Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Sep. 27, 2015 | Oct. 30, 2015 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | TESSCO TECHNOLOGIES INC | |
Entity Central Index Key | 927,355 | |
Current Fiscal Year End Date | --03-27 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 8,273,116 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q2 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 27, 2015 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Sep. 27, 2015 | Mar. 27, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 5,966,700 | $ 7,524,000 |
Trade accounts receivable, net | 66,164,700 | 59,572,100 |
Product inventory, net | 75,099,700 | 72,363,600 |
Deferred tax assets | 3,875,000 | 3,856,000 |
Prepaid expenses and other current assets | 6,868,500 | 10,868,900 |
Total current assets | 157,974,600 | 154,184,600 |
Property and equipment, net | 20,527,100 | 21,111,800 |
Goodwill, net | 11,684,700 | 11,684,700 |
Other long-term assets | 2,619,600 | 2,619,600 |
Total assets | 192,806,000 | 189,600,700 |
Current liabilities: | ||
Trade accounts payable | 56,449,000 | 51,804,200 |
Payroll, benefits and taxes | 6,165,200 | 5,531,900 |
Income and sales tax liabilities | 2,217,100 | 1,832,400 |
Accrued expenses and other current liabilities | 5,150,800 | 8,688,500 |
Current portion of long-term debt | 250,900 | 250,700 |
Total current liabilities | 70,233,000 | 68,107,700 |
Deferred tax liabilities | 3,360,100 | 3,360,100 |
Long-term debt, net of current portion | 1,831,900 | 1,957,500 |
Other long-term liabilities | 2,764,800 | 3,033,300 |
Total liabilities | $ 78,189,800 | $ 76,458,600 |
Shareholders' equity: | ||
Preferred stock, $0.01 par value, 500,000 shares authorized and no shares issued and outstanding | ||
Common stock $0.01 par value, 15,000,000 shares authorized, 13,934,332 shares issued and 8,242,439 shares outstanding as of September 27, 2015, and 13,817,239 shares issued and 8,159,592 shares outstanding as of March 29, 2015 | $ 97,400 | $ 96,100 |
Additional paid-in capital | 57,679,800 | 56,517,600 |
Treasury stock, at cost, 5,691,932 shares outstanding as of September 27, 2015 and 5,657,647 shares outstanding as of March 29, 2015 | (57,134,800) | (56,307,900) |
Retained earnings | 113,973,800 | 112,836,300 |
Total shareholders' equity | 114,616,200 | 113,142,100 |
Total liabilities and shareholders' equity | $ 192,806,000 | $ 189,600,700 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 27, 2015 | Mar. 27, 2015 |
Shareholders' equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, authorized (in shares) | 500,000 | 500,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars shares) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 15,000,000 | 15,000,000 |
Common stock, issued (in shares) | 13,934,332 | 13,817,239 |
Common stock, outstanding (in shares) | 8,242,439 | 8,159,592 |
Treasury stock (in shares) | 5,691,932 | 5,657,647 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) | 3 Months Ended | 6 Months Ended | ||
Sep. 27, 2015 | Sep. 27, 2014 | Sep. 27, 2015 | Sep. 27, 2014 | |
Consolidated Statements of Income [Abstract] | ||||
Revenues | $ 142,353,300 | $ 148,521,800 | $ 277,017,300 | $ 301,468,100 |
Cost of goods sold | 108,491,600 | 113,085,800 | 210,919,700 | 230,783,300 |
Gross profit | 33,861,700 | 35,436,000 | 66,097,600 | 70,684,800 |
Selling, general and administrative expenses | 29,215,400 | 29,569,400 | 58,591,800 | 58,745,800 |
Income from operations | 4,646,300 | 5,866,600 | 7,505,800 | 11,939,000 |
Interest expense, net | 47,100 | 49,400 | 93,400 | 77,800 |
Income before provision for income taxes | 4,599,200 | 5,817,200 | 7,412,400 | 11,861,200 |
Provision for income taxes | 1,850,900 | 2,303,600 | 2,968,800 | 4,676,200 |
Net income | $ 2,748,300 | $ 3,513,600 | $ 4,443,600 | $ 7,185,000 |
Basic earnings per share (in dollars per share) | $ 0.33 | $ 0.42 | $ 0.54 | $ 0.87 |
Diluted earnings per share (in dollars per share) | 0.33 | 0.42 | 0.54 | 0.86 |
Cash dividends declared per common share (in dollars per share) | $ 0.20 | $ 0.20 | $ 0.40 | $ 0.40 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 6 Months Ended | |
Sep. 27, 2015 | Sep. 27, 2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 4,443,600 | $ 7,185,000 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 2,338,500 | 2,352,900 |
Gain on sale of property and equipment | (3,000) | |
Non-cash stock-based compensation expense | 399,700 | 677,600 |
Deferred income taxes and other | (287,500) | (216,300) |
Change in trade accounts receivable | (6,592,600) | (13,169,800) |
Change in product inventory | (2,736,100) | (19,882,700) |
Change in prepaid expenses and other current assets | 4,000,400 | (1,141,700) |
Change in trade accounts payable | 4,644,800 | 22,769,900 |
Change in payroll, benefits and taxes | 633,300 | (2,341,900) |
Change in income and sales tax liabilities | 384,700 | (235,300) |
Change in accrued expenses and other current liabilities | (3,365,500) | 347,800 |
