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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 000-27115

 

PCTEL, Inc.

(Exact Name of Registrant as Specified in Its Charter)

 

 

Delaware

 

77-0364943

(State or Other Jurisdiction of

 

(I.R.S. Employer

Incorporation or Organization)

 

Identification Number)

 

 

 

471 Brighton Drive,

 

 

Bloomingdale, IL

 

60108

(Address of Principal Executive Office)

 

(Zip Code)

 

Registrant's Telephone Number, Including Area Code: (630) 372-6800

 

 

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 (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Date File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition of “large accelerated filer,” "accelerated filer,” “smaller reporting company," and “emerging growth company” in Rule 12b-2 of the Exchange Act:

 

Large accelerated filer

 

Accelerated filer

Non-accelerated filer

 

Smaller reporting company

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.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No

 

As of November 9, 2022, the registrant had 18,773,994 shares of common stock, $0.001 par value per share, outstanding.

 

 


 

PCTEL, INC.

Form 10-Q

For the Quarterly Period Ended September 30, 2022

TABLE OF CONTENTS

 

PART I

 

FINANCIAL INFORMATION

 

Page

Item 1

 

Financial Statements (unaudited)

 

1

 

 

Condensed Consolidated Balance Sheets

 

1

 

 

Condensed Consolidated Statements of Operations

 

2

 

 

Condensed Consolidated Statements of Comprehensive Income (Loss)

 

3

 

 

Condensed Consolidated Statements of Stockholders' Equity

 

4

 

 

Condensed Consolidated Statements of Cash Flows

 

5

 

 

Notes to the Condensed Consolidated Financial Statements

 

6

Item 2

 

Management's Discussion and Analysis of Financial Condition and Results of Operations

 

27

Item 3

 

Quantitative and Qualitative Disclosures about Market Risk

 

35

Item 4

 

Controls and Procedures

 

35

 

 

 

 

 

PART II

 

OTHER INFORMATION

 

36

Item 1

 

Legal Proceedings

 

36

Item 1A

 

Risk Factors

 

36

Item 2

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

36

Item 3

 

Defaults Upon Senior Securities

 

36

Item 4

 

Mine Safety Disclosures

 

36

Item 5

 

Other Information

 

36

Item 6

 

Exhibits

 

36

Signatures

 

 

 

37

 

 


 

PART I – FINANCIAL INFORMATION

Item 1: Financial Statements (unaudited)

PCTEL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

(in thousands, except share data)

 

 

 

 

 

 

 

 

 

 

September 30,

 

 

December 31,

 

 

 

2022

 

 

2021

 

ASSETS

 

 

 

 

 

 

Cash and cash equivalents

 

$

5,858

 

 

$

8,192

 

Short-term investment securities

 

 

22,147

 

 

 

22,562

 

Accounts receivable, net of allowances of $143 and $64 at September 30, 2022 and

 

 

 

 

 

 

December 31, 2021, respectively

 

 

20,553

 

 

 

18,905

 

Inventories, net

 

 

16,730

 

 

 

13,691

 

Prepaid expenses and other assets

 

 

1,374

 

 

 

1,747

 

Total current assets

 

 

66,662

 

 

 

65,097

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

10,300

 

 

 

11,949

 

Goodwill

 

 

5,778

 

 

 

6,334

 

Intangible assets, net

 

 

1,058

 

 

 

1,579

 

Other noncurrent assets

 

 

2,636

 

 

 

2,438

 

TOTAL ASSETS

 

$

86,434

 

 

$

87,397

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

Accounts payable

 

$

6,194

 

 

$

5,360

 

Accrued liabilities

 

 

10,618

 

 

 

11,117

 

Total current liabilities

 

 

16,812

 

 

 

16,477

 

Long-term liabilities

 

 

3,533

 

 

 

3,999

 

Total liabilities

 

 

20,345

 

 

 

20,476

 

Stockholders’ equity:

 

 

 

 

 

 

Common stock, $0.001 par value, 50,000,000 shares authorized at

 

 

 

 

 

 

September 30, 2022 and December 31, 2021, respectively, and 18,676,629 and 18,238,030

 

 

 

 

 

 

shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively

 

 

19

 

 

 

18

 

Additional paid-in capital

 

 

123,964

 

 

 

123,998

 

Accumulated deficit

 

 

(55,916

)

 

 

(56,735

)

Accumulated other comprehensive loss

 

 

(1,978

)

 

 

(360

)

Total stockholders’ equity

 

 

66,089

 

 

 

66,921

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 

$

86,434

 

 

$

87,397

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

1


 

PCTEL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

(in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

REVENUES

 

$

25,988

 

 

$

22,411

 

 

$

73,506

 

 

$

61,799

 

COST OF REVENUES

 

 

14,052

 

 

 

12,157

 

 

 

40,810

 

 

 

33,266

 

GROSS PROFIT

 

 

11,936

 

 

 

10,254

 

 

 

32,696

 

 

 

28,533

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

3,178

 

 

 

3,338

 

 

 

9,784

 

 

 

9,754

 

Sales and marketing

 

 

3,600

 

 

 

3,347

 

 

 

10,910

 

 

 

9,497

 

General and administrative

 

 

3,705

 

 

 

2,817

 

 

 

10,399

 

 

 

9,228

 

Amortization of intangible assets

 

 

63

 

 

 

80

 

 

 

201

 

 

 

135

 

