tess_Current folio_ER_8K

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 


FORM 8-K

CURRENT REPORT


 

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): July 16, 2018

 

TESSCO Technologies Incorporated

(Exact name of registrant as specified in its charter)

 

Delaware

001-33938

52-0729657

(State or other jurisdiction of incorporation)

(Commission File Number)

(IRS Employer Identification Number)

 

11126 McCormick Road, Hunt Valley, Maryland 21031

(Address of principal executive offices) (Zip Code)

 

(410) 229-1000

(Registrant’s telephone number, including area code)

 

Not Applicable

(Former name or former address, if changed since last report)

 

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)

☐    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))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 


 

Item 2.02Results of Operations and Financial Condition.

On July 16, 2018, the Company issued a press release which contained, among other things, an announcement of the Company’s financial results for the for the first quarter of fiscal year 2019, ended July 1, 2018. A copy of the Press Release is furnished as Exhibit 99.1 to this Form 8-K.

The information in this Item 2.02, including the information in Exhibit 99.1 attached hereto pertaining to this Item 2.02, is furnished solely pursuant to Item 2.02 of this Form 8-K. Consequently, pursuant to this Item 2.02, it is not deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liabilities of that Section. It may only be incorporated by reference in another filing under the Securities Exchange Act of 1934 or Securities Act of 1933 if such subsequent filing specifically references this Item 2.02 of this Form 8-K.

Item 9.01 Financial Statements and Exhibits.

(a)  Financial Statements of Businesses Acquired.

None.

(b)  Pro Forma Financial Information.

None.

(c)  Shell Company Transactions.

None.

(d)  Exhibits.


 

 

 

 

 

Exhibit No.

 

Description

99.1

 

Press release of TESSCO Technologies Incorporated, dated July 16, 2018.

 

Information presented in this Current Report on Form 8-K may contain forward-looking statements and certain assumptions upon which such forward-looking statements are in part based.  Numerous important factors, including those factors identified in the TESSCO Technologies Incorporated Annual Report on Form 10-K and other of the Company’s filings with the Securities and Exchange Commission, and the fact that the assumptions set forth in this Current Report on Form 8-K could prove incorrect, could cause actual results to differ materially from those contained in such forward-looking statements.


 

EXHIBIT INDEX

 

 

 

Exhibit No.

    

Description of Exhibits

99.1

 

Press release of TESSCO Technologies Incorporated, dated July 16, 2018.

 


 

SIGNATURE

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

 

 

 

TESSCO Technologies Incorporated

 

 

 

 

 

 

 

 

 

 

Date:

July 16, 2018

 

By:

/s/ Aric M. Spitulnik

 

 

 

 

Aric M. Spitulnik

 

 

 

 

Chief Financial Officer

 

 

 

 

(Principal Accounting and Financial Officer)

 

 


tess_EX99_1

Exhibit 99.1

 

Tessco Reports First-Quarter 2019 Financial Results

Quarterly Revenues Grow 8% Year Over Year

Achieves Earnings Per Share of $0.13

Quarterly Dividend of $0.20 Per Share Declared

HUNT VALLEY, MD, July 16, 2018—TESSCO TECHNOLOGIES INCORPORATED (NASDAQ: TESS) today reported financial results for its first quarter of fiscal 2019, ended July 1, 2018.

First-Quarter Highlights:

·

Revenue of $150.9 million, up 8% year over year

·

Revenue growth of 52% in the public carrier market compared with prior-year first quarter

·

Gross profit growth combined with overall expense management contributed to operating margin of 1.2%, compared with 0.9% in the prior-year first quarter

·

Diluted earnings per share grew 63% year over year to $0.13, representing the sixth consecutive quarter of year over year EPS growth

·

Declared quarterly dividend of $0.20 per share

 

 

 

 

 

 

 

 

First Quarter

FY 2019

First Quarter

FY 2018

Fourth Quarter

FY 2018

Revenue

$150.9M

$140.0M

$148.9M

Earnings per diluted share

$0.13

$0.08

$0.14**

EBITDA per diluted share*

$0.31

$0.27

$0.25

Operating margin

1.2%

0.9%

0.8%

Cash balance

$0.0M

$0.2M

$0.0M

Line of credit balance outstanding

$15.8M

$8.3M

$10.8M

 

* EBITDA per diluted share and EBITDA (on which EBITDA per diluted share is based) are Non-GAAP financial measures. Non-GAAP financial measures indicated by an asterisk (*) either in the above chart or in the text of this press release are so indicated as a means to direct the reader to the discussion of Non-GAAP Information below and the reconciliation of Non-GAAP to GAAP results included as an exhibit to this press release.  

