PCTEL Posts $26.8 Million In Revenue; 46 Percent Increase Includes $7 Million From Patent Dispute Resolution; High Margin Software and Scanner Sales Up 45 Percent
CHICAGO, Jul 27, 2006 (BUSINESS WIRE) -- PCTEL, Inc. (NASDAQ:PCTI), a leader in wireless broadband solutions, announced results for the second quarter ended June 30, 2006. Financial highlights of the quarter were:
-- $26.8 million in revenue for the quarter, an increase of 46 percent over the same period last year. Most of the increase - $7 million - reflects the resolution of PCTEL's intellectual property dispute with Agere. Revenue from product operations was up 8 percent over the same period last year.
-- $12.8 million in revenue for the quarter from the Antenna Products Group. This is a decrease of 5 percent over the second quarter last year. Revenue for the six months ended June 30, 2006 was up 6 percent from the same period a year ago. Results were unfavorably impacted by the termination of the SDARS (satellite radio antennas for retail outlets) late last year, but favorably impacted by the acquisition of the iVET(TM) product line during the third quarter of 2005.
-- $2.7 million in revenue for the quarter from the Mobility Solutions Group. This is an increase of 104 percent over the second quarter last year. Revenue for the six months ended June 30, 2006 was up 97 percent from the same period a year ago.
-- $4.0 million in revenue for the quarter from the RF Solutions Group. This is a 21 percent increase over the second quarter of last year. Revenue for the six months ended June 30, 2006 is also up 21 percent from the same period a year ago.
-- $7.4 million in licensing revenue for the quarter, an increase of $7.1 million from the second quarter last year. Again, this sharp increase includes the aforementioned patent dispute resolution.
-- $1.3 million gain on restructuring related to the closure of the Company's Dublin Factory and the termination of the local pension plan there.
-- GAAP net income of $6.3 million for the quarter, or $0.29 per diluted share, compared to $(0.3) million net loss, or $(0.02) per share for the same period in 2005.
-- Non-GAAP net income of $8.4 million for the quarter, or $0.39 per diluted share compared to $1.5 million of net income, or $0.07 per share for the same period in 2005. The Company's reporting of non-GAAP income excludes non-cash based expenses for stock compensation and amortization of intangible assets related to the Company's acquisitions. Those expenses were $2.1 million in the second quarter 2006 compared to $1.8 million for the same period a year ago.
-- $63.8 million of cash at June 30, 2006.
"The past quarter has been one of significant accomplishment for PCTEL," said Marty Singer, PCTEL's Chairman and CEO. "During the quarter, we resolved a long-standing patent dispute, kept on schedule our transition to a contract manufacturer for the iVET(TM) product line, achieved record revenues for our Mobility Solutions Group, continued to aggressively grow our scanner business, and introduced several new WiMax antennas. We are poised for a strong second half and a stronger 2007," added Singer.
PCTEL's management team will discuss the company's results during its scheduled earnings teleconference today at 6:15 PM EDT.
CONFERENCE CALL / WEBCAST
The company will hold a conference call at 6:15 PM EDT (5:15 PM CDT) today, Thursday, July 27, 2006 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) 289-0508 (U.S. / Canada) or (913) 981-5550 (international).
To listen via the Internet, please visit, www.pctel.com, or http://investor.pctel.com/eventdetail.cfm?eventid=28080
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: 5652483.
About PCTEL
PCTEL, Inc. (Nasdaq:PCTI), which is headquartered in Chicago, is a global leader in wireless broadband solutions. PCTEL's Antenna Products Group (http://antenna.pctel.com) designs, distributes, and supports innovative antenna solutions for public safety applications, unlicensed and licensed wireless broadband, fleet management, network timing, and other GPS applications. PCTEL's Mobility Solutions' (http://mobilitysolutions.pctel.com) software tools provide secure, access independent, remote connectivity to the Internet and VoIP capability for converged handsets. PCTEL's RF Solutions' (http://rfsolutions.pctel.com) portfolio of OEM receivers, receiver based products and interference management solutions are used to measure, monitor and optimize cellular networks.