Restructuring expenses

 

 

57

 

 

 

(1

)

 

 

1,309

 

 

 

59

 

Total operating expenses

 

 

10,603

 

 

 

9,581

 

 

 

32,603

 

 

 

28,673

 

OPERATING INCOME (LOSS)

 

 

1,333

 

 

 

673

 

 

 

93

 

 

 

(140

)

Other income (expense), net

 

 

205

 

 

 

(4

)

 

 

330

 

 

 

(10

)

INCOME (LOSS) BEFORE INCOME TAXES

 

 

1,538

 

 

 

669

 

 

 

423

 

 

 

(150

)

(Benefit) Expense for income taxes

 

 

(434

)

 

 

5

 

 

 

(396

)

 

 

17

 

NET INCOME (LOSS)

 

$

1,972

 

 

$

664

 

 

$

819

 

 

$

(167

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (Loss) per Share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.11

 

 

$

0.04

 

 

$

0.05

 

 

$

(0.01

)

Diluted

 

$

0.11

 

 

$

0.04

 

 

$

0.04

 

 

$

(0.01

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Shares:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

18,166

 

 

 

17,945

 

 

 

18,099

 

 

 

18,078

 

Diluted

 

 

18,187

 

 

 

17,962

 

 

 

18,214

 

 

 

18,078

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

 

2


 

PCTEL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (unaudited)

(in thousands)

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME (LOSS)

 

$

1,972

 

 

$

664

 

 

$

819

 

 

$

(167

)

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER COMPREHENSIVE LOSS:

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

(686

)

 

 

(152

)

 

 

(1,618

)

 

 

(238

)

 

 

 

 

 

 

 

 

 

 

 

 

 

COMPREHENSIVE INCOME (LOSS)

 

$

1,286

 

 

$

512

 

 

$

(799

)

 

$

(405

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

 

3


 

PCTEL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(unaudited, in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

Total

 

 

 

 

 

 

Additional

 

 

 

 

 

Other

 

 

Stockholders'

 

 

 

Common

 

 

Paid-In

 

 

Accumulated

 

 

Comprehensive

 

 

Equity of

 

 

 

Stock

 

 

Capital

 

 

Deficit

 

 

Loss

 

 

PCTEL, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BALANCE at JUNE 30, 2022

 

$

19

 

 

$

123,844

 

 

$

(57,888

)

 

$

(1,292

)

 

$

64,683

 

Stock-based compensation expense

 

 

0

 

 

 

1,147

 

 

 

0

 

 

 

0

 

 

 

1,147

 

Issuance of shares for stock purchase plans and stock options

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

Cancellation of shares for payment of withholding tax

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

Dividends paid ($0.055 per share)

 

 

0

 

 

 

(1,027

)

 

 

0

 

 

 

0

 

 

 

(1,027

)

Net income

 

 

0

 

 

 

0

 

 

 

1,972

 

 

 

0

 

 

 

1,972

 

Change in cumulative translation adjustment, net

 

 

0

 

 

 

0

 

 

 

0

 

 

 

(686

)

 

 

(686

)

BALANCE at SEPTEMER 30, 2022

 

$

19

 

 

$

123,964

 

 

$

(55,916

)

 

$

(1,978

)

 

$

66,089

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BALANCE at JUNE 30, 2021

 

$

19

 

 

$

126,791

 

 

$

(57,719

)

 

$

(68

)

 

 

69,023

 

Stock-based compensation expense

 

 

0

 

 

 

372

 

 

 

0

 

 

 

0

 

 

 

372

 

Issuance of shares for stock purchase plans and stock options

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

-

 

Cancellation of shares for payment of withholding tax

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

Repurchase of common stock

 

 

(1

)

 

 

(2,459

)

 

 

0

 

 

 

0

 

 

 

(2,460

)

Dividends paid ($0.055 per share)

 

 

0

 

 

 

(1,002

)

 

 

0

 

 

 

0

 

 

 

(1,002

)

Net income

 

 

0

 

 

 

0

 

 

 

664

 

 

 

0

 

 

 

664

 

Change in cumulative translation adjustment, net

 

 

0

 

 

 

0

 

 

 

0

 

 

 

(152

)

 

 

(152

)

BALANCE at SEPTEMBER 30, 2021

 

$

18

 

 

$

123,702

 

 

$

(57,055

)

 

$

(220

)

 

$

66,445

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BALANCE at DECEMBER 31, 2021

 

$

18

 

 

$

123,998

 

 

$

(56,735

)

 

$

(360

)

 

$

66,921

 

Stock-based compensation expense

 

 

1

 

 

 

3,006

 

 

 

0

 

 

 

0

 

 

 

3,007

 

Issuance of shares for stock purchase plans and stock options

 

 

0

 

 

 

404

 

 

 

0

 

 

 

0

 

 

 

404

 

Cancellation of shares for payment of withholding tax

 

 

0

 

 

 

(396

)

 

 

0

 

 

 

0

 

 

 

(396

)

Dividends paid ($0.165 per share)

 

 

0

 

 

 

(3,048

)

 

 

0

 

 

 

0

 

 

 

(3,048

)

Net income

 

 

0

 

 

 

0

 

 

 

819

 

 

 

0

 

 

 

819

 

Change in cumulative translation adjustment, net

 

 

0

 

 

 

0

 

 

 

0

 

 

 

(1,618

)

 

 

(1,618

)