pcti-8k_20200507.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, 2020

 

 

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))

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

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. 

 

 

 

 

 


 

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, 2020, PCTEL, Inc. issued a press release regarding its financial results for the first quarter ended March 31, 2020.  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, 2020, of PCTEL, Inc. announcing its financial results for the first quarter ended March 31, 2020.

 

 

 

 



 

 

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, 2020

 

 

 

 

 

 

 

 

 

PCTEL, INC.

 

 

By:

 

/s/ Kevin J. McGowan

 Kevin J. McGowan, Chief Financial Officer

 

pcti-ex991_6.htm

EXHIBIT 99.1

  

PCTEL Reports First Quarter Financial Results

BLOOMINGDALE, Illinois – May 7, 2020 – PCTEL, Inc. (Nasdaq: PCTI) announced its results for the first quarter ended March 31, 2020.

 

Highlights

 

 

Revenue of $17.5 million in the quarter, 15% lower compared to the first quarter 2019. Revenue was higher by 10% for the test and measurement product line, but lower by 24% in the higher volume antenna product line compared to the first quarter 2019.

 

 

Gross profit margin of 46.9% in the first quarter, up 4.9% compared to the gross profit margin in the first quarter 2019. The percentage increase in the first quarter is a result of higher revenues for test and measurement products and an increase in the gross margin percentage for antenna products.

 

 

GAAP net loss per share of $0.04 in the first quarter compared to a GAAP net loss per share of $0.02 in the first quarter 2019.  

 

 

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

 

 

Non-GAAP net income per diluted share of $0.01 in the first quarter compared to Non-GAAP net income per diluted share of $0.04 in the first quarter 2019.

 

 

Adjusted EBITDA as a percent of revenue of 3.8% in the first quarter compared to 6.6% in the first quarter 2019.

 

 

$38.3 million of cash and short-term investments and no debt at March 31, 2020 compared to $39.7 million and no debt at December 31, 2019. During the first quarter 2020, the Company repurchased shares valued at $2.0 million pursuant to a share repurchase program that has been terminated.

 

“Our priorities during this COVID-19 pandemic are to keep our employees safe and to serve our customers in critical infrastructure markets,” said David Neumann, PCTEL’s CEO. “While first quarter revenue didn’t meet our financial plan, we are pleased with our record-setting scanning receiver revenue in the quarter. This result reinforces our belief that 5G will be a growth driver for several years. We are well-positioned for the long-term with our cost structure and competitive products that enable wireless connectivity for mission critical applications.”

CONFERENCE CALL / WEBCAST  

 


 

PCTELs management team will discuss the Companys results today at 4:30 p.m. ET. The call can be accessed by dialing (844) 407-9500 (United States/Canada) or (862) 298-0850 (International). 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 (877) 481-4010 (United States /Canada), or (919) 882-2331 (International), PIN number: 34239.

About PCTEL

PCTEL is a leading global provider of wireless technology, including purpose-built Industrial IoT devices, antenna systems, and test and measurement solutions. Trusted by our customers for over 25 years, we solve complex wireless challenges to help organizations stay connected, transform, and grow.

 

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 about the Company’s expectations regarding the impact of the COVID-19 pandemic; our future financial performance; growth of our antenna solutions and test and measurement businesses; the impact of our transition plan for manufacturing inside and outside China; the anticipated demand for certain products including those related to public safety, the Industrial IoT, 5G and intelligent transportation; 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 disruptions to the Company’s workforce, operations, supply chain and customer demand caused by the COVID-19 pandemic and impact of the pandemic on the Company’s results of operations, financial condition and stock price; the impact of data densification and IoT on capacity and coverage demand; the 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. © 2020 PCTEL, Inc. All rights reserved.

 

For further information contact:

 

Kevin McGowanSuzanne Cafferty

CFOVice President, Global Marketing

PCTEL, Inc.PCTEL, Inc.

