PCTEL Announces Results of Operations for Fourth Quarter and Fiscal Year 2001

PCTEL Announces Results of Operations for Fourth Quarter and Fiscal Year 2001

February 5, 2002
PCTEL Announces Results of Operations for Fourth Quarter and Fiscal Year 2001 MILPITAS, Calif., Feb. 5 /PRNewswire-FirstCall/ -- PCTEL, Inc. (Nasdaq: PCTI), a leading provider of personal connectivity and Internet access technology, today announced results for the fourth quarter and fiscal year 2001. The company announced the stabilization of product and licensing revenue and a continued strong balance sheet position.

Fourth quarter total revenue was $7.5 million, comprised of $4.7 million of product and licensing revenue and collection of $2.8 million of previously reserved accounts receivable. This compares to $4.7 million of product and licensing revenue in the third quarter. Net loss for the fourth quarter was $(6.1) million or $(0.31) per diluted share. This compares to a loss of $(41.4) million or $(2.13) per diluted share in the third quarter. The sequential improvement in the net loss is due to the significant charges taken in the third quarter for goodwill, inventory, deferred taxes, restructuring and other charges and the accounts receivable recovery in the fourth quarter.

The company's balance sheet remains strong. Cash and short-term investments ended the year at $125.6 million, with no debt.

2001 Financial Summary

Total revenue for the full year was $41.0 million, compared to $97.2 million in 2000. The decline was largely attributable to the economic slow down in the PC industry combined with a build up of inventory in the channel. The full year net loss was $(58.2) million or $(3.02) per diluted share. This compares to net income of $6.1 million or $0.30 per diluted share in 2000. The 2001 results include significant charges to earnings totaling $38.2 million. These charges were for goodwill impairment of $16.8 million, inventory reserves of $10.9 million, change in deferred tax valuation of $5.3 million, restructuring and other charges of $5.2 million. While the fourth quarter had a significant recovery of accounts receivable previously reserved, the net specific accounts receivable reserved and recovered for the year was negligible.

"We had three goals for the first 90 days," said Marty Singer, PCTEL's recently appointed chairman and CEO. "They were to establish a new management team, identify and eliminate areas of unnecessary cost and stabilize product revenues and pricing. We have made significant progress on those goals and we are now prepared to turn our attention to the future."


The company will hold a conference call at 2:00 p.m. PST (5:00 p.m. EST) today with Marty Singer, chairman and chief executive officer, and John Schoen, chief operating officer and chief financial officer. The session will include brief remarks, and can be accessed by calling 888-343-2180 (domestic) or 646-862-1115 (international).

To listen via the Internet, please visit, http://www.pctel.com, or http://www.videonewswire.com/event.asp?id=2938 .

REPLAY: The replay will be available on PCTEL's web site at http://www.pctel.com or by calling 800-633-8284 (domestic) or (858) 812-6440 (international); access code: 20274120.


PCTEL, founded in March 1994, is leading the evolution of innovative, cost-effective Internet access solutions, including analog soft modems and embedded DSP-based modems. The company's market leadership is built upon a wide-ranging and comprehensive portfolio of more than 80 analog and broadband communications patents, issued or pending, including the key and essential patents for Host Signal Processing (HSP) modem technology. PCTEL products are available to PC and data communications equipment manufacturers. PCTEL is located at 1331 California Circle, Milpitas, CA., 95035. Telephone: 408-965-2100. Fax: 408-895-0178. For more information on PCTEL products, visit the PCTEL website at http://www.pctel.com .

Safe Harbor Statement

This press release contains "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995, regarding the company's intent to enter future markets other than the analog modem business. Actual results may differ materially from those projected as a result of certain risks and uncertainties. These risks and uncertainties include, but are not limited to; the demand for personal computers and the markets addressed by the company's and its customers' products; the cyclical nature of the semiconductor and PC industries; demand for and market acceptance of new alternative Internet access devices; and the ability to develop and implement new technologies and to obtain protection for the related intellectual property. The risks and uncertainties in the company's business, including but not limited to those detailed from time to time in the company's Securities and Exchange Commission filings, can affect results. These forward-looking statements are made only as of the date hereof, and the company disclaims any obligation to update or revise the information contained in any forward- looking statements, whether as a result of new information, future events or otherwise.


               Consolidated Condensed Statements of Operations
                 (in thousands, except per share information)

                             Three Months Ended        Twelve Months Ended
                                December 31,              December 31,
                             2001         2000         2001          2000

    REVENUES                $7,527       $16,654      $40,971       $97,183
    COST OF REVENUES         2,597        11,262       27,899        53,940
      (RECOVERIES)            (368)           --       10,920            --
    GROSS PROFIT             5,298         5,392        2,152        43,243
      Research and
       development           2,452         2,521       11,554        14,130
      Sales and marketing    1,915         3,908       10,926        14,293
      General and
       administrative        5,277         2,389       14,023         8,058
       Acquired in-process
        research and
         development            --            --           --         1,600
       Amortization of
        goodwill and
        other intangible
         assets                146           811        3,068         2,638
       Goodwill impairment   1,225            --       16,775            --
       Restructuring charges 1,406            --        3,787            --
       Amortization of
         compensation          238           311        1,081         1,308
        Total operating
         expenses           12,659         9,940       61,214        42,027
     FROM OPERATIONS        (7,361)       (4,548)     (59,062)        1,216
    Other income, net        1,279         2,122        6,154         7,288
      FOR INCOME TAXES      (6,082)       (2,426)     (52,908)        8,504
     FOR INCOME TAXES           21          (667)       5,311         2,366
    NET INCOME (LOSS)      $(6,103)      $(1,759)    $(58,219)       $6,138

    Basic earnings
     (loss) per share       $(0.31)       $(0.09)      $(3.02)        $0.34
    Shares used in
     computing basic
     earnings per share     19,494        18,755       19,275        18,011

    Diluted earnings
      (loss) per share      $(0.31)       $(0.09)      $(3.02)        $0.30
    Shares used in
     computing diluted
     earnings per share     19,494        18,755       19,275        20,514

                                 PCTEL, Inc.

                    Consolidated Condensed Balance Sheets
                                (in thousands)

                                                   December 31,  December 31,
                                                       2001          2000

      Cash and cash equivalents                      $38,393        $25,397
      Short-term investments                          87,235         92,983
      Accounts receivable, net                         2,849         24,112
      Inventories, net                                 2,870         13,837
      Prepaid expenses and other assets                5,055          4,369
      Deferred tax asset                                 400          3,322
        Total current assets                         136,802        164,020
    PROPERTY AND EQUIPMENT, net                        2,769          4,722
    GOODWILL AND OTHER INTANGIBLE ASSETS, net            384         21,662
    DEFERRED TAX ASSET                                    --          2,333
    OTHER ASSETS                                         228            219

    TOTAL ASSETS                                    $140,183       $192,956

      Accounts payable                                $4,944         $9,142
      Accrued royalties                               12,343         11,656
      Income taxes payable                             5,573          3,417
      Accrued liabilities                              9,421          8,894
        Total current liabilities                     32,281         33,109
    LONG-TERM LIABILITIES                                141             --
        Total liabilities                             32,422         33,109

      Common stock                                        20             19
      Additional paid-in capital                     150,319        146,461
      Deferred compensation                           (1,158)        (2,894)
      Retained earnings (deficit)                    (42,232)        15,987
      Accumulated other comprehensive income             812            274
        Total stockholders' equity                   107,761        159,847
    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY      $140,183       $192,956