TESSCO Reports Second Quarter Earnings of $0.55 per Share

  TESSCO Reports Second Quarter Earnings of $0.55 per Share

                     Quarterly Dividend of $0.18 Declared

Business Wire

HUNT VALLEY, Md. -- October 23, 2013

TESSCO (NASDAQ: TESS)

  *Revenues were $147 million and core revenues* grew 5% compared to Q2
    FY2013.
  *Operating margin increased to 5.2% compared to 4.4% last year.
  *EBITDA** was $1.06 per share.
  *FY 2014 EPS guidance raised to $1.90 - $2.10.
  *Aric Spitulnik elected to position of Chief Financial Officer.

TESSCO, Your Total Source® for the product and value chain solutions to build,
use and maintain wireless systems, today reported its second quarter results
for the period ended September 29, 2013.

TESSCO reported second quarter revenue of $146.5 million, and net income of
$4.6 million or $0.55 per share.

“TESSCO made great progress again this quarter in the transition of our
business to focus solely on being a total solutions provider, and in the
replacement of the $213 million in annual revenues we generated from a third
party logistics relationship that ended in fiscal 2013,” said Chairman and CEO
Robert B. Barnhill, Jr.

“Our 59 percent growth in purchases from our public carrier customers, and the
22 percent growth in sales of our Ventev^® proprietary products demonstrate
that our customers recognize the benefit of a partner that can bring the right
products and solutions together to deliver everything that is required, when
and where it is needed at the lowest total cost.

“Our goal is to expand this level of success into our other customer markets,
namely industrial and enterprise system operators, government, and resellers.
Our confidence in achieving this goal is high because of the strength of our
value proposition, product offering, marketing, sales and delivery strategies,
and the new opportunities in the expanding world of voice, data and video
wireless connectivity.”

Mr. Barnhill concluded, “I am also very pleased to announce that Aric
Spitulnik has been elected to the position of Chief Financial Officer. Over
the past year, Aric – who joined TESSCO in 2000 and has served as the
Company’s controller since 2005 – has taken a heightened role in all financial
and strategic areas of our business. We are delighted to recognize his
contribution and talent with this appointment and are confident that his
in-depth knowledge and experience will contribute to TESSCO’s continued
success.”

Second-Quarter Fiscal 2014 Financial Results

For our fiscal 2014 second quarter, revenues totaled $146.5 million as
compared to $197.2 million in the 2013 quarter, which included revenue from
the since transitioned 3PL relationship, and $139.6 million in the 2013
quarter excluding revenues from that relationship.  Core revenues* grew 5
percent from the prior-year period. The public carrier market produced 59
percent revenue growth as compared to the prior-year period, and the
commercial dealer and reseller market produced 2 percent revenue growth.
Revenues from the retailer, independent dealer agent and carrier market fell
by 13 percent, while revenues from the private & government system operators
decreased by 9 percent. Sales of our Ventev^® design and manufacturing
division, which supplies products into all of our markets, grew 22 percent as
compared to the same quarter last year.

Second-quarter fiscal 2014 gross profit was $36.5 million compared to $38.6
million in last year’s second quarter, which included a $4.6 million gross
profit contribution from the transitioned 3PL business. Largely due to the
transition of the low-margin 3PL business, gross margin increased to 24.9
percent in this year’s second quarter from 19.6 percent in last year’s period.

Selling general and administrative (SG&A) expenses were $28.9 million,
compared to $29.9 million in last year’s second quarter, primarily due to a
reduction in expenses associated with the transitioned 3PL business. Operating
margin rose to 5.2 percent from 4.4 percent in the prior-year quarter.

EBITDA** totaled $8.9 million, or $1.06 per diluted share, in the second
quarter of fiscal 2014, as compared to $10.0 million, or $1.21 per diluted
share, in the prior-year quarter.

Net income and diluted earnings per share totaled $4.6 million and $0.55 in
the second quarter of fiscal 2014, respectively, as compared to $5.3 million
and $0.64 in the prior-year quarter, respectively.

