PCTEL achieved first quarter revenues of $23.0
million and gross profit margin of 50%
Advancement on key growth strategies
PCTEL, Inc. (Nasdaq: PCTI) (“PCTEL” or the “Company”), a leading
global provider of wireless technology solutions, today reported
results for the first quarter ended March 31, 2023.
First Quarter 2023
Highlights
- Revenues of $23.0 million
- GAAP gross profit margin of 50.2%
- GAAP net income of $1.3 million or $0.07 per diluted share
- Non-GAAP net income of $2.1 million or $0.12 per diluted
share
- Adjusted EBITDA increased 153% year-over-year to $2.8
million
- Announced new VerStack antenna platform for smarter rail
communication and Industrial IoT applications
- Announced the industry’s first automated uplink drive or walk
testing system for public safety radio networks
David Neumann, Chief Executive Officer, commented, “I am pleased
with the Company’s strong start in 2023. Our team has remained
focused on our three core growth strategies, including geographic
expansion, product innovation, and market penetration in high
growth industries. During the quarter, we furthered our
relationship with a European Electric Vehicle manufacturer, which
selected Smarteq antennas for two new vehicle models. Additionally,
we experienced strong 5G scanning receiver sales to global service
and rental customers. On the innovation side, we made exciting
progress, having announced the release of our new VerStack antenna
platform and our new, industry first automated uplink drive or walk
testing system for public safety radio networks. I look forward to
further expansion of our customer relationships and product
portfolio as we progress through 2023.”
First Quarter 2023 Financial
Summary
Summary Financials
Q1’23
Q1’22
Change
Revenue (000’s)
$22,973
$22,542
2%
Gross Profit Margin %
50.2%
41.4%
880bps
Adjusted EBITDA (000’s)
$2,788
$1,100
153%
GAAP Diluted EPS
$0.07
($0.09)
$0.16
Non-GAAP Diluted EPS
$0.12
$0.02
$0.10
First quarter 2023 revenues were $23.0 million, an increase of
2% from the year ago period. First quarter 2023 antennas and
industrial IoT device revenue was $15.6 million, a decrease of 8.7%
year-over-year, partially due to customers’ supply chain challenges
which delayed previously planned projects. First quarter 2023 Test
& Measurement revenue was $7.4 million, an increase of 33.0%
year-over-year due to U.S. sales of 5G scanning receivers and sales
to our global 5G rental market customers.
First quarter 2023 GAAP gross profit margin was 50.2%, compared
to 41.4% in the first quarter of 2022. The higher gross profit
margin was primarily due to higher Test and Measurement sales and
stronger gross margins within Antennas and IoT devices.
Adjusted EBITDA in the first quarter increased to $2.8 million
compared to $1.1 million in the first quarter of 2022. First
quarter 2023 GAAP net income was $1.3 million or diluted earnings
per share of $0.07 compared to GAAP net income of ($1.6) million or
($0.09) per share in the first quarter of 2022. Non-GAAP net income
was $2.1 million, or $0.12 diluted earnings per share, compared to
$0.3 million or $0.02 per share in the first quarter of 2022.
Cash, cash equivalents and investments were $30.3 million as of
March 31, 2023, an increase of approximately $0.3 million as
compared to December 31, 2022.
Second Quarter 2023
Outlook
The following ranges represent PCTEL’s current expectations for
the second quarter 2023 based upon available data and
estimates.
- Revenue: $20.0 million to $21.0 million
- Non-GAAP Gross Margin: 47% to 48%
- Non-GAAP EPS: $0.02 to $0.04
Kevin McGowan, Chief Financial Officer, explained, “The first
quarter exemplified the strength of our underlying business and the
demand for our suite of products, but we anticipate lower
sequential revenues and earnings in the second quarter of 2023 due
to customer and project delays, the impact of economic slowdown in
certain areas, and the completion of Test & Measurement
projects for OEM customers. Our balance sheet remains strong and
provides us with necessary flexibility to execute our growth
strategy and deliver strong shareholder returns.”