PCTEL protects its leadership position with a portfolio of more than 130 analog and broadband communications, wireless and antenna patents, issued or pending. The company's products are sold or licensed to wireless carriers, wireless ISPs, distributors, system integrators, wireless test and measurement companies, wireless network equipment and handset manufacturers, PC card manufacturers and government agencies. 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, the discontinuance of the manufacturing operations in Dublin, Ireland, and the outsource of the manufacture of certain antenna product lines 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, the ability to realize product and manufacturing efficiencies, the ability to achieve reductions in costs as a result of the discontinuance of manufacturing operations and relocation or outsourcing of certain antenna products. 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 Six Months Ended
June 30, June 30,
--------------------- ---------------------
2006 2005 2006 2005
---------- ---------- ---------- ----------
REVENUES $ 26,758 $ 18,313 $ 45,324 $ 33,320
COST OF REVENUES 9,702 9,609 19,546 17,178
---------- ---------- ---------- ----------
GROSS PROFIT 17,056 8,704 25,778 16,142
---------- ---------- ---------- ----------
OPERATING EXPENSES:
Research and development 3,336 2,434 6,253 4,905
Sales and marketing 3,196 2,934 6,738 6,048
General and
administrative 3,725 3,865 7,473 8,031
Amortization of other
intangible assets 1,056 854 2,093 1,737
Restructuring benefit (1,269) (70) (716) (70)
Gain on sale of assets
and related royalties (250) (500) (500) (1,000)
---------- ---------- ---------- ----------
Total operating
expenses 9,794 9,517 21,341 19,651
---------- ---------- ---------- ----------
INCOME (LOSS) FROM
OPERATIONS 7,262 (813) 4,437 (3,509)
OTHER INCOME, NET 747 431 1,368 970
---------- ---------- ---------- ----------
INCOME (LOSS) BEFORE INCOME
TAXES 8,009 (382) 5,805 (2,539)
PROVISION (BENEFIT) FOR
INCOME TAXES 1,683 (60) 1,676 101
---------- ---------- ---------- ----------
NET INCOME (LOSS) $ 6,326 $ (322) $ 4,129 $ (2,640)
========== ========== ========== ==========
Basic income (loss) per
share $ 0.30 $ (0.02) $ 0.20 $ (0.13)
Shares used in computing
basic income (loss) per
share 20,837 20,108 20,656 20,014
Diluted income (loss) per
share $ 0.29 $ (0.02) $ 0.19 $ (0.13)
Shares used in computing
diluted income (loss) per
share 21,586 20,108 21,371 20,014
PCTEL Inc.
Consolidated Condensed Balance Sheets
(unaudited, in thousands)
June 30, December 31,
2006 2005
------------- -------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 63,611 $ 58,307
Restricted cash 208 208
Accounts receivable, net 19,367 13,725
Inventories, net 8,652 9,547
Prepaid expenses and other assets 2,221 3,109
------------- -------------
Total current assets 94,059 84,896
PROPERTY AND EQUIPMENT, net 11,603 11,190
GOODWILL 32,327 31,020
OTHER INTANGIBLE ASSETS, net 15,009 16,457
OTHER ASSETS 1,807 941
------------- -------------
TOTAL ASSETS $ 154,805 $ 144,504
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable 1,874 2,251
Income taxes payable 5,721 5,297
Deferred revenue 1,814 1,944
Accrued liabilities 6,964 5,595
Short Term Debt 959 -
------------- -------------
Total current liabilities 17,332 15,087
Pension liabilities - 3,046
LONG-TERM LIABILITIES 2,623 2,344
------------- -------------
Total liabilities 19,955 20,477
------------- -------------
STOCKHOLDERS' EQUITY:
Common stock 22 22
Additional paid-in capital 165,555 160,825
Accumulated deficit (32,523) (36,652)
Accumulated other comprehensive income 1,796 (168)
------------- -------------
Total stockholders' equity 134,850 124,027
------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 154,805 $ 144,504
============= =============
PCTEL, Inc.
