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TESSCO Technologies Inc. (TESS) filed Quarterly Report for the period ended 2011-12-25.
Tessco Technologies Inc. has a market cap of $139.6 million; its shares were traded at around $17.98 with a P/E ratio of 10 and P/S ratio of 0.2. The dividend yield of Tessco Technologies Inc. stocks is 3.3%. Tessco Technologies Inc. had an annual average earning growth of 15.8% over the past 10 years. GuruFocus rated Tessco Technologies Inc. the business predictability rank of 2-star.
This is the annual revenues and earnings per share of TESS over the last 10 years. For detailed 10-year financial data and charts, go to 10-Year Financials of TESS.
Highlight of Business Operations:
Excluding sales to our Tier 1 carriers, third quarter revenues increased by 5.6% as compared to the third quarter of fiscal year 2011. As a result of a 93.0% increase in sales to our Tier 1 carriers (including AT&T), total third quarter revenues increased by 34.7% compared to the third quarter of fiscal year 2011. In the third quarter of fiscal year 2012, AT&T, our largest customer, accounted for 45% of total revenues, compared to 30% of total revenues in the third quarter of fiscal year 2011. No other customer accounted for more than 7% of total consolidated revenues during the third quarter of fiscal year 2012. Excluding our Tier 1 carriers, gross profit increased 9.4% in the third quarter of fiscal 2012 as compared to the third quarter of fiscal year 2011. Gross profit from our Tier 1 carriers increased 43.8% in the same period, resulting in an overall increase of 16.8% compared to the third quarter of the prior fiscal year. Selling, general and administrative expenses increased by 7.2% over the prior year quarter, primarily due to increases in our pay for performance bonus expense and an increase in AT&T marketing development expenses. As a result, net income increased by 61.2% and diluted earnings per share grew by 55.3% over the prior-year quarter.Total Revenues. Revenues for the third quarter of fiscal year 2012 increased 34.7% as compared with the third quarter of fiscal year 2011, due to a 66.5% increase in retail segment revenues. The retail sales growth was largely a result of a 93.0% increase in sales to our Tier 1 carrier customers, primarily AT&T, but also due to a 15.3% increase in sales to our non-Tier 1 customers. Commercial segment revenues increased 2.2% compared to the third quarter of fiscal year 2011, with a significant increase in sales to our commercial dealers and resellers market, offset by a decline in sales to our public carrier, contractor and program manager market. During the third quarter, sales of our proprietary products, which are sold primarily to other than our Tier 1 carrier customers, increased 7.0% on a dollars basis, as compared to the prior year quarter . However, due to the significant increase in overall sales, and the fact that proprietary product sales represented only a small percentage of the increased AT&T sales on a dollar basis, proprietary product sales decreased to 6.9% of total sales compared to 8.6% of total sales in the prior year quarter. Because our proprietary products generally carry higher gross margins than our other non-proprietary third party products, the increased sales of proprietary products on a dollars basis contributed to the margin growth we experienced during the third quarter in sales to other than our Tier 1 carrier customers (see detailed explanation below).
Commercial Segment. Revenues in our commercial segment totaled $84.9 million in the third quarter of fiscal year 2012, compared to $83.1 million in the prior year period, a 2.2% increase. Gross profit totaled $21.8 million, a 2.6% increase as compared to the third quarter last year. Within this segment, the commercial dealers and resellers market grew revenues by 14.6% and gross profits by 10.8%. The private system operator and government market grew revenues by 8.6% and gross profits by 11.0%. We continue to see strong opportunities for our proprietary and customized solutions in this market as these customers continue to build and enhance their own private wireless applications. The public carrier, contractor and program manager market had revenue and gross profit decline of 21.1% as carriers continued to delay significant network builds.
Commercial Segment. Revenues in our commercial segment totaled $245.8 million in the first nine months of fiscal year 2012, up 2.7% as compared to the prior year period. Gross profit totaled $65.7 million during the first three quarters of fiscal year 2012, a 7.0% increase as compared to the prior year period. Within this segment, as compared to the prior year period, the private system operator and government market grew revenues by 17.8% and gross profits by 24.5%. We continue to see strong opportunities for our proprietary and customized solutions in this market as these customers continue to build and enhance their own private wireless applications. The commercial dealer and reseller market showed a 5.2% increase in revenues, and a 8.9% increase in gross profit during the first nine months of fiscal year 2012, as compared to the prior year period. The public carrier, contractor and program manager market had a revenue decline of 18.3% and a gross profit decline of 19.2% compared to the prior year period, as carriers continued to delay significant network builds.
Retail Segment. Revenues in our retail segment totaled $292.8 million in the first nine months of fiscal year 2012, a 24.3% increase over the prior year period. Gross profit totaled $45.0 million, an 8.3% increase as compared to the prior year period. As compared to the first nine months last year, revenues in our retailer, dealer agent and Tier 2/3 carrier market were up 11.1%, with a 16.0% increase in gross profit for the first nine months of fiscal year 2012. Sales to our Tier 1 carrier market (primarily AT&T), showed a 31.2% revenue increase and a 3.3% gross profit increase for the first nine months of fiscal year 2012 as compared to the same period last year, both due to the expansion of our AT&T relationship.
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