PCTI PCTEL Inc

 

 

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)

March 2, 2015

 

 

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, including Zip Code)

(630) 372-6800

(Registrant’s telephone number, including area code)

 

 

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 Instruction 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(b))

 

¨	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))

 

 

 

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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 March 2, 2015, PCTEL, Inc. issued a press release regarding its financial results for its fourth fiscal quarter ended December 31, 2014. 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 March 2, 2015, of PCTEL, Inc. announcing its financial results for its fourth fiscal quarter ended December 31, 2014.

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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: March 2, 2015

 

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EXHIBIT INDEX

 

Exhibit Number		Description
Exhibit 99.1		Press release, dated March 2, 2015, of PCTEL, Inc. announcing its financial results for its fourth fiscal quarter ended December 31, 2014.

Exhibit 99.1

 

PCTEL Achieves $29.4 Million in Fourth Quarter Revenue

$107.2 Million in 2014 Revenue

BLOOMINGDALE, IL. – March 2, 2015 — PCTEL, Inc. (NASDAQ:PCTI), a leader in Performance Critical Telecom solutions, announced its 2014 fourth quarter and annual results.

Fourth Quarter and Annual Highlights

$29.4 million in revenue for the quarter, an increase of 13 percent from the same period last year. $107.2 million in revenue for the year, an increase of three percent over 2013.

Gross profit margin of 40 percent in the quarter, compared to 42 percent for the same period last year. Gross profit margin of 41 percent for the year, compared to 40 percent in 2013.

GAAP operating margin from continuing operations of six percent for the quarter, compared to operating margin of two percent for the same period last year. Operating margin for the year of four percent as compared to break even in 2013.

GAAP net income from continuing operations of $2.0 million for the quarter, or $0.11 per diluted share, compared to net income of $453,000, or $0.02 per diluted share for the same period last year. $4.6 million of net income from continuing operations for the year, or $0.25 per diluted share, as compared to net income of $3.3 million, or $0.18 per diluted share in 2013.

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 from continuing operations of 12 percent in the quarter, compared to 10 percent in the same period last year. Non-GAAP operating margin for the year was 10 percent as compared to nine percent in 2013.

Non-GAAP net income from continuing operations of $3.0 million or $0.16 per diluted share in the quarter, as compared to $2.1 million or $0.12 per diluted share in the same period last year. Non-GAAP net income from continuing operations of $8.8 million or $0.48 per diluted share for the year, as compared to $7.6 million or $0.42 per diluted share in 2013. The 2014 Non-GAAP earnings represent a 4X increase over the last five years.

$60.0 million of cash and short-term investments at December 31, 2014, an increase of approximately $1.1 million from the preceding quarter. This quarterly change includes approximately $2.6 million of cash flow from operations and approximately $700,000 of capital expenditures.

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“Continued demand for in-building and small cell solutions drove our revenue growth, generating demand for our engineering services, scanning receivers, in-building antenna solutions, and our site solutions,” said Marty Singer, PCTEL’s Chairman and CEO. “We believe that we are off to a good start to 2015 with our recent announcement of an industry-leading five year warranty and our innovative VenU™ product line. We are preparing for the release of additional products during the Mobile World Congress this week,” added Singer.

CONFERENCE CALL / WEBCAST

PCTEL’s management team will discuss the Company’s results today at 8:30 AM ET. The call can be accessed by dialing (877) 734-5369 (U.S. / Canada) or (706) 679-6397 (International), conference ID: 13775109. 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: 13775109.

About PCTEL

PCTEL delivers Performance Critical Telecom solutions. Engineers rely upon PCTEL’s products and services to visualize, benchmark, and optimize wireless networks worldwide. PCTEL’s antennas and site solutions are vital elements for SCADA, oil and gas, utilities, fleet management, health care, public safety, education, small cell, and network timing.