CONFERENCE CALL / WEBCAST
PCTEL’s management team will discuss the Company’s results today
at 4:30 p.m. ET. The call will also be webcast at
https://investor.pctel.com/news-events/webcasts-events. The call
can also be accessed by dialing (888) 506-0062 (United
States/Canada) or (973) 528-0011 (International), access code:
426385.
Replay: A replay will be available for two weeks after the call
on either the website listed above or by calling (877) 481-4010
(United States/Canada), or (919) 882-2331 (International), access
code: 48180.
About PCTEL
PCTEL is a leading global provider of wireless technology
solutions, including purpose-built Industrial IoT devices, antenna
systems, and test and measurement products. Trusted by our
customers for over 29 years, we solve complex wireless challenges
to help organizations stay connected, transform, and grow.
For more information, please visit our website at
https://www.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 about the Company’s expectations regarding our
future financial performance; growth of our antenna and Industrial
IoT product line and our test & measurement product line
through execution of our three growth strategies; the ability of
the Company to continue to innovate new products for its product
lines; the impact of development and adoption of wireless solutions
in the public safety, rail, logistics, agriculture, utilities, and
electric vehicle markets on our revenue generation; our ability to
expand our product lines in the European market and through
distribution channels; the anticipated demand for certain products,
including those related to public safety, industrial IoT, 5G (e.g.,
the Gflex); and the anticipated growth of public and private
wireless systems are forward-looking statements. 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 higher than expected inflation;
an economic recession in the Americas or globally; the disruptions
to the Company’s workforce, operations, supply chain and customer
demand caused by the pandemic and the impact of the pandemic and
ensuing supply chain disruption on the Company’s results of
operations, financial condition and stock price; the impact of data
densification and IoT on capacity and coverage demand; the impact
of 5G; customer demand and growth generally in the Company’s
defined market segments; the Company’s ability to access the
government market and create demand for its products; the Company’s
ability to expand its European presence and benefit from additional
antenna and Industrial IoT product offerings from Smarteq; and the
Company’s ability to grow its 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 and Gflex® are registered trademarks of PCTEL, Inc. © 2023
PCTEL, Inc. All rights reserved.
PCTEL, INC. CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited) (in thousands, except share data)
March 31,
December 31,
2023
2022
ASSETS Cash and cash equivalents
$
8,717
$
7,736
Short-term investment securities
21,570
22,254
Accounts receivable, net of allowances of $135 and $132 at March
31, 2023 and December 31, 2022, respectively
15,531
18,853
Inventories, net
17,626
18,918
Prepaid expenses and other assets
1,594
1,861
Total current assets
65,038
69,622
Property and equipment, net
9,819
10,004
Goodwill
5,946
5,935
Intangible assets, net
968
1,045
Other noncurrent assets
3,085
3,269
TOTAL ASSETS
$
84,856
$
89,875
LIABILITIES AND STOCKHOLDERS’ EQUITY Accounts payable
$
3,520
$
4,648
Accrued liabilities
9,002
12,605
Total current liabilities
12,522
17,253
Long-term liabilities
3,431
3,624
Total liabilities
15,953
20,877
Stockholders’ equity: Common stock, $0.001 par value, 50,000,000
shares authorized at March 31, 2023 and December 31, 2022,
respectively, and 18,982,847 and 18,748,529 shares issued and
