BLOOMINGDALE, Ill.--(BUSINESS WIRE)--PCTEL, Inc. (NASDAQ: PCTI), a leader in Performance Critical TELecom solutions, announced its results for the second quarter and first half ended June 30, 2017.
The Company sold its engineering services operations in July. At June 30, 2017 the assets sold were classified as assets held for sale and the services operations are accounted for as discontinued operations.
Highlights From Continuing Operations
- Revenue of $21.5 million in the second quarter and $44.5 million in the first half, a 1% increase in the quarter and a 10% increase in the half compared to last year. Connected Solutions revenue was up 7% in the quarter and 12% in the half. RF Solutions was down 16% in the quarter and up 3% in the half.
- Gross profit margin of 41.7% in the second quarter and 41.4% in the first half, down 20 basis points in the quarter and up 90 basis points in the half compared to last year.
- Net loss per share of $0.01 in the second quarter and break even in the first half, compared to a net loss of $0.49 per share in the quarter and $0.52 in the half 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 of $0.05 per share in the second quarter and $0.10 in the first half compared to net income of $0.08 in the quarter and the half last year.
- Adjusted EBITDA margin as a percent of revenue of 8% in the second quarter and the first half compared to 10% in the quarter and 7% in the half last year.
- $34.2 million of cash and short-term investments at June 30, 2017. The Company generated free cash flow (cash flow from operations less capital spending) of approximately $2.0 million in the quarter and $2.9 million in the half.
“We are pleased to see continued antenna revenue growth in small cell, fleet, and utilities markets. Consistent with the Company’s investment thesis, antennas drove growth while RF Test tools generated profitable revenue,” said David Neumann, PCTEL’s CEO. “The recent sale of our non-core engineering services operation allows us to concentrate on our mission of being a best in class RF products company.”
CONFERENCE CALL / WEBCAST
PCTEL’s management team will discuss the Company’s results today at 5:15 p.m. ET. The call can be accessed by dialing (888) 782-2072 (U.S. / Canada) or (706) 679-6397 (International), conference ID: 47850677. The call will also be webcast at http://investor.pctel.com/events.cfm.
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: 47850677.
About PCTEL
PCTEL delivers Performance Critical TELecom technology solutions to the wireless industry. We are a leading global supplier of antennas and wireless network testing solutions. PCTEL Connected Solutions designs and manufactures precision antennas. PCTEL 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). PCTEL RF Solutions provides test tools that improve the performance of wireless networks globally. Mobile operators, neutral hosts, and equipment manufacturers rely on PCTEL’s scanning receivers and testing solutions to analyze, design, and optimize next generation wireless networks.
For more information, please visit the following websites.
PCTEL
Corporate: http://www.pctel.com/
PCTEL
Connected Solutions: http://www.antenna.com/
PCTEL
RF Solutions: http://rfsolutions.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 Connected Solutions and RF Solutions businesses, anticipated demand for certain products, including antennas for small cell, enterprise WiFi, IoT and FirstNet applications, and the impact of the divestiture of our engineering services assets 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 actual growth in the APAC region, impact of data densification and IoT on capacity and coverage demand, impact of 5G, customer demand for these types of products and services generally, growth and continuity in PCTEL’s vertical markets, 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, INC. | ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
