PCTEL Posts $20.7 Million in Fourth Quarter Revenue
CHICAGO, Feb 21, 2007 (BUSINESS WIRE) -- PCTEL, Inc. (NASDAQ:PCTI), a leader in wireless broadband solutions, announced results for the fourth quarter ended December 31, 2006 and for the entire year. Financial highlights of the quarter were:
-- $86.6 million in 2006 revenue compared to $77.7 million in 2005. 2006 revenues include a one-time intellectual property settlement of $7.0 million.
-- $20.7 million in revenue for the quarter, a decrease of 9 percent over the same period last year. Sales of scanners and software experienced strong growth, while antenna products declined.
-- $17.6 million in revenue for the quarter from the Broadband Technology Group. An increase in scanner sales was offset by lower antenna revenue resulting in a decrease of 10 percent compared to the fourth quarter last year. Revenue for the year was down 1 percent from 2005.
-- $2.6 million in revenue for the quarter from the Mobility Solutions Group. This is an increase of 7 percent over the fourth quarter last year. Revenue for the year was up 41 percent over 2005.
-- $0.5 million in licensing revenue for the quarter, a decrease of $0.4 million from the fourth quarter last year. Licensing revenue for the year was $8.7 million, included a $7.0 million one-time intellectual property settlement, compared to $2.3 million in the prior year.
-- GAAP net loss of $(10.0) million for the year, or $(0.48) per diluted share. This compares to a $(3.7) million net loss or $(0.18) per share in 2005. 2006 included $20.7 million of intangible impairments and restructuring expenses both related to the closure of its manufacturing operations in Ireland.
-- GAAP net income of $6.6 million for the quarter, or $0.30 per diluted share, compared to $(0.2) million net loss, or $(0.01) per share for the same period in 2005. The fourth quarter 2006 and the year included a one time favorable non cash adjustment of $5.2 million to the company's income tax accrual.
-- Non-GAAP net income for the year was $13.6 million or $0.63 per diluted share compared to $4.4 million or $0.21 per diluted share in the prior year. The Company's reporting of non-GAAP income excludes expenses for restructuring, stock based compensation, amortization and impairment of intangible assets and goodwill related to the Company's acquisitions, and the reversal of a non cash income tax accrual.
-- Non-GAAP net income of $3.3 million for the quarter, or $0.15 per diluted share compared to $2.2 million of net income, or $0.11 per share for the same period in 2005.
-- $69.9 million of cash net of debt at December 31, 2006, an increase of $0.5 million from the third quarter this year. The company repurchased 0.2 million shares in the quarter for $2.1 million under its share repurchase plan. The shares were purchased at an average price of $9.40.
"Our operating results reflect stronger gross margins out of the Broadband Technology Group, continued growth of the Mobility Solutions Group software business, and the success of our scanning receivers in the carrier market," said Marty Singer, PCTEL's Chairman and CEO. "In 2007, we anticipate that stronger antenna sales will complement our growth in scanners and software. We are excited about the traction that the Mobility Solutions Group has achieved globally and the dominance of our scanning solutions in the OEM test and measurement market. PCTEL should benefit from the deployment of high-bandwidth wireless networks and an increase in worldwide cellular data and IMS subscribers," added Singer.
PCTEL's management team will discuss the company's results and its recent reorganization during its scheduled earnings teleconference today at 6:15 PM EST.
CONFERENCE CALL / WEBCAST
The company will hold a conference call at 6:15 PM EST (5:15 PM CST) today, Wednesday, February 21, 2007 with Marty Singer, Chairman and Chief Executive Officer, and John Schoen, Chief Financial Officer. PCTEL will not be responding to inquiries regarding its financial results until the conference call. The session can be accessed by calling (800) 289-0533 (U.S. / Canada) or (913) 981-5525 (international).
To listen via the Internet, please visit, www.pctel.com, or http://investor.pctel.com/eventdetail.cfm?eventid=34784
REPLAY: A replay will be available for two weeks after the call on PCTEL's web site at www.pctel.com or by calling (888) 203-1112 (U.S. / Canada) or (719) 457-0820 (international) access code: 2126423.
About PCTEL
PCTEL, Inc. (Nasdaq:PCTI), which is headquartered in Chicago, is a global leader in wireless broadband solutions. The company's Broadband Technology Group (BTG) includes Antenna Products and RF Solutions. PCTEL's BTG designs, distributes, and supports innovative antenna solutions for public safety applications, unlicensed and licensed wireless broadband, fleet management, network timing, and other GPS applications. Its portfolio of OEM receivers, receiver based products and interference management solutions are used to measure, monitor and optimize cellular networks. PCTEL's Mobility Solutions' software tools provide secure, access independent, remote connectivity to the Internet and IMS services for converged handsets.
