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 7, 2016

 

 

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 7, 2016, PCTEL, Inc. issued a press release regarding its financial results for its fourth fiscal quarter and year ended December 31, 2015. 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 7, 2016, of PCTEL, Inc. announcing its financial results for its fourth fiscal quarter ended December 31, 2015.

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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 7, 2016

 

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EXHIBIT INDEX

 

Exhibit Number		Description
Exhibit 99.1		Press release, dated March 7, 2016, of PCTEL, Inc. announcing its financial results for its fourth fiscal quarter ended December 31, 2015.

Exhibit 99.1

 

PCTEL Achieves $26.1 Million in Fourth Quarter Revenue

$106.6 Million in 2015 Revenue

BLOOMINGDALE, IL. – March 7, 2016 — PCTEL, Inc. (NASDAQ:PCTI), a leader in Performance Critical Telecom solutions, announced its 2015 fourth quarter and annual results.

Fourth Quarter and Annual Highlights

$26.1 million in revenue for the quarter, a decrease of 11 percent from the same period last year. $106.6 million in revenue for the year, a decrease of a half percent as compared to 2014.

Gross profit margin of 34 percent in the quarter compared to 40 percent for the same period last year. Gross profit margin of 35 percent for the year, compared to 41 percent in 2014.

GAAP operating margin of negative seven percent for the quarter compared to operating margin of six percent for the same period last year. Operating margin for the year of negative five percent as compared to four percent in 2014.

GAAP net loss of $820,000 for the quarter, or $(0.05) per diluted share compared to net income of $2.0 million, or $0.11 per diluted share for the same period last year. $(1.6) million of net loss for the year, or $(0.09) per diluted share, as compared to net income of $4.6 million, or $0.25 per diluted share in 2014.

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 three percent in the quarter, compared to 12 percent in the same period last year. Non-GAAP operating margin for the year was two percent compared to 10 percent in 2014.

Non-GAAP net income of $611,000 or $0.04 per diluted share in the quarter, compared to $3.0 million or $0.16 per diluted share in the same period last year. Non-GAAP net income of $1.9 million or $0.11 per diluted share for the year compared to $8.8 million or $0.48 per diluted share in 2014.

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$31.8 million of cash and short-term investments at December 31, 2015, a decrease of approximately $2.5 million from the preceding quarter and a decrease of $28.2 million from 2014.

449,000 common shares repurchased in the quarter for $2.4 million. 1.94 million common shares repurchased in the year for $12.1 million.

$881,000 dividends paid in the quarter and $3.7 million paid in the year.

$869,000 of free cash flow in the quarter. $7.1 million of free cash flow in the year, an increase of $1.7 million from 2014.

“We made significant progress over the previous quarter led by strength in antenna and scanning receiver sales in North America,” said Marty Singer, PCTEL’s Chairman and CEO. “During the fourth quarter we also began to restructure our analytics and services operations, bringing in new leadership and sharpening our product focus on PCTEL’s traditional areas of strength. We believe that these efforts will lead to improved results in the second half of this year,” added Singer.

CONFERENCE CALL / WEBCAST

PCTEL’s management team will discuss the Company’s results today at 5:15 PM ET. The call can be accessed by dialing (877) 734-5369 (U.S. / Canada) or (706) 679-6397 (International), conference ID: 55187834. 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: 55187834.

About PCTEL

PCTEL, a global provider of RF expertise, delivers Performance Critical Telecom solutions to the wireless industry. PCTEL benchmarks and optimizes wireless networks with its data tools, engineering services, and RF products. PCTEL’s antennas and site solutions are vital elements for networks serving SCADA, fleet management, health care, public safety, and education.

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® Touch, SeeHawk® Collect, and SeeWave® tools. PCTEL’s sophisticated engineering services utilize these products as well as SeeHawk™ Analytics.

PCTEL Connected Solutions designs and delivers performance critical antennas and site solutions for public and private wireless networks globally. PCTEL’s performance critical 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 leverage our design, logistics, and support capabilities to deliver performance critical antenna and site solutions into carrier, railroad, utility applications, oil and gas, and other vertical markets.

