EX-99.1 2 ex99_1.htm EXHIBIT 99.1 ex99_1.htm

EXHIBIT 99.1
 
NASDAQ: TESS
- Overview
- Systems supported
- Products provided
- Organizations served
- Value delivered
- Transition from Major 3PL Relationship
- Results
- Goals & Foundation
19.March.2013
TESSCO Technologies Incorporated
11126 McCormick Road
Hunt Valley, Maryland USA 21031
 
 

 
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Certain statements made by us during this presentation are forward-looking
statements within the meaning of federal securities laws. TESSCO’s actual results
may differ materially from those discussed in any forward-looking statement.
Additional information concerning factors that may cause such a difference can
be found in TESSCO's public disclosure, including TESSCO's most recent report on
Form 10-K, as well as prior and subsequently filed reports.
Robert Barnhill
Founder, Chairman & Chief
Executive Officer
410.229.1353
Barnhill@tessco.com
Aric Spitulnik
Vice President,
Principal Accounting Officer &
Controller
410.229.1419
Spitulnik@tessco.com
Forward-Looking Statements
 
 

 
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Your Total Source
For Making Wireless Work
For 31 years,
TESSCO has been the vital link to the
solutions, products, services and support
for the organizations that build,
maintain, use and resell wireless.
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• Serves 20,000 different customers quarterly
• Supplies 51,000 products from 390 manufacturers
• Delivers 6,000 orders per day
• Processes over 1.5 Million Orders Annually
• 99.9% On Time Delivery
• 99.8% Order Accuracy
• 24/7/365 Emergency Response
• TL 9000 Certification; ISO 9001:2008
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TESSCO At a Glance
Marketing Innovation - Operational Excellence
Delivering what you need, when and where you need it.
®
 
 

 
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Source: Industry Reports
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Internet Access is Now Wireless
 
 

 
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Source: Industry
Reports
Telco Access Lines Are Now Wireless
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Demand for Wireless Broadband Explodes
 
 

 
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The convergence of wireless and the Internet is creating opportunities to
revolutionize the way we live, work & play.
Organizations are exploiting these opportunities by deploying new
and diverse wireless systems.
TESSCO is there.
Your Total Source® for building, using and maintaining wireless
broadband systems.
 
 

 
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Outdoor Wireless Infrastructure
• Tower
• Rooftop
• Remote
Today, TESSCO provides the end-to-end solutions for the organizations & people
that build, use, & maintain …
 
 

 
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Outdoor Broadband Networks
Today, TESSCO provides the end-to-end solutions for the organizations & people
that build, use, & maintain …
• Wireless Backhaul
• Leased Line
 Replacement
• Rural Broadband
• Campus
• Cellular
 
 

 
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Indoor Broadband Networks
• Wi-Fi
• Local Area
 Networks
Today, TESSCO provides the end-to-end solutions for the organizations & people
that build, use, & maintain …
 
 

 
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Enhanced Cellular Coverage & Capacity Systems
• Indoor
• Outdoor
Today, TESSCO provides the end-to-end solutions for the organizations & people
that build, use, & maintain …
 
 

 
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Remote Monitoring & Control Systems
• Positive Train
 Control
• Smart Grid
• Video Surveillance
• Network Operations
Today, TESSCO provides the end-to-end solutions for the organizations & people
that build, use, & maintain …
 
 

 
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Two-Way & Critical Communications
• Interoperability
• Disaster Recovery
• In-Vehicle
Today, TESSCO provides the end-to-end solutions for the organizations & people
that build, use, & maintain …
 
 

 
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Mobile Devices
• Feature Phones
• Smart Phones
• Tablets
Today, TESSCO provides the end-to-end solutions for the organizations & people
that use, support & sell …
 
 

 
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Maintenance, Repair & Assembly Operations
• Shop
• Vehicle
• Factory
• Technician
Today, TESSCO provides the end-to-end solutions for the organizations & people
that are responsible for …
 
 

 
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Offering the Products to Build the Solution
Base Station
Infrastructure
• Towers & Site Hardware
• Enclosures & Cable Management
• Grounding & Arrestors
• Cable, Connectors & Jumpers
• Power Systems
• Mobile Antennas & Amplifiers
• Vehicle Mounts
41% of Trailing 12 Month Core Revenues
 
 

 
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Network Systems
• Broadband Radios
• Distributed Antenna Systems
• Bidirectional Amplifiers
• Network Equipment
• Physical Security
15% of Trailing 12 Month Core Revenues
(including Training & Services)
Offering the Products to Build the Solution
 
 

 
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Mobile Devices
& Accessories
• Batteries & Chargers
• Cases & Protection
• Memory & Data
• Car Kits & Mounts
• Bluetooth-Enabled Devices
• Audio & Music Accessories
35% of Trailing 12 Month Core Revenues
Offering the Products to Build the Solution
 