PCTEL’s RF Solutions products and services improve the performance of wireless networks globally. PCTEL’s performance critical products include its MXflex™, IBflex™, and EXflex^® SeeGull^® scanning receivers and related SeeHawk^® and SeeWave™ tools. PCTEL’s sophisticated engineering services utilize these products as well as the Meridian™ network analytics tool.

PCTEL Connected Solutions™ designs and delivers performance critical antennas and site solutions for wireless networks globally. PCTEL’s performance critical MAXRAD^® and Bluewave™ antenna solutions include high rejection and high performance GPS and GNSS products, the industry leading Yagi portfolio, mobile and indoor LTE, broadband, and LMR antennas and PIM-rated antennas for transit, in-building, and small cell applications. We provide performance critical mobile towers for demanding emergency and oil and gas network applications and leverage our design, logistics, and support capabilities to deliver performance critical site solutions into carrier, railroad, and utility applications.

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, or www.rfsolutions.pctel.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 demand for in-building and small cell solutions generating growth in PCTEL’s in-building engineering services and scanning receiver sales, the impact of the five-year warranty, and the anticipated success of the Company’s new VenU™ and other products, are forward-looking statements within the meaning of the safe harbor. These statements are based on management’s current expectations and actual results may

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differ materially from those projected as a result of certain risks and uncertainties, including the customer demand for in-building and small cell solutions, PCTEL’s ability to successfully grow the wireless products business and its 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.

For further information contact:

 

John Schoen CFO PCTEL, Inc. (630) 372-6800		Jack Seller Public Relations PCTEL, Inc. (630)372-6800   Jack.seller@pctel.com

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PCTEL, INC.

CONSOLIDATED BALANCE SHEETS (unaudited)

(in thousands, except share data)

 

		December 31, 2014				December 31, 2013
ASSETS
Cash and cash equivalents		$	20,432			$	21,790
Short-term investment securities			39,577				36,105
Accounts receivable, net of allowance for doubtful accounts of $121 and $130 at December 31, 2014 and December 31, 2013, respectively			23,874				18,603
Inventories, net			16,358				14,535
Deferred tax assets, net			2,281				1,629
Prepaid expenses and other assets			1,757				3,166
Total current assets			104,279				95,828
Property and equipment, net			14,842				14,971
Goodwill			161				161
Intangible assets, net			2,637				4,604
Deferred tax assets, net			9,710				11,827
Other noncurrent assets			40				41
TOTAL ASSETS		$	131,669			$	127,432
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable		$	5,495			$	4,440
Accrued liabilities			10,211				7,803
Total current liabilities			15,706				12,243
Other long-term liabilities			448				3,137
Total liabilities			16,154				15,380
Stockholders’ equity:
Common stock, $0.001 par value, 100,000,000 shares authorized, 18,571,419 and 18,566,119 shares issued and outstanding at December 31, 2014 and December 31, 2013, respectively			19				19
Additional paid-in capital			145,462				143,572
Accumulated deficit			(30,101	)			(31,748	)
Accumulated other comprehensive income			135				209
Total stockholders’ equity			115,515				112,052
TOTAL LIABILITIES AND EQUITY		$	131,669			$	127,432

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PCTEL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

(in thousands, except per share data)

 

