PCTEL Posts $15.3 Million In Fourth Quarter Revenue; Wireless Revenue Up 305% Over Fourth Quarter Last Year
PCTEL Posts $15.3 Million In Fourth Quarter Revenue; Wireless Revenue Up 305% Over Fourth Quarter Last Year
BW6119 FEB 22,2005 13:16 PACIFIC 16:16 EASTERN
( BW)(IL-PCTEL)(PCTI) PCTEL Posts $15.3 Million In Fourth QuarterRevenue; Wireless Revenue Up 305% Over Fourth Quarter Last Year
Business Editors
CHICAGO--(BUSINESS WIRE)--Feb. 22, 2005--
2004 Revenue Climbs To $48.2 Million
PCTEL, Inc. (NASDAQ:PCTI), a global leader in simplifyingmobility, today announced financial results for the fourth quarterended December 31, 2004. Total revenue was $15.3 million for thefourth quarter of 2004, including $14.2 million of wireless productrevenue and $1.1 million of licensing revenue. This compares to $18.3million of revenue in the fourth quarter 2003, which included $3.5million of wireless revenue and $14.8 million of licensing revenue.The increase in wireless revenue was primarily due to the acquisitionof MAXRAD in the first quarter 2004 and several antenna product linesfrom Andrew Corporation (NASDAQ: ANDW) in the fourth quarter 2004.
Net income for the fourth quarter of 2004 was $1.1 million, or$0.05 per diluted share, compared to net income of $8.0 million, or$0.39 per diluted share reported in the fourth quarter of 2003. Boththe fourth quarter of 2004 and 2003 contained significant one-timeitems that positively impacted net income. The fourth quarter of 2004included a $3.2 million reversal of a modem royalty expense reservemade possible by the settlement of the company´s patent litigationwith 3Com. The fourth quarter of 2003 included $13.5 million in netlicensing revenue and gross profit related to an intellectual propertysettlement with Intel.
The company previously announced the acquisition of severalantenna product lines from Andrew Corporation (NASDAQ: ANDW). Thattransaction closed on October 29, 2004 and the results from theseoperations for November and December are reported in the fourthquarter 2004 results.
The company realized strong sales for its Wi-Fi Antennas and itsnew CLARIFY(TM) Interference Management System (IMS). During thequarter, the company released its secure Roaming Client for wirelessconnectivity and realized software licensing revenue through carriersales.
For the year ended December 31, 2004, the company´s total revenuewas $48.2 million, comprised of $42.3 million of wireless revenue and$5.9 million of licensing revenue. In 2003 the company had $45.6million of total revenue, comprised of $9.6 million of wirelessrevenue, $18.1 million of licensing revenue and $17.9 million of HSPmodem revenue. The HSP modem product line was sold to Conexant in Mayof 2003. Net loss for 2004 was $(2.7) million, or $(0.14) per dilutedshare, compared to net income of $5.9 million, or $0.28 cents perdiluted share in 2003.
"We are excited about our strong fourth quarter results," saidMarty Singer, PCTEL´s Chairman and CEO. "We achieved consistency inour software sales, established CLARIFY as a leading cellularoptimization tool, and immediately integrated our recent antennaproduct acquisitions into our core operations. Our efforts to simplifymobility now extend to both RFID and satellite radio as we continue toexpand our antenna product line. We look forward to continuing ourcorporate development activities and increasing revenue in 2005,"added Singer.
Cash and short-term investments on December 31, 2004 were $84.1million, a decrease of $18.2 million from the third quarter of 2004.The decrease is primarily attributed to the purchase of the Andrewproduct lines, the purchase of a new building for the Antenna ProductGroup, and the stock buyback program. The company repurchased 135,400of its shares during the quarter just ended. As of December 31, 2004,the company has repurchased 2.0 million out of the 2.5 million sharesauthorized by the Board of Directors under its share buyback program.