Net cash provided by (used in) operating activities | 3,863,300 | (3,657,500) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of property and equipment | (1,753,800) | (1,338,900) |
Proceeds from sale of property and equipment | 3,000 | |
Net cash used in investing activities | (1,753,800) | (1,335,900) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Payments on long-term debt | (125,400) | (125,100) |
Proceeds from issuance of stock | 81,200 | 109,200 |
Cash dividends paid | (3,306,100) | (3,332,200) |
Purchases of treasury stock and repurchases of stock from employees and directors for minimum tax withholdings | (826,900) | (1,642,800) |
Excess tax benefit from stock-based compensation | 510,400 | 1,173,300 |
Net cash used in financing activities | (3,666,800) | (3,817,600) |
Net decrease in cash and cash equivalents | (1,557,300) | (8,811,000) |
CASH AND CASH EQUIVALENTS, beginning of period | 7,524,000 | 11,467,900 |
CASH AND CASH EQUIVALENTS, end of period | $ 5,966,700 | $ 2,656,900 |
Organization
Organization | 6 Months Ended |
Sep. 27, 2015 | |
Organization | |
Business Description and Basis of Presentation | Note 1. Description of Business and Basis of Presentation TESSCO Technologies Incorporated, a Delaware corporation (TESSCO, we, our, or the Company), architects and delivers innovative product and value chain solutions to support wireless broadband systems. The Company provides marketing and sales services, knowledge and supply chain management, product-solution delivery and control systems, utilizing extensive Internet and information technology. Approximately 98% of the Company’s sales are made to customers in the United States. The Company takes orders in several ways, including phone, fax, online and through electronic data interchange. Almost all of the Company’s sales are made in United States Dollars. In management’s opinion, the accompanying interim consolidated financial statements of the Company include all adjustments, consisting only of normal, recurring adjustments, necessary for a fair presentation of the Company’s financial position for the interim periods presented. These statements are presented in accordance with the rules and regulations of the United States Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in the Company’s annual financial statements have been omitted from these statements, as permitted under the applicable rules and regulations. The results of operations presented in the accompanying interim consolidated financial statements are not necessarily representative of operations for an entire year. The information included in this Form 10-Q should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 29, 2015 . |
Recently Issued Accounting Pron
Recently Issued Accounting Pronouncements | 6 Months Ended |
Sep. 27, 2015 | |
Recently Issued Accounting Pronouncements | |
Recently Issued Accounting Pronouncements | Note 2. Recently Issued Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers. This guidance will supersede Topic 605, Revenue Recognition, in addition to other industry-specific guidance, once effective. The new standard requires a company to recognize revenue in a manner that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods and services. The accounting standard is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. Early adoption is permitted as of the original effective date, December 15, 2016. The Company is currently in the process of evaluating the methods of adoption allowed by the ASU and assessing its impact on the Company’s consolidated financial statements and related disclosures. In April 2015, the FASB issued ASU 2015-03, Interest – Imputation of Interest (Subtopic 835-30). This ASU requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. This ASU is effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years, and is to be adopted on a retrospective basis. Early adoption is permitted for financial statements that have not been previously issued. The Company does not expect this ASU will have a material impact on the Company’s consolidated financial statements or related disclosures. |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Sep. 27, 2015 | |
Stock-Based Compensation | |
Stock-Based Compensation | Note 3. Stock-Based Compensation The Company’s selling, general and administrative expenses for the fiscal quarter and six months ended September 27, 2015 include $268,000 and $399,700 , respectively, of non-cash stock-based compensation expense. The Company’s selling, general and administrative expenses for the fiscal quarter and six months ended September 28, 2014 include $228,000 and $677,600 , respectively, of non-cash stock-based compensation expense. Stock-based compensation expense is primarily related to our Performance Stock Unit (PSU) Program. In addition, the Company recorded an excess tax benefit directly to shareholders’ equity of $510,400 and $1,173,300 , primarily related to the PSUs which vested during the six months ended September 27, 2015 and September 28, 2014, respectively. Performance Stock Units: The following table summarizes the activity under the