		Three Months Ended December 31,								Year Ended December 31,
		2014				2013				2014				2013
REVENUES		$	29,395			$	25,963			$	107,164			$	104,253
COST OF REVENUES			17,634				15,120				63,577				62,493
GROSS PROFIT			11,761				10,843				43,587				41,760
OPERATING EXPENSES:
Research and development			2,766				3,102				11,736				11,064
Sales and marketing			3,649				3,134				12,961				12,121
General and administrative			2,997				3,589				12,819				15,623
Amortization of intangible assets			464				596				1,967				2,400
Restructuring charges			0				2				0				256
Total operating expenses			9,876				10,423				39,483				41,464
OPERATING INCOME			1,885				420				4,104				296
Other income, net			927				600				1,666				5,378
INCOME BEFORE INCOME TAXES			2,812				1,020				5,770				5,674
Expense for income taxes			817				567				1,158				2,332
NET INCOME FROM CONTINUING OPERATIONS			1,995				453				4,612				3,342
INCOME (LOSS) FROM DISCONTINUED OPERATIONS, NET OF TAX EXPENSE (BENEFIT)			0				17				0				(91	)
NET INCOME		$	1,995			$	470			$	4,612			$	3,251
Earnings per Share from Continuing Operations:
Basic		$	0.11			$	0.03			$	0.25			$	0.19
Diluted		$	0.11			$	0.03			$	0.25			$	0.18
Earnings (Loss) per Share from Discontinued Operations:
Basic		$	0.00			$	0.00			$	0.00			($	0.01	)
Diluted		$	0.00			$	0.00			$	0.00			$	0.00
Earnings per Share:
Basic		$	0.11			$	0.03			$	0.25			$	0.18
Diluted		$	0.11			$	0.03			$	0.25			$	0.18
Weighed Average Shares:
Basic			18,154				17,916				18,159				17,797
Diluted			18,412				18,508				18,389				18,184
Cash dividend per share		$	0.040			$	0.035			$	0.160			$	0.140

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PCTEL, INC.

P&L INFORMATION BY SEGMENT (unaudited)

(in thousands)

 

		Three Months Ended December 31, 2014																Year Ended December 31, 2014
		Connected Solutions				RF Solutions				Corporate				Total				Connected Solutions				RF Solutions				Corporate				Total
REVENUES		$	19,924			$	9,535			($	64	)		$	29,395			$	72,333			$	35,113			($	282	)		$	107,164
GROSS PROFIT			6,183				5,572				6				11,761				22,818				20,743				26				43,587
OPERATING INCOME (LOSS)		$	2,078			$	2,184			($	2,377	)		$	1,885			$	7,357			$	7,333			($	10,586	)		$	4,104
		Three Months Ended December 31, 2013																Year Ended December 30, 2013
		Connected Solutions				RF Solutions				Corporate				Total				Connected Solutions				RF Solutions				Corporate				Total
REVENUES		$	17,349			$	8,693			($	79	)		$	25,963			$	74,223			$	30,310			($	280	)		$	104,253
GROSS PROFIT			5,368				5,471				4				10,843				22,720				19,018				22				41,760
OPERATING INCOME (LOSS)		$	1,140			$	2,109			($	2,829	)		$	420			$	6,012			$	7,248			($	12,964	)		$	296

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

(in thousands except per share information)

Reconciliation of GAAP operating income to non-GAAP operating income (a) from Continuing Operations

 

				Three Months Ended December 31,								Year Ended December 31,
				2014				2013				2014				2013
		Operating Income		$	1,885			$	420			$	4,104			$	296
(a)		Add:
		Amortization of intangible assets			464				596				1,967				2,400
		TelWorx restructuring:
		-Restructuring charges			0				2				0				256
		-Cost of Goods Sold			0				0				0				284
		TelWorx investigation:
		-General & Administrative			580				747				1,266				2,626
		Legal settlement
		-General & Administrative			0				0				75				0
		Stock Compensation:
		-Cost of Goods Sold			111				95				426				390
		-Engineering			150				185				658				689
		-Sales & Marketing			170				140				661				575
		-General & Administrative			267				402				1,530				1,786
					1,742				2,167				6,583				9,006
		Non-GAAP Operating Income		$	3,627			$	2,587			$	10,687			$	9,302
		% of revenue			12.3	%			10.0	%			10.0	%			8.9	%

Reconciliation of GAAP net income to non-GAAP net income (b) from Continuing Operations

 

