pcti-8k_20190507.htm

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (date of earliest event reported) May 7, 2019

 

 

PCTEL, Inc.

(Exact name of registrant as specified in its charter)

 

 

 

 

 

 

 

 

Delaware

 

000-27115

 

77-0364943

(State or Other Jurisdiction

of Incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

 

471 Brighton Drive

Bloomingdale, Illinois

 

 

 

60108

(Address of Principal Executive Offices)

 

 

 

(Zip Code)

Registrant’s telephone number, including area code: (630) 372-6800

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Common Stock

 

PCTI

 

Nasdaq Global Select Market

 

 

 

 


 

Item 2.02 Results of Operations and Financial Condition

The following information is intended to be furnished under Item 2.02 of Form 8-K, “Results of Operations and Financial Condition.” This information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

On May 7, 2019, PCTEL, Inc. issued a press release regarding its financial results for the first quarter ended March 31, 2019.  The full text of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits

 

 

 

(d)

Exhibits.

 

 

 

99.1

Press release dated May 7, 2019, of PCTEL, Inc. announcing its financial results for the first quarter ended March 31, 2019.

 

 

 

 



 

 

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date:  May 8, 2019

 

 

 

 

 

 

 

 

 

PCTEL, INC.

 

 

By:

 

/s/ Kevin J. McGowan

 Kevin J. McGowan, Chief Financial Officer

 

pcti-ex991_6.htm

EXHIBIT 99.1

  

PCTEL Reports $20.6 Million in First Quarter Revenue

BLOOMINGDALE, Illinois – May 7, 2019 – PCTEL, Inc. (Nasdaq: PCTI) announced its results for the first quarter ended March 31, 2019.

 

Highlights

 

 

Revenue of $20.6 million in the quarter, 5% lower compared to the prior year. Compared to the first quarter 2018, the first quarter revenue was higher by 38% for the test and measurement product line and lower by 15% for the antenna product line.

 

 

Gross profit margin of 42.0% in the quarter, up 5.8% compared to gross profit margin in the prior year. The increase in the quarter is a result of improved profitability for scanning receivers and antennas.

 

 

GAAP net loss per share of $0.02 in the quarter compared to a GAAP loss of $0.05 per share in the quarter last year.  

 

 

Non-GAAP net income and adjusted EBITDA are measures the Company uses to reflect the results of its core earnings. A reconciliation of those non-GAAP measures to our financial statements is provided later in the press release.

 

 

Non-GAAP net income per share of $0.04 in the quarter compared to a net loss of $0.01 in the first quarter last year.

 

 

Adjusted EBITDA margin as a percent of revenue of 7% in the quarter compared to 2% in the prior year.

 

 

$35.0 million of cash and short-term investments at March 31, 2019 and no debt.

 

“We are pleased that early demand for 5G test and measurement tools continues to drive revenue growth and profitability for scanning receivers.  We expect this to continue as wireless operators deploy 5G networks in the US, Europe and Asia,” said David Neumann, PCTEL’s CEO.  “In addition, 5G and enterprise Wi-Fi networks require engineered antenna and radio systems to enable industrial IoT for both public and private applications.  We are positioned well to provide our antenna solutions for these applications in enterprise wireless, intelligent transportation and industrial IoT markets.”

 

 

 

 

 


 

CONFERENCE CALL / WEBCAST  

 

PCTEL’s management team will discuss the Company’s results today at 4:30 p.m. ET. The call can be accessed by dialing (888) 782-2072 (U.S. / Canada) or (706) 679-6397 (International), conference ID: 1689797. The call will also be webcast at http://investor.pctel.com/news-events/webcasts-presentations.

 

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: 1689797.

About PCTEL

PCTEL, Inc. is a leading global supplier of antennas and wireless network testing solutions. Founded in 1994, we are currently celebrating our 25th anniversary. PCTEL’s precision antennas are deployed in small cells, enterprise Wi-Fi access points, fleet management and transit systems, and in equipment and devices for the Industrial Internet of Things (IIoT). We offer in-house design, testing, radio integration, and manufacturing capabilities for our customers. PCTEL’s test and measurement tools improve the performance of wireless networks globally, with a focus on LTE, public safety, and emerging 5G technologies. Network operators, neutral hosts, and equipment manufacturers rely on our scanning receivers and testing solutions to analyze, design, and optimize their networks.