 

** Includes $0.06 per share resulting from one-time change in historical tax treatment of an insurance asset, as previously reported.

 

First-Quarter Revenue by Market:

 

 

 

 

 

 

 

 

Year over Year

Q1 FY 2019 vs.

Q1 FY 2018

Sequential

Q1 FY 2019 vs.

Q4 FY 2018

Commercial:

 

 

 Public Carrier

51.7%

5.3%

 Value-Added Resellers

(1.0)%

4.0%

 Government

9.3%

(10.6)%

 Private System Operators

2.8%

(6.6)%

Total Commercial

16.2%

0.7%

Retail

(7.9)%

2.8%

Total

7.8%

1.3%

 

 

 

 

 

 

 

1


 

“I’m excited to report that during the first quarter, we continued our recent trend of growing revenue and earnings,” said Murray Wright, President and Chief Executive Officer. “We executed well on our strategic plan again this quarter. The initiatives we put in place during the past year, and the technology, marketing and sales actions, are resulting in improved performance, establishing a firm foundation for our future growth.  First-quarter revenue grew 8% year over year, and we have now achieved year over year growth in six of the past seven quarters.  Revenue in our commercial markets grew 16% year over year, including impressive 52% growth in the carrier ecosystem. Our new customer relationships, including those with MasTec and Verizon, have significantly grown our market share. Accordingly, as carriers are increasing their activity levels, we are seeing significant revenue growth, and we are well positioned as the FirstNet project continues and 5G buildouts begin later this year. On the bottom line, earnings per share of $0.13 grew from $0.08 in the year-ago quarter, resulting from the growth in sales and gross profit and our improved operating leverage.

“We remain focused on balancing the implementation of our go-to-market strategy with increased operating efficiency,” Wright continued. “Due to projected increases in carrier activity, as well as anticipated growth across both the commercial and retail businesses, we expect accelerated growth in revenue and profitability during the remainder of fiscal 2019.”

First-Quarter 2019 Financial Results

For the fiscal 2019 first quarter, revenues totaled $150.9 million, compared with $140.0 million for first quarter of fiscal 2018. The increase in revenue was driven primarily by the Company’s public carrier market and to a lesser extent by higher sales to the private system operator and government markets.

Gross profit was $30.7 million for the first quarter of fiscal 2019, compared with $29.2 million for the same quarter of fiscal 2018. The 5% increase in first-quarter gross profit year over year was primarily the result of higher total sales. Gross margin was 20.3% of revenue for the first quarter of fiscal 2019, compared with last year’s first-quarter gross margin of 20.8%.  This decline is primarily a function of increased sales to key customers in the carrier ecosystem.

Selling, general and administrative (SG&A) expenses increased 4% to $29.0 million, due to greater investments in marketing and technology and higher-than-usual health insurance expenses. However, despite these expense increases, SG&A as a percentage of revenue for the first quarter declined from 19.9% to 19.2%.  

Net income and earnings per share (EPS) were $1.2 million and $0.13, respectively, for the first quarter of fiscal 2019, compared with $0.7 million, or $0.08 per share, for the prior-year first quarter.

Cash Dividend 

The Company’s Board of Directors has declared a quarterly cash dividend of $0.20 per common share payable on August 15, 2018 to common stockholders of record on August 1, 2018. Any future declaration of dividends, and the establishment of record and payment dates, is subject to future determinations of the Board of Directors.

