TESSCO Announces Record Revenue and Earnings for FY 2013

  TESSCO Announces Record Revenue and Earnings for FY 2013

  *Annual revenue excluding the 3PL relationship grows 12 percent
  *FY 2013 EPS reaches $2.15 on record revenues of $753 million
  *Major 3PL relationship successfully transitioned
  *Earnings guidance of $1.75 to $2.05 for FY2014
  *Quarterly dividend of $0.18 per share date set

Business Wire

HUNT VALLEY, Md. -- May 8, 2013

TESSCO Technologies Incorporated (NASDAQ:TESS), a leading provider of the
product and value chain solutions required to build, use and maintain wireless
broadband systems, today reported record annual revenues of $753 million for
the fiscal year ended March 31, 2013 and record earnings per diluted share of
$2.15. For the fourth fiscal quarter ended March 31, 2013, revenues were $158
million and earnings per diluted share were $0.35.

Chairman and CEO Robert B. Barnhill, Jr. commented, “For the fifth consecutive
year, we achieved record earnings per share, totaling $2.15. During the year,
we successfully completed our transition out of the high revenue, low margin,
third-party logistics (3PL) relationship with one customer. This now allows us
to focus exclusively on our core business and building on the many
opportunities materializing from the convergence of wireless and the Internet.
Going forward our business should be strategically healthier, with higher
margins and low customer concentration; no single customer is currently
expected to contribute more than 5 percent of revenues.

“The fourth quarter demonstrates the strength in our ongoing core business,
which excludes the 3PL relationship. We grew fourth quarter core revenues 11
percent year over year in what is typically our most seasonally impacted
quarter. Earnings per share were $0.35 despite the large decline in year over
year 3PL revenue and gross profit - $50 million decline in revenue and $6
million decline in gross profit.

“In 2014, our goal is to dramatically grow our core business by expanding the
wireless systems we support, growing our customer base and increasing the
frequency and the product categories our customers purchase - all while
expanding margins and return on assets.

“I want to thank our customers, manufacturers, team members and our
shareowners for their continued support in another record-setting year. We
look forward to what promises to be a very exciting fiscal 2014.”

Fourth-Quarter and Full Year Fiscal 2013 Financial Results

For our fiscal 2013 fourth quarter, revenue totaled $158.4 million. Core
revenues (excluding the 3PL relationship) increased 11 percent from the
prior-year quarter, although, due to the transitioning 3PL relationship,
overall revenues declined by 19 percent. The public carrier market produced 93
percent revenue growth; the retailer, independent dealer agent and carrier
market produced 4 percent revenue growth; and the commercial dealer and
reseller market produced 7 percent revenue growth. Revenue from the private
and government system operator market decreased by 17 percent. Revenue from
the major 3PL relationship decreased by 65 percent, as the transition of this
relationship was completed.

Fourth quarter fiscal 2013 gross profit was $34.0 million, down 11 percent
from last year’s fourth quarter gross profit of $38.0 million. In our core
markets, gross profit was up 8 percent. The public carrier market produced 77
percent gross profit growth; the retailer, independent dealer agent and
carrier market produced 6 percent gross profit growth; and the commercial
dealer and reseller market was essentially flat. Gross profit in the private
and government system operator market decreased 15 percent. Gross profit from
the major 3PL relationship decreased 79 percent.

Selling general and administrative (SG&A) expenses decreased by $3.1 million,
or 10 percent compared to last year’s fourth quarter.

EBITDA* totaled $6.1 million, or $0.73 per diluted share, in the fourth
quarter of 2013 as compared to $7.0 million, or $0.85 per diluted share, in
the prior-year quarter.

Net income and diluted earnings per share totaled $2.9 million and $0.35 in
the fourth quarter of fiscal 2013, respectively, as compared to $3.5 million
and $0.43 in the prior year quarter, respectively.

For the fiscal year ended March 31, 2013, we reported record revenues of
$752.6 million and record net income of $17.8 million, or $2.15 per diluted
share. These results compare to revenues of $733.4 million and net income of
$16.4 million, or $2.03 per diluted share, for fiscal 2012. EBITDA* totaled
$34.2 million, or $4.12 per share, compared to $31.8 million, or $3.93 per
share, in fiscal 2012.

As of March 31, 2013, our cash balance totaled $4.5 million and there was no
balance outstanding on our revolving line of credit.