(630) 339-2051(630) 339-2105

public.relations@pctel.com


 

 

 

 

 

PCTEL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

(in thousands, except share data)

 

 

 

(unaudited)

 

 

 

 

 

 

 

March 31,

 

 

December 31,

 

 

 

2020

 

 

2019

 

ASSETS

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

9,662

 

 

$

7,094

 

Short-term investment securities

 

 

28,608

 

 

 

32,556

 

Accounts receivable, net of allowances of $117 and $104 at March 31, 2020 and

   December 31, 2019, respectively

 

 

13,918

 

 

 

17,380

 

Inventories, net

 

 

11,133

 

 

 

11,935

 

Prepaid expenses and other assets

 

 

1,568

 

 

 

1,842

 

Total current assets

 

 

64,889

 

 

 

70,807

 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

12,130

 

 

 

11,985

 

Goodwill

 

 

3,332

 

 

 

3,332

 

Intangible assets, net

 

 

0

 

 

 

144

 

Other noncurrent assets

 

 

2,748

 

 

 

2,969

 

TOTAL ASSETS

 

$

83,099

 

 

$

89,237

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

Accounts payable

 

$

3,984

 

 

$

3,190

 

Accrued liabilities

 

 

5,770

 

 

 

9,382

 

Total current liabilities

 

 

9,754

 

 

 

12,572

 

Long-term liabilities

 

 

4,289

 

 

 

3,315

 

Total liabilities

 

 

14,043

 

 

 

15,887

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Common stock, $0.001 par value, 100,000,000 shares authorized, 18,456,149 and 18,611,289

   shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively

 

 

18

 

 

 

19

 

Additional paid-in capital

 

 

130,438

 

 

 

133,954

 

Accumulated deficit

 

 

(60,993

)

 

 

(60,305

)

Accumulated other comprehensive loss

 

 

(407

)

 

 

(318

)

Total stockholders’ equity

 

 

69,056

 

 

 

73,350

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 

$

83,099

 

 

$

89,237

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

 

 

 

 

 

PCTEL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

(in thousands, except per share data)

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2020

 

 

2019

 

 

 

 

 

 

 

 

 

 

REVENUES

 

$

17,506

 

 

$

20,590

 

COST OF REVENUES

 

 

9,291

 

 

 

11,932

 

GROSS PROFIT

 

 

8,215

 

 

 

8,658

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

Research and development

 

 

3,029

 

 

 

3,003

 

Sales and marketing

 

 

3,142

 

 

 

2,798

 

General and administrative

 

 

2,802

 

 

 

3,253

 

Amortization of intangible assets

 

 

33

 

 

 

73

 

Restructuring expenses

 

 

87

 

 

 

0

 

Total operating expenses

 

 

9,093

 

 

 

9,127

 

OPERATING LOSS

 

 

(878

)

 

 

(469

)

Other income, net

 

 

198

 

 

 

162

 

LOSS BEFORE INCOME TAXES

 

 

(680

)

 

 

(307

)

Expense for income taxes

 

 

8

 

 

 

10

 

NET LOSS

 

$

(688

)

 

$

(317

)

 

 

 

 

 

 

 

 

 

Net Loss per Share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.04

)

 

$

(0.02

)

Diluted

 

$

(0.04

)

 

$

(0.02

)

 

 

 

 

 

 

 

 

 

Weighted Average Shares:

 

 

 

 

 

 

 

 

Basic

 

 

18,207

 

 

 

17,617

 

Diluted

 

 

18,207

 

 

 

17,617

 

 

 

 

 

 

 

 

 

 

Cash dividend per share

 

$

0.055

 

 

$

0.055

 

 

 

 

 

 

 

 

 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PCTEL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in thousands)

 

 

 

Year Ended March 31,

 

.

 

2020

 

 

2019

 

 

 

 

 

 

 

 

 

 

Operating Activities:

 

 

 

 

 

 

 

 

Net loss

 

$

(688

)

 

$

(317

)

  Adjustments to reconcile net loss to net cash provided by operating activities:

 

 

 

 

 

 

 

 

    Depreciation

 

 

748

 

 

 

711

 

    Intangible asset amortization

 

 

144

 

 

 

240

 

    Stock-based compensation

 

 

562

 

 

 

882

 

    Loss on disposal/sale of property and equipment

 

 

7

 

 

 

0

 

    Restructuring costs

 

 

63

 

 

 

(3

)

    Bad debt provision

 

 

18

 

 

 

7

 

  Changes in operating assets and liabilities, net of acquisitions:

 

 

 

 

 

 

 

 

    Accounts receivable

 

 

3,432

 

 

 

(512

)

    Inventories

 

 

760

 

 

 

38

 

    Prepaid expenses and other assets

 

 

470

 

 

 

23

 

    Accounts payable

 

 

737

 

 

 

554

 

    Income taxes payable

 

 

8

 

 

 

(22

)

    Other accrued liabilities

 

 

(2,011

)

 

 

(39

)

    Deferred revenue

 

 

39

 

 

 

(23

)

      Net cash provided by operating activities

 

 

4,289

 

 

 

1,539

 

Investing Activities:

 

 

 

 

 

 

 

 

  Capital expenditures

 

 

(1,516

)