The company's products are sold or licensed to wireless carriers, wireless ISPs, distributors, system integrators, wireless test and measurement companies, wireless network equipment, handset manufacturers, and government agencies. PCTEL protects its technology with a strong intellectual property portfolio and broad cross-licensing agreements. For more information, please visit the company's 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 broadband wireless products and software solutions 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'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 Twelve Months
Ended Ended
December 31, December 31,
----------------- -------------------
2006 2005 2006 2005
-------- -------- --------- ---------
REVENUES $20,712 $22,794 $ 86,562 $ 77,746
COST OF REVENUES 9,827 12,107 39,990 40,878
-------- -------- --------- ---------
GROSS PROFIT 10,885 10,687 46,572 36,868
-------- -------- --------- ---------
OPERATING EXPENSES:
Research and development 3,932 2,548 13,762 10,015
Sales and marketing 3,322 3,388 13,287 13,074
General and administrative 3,259 4,700 14,127 16,836
Amortization of other
intangible assets 751 1,170 3,593 4,137
Impairment of goodwill and
intangible assets -- -- 20,349 --
Restructuring charges
(benefit) (35) -- 389 (70)
Gain on sale of assets and
related royalties (250) (500) (1,000) (2,100)
-------- -------- --------- ---------
Total operating expenses 10,979 11,306 64,507 41,892
-------- -------- --------- ---------
LOSS FROM OPERATIONS (94) (619) (17,935) (5,024)
OTHER INCOME, NET 945 502 3,303 1,546
-------- -------- --------- ---------
INCOME (LOSS) BEFORE PROVISION
(BENEFIT) 851 (117) (14,632) (3,478)
BEFORE INCOME TAXES
PROVISION (BENEFIT) FOR INCOME
TAXES (5,748) 39 (4,613) 235
-------- -------- --------- ---------
NET INCOME (LOSS) $ 6,599 $ (156) $(10,019) $ (3,713)
======== ======== ========= =========
Basic income (loss) per share $ 0.31 $ (0.01) $ (0.48) $ (0.18)
Shares used in computing basic
income (loss) 20,976 20,257 20,810 20,146
per share
Diluted income (loss) per share $ 0.30 $ (0.01) $ (0.48) $ (0.18)
Shares used in computing diluted
income (loss) 21,637 20,257 20,810 20,146
PCTEL Inc.
Consolidated Condensed Balance Sheets
(in thousands)
December 31, December 31,
2006 2005
------------- -------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 70,771 $ 58,307
Restricted cash -- 208
Accounts receivable, net 14,034 13,725
Inventories, net 7,258 9,547
Prepaid expenses and other assets 2,059 3,109
------------ ------------
Total current assets 94,122 84,896
PROPERTY AND EQUIPMENT, net 12,357 11,190
GOODWILL 17,569 31,020
OTHER INTANGIBLE ASSETS, net 7,451 16,457
OTHER ASSETS 1,221 941
------------- -------------
TOTAL ASSETS $ 132,720 $ 144,504
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable 885 2,251
Income taxes payable 59 5,297
Deferred revenue 1,025 1,944
Accrued liabilities 6,905 5,595
Short term debt 869 --
------------- -------------
Total current liabilities 9,743 15,087
Pension liabilities -- 3,046
LONG-TERM LIABILITIES 2,284 2,344
------------- -------------
Total liabilities 12,027 20,477
------------- -------------
STOCKHOLDERS' EQUITY:
Common stock 22 22
Additional paid-in capital 165,556 160,825
Accumulated deficit (46,671) (36,652)
Accumulated other comprehensive income 1,786 (168)
------------ -------------
Total stockholders' equity 120,693 124,027
------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 132,720 $ 144,504
============= =============
PCTEL, Inc.