PCTEL’s products are sold worldwide through direct and indirect channels. For more information, please visit the company’s web sites: pctel.com, antenna.com, or rfsolutions.pctel.com

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PCTEL Safe Harbor Statement

This press release and our related comments in our fourth quarter 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, new products and features, expectations regarding the future growth of our antenna and wireless RF businesses, and demand for engineering services 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 customer demand for these types of products and services generally, 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		Jack Seller
CFO		Public Relations
PCTEL, Inc.		PCTEL, Inc.
(630) 372-6800		(630)372-6800
		Jack.seller@pctel.com

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PCTEL, INC.

CONSOLIDATED BALANCE SHEETS (unaudited)

(in thousands, except share data)

 

		December 31, 2015				December 31, 2014
ASSETS
Cash and cash equivalents		$	7,055			$	20,432
Short-term investment securities			24,728				39,577
Accounts receivable, net of allowance for doubtful accounts of $314 and $121 at December 31, 2015 and December 31, 2014, respectively			21,001				23,874
Inventories, net			17,596				16,358
Deferred tax assets, net			0				2,281
Prepaid expenses and other assets			1,586				1,757
Total current assets			71,966				104,279
Property and equipment, net			13,839				14,842
Goodwill			3,332				161
Intangible assets, net			11,378				2,637
Deferred tax assets, net			13,155				9,710
Other noncurrent assets			40				40
TOTAL ASSETS		$	113,710			$	131,669
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable		$	6,735			$	5,495
Accrued liabilities			6,190				10,211
Total current liabilities			12,925				15,706
Other long-term liabilities			388				448
Total liabilities			13,313				16,154
Stockholders’ equity:
Common stock, $0.001 par value, 100,000,000 shares authorized, 17,654,236 and 18,571,419 shares issued and outstanding at December 31, 2015 and December 31, 2014, respectively			18				19
Additional paid-in capital			135,714				145,462
Accumulated deficit			(35,320	)			(30,101	)
Accumulated other comprehensive income (loss)			(15	)			135
Total stockholders’ equity			100,397				115,515
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		$	113,710			$	131,669

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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,
		2015				2014				2015				2014
REVENUES		$	26,138			$	29,395			$	106,615			$	107,164
COST OF REVENUES			17,287				17,634				69,354				63,577
GROSS PROFIT			8,851				11,761				37,261				43,587
OPERATING EXPENSES:
Research and development			2,699				2,766				11,205				11,736
Sales and marketing			3,639				3,649				14,196				12,961
General and administrative			2,887				2,997				12,399				12,819
Amortization of intangible assets			461				464				3,426				1,967
Impairment of goodwill			161				0				161				0
Restructuring charges			778				0				1,630				0
Total operating expenses			10,625				9,876				43,017				39,483
OPERATING INCOME (LOSS)			(1,774	)			1,885				(5,756	)			4,104
Other income, net			504				927				3,287				1,666
INCOME (LOSS) BEFORE INCOME TAXES			(1,270	)			2,812				(2,469	)			5,770
Expense (benefit) for income taxes			(450	)			817				(901	)			1,158
NET INCOME (LOSS)		($	820	)		$	1,995			($	1,568	)		$	4,612
Net Income (Loss) per Share:
Basic		($	0.05	)		$	0.11			($	0.09	)		$	0.25
Diluted		($	0.05	)		$	0.11			($	0.09	)		$	0.25
Weighed Average Shares:
Basic			16,820				18,154				17,737				18,159
Diluted			16,820				18,412				17,737				18,389
Cash dividend per share		$	0.05			$	0.04			$	0.20			$	0.16

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PCTEL, INC.

P&L INFORMATION BY SEGMENT (unaudited)

(in thousands)

 

		Three Months Ended December 31, 2015																Year Ended December 31, 2015
		Connected Solutions				RF Solutions				Corporate				Total				Connected Solutions				RF Solutions				Corporate				Total
REVENUES		$	16,675			$	9,506			($	43	)		$	26,138			$	69,579			$	37,255			($	219	)		$	106,615
GROSS PROFIT			4,838				4,000				13				8,851				20,426				16,803				32				37,261
OPERATING INCOME (LOSS)		$	675			($	8	)		($	2,441	)		($	1,774	)		$	5,040			($	298	)		($	10,498	)		($	5,756	)
		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

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Reconciliation of GAAP to non-GAAP Results (unaudited)

(in thousands except per share information)

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

 

