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PCTel Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: August 9, 2011 03:12PM

PCTel Inc. (PCTI) filed Quarterly Report for the period ended 2011-06-30. Pctel Inc. has a market cap of $119 million; its shares were traded at around $6.18 with a P/E ratio of 321 and P/S ratio of 1.7.



Highlight of Business Operations:

Research and development expenses decreased by $47 during the three months ended June 30, 2011 compared to the same period in 2010. During the three months ended June 30, 2011, we incurred $0.4 million of expense related to PCTEL Secure, but research and development expenses other than for PCTEL Secure declined by $0.4 million primarily due to the completion of several projects in scanning receiver development. Research and development expenses increased approximately $3.0 million for the six months ended June 30, 2011 compared to the same period in 2010. During the six months ended June 30, 2011, we incurred $3.8 million of expense related to PCTEL Secure, but research and development expenses other than for PCTEL Secure declined by $0.8 million. The expense for PCTEL Secure includes $0.1 million and $3.4 million of share-based payments for key contributors during the three and six month periods ended June 30, 2011 respectively. During the six months ended June 30, 2011, we recorded $3.1 million of compensation expense for the two contractors of Eclipse and $0.3 million of compensation expense for the employee of Eclipse. Because the quantity and terms of the equity instruments are known upfront for the share-based payment arrangements between the contractors and Eclipse, we recognized the total share-based payment obligation to the contractors of $3.1 million on January 5, 2011.

Amortization decreased approximately $0.1 million and $0.2 million during the three and six months ended June 30, 2011, respectively, compared to the same period in 2010. Amortization expense for the three and six months ended June 30, 2011 declined $0.2 million and $0.4 million, respectively, because intangible assets acquired from Andrew Corporation were fully amortized in 2010 and due to the fact that certain intangible assets related to the Wider settlement and the acquisition of products from Ascom were impaired during the fourth quarter 2010. These decreases in amortization were partially offset by additional amortization of $0.1 million and $0.2 million during the three and six months ended June 30, 2011, respectively, related to the intangible assets contributed by Eclipse for PCTEL Secure.

The condensed consolidated statements of operations include $1.0 million and $1.8 million of stock compensation expense for the three and six months ended June 30, 2011, respectively. Stock compensation expense for the three months ended June 30, 2011 consists of $0.9 million for restricted stock awards and $0.1 million for performance share awards, stock option and stock purchase plan expenses. Stock compensation expense for the six months ended June 30, 2011 consists of $1.6 million for restricted stock awards, $0.1 million for performance share awards, and $0.1 million for stock option and stock purchase plan expenses.

The condensed consolidated statements of operations include $1.6 million and $2.5 million of stock compensation expense for the three and six months ended June 30, 2010, respectively. Stock compensation expense for the three months ended June 30, 2010 consists of $1.2 million for restricted stock awards, $0.1 million for performance share awards, $0.1 million for stock option and stock purchase plan expenses and $0.2 million for stock bonuses. Stock compensation expense for the six months ended June 30, 2010 consists of $1.9 million for restricted stock awards, $0.2 million for performance share awards, $0.1 million for stock option and stock purchase plan expenses, and $0.3 million for stock bonuses.

Operating activities provided $0.7 million of cash during the six months ended June 30, 2011. We generated $2.7 million in cash from our income statement activities, offsetting $2.0 million of cash used from the balance sheet. We used $1.2 million for payroll taxes related to stock-based compensation. The tax payments related to our stock issued for restricted stock awards, stock bonuses under the 2010 STIP, and performance shares. The tax payments were lower during the same period last year because there were no stock bonuses or performance shares issued in the six months ended June 30, 2010. Within the balance sheet, inventory increased by $1.9 million due to the purchase of buffer inventory necessary during the implementation of sourcing initiatives and also because more production is being sourced in-house rather than from contract manufacturers. The $2.1 million in cash provided by the increase in accounts payable is primarily related to the inventory increase. The $1.6 million decrease in accruals consisted of payments for cash bonuses, sales commissions, and inventory purchases. We used $0.9 million of cash for bonuses under the 2010 STIP during the six months ended June 30, 2011. Cash bonuses were only $17 for the same period in 2010. The operations of PCTEL Secure used $0.5 million of cash during the six months ended June 30, 2011.

Operating activities provided $0.8 million of cash during the six months ended June 30, 2010. During the six months ended June 30, 2010, the income statement provided $3.1 million, offsetting $2.3 million of cash used by the balance sheet. An increase in accounts receivable of $2.7 million offset increases in accounts payable and accrued liabilities of $0.8 million and $0.7 million, respectively. The accounts receivable increase is due to an increase in revenues in the quarter ended June 30, 2010 compared to the quarter ended December 31, 2009 and because of the timing of the revenues within each quarter. Revenues increased $3.0 million during the three months end

Read the The complete Report



Stocks Discussed: PCTI,
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Re PCTel Inc Reports Operating Results 10-Q
Posted by: maxan (IP Logged)
Date: August 9, 2011 09:40PM

It looks like PCTel is no longer planning to invest in the RF Scanner business seeing that they did not replace the GM of RF Solutions, and after the completion of MX Scanner, they've been laying off engineers.


Stocks Discussed: PCTI,
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