				Three Months Ended December 31,								Year Ended December 31,
				2014				2013				2014				2013
		Net Income from Continuing Operations		$	1,995			$	453			$	4,612			$	3,342
		Adjustments:
(a)		Non-GAAP adjustment to operating income			1,742				2,167				6,583				9,006
		Other income related to the TelWorx settlement and       TelWorx SEC investigation			(908	)			(586	)			(1,568	)			(5,353	)
		Other legal settlements			0				0				(75	)			0
(b)		Income Taxes			161				99				(770	)			653
					995				1,680				4,170				4,306
		Non-GAAP Net Income from Continuing Operations		$	2,990			$	2,133			$	8,782			$	7,648
		Non-GAAP Earning per Share:
		Basic		$	0.16			$	0.12			$	0.48			$	0.43
		Diluted		$	0.16			$	0.12			$	0.48			$	0.42
		Weighed Average Shares:
		Basic			18,154				17,916				18,159				17,797
		Diluted			18,412				18,508				18,389				18,184

This schedule reconciles the Company’s GAAP operating income and GAAP net income to its non-GAAP operating income and non-GAAP net 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 TelWorx investigation.

(b) These adjustments include the items described in footnote (a) as well as other income for the TelWorx legal settlement and insurance claims related to the TelWorx investigation, and non-cash income tax expense.

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Reconciliation GAAP To non-GAAP SEGMENT INFORMATION (unaudited) (a) - Continuing Operations

(in thousands except per share information)

 

		Three Months Ended December 31, 2014																Year Ended December 31, 2014
		Connected Solutions				RF Solutions				Corporate				Total				Connected Solutions				RF Solutions				Corporate				Total
Operating Income (Loss)		$	2,078			$	2,184			($	2,377	)		$	1,885			$	7,357			$	7,333			($	10,586	)		$	4,104
Add:
Amortization of intangible assets			260				204				0				464				1,151				816				0				1,967
TelWorx restructuring:
-Restructuring charges			0				0				0				0				0				0				0				0
-Cost of Goods Sold			0				0				0				0				0				0				0				0
TelWorx investigation:
-General & Administrative			0				0				580				580				0				0				1,266				1,266
Legal settlement
-General & Administrative			0				0				0				0				0				0				75				75
Stock Compensation:
-Cost of Goods Sold			58				53				0				111				215				211				0				426
-Engineering			64				86				0				150				292				366				0				658
-Sales & Marketing			133				37				0				170				534				127				0				661
-General & Administrative			54				31				182				267				256				129				1,145				1,530
			569				411				762				1,742				2,448				1,649				2,486				6,583
Non-GAAP Operating Income (Loss)		$	2,647			$	2,595			($	1,615	)		$	3,627			$	9,805			$	8,982			($	8,100	)		$	10,687
		Three Months Ended December 31, 2013																Year Ended December 30, 2013
		Connected Solutions				RF Solutions				Corporate				Total				Connected Solutions				RF Solutions				Corporate				Total
Operating Income (Loss)		$	1,140			$	2,109			($	2,829	)		$	420			$	6,012			$	7,248			($	12,964	)		$	296
Add:
Amortization of intangible assets			392				204				0				596				1,573				827				0				2,400
TelWorx restructuring:
-Restructuring charges			2				0				0				2				256				0				0				256
-Cost of Goods Sold			0				0				0				0				284				0				0				284
TelWorx investigation:
-General & Administrative			0				0				747				747				0				0				2,626				2,626
Stock Compensation:
-Cost of Goods Sold			44				51				0				95				153				237				0				390
-Engineering			78				107				0				185				285				404				0				689
-Sales & Marketing			122				18				0				140				450				125				0				575
-General & Administrative			91				33				278				402				341				109				1,336				1,786
			729				413				1,025				2,167				3,342				1,702				3,962				9,006
Non-GAAP Operating Income (Loss)		$	1,869			$	2,522			($	1,804	)		$	2,587			$	9,354			$	8,950			($	9,002	)		$	9,302

This schedule reconciles the Company’s GAAP operating income by segment to its non-GAAP operating income and non-GAAP net 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 TelWorx investigation.