Quarterly Cash Dividends

The Board of Directors declared a quarterly cash dividend of $0.18 per common
share payable on June 6, 2013 to holders of record on May 22, 2013.

Any future declaration of dividends, and the establishment of record and
payment dates, is subject to further determinations of the Board of Directors.

Business Outlook

We currently expect diluted earnings per share for fiscal 2014 to range from
$1.75 to $2.05. This guidance reflects a decline in revenues and earnings as a
result of the transitioned 3PL relationship, and the expected growth in our
core business.

Revenues and gross profits from the 3PL relationship totaled $213.5 million
and $15.0 million, respectively, during fiscal 2013, compared to $251.2
million and $26.9 million, respectively, in fiscal 2012. The fiscal 2013
selling, general and administrative expenses associated with this 3PL business
totaled approximately 2 percent of the 3PL revenues.

Forecasting future results is inherently difficult for any business, and
actual results may differ materially from those forecasted. Moreover, our
current expectations related to the transition of the supply chain
relationship with our largest customer are based upon indications received
from this customer, and actual events may differ materially. This
relationship, like those with most of our other customers and suppliers,
contains no ongoing purchase or sale obligations and is terminable by either
party upon relatively short notice. Absent this supply chain relationship, we
will, however, maintain the ability to sell our proprietary products to this
customer.

The nature of our business is that we typically ship products within several
days after booking orders. The lack of an order backlog makes it even more
difficult to forecast future results. The Business Outlook published in this
press release reflects only the company's current best estimate and the
company assumes no obligation to update the information contained in this
press release, including the Business Outlook, at any time.

Fourth-Quarter Fiscal 2013 Conference Call

Management will host a conference call to discuss its fourth-quarter and
full-year 2013 results on Thursday, May 9, 2013 at 10:00 a.m. ET. To
participate in the conference call, please call: 866-953-6856 (domestic
call-in) or 617-399-3480 (international call-in) and reference code #34380554.

A live webcast of the conference call will be available at
http://www.tessco.com/go/pressroom. 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 12:00 p.m. ET
on May 9, 2013 until 11:59 p.m. ET on May 16, 2013 by calling 888-286-8010
(domestic) or 617-801-6888 (international) and entering confirmation
#80934427. An archived replay of the conference call will also be available on
the company’s website.

*Non-GAAP Information

EBITDA, a measure used by management to evaluate the company’s ongoing
operations and as a general indicator of its 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), is defined as
income from operations, plus interest expense, net of interest income,
provision for income taxes, and depreciation and amortization. Management
believes EBITDA as well as 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 EBITDA and EBITDA
per share may not be comparable to other similarly titled measures of other
companies. EBITDA is not a recognized term under GAAP and 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. EBITDA per
diluted share is also a non-GAAP calculation defined as EBITDA divided by the
company’s diluted weighted average shares outstanding. Additionally, EBITDA is
not intended to be a measure of free cash flow for management's discretionary
use, as it does not reflect certain cash requirements such as interest
payments, tax payments and debt service requirements. The amounts shown for
EBITDA as presented herein differ from the amounts calculated under the
definition of EBITDA used in the company's loan agreements. The definition of
EBITDA as used in the company's loan agreements is further adjusted for
certain cash and non-cash charges/credits, including stock compensation
expense, and is used to determine compliance with financial covenants and the
ability to engage in certain activities such as incurring additional debt.

A reconciliation of the company's non-GAAP to GAAP results is included as an
exhibit to this release.

About TESSCO

TESSCO Technologies (NASDAQGS:TESS), is Your Total Source^® for making
wireless work. The convergence of wireless and the Internet is revolutionizing
the way we live, work and play. New systems and applications are creating
opportunities and challenges at an unprecedented rate. TESSCO is there,
thinking in new ways for exceptional outcomes. TESSCO architects and delivers,
with innovation, productivity and speed, the product and value chain solutions
to organizations responsible for building, using and maintaining wireless
broadband systems.

Forward-Looking Statements

This press release, including the statements of Robert Barnhill and the
discussion under the heading “Business Outlook”, contains 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. These forward-looking statements may
generally be identified by the use of the words "may," "will," "expects,"
"anticipates," "believes," "estimates," and similar expressions, but the
absence of these words or phrases does not necessarily mean that a statement
is not forward-looking. Forward-looking statements involve a number of risks
and uncertainties. Our actual results may differ materially 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, 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.