For the first half of fiscal 2014, TESSCO reported revenues of $290.6 million
and net income of $8.9 million, or $1.06 per diluted share. These results
compare to revenues of $389.7 million and net income of $9.5 million, or $1.15
per diluted share, for the first half of fiscal 2013. EBITDA** for the first
half of fiscal 2014 totaled $17.0 million, or $2.04 per share, compared to
$18.2 million, or $2.20 per share, for the first half of fiscal 2013.

Quarterly Cash Dividends

The Board of Directors declared a quarterly cash dividend of $0.18 per common
share payable on November 20, 2013 to holders of record on November 6, 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

The Company raised its earnings per diluted share guidance for fiscal 2014 to
a range of $1.90 to $2.10 from a range of $1.75 to $2.05. As TESSCO’s fiscal
year progresses and visibility increases, management may review and update its
financial targets as appropriate.

Forecasting future results is inherently difficult for any business, and
actual results may differ materially from those forecasted. 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.

Second-Quarter Fiscal 2014 Conference Call

Management will host a conference call to discuss its second-quarter-2014
results on Thursday, October 24, 2013 at 10:00 a.m. ET. To participate in the
conference call, please call 877-280-4957 (domestic call-in) or 857-244-7314
(international call-in) and reference code #58255259.

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 2:00 p.m. ET
on October 24, 2013 until 11:59 p.m. ET on October 31, 2013 by calling
888-286-8010 (domestic) or 617-801-6888 (international) and entering
confirmation #40014034. An archived replay of the conference call will also be
available on the company’s website at
www.tessco.com/go/corporatepresentations.

Chief Financial Officer

Mr. Spitulnik, age 42, graduated from the State University of New York at
Buffalo in 1994 with a BS/MBA accounting degree. He was employed as an
accounting professional for several public accounting firms before joining
TESSCO in 2000. Mr. Spitulnik was appointed controller in 2005 and a vice
president in 2006. In 2012, he assumed the role of principal accounting
officer and was appointed corporate secretary. As chief financial officer, Mr.
Spitulnik will manage the Company’s financial operations and support the
Company’s growth strategies.

Thomas (“Ted”) Perez, age 39, who has been with TESSCO for six years in
various accounting roles, will follow Mr. Spitulnik as the Company’s
controller. Mr. Perez holds a Bachelor of Science degree in accounting and an
MBA with a finance concentration, both from Loyola University, and previously
worked for several large public companies as well as the public accounting
firm PricewaterhouseCoopers LLP.

*Core Revenues

“Core revenues” are our total revenues other than and excluding revenues
related to the major 3PL relationship with a Tier 1 Carrier that transitioned
at the completion of fiscal year 2013. The amount of “core revenues” for a
given period is determined by subtracting from total revenues, any revenues
related to the major 3PL relationship for the corresponding period. There are
no revenues related to this relationship in fiscal 2014, and thus, total
revenues and core revenues are the same for fiscal 2014.

**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 Incorporated (NASDAQ: 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 for customers 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                           Six Months Ended
                 September 29,  June 30, 2013  September 30,   September 29,  September 30,
                 2013                            2012            2013            2012
                                                                                 
Revenues         $ 146,526,000   $ 144,108,800   $ 197,238,300   $ 290,634,800   $ 389,656,500
Cost of goods     110,033,200    108,670,900    158,613,300    218,704,100    315,538,300
sold
Gross profit       36,492,800      35,437,900      38,625,000      71,930,700      74,118,200
Selling,
general and       28,903,400     28,474,100     29,887,000     57,377,500     58,449,400
administrative
expenses
Income from        7,589,400       6,963,800       8,738,000       14,553,200      15,668,800
operations
Interest, net     67,000         54,600         12,000         121,600        69,400
Income before
provision for      7,522,400       6,909,200       8,726,000       14,431,600      15,599,400
income taxes
Provision for     2,941,300      2,617,000      3,457,100      5,558,300      6,124,000
income taxes
Net income       $ 4,581,100     $ 4,292,200      5,268,900      8,873,300      9,475,400
                                                                                 