Company’s PSU program for the first six months of fiscal 2016: Six Months Weighted Ended Average Fair September 27, Value at Grant 2015 Date (per unit) Unvested shares available for issue under outstanding PSUs, beginning of period $ PSU’s Granted PSU’s Vested PSU’s Forfeited/Cancelled Unvested shares available for issue under outstanding PSUs, end of period $ Of the 139,466 unvested shares available for issue under outstanding PSUs as of September 27, 2015, 36,466 shares have been earned in respect of the applicable measurement year, and assuming the respective participants remain employed by or associated with the Company on these dates, the shares earned in respect of each measurement year will vest and be issued in installments beginning on or about May 1 of the fiscal year immediately following the applicable measurement year and continuing on or about May 1 of each of the three succeeding fiscal years. The remaining 103,000 unvested shares available for issue under outstanding PSUs as of September 27, 2015 are issuable pursuant to PSUs granted during fiscal 2016 to select key employees. These PSUs were granted by the Compensation Committee of the Board of Directors with concurrence of the full Board of Directors and provide the employees with the opportunity to earn up to 103,000 additional shares of the Company’s common stock in the aggregate, depending upon whether certain earnings per share targets are met, and subject to individual performance. These not yet earned PSUs have a one year measurement period (fiscal 2016), and any shares earned at the end of fiscal 2016 will vest and be issued ratably on or about May 1 of 2016, 2017, 2018 and 2019, provided that the respective employees remain employed by or associated with the Company on each date. The PSUs cancelled during fiscal 2016 related primarily to the fiscal 2015 grant of PSUs, which had a one year measurement period (fiscal 2015). The PSUs were cancelled because the applicable fiscal 2015 performance targets were not fully attained. Per the provisions of the 1994 Plan, the shares related to these forfeited and cancelled PSUs were added back to the 1994 Plan and became available for future issuance. If the entire number of PSUs granted in fiscal 2016 is assumed to be earned, total unrecognized compensation costs, on these PSUs plus all earned but unvested PSUs would be approximately $2.3 million, net of estimated forfeitures, as of September 27, 2015, and would be expensed through fiscal 2019. To the extent the actual forfeiture rate is different from what is anticipated or the maximum number of PSUs granted in fiscal 2016 is not earned, stock-based compensation related to these awards will be different from this amount. Restricted Stock/Restricted Stock Units: In fiscal 2007, the Company granted 225,000 shares of the Company’s common stock to its Chairman and Chief Executive Officer as a restricted stock award under the 1994 Plan. These shares were issued (subject to the risk of forfeiture) and vest ratably over ten fiscal years based on service, beginning on the last day of fiscal 2007 and ending on the last day of fiscal 2016, subject, however, to the terms applicable to the award, including terms providing for possible acceleration of vesting upon death, disability, change in control or certain other events. The fair value for these shares at the grant date was $10.56 per share. There was no activity related to these restricted shares during the first six months of fiscal 2016. As of September 27, 2015, 22,500 of these restricted shares remained unvested, and there was approximately $0.1 million of total unrecognized compensation costs, net of estimated forfeitures, related to these shares. Unrecognized compensation costs are expected to be recognized ratably over a remaining period of approximately one year. In addition the Company has issued restricted stock units (RSUs) to its non-employee directors. On May 11, 2015, the Compensation Committee, with the concurrence of the full Board of Directors, awarded an aggregate of 10,000 RSUs to the non-employee directors of the Company. These awards provide for the issuance of shares of the Company’s common stock in accordance with a four year annual vesting schedule, from the date of grant, provided that the director remains associated with the Company (or meets other criteria as prescribed in the applicable award agreement) on each such date. As of September 27, 2015, there was approximately $0.5 million of total unrecognized compensation cost, net of estimated forfeitures, related to all outstanding restricted stock unit awards, including the May 11, 2015 grant. Unrecognized compensation costs are expected to be recognized ratably over a remaining period of approximately three years. PSUs and RSUs are expensed based on the grant date fair value, calculated as the closing price of TESSCO common stock as reported by NASDAQ on the date of grant minus the present value of dividends expected to be paid on the common stock before the award vests, because dividends or dividend-equivalent