 

For more information, please visit our website at https://www.pctel.com/.

 

PCTEL Safe Harbor Statement

This press release and our related comments in our earnings conference call contain “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Specifically, the statements regarding our future financial performance, growth of our antenna solutions and test and measurement businesses, the impact of our redefined market segments and our 2018 cost reduction actions, the anticipated demand for certain products including those related to antennas, the industrial IoT and the rollout of 5G, the impact of tariffs on certain imports from China, and the anticipated growth of public and private wireless systems 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 impact of data densification and IoT on capacity and coverage demand, impact of 5G, customer demand for these types of products and services generally including demand from customers in China, growth and continuity in PCTEL’s defined market segments, and PCTEL’s ability to grow its wireless products business and create, protect and implement new technologies and solutions. 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 is a registered trademark of PCTEL, Inc. © 2019 PCTEL, Inc. All rights reserved.

 

For further information contact:

 

Kevin McGowanMichael Rosenberg

CFODirector of Marketing

PCTEL, Inc.PCTEL, Inc.

(630) 372-6800(301) 444-2046

public.relations@pctel.com

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

 

 

 

PCTEL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

 

 

 

March 31,

 

 

December 31,

 

 

 

2019

 

 

2018

 

ASSETS

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

4,455

 

 

$

4,329

 

Short-term investment securities

 

 

30,586

 

 

 

30,870

 

Accounts receivable, net of allowances of $86 and $63 at March 31, 2019 and

   December 31, 2018, respectively

 

 

16,427

 

 

 

15,864

 

Inventories, net

 

 

12,919

 

 

 

12,848

 

Prepaid expenses and other assets

 

 

1,541

 

 

 

1,416

 

Total current assets

 

 

65,928

 

 

 

65,327

 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

11,740

 

 

 

12,138

 

Goodwill

 

 

3,332

 

 

 

3,332

 

Intangible assets, net

 

 

789

 

 

 

1,029

 

Other noncurrent assets

 

 

1,531

 

 

 

45

 

TOTAL ASSETS

 

$

83,320

 

 

$

81,871

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

Accounts payable

 

$

6,881

 

 

$

6,083

 

Accrued liabilities

 

 

6,668

 

 

 

5,801

 

Total current liabilities

 

 

13,549

 

 

 

11,884

 

Long-term liabilities

 

 

868

 

 

 

381

 

Total liabilities

 

 

14,417

 

 

 

12,265

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Common stock, $0.001 par value, 100,000,000 shares authorized, 18,417,701 and 18,271,249

   shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively

 

 

18

 

 

 

18

 

Additional paid-in capital

 

 

133,320

 

 

 

133,859

 

Accumulated deficit

 

 

(64,372

)

 

 

(64,055

)

Accumulated other comprehensive loss

 

 

(63

)

 

 

(216

)

Total stockholders’ equity

 

 

68,903

 

 

 

69,606

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 

$

83,320

 

 

$

81,871

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

 

 

 

PCTEL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

(in thousands, except per share data)

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2019

 

 

2018

 

 

 

 

 

 

 

 

 

 

REVENUES

 

$

20,590

 

 

$

21,731

 

COST OF REVENUES

 

 

11,932

 

 

 

13,867

 

GROSS PROFIT

 

 

8,658

 

 

 

7,864

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

Research and development

 

 

3,003

 

 

 

2,940

 

Sales and marketing

 

 

2,798

 

 

 

3,028

 

General and administrative

 

 

3,253

 

 

 

2,993

 

Amortization of intangible assets

 

 

73

 

 

 

124

 

Total operating expenses

 

 

9,127

 

 

 

9,085

 

OPERATING LOSS

 

 

(469

)

 

 

(1,221

)

Other income, net

 

 

162

 

 

 

51

 

LOSS BEFORE INCOME TAXES

 

 