Revenue & Gross Profit by Segment
(unaudited, in thousands)
Three Months Ended Six Months Ended
June 30, June 30,
--------------------- ---------------------
2006 2005 2006 2005
---------- ---------- ---------- ----------
REVENUES:
---------
APG $ 12,753 $ 13,385 $ 25,141 $ 23,705
RFS 3,990 3,299 7,697 6,382
MSG 2,668 1,311 4,784 2,433
LICENSING 7,382 331 7,772 823
Eliminations (35) (13) (70) (23)
---------- ---------- ---------- ----------
TOTAL REVENUES 26,758 18,313 45,324 33,320
GROSS PROFIT:
-------------
APG $ 4,189 $ 4,840 $ 7,859 $ 8,386
RFS 2,834 2,262 5,403 4,590
MSG 2,653 1,273 4,755 2,354
LICENSING 7,379 329 7,764 816
Eliminations 1 -- (3) (4)
---------- ---------- ---------- ----------
TOTAL GROSS PROFIT 17,056 8,704 25,778 16,142
PCTEL, Inc.
Reconciliation of Non-GAAP to GAAP Revenue & Gross Profit by Segment
--------------------------------------------------------------------
(unaudited, in thousands)
Three Months Ended June 30, 2006
-------------------------------------------
As Non-GAAP Non
Reported Adjustments (a) GAAP
------------ ------------ ---- ------------
REVENUES:
---------
APG 12,753 12,753
RFS 3,990 3,990
MSG 2,668 2,668
LICENSING 7,382 7,382
Eliminations (35) (35)
------------ ------------ ------------
TOTAL REVENUES 26,758 26,758
------------ ------------ ------------
GROSS PROFIT:
-------------
APG 4,189 (48) (b) 4,237
RFS 2,834 (38) (b) 2,872
MSG 2,653 2,653
LICENSING 7,379 7,379
Eliminations 1 1
------------ ------------ ------------
TOTAL GROSS PROFIT 17,056 (86) 17,142
------------ ------------ ------------
Three Months Ended June 30, 2005
-------------------------------------------
As Non-GAAP Non
Reported Adjustments (a) GAAP
------------ ----------------- ------------
REVENUES:
---------
APG 13,385 13,385
RFS 3,299 3,299
MSG 1,311 1,311
LICENSING 331 331
Eliminations (13) (13)
------------ ------------- ------------
TOTAL REVENUES 18,313 18,313
------------ ------------- ------------
GROSS PROFIT:
-------------
APG 4,840 (4) (b) 4,844
RFS 2,262 (2) (b) 2,264
MSG 1,273 1,273
LICENSING 329 329
Eliminations -- -
------------ ------------- ------------
TOTAL GROSS PROFIT 8,704 (6) 8,710
------------ ------------- ------------
(a) These adjustments reconcile the Company's GAAP gross profit to its
non-GAAP gross profit. The Company believes that presentation of
results excluding non-cash share-based compensation provides
meaningful supplemental information to both management and
investors that is indicative of the Company's core operating
results and facilitates comparison of gross profit 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 stock grants and stock bonuses awarded to
the Company's employees. The adjustment for the three months ended
June 30, 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)
Six Months Ended June 30, 2006
-------------------------------------------
As Non-GAAP Non
Reported Adjustments (a) GAAP
------------ ------------- --- ------------
REVENUES:
---------
APG 25,141 25,141
RFS 7,697 7,697
MSG 4,784 4,784
LICENSING 7,772 7,772
Eliminations (70) (70)
------------ ------------- ------------
TOTAL REVENUES 45,324 45,324
------------ ------------- ------------
GROSS PROFIT:
-------------
APG 7,859 (92) (b) 7,951
RFS 5,403 (71) (b) 5,474
MSG 4,755 4,755
LICENSING 7,764 7,764
Eliminations (3) (3)
------------ ------------- ------------
TOTAL GROSS PROFIT 25,778 (163) 25,941
------------ ------------- ------------
Six Months Ended June 30, 2005
