PCTEL Achieves $25.9 Million in Third Quarter Revenue
Third Quarter Highlights
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$25.9 million in revenue for the quarter, an increase of 33 percent from the same period last year. The acquisitions ofEnvision Wireless inOctober 2011 and TelWorx inJuly 2012 accounted for 25% growth, with the remaining 8% growth from our existing pre-acquisition products. -
Gross profit margin of 39 percent in the quarter, compared to
48 percent in the same period last year. The change in gross
profit margin reflects the change in the Company's revenue mix arising
from our acquisitions of
Envision Wireless inOctober 2011 and TelWorx inJuly 2012 . - GAAP operating margin of two percent for the quarter, compared to two percent for the same period last year.
-
GAAP net income available to common shareholders of
$272,000 for the quarter, or$0.02 per diluted share, compared to a net income of$386,000 , or$0.02 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 profit of 9 percent in the quarter, as
compared to 10 percent operating profit in the same period last
year.
Non-GAAP net income of
-
$48.0 million of cash, short-term investments, and long-term investments atSeptember 30, 2012 , a decrease of approximately$18.0 million from the preceding quarter. During the quarter the Company used$16.5 million of cash for the acquisition of TelWorx,$800,000 for the acquisition of the remaining 30% percent membership interest in PCTEL Secure,$552,000 for the regular quarterly dividend, and used approximately$150,000 of cash and investments for all other activities. The Company noted that accounts receivable increased by$6.6 million in the quarter. The increase reflected$5.0 million in late quarter revenue and$1.6 million from the acquisition of TelWorx.
"We were pleased with the progress in all of our product groups. Each of
our established businesses grew quarter over quarter and, with the
addition of our Connected Solutions, we have the momentum to generate
over
CONFERENCE CALL / WEBCAST
PCTEL's management team will discuss the Company's results today at
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./
About
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 PCTEL's future financial performance and
expectations regarding growth and expansion 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
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CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||||
(in thousands, except share data) | ||||||||||
(unaudited) | ||||||||||
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December 31, | |||||||||
2012 | 2011 | |||||||||
ASSETS | ||||||||||
Cash and cash equivalents | $ | 17,061 | $ | 19,418 | ||||||
Short-term investment securities | 30,705 | 42,210 | ||||||||
Cash held in escrow | 500 | 0 | ||||||||
Accounts receivable, net of allowance for doubtful accounts | ||||||||||
of |
21,210 | 14,342 | ||||||||
Inventories, net | 16,060 | 13,911 | ||||||||
Deferred tax assets, net | 896 | 896 | ||||||||
Prepaid expenses and other assets | 1,054 | 2,277 | ||||||||
Total current assets | 87,486 | 93,054 | ||||||||
Property and equipment, net | 14,702 | 13,590 | ||||||||
Long-term investment securities | 261 | 7,177 | ||||||||
Goodwill | 9,651 | 161 | ||||||||
Intangible assets, net | 11,959 | 9,332 | ||||||||
Deferred tax assets, net | 8,831 | 8,831 | ||||||||
Other noncurrent assets | 1,584 | 1,319 | ||||||||
TOTAL ASSETS | $ | 134,474 | $ | 133,464 | ||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||
Accounts payable | $ | 8,028 | $ | 5,651 | ||||||
Accrued liabilities | 6,574 | 7,092 | ||||||||
Total current liabilities | 14,602 | 12,743 | ||||||||
Contingent consideration | 1,147 | 0 | ||||||||
Other long-term liabilities | 2,695 | 2,144 | ||||||||
3,842 | 2,144 | |||||||||
Total liabilities | 18,444 | 14,887 | ||||||||
Redeemable equity | 0 | 1,731 | ||||||||
Stockholders' equity: | ||||||||||
Common stock, |
||||||||||
authorized, 18,515,538 and 18,218,537 shares issued and | ||||||||||
outstanding at |
18 | 18 | ||||||||
Additional paid-in capital | 139,416 | 137,117 | ||||||||
Accumulated deficit | (23,533 | ) | (20,941 | ) | ||||||
Accumulated other comprehensive income | 129 | 121 | ||||||||
Total stockholders' equity of |
116,030 | 116,315 | ||||||||
Noncontrolling interest | 0 | 531 | ||||||||
Total equity | 116,030 | 116,846 | ||||||||
TOTAL LIABILITIES AND EQUITY | $ | 134,474 | $ | 133,464 |
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) | |||||||||||||||||
(in thousands, except per share data) | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
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September 30, | ||||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||||
REVENUES | $ | 25,853 | $ | 19,494 | $ | 63,007 | $ | 56,837 | |||||||||
COST OF REVENUES | 15,813 | 10,140 | 37,119 | 30,258 | |||||||||||||
GROSS PROFIT | 10,040 | 9,354 | 25,888 | 26,579 | |||||||||||||
OPERATING EXPENSES: | |||||||||||||||||
Research and development | 2,858 | 3,035 | 8,454 | 8,991 | |||||||||||||