(307

)

 

 

(1,170

)

Expense (benefit) for income taxes

 

 

10

 

 

 

(312

)

NET LOSS

 

$

(317

)

 

$

(858

)

 

 

 

 

 

 

 

 

 

Net Loss per Share:

 

 

 

 

 

 

 

 

Basic

 

$

(0.02

)

 

$

(0.05

)

Diluted

 

$

(0.02

)

 

$

(0.05

)

Weighted Average Shares:

 

 

 

 

 

 

 

 

Basic

 

 

17,617

 

 

 

17,056

 

Diluted

 

 

17,617

 

 

 

17,056

 

 

 

 

 

 

 

 

 

 

Cash dividend per share

 

$

0.055

 

 

$

0.055

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PCTEL, INC.


 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in thousands)

 

 

 

Three Months Ended March 31,

 

.

 

2019

 

 

2018

 

 

 

 

 

 

 

 

 

 

Operating Activities:

 

 

 

 

 

 

 

 

Net loss

 

$

(317

)

 

$

(858

)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

 

 

 

 

 

 

 

 

Depreciation

 

 

711

 

 

 

674

 

Intangible asset amortization

 

 

240

 

 

 

290

 

Stock-based compensation

 

 

882

 

 

 

668

 

Loss on disposal of property and equipment

 

 

0

 

 

 

10

 

Restructuring costs

 

 

(3

)

 

 

(11

)

Bad debt provision

 

 

7

 

 

 

15

 

Deferred tax provision

 

 

0

 

 

 

(236

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(512

)

 

 

(350

)

Inventories

 

 

38

 

 

 

321

 

Prepaid expenses and other assets

 

 

23

 

 

 

(250

)

Accounts payable

 

 

554

 

 

 

(64

)

Income taxes payable

 

 

(22

)

 

 

(3

)

Other accrued liabilities

 

 

(39

)

 

 

(1,808

)

Deferred revenue

 

 

(23

)

 

 

14

 

Net cash provided by (used in) operating activities

 

 

1,539

 

 

 

(1,588

)

Investing Activities:

 

 

 

 

 

 

 

 

Capital expenditures

 

 

(311

)

 

 

(884

)

Proceeds from disposal of property and equipment

 

 

0

 

 

 

14

 

Purchases of investments

 

 

(13,893

)

 

 

(7,266

)

Redemptions/maturities of short-term investments

 

 

14,177

 

 

 

17,480

 

Net cash (used in) provided by investing activities

 

 

(27

)

 

 

9,344

 

Financing Activities:

 

 

 

 

 

 

 

 

Proceeds from issuance of common stock

 

 

338

 

 

 

364

 

Payment of withholding tax on stock-based compensation

 

 

(743

)

 

 

(289

)

Principle payments on capital leases

 

 

(26

)

 

 

(24

)

Cash dividends

 

 

(1,016

)

 

 

(995

)

Net cash used in financing activities

 

 

(1,447

)

 

 

(944

)

 

 

 

 

 

 

 

 

 

Net increase in cash and cash equivalents

 

 

65

 

 

 

6,812

 

Effect of exchange rate changes on cash

 

 

61

 

 

 

81

 

Cash and cash equivalents, beginning of period

 

 

4,329

 

 

 

5,559

 

Cash and Cash Equivalents, End of Period

 

$

4,455

 

 

$

12,452

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PCTEL, INC.

P&L INFORMATION BY PRODUCT LINE - Continuing Operations (unaudited)


 

(in thousands)

 

 

 

Three Months Ended March 31, 2019

 

 

 

Antenna Products

 

 

Test & Measurement Products

 

 

Corporate

 

 

Total

 

REVENUES

 

$

15,088

 

 

$

5,535

 

 

$

(33

)

 

$

20,590

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GROSS PROFIT

 

$

4,861

 

 

$

3,785

 

 

$

12

 

 

$

8,658

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GROSS PROFIT %

 

 

32.2

%

 

 

68.4

%

 

 

 

 

 

 

42.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31, 2018

 

 

 

Antenna Products

 

 

Test & Measurement Products

 

 

