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PCTI...Nice Q...Adj EPS = $0.10...PCTEL Reports Second Quarter 2022 Financial Results
Revenue increased 15% year-over-year and achieved gross profit margin of 45.8%

Strong execution for both product lines through significant orders for test & measurement products and the launch of an innovative new antenna portfolio

August 09, 2022 04:01 PM Eastern Daylight Time

PCTEL, Inc. (Nasdaq: PCTI), a leading global provider of wireless technology solutions, announced its results for the second quarter ended June 30, 2022.

Recent Highlights

Revenues increased 15.2% year-over-year to $25.0 million
GAAP gross profit margin of 45.8%
GAAP net income of $0.4 million or $0.02 per diluted share
Non-GAAP net income of $1.8 million or $0.10 per diluted share
Adjusted EBITDA increased 18% year-over-year to $2.6 million
Launched new 5G, 10-in-1 combination antenna portfolio for rail, fleet, and mass transit, supporting the Company’s commitment to innovative product development
Received multimillion dollar orders from two of its largest OEM customers for the Gflex® and HBflex™ scanning receivers
David Neumann, Chief Executive Officer of PCTEL, Inc., commented, “We are pleased to have delivered strong results in the quarter, driven by double-digit top-line expansion and operational efficiencies, both of which contributed to our solid performance. We expect positive momentum to continue and are keenly focused on executing on our three key growth strategies: launching innovative wireless products, increasing market share by providing more components of the wireless ecosystem, and expanding and leveraging distribution channels.”

Neumann continued, “We recently launched a 10-in-1 combination antenna designed to perform in harsh conditions and therefore useful in numerous end markets. We have also made great progress within our test & measurement product line, securing multimillion dollar OEM orders for our leading products, the Gflex and HBflex, and launching a new product, SeeHawk™ Monitor, that will continuously monitor public safety RF performance. Finally, we have made significant advances in expanding our distribution channels globally, building on our strong foundation in the Americas with the acquisition of Smarteq, that is now contributing products for distribution in both our European and American channels. We have momentum in innovation, market penetration, and distribution channel leverage, and will continue to execute on our growth strategy in the coming quarters.”

Second Quarter Financial Results

Revenue increased 15.2% to $25.0 million, compared to $21.7 million in the second quarter of 2021.
Antennas and IIoT Devices revenue was $17.6 million, an increase of 12.8% year-over-year due to an increase in revenues related to antennas for fleet applications and a full quarter of revenue recognized from Smarteq, which was acquired at the end of April 2021.
Test & Measurement products revenue was $7.4 million, an increase of 15.9% year-over-year due to higher revenues for 5G products in the U.S.
GAAP gross margin was 45.8% compared to 45.9% for the second quarter of 2021. Non-GAAP gross margin was 46.0% compared to 47.5% in the second quarter of 2021 due to lower gross margin for antennas and devices.
GAAP operating expenses were $11.1 million compared to $10.1 million in the second quarter of 2021. Non-GAAP operating expenses were $9.7 million compared to $8.8 million in the second quarter of 2021. Operating expenses include a full quarter of expenses related to Smarteq in the second quarter 2022 versus two months of expenses in the second quarter 2021.
GAAP net income was $0.4 million or diluted earnings per share of $0.02 compared to GAAP net loss of $(0.2) million or $(0.01) per share in the second quarter of 2021. Restructuring expenses related to the manufacturing transition in China were $0.02 per share in the second quarter 2022 compared to $0.00 in the second quarter 2021.
Non-GAAP net income was $1.8 million or $0.10 diluted earnings per share compared to $1.3 million or $0.07 in the second quarter of 2021.
Adjusted EBITDA increased by 18% to $2.6 million compared to $2.2 million in the second quarter of 2021.
Cash, cash equivalents and investments were $28.3 million, an increase of approximately $0.6 million as compared to the first quarter of 2022 as free cash flow of $1.6 million offset cash used in financing activities of $0.6 million.

Third Quarter 2022 Outlook
The following ranges represent our current expectations for the third quarter based upon available data and estimates.

Revenue: $25.5 million to $26.5 million
Non-GAAP Gross Margin: 44% to 45%
Non-GAAP EPS: $0.09 to $0.11
Kevin McGowan, Chief Financial Officer of PCTEL, added, “We remain confident in our ability to execute on our strategic growth initiatives despite the impact of macro-environmental and supply chain challenges, which our team continues to mitigate through careful supply chain management. Our third quarter outlook reflects our backlog across both our antenna and test & measurement product lines and solid demand for our wireless products.”

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 [phone] (United States/Canada) or [phone] (International), access code: 556919.

Replay: A replay will be available for two weeks after the call on either the website listed above or by calling [phone] (United States/Canada), or [phone] (International), access code: 45956.