Form_SD

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM SD

Specialized Disclosure Report

 

 

Commission File Number: 00133938

 

TESSCO Technologies Incorporated

(Exact name of registrant as specified in its charter)

 

 

 

 

Delaware

 

52-0729657

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S Employer

Identification No.)

 

 

 

11126 McCormick Road, Hunt Valley, Maryland

 

21031

(Address of principal executive offices)

 

(Zip Code)

 

(410) 229-1000

(Registrant’s telephone number, including area code)

 

 

Check the appropriate box to indicate the rule pursuant to which this form is being filed, and provide the period to which the information in this form applies:

 

þ

Rule 13p-1 under the Securities Exchange Act (17 CFR 240.13p-1) for the reporting period from January 1 to December 31, 2017.

 


 

 

Section 1 – Conflict Minerals Disclosure

 

Item 1.01 Conflict Minerals Disclosure and Report

 

Conflict Minerals Disclosure

This Form SD of TESSCO Technologies Incorporated (the Company) is filed pursuant to Rule 13p-1 promulgated under the Securities Exchange Act of 1934, as amended, for the reporting period January 1, 2017 to December 31, 2017.

   

A copy of the Company’s Conflict Minerals Report is provided as Exhibit 1.01 to this Form SD and is publicly available at www.tessco.com/yts/corporate/investor/pdf/form-sd-and-conflict-minerals-report.pdf.

 

Item 1.02 Exhibit

 

As an exhibit to this Form SD, the Conflict Minerals Report required by Item 1.01 is found in Section 2, Item 2.01.

 

Section 2 – Exhibits

 

Item 2.01 Exhibits

 

Exhibit 1.01- Conflict Minerals Report for the reporting period January 1, 2017 to December 31, 2017.

 

 


 

 

 

 

Exhibit No.

 

Description

1.01

 

Conflict Minerals Report for the reporting period January 1, 2017 to December 31, 2017.


 

 

 

Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

 

 

 

 

 

TESSCO TECHNOLOGIES INCORPORATED

 

 

 

 

Date:

May 29, 2018

By:

/s/ Aric Spitulnik

 

 

 

Aric Spitulnik

 

 

 

Chief Financial Officer

 

 

 

(principal financial and accounting officer)

 

 


Exhibit_1.01

Exhibit 1.01

TESSCO Technologies Incorporation

Conflict Minerals Report

For the Year Ended December 31, 2017

 

 

TESSCO Technologies Incorporated, a Delaware corporation (TESSCO, we, or the Company), architects and delivers innovative product and value chain solutions, and supplies products, to support wireless broadband systems. The Company provides marketing and sales services, knowledge and supply chain management, product-solution delivery and control systems, utilizing extensive Internet and information technology. 

 

This is the Conflict Minerals Report for TESSCO for calendar year 2017, filed in accordance with Rule 13p-1 under the Securities Exchange Act of 1934, as amended (“Rule 13p-1”).  Rule 13p-1 requires disclosure of certain information when a company manufactures or contracts to manufacture products containing conflict minerals necessary to the functionality or production of the products.  “Conflict minerals” are defined as gold, columbite-tantalite (coltan), cassiterite, wolframite, tantalum, tin, and tungsten.

 

Overview of Conflict Minerals Program and Reasonable Country of Origin Inquiry

 

TESSCO’s Conflict Minerals Program is designed to facilitate compliance with Dodd-Frank Section 1502 and Rule 13p-1. We reviewed our product offerings and concluded that only certain products in our Ventev® product line contain conflict minerals that are necessary to the functionality or production of the product and are subject to Rule 13p-1.  These Ventev® products include products contracted by us to be manufactured by others, and products assembled by TESSCO, referred to as “integrated” products.  An evaluation of these products was performed in order to determine the risk that they included conflict minerals that directly or indirectly financed or benefitted armed groups in the Democratic Republic of the Congo or an adjoining country (collectively, the “Covered Countries”).  Based on this evaluation, the products that could contain conflict minerals, and which were not generic in nature, were determined to be, and are referred to as, “in-scope” for purposes of the Conflict Minerals Program. 

 

Representatives from our Finance, Ventev® and Global Manufacture Supply Chain teams participate in the Conflict Minerals Program and support compliance. Our Conflict Minerals Policy is aimed at reducing the risk of using in our contracted to manufacture or assembled products any conflict minerals that directly or indirectly finance or benefit armed groups in the Covered Countries.  The Conflict Minerals Policy statement can be found at: http://tesscotechnologies.gcs-web.com/corporate-governance/conflict-minerals-policy.  The content of any website referred to in this Conflict Minerals Report is included for general information only and is not incorporated by reference herein.