2


 

 

Business Outlook

 

The Company currently anticipates year-over-year growth in revenue and profitability in both its second fiscal quarter and its full-year fiscal 2019. While the Company does expect growth in the carrier ecosystem, it also expects this to result in a lower overall year-over-year gross margin, given the lower-margin nature of many of these large carrier relationships. 

Forecasting future results or trends is inherently difficult for any business, and actual results or trends may differ materially from those forecasted. The nature of the business is that TESSCO typically ships products within several days after booking orders, which makes it more difficult to forecast future results. The Business Outlook published in this press release reflects only the Company’s current best estimate and it assumes no obligation to update the information contained in this press release, including the Business Outlook, at any time.

First-Quarter Fiscal 2019 Conference Call 

Management will host a conference call to discuss first-quarter fiscal year 2019 results tomorrow, Tuesday, July 17, 2018 at 8:30 a.m. ET. To participate in the conference call, please call 855-319-5921 (domestic call-in) or 503-343-6034 (international call-in) and reference code #7577579.

A live webcast of the conference call will be available on the Events page of the Company’s website. All participants should call or access the website approximately 10 minutes before the conference begins.

A telephone replay of the conference call will be available from 11:30 a.m. ET on July 17, 2018 until 11:59 p.m. ET on July 24, 2018 by calling 855-859-2056 (domestic) or 404-537-3406 (international) and entering confirmation #7577579. An archived replay of the conference call will also be available on the Events page of the Company's website.

Non-GAAP Information 

EBITDA and EBITDA per diluted share are measures used by management to evaluate the Company’s ongoing operations, and to provide a general indicator of the Company's operating cash flow (in conjunction with a cash flow statement which also includes among other items, changes in working capital and the effect of non-cash charges). EBITDA is defined as income from operations, plus interest expense, net of interest income, provision for income taxes, and depreciation and amortization. EBITDA per diluted share is defined as EBITDA divided by Tessco’s diluted weighted average shares outstanding.

Management believes EBITDA and EBITDA per share are useful to investors because they are frequently used by securities analysts, investors and other interested parties in the evaluation of companies. Because not all companies use identical calculations, the Company’s presentation of these Non-GAAP measures may not be comparable to other similarly titled measures of other companies. Neither EBITDA nor EBITDA per diluted share is a recognized term under GAAP, and EBITDA does not purport to be an alternative to net income as a measure of operating performance or to cash flows from operating activities as a measure of liquidity. Additionally, neither EBITDA nor EBITDA per diluted share is intended to be a measure of free cash flow for management's discretionary use, as certain cash requirements, such as interest payments, tax payments and debt service requirements, are not reflected.

A reconciliation of Non-GAAP to GAAP results is included as an exhibit to this release.

3


 

About TESSCO Technologies Incorporated (NASDAQ: TESS)

TESSCO Technologies, Inc. (NASDAQ: TESS) is a value-added technology distributor, manufacturer, and solutions provider serving commercial and retail customers in the wireless infrastructure and mobile device accessories markets. The company was founded more than 30 years ago with a commitment to deliver industry-leading products, knowledge, solutions, and customer service. Tessco supplies more than 50,000 products from 400 of the industry’s top manufacturers in mobile communications, Wi-Fi, Internet of Things (“IoT”), wireless backhaul, and more. Tessco is a single source for outstanding customer experience, expert knowledge, and complete end-to-end solutions for the wireless industry. For more information, visit www.tessco.com.  

Forward-Looking Statements 

This press release contains certain forward-looking statements as to anticipated results and future prospects. These forward-looking statements are based on current expectations and analysis, and actual results may differ materially from those projected. These forward-looking statements may generally be identified by the use of the words "may," "will," "expects," "anticipates," “targets,” “goals,” “projects,” “intends,” “plans,” “seeks,” "believes," "estimates," and similar expressions, but the absence of these words or phrases does not necessarily mean that a statement is not forward-looking. These forward-looking statements are only predictions and involve a number of risks, uncertainties and assumptions, many of which are outside of our control. Our actual results may differ materially and adversely from those described in or contemplated by any such forward-looking statement for a variety of reasons, including those risks identified in our most recent Annual Report on Form 10-K and other periodic reports filed with the Securities and Exchange Commission (the “SEC”), under the heading "Risk Factors" and otherwise. Consequently, the reader is cautioned to consider all forward-looking statements in light of the risks to which they are subject. For additional information with respect to risks and other factors which could occur, see TESSCO’s Annual Report on Form 10-K for the year ended April 1, 2018, including Part I, Item 1A, "Risk Factors" therein, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other securities filings with the SEC that are available at the SEC's website at www.sec.gov and other securities regulators.

