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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 announced its results for the second quarter of fiscal year 2013, ended September 30, 2012.
“During the second quarter we greatly accelerated our revenue and profitability growth; compared to last year’s second quarter, revenue increased 21 percent in our core markets and 33 percent overall, and EPS grew 45 percent,” commented Chairman and CEO Robert Barnhill.
“We are very pleased with the strong growth from our core markets. On a sequential basis, revenues and profits from our third-party (3PL) logistics business with a Tier 1 carrier declined, and by the end of this fiscal year we expect to have completely transitioned out of this business. While the revenues from this customer are significant, the profit contribution margin remains low. Our strong results this quarter illustrate how, as we exit the 3PL business with this customer, we are realigning our resources and intensifying our focus on TESSCO’s commercial and retail markets, enabling us to profit from the immense opportunities in wireless broadband.
“Due to this quarter’s strong results we are raising the bottom end of our guidance range for fiscal 2013. We now expect full-year diluted earnings per share to be in the range of $1.90 to $2.15, compared to our previous $1.80 to $2.15 guidance. We believe our leverage of the many opportunities being created by the convergence of wireless and the Internet will enable us to continue to grow revenues and profits from our core markets.”
Second-Quarter Fiscal 2013 Financial Results
For the company’s fiscal 2013 second quarter, revenue reached $197.2 million, a 33 percent increase compared to last year’s second quarter. Comparing the results in our core markets – i.e., our total business excluding Tier 1 carrier retail customers – revenues grew by $22.7 million, or 21 percent, compared to the prior year quarter. The public systems operator market produced 29 percent revenue growth; the commercial dealer & reseller market produced 14 percent revenue growth; the private & government systems market produced 10 percent revenue growth; and the retailer, dealer agent & Tier 2/3 carrier market produced 35 percent revenue growth. The Tier 1 carrier retail market produced 65 percent revenue growth, mostly attributable to the temporary expansion of our low-margin 3PL relationship with the major Tier 1 carrier customer.