Basic earnings   $ 0.56          $ 0.53          $ 0.66          $ 1.09          $ 1.19
per share
Diluted
earnings per     $ 0.55          $ 0.51          $ 0.64          $ 1.06          $ 1.15
share



TESSCO Technologies Incorporated

Consolidated Balance Sheets
                                                              
                                           September 29, 2013   March 31, 2013
                                           (unaudited)          (audited)
                                                                
ASSETS
Current Assets:
Cash and cash equivalents                  $   3,230,500        $ 4,468,000
Trade accounts receivable, net                 75,059,700         82,177,600
Product inventory                              66,221,700         60,913,600
Deferred tax assets                            6,220,200          6,227,300
Prepaid expenses and other current assets     2,613,000         3,482,300
Total current assets                           153,345,100        157,268,800
                                                                
Property and equipment, net                    22,788,400         23,202,000
Goodwill, net                                  11,684,700         11,684,700
Other long-term assets                        2,132,200         2,144,500
Total assets                               $   189,950,400      $ 194,300,000
                                                                
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Trade accounts payable                     $   58,815,400       $ 65,209,300
Payroll, benefits and taxes                    7,395,000          11,678,500
Income and sales tax liabilities               2,368,600          2,530,700
Accrued expenses and other current             1,072,600          1,048,900
liabilities
Revolving line of credit                       --                 --
Current portion of long-term debt             249,900           249,700
Total current liabilities                      69,901,500         80,717,100
                                                                
Deferred tax liabilities                       3,951,800          3,951,800
Long-term debt, net of current portion         2,331,300          2,458,300
Other long-term liabilities                   4,112,100         4,370,200
Total liabilities                             80,296,700        91,497,400
                                                                
Shareholders’ Equity:
Preferred stock                                --                 --
Common stock                                   94,000             91,500
Additional paid-in capital                     52,843,400         50,481,600
Treasury stock, at cost                        (49,866,700)       (48,438,300)
Retained earnings                              106,583,000        100,667,800
Accumulated other comprehensive loss          --                --
Total shareholders’ equity                    109,653,700       102,802,600
                                                                
Total liabilities and shareholders’ equity $   189,950,400      $ 194,300,000



TESSCO Technologies Incorporated
Reconciliation of Net Income to Earnings Before Interest, Taxes and Depreciation and
Amortization (EBITDA) (Unaudited)
                                                      
               Fiscal Quarters Ended                     Six Months Ended
                                                                    
               September     June 30,      September     September      September
               29, 2013      2013          30, 2012      29, 2013       30, 2012
Net income     $ 4,581,100   $ 4,292,200   $ 5,268,900   $ 8,873,300    $ 9,475,400
Add:
Provision
for income       2,941,300     2,617,000     3,457,100     5,558,300      6,124,000
taxes
Interest,        67,000        54,600        12,000        121,600        69,400
net
Depreciation
and             1,261,300    1,212,900    1,247,200    2,474,200     2,495,100
amortization
EBITDA         $ 8,850,700   $ 8,176,700   $ 9,985,200   $ 17,027,400   $ 18,163,900
EBITDA per
diluted        $ 1.06        $ 0.98        $ 1.21        $ 2.04         $ 2.20
share


  
  TESSCO Technologies Incorporated
  Supplemental Results Summary (in thousands) (Unaudited)
                                                         
                                       Three months ended   Six months ended
                                       September 29, 2013   September 29, 2013
                                       Total                Total
Market Revenues
  Public Carriers, Contractors &       $      40,948        $      78,331
  Program Managers
  Private & Government System                 31,059               58,952
  Operators
  Commercial Dealers & Resellers              36,433               72,477
  Retailer, Independent Dealer               38,086              80,875
  Agents & Carriers
  Revenue, excluding Major 3PL                146,526              290,635
  relationship
  Major 3PL relationship                     --                  --
  Total revenues                             146,526             290,635
                                                            
