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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
APRIL 7, 2006
Date of Report (Date of earliest event reported)
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PCTEL, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 000-27115 77-0364943
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(State or Other Jurisdiction of (Commission (IRS Employer
Incorporation) File Number) Identification No.)
8725 W. HIGGINS ROAD, SUITE 400
CHICAGO, IL 60631
(Address of Principal Executive Offices, including Zip Code)
(773) 243-3000
(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12(b))
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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ITEM 2.05 COSTS ASSOCIATED WITH EXIT OR DISPOSAL ACTIVITIES
On April 7, 2006, the company reached an agreement in principle with
the labor union responsible for the company's manufacturing and certain other
personnel in its Dublin, Ireland factory to discontinue the manufacture of the
iVET, PMR and DPMR lines of the company's antenna products at that location.
This agreement will enable the company to wind down its manufacturing operations
at the Dublin facility, terminate 65 redundant employee positions, terminate its
facilities lease at this location, and reduce its pension obligations to
terminated employees. Manufacturing of the discontinued lines of antenna
products will be substantially relocated either to a contract manufacturer in
St. Petersburg, Russia, or to the company's Antenna Products Group facility in
Bloomingdale, Illinois. The process of winding down manufacturing operations in
Dublin and relocating the products to their new manufacturing locations is
expected to be complete by mid- 2006, and the related general and administrative
support functions are expected to be eliminated by the end of 2006.
The company will continue to maintain antenna research and development
as well as sales and marketing activities in a smaller facility in Dublin to be
established during the last quarter of 2006. The company believes that its
restructuring activities in Dublin will enable it to improve the gross profit
margins of the antenna product lines that were included with the company's
acquisition of Sigma Wireless Technologies in July 2005.
The company expects to incur restructuring costs related to the
discontinuation of its Dublin manufacturing operations. The categories of costs
are: severance pay for employees whose jobs are being made redundant; future
minimum lease payments through June 2007 on the existing Dublin facility which
will be vacated; and, termination of the employee pension defined benefit plan.
The severance, future lease payments, and a portion of the termination of the
employee pension defined benefit plan will result in future cash expenditures.
The company will incur severance costs of approximately $1.4 million.
Approximately $0.5 million is statutory and will be recorded in the first
quarter 2006. The remaining amount will be recorded over the service period of
the affected employees. It is anticipated that the future minimum lease payments
between the time the facility is vacated and the end of the minimum lease period
will be between $0.1 and $0.2 million. The company is still evaluating the
potential credit, if any, which would be incurred with the termination of the
pension plan and related payout to the pension members. It is not in a position
at this time to estimate costs or credits for the pension termination. When
those costs or credits are known, the company will make additional disclosure.
ITEM 2.06 MATERIAL IMPAIRMENTS
In conjunction with the discontinuance of manufacturing operations in
the Dublin facility, the company will dispose of fixed assets no longer
required. It anticipates the net book value of such assets to be in a range
between $0.3 and $0.5 million. The impairment is non-cash in nature.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
Date: April 13, 2006
PCTEL, INC.
By: /s/ John W. Schoen
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John W. Schoen, Chief Financial Officer
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