Sales and marketing | 2,811 | 2,643 | 7,907 | 7,853 | |||||||||||||
General and administrative | 2,647 | 2,520 | 8,054 | 8,236 | |||||||||||||
Amortization of intangible assets | 1,120 | 661 | 2,610 | 1,995 | |||||||||||||
Restructuring charges | 156 | 125 | 156 | 125 | |||||||||||||
Total operating expenses | 9,592 | 8,984 | 27,181 | 27,200 | |||||||||||||
OPERATING INCOME (LOSS) | 448 | 370 | (1,293 | ) | (621 | ) | |||||||||||
Other income, net | 11 | 64 | 125 | 266 | |||||||||||||
INCOME (LOSS) BEFORE INCOME TAXES | 459 | 434 | (1,168 | ) | (355 | ) | |||||||||||
Expense (benefit) for income taxes | 187 | 216 | (192 | ) | (13 | ) | |||||||||||
NET INCOME (LOSS) | 272 | 218 | (976 | ) | (342 | ) | |||||||||||
Less: Net loss attributable to noncontrolling interests | 0 | (274 | ) | (687 | ) | (740 | ) | ||||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO PCTEL, INC. | 272 | 492 | (289 | ) | 398 | ||||||||||||
Less: adjustments to redemption value of noncontrolling interests | 0 | (106 | ) | (648 | ) | (762 | ) | ||||||||||
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS | $ | 272 | $ | 386 |
( |
) |
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) | |||||||||
Basic Earnings per Share: | |||||||||||||||||
Net income (loss) available to common shareholders | $ | 0.02 | $ | 0.02 |
( |
) |
( |
) | |||||||||
Diluted Earnings per Share: | |||||||||||||||||
Net income (loss) available to common shareholders | $ | 0.02 | $ | 0.02 |
( |
) |
( |
) | |||||||||
Weighted average shares - Basic | 17,493 | 17,238 | 17,368 | 17,239 | |||||||||||||
Weighted average shares - Diluted | 17,779 | 17,640 | 17,368 | 17,239 | |||||||||||||
Cash dividend per share | $ | 0.03 | $ | 0.00 | $ | 0.09 | $ | 0.00 |
Reconciliation GAAP To non-GAAP Results Of Operations (unaudited) |
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(in thousands except per share information) | ||||||||||||||||||||
Reconciliation of GAAP operating income to non-GAAP operating income (a) |
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Three Months |
Nine Months Ended September 30, | |||||||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||||||
Operating Income (Loss) | $ | 448 | $ | 370 |
( |
) |
( |
) | ||||||||||||
(a) | Add: | |||||||||||||||||||
Amortization of intangible assets | 1,120 | 661 | 2,610 | 1,995 | ||||||||||||||||
Restructuring charges | 156 | 125 | 156 | 125 | ||||||||||||||||
Share based payment - PCTEL Secure: | ||||||||||||||||||||
-Engineering | 0 | 61 | 80 | 183 | ||||||||||||||||
Stock Compensation: | ||||||||||||||||||||
-Cost of Goods Sold | 99 | 67 | 302 | 204 | ||||||||||||||||
-Engineering | 153 | 139 | 442 | 451 | ||||||||||||||||
-Sales & Marketing | 141 | 155 | 398 | 494 | ||||||||||||||||
-General & Administrative | 302 | 351 | 1,194 | 1,374 | ||||||||||||||||
1,971 | 1,559 | 5,182 | 4,826 | |||||||||||||||||
Non-GAAP Operating Income | $ | 2,419 | $ | 1,929 | $ | 3,889 | $ | 4,205 | ||||||||||||
% of revenue | 9.4 | % | 9.9 | % | 6.2 | % | 7.4 | % | ||||||||||||
Reconciliation of GAAP net income to non-GAAP net income (b) |
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Three Months |
Nine Months Ended September 30, | |||||||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||||||
Net Income (Loss) attributable to |
$ | 272 | $ | 492 |
( |
) | $ | 398 | ||||||||||||
Adjustments: | ||||||||||||||||||||
(a) | Non-GAAP adjustment to operating income (loss) | 1,971 | 1,559 | 5,182 | 4,826 | |||||||||||||||
(b) | Noncontrolling interest related to Non-GAAP | 0 | (86 | ) | (225 | ) | (258 | ) | ||||||||||||
adjustments to operating income (loss) | ||||||||||||||||||||
(b) | Investment income related to share based payment | 0 | (31 | ) | (41 | ) | (93 | ) | ||||||||||||
for PCTEL Secure | ||||||||||||||||||||
(b) | Income Taxes | (250 | ) | (171 | ) | (990 | ) | (888 | ) | |||||||||||
1,721 | 1,271 | 3,926 | 3,587 | |||||||||||||||||
Non-GAAP Net Income | $ | 1,993 | $ | 1,763 | $ | 3,637 | $ | 3,985 | ||||||||||||
Basic Earnings per Share: | ||||||||||||||||||||
Non-GAAP Net Income | $ | 0.11 | $ | 0.10 | $ | 0.21 | $ | 0.23 | ||||||||||||
Diluted Earnings per Share: | ||||||||||||||||||||
Non-GAAP Net Income | $ | 0.11 | $ | 0.10 | $ | 0.20 | $ | 0.23 | ||||||||||||
Weighted average shares - Basic | 17,493 | 17,238 | 17,368 | 17,239 | ||||||||||||||||
Weighted average shares - Diluted | 17,779 | 17,640 | 17,751 | 17,705 | ||||||||||||||||
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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. |
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(a) These adjustments reflect stock based compensation expense, amortization of intangible assets, and restructuring charges. | ||||||||||||||||||||
(b) These adjustments include the items described in footnote (a) as well as the non-cash income tax expense, noncontrolling interest, and investment income related to noncontrolling interest. |
(630) 372-6800
or
(630) 372-6800
Jack.seller@pctel.com
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