We are not able to identify or control all circumstances that could occur in the future that may materially and adversely affect our business and operating results. Without limiting the risks that we describe in our periodic reports and elsewhere, among the risks that could lead to a materially adverse impact on our business or operating results are the following:  termination or non-renewal of limited duration agreements or arrangements with our vendors and affinity partners that are typically terminable by either party upon several months or otherwise relatively short notice; loss of significant customers or relationships, including affinity relationships; loss of customers either directly or indirectly as a result of consolidation among large  wireless services carriers and others within the wireless communications industry; the strength of our customers', vendors' and affinity partners' business; negative or adverse economic conditions, including those adversely affecting consumer confidence or consumer or business spending or otherwise adversely impacting our vendors or customers, including their access to capital or liquidity, or our customers' demand for, or ability to fund or pay for, the purchase of our products and services; our dependence on a relatively small number of suppliers and vendors, which could hamper our ability to maintain appropriate inventory levels and meet customer demand; changes in customer and product mix that affect gross margin; effect of “conflict minerals” regulations on the supply and cost of certain of our products; failure of our information technology system or distribution system; system security or data protection breaches; technology changes in the wireless communications industry or technological failures, which could lead to significant inventory obsolescence and/or our inability to offer key products that our customers demand; third-party freight carrier interruption; increased competition from competitors, including manufacturers or national and regional distributors of the products we sell and the absence of significant barriers to entry which could result in pricing and other pressures on profitability and market share; our relative bargaining power and inability to negotiate favorable terms with our vendors and customers; our inability to access capital and obtain financing as and when needed; transitional and other risks

4


 

associated with acquisitions of companies that we may undertake in an effort to expand our business; claims against us for breach of the intellectual property rights of third parties; product liability claims; our inability to protect certain intellectual property, including systems and technologies on which we rely; our inability to hire or retain for any reason our key professionals, management and staff; and the possibility that, for unforeseen or other reasons, we may be delayed in entering into or performing, or may fail to enter into or perform, anticipated contracts or may otherwise be delayed in realizing or fail to realize anticipated revenues or anticipated savings.

TESSCO Technologies Incorporated
Aric Spitulnik
Chief Financial Officer
410-229-1419
spitulnik@tessco.com

or

David Calusdian
Sharon Merrill Associates
617-542-5300

TESS@investorrelations.com 

5


 

TESSCO Technologies Incorporated

Consolidated Statements of Income (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

Fiscal Quarters Ended

 

 

July 1, 2018

    

June 25, 2017

 

April 1, 2018

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

150,919,400

 

$

140,010,800

 

$

148,920,100

Cost of goods sold

 

 

120,221,300

 

 

110,844,000

 

 

117,381,400

Gross profit

 

 

30,698,100

 

 

29,166,800

 

 

31,538,700

Selling, general and administrative expenses

 

 

28,961,300

 

 

27,881,500

 

 

30,357,600

Income from operations

 

 

1,736,800

 

 

1,285,300

 

 

1,181,100

Interest expense, net

 

 

174,400

 

 

68,600

 

 

89,500

Income before provision for income taxes

 

 

1,562,400

 

 

1,216,700

 

 

1,091,600

Provision for income taxes (benefit)

 

 

404,000

 

 

533,800

 

 

(76,800)

Net income

 

$

1,158,400

 

$

682,900

 

$

1,168,400

Basic earnings per share

 

$

0.14

 

$

0.08

 

 

0.14

Diluted earnings per share

 

$

0.13

 

$

0.08

 