				Three Months Ended December 31,								Year Ended December 31,
				2015				2014				2015				2014
		Operating Income (Loss)		($	1,774	)		$	1,885			($	5,756	)		$	4,104
(a)		Add:
		Amortization of intangible assets
		-Cost of Goods Sold			595				0				595				0
		-Operating expenses			461				464				3,426				1,967
		Impairment of goodwill			161				0				161				0
		Restructuring:
		-Cost of Goods Sold			42				0				288				0
		-Restructuring			778				0				1,630				0
		TelWorx investigation:
		-General & Administrative			7				580				107				1,266
		Legal settlement:
		-General & Administrative			0				0				0				75
		Stock Compensation:
		-Cost of Goods Sold			125				111				369				426
		-Engineering			175				150				419				658
		-Sales & Marketing			(132	)			170				238				661
		-General & Administrative			304				267				838				1,530
					2,516				1,742				8,071				6,583
		Non-GAAP Operating Income		$	742			$	3,627			$	2,315			$	10,687
		% of revenue			2.8	%			12.3	%			2.2	%			10.0	%

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

 

				Three Months Ended December 31,								Year Ended December 31,
				2015				2014				2015				2014
		Net Income (Loss)		($	820	)		$	1,995			($	1,568	)		$	4,612
		Adjustments:
(a)		Non-GAAP adjustment to operating income			2,516				1,742				8,071				6,583
(b)		Other income related to SEC investigation of TelWorx			(1	)			(908	)			(102	)			(1,568	)
(b)		Legal Settlement - Amendment to Nexgen APA			(500	)			0				(3,160	)			0
(b)		Legal Settlement - other			0				0				0				(75	)
(b)		Income Taxes			(584	)			161				(1,322	)			(770	)
					1,431				995				3,487				4,170
		Non-GAAP Net Income		$	611			$	2,990			$	1,919			$	8,782
		Non-GAAP Earning per Share:
		Basic		$	0.04			$	0.16			$	0.11			$	0.48
		Diluted		$	0.04			$	0.16			$	0.11			$	0.48
		Weighed Average Shares:
		Basic			16,820				18,154				17,737				18,159
		Diluted			16,969				18,412				18,257				18,389

This schedule reconciles the Company’s GAAP operating loss and GAAP net loss 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 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.

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Reconciliation of GAAP To non-GAAP SEGMENT INFORMATION (unaudited) (a)

(in thousands except per share information)

 

		Three Months Ended December 31, 2015																Year Ended December 31, 2015
		Connected Solutions				RF Solutions				Corporate				Total				Connected Solutions				RF Solutions				Corporate				Total
Operating Income (Loss)		$	675			($	8	)		($	2,441	)		($	1,774	)		$	5,040			($	298	)		($	10,498	)		($	5,756	)
Add:
Amortization of intangible assets
-Cost of Goods Sold			39				556				0				595				39				556				0				595
-Operating expenses			156				305				0				461				811				2,615				0				3,426
Impairment of goodwill			0				161				0				161				0				161				0				161
TelWorx investigation:
-General & Administrative			0				0				7				7				0				0				107				107
Restructuring:
-Cost of Goods Sold			42				0				0				42				288				0				0				288
-Restructuring charges			755				23				0				778				1,293				337				0				1,630
Stock Compensation:
-Cost of Goods Sold			28				97				0				125				82				287				0				369
-Engineering			49				126				0				175				104				315				0				419
-Sales & Marketing			88				(220	)			0				(132	)			261				(23	)			0				238
-General & Administrative			(18	)			70				252				304				(12	)			113				737				838
			1,139				1,118				259				2,516				2,866				4,361				844				8,071
Non-GAAP Operating Income (Loss)		$	1,814			$	1,110			($	2,182	)		$	742			$	7,906			$	4,063			($	9,654	)		$	2,315
		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 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			129				41				0				170				530				131				0				661
-General & Administrative			54				31				182				267				256				129				1,145				1,530
			565				415				762				1,742				2,444				1,653				2,486				6,583
Non-GAAP Operating Income (Loss)		$	2,643			$	2,599			($	1,615	)		$	3,627			$	9,801			$	8,986			($	8,100	)		$	10,687

This schedule reconciles the Company’s GAAP operating income (loss) by segment 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.

 

(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.