amounts do not accrue and are not paid on unvested PSUs and RSUs. Dividends do, however, accrue on both the vested and unvested shares subject to the restricted stock award made to the Company’s Chairman. To the extent the actual forfeiture rates are different from what is estimated, stock-based compensation related to the restricted awards will be different from the Company’s expectations. Stock Options: On July 21, 2015 the Compensation Committee of the Board of Directors, with the concurrence of the full Board of Directors, granted a total of 80,000 stock options to select employees with an exercise price of $22.64 . The options will vest over four years, 25.0% on July 21, 2016 and 2.1% each month thereafter for an additional 36 months, and will expire on July 21, 2020, provided that the respective employees remain employed by the C ompany on the respective vesting dates. The fair value of the Company’s stock options has been determined using an acceptable pricing model, the Black-Scholes-Merton option pricing model, based upon facts and assumptions existing at the date of grant. Outstanding stock options have exercise prices equal to the market price of the Company’s common stock on the grant date. The fair value of each option at the date of grant is amortized as compensation expense over the option service or vesting period. This occurs without regard to subsequent changes in stock price, volatility or interest rates over time, provided that the option remains outstanding. As of September 27, 2015, there was approximately $0.6 million of total unrecognized compensation cost, net of estimated forfeitures, related to all outstanding stock options. As of September 27, 2015, none of the outstanding stock options have vested. |
Borrowings Under Revolving Cred
Borrowings Under Revolving Credit Facility | 6 Months Ended |
Sep. 27, 2015 | |
Borrowings Under Revolving Credit Facility [Abstract] | |
Borrowings Under Revolving Credit Facility | Note 4. Borrowings Under Revolving Credit Facility On September 24, 2015, the Company and its primary operating subsidiaries, as borrowers, entered into a Tenth Modification Agreement (the “Tenth Modification”) with SunTrust Bank and Wells Fargo Bank, National Association, amending the Credit Agreement, and related Note, for the Company's existing $35.0 million unsecured revolving credit facility. Pursuant to the Tenth Modification, the term of the credit facility was extended from October 1, 2016 to October 1, 2018 ; the aggregate amount of cash dividend payments allowed under the credit facility to be made in any 12 -month period by the Company, assuming continued compliance with the otherwise applicable terms of the Credit Agreement, was increased from $8 million to $9 million; and certain definitions and financial covenants were modified. In addition, the credit facility now contains an accordion feature that permits the lenders’ aggregate commitment to be increased to a maximum of $45.0 million, subject to the lenders’ discretion and other customary conditions. |
Fair Value Disclosure
Fair Value Disclosure | 6 Months Ended |
Sep. 27, 2015 | |
Fair Value Disclosure | |
Fair Value Disclosure | Note 5. Fair Value Disclosure Assets and liabilities carried at fair value are classified and disclosed in one of the following three categories: · Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities. · Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets, and quoted prices for identical or similar assets or liabilities in markets that are not active. · Level 3: Unobservable inputs for the asset or liability that reflect the reporting entity’s own assumptions about the inputs used in pricing the asset or liability. The Company had no assets or liabilities required to be measured at fair value as of September 27, 2015 or as of March 29, 2015. The carrying amounts of cash and cash equivalents, trade accounts receivable, trade accounts payable, accrued expenses and other current liabilities approximate their fair values as of September 27, 2015 and March 29, 2015 due to their short term nature. Fair value of long-term debt is calculated using current market interest rates, which we consider to be a Level 2 input as described in the fair value accounting guidance on fair value measurements, and future principle payments, as of September 27, 2015 and March 29, 2015 is estimated as follows: September 27, 2015 March 29, 2015 Carrying Fair Carrying Fair Amount Value Amount Value Note payable to a Bank $ $ $ $ Note payable to Baltimore County $ $ $ $ |
Income Taxes
Income Taxes | 6 Months Ended |
Sep. 27, 2015 | |
Income Taxes | |