We are not able to identify or control all circumstances that could occur in
the future that may 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 as a result of consolidation among the wireless communications
industry; the strength of our customers’, vendors’ and affinity partners’
business; economic conditions that may impact customers’ ability to fund or
pay for our products and services; failure of our information technology
system or distribution system; technology changes in the wireless
communications industry; third-party freight carrier interruption; increased
competition; our inability to access capital and obtain financing as and when
needed; and the possibility that, for unforeseen 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

Consolidated Statements of Income (Unaudited)
                                                                
                     Fiscal Quarters Ended                           Fiscal Years Ended
                                                                     
                     March 31,      December 30,   April 1, 2012   March 31,      April 1, 2012
                     2013            2012                            2013
                                                                                     
Revenues             $ 158,449,800   $ 204,458,700   $ 194,787,400   $ 752,565,000   $ 733,389,900
Cost of goods         124,498,600    165,488,900    156,798,300    605,525,800    584,733,700
sold
Gross profit           33,951,200      38,969,800      37,989,100      147,039,200     148,656,200
Selling,
general and           29,144,900     30,226,300     32,221,100     117,820,600    121,652,400
administrative
expenses
Income from            4,806,300       8,743,500       5,768,000       29,218,600      27,003,800
operations
Interest, net         141,100        13,700         41,000         224,200        292,900
Income before
provision for          4,665,200       8,729,800       5,727,000       28,994,400      26,710,900
income taxes
Provision for         1,743,900      3,331,100      2,178,100      11,199,000     10,274,000
income taxes
Net income           $ 2,921,300     $ 5,398,700     $ 3,548,900     $ 17,795,400    $ 16,436,900
                                                                                     
Basic earnings       $ 0.36          $ 0.67          $ 0.46          $ 2.22          $ 2.12
per share
Diluted
earnings per         $ 0.35          $ 0.65          $ 0.43          $ 2.15          $ 2.03
share
                                                                                       


TESSCO Technologies Incorporated

Consolidated Balance Sheets
                                                          
                                             March 31, 2013    April 1, 2012
                                             (unaudited)       (audited)
                                                               
ASSETS
Current Assets:
Cash and cash equivalents                    $ 4,468,000       $ 18,211,600
Trade accounts receivable, net                 82,177,600        88,748,200
Product inventory                              60,913,600        53,360,300
Deferred tax assets                            6,227,300         3,135,100
Prepaid expenses and other current            3,482,300       2,308,200   
assets
Total current assets                           157,268,800       165,763,400
                                                               
Property and equipment, net                    23,202,000        22,905,700
Goodwill, net                                  11,684,700        11,684,700
Other long-term assets                        2,144,500       2,143,900   
Total assets                                 $ 194,300,000    $ 202,497,700 
                                                               
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Trade accounts payable                       $ 65,209,300      $ 78,344,700
Payroll, benefits and taxes                    11,678,500        17,211,600
Income and sales tax liabilities               2,081,700         3,137,000
Accrued expenses and other current             1,048,900         1,041,100
liabilities
Revolving line of credit                       --                --
Current portion of long-term debt             249,700         249,200     
Total current liabilities                      80,268,100        99,983,600
                                                               
Deferred tax liabilities                       4,399,300         2,243,500
Long-term debt, net of current portion         2,458,300         2,708,000
Other long-term liabilities                   4,370,200       3,910,700   
Total liabilities                             91,495,900      108,845,800 
                                                               
Shareholders’ Equity:
Preferred stock                                --                --
Common stock                                   91,500            88,000
Additional paid-in capital                     50,481,600        45,135,900
Treasury stock, at cost                        (48,438,300 )     (46,276,400 )
Retained earnings                              100,669,300       94,704,400
Accumulated other comprehensive loss          --              --          
Total shareholders’ equity                    102,804,100     93,651,900  
                                                               
Total liabilities and shareholders'          $ 194,300,000    $ 202,497,700 
equity
                                                                             


TESSCO Technologies Incorporated

Reconciliation of Net Income to Earnings Before Interest, Taxes and Depreciation and
Amortization (EBITDA) (Unaudited)
                                                        