Gross Profit
  Public Carriers, Contractors &              9,015                16,909
  Program Managers
  Private & Government System                 8,377                16,178
  Operators
  Commercial Dealers & Resellers              10,093               20,340
  Retailer, Independent Dealer               9,008               18,504
  Agents & Carriers
  Gross profit, excluding Major 3PL           36,493               71,931
  relationship
  % of revenues                               24.9%                24.7%
  Major 3PL relationship                     --                  --
  Total gross profit                         36,493              71,931
  % of revenues                               24.9%                24.7%
                                                            
  Direct expenses                            17,797              35,412
  Segment net profit contribution             18,696               36,519
  % of revenues                               12.8%                12.6%
  Corporate support expenses*                11,174              22,087
  Income before provision for income   $      7,522         $      14,432
  taxes
  % of revenues                               5.1%                 5.0%
                                                            
Growth Rates Compared to Prior Year Period:
Revenues
  Public Carriers, Contractors &              58.6%                70.9%
  Program Managers
  Private & Government System                 -9.4%                -7.7%
  Operators
  Commercial Dealers & Resellers              2.2%                 7.8%
  Retailer, Independent Dealer               -13.1%              -4.9%
  Agents & Carriers
  Revenue, excluding Major 3PL                5.0%                 10.9%
  relationship
  Major 3PL relationship                     -100.0%             -100.0%
  Total revenues                             -25.7%              -25.4%
                                                            
Gross Profit
  Public Carriers, Contractors &              60.0%                67.5%
  Program Managers
  Private & Government System                 -9.3%                -7.0%
  Operators
  Commercial Dealers & Resellers              3.0%                 9.4%
  Retailer, Independent Dealer               -4.0%               2.4%
  Agents & Carriers
  Gross profit, excluding Major 3PL           7.1%                 12.1%
  relationship
  Major 3PL relationship                     -100.0%             -100.0%
  Total gross profit                          -5.5%                -3.0%
                                                            
  Direct expenses                            -1.6%               0.2%
  Segment net profit contribution             -9.0%                -5.8%
  Corporate support expenses*                -5.4%               -4.7%
  Income before provision for income         -13.8%              -7.5%
  taxes
                                                            

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



TESSCO Technologies Incorporated
Supplemental Results Summary (in thousands)
                                                        
                                       Three months ended   Six months ended
                                       September 29, 2013   September 29, 2013
Revenues
     Base station infrastructure       $      67,888        $      137,429
     Network systems                          21,838               40,901
     Installation, test and                   12,588               22,350
     maintenance
     Mobile device accessories               44,212              89,955
     Total revenues                           146,526              290,635
                                                            
Gross Profit
     Base station infrastructure              18,765               37,654
     Network systems                          3,745                7,563
     Installation, test and                   2,780                5,130
     maintenance
     Mobile device accessories               11,203              21,584
     Total gross profit                $      36,493               71,931
     % of revenues                            24.9%                24.7%
                                                            
Growth Rates Compared to Prior Year
Period
                                                            
Revenues
     Base station infrastructure              19.0%                29.4%
     Network systems                          -1.5%                2.5%
     Installation, test and                   3.7%                 -1.9%
     maintenance
     Mobile device accessories               -58.3%              -59.3%
     Total revenues                           -25.7%               -25.4%
                                                            
Gross Profit
     Base station infrastructure              12.0%                20.8%
     Network systems                          -5.9%                -1.0%
     Installation, test and                   -1.6%                -4.4%
     maintenance
     Mobile device accessories               -25.6%              -27.9%
     Total gross profit                       -5.5%                -3.0%

Contact:

TESSCO Technologies Incorporated
Aric Spitulnik
Chief Financial Officer
410-229-1419
spitulnik@tessco.com
or
LHA
Harriet Fried
212-838-3777
hfried@lhai.com