outstanding at March 31, 2023 and December 31, 2022, respectively
19
19
Additional paid-in capital
127,938
128,370
Accumulated deficit
(57,647
)
(57,941
)
Accumulated other comprehensive loss
(1,407
)
(1,450
)
Total stockholders’ equity
68,903
68,998
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$
84,856
$
89,875
PCTEL, INC. CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (unaudited) (in thousands, except per share
data)
Three Months Ended
March 31,
2023
2022
REVENUES
$
22,973
$
22,542
COST OF REVENUES
11,441
13,209
GROSS PROFIT
11,532
9,333
OPERATING EXPENSES: Research and development
2,984
3,250
Sales and marketing
3,562
3,402
General and administrative
3,605
3,242
Amortization of intangible assets
63
71
Restructuring expenses
0
935
Total operating expenses
10,214
10,900
OPERATING INCOME (LOSS)
1,318
(1,567
)
Other income, net
220
11
INCOME (LOSS) BEFORE INCOME TAXES
1,538
(1,556
)
Expense for income taxes
214
8
NET INCOME (LOSS)
$
1,324
$
(1,564
)
Net Loss per Share: Basic
$
0.07
$
(0.09
)
Diluted
$
0.07
$
(0.09
)
Weighted Average Shares: Basic
18,367
17,972
Diluted
18,428
17,972
PCTEL, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS (Unaudited) (in thousands)
Three Months Ended March
31,
2023
2022
Operating Activities: Net income (loss)
$
1,324
$
(1,564
)
Adjustments to reconcile net income (loss) to net cash provided by
operating activities: Depreciation and amortization
548
781
Intangible asset amortization
81
91
Stock-based compensation
278
774
Loss on disposal of property and equipment
26
0
Restructuring costs
0
(368
)
Bad debt provision
14
(3
)
Changes in operating assets and liabilities: Accounts receivable
3,315
1,530
Inventories
1,297
772
Prepaid expenses and other assets
361
(145
)
Deferred tax assets
80
-
Accounts payable
(1,117
)
(1,299
)
Income taxes payable
134
41
Other accrued liabilities
(3,940
)
(2,027
)
Deferred revenue
18
87
Net cash provided by (used in) operating activities
2,419
(1,330
)
Investing Activities: Capital expenditures
(389
)
(320
)
Purchase of short-term investments
(6,660
)
(8,194
)
Redemptions/maturities of short-term investments
7,344
8,187
Net cash provided by (used in) investing activities
295
(327
)
Financing Activities: Payment of withholding tax on
stock-based compensation
(710
)
(392
)
Principal payments on finance leases
(14
)
(19
)
Cash dividends
(1,030
)
(1,001
)
Net cash used in financing activities
(1,754
)
(1,412
)
Net increase (decrease) in cash and cash equivalents
960
(3,069
)
Effect of exchange rate changes on cash
21
(16
)
Cash and cash equivalents, beginning of period
7,736
8,192
Cash and Cash Equivalents, End of Period
$
8,717
$
5,107
PCTEL, INC. REVENUE AND GROSS PROFIT BY PRODUCT
LINE (unaudited) Reconciliation of GAAP Gross Profit
percentage to Non-GAAP Gross Profit percentage (in
thousands)
Three Months Ended March 31,
2023
Antennas and
Industrial IoT
Devices
Test &
Measurement
Products
Corporate
Total
REVENUES
$15,614
$7,427
($68
)
$22,973
GROSS PROFIT
$6,120
$5,383
$29
$11,532
GAAP GROSS PROFIT %
39.2
%
72.5
%
50.2
%
Non-GAAP adjustments: Amortization of intangible
assets
0.1
%
0.0
%
0.1
%
Stock compensation expenses
0.1
%
20.0
%
0.3
%
Non-GAAP GROSS PROFIT %
39.4
%
72.7
%
50.4
%
Three Months Ended March 31,
2022
Antennas and
Industrial IoT
Devices
Test &
Measurement
Products
Corporate
Total
REVENUES
$17,102
$5,583
($143
)
$22,542
GROSS PROFIT
$5,247
$4,162
($76
)
$9,333
GROSS PROFIT %
30.7
%
74.5
%
41.4
%
Non-GAAP adjustments: Amortization of intangible
assets
0.1
%
0.0
%
0.1
%
Stock compensation expenses
0.2
%
0.6
%
0.3
%
Non-GAAP GROSS PROFIT %
31.0
%
75.2
%
41.8
%
The Corporate column includes the elimination of
intercompany revenues between Antennas and Industrial IoT Devices
and Test & Measurement Products and other licensing revenues.
