Increase of 34 Percent Over Same Period Last Year

BLOOMINGDALE, Ill.--(BUSINESS WIRE)-- PCTEL, Inc. (NASDAQ: PCTI), a leader in simplifying wireless and site solutions for private and public networks, announced results for the second quarter ended June 30, 2013.

Second Quarter Highlights

• $26.7 million in revenue for the quarter, an increase of 34 percent from the same period last year. The asset acquisition now included in our Connected Solutions segment accounted for 22 percent growth, with the remaining 12 percent growth from our existing pre-acquisition products and services.
• Gross profit margin of 40 percent in the quarter, compared to 43 percent in the same period last year. Connected Solutions represents a larger proportion of PCTEL's total revenue than in the past.
• GAAP operating margin from continuing operations of one percent for the quarter, compared to three percent for the same period last year. This quarter's results include a restructuring charge of $0.4 million, or two percent of revenue, for the consolidation of the Company's North Carolina operations into its Illinois facility.
• GAAP net income from continuing operations of $187,000 for the quarter, or $0.01 per diluted share, compared to a net income of $445,000, 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 or legal settlements, 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 from continuing operations of nine percent in the quarter, as compared to 11 percent in the same period last year.
  • Non-GAAP net income from continuing operations of $2.0 million or $0.11 per diluted share in the quarter, as compared to $1.8 million or $0.10 per diluted share in the same period last year.
• GAAP loss from discontinued operations net of tax benefit of $(22,000), compared to a net loss of $(774,000) in the same period last year. The Company disposed of its PCTEL Secure assets in April 2013 and the results of that operation are presented as discontinued operations in the Company's financial statements.

• $51.5 million of cash and short-term investments at June 30, 2013, a decrease of approximately $500,000 from the preceding quarter. During the quarter the Company used cash of $435,000 to purchase 60,000 common shares under its stock repurchase program at an average price of $7.31, and $643,000 on its regular quarterly dividend.

"We made solid progress on all fronts during the second quarter," said Marty Singer, PCTEL's Chairman and CEO. "We saw revenue increases in Connected Solutions and RF Solutions and a contribution from assets acquired over the past two years. Favorable responses to the EXflex, our new MIMO antennas, and our expanded indoor services should help PCTEL maintain momentum," 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: 19875285. 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: 19875285.

About PCTEL

PCTEL, Inc. (NASDAQ: PCTI), develops antenna, scanning receiver, and engineered site solutions and services for public and private networks. PCTEL RF Solutions specializes in the design, optimization and testing of today's wireless communication networks. The company's SeeGull® scanning receivers, SeeHawk® visualization tool, and Clarify® system, measure and analyze wireless signals for efficient cellular network planning, deployment, and optimization. PCTEL develops and supports scanning receivers for LTE, TD-LTE, EV-DO, CDMA, WCDMA, TD-SCDMA, GSM, and WiMAX networks.

PCTEL Connected Solutions™ simplifies network deployment for wireless, data and communications applications for private network, public safety, and government customers. PCTEL Connected Solutions develops and delivers high-value YAGI, Land Mobile Radio, WiFi, GPS, In-Tunnel, Subway, and broadband antennas (parabolic and flat panel) through its MAXRAD®, Bluewave™ and Wi-Sys™ product lines. PCTEL also designs specialized towers, enclosures, fiber optic panels, and fiber jumper cables to deliver custom engineered site solutions. The company's vertical markets include SCADA, Health Care, Smart Grid, Positive Train Control, Precision Agriculture, Indoor Wireless, Telemetry, Off-loading, and Wireless Backhaul. 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 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 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,
		2013				2012
ASSETS
Cash and cash equivalents		$	18,330			$	17,543
Short-term investment securities			33,151				33,596
Accounts receivable, net of allowance for doubtful accounts of $239 and $222 at June 30, 2013 and December 31, 2012, respectively			18,337				18,586
Inventories, net			16,108				17,573
Deferred tax assets, net			1,484				1,484
Prepaid expenses and other assets			1,164				2,160
Total current assets			88,574				90,942
Property and equipment, net			14,671				14,775
Goodwill			161				161
Intangible assets, net			5,795				7,004
Deferred tax assets, net			12,989				14,034
Other noncurrent assets			1,727				1,636
Assets of discontinued operations			0				18
TOTAL ASSETS		$	123,917			$	128,570
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable		$	5,752			$	10,557
Accrued liabilities			5,751				5,899
Total current liabilities			11,503				16,456
Contingent consideration			0				1,130
Other long-term liabilities			2,781				2,736
Liabilities of discontinued operations			0				103
			2,781				3,969
Total liabilities			14,284				20,425
Stockholders' equity:
Common stock, $0.001 par value, 100,000,000 shares authorized, 18,445,099 and 18,514,809 shares issued and outstanding at June 30, 2013 and December 31, 2012, respectively			18				19
Additional paid-in capital			141,122				140,388
Accumulated deficit			(31,675	)			(32,410	)
Accumulated other comprehensive income			168				148
Total equity			109,633				108,145
TOTAL LIABILITIES AND EQUITY		$	123,917			$	128,570