$

0.14

6


 

TESSCO Technologies Incorporated

Consolidated Balance Sheets

 

 

 

 

 

 

 

 

    

July 1,

    

April 1,

 

 

2018

 

2018

 

 

(unaudited)

 

 

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

9,000

 

$

19,400

Trade accounts receivable

 

 

92,815,800

 

 

87,862,300

Product inventory, net

 

 

86,367,200

 

 

72,323,000

Prepaid expenses and other current assets

 

 

5,585,400

 

 

4,489,100

Total current assets

 

 

184,777,400

 

 

164,693,800

 

 

 

 

 

 

 

Property and equipment, net

 

 

13,679,200

 

 

13,662,800

Goodwill, net

 

 

11,677,700

 

 

11,677,700

Deferred tax assets

 

 

713,200

 

 

710,500

Other long-term assets

 

 

8,920,900

 

 

8,678,900

Total assets

 

$

219,768,400

 

$

199,423,700

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Trade accounts payable

 

$

82,483,900

 

$

67,041,100

Payroll, benefits and taxes

 

 

6,645,200

 

 

8,291,100

Income and sales tax liabilities

 

 

2,709,800

 

 

2,339,200

Accrued expenses and other current liabilities

 

 

2,795,000

 

 

1,370,300

Revolving line of credit

 

 

15,770,600

 

 

10,835,400

Current portion of long-term debt

 

 

22,800

 

 

27,300

Total current liabilities

 

 

110,427,300

 

 

89,904,400

 

 

 

 

 

 

 

Long-term debt, net of current portion

 

 

-

 

 

2,300

Other long-term liabilities

 

 

1,475,800

 

 

1,465,400

Total liabilities

 

 

111,903,100

 

 

91,372,100

 

 

 

 

 

 

 

Shareholders’ equity:

 

 

 

 

 

 

Preferred stock

 

 

-

 

 

-

Common stock

 

 

99,300

 

 

99,000

Additional paid-in capital

 

 

61,062,200

 

 

60,611,900

Treasury stock

 

 

(57,614,100)

 

 

(57,503,000)

Retained earnings

 

 

104,317,900

 

 

104,843,700

Total shareholders’ equity

 

 

107,865,300

 

 

108,051,600

Total liabilities and shareholders’ equity

 

$

219,768,400

 

$

199,423,700

 

7


 

TESSCO Technologies Incorporated

Reconciliation of Net Income to Earnings Before Interest, Taxes and Depreciation and Amortization (EBITDA) (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

Fiscal Quarters Ended

 

 

July 1, 2018

 

 

June 25, 2017

 

 

April 1, 2018

 

 

 

 

 

 

 

 

 

Net Income as reported

$

1,158,400

 

$

682,900

 

$

1,168,400

Add:

 

 

 

 

 

 

 

 

Income tax provision (benefit)

 

404,000

 

 

533,800

 

 

(76,800)

Interest, net

 

174,400

 

 

68,600

 

 

89,500

Depreciation and amortization

 

937,100

 

 

989,600

 

 

961,900

EBITDA

$

2,673,900

 

$

2,274,900

 

$

2,143,000

Add:

 

 

 

 

 

 

 

 

Stock based compensation

 

320,500

 

 

247,600

 

 

256,700

EBITDA, adjusted

$

2,994,400

 

$

2,522,500

 

$

2,399,700

 

 

 

 

 

 

 

 

 

EBITDA per diluted share

$

0.31

 

$

0.27

 

$

0.25

Adjusted EBITDA per diluted share

$

0.35

 

$

0.30

 

$

0.28

 

 

 

8


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TESSCO Technologies Incorporated

Supplemental Results Summary (in thousands) (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Three Months Ended

 

Growth Rates Compared to

 

 

July 1, 2018

 

June 25, 2017

 

Prior Year Period

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Market Revenues

 

Commercial

 

Retail

 

Total

 

Commercial

 

Retail

 

Total

 

Commercial

 

Retail

 

Total

Public Carriers, Contractors & Program Managers 

 

$

40,360

 

$

-

 