(in thousands, except share data) | ||||||||
(unaudited) | ||||||||
June 30, | December 31, | |||||||
2017 | 2016 | |||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | 11,875 | $ | 14,855 | ||||
Short-term investment securities | 22,340 | 18,456 | ||||||
Accounts receivable, net of allowance for doubtful accounts of $257 and $273 at | ||||||||
June 30, 2017 and December 31, 2016, respectively | 17,735 | 19,101 | ||||||
Inventories, net | 13,783 | 14,442 | ||||||
Prepaid expenses and other assets | 1,365 | 1,498 | ||||||
Current assets held for sale | 694 | 50 | ||||||
Total current assets | 67,792 | 68,402 | ||||||
Property and equipment, net | 12,310 | 11,796 | ||||||
Goodwill | 3,332 | 3,332 | ||||||
Intangible assets, net | 2,694 | 3,275 | ||||||
Deferred tax assets, net | 5,647 | 4,512 | ||||||
Other noncurrent assets | 83 | 36 | ||||||
Non-current assets held for sale | 0 | 813 | ||||||
TOTAL ASSETS | $ | 91,858 | $ | 92,166 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Accounts payable | $ | 6,009 | $ | 6,073 | ||||
Accrued liabilities | 6,300 | 7,177 | ||||||
Total current liabilities | 12,309 | 13,250 | ||||||
Other long-term liabilities | 472 | 391 | ||||||
Total liabilities | 12,781 | 13,641 | ||||||
Stockholders’ equity: | ||||||||
Common stock, $0.001 par value, 100,000,000 shares authorized, 17,791,498 and 17,335,122 | ||||||||
shares issued and outstanding at June 30, 2017 and December 31, 2016, respectively | 18 | 17 | ||||||
Additional paid-in capital | 134,748 | 134,480 | ||||||
Accumulated deficit | (55,463 | ) | (55,590 | ) | ||||
Accumulated other comprehensive loss | (226 | ) | (382 | ) | ||||
Total stockholders’ equity | 79,077 | 78,525 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 91,858 | $ | 92,166 |
PCTEL, INC. | |||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) | |||||||||||||||||
(in thousands, except per share data) | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||||
REVENUES | $ | 21,501 | $ | 21,308 | $ | 44,471 | $ | 40,491 | |||||||||
COST OF REVENUES | 12,539 | 12,374 | 26,055 | 24,097 | |||||||||||||
GROSS PROFIT | 8,962 | 8,934 | 18,416 | 16,394 | |||||||||||||
OPERATING EXPENSES: | |||||||||||||||||
Research and development | 2,667 | 2,523 | 5,383 | 5,130 | |||||||||||||
Sales and marketing | 2,912 | 3,090 | 6,165 | 5,954 | |||||||||||||
General and administrative | 3,598 | 3,256 | 6,937 | 6,185 | |||||||||||||
Amortization of intangible assets | 124 | 129 | 248 | 284 | |||||||||||||
Restructuring expenses | 0 | 22 | 0 | 216 | |||||||||||||
Total operating expenses | 9,301 | 9,020 | 18,733 | 17,769 | |||||||||||||
OPERATING LOSS | (339 | ) | (86 | ) | (317 | ) | (1,375 | ) | |||||||||
Other income, net | 14 | 8 | 42 | 14 | |||||||||||||
LOSS BEFORE INCOME TAXES | (325 | ) | (78 | ) | (275 | ) | (1,361 | ) | |||||||||
(Benefit) expense for income taxes | (140 | ) | 7,703 | (274 | ) | 6,957 | |||||||||||
NET LOSS FROM CONTINUING OPERATIONS | (185 | ) | (7,781 | ) | (1 | ) | (8,318 | ) | |||||||||
NET LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX BENEFIT | (168 | ) | (3,292 | ) | (382 | ) | (4,211 | ) | |||||||||
NET LOSS | $ | (353 | ) | $ | (11,073 | ) | (383 | ) | $ | (12,529 | ) | ||||||
Net Loss per Share From Continuing Operations: | |||||||||||||||||
