PCTEL, Inc. (NASDAQ:PCTI), a leader in propagation and optimization
solutions for the wireless industry, announced today that it had
acquired the antenna product lines of Bluewave Antenna Systems, Ltd., a
privately-held, Canadian company. Bluewave Antenna Systems designs,
manufactures, and distributes rugged antennas for harsh conditions,
targeting manufacturing process control in the energy and utility
industries and communication systems in extreme environments. PCTEL will
assume the design and final assembly of the three major product lines at
its Bloomingdale facility. PCTEL paid $3.9 million in cash for the
product lines and associated technology.
"The Bluewave antenna product line augments
our Land Mobile Radio (LMR) portfolio and should accelerate our growth
in Enterprise applications of these antennas,”
said Marty Singer, PCTEL’s Chairman and CEO. "This
is exactly the type of acquisition that we are pursuing: the opportunity
to acquire product lines that leverage our existing development,
manufacturing, and distribution capabilities –
without the risk of integrating large organizations. This is a
productive use of our capital,” added Singer.
Under the terms of the agreements, Bluewave will continue to supply
product during a transition period. During the transition period, PCTEL
will migrate component supply sourcing to its contract manufacturers and
final assembly and test to its Bloomingdale facility. PCTEL’s
Antenna Products Group will manage the product line. Nearly all of
Bluewave’s current revenue is from North
America, with 25 percent coming from Canadian customers.
The acquired LMR antenna products operate in the 450 MHz to 1.4 GHz
spectrum. The three product lines – Marathon™,
Guardian™, and Summit™ – offer different levels of environmental
robustness.
The company anticipates that the new antenna lines will add
approximately $1 million of revenue per quarter to its previous
guidance, starting in the second quarter. The related gross profit is
expected to be approximately 25 percent in second quarter 2008 and
approximately 35 percent thereafter. The company expects to incur
$300,000 of incremental development and marketing expenses for the year
associated with the new products.
PCTEL had previously announced that the divestiture of the Mobility
Solutions Group (MSG) was expected to result in a first quarter cash and
investments balance of approximately $125 to $128 million, of which
approximately $20 million was expected to be paid out in April for
estimated taxes related to the transaction. The company’s
share repurchase program and acquisition of Bluewave’s
antenna product lines have consumed an additional $11.5 million. The
company repurchased 1.14 million shares during the first quarter for
$7.6 million at an average price of $6.66. In addition, the company used
$3.9 million of its cash for the Bluewave acquisition. Management now
anticipates that the company will have between $114-$117 million of cash
and investments at the end of the first quarter, of which approximately
$20 million is expected to be paid out in April for estimated taxes
related to the MSG transaction.
About PCTEL
PCTEL, Inc. (NASDAQ: PCTI),
is a global leader in propagation and optimization solutions for the
wireless industry. The company designs and develops software-based
radios for wireless network optimization and develops and distributes
innovative antenna solutions. PCTEL’s MAXRAD®
antenna products address public safety applications, unlicensed and
licensed wireless broadband applications, fleet management, and network
timing. Its product portfolio includes a broad range of antennas for
WiMAX, Land Mobile Radio, GPS, telemetry, RFID, WiFi, indoor-cellular,
and mesh networks. The company’s SeeGull®
scanning receivers, receiver-based products and CLARIFY®
interference management solutions are used to measure, monitor and
optimize cellular networks. PCTEL’s products
are sold worldwide through direct and indirect channels. For more
information, please visit the company’s web
site at: www.pctel.com.
About Bluewave
Bluewave Antenna Systems Ltd. was founded in 1996 to serve the Supervisory
Control And Data Acquisition (SCADA)
industry by building easy-to-install antennas designed to perform
flawlessly in harsh environments. Today, Bluewave products serve a wide
variety of SCADA, wireless industrial automation, land mobile radio and
homeland security applications. For more information, please visit the
website at www.bluewaveantenna.com.
PCTEL Safe Harbor Statement
This press release contains "forward-looking
statements” as defined in the Private
Securities Litigation Reform Act of 1995. Specifically, the statements
regarding PCTEL’s expectations regarding
accelerated growth in enterprise applications of the acquired antennas,
benefits resulting from the leverage of PCTEL’s
capabilities, low level of integration risk, anticipated revenue
contribution and timing of the contribution, improvements in gross
profit and operating cost levels in future periods, and levels of cash
and cash investments in future periods are forward looking statements
within the meaning of the safe harbor. 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 the ability to successfully
grow the wireless products business and the ability to implement new
technologies and obtain protection for the related intellectual
property. 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.
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