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PCTel Inc. Reports Operating Results (10-Q)

November 09, 2010 | About:
10qk

10qk

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PCTel Inc. (PCTI) filed Quarterly Report for the period ended 2010-09-30.

Pctel Inc. has a market cap of $122.3 million; its shares were traded at around $6.49 with and P/S ratio of 2.2. PCTI is in the portfolios of Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC, John Rogers of ARIEL CAPITAL MANAGEMENT LLC.

Highlight of Business Operations:

General and administrative expenses are about the same for the three months ended September 30, 2010 compared to the same period in fiscal 2009. General and administrative expenses increased approximately $0.4 million for the nine months ended September 30, 2010 compared to the same period in 2009. This expense increase is due to $0.4 million higher stock-based compensation expense for employees in general and administrative functions and $0.2 million of cash-based incentive compensation expenses, offsetting $0.2 million of reductions in corporate and other administrative costs.

Amortization increased approximately $0.2 million in the three months ended September 30, 2010 compared to the same period in 2009 due to $0.4 million of additional amortization of intangible assets from acquisitions in December 2009 and the first quarter 2010, offsetting $0.2 million lower amortization related to the intangible assets acquired from MAXRAD, Inc. (MAXRAD) in 2004. Amortization increased approximately $0.6 million in the nine months ended September 30, 2010 compared to the same period in 2009 due to $1.2 million of additional amortization of intangible assets from acquisitions in December 2009 and the first quarter 2010, offsetting $0.6 million lower amortization related to the intangible assets acquired from MAXRAD in 2004. Certain intangible assets of MAXRAD were fully amortized as of December 31, 2009. The additional amortization relates to intangible assets acquired from Sparco in January 2010, Ascom in December 2009 and from the Wider settlement in December 2009.

During the three months ended September 30, 2010, we incurred $0.1 million for restructuring expenses related to shutdown of our Sparco operations. During the nine months ended September 30, 2010, we incurred $0.6 million of restructuring expense consisting of $0.1 million for the shutdown of Sparco operations and $0.5 related to our functional reorganization.

In March 2009, we recorded goodwill impairment of $1.5 million. This amount represented the remaining $0.4 million of goodwill for Licensing and the $1.1 million in goodwill recorded with the Wi-Sys acquisition in January 2009. We tested our goodwill for impairment because our market capitalization was below our book value at March 31, 2009. We considered this market capitalization deficit as a triggering event for testing goodwill for impairment.

The condensed consolidated statements of operations include $1.0 million and $3.5 million of stock compensation expense for the three and nine months ended September 30, 2010, respectively. Stock compensation expense for the three months ended September 30, 2010 consists of $0.7 million for restricted stock awards, $0.1 million for performance share awards, $0.1 million for stock option and stock purchase plan expenses and $0.1 million for stock bonuses. Stock compensation expense for the nine months ended September 30, 2010 consists of $2.6 million for restricted stock awards, $0.3 million for performance share awards, $0.2 million for stock option and stock purchase plan expenses, and $0.4 million for stock bonuses.

The condensed consolidated statements of operations include $0.7 million and $2.7 million of stock compensation expense for the three and nine months ended September 30, 2009, respectively. Stock compensation expense for the three months ended September 30, 2009 consists of $0.7 million of restricted stock awards and $0.1 million for stock option and stock purchase plan expenses offsetting $0.1 million expense reversal for stock bonuses. Stock compensation expense for the nine months ended September 30, 2009 consists of $2.4 million for restricted stock awards and $0.3 million for stock option expense and stock purchase plan expenses.

Read the The complete Report

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