Basic | $ | (0.01 | ) | $ | (0.49 | ) | $ | (0.00 | ) | $ | (0.52 | ) | |||||
Diluted | $ | (0.01 | ) | $ | (0.49 | ) | $ | (0.00 | ) | $ | (0.52 | ) | |||||
Net Loss per Share From Discontinued Operations: | |||||||||||||||||
Basic | $ | (0.01 | ) | $ | (0.21 | ) | $ | (0.02 | ) | $ | (0.26 | ) | |||||
Diluted | $ | (0.01 | ) | $ | (0.21 | ) | $ | (0.02 | ) | $ | (0.26 | ) | |||||
Net Loss per Share: | |||||||||||||||||
Basic | $ | (0.02 | ) | $ | (0.69 | ) | $ | (0.02 | ) | $ | (0.78 | ) | |||||
Diluted | $ | (0.02 | ) | $ | (0.69 | ) | $ | (0.02 | ) | $ | (0.78 | ) | |||||
Weighted Average Shares: | |||||||||||||||||
Basic | 16,534 | 15,979 | 16,437 | 16,149 | |||||||||||||
Diluted | 16,534 | 15,979 | 16,437 | 16,149 | |||||||||||||
Cash dividend per share | $ | 0.05 | $ | 0.05 | $ | 0.10 | $ | 0.10 |
PCTEL, INC. | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
(unaudited, in thousands) | ||||||||
Six Months Ended June 30, | ||||||||
|
2017 | 2016 | ||||||
Operating Activities: | ||||||||
Net loss from continuing operations | $ | (1 | ) | $ | (8,318 | ) | ||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
Depreciation | 1,262 | 1,319 | ||||||
Intangible asset amortization | 581 | 618 | ||||||
Stock-based compensation | 1,797 | 2,090 | ||||||
Loss on disposal/sale of property and equipment | 3 | 5 | ||||||
Restructuring costs | (58 | ) | 109 | |||||
Deferred tax provision | (423 | ) | 6,700 | |||||
Changes in operating assets and liabilities, net of acquisitions: | ||||||||
Accounts receivable | 1,451 | 2,770 | ||||||
Inventories | 779 | 2,325 | ||||||
Prepaid expenses and other assets | 96 | 157 | ||||||
Accounts payable | (232 | ) | (1,907 | ) | ||||
Income taxes payable | (186 | ) | (54 | ) | ||||
Other accrued liabilities | (694 | ) | (576 | ) | ||||
Deferred revenue | 20 | 41 | ||||||
Net cash provided by operating activities | 4,395 | 5,279 | ||||||
Investing Activities: | ||||||||
Capital expenditures | (1,544 | ) | (1,268 | ) | ||||
Proceeds from disposal of property and equipment | 0 | 1 | ||||||
Purchases of investments | (23,071 | ) | (28,519 | ) | ||||
Redemptions/maturities of short-term investments | 19,187 | 31,274 | ||||||
Net cash (used in) provided by investing activities | (5,428 | ) | 1,488 | |||||
Financing Activities: | ||||||||
Proceeds from issuance of common stock | 867 | 350 | ||||||
Payments for repurchase of common stock | 0 | (4,095 | ) | |||||
Payment of withholding tax on stock-based compensation | (692 | ) | (187 | ) | ||||
Principle payments on capital leases | (41 | ) | (9 | ) | ||||
Cash dividends | (1,752 | ) | (1,723 | ) | ||||
Net cash used in financing activities | (1,618 | ) | (5,664 | ) | ||||
Cash flows from discontinued operations: | ||||||||
Net cash used in operating activities | (349 | ) | (690 | ) | ||||
Net cash used in investing activities | (16 | ) | (124 | ) | ||||
Net (decrease) increase in cash and cash equivalents | (3,016 | ) | 289 | |||||
Effect of exchange rate changes on cash | 36 | (39 | ) | |||||
Cash and cash equivalents, beginning of year | 14,855 | 7,055 | ||||||
Cash and Cash Equivalents, End of Period | $ | 11,875 | $ | 7,305 |
PCTEL, INC. | ||||||||||||||||||||
P&L INFORMATION BY SEGMENT - Continuing Operations (unaudited) | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Three Months Ended June 30, 2017 | Six Months Ended June 30, 2017 | |||||||||||||||||||
Connected |
RF Solutions | Corporate | Total |
Connected |
RF Solutions | Corporate | Total | |||||||||||||
REVENUES | $16,866 | $4,661 | ($26 | ) | $21,501 | $34,137 | $10,418 | ($84 | ) | $44,471 | ||||||||||