PCTEL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
(in thousands, except per share data)
		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2013				2012				2013				2012
REVENUES		$	26,746			$	19,993			$	51,818			$	37,154
COST OF REVENUES			15,914				11,323				31,388				21,306
GROSS PROFIT			10,832				8,670				20,430				15,848
OPERATING EXPENSES:
Research and development			2,683				2,215				5,233				4,531
Sales and marketing			3,054				2,573				6,075				5,082
General and administrative			3,825				2,656				8,456				5,389
Amortization of intangible assets			604				542				1,209				1,084
Restructuring charges			408				0				509				0
Total operating expenses			10,574				7,986				21,482				16,086
OPERATING INCOME (LOSS)			258				684				(1,052	)			(238	)
Other income, net			57				39				4,389				73
INCOME (LOSS) BEFORE INCOME TAXES			315				723				3,337				(165	)
Expense (benefit) for income taxes			128				278				1,198				(54	)
NET INCOME (LOSS) FROM CONTINUING OPERATIONS			187				445				2,139				(111	)
NET LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX BENEFIT			(22	)			(775	)			(109	)			(1,098	)
NET INCOME (LOSS)		$	165				($330	)		$	2,030				($1,209	)
Earnings (Loss) per Share from Continuing Operations:
Basic		$	0.01			$	0.03			$	0.12				($0.01	)
Diluted		$	0.01			$	0.03			$	0.12				($0.01	)
Earnings (Loss) per Share from Discontinued Operations:
Basic		$	0.00				($0.04	)			($0.01	)			($0.06	)
Dilute		$	0.00				($0.04	)			($0.01	)			($0.06	)
Earnings (Loss) per Share:
Basic		$	0.01				($0.02	)		$	0.11				($0.07	)
Diluted		$	0.01				($0.02	)		$	0.11				($0.07	)
Weighed Average Shares:
Basic			17,790				17,404				17,731				17,317
Diluted			18,075				17,404				17,973				17,317
Cash dividend per share		$	0.035			$	0.030			$	0.070			$	0.060

PCTEL, INC.
P&L INFORMATION BY SEGMENT - Continuing Operations
(in thousands)
		Three Months Ended June 30, 2013												Six Months Ended June 30, 2013
		Connected Solutions			RF Solutions			Consolidating			Total			Connected Solutions			RF Solutions			Consolidating			Total
REVENUES		$	19,199		$	7,602		($55	)		$	26,746		$	38,555		$	13,374		($111	)		$	51,818
GROSS PROFIT			5,946			4,876		10				10,832			11,958			8,457		15				20,430
OPERATING INCOME (LOSS)		$	1,374		$	2,072		($3,188	)		$	258		$	3,133		$	3,042		($7,227	)			($1,052	)
		Three Months Ended June 30, 2012												Six Months Ended June 30, 2012
		Connected Solutions			RF Solutions			Consolidating			Total			Connected Solutions			RF Solutions			Consolidating			Total
REVENUES		$	14,821		$	5,206		($34	)		$	19,993		$	27,988		$	9,204		($38	)		$	37,154
GROSS PROFIT			5,104			3,556		10				8,670			9,503			6,318		27				15,848
OPERATING INCOME (LOSS)		$	1,954		$	1,014		($2,284	)		$	684		$	3,172		$	1,223		($4,633	)			($238	)