                   Fiscal Quarters Ended                     Fiscal Years Ended
                   March 31,    December     April 1,      March 31,     April 1,
                   2013          30, 2012      2012          2013           2012
Net income         $ 2,921,300   $ 5,398,700   $ 3,548,900   $ 17,795,400   $ 16,436,900
Add:
Provision
for income           1,743,900     3,331,100     2,178,100     11,199,000     10,274,000
taxes
Interest,            141,100       13,700        41,000        224,200        292,900
net
Depreciation
and                 1,259,900    1,224,500    1,271,200    4,979,400     4,844,900
amortization
EBITDA             $ 6,066,200   $ 9,968,000   $ 7,039,200   $ 34,198,000   $ 31,848,700
EBITDA per
diluted            $ 0.73        $ 1.20        $ 0.85        $ 4.12         $ 3.93
share
                                                                              


TESSCO Technologies Incorporated
Supplemental Results Summary (in thousands) (Unaudited)
                                                             
                                         Three months ended March 31, 2013
                                         Commercial   Retail
                                                                   Total
                                         Segment      Segment
Market Revenues
Public Carriers, Contractors &           $ 32,763     $ --         $ 32,763
Program Managers
Private & Government System                27,250       --           27,250
Operators
Commercial Dealers & Resellers             34,688       --           34,688
Retailer, Independent Dealer              --         36,852     36,852  
Agents & Carriers
Revenue, excluding Major 3PL               94,701       36,852       131,553
relationship
Major 3PL relationship                    --         26,897     26,897  
Total revenues                            94,701     63,749     158,450 
                                                                   
Gross Profit
Public Carriers, Contractors &             7,258        --           7,258
Program Managers
Private & Government System                7,729        --           7,729
Operators
Commercial Dealers & Resellers             9,519        --           9,519
Retailer, Independent Dealer              --         7,773      7,773   
Agents & Carriers
Gross profit, excluding Major 3PL          24,506       7,773        32,279
relationship
% of revenues                              25.9   %     21.1   %     24.5    %
Major 3PL relationship                    --         1,672      1,672   
Total gross profit                        24,506     9,445      33,951  
% of revenues                              25.9   %     14.8   %     21.4    %
                                                                   
Directly allocatable expenses             10,575     5,750      16,325  
Segment net profit contribution          $ 13,931    $ 3,695       17,626
% of revenues                              14.7   %     5.8    %     11.1    %
Corporate support expenses*                                         12,961  
Income before provision for income                                 $ 4,665   
taxes
% of revenues                                                        2.9     %
                                                                   
Growth Rates Compared to Prior Year Period:
Revenues
Public Carriers, Contractors &             92.5   %     --           92.5    %
Program Managers
Private & Government System                -17.4  %     --           -17.4   %
Operators
Commercial Dealers & Resellers             6.5    %     --           6.5     %
Retailer, Independent Dealer              --        3.7    %   3.7     %
Agents & Carriers
Revenue, excluding Major 3PL               14.7   %     3.7    %     11.4    %
relationship
Major 3PL relationship                    --        -64.9  %   -64.9   %
Total revenues                            14.7   %   -43.2  %   -18.7   %
                                                                   
Gross Profit
Public Carriers, Contractors &             76.7   %     --           76.7    %
Program Managers
Private & Government System                -15.0  %     --           -15.0   %
Operators
Commercial Dealers & Resellers             0.2    %     --           0.2     %
Retailer, Independent Dealer              --        6.4    %   6.4     %
Agents & Carriers
Gross profit, excluding Major 3PL          8.0    %     6.4    %     7.6     %
relationship
Major 3PL relationship                    --        -79.1  %   -79.1   %
Total gross profit                         8.0    %     -38.2  %     -10.6   %
                                                                   
Directly allocatable expenses             -1.6   %   -25.9  %   -11.8   %
Segment net profit contribution           16.5   %   -50.9  %     -9.5    %
Corporate support expenses*                                         -5.8    %
Income before provision for income                                  -18.5   %
taxes

* Includes corporate overhead, facilities expense, depreciation, interest and
company-wide pay-for-performance bonus expense


TESSCO Technologies Incorporated
Supplemental Results Summary (in thousands) (Unaudited)
                                                             
                                       Fiscal Year Ended March 31, 2013
                                       Commercial    Retail
                                                                   Total
                                       Segment       Segment
Revenues
Public Carriers, Contractors &         $ 111,146     $ --          $ 111,146
Program Managers
Private & Government System              121,313       --            121,313
Operators
Commercial Dealers & Resellers           138,737       --            138,737
Retailer, Independent Dealer            --          167,895     167,895 
Agents & Carriers
Revenue, excluding Major 3PL             371,196       167,895       539,091
relationship
Major 3PL relationship                  --          213,474     213,474 
Total revenues                          371,196     381,369     752,565 
                                                                   
