Savvy Trades and Investments

[2morrowsGains]

PCTI...Nice Q. Nice cash, Low debt, 4.7% yield..."We are pleased with the underlying strength with which we exited the fourth quarter and progress into 2023. Our leading wireless technology solutions enable us to serve customers in the utilities, rail, 5G and public safety sectors, supporting critical applications that require reliable connectivity. For the first quarter of 2023, we anticipate lower sequential revenue due to typical seasonality effects; however, we maintain a positive outlook for the remainder of the year. Our healthy balance sheet provides us with the financial flexibility to support the growth of our business and execution of our strategy."

PCTEL Reports Fourth Quarter and Full Year 2022 Financial Results

PCTEL achieved 2022 revenues of $99.4 million, up 13%, and gross profit margin of 46%

Strong expansion in net income and Adjusted EBITDA in the fourth quarter and fiscal year 2022

BLOOMINGDALE, Ill., March 07, 2023--(BUSINESS WIRE)--PCTEL, Inc. (Nasdaq: PCTI) ("PCTEL" or the "Company"), a leading global provider of wireless technology solutions, today reported results for the fourth quarter and full year ended December 31, 2022.

Fourth Quarter 2022 Highlights

Revenues of $25.9 million, equivalent to the fourth quarter 2021

GAAP gross profit margin of 50.3%

GAAP net income of $2.1 million or $0.11 per diluted share

Non-GAAP net income of $3.0 million or $0.16 per diluted share

Adjusted EBITDA increased 21.7% year-over-year to $3.7 million

Launched new features in the SeeHawk™ Central cloud platform which simplifies the tracking, review and approval of public safety network coverage testing

Full Year 2022 Highlights

Revenues of $99.4 million were 13.2% higher compared to the prior year

GAAP gross profit margin of 46.0%

GAAP net income of $2.9 million or $0.15 per diluted share

Non-GAAP net income of $7.7 million or $0.41 per diluted share

Adjusted EBITDA increased 26.8% year-over-year to $10.7 million

Released multiple mission critical application products throughout the year, targeting diverse end markets including rail, electric vehicles and agriculture applications

Streamlined sales organization to gain scale as well as support global distribution networks

David Neumann, Chief Executive Officer, commented, "I am very proud of our team’s performance in 2022, which reflected a year of sales growth driven by demand strength and strong execution through challenging macroeconomic conditions. We enjoyed numerous successes over the course of the year supported by the ongoing execution of our three-pronged growth strategy, including the launch of innovative products, expansion of our sales channels globally, and an increase in our market share by strong adoption of our integrated solutions by our customers. We released a major update to the SeeHawk™ Central cloud-based software platform to improve support for public safety testing, along with multiple new, high-reliability and mission critical products including our MultiFin 7-in-1 antenna, and CMTA antenna portfolio. Additionally, we have grown our international customer base and distribution network, particularly in the European market, expanding PCTEL’s customer reach and end market opportunities. In 2023, we look forward to growing our Company while remaining on the forefront of innovation in the wireless technology space."

Fourth Quarter & Full Year 2022 Financial Summary

Summary Financials

Q4’22

Q4’21

Change

FY’22

FY’21

Change

Revenue (000’s)

$25,922

$26,008

(0.3%)

$99,428

$87,807

13.2%

Gross Profit Margin %

50.3%

45.9%

440 bps

46.0%

46.1%

(10 bps)

Adjusted EBITDA (000’s)

$3,741

$3,074

21.7%

$10,725

$8,458

26.8%

GAAP Diluted EPS

$0.11

$0.02

$0.09

$0.15

$0.01

$0.14

Non-GAAP Diluted EPS

$0.16

$0.12

$0.04

$0.41

$0.27

$0.14

Fourth quarter 2022 revenues were $25.9 million, equivalent to the fourth quarter 2021. Fourth quarter 2022 antennas and industrial IoT device revenue was $16.4 million, a decrease of 14.2% year-over-year, partially due to high customer inventory levels. Fourth quarter 2022 Test & Measurement revenue was $9.9 million, an increase of 37.7% year-over-year due to higher revenues for 5G products in the U.S. Fiscal 2022 revenues were $99.4 million, an increase of 13.2% compared to $87.8 million in fiscal 2021. The increase in revenue for fiscal 2022 was driven by double-digit growth in both segments. Fiscal 2022 Antennas and IIoT Devices revenue was $69.7 million, an increase of 10.5% year-over-year. Fiscal 2022 Test & Measurement revenue was $30.6 million, an increase of 18.9% year-over-year.

Fourth quarter 2022 GAAP gross profit margin was 50.3%, compared to 45.9% in the fourth quarter of 2021. The higher gross profit margin was due to a higher mix of Test & Measurement products. Fiscal 2022 gross profit margin was 46.0%, compared to 46.1% in fiscal 2021.

Adjusted EBITDA in the fourth quarter increased to $3.7 million compared to $3.1 million in the fourth quarter of 2021. Adjusted EBITDA in fiscal 2022 increased to $10.7 million compared to $8.5 million in fiscal 2021.

Fourth quarter 2022 GAAP net income was $2.1 million or diluted earnings per share of $0.11 compared to GAAP net income of $0.3 million or $0.02 per share in the fourth quarter of 2021. A reversal of allowances related to deferred income taxes contributed $0.02 per share during the fourth quarter 2022. Non-GAAP net income was $3.0 million, or $0.16 diluted earnings per share, compared to $2.1 million or $0.12 per share in the fourth quarter of 2021.

Fiscal 2022 GAAP net income was $2.9 million or diluted earnings per share of $0.15 compared to GAAP net income of $0.2 million or $0.01 per share during fiscal 2021. A reversal of allowances related to deferred income taxes contributed $0.04 per share during the full year 2022. Non-GAAP net income was $7.7 million, or $0.41 diluted earnings per share, compared to $5.0 million or $0.27 per share during fiscal 2021.

Cash, cash equivalents and investments were $30.0 million as of December 31, 2022, a decrease of approximately $0.8 million as compared to December 31, 2021.

First Quarter 2023 Outlook

The following ranges represent PCTEL’s current expectations for the first quarter 2023 based upon available data and estimates.

Revenue: $22.0 million to $23.0 million

Non-GAAP Gross Margin: 47% to 48%

Non-GAAP EPS: $0.05 to $0.07

Kevin McGowan, Chief Financial Officer, explained, "We are pleased with the underlying strength with which we exited the fourth quarter and progress into 2023. Our leading wireless technology solutions enable us to serve customers in the utilities, rail, 5G and public safety sectors, supporting critical applications that require reliable connectivity. For the first quarter of 2023, we anticipate lower sequential revenue due to typical seasonality effects; however, we maintain a positive outlook for the remainder of the year. Our healthy balance sheet provides us with the financial flexibility to support the growth of our business and execution of our strategy."

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: 209567.

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: 47628.

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/