PCTEL Posts $14.1 Million in First Quarter Revenue from Continuing Operations

PCTEL, Inc. (NASDAQ: PCTI), a leader in propagation and optimization solutions for the wireless industry, announced results for the first quarter ended March 31, 2009.

First Quarter Financial Highlights – Continuing Operations

• $14.1 million in revenue from continuing operations for the quarter, a decrease of 23% over the same period last year.
• GAAP Gross Profit Margin from continuing operations of 47%, as compared to 48% for the same period last year.
• Non-GAAP Gross Profit Margin is 48%, unchanged from the same period last year.
• GAAP Operating Margin from continuing operations of a negative (17) % as compared to a positive 2% in the same period last year. The current quarter includes a $1.3 million (9%) goodwill impairment charge, representing all of the company’s remaining goodwill, including $922,000 related to the recent Wi-Sys acquisition. The charge was caused by goodwill impairment accounting rules as they relate to the total company’s market capitalization versus book value, and not the profitability of the underlying operations.
• Non-GAAP Operating Margin from continuing operations of 3% versus 13% in the same period last year. The Company’s reporting of non-GAAP operating margin excludes expenses for restructuring, gain or loss on sale of assets, stock based compensation, amortization and impairment of intangible assets and goodwill related to the Company’s acquisitions.
• GAAP net loss from continuing operations of $(1.6) million for the quarter, or $(0.09) per diluted share, compared to a net income of $475,000, or $0.02 per share for the same period in 2008.
• Non-GAAP net income from continuing operations of $451,000 for the quarter, or $0.03 per diluted share compared to $2.7 million of net income, or $0.13 per diluted share, for the same period in 2008. The Company’s reporting of non-GAAP net income excludes expenses for restructuring, gain or loss on sale of assets, stock based compensation, amortization and impairment of intangible assets and goodwill related to the Company’s acquisitions, and non-cash related income tax expense.

• $77 million of cash, short term investments, and long term investments at March 31, 2009, compared to $78 million at December 31, 2008. During the quarter, the Company spent $2 million for the purchase of Wi-Sys, a Canadian based antenna company, and generated approximately $1 million in cash and investments from all other activities. The Company repurchased approximately 20,000 shares of its common stock during the first quarter at an average price of $4.26. The company has approximately $4.9 million remaining under previously authorized share repurchase programs.

"The first quarter revenue reflects the challenging economic environment that is constraining both Enterprise and Public Carrier spending on infrastructure growth and maintenance,” said Marty Singer, PCTEL’s Chairman and CEO. "To some extent, we anticipated this downturn and moderated our spending in mid-2008. Our cost structure and relatively stable gross margins permitted us to generate a small profit and, more importantly, positions the company to benefit from modest improvements in the broader economy. We continue to invest aggressively in our product lines in anticipation of stronger markets in the future,” added Singer.

The Company completed the sale of its Mobility Solutions Group (MSG) in January, 2008. The Company’s financial statements reflect MSG as a discontinued operation.

CONFERENCE CALL / WEBCAST

PCTEL’s management team will discuss the Company’s results today at 5:30 PM ET. The call can be accessed by dialing (877) 693-6682 (U.S. / Canada) or (706) 679-6397 (International) conference ID: 92164464. The call will also be webcast at http://investor.pctel.com/events.cfm.

REPLAY: A replay will be available for two weeks after the call on either the website listed above or by calling (800) 642-1687 (U.S./Canada), or International (706) 645-9291 conference ID: 92164464.

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. 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 MAXRAD^® Bluewave™ and Wi-Sys™ antenna solutions address public safety, military, and government applications; SCADA, Health Care, Energy, Smart Grid, and Agricultural applications; Indoor Wireless, Wireless Backhaul, and Cellular applications. Its portfolio includes a broad range of WiMAX antennas, WiFi antennas, Land Mobile Radio antennas, and GPS antennas that serve innovative applications in telemetry, RFID, in-building, fleet management, and mesh networks. PCTEL provides parabolic antennas, ruggedized antennas, yagi antennas, and other high performance antennas for many applications. PCTEL’s products are sold worldwide through direct and indirect channels. For more information, please visit the company’s web sites www.pctel.com, www.antenna.com, www.antenna.pctel.com, or www.rfsolutions.pctel.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 momentum and opportunities for growth in the future is a forward-looking statement 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.