$

40,360

 

$

26,598

 

$

-

 

$

26,598

 

51.7%

 

-

 

51.7%

Government System Operators 

 

 

9,231

 

 

-

 

 

9,231

 

 

8,445

 

 

-

 

 

8,445

 

9.3%

 

-

 

9.3%

Private System Operators

 

 

21,634

 

 

-

 

 

21,634

 

 

21,042

 

 

-

 

 

21,042

 

2.8%

 

-

 

2.8%

Value-Added Resellers 

 

 

34,682

 

 

-

 

 

34,682

 

 

35,040

 

 

-

 

 

35,040

 

(1.0%)

 

-

 

(1.0%)

Retailer, Independent Dealer Agents & Carriers 

 

 

-

 

 

45,012

 

 

45,012

 

 

-

 

 

48,886

 

 

48,886

 

-

 

(7.9%)

 

(7.9%)

Total revenues 

 

$

105,907

 

$

45,012

 

$

150,919

 

$

91,125

 

$

48,886

 

$

140,011

 

16.2%

 

(7.9%)

 

7.8%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Market Gross Profit

 

Commercial

 

Retail

 

Total

 

Commercial

 

Retail

 

Total

 

Commercial

 

Retail

 

Total

Public Carriers, Contractors & Program Managers 

 

$

5,626

 

$

-

 

$

5,626

 

$

4,128

 

$

-

 

$

4,128

 

36.3%

 

-

 

36.3%

Government System Operators 

 

 

2,137

 

 

-

 

 

2,137

 

 

2,004

 

 

-

 

 

2,004

 

6.6%

 

-

 

6.6%

Private System Operators

 

 

4,865

 

 

-

 

 

4,865

 

 

4,607

 

 

-

 

 

4,607

 

5.6%

 

-

 

5.6%

Value-Added Resellers  

 

 

8,915

 

 

-

 

 

8,915

 

 

8,961

 

 

-

 

 

8,961

 

(0.5%)

 

-

 

(0.5%)

Retailer, Independent Dealer Agents & Carriers 

 

 

 

 

9,155

 

 

9,155

 

 

 

 

9,467

 

 

9,467

 

-

 

(3.3%)

 

(3.3%)

Total gross profit 

 

$

21,543

 

$

9,155

 

$

30,698

 

$

19,700

 

$

9,467

 

$

29,167

 

9.4%

 

(3.3%)

 

5.2%

% of revenues 

 

 

20.3%

 

 

20.3%

 

 

20.3%

 

 

21.6%

 

 

19.4%

 

 

20.8%

 

 

 

 

 

 

 

9


 

TESSCO Technologies Incorporated

Supplemental Results Summary (in thousands) (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Three Months Ended

 

Growth Rates Compared

 

 

July 1, 2018

 

June 25, 2017

 

to Prior Year Period

Revenues

 

 

 

 

 

 

 

 

 

Base station infrastructure

 

$

74,314

 

$

59,070

 

25.8

%

Network systems

 

 

22,777

 

 

23,837

 

(4.4)

%

Installation, test and maintenance

 

 

7,431

 

 

6,993

 

6.3

%

Mobile device accessories

 

 

46,397

 

 

50,111

 

(7.4)

%

Total revenues

 

$

150,919

 

$

140,011

 

7.8

%

 

 

 

 

 

 

 

 

 

 

Gross Profit

 

 

 

 

 

 

 

 

 

Base station infrastructure

 

$

15,716

 

$

14,057

 

11.8

%

Network systems

 

 

3,663

 

 

3,829

 

(4.3)

%

Installation, test and maintenance

 

 

1,473

 

 

1,419

 

3.8

%

Mobile device accessories

 

 

9,846

 

 

9,862

 

(0.2)

%

Total gross profit

 

$

30,698

 

$

29,167

 

5.2

%

 

10


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TESSCO Technologies Incorporated

Supplemental Results Summary (in thousands) (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Three Months Ended

 

Growth Rates Compared to

 

 

July 1, 2018

 

April 1, 2018

 

Prior Period

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Market Revenues

 