 

 
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Installation, Test
& Maintenance
• Test Equipment
• Tools
• Installation & Shop Supplies
9% of Trailing 12 Month Core Revenues
Offering the Products to Build the Solution
 
 

 
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Training & Services
• Cisco Wireless Certification
• RF & Broadband
• IT & Data Network
• Safety
• Disaster Recovery
Offering the Services to Build the Solution
 
 

 
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Filling unmet market needs.
Designed and manufactured by Ventev - a division of TESSCO.
TESSCO Proprietary Products
 Mobility & User Devices
 & Accessories
 Power Systems
 Turnkey integrated systems
 WiFi Enclosures
 WiFi Antennas
 Cable assemblies
 Base Site Infrastructure
 Mobile Device Accessories
 Tools & Supplies
12% of Trailing 12 Month Core Revenues
Customer Satisfaction - Strategic Strength - Higher Margins
 
 

 
 
 

 
 
 

 
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• Carriers
• Program Managers
 & Contractors
• Wireless Internet
 Service Providers
• Tower Owners
Customers and Potential Customers…
Public Network Organizations
18% of Trailing 12 Month
Core Revenues
 
 

 
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• State & Local
• Federal
• General Contractors
Customers and Potential Customers…
Government
 
 

 
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• Manufacturers
• Oil & Gas Pipeline
• Enterprise
• Utilities
• Transportation
• Mining
• Engineers
 & Technicians
Customers and Potential Customers…
Self Maintained Users
24% of Trailing 12 Month Core
Revenues
(includes Government)
 
 

 
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• Two-Way Dealers
• Network VARs
Customers and Potential Customers…
Value-Added Resellers
26% of Trailing 12 Month
Core Revenues
 
 

 
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• Carriers stores
• Independent
 Carrier Agents
• Retailers
• eTailers
Customers and Potential Customers…
Retail
32% of Trailing 12 Month
Core Revenues
 
 

 
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Manufacturers Direct
& “Habit”
Competitors
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Wireless network,
infrastructure &
broadband products
& solutions
Communication &
security products,
electrical wire &
cable products,
& fasteners
Cisco networking,
collaboration, security
& data center
solutions
Electrical,
communications, data
networking &
security products
Commercial wireless
communications &
related equipment
Information
technology (IT)
products & supply
chain solutions
Supply chain,
deployment &
equipment
distribution services
Wholesale distributor
of specialty
technology products
Manufactures wireless
site components
Manufactures &
Markets OEM/brand
& ODM wireless
accessories
Distributes wireless
infrastructure,
communications &
mobile products
Engages in the
wholesale distribution
of technology products
Markets & distributes
network technology
solutions
Designs, develops, &
manufactures industrial
computer & embedded
computer products
 
 

 
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from a choice of
Products, Manufacturers & Brands
Linking
Configured
Value Proposition
The Vital Link to a Wireless World
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Customers
With
Solutions
 
 

 
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Superior Channel of Distribution
TESSCO markets, supplies, supports, and sells manufacturer partners' products as part of a total
customer solution to our broad, diverse and loyal customer base.
In-depth Inventory
TESSCO assures product availability of manufacturers’ when and where customers require.
 
Meaningful Partnership
TESSCO collaborates with manufacturer partners with continual improvement to build customer
satisfaction, sales, productivity, low inventory and profits.
Broad Product Exposure & Demand Creation
TESSCO aggressively offers and presents product specifications, features and benefits,
and markets in solutions or manufacturer based campaigns.
Lowest Total Value Chain Costs
TESSCO minimizes the total marketing - sales - inventory - fulfillment costs by providing the
total system of knowledge, delivery, production planning, order entry, order processing,
inventory holding, shipping, credit, collection and warranty costs.
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Our Manufacturer Value Proposition
 
 

 
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KNOWLEDGE
Transforming information into the intelligence to
design, implement, and support your system.
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CONFIGURATION & DESIGN
Architecting the end to end solutions ready for immediate
deployment to meet your requirements.
PROCUREMENT & DELIVERY
Delivering what you need, when and where you need it.®
CONTROL
Building certainty into your supply chain, from start to finish.
Our Customer Value Proposition
Assured Availability - Lowest Inventory - Lowest TOTAL Cost
 
 

 
 
 

 
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Internet - Data Based - One to One Marketing
• Presents a welcoming, personal and definitive place to learn and procure the products to build,
use and maintain wireless, through the electronic
KCDC (Knowledge, Configuration & Design,
Procure and Delivery and Control)
system.
• Attracts & captures new customer & sales opportunities
and then directs one to one conversations to fulfill the
customers’ needs, build relationships and generate sales.
• Builds a prospects and customer data base consisting of
profiles of customers, individuals and opportunity.
• Allows customers - individuals to create a personalized
experience by defining their preferences and privileges.
• Provides the foundation for customer - individual
specific delivery of the value proposition and
marketing-sales campaigns.
• Presents product - price - availability confirmation
and enables productive order entry & delivery tracking.
 