This schedule reconciles the Company's GAAP gross profit percentage
to its Non-GAAP gross profit percentage. 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 adjustments on this schedule consist
of amortization of intangible assets and stock compensation
expenses.
Reconciliation of GAAP to
Non-GAAP results (unaudited) (in thousands except per
share information) Reconciliation of GAAP operating income (loss) to
Non-GAAP operating income Three Months Ended
March 31,
2023
2022
Operating Income (Loss)
$1,318
($1,567
)
(a)
Add: Amortization of intangible assets: -Cost of
revenues
18
20
-Operating expenses
63
71
Restructuring expenses
0
935
Stock compensation expenses: -Cost of revenues
29
65
-Research and development
58
136
-Sales & marketing
43
197
-General & administrative
148
376
Transaction expenses related to strategic alternatives
563
86
922
1,886
Non-GAAP Operating Income
$2,240
$319
% of revenue
9.8
%
1.4
%
Reconciliation of GAAP net income
(loss) to Non-GAAP net income Three Months
Ended March 31,
2023
2022
Net Income (Loss)
$1,324
($1,564
)
Adjustments: (a) Non-GAAP adjustments to operating
income (loss)
922
1,886
(b) Income Taxes
(106
)
(18
)
816
1,868
Non-GAAP Net Income
$2,140
$304
Non-GAAP Income per Share: Basic
$0.12
$0.02
Diluted
$0.12
$0.02
Weighed Average Shares: Basic
18,367
17,972
Diluted
18,428
17,972
This schedule reconciles the Company's GAAP operating income
(loss) 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. The adjustments to GAAP operating income
(loss) (a) consist of stock compensation expense, amortization of
intangible assets, restructuring expenses, and acquisition related
expenses. The adjustments to GAAP net income (loss) includes the
non-GAAP adjustments to operating income (loss) as well as
adjustments for (b) non-cash income tax expense.
PCTEL, Inc. Reconciliation of GAAP operating income (loss) to
adjusted EBITDA (unaudited) (in thousands)
Three Months Ended March 31,
2023
2022
Operating income (loss)
$1,318
($1,567
)
Add: Depreciation and amortization
548
781
Intangible amortization
81
91
Restructuring expenses
0
935
Stock compensation expenses
278
774
Transaction expenses related to strategic alternatives
563
86
Adjusted EBITDA
$2,788
$1,100
% of revenue
12.1
%
4.9
%
This schedule reconciles the Company's GAAP operating income
(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. Adjusted EBITDA is
defined as net income before interest, income taxes, depreciation
and amortization and extraordinary expenses. The adjustments on
this schedule consist of depreciation, amortization of intangible
assets, stock compensation expenses, restructuring expenses, and
acquisition related expenses.
PCTEL, INC.
Reconciliation of GAAP operating expenses to Non-GAAP operating
expenses (unaudited) (in thousands) Three
Months Ended March 31,
2023
2022
GAAP operating expenses
$10,214
$10,900
Stock compensation expenses
(249
)
(709
)
Amortization of intangible assets
(63
)
(71
)
Restructuring expenses
0
(935
)
Transaction expenses related to strategic alternatives
(563
)
(86
)
Non-GAAP Operating expenses
$9,339
$9,099
This schedule reconciles the Company's GAAP operating
expenses to its Non-GAAP operating expenses. 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 adjustments on this
schedule consist of amortization of intangible assets, stock
compensation expenses, restructuring expenses, and acquisition
related expenses.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230504005863/en/
PCTEL Company Contacts Kevin McGowan CFO PCTEL, Inc.
(630) 339-2051
PCTEL Investor Relations Contact Lisa Fortuna or Ashley
Gruenberg Alpha IR Group 312-445-2870 PCTI@alpha-ir.com
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