PCTEL Inc (PCTI) Reports Decline in Q3 Revenue and Adjusted EBITDA Amid Pending Merger with Amphenol
Revenue decreased by 33.1% year-over-year to $17.4 million in Q3 2023.
GAAP gross profit margin declined to 43.8%, with a GAAP net loss of $0.1 million.
Adjusted EBITDA fell sharply to $0.3 million, a 92% decrease from Q3 2022.
Pending merger with Amphenol Corporation expected to close between Q4 2023 and early 2024.
On November 8, 2023, PCTEL Inc (NASDAQ:PCTI) released its financial results for the third quarter ended September 30, 2023, revealing a significant downturn in revenue and profitability. The company, a leading provider of wireless technology solutions, reported a 33.1% decrease in revenue to $17.4 million compared to the same period last year. This decline was attributed to lower revenues in both the antennas and industrial IoT device segment, particularly in agriculture and public safety applications, and a decrease in Test & Measurement revenue, primarily due to reduced sales with OEM customers for 5G technology products.
Financial Highlights and Challenges
The GAAP gross profit margin for Q3 2023 was 43.8%, a decrease from 45.9% in Q3 2022, reflecting a negative mix shift between product lines. Adjusted EBITDA plummeted by 92% to $0.3 million, and the company experienced a GAAP net loss of $0.1 million, or $0.01 per diluted share. This contrasts with a GAAP net income of $2.0 million, or $0.11 earnings per share, in the same quarter of the previous year. Non-GAAP net income broke even, a stark contrast to the $2.6 million, or $0.14 per share, reported in Q3 2022.
Merger and Future Outlook
Amidst these financial challenges, PCTEL Inc (NASDAQ:PCTI) is in the process of being acquired by Amphenol Corporation. The merger agreement, announced on October 13, 2023, stipulates that PCTEL stockholders will receive $7.00 in cash for each share of common stock owned. The transaction is expected to close in the fourth quarter of 2023 or early 2024, pending customary closing conditions and approval by PCTEL's stockholders. Following the merger's completion, PCTEL will be delisted from public markets.
Liquidity Position
The company's liquidity, as measured by cash, cash equivalents, and investments, stood at $33.3 million as of September 30, 2023, marking a slight decrease from the previous quarter.
For more detailed information about PCTEL Inc (NASDAQ:PCTI)'s financial performance and the pending merger with Amphenol Corporation, investors and interested parties are encouraged to visit the company's website at https://www.pctel.com/ and the investor relations section at https://investor.pctel.com/.
PCTEL Inc (NASDAQ:PCTI) faces a challenging period, with significant declines in key financial metrics. However, the pending merger with Amphenol Corporation may offer a strategic pathway forward for the company and its stakeholders.
Explore the complete 8-K earnings release (here) from PCTEL Inc for further details.
This article first appeared on GuruFocus.
