PCTEL Achieves $25.8 Million in Fourth Quarter Revenue

PCTEL Achieves $25.8 Million in Fourth Quarter Revenue

29 Percent Increase Over Same Period Last Year

$88.8 Million in 2012 Revenue; 16 Percent Increase


BLOOMINGDALE, Ill.--(BUSINESS WIRE)-- PCTEL, Inc. (NAS: PCTI) , a leader in simplifying wireless and site solutions for private and public networks, announced its 2012 annual and fourth quarter results.

Fourth Quarter and Annual Highlights

  • $25.8 million in revenue for the quarter, an increase of 29 percent over the same period last year. $88.8 million in revenue for the year, an increase of 16 percent over 2011.

  • Gross profit margin of 38 percent in the quarter, compared to 46 percent in the same period last year. Gross profit margin of 40 percent for the year, a decrease of (7) percent from 2011. The acquisition of Envision Wireless in October 2011 and TelWorx in July 2012 have established a new long term product mix starting in 2012 that is designed to yield a total Company gross profit margin in a range of 38 to 40 percent.

  • GAAP operating margin of negative (52) percent for the quarter, compared to operating margin of 2 percent for the same period last year. Operating margin for the year of negative (17) percent as compared to just under break even in 2011. The fourth quarter of 2012 contained a $12.6 million impairment of goodwill related to its TelWorx acquisition and $1.1 million impairment of intangible assets related to its PCTEL Secure segment. Without the impairments operating margin in the quarter and the year were 1 percent and negative (1) percent, respectively.

  • GAAP net loss available to common shareholders of $(8.3) million for the quarter, or $(0.48) per diluted share, compared to a net income of $548,000 or $0.03 per diluted share for the same period last year. $(9.3) million net loss for the year, or $(0.53) per diluted share, as compared to net income of $184,000 or $0.01 per diluted share in 2011. The goodwill and intangible asset impairment in the fourth quarter 2012 accounted for a net loss of approximately $(0.48) per diluted share in the quarter and year.

  • Non-GAAP operating profit and net income are measures the company uses to reflect the results of its core earnings. The Company's reporting of Non-GAAP net income excludes expenses for restructuring, gain or loss on sale of assets, stock based compensation, amortization and impairment of intangible assets and goodwill related to the Company's acquisitions, and non-cash related income tax expense.

    • Non-GAAP operating margin of 6 percent in the quarter, compared to 10 percent in the same period last year. Non-GAAP operating margin for the year was 6 percent as compared to 8 percent in 2011.

    • Non-GAAP net income of $1.2 million or $0.07 per diluted share in the quarter, as compared to $1.9 million or $0.11 per diluted share in the same period last year. Non-GAAP net income of $4.8 million or $0.27 per diluted share for the year, as compared to $5.9 million or $0.33 per diluted share in 2011.

  • $51.2 million of cash, short-term investments, and long-term investments at December 31, 2012, an increase of approximately $3.1 million from the preceding quarter. This change reflects approximately $3.9 million of cash flow from operations less approximately $0.8 million in capital expenditures. The cash and investments at December 31, 2012 do not include $4.25 million of cash received on March 27, 2013 as part of a settlement with Tim and Brenda Scronce related to the TelWorx transaction. For further details on the settlement see the Company's disclosure on Form 8-K filed March 27, 2013.

The Company also is providing and expanding upon guidance for the 2013 first quarter and annual revenue during their conference call. At this time, the Company anticipates revenue between $24.5 and $25.0 million for the quarter ending March 31, 2013 and between $100 and $104 million for the year.

"Our operating results reflect strong antenna sales into our vertical markets and the positive impact of acquired products and revenue," said Marty Singer, Chairman and CEO of PCTEL. "We anticipate that TD-LTE, the success of our MX and new EX-Flex product line, the growth of our in-building engineering services, and continued vertical market growth for antennas solutions, will ignite strong, overall revenue growth in 2013," added Singer.

CONFERENCE CALL / WEBCAST

PCTEL's management team will discuss the Company's results today at 5:00 PM ET. The call can be accessed by dialing (877) 734-5369 (U.S. / Canada) or (706) 679-6397 (International), conference ID: 99012641. 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: 99012641.

About PCTEL

PCTEL, Inc. (NAS: PCTI) , develops antenna, scanning receiver, and engineered site solutions and services for public and private networks. PCTEL RF Solutions specializes in the design, optimization and testing of today's wireless communication networks. The company's SeeGull® scanning receivers, SeeHawk® visualization tool, and Clarify® system, measure and analyze wireless signals for efficient cellular network planning, deployment, and optimization. PCTEL develops and supports scanning receivers for LTE, TD-LTE, EV-DO, CDMA, WCDMA, TD-SCDMA, GSM, and WiMAX networks. PCTEL Secure, which is part of RF Solutions, focuses on Android mobile platform security.