In connection with its evaluation and testing activities underSection 404 of the Sarbanes Oxley Act of 2002, the company hasconcluded that a control deficiency in its internal controls overfinancial reporting as of December 31, 2004 constitutes a "materialweakness" within the meaning of the Public Company AccountingOversight Board Auditing Standard No. 2. The material weakness relatesto the company´s accounting for income taxes in the fourth quarter aspart of the year-end reporting process. The financial statementspresented have been appropriately adjusted and reflect the correctincome tax expense and income tax accrual. Because the error relatesto our tax accounting, it has no effect on our business or customers,and has no impact on our revenues, our cash flows or our financialcondition. To remediate the deficiency, the company has engaged anoutside tax consultant and is implementing an internal trainingprogram to enhance the capabilities of its internal tax personnel.Management will disclose the material weakness in internal controls inits 2004 annual Form 10-K and indicate that the company´s internalcontrols over financial reporting were not effective as of year-end.In addition, the company expects that the material weakness willresult in an adverse opinion by the company´s independent registeredpublic accountants on the effectiveness of the company´s internalcontrols.
CONFERENCE CALL / WEBCAST
The company will hold a conference call at 4:00 PM CST (5:00 PMEST) today with Marty Singer, chairman and chief executive officer,and John Schoen, chief operating officer and chief financial officer.The session will include brief remarks, and can be accessed by calling(800) 545-9583 (U.S. / Canada) or (913) 981-4910 (international).
To listen via the Internet, please visit, www.pctel.com, orwww.shareholder.com/pctel/MediaList.cfm
REPLAY: A replay will be available for two weeks after the call onPCTEL´s web site at www.pctel.com or by calling (888) 203-1112 (U.S. /Canada) or (719) 457-0820 (international) access code: 3254384.
ABOUT PCTEL
PCTEL (NASDAQ:PCTI), founded in March 1994, is a global leader insimplifying mobility. PCTEL´s Mobility Solution Group´s(mobilitysolutions.pctel.com) software tools provide secure,access independent, remote connectivity. PCTEL´s RF Solution Group´s(rfsolutions.pctel.com) portfolio of OEM receivers andreceiver-based products are used to measure and monitor cellularnetworks. PCTEL´s Antenna Products Group (antenna.pctel.com)designs, distributes, and supports innovative antenna solutions thatfacilitate and simplify wireless communications. PCTEL protects itsleadership position with a portfolio of more than 130 analog andbroadband communications and wireless patents, issued or pending,including key and essential patents for modem technology. PCTEL´sproducts are sold or licensed to wireless carriers, wireless ISPs,distributors, wireless test and measurement companies, systemintegrators, PC manufacturers and PC card and board manufacturers.PCTEL headquarters are located at 8725 West Higgins Road, Suite 400,Chicago, IL 60631. Telephone: 773-243-3000. For more information,please visit our web site at: www.pctel.com.
PCTEL Safe Harbor Statement
This press release contains "forward-looking statements" asdefined in the Private Securities Litigation Reform Act of 1995.Specifically, the statements regarding PCTEL´s expectations regardingits future business prospects and the future growth of its wirelessand licensing businesses are forward looking statements within themeaning of the safe harbor. These statements are based on management´scurrent expectations and actual results may differ materially fromthose projected as a result of certain risks and uncertainties,including the ability to successfully grow the wireless productsbusiness, the ability to implement new technologies and obtainprotection for the related intellectual property, and the risksinherent in potential acquisitions. In addition, there is no certaintythat, in connection with the required compliance activities underSection 404 of the Sarbanes-Oxley Act of 2002, PCTEL or itsindependent auditors will not identify additional control deficienciesin the company´s internal controls over financial reporting, includingdeficiencies that constitute additional material weaknesses within themeaning of the accounting requirements. These and other risks anduncertainties are detailed in PCTEL´s Securities and ExchangeCommission filings. These forward-looking statements are made only asof the date hereof, and PCTEL disclaims any obligation to update orrevise the information contained in any forward-looking statement,whether as a result of new information, future events or otherwise.