 

 
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• Assuring product availability & return on
inventory
• Integrating product items into total solutions
• Delivering when and where required
• Assuring credit availability and payment
Configuration, Fulfillment & Delivery Engine
 
 

 
 
 

 
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Future
• Supplying Ventev Products to the customer
• Continue selling their Independent Agents
• New future opportunities due to strong relationships with their Marketing,
 Supply Chain and Emerging Device Group
• 100% focus on our Your Total Source® business model
 - Broad and diverse customer base purchasing a broad and diverse product offering
 - Significantly higher margins
Transition from Major 3PL Relationship
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Strong earnings performance
• Fourth consecutive record earnings year
 - EPS of $2.03 vs. $1.27 in FY11
• Record revenues
 - $733 million vs. $605 million in FY11
 - 7% increase excluding major 3 PL relationship
Improved operating margins
• 3.7% op margin vs. 2.6% in FY11
Excellent cash flows and strong balance sheet
• $21.7 million cash flow from ops
• $18.2 million ending cash balance with no operating debt
Shareholder returns
• Quarterly dividend increased from $0.15 to $0.18 per share in Q4
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Investor Highlights
Fiscal Year 2012
 
 

 
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Revenue Growth
• +10% Growth for nine months of revenue of $594 million
 - +12% growth excluding major 3 PL relationship
 - Major 3 PL up 3%
Strong operating margins
• 4.1% operating margin vs. 3.9% in FY12
Strong earnings performance
• Nine month EPS of $1.80 vs. $1.60 in first nine months of FY12
 - Q1 FY13 EPS of $0.51
 - Q2 FY13 EPS of $0.64 (previous record)
 - Q3 FY13 EPS of $0.65 (current record)
Solid cash position and strong balance sheet
• $2.6 million ending cash balance with no operating debt
Increasing shareholder returns
• Quarterly dividend of $0.18 per share
• Special dividend $0.75 per share paid in December
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Financial Highlights
First Nine Months of Fiscal Year 2013
(ended December 2012)
 
 

 
 
 

 
 
 

 
 
 

 
 
 

 
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Gross Margins
 
 

 
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AR & Days Sales O/S
$ in millions
 
 

 
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Inventory & Turns
$ in millions
 
 

 
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Bad Debt & Inventory Reserves
 
 

 
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Annual EPS Guidance of $2.09-$2.15
• Compares to $2.03 in FY12 (current record EPS year)
• Based on YTD of $1.80, Q4 guidance is $0.29-$0.35
 - Q4 is our quarter most affected by seasonality
• Q4 total revenue projected at $148-160M
 - Excluding the major 3 PL relationship, revenue is a 5-12% increase
 - Major 3 PL revenue would be down almost 70%, so overall revenue will be down 18-
24%
• Major 3 PL relationship continues to transition and we expect it to be transitioned by
the end of the fiscal year
 - Continue to sell Ventev products and other programs with them
Full FY13 financial results and FY14 guidance will be released on May 8, 2013
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FY13 Guidance
 
 

 
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Expand Customer Base
• New customers in existing markets
• New customers in new markets
Increase Customer Purchases
• Category share
• Cross sell
• New products offered
• New systems supported
Enhance Margins & Return on Assets
• Sales & marketing productivity
• Pricing strategy
• Landed product cost
• Operational productivity
Achieving Accelerated Sustainable
Profitable Growth
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Knowledge, Logistics, Inventory
Availability Management &
Customer Service Excellence
Margin & EBITDA Growth
& Strong Financial Position
Expansion of Our Proprietary
Products Portfolio
Superior Leadership
& Team of Teams
Aggressive Internet -
Data Based Viral Marketing
Potential acquisitions of companies
with synergistic addition of new
products and/or customers
Extraordinary Opportunities
in the Converging World of
Wireless & Internet
Broad & Diverse Customer &
Manufacturer Partnerships
Exit Low Margin 3PL Business
The Foundation for Sustainable Profitable Growth
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NASDAQ: TESS
Giving our customers experiences to remember,
and making their businesses better.
Higher, faster and stronger innovative thinking
and operational excellence.
Making everything we do extraordinary.
Robert Barnhill
Founder, Chairman & CEO
410.229.1353
Barnhill@tessco.com
Aric Spitulnik
VP, Principal Accounting Officer & Controller
410.229.1419
Spitulnik@tessco.com
Hunt Valley, Maryland
Timonium, Maryland
Reno, Nevada
San Antonio, Texas
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Our passion is to build
an enduring company.