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TESSCO Technologies Inc. Reports Operating Results (10-Q)

February 08, 2013 | About:
10qk

10qk

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TESSCO Technologies Inc. (TESS) filed Quarterly Report for the period ended 2012-12-30.

Tessco Technologies has a market cap of $180.124 million; its shares were traded at around $22.39 with a P/E ratio of 10.2249 and P/S ratio of 0.2245. The dividend yield of Tessco Technologies stocks is 3.21%. Tessco Technologies had an annual average earning growth of 15.1% over the past 10 years. GuruFocus rated Tessco Technologies the business predictability rank of 4-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 fiscal 2013 revenues increased by 17.9% as compared to the third quarter of fiscal 2012. This growth was offset by a 39.8% decrease in sales to our Tier 1 carriers (including AT&T), which resulted in a total third quarter revenue decrease of 9.6% compared to the third quarter of fiscal 2012. Excluding our Tier 1 carriers, gross profit increased by 18.1% in the third quarter of fiscal 2013 as compared to the third quarter of fiscal 2012 and gross profit from our Tier 1 carriers decreased by 54.8%. This resulted in an overall decrease in gross profits of 1.3% compared to the third quarter of the prior fiscal year. Selling, general and administrative expenses decreased by 4.3% over the prior year quarter. As a result, net income increased by 13.1% and diluted earnings per share increased by 10.1% over the prior-year quarter.

Commercial Segment. Revenues in our commercial segment totaled $99.5 million in the third quarter of fiscal 2013, compared to $84.9 million in the prior year period, a 17.2% increase. Gross profit totaled $25.5 million, a 17.4% increase as compared to the third quarter last year. Within this segment, the public system operators, contractors and program managers market grew revenues by 75.3% and gross profits by 57.6%. This growth was primarily driven by a need by our customers to increase bandwidth and upgrade their infrastructure to accommodate increasing wireless traffic. The need for increased bandwidth was echoed in our commercial dealers and resellers market, with revenue growth of 12.4% and gross profit growth of 16.4%. Revenue within the private and government system operators markets declined 10.2% with a lesser decrease in gross profit of 1.8%. This decline was due in part to economic uncertainties, including potential government spending cuts.

Retail Segment. Revenues in our retail segment totaled $104.9 million in the third quarter of fiscal 2013, representing a 25.8% decrease from the prior year period. Gross profit totaled $13.4 million, a 24.2% decrease. Revenues in our retailer, dealer agent and Tier 2/3 carrier market increased in the third quarter of fiscal 2013 as compared to the same period last year, up 19.5%, with a 20.2% increase in gross profit, as a result of increased sales to independent agents and dealers. We experienced significantly lower sales to our Tier 1 carrier market, primarily AT&T, which showed a 39.8% revenue decrease and a 54.8% decrease in gross profit.

Commercial Segment. Revenues in our commercial segment totaled $276.5 million in the first nine months of fiscal 2013, compared to $245.8 million in the prior year period, a 12.5% increase. Gross profit totaled $71.6 million, a 9.1% increase as compared to the first nine months of last year. Within this segment, the public system operators, contractors and program managers market grew revenues by 38.0% and gross profits by 30.3%. This growth was primarily driven by a need by our customers to increase bandwidth and upgrade their infrastructure to accommodate increasing wireless traffic. The need for increased bandwidth was echoed in our commercial dealers and resellers market, with revenue growth of 12.0% and gross profit growth of 11.3%. Revenue within the private and government system operators markets declined slightly by 2.2% with a decrease in gross profit of 3.4%. This decline was due to economic uncertainties as well as potential government spending cuts.

Retail Segment. Revenues in our retail segment totaled $317.6 million in the first nine months of fiscal 2013, representing an 8.5% increase from the prior year period. Gross profit totaled $41.5 million, a 7.9% decrease. Revenues in our retailer, dealer agent and Tier 2/3 carrier market increased in the first nine months of fiscal 2013 as compared to the same period last year, up 21.3%, with a 19.1% increase in gross profit, as a result of increased sales from independent agents and dealers. Sales were relatively flat in our Tier 1 carrier market, primarily AT&T, which showed a 2.9% revenue increase; however, due to the lower gross margin associated with this business, and the beginning of the business transition, gross profit decreased 28.0%.

Read the The complete Report

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