Corporate

 

 

Total

 

REVENUES

 

$

17,764

 

 

$

3,999

 

 

$

(32

)

 

$

21,731

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GROSS PROFIT

 

$

5,198

 

 

$

2,670

 

 

$

(4

)

 

$

7,864

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GROSS PROFIT %

 

 

29.3

%

 

 

66.8

%

 

 

 

 

 

 

36.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

Reconciliation of GAAP to non-GAAP Results (unaudited)

 

(in thousands except per share information)

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of GAAP operating loss to non-GAAP operating income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31,

 

 

 

 

2019

 

 

2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Loss

 

$

(469

)

 

$

(1,221

)

 

 

 

 

 

 

 

 

 

 

(a)

Add:

 

 

 

 

 

 

 

 

 

Amortization of intangible assets

 

 

 

 

 

 

 

 

 

     -Cost of revenues

 

 

167

 

 

 

167

 

 

     -Operating expenses

 

 

73

 

 

 

124

 

 

Stock Compensation:

 

 

 

 

 

 

 

 

 

     -Cost of revenues

 

 

103

 

 

 

88

 

 

     -Engineering

 

 

172

 

 

 

138

 

 

-Sales & marketing

 

 

180

 

 

 

131

 

 

     -General & administrative

 

 

427

 

 

 

311

 

 

 

 

 

1,122

 

 

 

959

 

 

Non-GAAP Operating Income (Loss)

 

$

654

 

 

$

(262

)

 

% of revenue

 

 

3.2

%

 

 

-1.2

%

 

 

 

 

 

 

 

 

 

 

Reconciliation of GAAP net loss to non-GAAP net income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31,

 

 

 

 

2019

 

 

2018

 

 

 

 

 

 

 

 

 

 

 

 

Net Loss

 

$

(317

)

 

$

(858

)

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

(a)

Non-GAAP adjustment to operating loss

 

 

1,122

 

 

 

959

 

 

Income Taxes

 

 

(56

)

 

 

(295

)

 

 

 

 

1,067

 

 

 

664

 

 

Non-GAAP Net (Loss) Income

 

$

750

 

 

$

(194

)

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP (Loss) Income per Share:

 

 

 

 

 

 

 

 

 

Basic

 

$

0.04

 

 

$

(0.01

)

 

Diluted

 

$

0.04

 

 

$

(0.01

)

 

 

 

 

 

 

 

 

 

 

 

Weighed Average Shares:

 

 

 

 

 

 

 

 

 

Basic

 

 

17,617

 

 

 

17,056

 

 

Diluted

 

 

17,660

 

 

 

17,056

 

 

 

This schedule reconciles the Company's GAAP operating loss to its non-GAAP operating (loss) 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.

 

The adjustments to GAAP operating loss (a) consist of stock compensation expense and amortization of intangible assets.  The adjustments to GAAP net loss include the non-GAAP adjustments to operating loss as well as adjustments for (b) non-cash income tax expense.

 


 

 

PCTEL, Inc.

Reconciliation of GAAP operating loss to Adjusted EBITDA

(unaudited, in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31,

 

 

 

 

 

 

 

2019

 

 

2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Loss

 

 

 

$

(469

)

 

$

(1,221

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Add:

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

 

 

711

 

 

 

674

 

 

 

Intangible amortization

 

 

 

 

240

 

 

 

291

 

 

 

Stock compensation expenses

 

 

 

 

882

 

 

 

668

 

 

 

Adjusted EBITDA

 

 

 

$

1,365

 

 

$

412

 

 

 

% of revenue

 

 

 

 

6.6

%

 

 

1.9

%

 

 

This schedule reconciles the Company's GAAP operating loss to Adjusted EBITDA.  The Company believes that 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 Adjusted EBITDA when evaluating its financial results as well as for internal planning and forecasting purposes.  Adjusted EBITDA should not be viewed as a substitute for the Company's GAAP results.

 

Adjusted EBITDA is defined as net income before interest, income taxes, depreciation and amortization.  The adjustments on this schedule consist of depreciation, amortization of intangible assets, and stock compensation expenses.