Gross Profit
Public Carriers, Contractors &           24,183        --            24,183
Program Managers
Private & Government System              33,596        --            33,596
Operators
Commercial Dealers & Resellers           38,345        --            38,345
Retailer, Independent Dealer            --          35,903      35,903  
Agents & Carriers
Gross profit, excluding Major            96,124        35,903        132,027
3PL relationship
% of revenues                            25.9    %     21.4    %     24.5    %
Major 3PL relationship                  --          15,012      15,012  
Total gross profit                      96,124      50,915      147,039 
% of revenues                            25.9    %     13.4    %     19.5    %
                                                                   
Directly allocatable expenses           42,821      27,701      70,522  
Segment net profit contribution        $ 53,303     $ 23,214       76,517
% of revenues                            14.4    %     6.1     %     10.2    %
Corporate support expenses*                                         47,523  
Income before provision for                                        $ 28,994  
income taxes
% of revenues                                                        3.9     %
                                                                   
Growth Rates Compared to Prior
Year Period:
                                                                   
Revenues
Public Carriers, Contractors &           50.6    %     --            50.6    %
Program Managers
Private & Government System              -6.1    %     --            -6.1    %
Operators
Commercial Dealers & Resellers           10.6    %     --            10.6    %
Retailer, Independent Dealer            --          9.2     %    9.2     %
Agents & Carriers
Revenue, excluding Major 3PL             13.0    %     9.2     %     11.8    %
relationship
Major 3PL relationship                               -15.0   %    -15.0   %
Total revenues                          13.0    %    -5.8    %    2.6     %
                                                                   
Gross Profit
Public Carriers, Contractors &           41.4    %     --            41.4    %
Program Managers
Private & Government System              -6.3    %     --            -6.3    %
Operators
Commercial Dealers & Resellers           8.3     %     --            8.3     %
Retailer, Independent Dealer            --          7.4     %    7.4     %
Agents & Carriers
Gross profit, excluding Major            8.8     %     7.4     %     8.4     %
3PL relationship
Major 3PL relationship                  --          -44.2   %    -44.2   %
Total gross profit                      8.8     %    -15.6   %    -1.1    %
                                                                   
Directly allocatable expenses           3.2     %    -7.5    %    -1.3    %
Segment net profit contribution         13.7    %    -23.5   %     -0.9    %
Corporate support expenses*                                         -5.9    %
Income before provision for                                         8.5     %
income taxes

* Includes corporate overhead, facilities expense, depreciation, interest and
company-wide pay-for-performance bonus expense

TESSCO Technologies Incorporated

Supplemental Results Summary (in thousands)
                                                        
                                        Three months ended   Fiscal Year ended

                                        March 31, 2013       March 31, 2013
Revenues
Base station infrastructure             $    59,930          $   227,510
Network systems                              19,438              78,989
Installation, test and                       11,629              47,766
maintenance
Mobile device accessories                   67,453            398,300   
Total revenues                               158,450             752,565
                                                             
Gross Profit
Base station infrastructure                  16,586              65,472
Network systems                              3,465               14,887
Installation, test and                       2,708               11,151
maintenance
Mobile device accessories                   11,192            55,529    
Total gross profit                           33,951              147,039
% of revenues                                21.4      %         19.5      %
                                                             
Growth Rates Compared to Prior Year Period
                                                             
Revenues
Base station infrastructure                  20.6      %         15.7      %
Network systems                              10.0      %         5.1       %
Installation, test and                       12.7      %         7.3       %
maintenance
Mobile device accessories                   -42.4     %        -4.5      %
Total revenues                               -18.7     %         2.6       %
                                                             
Gross Profit
Base station infrastructure                  1.4       %         6.0       %
Network systems                              -15.5     %         -5.9      %
Installation, test and                       -0.1      %         7.6       %
maintenance
Mobile device accessories                   -24.5     %        -8.5      %
Total gross profit                           -10.6     %         -1.1      %
                                                                           

Contact:

TESSCO Technologies Incorporated
Aric Spitulnik, 410-229-1419
Vice President and Controller
or
LHA
Harriet Fried, 212-838-3777
hfried@lhai.com
 
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