-------------------------------------------
As Non-GAAP Non
Reported Adjustments (a) GAAP
------------ ------------ --- ------------
REVENUES:
---------
APG 23,705 23,705
RFS 6,382 6,382
MSG 2,433 2,433
LICENSING 823 823
Eliminations (23) (23)
------------ ------------ ------------
TOTAL REVENUES 33,320 33,320
------------ ------------ ------------
GROSS PROFIT:
-------------
APG 8,386 (5) (b) 8,391
RFS 4,590 (2) (b) 4,592
MSG 2,354 2,354
LICENSING 816 816
Eliminations (4) (4)
------------ ------------ ------------
TOTAL GROSS PROFIT 16,142 (7) 16,149
------------ ------------ ------------
(a) These adjustments reconcile the Company's GAAP gross profit to its
non-GAAP gross profit. The Company believes that presentation of
results excluding non-cash share-based compensation provides
meaningful supplemental information to both management and
investors that is indicative of the Company's core operating
results and facilitates comparison of gross profit 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 stock grants and stock bonuses awarded to
the Company's employees. The adjustment for the six months ended
June 30, 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 Months Ended June 30, 2006
-----------------------------------------
As Non-GAAP Non
Reported Adjustments (a) GAAP
------------ ------------ ------------
REVENUES $26,758 $26,758
COST OF REVENUES 9,702 (86) (b) 9,616
------------ ------------ ------------
GROSS PROFIT 17,056 86 17,142
OPERATING EXPENSES:
Research and development 3,336 (161) (b) 3,175
Sales and marketing 3,196 (215) (b) 2,981
General and administrative 3,725 (603) (b) 3,122
Amortization of other
intangible assets 1,056 (1,056) -
Restructuring benefit (1,269) (1,269)
Gain on sale of assets and
related royalties (250) (250)
------------ ------------ ------------
Total operating expenses 9,794 (2,035) 7,759
------------ ------------ ------------
INCOME (LOSS) FROM OPERATIONS 7,262 2,121 9,383
OTHER INCOME, NET 747 747
------------ ------------ ------------
INCOME (LOSS) BEFORE INCOME
TAXES 8,009 2,121 10,130
PROVISION (BENEFIT) FOR
INCOME TAXES 1,683 1,683
------------ ------------ ------------
NET INCOME (LOSS) $6,326 $2,121 $8,447
------------ ------------ ------------
Earnings (loss) per share
Basic $0.30 $0.41
Diluted $0.29 $0.39
Shares used in computing
EPS (in thousands)
Basic 20,837 20,837
Diluted 21,586 21,586
Three Months Ended June 30, 2005
-----------------------------------------
As Non-GAAP Non
Reported Adjustments (a) GAAP
------------ ------------ ------------
REVENUES $18,313 $18,313
COST OF REVENUES 9,609 (6) 9,603
------------ ------------ ------------
GROSS PROFIT 8,704 6 8,710
OPERATING EXPENSES:
Research and development 2,434 (70) (b) 2,364
Sales and marketing 2,934 (183) (b) 2,751
General and administrative 3,865 (663) (b) 3,202
Amortization of other
intangible assets 854 (854) -
Restructuring benefit (70) (70)
Gain on sale of assets and
related royalties (500) (500)
------------ ------------ ------------
Total operating expenses 9,517 (1,770) 7,747
------------ ------------ ------------
INCOME (LOSS) FROM OPERATIONS (813) 1,776 963
OTHER INCOME, NET 431 431
------------ ------------ ------------
INCOME (LOSS) BEFORE INCOME
TAXES (382) 1,776 1,394
PROVISION (BENEFIT) FOR
INCOME TAXES (60) (60)
------------ ------------ ------------
NET INCOME (LOSS) $(322) $1,776 $1,454
------------ ------------ ------------
Earnings (loss) per share
