PCTEL Posts $20.1 Million in Third Quarter Revenue from Continuing Operations

PCTEL, Inc. (NASDAQ: PCTI), a leader in propagation and optimization solutions for the wireless industry, announced results for the third quarter ended September 30, 2008.

The Company completed the sale of its Mobility Solutions Group (MSG) on January 4, 2008. The Company’s financial statements reflect MSG as a discontinued operation.

Third Quarter Financial Highlights – Continuing Operations (excludes MSG)

• $20.1 million in revenue from continuing operations for the quarter, an increase of 14 percent over the same period last year.
• Gross Profit Margin from continuing operations of 48%, versus 45% from the same period last year.
• GAAP Operating Margin from continuing operations of 3% as compared to negative (1)% in the same period last year. The operating results of the third quarter this year include a $0.9 million impairment charge (4%) related to the sale of several antenna product lines during the quarter.
• Non-GAAP Operating Margin from continuing operations of 15% versus 6% in the same period last year. The Company’s reporting of non-GAAP operating profit 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 income from continuing operations of $10.9 million for the quarter, or $0.58 per diluted share, compared to a net income of $0.5 million, or $0.03 per share for the same period in 2007. The results from the third quarter this year include a $10 million benefit to the tax provision related to the reversal of a valuation allowance that the company had carried on its deferred tax assets. The company reversed the allowance as it believes its long term profit profile will reasonably assure the realization of those assets.
• Non-GAAP net income from continuing operations of $2.6 million for the quarter, or $0.14 per diluted share compared to $1.8 million of net income, or $0.09 per diluted share, for the same period in 2007. The Company’s reporting of non-GAAP 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.

• $80 million of cash and investments at September 30, 2008, of which $13 million is classified as long term. The Company repurchased 503,000 shares of its common stock during the quarter at an average price of $9.92 under its recently announced 1.0 million share buyback program.

"Although WiMAX antenna sales are lower than expected, we were pleased with the performance of other product areas,” said Marty Singer, PCTEL’s Chairman and CEO. "The new product introductions that we announced in late September should give us some momentum in GPS, WiMAX, and new cellular opportunities as we move into 2009,” added Singer.

Third Quarter Financial Highlights – Discontinued Operations (MSG)

• GAAP net income from discontinued operations of $157,000 in the third quarter 2008 represents an adjustment to accrued income tax related to the gain on sale of the Mobility Solutions Group recorded in the first quarter 2008. The Company excludes discontinued operations from its non-GAAP earnings.

PCTEL’s management team will discuss the Company’s results during its scheduled earnings teleconference today at 5:15 PM ET. Management will host the call from their corporate headquarters in Bloomingdale, Illinois.

CONFERENCE CALL / WEBCAST

The company will hold a conference call at 5:15 PM ET (4:15 PM CT) today, Monday, October 27, 2008 with Marty Singer, Chairman and Chief Executive Officer, and John Schoen, Chief Financial Officer. PCTEL will not be responding to inquiries regarding its financial results until the conference call. The session can be accessed by calling (866) 409-1564 (U.S. / Canada) or (913) 312-1264 (International), conference ID 7490917.

To listen via the Internet, please visit http://investor.pctel.com/events.cfm

REPLAY: A replay will be available for two weeks after the call on PCTEL's web site at www.pctel.com or by calling (888) 203-1112 (U.S. / Canada) or (719) 457-0820 (International) conference ID 7490917.

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 solutions address public safety applications, unlicensed and licensed wireless broadband, fleet management, and network timing. Its 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.

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 2009 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.