GROSS PROFIT | 5,731 | 3,223 | 8 | 8,962 | 11,135 | 7,270 | 11 | 18,416 | ||||||||||||
OPERATING (LOSS) INCOME | $2,349 | $411 | ($3,099 | ) | ($339 | ) | $4,095 | $1,432 | ($5,844 | ) | ($317 | ) | ||||||||
Three Months Ended June 30, 2016 | Six Months Ended June 30, 2016 | |||||||||||||||||||
Connected |
RF Solutions | Corporate | Total |
Connected |
RF Solutions | Corporate | Total | |||||||||||||
REVENUES | $15,781 | $5,572 | ($45 | ) | $21,308 | $30,480 | $10,116 | ($105 | ) | $40,491 | ||||||||||
GROSS PROFIT | 4,941 | 3,983 | 10 | 8,934 | 9,265 | 7,122 | 7 | 16,394 | ||||||||||||
OPERATING (LOSS) INCOME | $1,792 | $859 | ($2,737 | ) | ($86 | ) | $3,094 | $786 | ($5,255 | ) | ($1,375 | ) |
Reconciliation of GAAP to non-GAAP Results - Continuing Operations (unaudited) |
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(in thousands except per share information) | |||||||||||||
Reconciliation of GAAP operating loss to non-GAAP operating income - Continuing Operations (a) |
|||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||
2017 |
2016 |
2017 |
2016 |
||||||||||
Operating Loss | ($339 | ) | ($86 | ) | ($317 | ) | ($1,375 | ) | |||||
(a) | Add: | ||||||||||||
Amortization of intangible assets | |||||||||||||
-Cost of revenues | 167 | 167 | 333 | 333 | |||||||||
-Operating expenses | 124 | 129 | 248 | 284 | |||||||||
Restructuring | 0 | 22 | 0 | 216 | |||||||||
TelWorx investigation: | |||||||||||||
-General & Administrative | 0 | (1 | ) | 0 | 5 | ||||||||
Stock Compensation: | |||||||||||||
-Cost of revenues | 72 | 73 | 133 | 141 | |||||||||
-Engineering | 120 | 175 | 266 | 342 | |||||||||
-Sales & Marketing | 126 | 161 | 246 | 301 | |||||||||
-General & Administrative | 770 | 892 | 1,152 | 1,306 | |||||||||
1,379 | 1,618 | 2,378 | 2,928 | ||||||||||
Non-GAAP Operating Income | $1,040 | $1,532 | $2,061 | $1,553 | |||||||||
% of revenue | 4.8 | % | 7.2 | % | 4.6 | % | 3.8 | % | |||||
Reconciliation of GAAP net loss to non-GAAP net (loss) income - Continuing Operations (b) |
|||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||
2017 |
2016 |
2017 |
2016 |
||||||||||
Net Loss | ($185 | ) | ($7,781 | ) | ($1 | ) | ($8,318 | ) | |||||
Adjustments: | |||||||||||||
(a) | Non-GAAP adjustment to operating loss | 1,379 | 1,618 | 2,378 | 2,928 | ||||||||
(b) | Other income related to SEC investigation of TelWorx | 0 | 1 | 0 | (5 | ) | |||||||
(b) | Income Taxes | (330 | ) | 7,426 | (653 | ) | 6,676 | ||||||
1,049 | 9,045 | 1,725 | 9,599 | ||||||||||
Non-GAAP Net Income | $864 | $1,264 | $1,724 | $1,281 | |||||||||
Non-GAAP Earning per Share: | |||||||||||||
Basic | $0.05 | $0.08 | $0.10 | $0.08 | |||||||||
Diluted | $0.05 | $0.08 | $0.10 | $0.08 | |||||||||
Weighed Average Shares: | |||||||||||||
Basic | 16,534 | 15,979 | 16,437 | 16,149 | |||||||||
Diluted | 17,015 | 15,979 | 16,921 | 16,312 |
This schedule reconciles the Company's GAAP operating loss and GAAP net loss to its non-GAAP operating (loss) income and non-GAAP net (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. |
|
(a) These adjustments reflect stock based compensation expense, amortization of intangible assets, restructuring charges, and general and administrative expenses associated with the SEC investigation of TelWorx. |
|
|
|
(b) These adjustments include the items described in footnote (a) as well as other income for insurance claims related to the SEC investigation of TelWorx, legal settlements, and non-cash income tax expense. |
Reconciliation of GAAP to non-GAAP SEGMENT INFORMATION - Continuing Operations (unaudited) (a) |
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(in thousands) | |||||||||||||||||||||