Income Taxes | Note 6. Income Taxes As of September 27, 2015, the Company had a gross amount of unrecognized tax benefits of $399,600 ( $259,700 net of federal benefit). As of March 29, 2015, the Company had a gross amount of unrecognized tax benefits of $394,400 ( $256,400 net of federal benefit). The Company’s accounting policy with respect to interest and penalties related to tax uncertainties is to classify these amounts as part of the provision for income taxes. The total amount of interest and penalties related to tax uncertainties recognized in the consolidated statement of income for the first six months of fiscal 2016 was $31,800 (net of federal benefit). The cumulative amount included in the consolidated balance sheet as of September 27, 2015 was $355,000 (net of federal benefit). The total amount of interest and penalties related to tax uncertainties recognized in the consolidated statement of income for the first six months of fiscal 2015 was $33,100 (net of federal benefit). The cumulative amount of interest and penalties included in the consolidated balance sheet as of March 29, 2015 was $323,800 (net of federal benefit). A reconciliation of the changes in the gross balance of unrecognized tax benefits, excluding interest is as follows: Beginning balance at March 29, 2015 of unrecognized tax benefit $ Increases related to current period tax positions Ending balance at September 27, 2015 of unrecognized tax benefits $ |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Sep. 27, 2015 | |
Earnings Per Share | |
Earnings Per Share | Note 7. Earnings Per Share The Company calculates earnings per share considering the Accounting Standard Codification No. 260 regarding accounting for participating securities, which requires the Company to use the two-class method to calculate earnings per share. Under the two-class method, earnings per common share is computed by dividing the sum of the distributed earnings to common shareholders and undistributed earnings allocated to common shareholders by the weighted average number of common shares outstanding for the period. In applying the two-class method, undistributed earnings are allocated to both common shares and participating securities based on the weighted average shares outstanding during the period. The following table presents the calculation of basic and diluted earnings per common share: Fiscal Quarter Ended Six Months Ended Amounts in thousands, except per share amounts September 27, 2015 September 28, 2014 September 27, 2015 September 28, 2014 Earnings per share – Basic: Net earnings $ $ $ $ Less: Distributed and undistributed earnings allocated to nonvested stock Earnings available to common shareholders – Basic $ $ $ $ Weighted average common shares outstanding – Basic Earnings per common share – Basic $ $ $ $ Earnings per share – Diluted: Net earnings $ $ $ $ Less: Distributed and undistributed earnings allocated to nonvested stock Earnings available to common shareholders – Diluted $ $ $ $ Weighted average common shares outstanding – Basic Effect of dilutive options Weighted average common shares outstanding – Diluted Earnings per common share – Diluted $ $ $ $ Anti-dilutive equity awards not included above — — |
Business Segments
Business Segments | 6 Months Ended |
Sep. 27, 2015 | |
Operating Segments | |
Business Segments | Note 8. Business Segments The Company evaluates its business as one segment, as the chief operating decision maker assesses performance and allocates resources on a consolidated basis. However, to provide investors with increased visibility into the markets it serves, the Company also reports revenue and gross profit by the following customer market units: (1) public carriers, contractors and program managers, that are generally responsible for building and maintaining the infrastructure system and provide airtime service to individual subscribers; (2) government system operators including federal agencies and state and local governments that run wireless networks for their own use; (3) private system operators including commercial entities such as enterprise customers, major utilities and transportation companies; (4) commercial dealers and resellers that sell, install and/or service cellular telephone, wireless networking, broadband and two-way radio communications equipment primarily for the enterprise market; and (5) retailers, independent dealer agents and carriers. Beginning in the third quarter of fiscal 2015, the Company began reporting private system operators and government system operators as two separate market units. All prior periods have been restated to reflect this change. To provide investors with better visibility, the Company also discloses revenue and gross profit by its four product categories: · Base station infrastructure products are used to build, repair and upgrade wireless telecommunications systems. Products include base station antennas, cable and transmission lines, small towers, lightning protection devices, connectors, power systems, miscellaneous hardware, and mobile antennas. Our base station infrastructure service offering includes connector installation, custom jumper assembly, site kitting and logistics integration. · Network systems products are used to build and upgrade computing and Internet networks. Products include fixed and mobile broadband equipment, distributed antenna systems (DAS), wireless networking, filtering systems, two-way radios and security and surveillance products. This product