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PCTI...Nice Q3 results and guidance...PCTEL increased revenue 16% year-over-year and achieved gross profit margin of 45.9%

New MultiFin 7-in-1 antenna product and FCC Certification of the Industrial IoT Radio Module further progress the Company’s product innovation strategy

November 03, 2022 04:01 PM Eastern Daylight Time
BLOOMINGDALE, Ill.--(BUSINESS WIRE)--PCTEL, Inc. (Nasdaq: PCTI) (“PCTEL” or the “Company”), a leading global provider of wireless technology solutions, announced its results for the third quarter ended September 30, 2022.

Recent Highlights

Revenues increased 16.0% year-over-year to $26.0 million
GAAP gross profit margin of 45.9%
GAAP net income of $2.0 million or $0.11 per diluted share
Non-GAAP net income of $2.6 million or $0.14 per diluted share
Adjusted EBITDA increased 41.0% year-over-year to $3.3 million
New MultiFin 7-in-1 antenna product offering for public safety, fleet management and intelligent transportation applications
Received FCC approval for the Company’s Industrial IoT Radio Module to support the utilities, fleet, manufacturing, automation, mining and oil and gas end markets
David Neumann, Chief Executive Officer, commented, “We delivered another strong quarter, and I am very pleased by our team’s consistent execution of our growth strategy which allowed us to deliver solid performance in the face of a challenging macro-economic backdrop. Our results were driven by key elements of our growth strategy, including launching innovative products, expanding and leveraging our sales channels globally and increasing our market share with existing customers by providing integrated solutions. Some exciting examples of those initiatives include the FCC certification for our IoT radio modules, preparation for orders of our SeeHawk Monitor by year end, and strategic investments to pursue additional long-term growth in Europe. As we close out fiscal 2022 and prepare to enter 2023, we see potential challenges but remain committed to executing our growth strategy.”

Third Quarter Financial Results

Revenue increased 16.0% to $26.0 million, compared to $22.4 million in the third quarter of 2021.
Antennas and IIoT Devices revenue was $18.7 million, an increase of 11.8% year-over-year primarily due to an increase in revenues related to antennas for agriculture fleet applications
Test & Measurement products revenue was $7.7 million, an increase of 29.8% year-over-year due to higher revenues for 5G products in the U.S.
GAAP gross margin was 45.9%, compared to 45.8% in the third quarter of 2021. Non-GAAP gross margin was 46.2% compared to 46.7% in the third quarter of 2021 due to lower gross margin for test & measurement products.
GAAP operating expenses were $10.6 million compared to $9.6 million in the third quarter of 2021. Non-GAAP operating expenses were $9.4 million compared to $8.9 million in the third quarter of 2021.
GAAP net income was $2.0 million or diluted earnings per share of $0.11 compared to GAAP net income of $0.7 million or $0.04 per share in the third quarter of 2021. A reversal of allowances related to deferred income taxes contributed $0.02 per share during the third quarter 2022.
Non-GAAP net income was $2.6 million or $0.14 diluted earnings per share compared to $1.4 million or $0.08 in the third quarter of 2021.
Adjusted EBITDA increased to $3.3 million compared to $2.3 million in the third quarter of 2021.
Cash, cash equivalents and investments were $28.0 million, a decrease of approximately $0.3 million as compared to the second quarter of 2022. Payment of our quarterly dividend of $1.0 million was approximately equal to our free cash in the third quarter 2022.
Fourth Quarter 2022 Outlook

The following ranges represent PCTEL’s current expectations for the fourth quarter 2022 based upon available data and estimates.

Revenue: $25.5 million to $26.5 million
Non-GAAP Gross Margin: 47% to 49%
Non-GAAP EPS: $0.14 to $0.16
Kevin McGowan, Chief Financial Officer, explained, “Following a very strong third quarter, we expect fourth quarter revenues to be consistent sequentially with a higher gross margin primarily due to the product mix. We continue to see growth opportunities in the industries we serve, and we have a healthy balance sheet which provides us flexibility to navigate any short-term macro-economic challenges that could emerge and to support our long-term growth initiatives.”