Three Months Ended June 30, 2017 | Six Months Ended June 30, 2017 | ||||||||||||||||||||
Connected |
RF |
Corporate | Total |
Connected |
RF |
Corporate | Total | ||||||||||||||
Operating (Loss) Income | $2,349 | $411 | ($3,099 | ) | ($339 | ) | $4,095 | $1,432 | ($5,844 | ) | ($317 | ) | |||||||||
Add: | |||||||||||||||||||||
Amortization of intangible assets: | |||||||||||||||||||||
-Cost of revenues | 0 | 167 | 0 | 167 | 0 | 333 | 0 | 333 | |||||||||||||
-Operating expenses | 39 | 85 | 0 | 124 | 78 | 170 | 0 | 248 | |||||||||||||
Stock Compensation: | |||||||||||||||||||||
-Cost of revenues | 43 | 29 | 0 | 72 | 82 | 51 | 0 | 133 | |||||||||||||
-Engineering | 62 | 58 | 0 | 120 | 117 | 149 | 0 | 266 | |||||||||||||
-Sales & Marketing | 79 | 47 | 0 | 126 | 164 | 82 | 0 | 246 | |||||||||||||
-General & Administrative | 46 | 17 | 707 | 770 | 89 | 31 | 1,032 | 1,152 | |||||||||||||
269 | 403 | 707 | 1,379 | 530 | 816 | 1,032 | 2,378 | ||||||||||||||
Non-GAAP Operating (Loss) Income | $2,618 | $814 | ($2,392 | ) | $1,040 | $4,625 | $2,248 | ($4,812 | ) | $2,061 | |||||||||||
Three Months Ended June 30, 2016 | Six Months Ended June 30, 2016 | ||||||||||||||||||||
Connected |
RF |
Corporate | Total |
Connected |
RF |
Corporate | Total | ||||||||||||||
Operating (Loss) Income | $1,792 | $859 | ($2,737 | ) | ($86 | ) | $3,094 | $786 | ($5,255 | ) | ($1,375 | ) | |||||||||
Add: | |||||||||||||||||||||
Amortization of intangible assets: | |||||||||||||||||||||
-Cost of revenues | 0 | 167 | 0 | 167 | 0 | 333 | 0 | 333 | |||||||||||||
-Operating expenses | 44 | 85 | 0 | 129 | 114 | 170 | 0 | 284 | |||||||||||||
Restructuring expenses | 0 | 5 | 17 | 22 | 44 | 99 | 73 | 216 | |||||||||||||
TelWorx investigation: | |||||||||||||||||||||
-General & Administrative | 0 | 0 | (1 | ) | (1 | ) | 0 | 0 | 5 | 5 | |||||||||||
Stock Compensation: | |||||||||||||||||||||
-Cost of Goods Sold | 43 | 30 | 0 | 73 | 84 | 57 | 0 | 141 | |||||||||||||
-Engineering | 30 | 145 | 0 | 175 | 72 | 270 | 0 | 342 | |||||||||||||
-Sales & Marketing | 113 | 48 | 0 | 161 | 200 | 101 | 0 | 301 | |||||||||||||
-General & Administrative | 52 | 95 | 745 | 892 | 92 | 165 | 1,049 | 1,306 | |||||||||||||
282 | 575 | 761 | 1,618 | 606 | 1,195 | 1,127 | 2,928 | ||||||||||||||
Non-GAAP Operating (Loss) Income | $2,074 | $1,434 | ($1,976 | ) | $1,532 | $3,700 | $1,981 | ($4,128 | ) | $1,553 |
This schedule reconciles the Company's GAAP operating income (loss) by segment 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. |
|
(a) These adjustments reflect stock based compensation expense, amortization of intangible assets, restructuring charges, and general and administrative expenses associated with the SEC investigation of TelWorx. |
PCTEL, Inc. |
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Reconciliation of GAAP operating loss to Adjusted EBITDA - Continuing Operations (a) |
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(in thousands) | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2017 |
2016 |
2017 |
2016 |
||||||||||||
Operating Loss | ($339 | ) | ($86 | ) | ($317 | ) | ($1,375 | ) | |||||||
(a) | Add: | ||||||||||||||
Depreciation and amortization | 633 | 659 | 1,262 | 1,319 | |||||||||||
Intangible amortization | 291 | 296 | 581 | 617 | |||||||||||
Stock compensation expenses | 1,088 | 1,301 | 1,797 | 2,090 | |||||||||||
Restructuring - operating expenses | 0 | 22 | 0 | 216 | |||||||||||
TelWorx investigation- operating expenses | 0 | (1 | ) | 0 | 5 | ||||||||||
Adjusted EBITDA | $1,673 | $2,191 | $3,323 | $2,872 | |||||||||||
% of revenue | 7.8 | % | 10.3 | % | 7.5 | % | 7.1 | % |