category also includes training classes, technical support and engineering design services. · Installation, test and maintenance products are used to install, tune, maintain and repair wireless communications equipment. Products include sophisticated analysis equipment and various frequency-, voltage- and power-measuring devices, as well as an assortment of tools, hardware, GPS, safety and replacement and component parts and supplies required by service technicians. · Mobile device accessories include cellular phone and data device accessories such as replacement batteries, cases, speakers, mobile amplifiers, power supplies, headsets, mounts, car antennas, music accessories and data and memory cards. Retail merchandising displays, promotional programs, customized order fulfillment services and affinity-marketing programs, including private label Internet sites, complement our mobile devices and accessory product offering. The Company evaluates revenue, gross profit, and income before provision for income taxes at a consolidated level. Certain cost of sales and other applicable expenses have been allocated to each market unit or product type based on a percentage of revenues and/or gross profit, where appropriate. Market unit activity for the second quarter and first six months of fiscal years 2016 and 2015 are as follows (in thousands): Three Months Ended September 27, 2015 September 28, 2014 Revenues Public Carriers, Contractors & Program Managers $ $ Government System Operators Private System Operators Commercial Dealers & Resellers Retailer, Independent Dealer Agents & Carriers Total revenues $ $ Gross Profit Public Carriers, Contractors & Program Managers $ $ Government System Operators Private System Operators Commercial Dealers & Resellers Retailer, Independent Dealer Agents & Carriers Total gross profit $ $ Six Months Ended September 27, 2015 September 28, 2014 Revenues Public Carriers, Contractors & Program Managers $ $ Government System Operators Private System Operators Commercial Dealers & Resellers Retailer, Independent Dealer Agents & Carriers Total revenues $ $ Gross Profit Public Carriers, Contractors & Program Managers $ $ Government System Operators Private System Operators Commercial Dealers & Resellers Retailer, Independent Dealer Agents & Carriers Total gross profit $ $ Supplemental revenue and gross profit information by product category for the second quarter and first six months of fiscal years 2016 and 2015 are as follows (in thousands): Three months ended Three months ended September 27, 2015 September 28, 2014 Revenues Base station infrastructure $ $ Network systems Installation, test and maintenance Mobile device accessories Total revenues $ $ Gross Profit Base station infrastructure $ $ Network systems Installation, test and maintenance Mobile device accessories Total gross profit $ $ Six months ended Six months ended September 27, 2015 September 28, 2014 Revenues Base station infrastructure $ $ Network systems Installation, test and maintenance Mobile device accessories Total revenues $ $ Gross Profit Base station infrastructure $ $ Network systems Installation, test and maintenance Mobile device accessories Total gross profit $ $ |
Stock Buyback
Stock Buyback | 6 Months Ended |
Sep. 27, 2015 | |
Stock Buyback | |
Stock Buyback | Note 9. Stock Buyback On April 23, 2014, the Board of Directors expanded the Company’s existing stock buyback program and authorized the purchase on a non-accelerated basis of up to $10.0 million of the Company’s stock over a 24 -month period, ending in April 2016. Shares may be purchased from time to time in the open market, by block purchase, or through negotiated transactions, or possibly other transactions managed by broker-dealers. No shares were purchased during the first six months of fiscal year 2016. As of September 27, 2015, $5.4 million remained available for repurchase under this program. Our revolving credit facility and term loan with SunTrust Bank and Wells Fargo Bank, National Association, limits the aggregate dollar value of shares that may be repurchased to $30.0 million. As of September 27, 2015, the Company had the ability to purchase approximately $11.7 million in additional shares of common stock without violating this covenant. The Company also withholds shares from its employees and directors at their request, equal to the minimum federal and state tax withholdings related to vested performance stock units, stock option exercises and restricted stock awards. For the six months ended September 27, 2015 and September 28, 2014, the allocated value of the shares withheld totaled $827,000 and $1,411,800 , respectively. |
Concentration of Risk
Concentration of Risk | 6 Months Ended |
Sep. 27, 2015 | |
Concentration of Risk | |