PCTEL, Inc. Condensed Consolidated Statements of Operations (unaudited, in thousands, except per share information) Three Months Twelve Months Ended Ended December 31, December 31, ----------------- ----------------- 2004 2003 2004 2003 -------- -------- -------- --------REVENUES $15,298 $18,311 $48,221 $45,600COST OF REVENUES 7,335 592 19,786 13,464MODEM INVENTORY AND ROYALTY EXPENSE RECOVERY (3,208) - (3,208) (1,800) -------- -------- -------- --------GROSS PROFIT 11,171 17,719 31,643 33,936 -------- -------- -------- --------OPERATING EXPENSES: Research and development 2,376 1,715 8,506 7,808 Sales and marketing 2,863 1,848 10,944 7,503 General and administrative 4,243 3,092 14,402 10,387 Amortization of other intangible assets 840 343 2,972 1,124 Acquired in-process research and development - - - 1,100 Restructuring charges 129 522 (66) 3,462 Gain on sale of assets and related royalties (500) (500) (2,000) (5,476) Stock Based Payments 385 210 1,425 958 -------- -------- -------- -------- Total operating expenses 10,336 7,230 36,183 26,866 -------- -------- -------- --------INCOME (LOSS) FROM OPERATIONS 835 10,489 (4,540) 7,070OTHER INCOME, NET 402 263 1,261 1,383 -------- -------- -------- --------INCOME (LOSS) BEFORE PROVISION (BENEFIT) FOR INCOME TAXES 1,237 10,752 (3,279) 8,453PROVISION (BENEFIT) FOR INCOME TAXES 173 2,730 (541) 2,575 -------- -------- -------- --------NET INCOME (LOSS) $ 1,064 $ 8,022 $(2,738) $ 5,878 ======== ======== ======== ========Basic earnings (loss) per share $ 0.05 $ 0.41 $ (0.14) $ 0.29Shares used in computing basic earnings (loss) per share 20,064 19,722 19,857 20,145Diluted earnings (loss) per share $ 0.05 $ 0.39 $ (0.14) $ 0.28Shares used in computing diluted earnings (loss) per share 20,408 20,403 19,857 20,975 PCTEL, Inc. Consolidated Condensed Balance Sheets (unaudited, in thousands) December 31, December 31, 2004 2003 ------------- ------------- ASSETSCURRENT ASSETS: Cash and cash equivalents $ 83,887 $ 106,007 Restricted cash 208 278 Short-term investments - 19,177 Accounts receivable, net 10,819 3,630 Inventories, net 8,554 1,267 Prepaid expenses and other assets 2,969 1,929 ------------- ------------- Total current assets 106,437 132,288PROPERTY AND EQUIPMENT, net 9,746 1,197GOODWILL 14,114 5,561OTHER INTANGIBLE ASSETS, net 11,628 4,140OTHER ASSETS 180 55 ------------- -------------TOTAL ASSETS $ 142,105 $ 143,241 ============= ============= LIABILITIES AND STOCKHOLDERS´ EQUITY-----------------------------------------CURRENT LIABILITIES: Accounts payable $ 1,085 $ 333 Accrued royalties 11 3,208 Income taxes payable 5,692 7,359 Deferred revenue 1,920 2,960 Accrued liabilities 10,140 5,739 ------------- ------------- Total current liabilities 18,848 19,599LONG-TERM LIABILITIES 334 736 ------------- ------------- Total liabilities 19,182 20,335 ------------- -------------STOCKHOLDERS´ EQUITY: Common stock 21 20 Additional paid-in capital 160,180 155,548 Deferred compensation (4,422) (2,552) Accumulated deficit (32,938) (30,201) Accumulated other comprehensive income 82 91 ------------- ------------- Total stockholders´ equity 122,923 122,906 ------------- -------------TOTAL LIABILITIES AND STOCKHOLDERS´ EQUITY $ 142,105 $ 143,241 ============= =============
--30--JC/cg* CONTACT: PCTEL, Inc. John Schoen, 773-243-3000 or Jack Seller, 773-243-3016 jack_seller@pctel.com KEYWORD: ILLINOIS INDUSTRY KEYWORD: TELECOMMUNICATIONS SOFTWARE NETWORKING INTERNETE-COMMERCE EARNINGS CONFERENCE CALLS SOURCE: PCTEL, Inc.Copyright Business Wire 2005
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