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. |
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(a) Adjusted EBITDA is defined as net income before interest, income taxes, depreciation and amortization. These adjustments reflect depreciation, amortization of intangible assets, stock compensation expenses, restructuring expenses, and general and administrative expenses associated with the SEC investigation of TelWorx. |
Restated GAAP Results - Continuing Operations (unaudited) |
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(in thousands except per share information) | |||||||||||||||||||||||||||||||||
FY2015 | FY2016 | FY2017 | |||||||||||||||||||||||||||||||
Q1 |
Q2 |
Q3 |
Q4 |
Q1 |
Q2 |
Q3 |
Q4 |
Q1 |
Q2 |
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REVENUES | $23,158 | $23,032 | $22,393 | $21,950 | $19,183 | $21,308 | $20,892 | $23,623 | $22,970 | $21,501 | |||||||||||||||||||||||
COST OF REVENUES | 13,535 | 14,272 | 14,211 | 13,388 | 11,724 | 12,374 | 12,637 | 13,860 | 13,516 | 12,539 | |||||||||||||||||||||||
GROSS PROFIT | 9,623 | 8,760 | 8,182 | 8,562 | 7,459 | 8,934 | 8,255 | 9,763 | 9,454 | 8,962 | |||||||||||||||||||||||
OPERATING EXPENSES: | |||||||||||||||||||||||||||||||||
Research and development | 2,738 | 2,904 | 2,863 | 2,699 | 2,607 | 2,523 | 2,451 | 2,577 | 2,716 | 2,667 | |||||||||||||||||||||||
Sales and marketing | 3,273 | 3,108 | 3,307 | 3,285 | 2,864 | 3,090 | 3,116 | 3,646 | 3,253 | 2,912 | |||||||||||||||||||||||
General and administrative | 3,321 | 3,108 | 2,682 | 2,809 | 2,928 | 3,256 | 2,847 | 2,873 | 3,339 | 3,598 | |||||||||||||||||||||||
Amortization of intangible assets | 435 | 558 | 470 | 441 | 155 | 129 | 124 | 124 | 124 | 124 | |||||||||||||||||||||||
Restructuring expenses | 0 | 432 | 411 | 767 | 194 | 22 | 17 | - | 0 | 0 | |||||||||||||||||||||||
Total operating expenses | 9,767 | 10,110 | 9,733 | 10,001 | 8,748 | 9,020 | 8,555 | 9,220 | 9,432 | 9,301 | |||||||||||||||||||||||
OPERATING (LOSS) INCOME | (144 | ) | (1,350 | ) | (1,551 | ) | (1,439 | ) | (1,289 | ) | (86 | ) | (300 | ) | 543 | 22 | (339 | ) | |||||||||||||||
Other income, net | 44 | 2,205 | 534 | 504 | 6 | 8 | 35 | 63 | 28 | 14 | |||||||||||||||||||||||
(LOSS) INCOME BEFORE INCOME TAXES | (100 | ) | 855 | (1,017 | ) | (935 | ) | (1,283 | ) |
|
(78 | ) |
|
(265 | ) | 606 | 50 |
|
(325 | ) | |||||||||||||
Expense (benefit) for income taxes | (36 | ) | 303 | (391 | ) | (333 | ) | (746 | ) | 7,703 | (354 | ) | 5,173 | (134 | ) | (140 | ) | ||||||||||||||||
NET (LOSS) INCOME FROM CONTINUING OPERATIONS | (64 | ) | 552 | (626 | ) | (602 | ) | (537 | ) | (7,781 | ) | 89 | (4,567 | ) | 184 | (185 | ) | ||||||||||||||||
NET (LOSS) INCOME FROM DISCONTINUED OPERATIONS | 31 | 171 | 203 | 304 | (919 | ) | (3,292 | ) | 86 | (760 | ) | (214 | ) | (168 | ) | ||||||||||||||||||
NET (LOSS) INCOME | ($33 | ) | $723 | ($423 | ) | ($298 | ) | ($1,456 | ) |
($11,073 |
) |
$175 | ($5,327 | ) | ($30 | ) | ($353 | ) | |||||||||||||||
Earning per Share - Continuing Operations: | |||||||||||||||||||||||||||||||||
Basic | ($0.00 | ) | $0.03 | ($0.04 | ) | ($0.04 | ) | ($0.03 | ) | ($0.49 | ) | $0.01 | ($0.28 | ) | $0.01 | ($0.01 | ) | ||||||||||||||||
Diluted | ($0.00 | ) | $0.03 | ($0.04 | ) | ($0.04 | ) | ($0.03 | ) | ($0.49 | ) | $0.01 | ($0.28 | ) | $0.01 | ($0.01 | ) | ||||||||||||||||
Earning per Share - Discontinued Operations: | |||||||||||||||||||||||||||||||||
Basic | $0.00 | $0.01 | $0.01 | $0.02 | ($0.06 | ) | ($0.21 | ) | $0.01 | ($0.05 | ) | ($0.01 | ) | ($0.01 | ) | ||||||||||||||||||