Concentration of Risk | Note 10. Concentration of Risk The Company’s future results could be negatively impacted by the loss of certain customer and/or vendor relationships. For the fiscal quarter and six months ended September 27, 2015, no customer accounted for more than 5.0% of total consolidated revenues. For the fiscal quarter and six months ended September 28, 2014, American Tower Corporation accounted for 9.5% and 9.8% of consolidated revenue. For the fiscal quarter ended September 27, 2015, sales of Otter Products LLC and CommScope Incorporated products accounted for 15.4% and 11.9% of consolidated revenue, respectively. For the six months ended September 27, 2015, sales of Otter Products LLC and CommScope Incorporated products accounted for 14.7% and 11.4% of consolidated revenue, respectively. For the fiscal quarter and six months ended September 28, 2014, sales of CommScope Incorporated products accounted for 15.1% and 16.4% of consolidated revenue, respectively. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Sep. 27, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 11. Subsequent Events On October 7, 2015, the Company entered into a Fourth Modification Agreement with SunTrust Bank and Wells Fargo Bank, National Association, to extend the maturity date of the Company's existing term loan, secured by the Company’s Hunt Valley, Maryland facility, in the original principal amount of $4.5 million from July 1, 2016 to October 1, 2020 . The principal balance of the term loan as of October 7, 2015 was $1,968,750 . |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Sep. 27, 2015 | |
Stock-Based Compensation | |
Nonvested Performance-based Units Activity | Six Months Weighted Ended Average Fair September 27, Value at Grant 2015 Date (per unit) Unvested shares available for issue under outstanding PSUs, beginning of period $ PSU’s Granted PSU’s Vested PSU’s Forfeited/Cancelled Unvested shares available for issue under outstanding PSUs, end of period $ |
Fair Value Disclosure (Tables)
Fair Value Disclosure (Tables) | 6 Months Ended |
Sep. 27, 2015 | |
Fair Value Disclosure | |
Fair Value of Long-term Debt | September 27, 2015 March 29, 2015 Carrying Fair Carrying Fair Amount Value Amount Value Note payable to a Bank $ $ $ $ Note payable to Baltimore County $ $ $ $ |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Sep. 27, 2015 | |
Income Taxes | |
Reconciliation of Changes in Gross Balance of Unrecognized Tax Benefit Amounts, Net of Interest | Beginning balance at March 29, 2015 of unrecognized tax benefit $ Increases related to current period tax positions Ending balance at September 27, 2015 of unrecognized tax benefits $ |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Sep. 27, 2015 | |
Earnings Per Share | |
Calculation of Basic and Diluted Earnings Per Common Share | Fiscal Quarter Ended Six Months Ended Amounts in thousands, except per share amounts September 27, 2015 September 28, 2014 September 27, 2015 September 28, 2014 Earnings per share – Basic: Net earnings $ $ $ $ Less: Distributed and undistributed earnings allocated to nonvested stock Earnings available to common shareholders – Basic $ $ $ $ Weighted average common shares outstanding – Basic Earnings per common share – Basic $ $ $ $ Earnings per share – Diluted: Net earnings $ $ $ $ Less: Distributed and undistributed earnings allocated to nonvested stock Earnings available to common shareholders – Diluted $ $ $ $ Weighted average common shares outstanding – Basic Effect of dilutive options Weighted average common shares outstanding – Diluted Earnings per common share – Diluted $ $ $ $ Anti-dilutive equity awards not included above — — |
Business Segments (Tables)
Business Segments (Tables) | 6 Months Ended |
Sep. 27, 2015 | |
Operating Segments | |
Revenue Information by Market | Three Months Ended September 27, 2015 September 28, 2014 Revenues Public Carriers, Contractors & Program Managers $ $ Government System Operators Private System Operators Commercial Dealers & Resellers Retailer, Independent Dealer Agents & Carriers Total revenues $ $ Gross Profit Public Carriers, Contractors & Program Managers $ $ Government System Operators Private System Operators Commercial Dealers & Resellers Retailer, Independent Dealer Agents & Carriers Total gross profit $ $ Six Months Ended September 27, 2015 September 28, 2014 Revenues Public Carriers, Contractors & Program Managers $ $ Government System Operators Private System Operators Commercial Dealers & Resellers Retailer, Independent Dealer Agents & Carriers Total revenues $ $ Gross Profit Public Carriers, Contractors & Program Managers $ $ Government System Operators Private System Operators Commercial Dealers & Resellers Retailer, Independent Dealer Agents & Carriers Total gross profit $ $ |
Revenue Information by Product | Three months ended Three months ended September 27, 2015 September 28, 2014 Revenues Base station infrastructure $ $ Network systems Installation, test and maintenance Mobile device accessories Total revenues $ $ Gross Profit Base station infrastructure $ $ Network systems Installation, test and maintenance Mobile device accessories Total gross profit $ $ Six months ended Six months ended September 27, 2015 September 28, 2014 Revenues Base station infrastructure $ $ Network systems Installation, test and maintenance Mobile device accessories Total revenues $ $ Gross Profit Base station infrastructure $ $ Network systems Installation, test and maintenance Mobile device accessories Total gross profit $ $ |