 

TESSCO conducted in good faith a reasonable country of origin inquiry (RCOI), which was designed to determine whether any of the conflict minerals contained in in-scope Ventev® products originated in the Covered Countries or came from recycled or scrap sources.  TESSCO surveyed more than 40 contracted manufacturers and integrated parts suppliers that contributed to in-scope Ventev® products manufactured for or supplied to TESSCO during 2017. The terms “manufacturer” and “supplier” are used interchangeably herein to refer to both contracted manufacturers and integrated parts suppliers. All such manufacturers were requested to complete and return a conflict minerals reporting questionnaire. We provided information and assistance to suppliers about the specifics of Rule 13p-1 and the information requested by the questionnaire. Responses from suppliers were evaluated for red flags, defined as the following: incomplete questionnaire;


 

inconsistent questionnaire responses; conflict minerals identified as being sourced from the Covered Countries; non-responsiveness; and undeterminable conflict mineral sourcing.

 

The Company’s Corrective Action Plan was utilized when a conflict minerals reporting questionnaire response revealed a red flag. The Corrective Action Plan focused on communicating with the manufacturer to address the identified red flag issues and on providing training and reference materials, including website links to appropriate educational information, and guidance to the manufacturer to assist in the completion of the conflict minerals reporting questionnaire.  Much of the information provided to manufacturers highlighted the importance of achieving a conflict free supply chain and adopting a mutually sustainable compliance program. TESSCO instituted corrective measures in accordance with the Corrective Action Plan for all suppliers whose responses revealed a red flag. In addition, TESSCO encouraged suppliers to adopt a conflict free supply chain and informed them that failure to provide a completed conflict minerals reporting questionnaire could affect TESSCO’s future sourcing decisions. 

 

TESSCO undertook additional due diligence measures, as described below, with regard to the smelters and refiners identified in RCOI responses as potential sources of conflict minerals used in in-scope Ventev® products.

 

Ventev® Product Line Overview

The in-scope Ventev® products that required due diligence on the source and chain of custody of conflict minerals were infrastructure products used to build, repair and upgrade wireless communications and wireless mobility products used to power and connect mobile devices.  The infrastructure products included antennas, cables, lightning protective devices, connectors, power systems and miscellaneous hardware.  The wireless mobility products included wall and car chargers, portable battery chargers, and charge/synch cables. These products were either manufactured on behalf of TESSCO or purchased from suppliers and assembled by TESSCO.  As such, we have limited influence over the manufacturing process of these products and must rely on the information provided to us by our suppliers in identifying the source and chain of custody of any conflict minerals contained in these products.

 

Design of Due Diligence

TESSCO’s due diligence design conforms to the measures prescribed by the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas: Second Edition, including the related supplements on tantalum, tin, tungsten and gold, an internationally recognized due diligence framework.

 

Due Diligence Measures Performed

Through the RCOI process, our suppliers provided us with over 3,500 purported smelter and refiner names.  We evaluated and conducted due diligence in respect of these names and our in-scope Ventev products, and after eliminating known non-metal processors and duplicate names, identified 420 smelters and refiners as potential sources of conflict minerals used in our in-scope products.

 

In order to validate the information provided for these smelters and refiners, including their location and conflict minerals sourcing, TESSCO engaged a qualified independent third party with expertise in conflict minerals compliance, to provide data enrichment and verification services. This third party service provider reevaluated whether the companies identified by TESSCO’s suppliers were in fact metal processors (smelters, refiners, and recyclers of conflict minerals); assessed the risk that those processors sourced conflict minerals from the Covered Countries; determined the location of the metal processors and the country of origin of conflict minerals processed by the metal processors; and matched the metal processors


 

against available lists of processors that have been certified by internationally accepted audit standards, such as the Conflict-Free Sourcing Initiative’s Conflict-Free Smelter Program list or an equivalent third-party audit program.  If a metal processor was not certified as conflict free, the third party service provider contacted the processor to gain more information about its sourcing practices.

 

Determination

TESSCO’s due diligence measures identified 296 metal processors as possible sources of conflict minerals contained in in-scope Ventev® products for calendar year 2017. Of these 296 metal processors, we believe 195 did not process conflict minerals originating in the Covered Countries. For 41 of the remaining 101 metal processors, we were unable to determine their conflict mineral sourcing. While the country of origin is unknown, 30 of the 41 are compliant with the CFSI’s Conflict-Free Smelter Program or an equivalent third-party audit program. Sixty of the remaining 101 metal processors were identified as possible sources of conflict minerals originating from the Covered Countries (see Table 1).  All but two of these 60 were verified as conflict-free compliant. 

 

Not all of TESSCO’s suppliers were able to provide smelter or refiner information. Due to our limited access to manufacturing supply chain information, we were unable to determine the source and chain of custody of conflict minerals in products purchased or manufactured by those of our suppliers not providing smelter or refiner information.  Accordingly, we do not have sufficient information to determine the country of origin of all conflict minerals found in our in-scope Ventev® products, the facilities used in the production of such conflict minerals, or the mine or location of origin.   