Commercial

 

Retail

 

Total

 

Commercial

 

Retail

 

Total

 

Commercial

 

Retail

 

Total

Public Carriers, Contractors & Program Managers 

 

$

40,360

 

$

-

 

$

40,360

 

$

38,319

 

$

-

 

$

38,319

 

5.3%

 

-

 

5.3%

Government System Operators 

 

 

9,231

 

 

-

 

 

9,231

 

 

10,331

 

 

-

 

 

10,331

 

(10.6%)

 

-

 

(10.6%)

Private System Operators

 

 

21,634

 

 

-

 

 

21,634

 

 

23,153

 

 

-

 

 

23,153

 

(6.6%)

 

-

 

(6.6%)

Value-Added Resellers 

 

 

34,682

 

 

-

 

 

34,682

 

 

33,340

 

 

-

 

 

33,340

 

4.0%

 

-

 

4.0%

Retailer, Independent Dealer Agents & Carriers 

 

 

-

 

 

45,012

 

 

45,012

 

 

-

 

 

43,777

 

 

43,777

 

-

 

2.8%

 

2.8%

Total revenues 

 

$

105,907

 

$

45,012

 

$

150,919

 

$

105,143

 

$

43,777

 

$

148,920

 

0.7%

 

2.8%

 

1.3%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Market Gross Profit

 

Commercial

 

Retail

 

Total

 

Commercial

 

Retail

 

Total

 

Commercial

 

Retail

 

Total

Public Carriers, Contractors & Program Managers 

 

$

5,626

 

$

-

 

$

5,626

 

$

5,624

 

$

-

 

$

5,624

 

0.0%

 

-

 

0.0%

Government System Operators 

 

 

2,137

 

 

-

 

 

2,137

 

 

2,282

 

 

-

 

 

2,282

 

(6.4%)

 

-

 

(6.4%)

Private System Operators

 

 

4,865

 

 

-

 

 

4,865

 

 

5,397

 

 

-

 

 

5,397

 

(9.9%)

 

-

 

(9.9%)

Value-Added Resellers  

 

 

8,915

 

 

-

 

 

8,915

 

 

8,888

 

 

-

 

 

8,888

 

0.3%

 

-

 

0.3%

Retailer, Independent Dealer Agents & Carriers 

 

 

 

 

9,155

 

 

9,155

 

 

 

 

9,348

 

 

9,348

 

-

 

(2.1%)

 

(2.1%)

Total gross profit 

 

$

21,543

 

$

9,155

 

$

30,698

 

$

22,191

 

$

9,348

 

$

31,539

 

(2.9%)

 

(2.1%)

 

(2.7%)

% of revenues 

 

 

20.3%

 

 

20.3%

 

 

20.3%

 

 

21.1%

 

 

21.4%

 

 

21.2%

 

 

 

 

 

 

 

11


 

 

TESSCO Technologies Incorporated

Supplemental Results Summary (in thousands) (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Three Months Ended

 

Growth Rates Compared

 

 

July 1, 2018

 

April 1, 2018

 

to Prior Period

Revenues

 

 

 

 

 

 

 

 

 

Base station infrastructure

 

$

74,314

 

$

73,149

 

1.6

%

Network systems

 

 

22,777

 

 

21,601

 

5.4

%

Installation, test and  maintenance

 

 

7,431

 

 

9,273

 

(19.9)

%

Mobile device accessories

 

 

46,397

 

 

44,897

 

3.3

%

Total revenues

 

$

150,919

 

$

148,920

 

1.3

%

 

 

 

 

 

 

 

 

 

 

Gross Profit

 

 

 

 

 

 

 

 

 

Base station infrastructure

 

$

15,716

 

$

16,591

 

(5.3)

%

Network systems

 

 

3,663

 

 

3,479

 

5.3

%

Installation, test and maintenance

 

 

1,473

 

 

1,655

 

(11.0)

%

Mobile device accessories

 

 

9,846

 

 

9,814

 

0.3

%

Total gross profit

 

$

30,698

 

$

31,539

 

(2.7)

%

 

12