Basic $(0.02) $0.07
Diluted $(0.02) $0.07
Shares used in computing
EPS (in thousands)
Basic 20,108 20,108
Diluted 20,108 20,200
(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 share-based compensation and amortization of intangible
assets 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 stock grants and stock bonuses awarded to
the Company's employees. The adjustment for the three months ended
June 30, 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)
Six Months Ended June 30, 2006
-----------------------------------------
As Non-GAAP Non
Reported Adjustments (a) GAAP
------------ ------------ ------------
REVENUES $45,324 $45,324
COST OF REVENUES 19,546 (163) (b) 19,383
------------ ------------ ------------
GROSS PROFIT 25,778 163 25,941
OPERATING EXPENSES:
Research and development 6,253 (306) (b) 5,947
Sales and marketing 6,738 (439) (b) 6,299
General and administrative 7,473 (1,307) (b) 6,166
Amortization of other
intangible assets 2,093 (2,093) --
Restructuring benefit (716) (716)
Gain on sale of assets and
related royalties (500) (500)
------------ ------------ ------------
Total operating expenses 21,341 (4,145) 17,196
------------ ------------ ------------
INCOME (LOSS) FROM OPERATIONS 4,437 4,308 8,745
OTHER INCOME, NET 1,368 1,368
------------ ------------ ------------
INCOME (LOSS) BEFORE INCOME
TAXES 5,805 4,308 10,113
PROVISION FOR INCOME TAXES 1,676 1,676
------------ ------------ ------------
NET INCOME (LOSS) $4,129 $4,308 $8,437
------------ ------------ ------------
Earnings (loss) per share
Basic $0.20 $0.41
Diluted $0.19 $0.39
Shares used in computing EPS
(in thousands)
Basic 20,656 20,656
Diluted 21,371 21,371
Six Months Ended June 30, 2005
-----------------------------------------
As Non-GAAP Non
Reported Adjustments (a) GAAP
------------ ------------ ------------
REVENUES $33,320 $33,320
COST OF REVENUES 17,178 (7) 17,171
------------ ------------ ------------
GROSS PROFIT 16,142 7 16,149
OPERATING EXPENSES:
Research and development 4,905 (120) (b) 4,785
Sales and marketing 6,048 (315) (b) 5,733
General and administrative 8,031 (1,140) (b) 6,891
Amortization of other
intangible assets 1,737 (1,737) --
Restructuring benefit (70) (70)
Gain on sale of assets and
related royalties (1,000) (1,000)
------------ ------------ ------------
Total operating expenses 19,651 (3,312) 16,339
------------ ------------ ------------
INCOME (LOSS) FROM OPERATIONS (3,509) 3,319 (190)
OTHER INCOME, NET 970 970
------------ ------------ ------------
INCOME (LOSS) BEFORE INCOME
TAXES (2,539) 3,319 780
PROVISION FOR INCOME TAXES 101 101
------------ ------------ ------------
NET INCOME (LOSS) $(2,640) $3,319 $679
------------ ------------ ------------
Earnings (loss) per share
Basic $(0.13) $0.03
Diluted $(0.13) $0.03
Shares used in computing EPS
(in thousands)
Basic 20,014 20,014
Diluted 20,014 20,357
(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 share-based compensation and amortization of intangible
assets 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 stock grants and stock bonuses awarded to
the Company's employees. The adjustment for the six months ended
June 30, 2006 also includes non cash stock based compensation
expense for stock options in accordance with SFAS No. 123R.
SOURCE: PCTEL, Inc.
PCTEL, Inc. John Schoen, 773-243-3000 or Jack Seller (Public Relations), 773-243-3016 jack.seller@pctel.com
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