PCTEL Posts $10.7 Million In First Quarter Revenue

PCTEL Posts $10.7 Million In First Quarter Revenue

April 27, 2004

CHICAGO, Apr 27, 2004 (BUSINESS WIRE) -- PCTEL, Inc. (NASDAQ:PCTI), a leading provider of wireless solutions, today announced financial results for the first quarter ended March 31, 2004. This was the third full quarter of operating results following the company's sale of its legacy HSP modem product line to Conexant (NASDAQ:CNXT) in May 2003 as part of PCTEL's well-established wireless transition plan.

Total revenue was $10.7 million for the first quarter of 2004, including $8.6 million of wireless product revenue and $2.1 million of licensing revenue. This compares to $13.1 million of revenue in the first quarter 2003, which included $0.7 million of wireless revenue, $1.9 million of licensing revenue, and $10.5 million of HSP modem revenue. Net loss for the first quarter of 2004 was $(0.5) million, or $(0.02) per diluted share, compared to net loss of $(0.9) million, or $(0.05) per diluted share reported in the first quarter of 2003.

Compared to the fourth quarter of 2003, the company grew its wireless revenue from $3.5 million to $8.6 million, an increase of 146 percent. The company acquired MAXRAD, a leading provider of antenna solutions on January 2, 2004. The MAXRAD product group contributed to the strong wireless growth for the quarter.

"Our expanding customer list for Segue™ products, strong sales of our software-defined radios and CLARIFY™ into carrier markets, and the anticipated contribution of the new MAXRAD product line have strengthened our wireless presence," said Marty Singer, PCTEL's Chairman and CEO. "As we move onto the rest of the year, we look forward to realizing benefits from the integration of our three product groups under a financially stable and focused PCTEL," added Singer.

Cash and short-term investments on March 31, 2004 were $107.4 million, a decrease of $18.0 million from the fourth quarter of 2003. The decline was primarily due to the acquisition of MAXRAD in the quarter. As of March 31, 2004, the company has repurchased 1.54 million out of the 2.5 million shares authorized by the Board of Directors under its share buyback program. No shares were repurchased during the first quarter.


The company will hold a conference call at 4:00 PM CDT (5:00 PM EDT) 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 (800) 545-9583 (U.S. / Canada) or (973) 317-5317 (international).

To listen via the Internet, please visit, www.pctel.com, or http://www.shareholder.com/pctel/MediaList.cfm

REPLAY: A replay will be available for two weeks after the call on PCTEL's web site at www.pctel.com or by calling (800) 428-6051 (U.S. / Canada) or (973) 709-2089 (international) access code: 347900.


PCTEL (NASDAQ:PCTI), founded in March 1994, dedicated to wireless excellence, is a leading provider of mobility software solutions, software-defined radio products and access technology. PCTEL's Segue™ software products simplify installation, roaming, Internet access and billing. Its DTI product portfolio of OEM receivers and receiver-based products, measure and monitor cellular networks. MAXRAD designs, distributes, and supports innovative antenna solutions that facilitate and simplify wireless communications. PCTEL protects its leadership position with a portfolio of more than 130 analog and broadband communications and wireless patents, issued or pending, including key and essential patents for modem technology. The company's products are sold or licensed to PC manufacturers, PC card and board manufacturers, wireless carriers, wireless ISPs, distributors, wireless test and measurement companies, and system integrators. PCTEL headquarters are located at 8725 West Higgins Road, Suite 400, Chicago, IL 60631. Telephone: 773-243-3000. For more information, please visit our web site at: http://www.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 expectations regarding the future growth of its wireless and licensing businesses 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, the ability to implement new technologies and obtain protection for the related intellectual property, and the risks inherent in potential acquisitions. 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.

                              PCTEL, Inc.

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

                                               Three Months Ended
                                                    March 31,
                                                2004          2003
                                           ------------- -------------

REVENUES                                   $     10,690  $     13,082

COST OF REVENUES                                  3,769         7,907
INVENTORY RECOVERY                                    -        (1,348)
                                           ------------- -------------
GROSS PROFIT                                      6,921         6,523
                                           ------------- -------------
      Research and development                    2,030         2,118
      Sales and marketing                         2,934         2,261
      General and administrative                  3,176         1,852
      Amortization of deferred compensation         310           299
      Amortization of other intangible
       assets                                       711            99
      Acquired in-process research and
       development                                    -         1,100
      Restructuring charges                         (51)          155
      Gain on sale of assets and related
       royalties                                   (500)            -
                                           ------------- -------------
           Total operating expenses               8,610         7,884
                                           ------------- -------------
LOSS FROM OPERATIONS                             (1,689)       (1,361)
OTHER INCOME, NET                                   239           495
                                           ------------- -------------
 TAXES                                           (1,450)         (866)
PROVISION (BENEFIT) FOR INCOME TAXES               (982)           64
                                           ------------- -------------
NET LOSS                                   $       (468) $       (930)
                                           ============= =============

Basic earnings (loss) per share            $      (0.02) $      (0.05)
Shares used in computing basic earnings
 (loss) per share                                19,901        19,238

Diluted earnings (loss) per share          $      (0.02) $      (0.05)
Shares used in computing diluted earnings
 (loss) per share                                19,901        19,238

                              PCTEL, Inc.

                 Consolidated Condensed Balance Sheets
                       (unaudited, in thousands)

                                             March 31,    December 31,
                                               2004          2003
                                           ------------- -------------

       Cash and cash equivalents           $     95,996  $    106,007
        Restricted cash                             278           278
       Short-term investments                    11,156        19,177
       Accounts receivable, net                   5,792         3,630
       Inventories, net                           3,082         1,267
       Prepaid expenses and other assets          3,207         1,929
                                           ------------- -------------
              Total current assets              119,511       132,288
PROPERTY AND EQUIPMENT, net                       4,572         1,197
GOODWILL                                         11,335         5,561
OTHER INTANGIBLE ASSETS, net                     10,329         4,140
OTHER ASSETS                                         60            55
                                           ------------- -------------
TOTAL ASSETS                               $    145,807  $    143,241
                                           ============= =============

       Accounts payable                    $        859  $        333
       Accrued royalties                          3,213         3,208
       Income taxes payable                       5,456         7,359
       Deferred revenue                           2,370         2,960
       Accrued liabilities                        6,507         5,739
                                           ------------- -------------
              Total current liabilities          18,405        19,599
LONG-TERM LIABILITIES                               736           736
                                           ------------- -------------
              Total liabilities                  19,141        20,335
                                           ------------- -------------

       Common stock                                  21            20
       Additional paid-in capital               162,146       155,548
       Deferred compensation                     (4,910)       (2,552)
       Accumulated deficit                      (30,669)      (30,201)
       Accumulated other comprehensive
        income                                       78            91
                                           ------------- -------------
              Total stockholders' equity        126,666       122,906
                                           ------------- -------------
                                           ============= =============


John Schoen, 773-243-3000
Jack Seller, 773-243-3016
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