PCTEL Connected Solutions™ simplifies network deployment for wireless, data and communications applications for private network, public safety, and government customers. PCTEL Connected Solutions develops and delivers high-value YAGI, Land Mobile Radio, WiFi, GPS, In-Tunnel, Subway, and broadband antennas (parabolic and flat panel) through its MAXRAD®, Bluewave™ and Wi-Sys™ product lines. PCTEL also designs specialized towers, enclosures, fiber optic panels, and fiber jumper cables to deliver custom engineered site solutions. The company's vertical markets include SCADA, Health Care, Smart Grid, Positive Train Control, Precision Agriculture, Indoor Wireless, Telemetry, Off-loading, and Wireless Backhaul. PCTEL's products are sold worldwide through direct and indirect channels. For more information, please visit the company's web sites www.pctel.com, www.antenna.com, www.rfsolutions.pctel.com, www.connectedsolutions.pctel.com, www.towerworx.com, or www.pctelsecure.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 the continued vertical market growth of PCTEL's antenna solutions, the anticipated success of TD-LTE, MX and the new EX-Flex product line, and the growth of the Company's in-building engineering services business, resulting in overall revenue growth in 2013, 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 and the ability to implement new technologies and obtain protection for the related intellectual property. 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.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

December 31,

December 31,

2012

2011

ASSETS

Cash and cash equivalents

$

17,559

$

19,418

Short-term investment securities

33,596

42,210

Accounts receivable, net of allowance for doubtful accounts

of $222 and $132 at December 31, 2012 and December 31, 2011, respectively

18,586

14,342

Inventories, net

17,573

13,911

Deferred tax assets, net

1,484

896

Prepaid expenses and other assets

2,160

2,277

Total current assets

90,958

93,054

Property and equipment, net

14,777

13,590

Long-term investment securities

0

7,177

Goodwill

161

161

Intangible assets, net

7,004

9,332

Deferred tax assets, net

14,034

8,831

Other noncurrent assets

1,636

1,319

TOTAL ASSETS

$

128,570

$

133,464

LIABILITIES AND STOCKHOLDERS' EQUITY

Accounts payable

$

10,643

$

5,651

Accrued liabilities

5,916

7,092

Total current liabilities

16,559

12,743

Contingent consideration

1,130

0

Other long-term liabilities

2,736

2,144

3,866

2,144

Total liabilities

20,425

14,887

Redeemable equity

0

1,731

Stockholders' equity:

Common stock, $0.001 par value, 100,000,000 shares

authorized, 18,514,809 and 18,218,537 shares issued and

outstanding at December 31, 2012 and December 31, 2011, respectively

19

18

Additional paid-in capital

140,388

137,117

Accumulated deficit

(32,410

)

(20,941

)

Accumulated other comprehensive income

148

121

Total stockholders' equity of PCTEL, Inc.

108,145

116,315

Noncontrolling interest

0

531

Total equity

108,145

116,846

TOTAL LIABILITIES AND EQUITY

$

128,570

$

133,464

PCTEL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

(in thousands, except per share data)

Three Months Ended

Year Ended

December 31,

December 31,

2012

2011

2012

2011

REVENUES

$

25,842

$

20,008

$

88,849

$

76,844

COST OF REVENUES

15,910

10,723

53,029

40,982

GROSS PROFIT

9,932

9,285

35,820

35,862

OPERATING EXPENSES:

Research and development

2,770

2,921

11,224

11,912

Sales and marketing

3,450

2,639

11,357

10,492

General and administrative

2,946

2,563

11,000

10,799

Amortization of intangible assets

560

801

3,170

2,795

Impairment of goodwill and intangible assets

13,601

0

13,601

0

Restructuring charges

1

(8

)

157

117

Total operating expenses

23,328

8,916

50,509

36,115

OPERATING INCOME (LOSS)

(13,396

)

369

(14,689

)

(253

)

Other income, net

15

92

141

358

INCOME (LOSS) BEFORE INCOME TAXES

(13,381

)

461

(14,548

)

105

Expense (benefit) for income taxes

(5,058

)

229

(5,250

)

216

NET INCOME (LOSS)

(8,323

)

232

(9,298

)

(111

)

Less: Net loss attributable to noncontrolling interests

0

(417

)

(687

)

(1,158

)

NET INCOME (LOSS) ATTRIBUTABLE TO PCTEL, INC.

(8,323

)

649

(8,611

)

1,047

Less: adjustments to redemption value of noncontrolling interests

0

(101

)

(648

)

(863

)

NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS

($8,323

)

$

548

($9,259

)

$

184

Basic Earnings per Share:

Net income (loss) available to common shareholders

($0.48

)

$

0.03

($0.53

)

$

0.01

Diluted Earnings per Share:

Net income (loss) available to common shareholders

($0.48

)

$

0.03

($0.53

)

$

0.01

Weighted average shares - Basic

17,501

17,056

17,402

17,186

Weighted average shares - Diluted

17,501

17,652

17,402

17,739

Cash dividend per share

$

0.03

$

0.03

$

0.12

$

0.03

Reconciliation GAAP To non-GAAP Results Of Operations (unaudited)

(in thousands except per share information)

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

Three Months Ended December 31,

Year Ended December 31,

2012

2011

2012

2011

Operating Income (Loss)

($13,396

)

$

369

($14,689

)

($253

)

(a)

Add:

Amortization of intangible assets

560

801

3,170

2,795

Impairment of goodwill and intangible assets

13,601

0

13,601

0

Restructuring charges

1

(8

)

157

117

Share based payment - PCTEL Secure:

-Engineering

0

137