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

November 03, 2010 | About:

TESSCO Technologies Inc. (NASDAQ:TESS) filed Quarterly Report for the period ended 2010-09-30.

Tessco Technologies Inc. has a market cap of $116.2 million; its shares were traded at around $15.37 with a P/E ratio of 12.4 and P/S ratio of 0.2. The dividend yield of Tessco Technologies Inc. stocks is 2.5%. Tessco Technologies Inc. had an annual average earning growth of 4.7% over the past 10 years.TESS is in the portfolios of Jim Simons of Renaissance Technologies LLC, Chuck Royce of Royce& Associates.

Highlight of Business Operations:

Our second quarter revenues increased by 24.1% compared to the second quarter of the last fiscal year. This increase was driven by growth in our network infrastructure and mobile devices and accessories commercial lines of business, partially offset by a decline in our installation, test and maintenance commercial line of business. In the second quarter AT&T Mobility, our largest customer, accounted for 31% of total revenues. No other customer accounted for more than 4% of total consolidated revenues. Our second quarter gross profits increased by 16.3% compared to the second quarter of last fiscal year, driven by growth in our network infrastructure and mobile devices and accessories commercial lines of business, partially offset by a decline in our installation, test and maintenance commercial line of business. Selling, general and administrative expenses increased by 14.2% over the prior year quarter, primarily related to people costs and freight costs related to increased order volume. Consequently, net income increased by 29.0% and diluted earnings per share grew by 26.5% over the prior-year quarter.

The current global financial crisis which has included, among other things, significant reductions in available capital and liquidity from banks and other providers of credit, substantial reductions and/or fluctuations in equity and currency values worldwide, significant decreases in consumer confidence and consumer and business spending, rising unemployment and concerns that the worldwide economy may experience a prolonged recessionary period may materially adversely affect our customers access to capital or willingness to spend capital on our products, and/or their levels of cash liquidity with which to pay for our products. Our strong second quarter revenue growth was driven by a 4% growth in the average number of monthly buying customers and a 21% increase in the average dollars purchased for each buying customer compared to the same period of fiscal year 2010. Accordingly, while we believe that the economy continues to show signs of improvement and we believe we are starting to win a larger percentage of our customers business, we also believe that our customers are continuing to experience difficulty in the current economic environment. In addition, the current global financial crisis may materially adversely affect our suppliers access to capital and liquidity, which may in turn adversely impact their ability to maintain inventories, production levels, and/or product quality, or cause them to raise prices or lower production levels, or result in their ceasing operation. The impact of the crisis on our liquidity is further discussed below under the heading Liquidity and Capital Resources.

Read the The complete Report

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