Diluted | $0.00 | $0.01 | $0.01 | $0.02 | ($0.06 | ) | ($0.21 | ) | $0.01 | ($0.05 | ) | ($0.01 | ) | ($0.01 | ) | ||||||||||||||||||
Earning per Share: | |||||||||||||||||||||||||||||||||
Basic | ($0.00 | ) | $0.04 | ($0.02 | ) | ($0.02 | ) | ($0.09 | ) | ($0.69 | ) | $0.01 | ($0.33 | ) | ($0.00 | ) | ($0.02 | ) | |||||||||||||||
Diluted | ($0.00 | ) | $0.04 | ($0.02 | ) | ($0.02 | ) | ($0.09 | ) | ($0.69 | ) | $0.01 | ($0.32 | ) | ($0.00 | ) | ($0.02 | ) | |||||||||||||||
Weighed Average Shares: | |||||||||||||||||||||||||||||||||
Basic | 18,312 | 18,257 | 17,626 | 16,820 | 16,324 | 15,979 | 16,106 | 16,194 | 16,340 | 16,534 | |||||||||||||||||||||||
Diluted | 18,525 | 18,408 | 17,809 | 16,969 | 16,324 | 15,979 | 16,245 | 16,194 | 16,715 | 16,534 |
Reconciliation of GAAP to non-GAAP Results - Continuing Operations (unaudited) |
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(in thousands except per share information) | |||||||||||||||||||||||||||||||||
Reconciliation of GAAP operating loss to non-GAAP operating income - Continuing Operations (a) |
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FY2015 | FY2016 | FY2017 | |||||||||||||||||||||||||||||||
Q1 |
Q2 |
Q3 |
Q4 |
Q1 |
Q2 |
Q3 |
Q4 |
Q1 |
Q2 |
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Operating Income (Loss) | ($100 | ) | ($1,350 | ) | ($1,017 | ) | ($1,439 | ) | ($1,289 | ) | ($86 | ) | ($300 | ) | $543 | $22 | ($339 | ) | |||||||||||||||
(a) | Add: | ||||||||||||||||||||||||||||||||
Amortization of intangible assets: | |||||||||||||||||||||||||||||||||
-Cost of revenues | 20 | 241 | 167 | 167 | 167 | 167 | 167 | 167 | 166 | 167 | |||||||||||||||||||||||
-Operating expenses | 435 | 558 | 470 | 441 | 155 | 129 | 124 | 124 | 124 | 124 | |||||||||||||||||||||||
Restructuring: | |||||||||||||||||||||||||||||||||
-Cost of revenues | 0 | 114 | 132 | 42 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||
-Operating expenses | 0 | 432 | 411 | 767 | 194 | 22 | 17 | 0 | 0 | 0 | |||||||||||||||||||||||
TelWorx investigation: | |||||||||||||||||||||||||||||||||
-General & Administrative | 38 | 54 | 9 | 7 | 5 | (1 | ) | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
Stock Compensation: | |||||||||||||||||||||||||||||||||
-Cost of revenues | 52 | 80 | 64 | 54 | 68 | 73 | 78 | 63 | 61 | 72 | |||||||||||||||||||||||
-Engineering | 115 | 31 | 99 | 175 | 167 | 175 | 183 | 125 | 147 | 120 | |||||||||||||||||||||||
-Sales & Marketing | 151 | (17 | ) | 220 | (142 | ) | 140 | 161 | 176 | 140 | 119 | 126 | |||||||||||||||||||||
-General & Administrative | 153 | 171 | 203 | 304 | 414 | 892 | 541 | 451 | 382 | 770 | |||||||||||||||||||||||
964 | 1,664 | 1,775 | 1,815 | 1,310 | 1,618 | 1,286 | 1,070 | 999 | 1,379 | ||||||||||||||||||||||||
Non-GAAP Operating Income | $864 | $314 | $758 | $376 | $21 | $1,532 | $986 | $1,613 | $1,021 | $1,040 | |||||||||||||||||||||||
% of revenue | 3.7 | % | 1.4 | % | 3.4 | % | 1.7 | % | 0.1 | % | 7.2 | % | 4.7 | % | 6.8 | % | 4.4 | % | 4.8 | % | |||||||||||||
Reconciliation of GAAP net loss to non-GAAP net (loss) income - Continuing Operations (b) |
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FY2015 | FY2016 | FY2017 | |||||||||||||||||||||||||||||||
Q1 |
Q2 |
Q3 |
Q4 |
Q1 |
Q2 |
Q3 |
Q4 |
Q1 |
Q2 |
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Net Income (Loss) | ($64 | ) | $552 | ($626 | ) | ($602 | ) | ($537 | ) | ($7,781 | ) | $89 | ($4,567 | ) | $184 | ($185 | ) | ||||||||||||||||
Adjustments: | |||||||||||||||||||||||||||||||||
(a) | Non-GAAP adjustment to operating loss | 964 | 1,664 | 1,775 | $ 1,815 | 1,310 | 1,618 | 1,286 | 1,070 | 999 | 1,379 | ||||||||||||||||||||||