 

 

(311

)

  Purchase of investments

 

 

(9,918

)

 

 

(13,893

)

  Redemptions/maturities of short-term investments

 

 

13,866

 

 

 

14,177

 

      Net cash provided by (used in) investing activities

 

 

2,432

 

 

 

(27

)

Financing Activities:

 

 

 

 

 

 

 

 

Proceeds from issuance of common stock

 

 

59

 

 

 

338

 

Payment of withholding tax on stock-based compensation

 

 

(1,106

)

 

 

(743

)

Principle payments on finance leases

 

 

(20

)

 

 

(26

)

Purchase of common stock from repurchase program

 

 

(2,000

)

 

 

0

 

Cash dividends

 

 

(1,032

)

 

 

(1,016

)

Net cash used in financing activities

 

 

(4,099

)

 

 

(1,447

)

 

 

 

 

 

 

 

 

 

Net increase in cash and cash equivalents

 

 

2,622

 

 

 

65

 

Effect of exchange rate changes on cash

 

 

(54

)

 

 

61

 

Cash and cash equivalents, beginning of period

 

 

7,094

 

 

 

4,329

 

Cash and Cash Equivalents, End of Period

 

$

9,662

 

 

$

4,455

 

 

 

 

 

 

 

 

 

 

 

 

 


 

 

 

 

 

 

 

 

 

 

PCTEL, INC.

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

(in thousands)

 

 

 

Three Months Ended March 31, 2020

 

 

 

 

Antenna Products

 

 

Test & Measurement Products

 

 

Corporate

 

 

Total

 

 

REVENUES

 

$

11,460

 

 

$

6,083

 

 

$

(37

)

 

$

17,506

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GROSS PROFIT

 

$

3,918

 

 

$

4,297

 

 

$

0

 

 

$

8,215

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GROSS PROFIT %

 

 

34.2

%

 

 

70.6

%

 

 

 

 

 

 

46.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

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,

 

 

 

 

 

2020

 

 

2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Loss

 

$

(878

)

 

$

(469

)

 

 

 

 

 

 

 

 

 

 

 

 

(a)

Add:

 

 

 

 

 

 

 

 

 

 

Amortization of intangible assets

 

 

 

 

 

 

 

 

 

 

     -Cost of revenues

 

 

111

 

 

 

167

 

 

 

     -Operating expenses

 

 

33

 

 

 

73

 

 

 

Restructuring

 

 

87

 

 

 

0

 

 

 

Stock Compensation:

 

 

 

 

 

 

 

 

 

 

     -Cost of revenues

 

 

72

 

 

 

103

 

 

 

     -Engineering

 

 

137

 

 

 

172

 

 

 

-Sales & marketing

 

 

150

 

 

 

180

 

 

 

     -General & administrative

 

 

203

 

 

 

427

 

 

 

 

 

 

793

 

 

 

1,122

 

 

 

Non-GAAP Operating Income (Loss)

 

$

(85

)

 

$

653

 

 

 

% of revenue

 

 

-0.5

%

 

 

3.2

%

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31,

 

 

 

 

 

2020

 

 

2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Loss

 

$

(688

)

 

$

(317

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

(a)

Non-GAAP adjustment to operating loss

 

 

793

 

 

 

1,122

 

 

 

Income Taxes

 

 

(1

)

 

 

(55

)

 

 

 

 

 

792

 

 

 

1,067

 

 

 

Non-GAAP Net Income

 

$

104

 

 

$

750

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP Income per Share:

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.01

 

 

$

0.04

 

 

 

Diluted

 

$

0.01

 

 

$

0.04

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighed Average Shares:

 

 

 

 

 

 

 

 

 

 

Basic

 

 

18,207

 

 

 

17,617

 

 

 

Diluted

 

 

18,343

 

 

 

17,660

 

 

 

This schedule reconciles the Company's GAAP operating loss to its non-GAAP operating 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 income (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,

 

 

 

 

 

 

 

 

2020

 

 

2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Loss

 

 

 

$

(878

)

 

$

(469

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Add:

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

 

 

748

 

 

 

711

 

 

 

 

Intangible amortization

 

 

 

 

144

 

 

 

240

 

 

 

 

Restructuring expenses

 

 

 

 

87

 

 

 

0

 

 

 

 

Stock compensation expenses

 

 

 

 

562

 

 

 

882

 

 

 

 

Adjusted EBITDA

 

 

 

$

663

 

 

$

1,364

 

 

 

 

% of revenue

 

 

 

 

3.8

%

 

 

6.6

%

 

 

 

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.