Revenue & Gross Profit by Segment
(in thousands)
Three Months Twelve Months
Ended Ended
December 31, December 31,
------------------- -------------------
2006 2005 2006 2005
--------- --------- -------- ----------
REVENUES:
------------------------------
Broadband Technology Group $ 17,648 $ 19,514 $68,195 $ 68,592
Mobility Solutions Group 2,602 2,432 9,793 6,922
Licensing 472 868 8,681 2,289
Eliminations (10) (20) (107) (57)
--------- --------- -------- ----------
TOTAL REVENUES 20,712 22,794 86,562 77,746
GROSS PROFIT:
------------------------------
Broadband Technology Group $ 7,823 $ 7,405 $28,173 $ 27,827
Mobility Solutions Group 2,586 2,424 9,739 6,834
Licensing 469 864 8,658 2,207
Eliminations 7 (6) 2 --
--------- --------- -------- ----------
TOTAL GROSS PROFIT 10,885 10,687 46,572 36,868
GROSS PROFIT %:
------------------------------
Broadband Technology Group 44.3% 37.9% 41.3% 40.6%
Mobility Solutions Group 99.4% 99.7% 99.4% 98.7%
Licensing 99.4% 99.5% 99.7% 96.4%
Eliminations -- -- -- --
-------- -------- ------- ---------
TOTAL GROSS PROFIT % 52.6% 46.9% 53.8% 47.4%
PCTEL, Inc.
Reconciliation of Non-GAAP to GAAP Revenue & Gross Profit by Segment
----------------------------------------------------------------------
(unaudited, in thousands)
Three Month Ended December 31, 2006
------------------------------------
As Non-GAAP Non
Reported Adjustments (a) GAAP
--------- ------------ ---- -------
REVENUES:
--------------------------------
Broadband Technology Group 17,648 17,648
Mobility Solutions Group 2,602 2,602
Licensing 472 472
Eliminations (10) (10)
--------- -------
TOTAL REVENUES 20,712 20,712
--------- -------
GROSS PROFIT:
--------------------------------
Broadband Technology Group 7,823 73 7,896
Mobility Solutions Group 2,586 2,586
Licensing 469 469
Eliminations 7 7
--------- ------------ -------
TOTAL GROSS PROFIT 10,885 73 10,958
--------- ------------ -------
GROSS PROFIT %:
--------------------------------
Broadband Technology Group 44.3% 44.7%
Mobility Solutions Group 99.4% 99.4%
Licensing 99.4% 99.4%
Eliminations -- --
--------- -------
TOTAL GROSS PROFIT % 52.6% 52.9%
========= =======
Three Month Ended December 31, 2005
-----------------------------------
As Non-GAAP Non
Reported Adjustments (a) GAAP
--------- ------------ ---- -------
REVENUES:
---------------------------------
Broadband Technology Group 19,514 19,514
Mobility Solutions Group 2,432 2,432
Licensing 868 868
Eliminations (20) (20)
--------- -------
TOTAL REVENUES 22,794 22,794
--------- -------
GROSS PROFIT:
---------------------------------
Broadband Technology Group 7,405 81 7,486
Mobility Solutions Group 2,424 2,424
Licensing 864 864
Eliminations (6) (6)
--------- ------------ -------
TOTAL GROSS PROFIT 10,687 81 10,768
--------- ------------ -------
GROSS PROFIT %:
---------------------------------
Broadband Technology Group 37.9% 38.4%
Mobility Solutions Group 99.7% 99.7%
Licensing 99.5% 99.5%
Eliminations -- --
--------- -------
TOTAL GROSS PROFIT % 46.9% 47.2%
========= =======
(a) This adjustment reflects the non-cash stock based compensation
expense for restricted grants and stock bonuses awarded to the
Company's employees. The adjustment for the three months ended
December 31, 2006 also includes non-cash stock based compensation
expense for stock options in accordance with SFAS No. 123R.
PCTEL, Inc.