(b) | Other income related to SEC investigation of TelWorx | (38 | ) | (54 | ) | (10 | ) | $ (1 | ) | (5 | ) | 1 | 0 | 0 | 0 | 0 | |||||||||||||||||
Legal Settlement - Amendment to Nexgen APA | 0 | (2,160 | ) | (500 | ) | $ (500 | ) | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||
(b) | Income Taxes | (185 | ) | 248 | (450 | ) | $ (401 | ) | (750 | ) | 7,426 | (538 | ) | 4,871 | (424 | ) | (330 | ) | |||||||||||||||
741 | (302 | ) | 815 | $ 913 | 555 | 9,045 | 748 | 5,941 | 575 | 1,049 | |||||||||||||||||||||||
Non-GAAP Net Income (Loss) | $677 | $250 | $189 | $ 311 | $18 | $1,264 | $837 | $1,374 | $759 | $864 | |||||||||||||||||||||||
Non-GAAP Earning per Share: | |||||||||||||||||||||||||||||||||
Basic | $0.04 | $0.01 | $0.01 | $0.02 | $0.00 | $0.08 | $0.05 | $0.08 | $0.05 | $0.05 | |||||||||||||||||||||||
Diluted | $0.04 | $0.01 | $0.01 | $0.02 | $0.00 | $0.08 | $0.05 | $0.08 | $0.05 | $0.05 | |||||||||||||||||||||||
Weighed Average Shares: | |||||||||||||||||||||||||||||||||
Basic | 18,312 | 18,257 | 17,626 | 16,820 | 16,324 | 15,979 | 16,106 | 16,194 | 16,340 | 16,340 | |||||||||||||||||||||||
Diluted | 18,525 | 18,408 | 17,809 | 16,969 | 16,324 | 15,979 | 16,245 | 16,439 | 16,715 | 16,715 |
This schedule reconciles the Company's GAAP operating loss and GAAP net loss to its non-GAAP operating (loss) income and non-GAAP net (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. |
|
(a) These adjustments reflect stock based compensation expense, amortization of intangible assets, restructuring charges, and general and administrative expenses associated with the SEC investigation of TelWorx. |
|
(b) These adjustments include the items described in footnote (a) as well as other income for insurance claims related to the SEC investigation of TelWorx, legal settlements, and non-cash income tax expense. |
PCTEL, Inc. |
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Reconciliation of GAAP operating loss to Adjusted EBITDA - Continuing Operations (a) |
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(in thousands) | |||||||||||||||||||||||||||||||||
FY2015 | FY2016 | FY2017 | |||||||||||||||||||||||||||||||
Q1 |
Q2 |
Q3 |
Q4 |
Q1 |
Q2 |
Q3 |
Q4 |
Q1 |
Q2 |
||||||||||||||||||||||||
Operating (Loss) Income | ($144 | ) |
($1,350 |
) |
($1,551 | ) | ($1,439 | ) | ($1,289 | ) | ($86 | ) | ($300 | ) | $543 | $22 | ($339 | ) | |||||||||||||||
(a) | Add: | ||||||||||||||||||||||||||||||||
Depreciation and amortization | 634 | 656 | 660 | 660 | 660 | 659 | 675 | 635 | 628 | 633 | |||||||||||||||||||||||
Intangible amortization | 455 | 799 | 637 | 608 | 322 | 296 | 291 | 291 | 290 | 291 | |||||||||||||||||||||||
Stock compensation expenses | 471 | 265 | 586 | 391 | 789 | 1,301 | 978 | 779 | 709 | 1,088 | |||||||||||||||||||||||
Restructuring - operating expenses | 0 | 432 | 411 | 767 | 194 | 22 | 17 | 0 | 0 | 0 | |||||||||||||||||||||||
TelWorx investigation- operating expenses | 38 | 54 | 9 | 7 | 5 | (1 | ) | 0 | 0 | 0 | 0 | ||||||||||||||||||||||
Adjusted EBITDA | $1,454 | $856 | $752 | $994 | $681 |
$2,191 |
$1,661 | $2,248 | $1,649 |
$1,673 |
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% of revenue | 6.3 | % | 3.7 | % | 3.4 | % | 4.5 | % | 3.6 | % | 10.3 | % | 8.0 | % | 9.5 | % | 7.2 | % | 7.3 | % |
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. |
|
(a) Adjusted EBITDA is defined as net income before interest, income taxes, depreciation and amortization. These adjustments reflect depreciation, amortization of intangible assets, stock compensation expenses, restructuring expenses, and general and administrative expenses associated with the SEC investigation of TelWorx. |
|