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 June 30,								Six Months Ended June 30,
			2013				2012				2013				2012
	Operating Income (Loss)		$	258			$	684				($1,052	)			($238	)
(a)	Add:
	Amortization of intangible assets			604				542				1,209				1,084
	Restructuring charges			408				0				509				0
	TelWorx investigation:
	-General & Administrative			100				0				1,491				0
	Stock Compensation:
	-Cost of Goods Sold			107				99				191				203
	-Engineering			178				148				322				287
	-Sales & Marketing			154				128				261				257
	-General & Administrative			660				567				947				891
				2,211				1,484				4,930				2,722
	Non-GAAP Operating Income		$	2,469			$	2,168			$	3,878			$	2,484
	% of revenue			9.2	%			10.8	%			7.5	%			6.7	%
Reconciliation of GAAP net income to non-GAAP net income (b) from Continuing Operations
			Three Months Ended June 30,								Six Months Ended June 30,
			2013				2012				2013				2012
	Net Income (Loss) from Continuing Operations		$	187			$	445			$	2,139				($111	)
	Adjustments:
(a)	Non-GAAP adjustment to operating income (loss)			2,211				1,484				4,930				2,722
	Other income related to the TelWorx legal settlement			(49	)			0				(4,379	)			0
(b)	Income Taxes			(318	)			(119	)			498				(513	)
				1,844				1,365				1,049				2,209
	Non-GAAP Net Income		$	2,031			$	1,810			$	3,188			$	2,098
	Non-GAAP Earning per Share:
	Basic		$	0.11			$	0.10			$	0.18			$	0.12
	Diluted		$	0.11			$	0.10			$	0.18			$	0.12
	Weighed Average Shares:
	Basic			17,790				17,404				17,731				17,317
	Diluted			18,075				17,685				17,973				17,705

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 the non-cash income tax expense, noncontrolling interest, and other income related to the TelWorx legal settlement.

Reconciliation GAAP To non-GAAP SEGMENT INFORMATION (unaudited) (a) - Continuing Operations
(in thousands except per share information)
		Three Months Ended June 30, 2013												Six Months Ended June 30, 2013
		Connected Solutions			RF Solutions			Consolidating			Total			Connected Solutions			RF Solutions			Consolidating			Total
Operating Income (Loss)		$	1,374		$	2,072		($3,188	)		$	258		$	3,133		$	3,042		($7,227	)			($1,052	)
Add:
Amortization of intangible assets			394			210		0				604			790			419		0				1,209
Restructuring charges			408			0		0				408			509			0		0				509
TelWorx investigation:
-General & Administrative			0			0		100				100			0			0		1,491				1,491
Stock Compensation:
-Cost of Goods Sold			39			68		0				107			65			126		0				191
-Engineering			76			102		0				178			131			191		0				322
-Sales & Marketing			122			32		0				154			200			61		0				261
-General & Administrative			89			26		545				660			155			42		750				947
			1,128			438		645				2,211			1,850			839		2,241				4,930
Non-GAAP Operating Income (Loss)		$	2,502		$	2,510		($2,543	)		$	2,469		$	4,983		$	3,881		($4,986	)		$	3,878
		Three Months Ended June 30, 2012												Six Months Ended June 30, 2012
		Connected Solutions			RF Solutions			Consolidating			Total			Connected Solutions			RF Solutions			Consolidating			Total
Operating Income (Loss)		$	1,954		$	1,014		($2,284	)		$	684		$	3,172		$	1,223		($4,633	)			($238	)
Add:
Amortization of intangible assets			321			221		0				542			643			441		0				1,084
Stock Compensation:
-Cost of Goods Sold			39			60		0				99			84			119		0				203
-Engineering			56			92		0				148			110			177		0				287
-Sales & Marketing			80			48		0				128			167			90		0				257
-General & Administrative			41			30		496				567			88			60		743				891
			537			451		496				1,484			1,092			887		743				2,722
Non-GAAP Operating Income (Loss)		$	2,491		$	1,465		($1,788	)		$	2,168		$	4,264		$	2,110		($3,890	)		$	2,484

This schedule reconciles the Company's GAAP operating income by segment to its non-GAAP operating income. 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.
John Schoen
CFO
(630) 372-6800
or
PCTEL, Inc.
Jack Seller
Public Relations
(630) 372-6800
Jack.seller@pctel.com

Source: PCTEL, Inc.

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