Reconciliation of Non-GAAP to GAAP Revenue & Gross Profit by Segment
----------------------------------------------------------------------
(unaudited, in thousands)
Twelve Months Ended December 31, 2006
-------------------------------------
As Non-GAAP Non
Reported Adjustments (a) GAAP
----------- ------------ ---- -------
REVENUES:
-------------------------------
Broadband Technology Group 68,195 68,195
Mobility Solutions Group 9,793 9,793
Licensing 8,681 8,681
Eliminations (107) (107)
----------- -------
TOTAL REVENUES 86,562 86,562
----------- -------
GROSS PROFIT:
-------------------------------
Broadband Technology Group 28,173 331 28,504
Mobility Solutions Group 9,739 9,739
Licensing 8,658 8,658
Eliminations 2 2
----------- ------------ -------
TOTAL GROSS PROFIT 46,572 331 46,903
----------- ------------ -------
GROSS PROFIT %:
-------------------------------
Broadband Technology Group 41.3% 41.8%
Mobility Solutions Group 99.4% 99.4%
Licensing 99.7% 99.7%
Eliminations -- --
----------- -------
TOTAL GROSS PROFIT % 53.8% 54.2%
=========== =======
Twelve Months December 31, 2005
-----------------------------------
As Non-GAAP Non
Reported Adjustments (a) GAAP
--------- ------------ ---- -------
REVENUES:
----------------------------------
Broadband Technology Group 68,592 68,592
Mobility Solutions Group 6,922 6,922
Licensing 2,289 2,289
Eliminations (57) (57)
--------- -------
TOTAL REVENUES 77,746 77,746
--------- -------
GROSS PROFIT:
----------------------------------
Broadband Technology Group 27,827 164 27,991
Mobility Solutions Group 6,834 6,834
Licensing 2,207 2,207
Eliminations -- --
--------- ------------ -------
TOTAL GROSS PROFIT 36,868 164 37,032
--------- ------------ -------
GROSS PROFIT %:
----------------------------------
Broadband Technology Group 40.6% 40.8%
Mobility Solutions Group 98.7% 98.7%
Licensing 96.4% 96.4%
Eliminations -- --
--------- -------
TOTAL GROSS PROFIT % 47.4% 47.6%
========= =======
(a) This adjustment reflects the non-cash stock based compensation
expense for restricted grants and stock bonuses awarded to the
Company's employees. The adjustment for the twelve months ended
December 31, 2006 also includes non-cash stock based compensation
expense for stock options in accordance with SFAS No. 123R.
PCTEL, Inc.
Reconciliation Of Non GAAP To GAAP Results Of Operations (a)
----------------------------------------------------------------------
(unaudited, in thousands)
Three Month Ended December 31, 2006
-----------------------------------
As Non-GAAP Non
Reported Adjustments (a) GAAP
---------- ------------ ---------
REVENUES $20,712 $20,712
COST OF REVENUES 9,827 (73)(b) 9,754
---------- ------------ ---------
GROSS PROFIT 10,885 73 10,958
OPERATING EXPENSES:
Research and development 3,932 (158)(b) 3,774
Sales and marketing 3,322 (227)(b) 3,095
General and administrative 3,259 (720)(b) 2,539
Amortization of other intangible
assets 751 (751) --
Impairment of intangible assets -- -- --
Restructuring charges (35) 35 --
Gain on sale of assets and
related royalties (250) (250)
---------- ------------ ---------
Total operating expenses 10,979 (1,821) 9,158
---------- ------------ ---------
INCOME (LOSS) FROM OPERATIONS (94) 1,894 1,800
OTHER INCOME, NET 945 945
---------- ------------ ---------
INCOME (LOSS) BEFORE INCOME TAXES 851 1,894 2,745
PROVISION (BENEFIT) FOR INCOME
TAXES (5,748) 5,235 (c) (513)
---------- ------------ ---------
NET INCOME (LOSS) $6,599 $(3,341) $3,258
---------- ------------ ---------
Earnings (loss) per share
Basic $0.31 $0.16
Diluted $0.30 $0.15
Shares used in computing EPS (in
thousands)
Basic 20,976 20,976
Diluted 21,637 21,637
Three Month Ended December 31, 2005
------------------------------------
As Non-GAAP Non
Reported Adjustments(a) GAAP
------------ ------------ --------
REVENUES $22,794 $22,794
COST OF REVENUES 12,107 (81)(b) 12,026
------------ ------------ --------
GROSS PROFIT 10,687 81 10,768
OPERATING EXPENSES:
Research and development 2,548 (97)(b) 2,451
Sales and marketing 3,388 (240)(b) 3,148
General and administrative 4,700 (768) 3,932
Amortization of other intangible
assets 1,170 (1,170) --
Impairment of intangible assets -- --
Restructuring charges -- --
Gain on sale of assets and
related royalties (500) (500)
------------ ------------ --------
Total operating expenses 11,306 (2,275) 9,031
------------ ------------ --------
INCOME (LOSS) FROM OPERATIONS (619) 2,356 1,737
OTHER INCOME, NET 502 502
------------ ------------ --------
INCOME (LOSS) BEFORE INCOME TAXES (117) 2,356 2,239
PROVISION (BENEFIT) FOR INCOME
TAXES 39 39
------------ ------------ --------
NET INCOME (LOSS) $(156) $2,356 $2,200
------------ ------------ --------
Earnings (loss) per share
Basic $(0.01) $0.11
Diluted $(0.01) $0.11
Shares used in computing EPS (in
thousands)
Basic 20,257 20,257
Diluted 20,257 20,854
(a) These adjustments reconcile the company's GAAP results of
operations to its non-GAAP results of operations. The company
believes that presentation of results excluding items such as non-
cash compensation expense, amortization of intangible assets,
impairment of intangible assets, restructuring expense, and other
one-time adjustments 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.