 

Risk Mitigation/Future Due Diligence Measures

TESSCO has a continuous improvement plan that describes steps to be taken to mitigate the risk that its necessary conflict minerals benefit armed groups in the Covered Countries. Included in these are the following steps, among others, to continue to improve our due diligence measures:

 

·

Continue to assess the risks in our Ventev® supply chain of conflict minerals sourced from Covered Countries.

·

Continue to influence Ventev® sourcing practices to encourage the use of conflict free compliant sources.

·

Continue to engage suppliers during the year to communicate TESSCO’s expectations and timelines.

·

Continue to enhance training materials for suppliers.

·

Continue to work with third party service providers to review and validate our supplier RCOI responses.

 

 

 

 


 

Table 1

Following is a list of facilities which may have processed conflict minerals found in in-scope Ventev® products, which originated or TESSCO has reason to believe may have originated in Covered Countries.

 

 

 

Metal

Smelter or Refiner Name

Gold

Almalyk Mining and Metallurgical Complex (AMMC)

Gold

Asaka Riken Co., Ltd.

Gold

CCR Refinery - Glencore Canada Corporation

Gold

Elemetal Refining, LLC

Gold

Jiangxi Copper Co., Ltd.

Gold

Mitsubishi Materials Corporation

Gold

Nihon Material Co., Ltd.

Gold

Prioksky Plant of Non-Ferrous Metals

Gold

Rand Refinery (Pty) Ltd.

Gold

Samduck Precious Metals

Tantalum

Changsha South Tantalum Niobium Co., Ltd.

Tantalum

Duoluoshan

Tantalum

F&X Electro-Materials Ltd.

Tantalum

Global Advanced Metals Aizu

Tantalum

Global Advanced Metals Boyertown

Tantalum

Guangdong Rising Rare Metals-EO Materials Ltd.

Tantalum

Guangdong Zhiyuan New Material Co., Ltd.

Tantalum

H.C. Starck Co., Ltd.

Tantalum

H.C. Starck Hermsdorf GmbH

Tantalum

H.C. Starck Inc.

Tantalum

H.C. Starck Ltd.

Tantalum

H.C. Starck Smelting GmbH & Co. KG

Tantalum

H.C. Starck Tantalum and Niobium GmbH

Tantalum

JiuJiang JinXin Nonferrous Metals Co., Ltd.

Tantalum

Jiujiang Nonferrous Metals Smelting Company Limited

Tantalum

Jiujiang Zhongao Tantalum & Niobium Co., Ltd.

Tantalum

KEMET Blue Metals

Tantalum

Kemet Blue Powder

Tantalum

LSM Brasil S.A.

Tantalum

Ningxia Orient Tantalum Industry Co., Ltd.

Tantalum

Taki Chemical Co., Ltd.

Tantalum

Ulba Metallurgical Plant JSC

Tin

CV United Smelting

Tin

CV Venus Inti Perkasa

Tin

EM Vinto

Tin

Jiangxi Ketai Advanced Material Co., Ltd.

Tin

Magnu's Minerais Metais e Ligas Ltda.

Tin

Malaysia Smelting Corporation (MSC)

Tin

Metallo Belgium N.V.

Tin

Operaciones Metalurgical S.A.

Tin

PT Bangka Tin Industry

Tin

PT Bukit Timah

Tin

PT Eunindo Usaha Mandiri


 

Tin

PT Stanindo Inti Perkasa

Tin

PT Sumber Jaya Indah

Tin

PT Timah  (Persero)  Tbk Kundur

Tin

PT Timah  (Persero)  Tbk Mentok

Tin

PT Tinindo Inter Nusa

Tin

Thaisarco

Tungsten

A.L.M.T. TUNGSTEN Corp.

Tungsten

Asia Tungsten Products Vietnam Ltd.

Tungsten

Chongyi Zhangyuan Tungsten Co., Ltd.

Tungsten

Ganzhou Huaxing Tungsten Products Co., Ltd.

Tungsten

Ganzhou Jiangwu Ferrotungsten Co., Ltd.

Tungsten

H.C. Starck Tungsten GmbH

Tungsten

Hydrometallurg, JSC

Tungsten

Jiangxi Xinsheng Tungsten Industry Co., Ltd.

Tungsten

Vietnam Youngsun Tungsten Industry Co., Ltd.

Tungsten

Xiamen Tungsten (H.C.) Co., Ltd.

Tungsten

Xiamen Tungsten Co., Ltd.

 

Countries of origin of the conflict minerals these facilities process are believed to include:  Angola, Burundi, Central African Republic, Congo (Brazzaville), DRC-Congo (Kinshasa), Rwanda, South Sudan, Tanzania, Uganda, and Zambia