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PCTel Inc. Reports Operating Results (10-Q)

August 10, 2009 | About:

PCTel Inc. (PCTI) filed Quarterly Report for the period ended 2009-06-30.

PCTEL designs develops and delivers wireless solutions. PCTEL\'s products include wireless local area network software products that simplify installation roaming Internet access and billing. Its subsidiary DTI designs develops and distributes software-defined receivers and receiver-based products that measure monitor and optimize the performance of cellular and Wi-Fi networks. . MAXRAD designs develops manufactures and distributes innovative antenna solutions that facilitate and simplify wireless communications. PCTel Inc. has a market cap of $115.31 million; its shares were traded at around $6.12 with a P/E ratio of 102 and P/S ratio of 1.5.

Highlight of Business Operations:

General and administrative expenses decreased approximately $0.4 million for the three months ended June 30, 2009 and approximately $0.7 million for the six months ended June 30, 2009 compared to the same periods in fiscal 2008. For the three months ended June 30, 2009, the expense decrease is due to $0.2 million lower stock compensation expense for employees in general and administrative functions and $0.2 million due to corporate cost reductions. For the six months ended June 30, 2009, the expense decrease is due to $0.5 million lower stock compensation expense for employees in general and administrative functions and $0.2 million due to corporate cost reductions.

During the three months ended June 30, 2009 we recorded $0.2 million expense related to Wi-Sys restructuring and $0.1 million expense related to antenna operations. During the six months ended June 30, 2009, we recorded $0.2 million expense related to Wi-Sys restructuring and $0.3 million expense related to antenna operations.

In the fourth quarter of 2008 we sold certain antenna products and related assets to SWTS. SWTS purchased the intellectual property, dedicated inventory, and certain fixed assets related to four of our antenna product families for $0.7 million, payable in installments at close and over a period of 18 months. The four product families represent the last remaining products acquired by us through our acquisition of Sigma in July 2005. SWTS and Sigma are unrelated. In the year ended December 31, 2008, we recorded a $0.9 million loss on sale of product lines, separately within operating expenses in the consolidated statements of operations. The net loss included the book value of the assets sold to SWTS, impairment charges in accordance with FAS 142 and FAS No. 144, Accounting for Impairment or Disposal of Long-Lived Assets, (FAS 144), and incentive payments due the new employees of SWTS, net of the proceeds due to us. We sold inventory with a net book value of $0.8 million and wrote off intangible assets including goodwill of $0.5 million. The intangible asset write-off was the net book value and the goodwill write-off was a pro-rata portion of goodwill in accordance with FAS 142. We paid incentive payments of $0.1 million and calculated $0.5 million in proceeds based on the principal value of the installment payments excluding imputed interest.

Other income, net consists primarily of interest income and foreign exchange gains and losses. Other income, net decreased in the three months and six months ended June 30, 2009 compared to the comparable period in 2008 due to lower interest income and lower foreign exchange gains. For the three months ended June 30, 2009 and 2008, interest income was $0.2 million and $0.6 million, respectively. For the six months ended June 30, 2009 and 2008, interest income was $0.4 million and $1.2 million, respectively. Interest income decreased due to lower cash balances in 2009 compared to 2008 and because of lower interest rates. The cash balance during the first quarter 2008 includes the proceeds from the sale of MSG. We subsequently used a portion of the cash for a cash dividend and for repurchases of our common stock. In the three months ended June 30, 2009 and 2008, we recorded foreign exchange gains (losses) of $(4) and $52, respectively. In the six months ended June 30, 2009 and 2008, we recorded foreign exchange gains (losses) of $(34) and $218, respectively.

We had no activity related to discontinued operations in the three months and six months ended June 30, 2009 and we do not anticipate any activity in discontinued operations in 2009. Discontinued operations for the three months ended June 30, 2008 included a $0.1 million benefit for state income taxes. Discontinued operations for the six months ended June 30, 2008 included the gain on the sale of MSG of $60.3 million in addition to net loss from operations of $0.3 million and income tax expense of $23.2 million.

Total stock compensation expense for the three months ended June 30, 2009 was $1.1 million in the condensed consolidated statement of operations, which included $1.0 million of restricted stock amortization and $0.1 million for stock option expense and stock bonuses. Total stock compensation expense for the six months ended June 30, 2009 was $2.0 million in the condensed consolidated statement of operations, which included $1.8 million of restricted stock amortization a

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