(b) This adjustment reflects the non-cash stock based compensation
expense for restricted grants and stock bonuses awarded to the
company's employees. The adjustment for the three months ended
December 31, 2006 also includes non-cash stock based compensation
expense for stock options in accordance with SFAS No. 123R.
(c) This adjustment reflects a one-time non-cash adjustment to the
company's income tax accruals.
PCTEL, Inc.
Reconciliation Of Non GAAP To GAAP Results Of Operations (a)
----------------------------------------------------------------------
(unaudited, in thousands)
Twelve Months Ended December 31, 2006
-------------------------------------
As Non-GAAP Non
Reported Adjustments (a) GAAP
------------ ------------ --------
REVENUES $86,562 $86,562
COST OF REVENUES 39,990 (331)(b) 39,659
------------ ------------ --------
GROSS PROFIT 46,572 331 46,903
OPERATING EXPENSES:
Research and development 13,762 (630)(b) 13,132
Sales and marketing 13,287 (873)(b) 12,414
General and administrative 14,127 (2,668)(b) 11,459
Amortization of other
intangible assets 3,593 (3,593) --
Impairment of intangible assets 20,349 (20,349) --
Restructuring charges (benefit) 389 (389) --
Gain on sale of assets and
related royalties (1,000) (1,000)
------------ ------------ --------
Total operating
expenses 64,507 (28,502) 36,005
------------ ------------ --------
INCOME (LOSS) FROM OPERATIONS (17,935) 28,833 10,898
OTHER INCOME, NET 3,303 3,303
------------ ------------ --------
INCOME (LOSS) BEFORE INCOME TAXES (14,632) 28,833 14,201
PROVISION (BENEFIT) FOR INCOME
TAXES (4,613) 5,235 (c) 622
------------ ------------ --------
NET INCOME (LOSS) $(10,019) $23,598 $13,579
------------ ------------ --------
Earnings (loss) per share
Basic $(0.48) $0.65
Diluted $(0.48) $0.63
Shares used in computing EPS (in
thousands)
Basic 20,810 20,810
Diluted 20,810 21,512
Twelve Months December 31, 2005
-----------------------------------
As Non-GAAP Non
Reported Adjustments (a) GAAP
---------- ------------ --------
REVENUES $77,746 $77,746
COST OF REVENUES 40,878 (164)(b) 40,714
---------- ------------ --------
GROSS PROFIT 36,868 164 37,032
OPERATING EXPENSES:
Research and development 10,015 (309)(b) 9,706
Sales and marketing 13,074 (812)(b) 12,262
General and administrative 16,836 (2,766)(b) 14,070
Amortization of other
intangible assets 4,137 (4,137) --
Impairment of intangible assets -- --
Restructuring charges (benefit) (70) 70 --
Gain on sale of assets and
related royalties (2,100) (2,100)
---------- ------------ --------
Total operating
expenses 41,892 (7,954) 33,938
---------- ------------ --------
INCOME (LOSS) FROM OPERATIONS (5,024) 8,118 3,094
OTHER INCOME, NET 1,546 1,546
---------- ------------ --------
INCOME (LOSS) BEFORE INCOME TAXES (3,478) 8,118 4,640
PROVISION (BENEFIT) FOR INCOME
TAXES 235 235
---------- ------------ --------
NET INCOME (LOSS) $(3,713) $8,118 $4,405
---------- ------------ --------
Earnings (loss) per share
Basic $(0.18) $0.22
Diluted $(0.18) $0.21
Shares used in computing EPS (in
thousands)
Basic 20,146 20,146
Diluted 20,146 20,701
(a) These adjustments reconcile the company's GAAP results of
operations to its non-GAAP results of operations. The company
believes that presentation of results excluding items such as non-
cash compensation expense, amortization of intangible assets,
impairment of intangible assets, restructuring expense, and other
one-time adjustments 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.
(b) This adjustment reflects the non-cash stock based compensation
expense for restricted grants and stock bonuses awarded to the
company's employees. The adjustment for the twelve months ended
December 31, 2006 also includes non-cash stock based compensation
expense for stock options in accordance with SFAS No. 123R.
(c) This adjustment reflects a one-time non-cash adjustment to the
company's income tax accruals.
SOURCE: PCTEL, Inc.
PCTEL, Inc. John Schoen, 773-243-3000 CFO or Jack Seller, 773-243-3016 Public Relations jack.seller@pctel.com
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