|
|
863 |
|
|
|
1,021 |
|
|
|
|
|
|
|
|
301 |
|
|
|
474 |
|
|
|
635 |
|
|
|
1,410 |
|
|
|
601 |
|
|
|
904 |
|
|
|
863 |
|
|
|
2,368 |
|
|
|
|
|
Non-GAAP Operating (Loss) Income |
|
$ |
1,831 |
|
|
$ |
76 |
|
|
$ |
(2,099 |
) |
|
$ |
(192 |
) |
|
$ |
3,735 |
|
|
$ |
180 |
|
|
$ |
(4,370 |
) |
|
$ |
(455 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
|
|
165 |
|
|
|
81 |
|
|
|
0 |
|
|
|
246 |
|
|
|
|
|
-General & administrative |
|
|
46 |
|
|
|
17 |
|
|
|
707 |
|
|
|
770 |
|
|
|
89 |
|
|
|
31 |
|
|
|
1,032 |
|
|
|
1,152 |
|
|
|
|
|
|
|
|
269 |
|
|
|
403 |
|
|
|
707 |
|
|
|
1,379 |
|
|
|
531 |
|
|
|
815 |
|
|
|
1,032 |
|
|
|
2,378 |
|
|
|
|
|
Non-GAAP Operating Income (Loss) |
|
$ |
2,618 |
|
|
$ |
814 |
|
|
$ |
(2,392 |
) |
|
$ |
1,040 |
|
|
$ |
4,626 |
|
|
$ |
2,247 |
|
|
$ |
(4,812 |
) |
|
$ |
2,061 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
This schedule reconciles the Company's GAAP operating (loss) income 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.
The adjustments to GAAP operating (loss) income consist of stock compensation expense and amortization of intangible assets.
|
PCTEL, Inc. |
|
Reconciliation of GAAP operating income (loss) to Adjusted EBITDA - Continuing Operations |
|
(unaudited, in thousands) |
|
|
|
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
|
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Loss |
|
|
|
$ |
(1,602 |
) |
|
$ |
(339 |
) |
|
$ |
(2,823 |
) |
|
$ |
(317 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
|
|
707 |
|
|
|
634 |
|
|
|
1,381 |
|
|
|
1,262 |
|
|
|
Intangible amortization |
|
|
|
|
291 |
|
|
|
291 |
|
|
|
581 |
|
|
|
581 |
|
|
|
Stock compensation expenses |
|
|
|
|
1,119 |
|
|
|
1,088 |
|
|
|
1,787 |
|
|
|
1,797 |
|
|
|
Adjusted EBITDA |
|
|
|
$ |
515 |
|
|
$ |
1,674 |
|
|
$ |
926 |
|
|
$ |
3,323 |
|
|
|
% of revenue |
|
|
|
|
2.4 |
% |
|
|
7.8 |
% |
|
|
2.1 |
% |
|
|
7.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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.
Adjusted EBITDA is defined as net income before interest, income taxes, depreciation and amortization. The adjustments on this schedule consist of depreciation, amortization of intangible assets, and stock compensation expenses.