Organization (Details)
Organization (Details) | Sep. 27, 2015 |
Organization | |
Percentage of sales in US (in hundredths) | 98.00% |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) | Jul. 22, 2016 | Jul. 21, 2016 | Jul. 21, 2015 | May. 11, 2015 | Sep. 27, 2015 | Sep. 27, 2014 | Sep. 27, 2015 | Sep. 27, 2014 | Apr. 01, 2007 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Income tax benefit from share-based compensation | $ 510,400 | $ 1,173,300 | |||||||
Performance Stock Units | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Shares earned | 36,466 | 36,466 | |||||||
Unrecognized compensation costs | $ 2,300,000 | $ 2,300,000 | |||||||
Nonvested PSU shares, Outstanding [Roll Forward] | |||||||||
Outstanding, non-vested beginning of period (in shares) | 203,841 | ||||||||
Granted (in shares) | 103,000 | ||||||||
Vested (in shares) | (87,107) | ||||||||
Forfeited/cancelled (in shares) | (80,268) | ||||||||
Outstanding, non-vested end of period (in shares) | 139,466 | 139,466 | |||||||
Nonvested PSU shares, Weighted-Average Grant Date Fair Value [Roll Forward] | |||||||||
Outstanding, non-vested beginning of period (in dollars per share) | $ 20.65 | ||||||||
Granted (in dollars per share) | 22.15 | ||||||||
Vested (in dollars per share) | 13.84 | ||||||||
Forfeited/cancelled (in dollars per share) | 28.57 | ||||||||
Outstanding, non-vested end of period (in dollars per share) | $ 21.45 | $ 21.45 | |||||||
Stock Options: | |||||||||
Vesting period | 3 years | ||||||||
Share released and vested (in shares) | 87,107 | ||||||||
Stock Options | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Unrecognized compensation costs | $ 600,000 | $ 600,000 | |||||||
Annual vesting percentage (in hundredths) | 25.00% | ||||||||
Stock Options: | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 80,000 | ||||||||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ 22.64 | ||||||||
Monthly percentage of vesting of share based compensation | 2.10% | ||||||||
Additional vesting months after the initial period | 36 months | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value | 0 | ||||||||
Vesting period | 4 years | ||||||||
Restricted Stock | Non-Employee Director | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Unrecognized compensation costs | $ 500,000 | $ 500,000 | |||||||
Unrecognized compensation costs, period for recognition | 3 years | ||||||||
Nonvested PSU shares, Outstanding [Roll Forward] | |||||||||
Granted (in shares) | 10,000 | ||||||||
Stock Options: | |||||||||
Vesting period | 4 years | ||||||||
Second Amended and Restated 1994 Stock and Incentive Plan | Subsequent Event | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Measurement period | 1 year | ||||||||
Second Amended and Restated 1994 Stock and Incentive Plan | Restricted Stock | Chief Executive Officer | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Unrecognized compensation costs | $ 100,000 | $ 100,000 | |||||||
Unrecognized compensation costs, period for recognition | 1 year | ||||||||
Nonvested PSU shares, Outstanding [Roll Forward] | |||||||||
Outstanding, non-vested end of period (in shares) | 22,500 | 22,500 | |||||||
Nonvested PSU shares, Weighted-Average Grant Date Fair Value [Roll Forward] | |||||||||
Granted (in dollars per share) | $ 10.56 | ||||||||
Stock Options: | |||||||||
Shares of common stock granted (in shares) | 225,000 | ||||||||
Vesting period | 10 years | ||||||||
Selling, General and Administrative Expenses | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Non-cash stock-based compensation | $ 268,000 | $ 228,000 | $ 399,700 | $ 677,600 |
Borrowings Under Revolving Cr24
Borrowings Under Revolving Credit Facility (Details) - Revolving Credit Facility [Member] - USD ($) $ in Millions | Sep. 24, 2015 | Jun. 27, 2015 |
Line of Credit Facility [Line Items] | ||
Maximum borrowing capacity | $ 45 | $ 35 |
Expiration date | Oct. 1, 2018 | Oct. 1, 2016 |
Maximum [Member] | ||
Line of Credit Facility [Line Items] | ||
Dividend payment permitted by lender agreement | $ 9 | $ 8 |
Rolling dividend payment period permitted by lender agreement | 12 months |
Fair Value Disclosure (Details)
Fair Value Disclosure (Details) - USD ($) | Sep. 27, 2015 | Mar. 27, 2015 |
Note Payable to a Bank | Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, fair value | $ 1,987,500 | $ 2,100,000 |
Note Payable to a Bank | Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, fair value | 1,803,200 | 2,031,400 |
Note Payable to Baltimore County | Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, fair value | 95,300 | 108,200 |
Note Payable to Baltimore County | Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, fair value | $ 90,800 | $ 102,300 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 6 Months Ended | ||
Sep. 27, 2015 | Sep. 27, 2014 | Mar. 27, 2015 | |
Income Taxes | |||
Net of indirect tax benefits | $ 259,700 | $ 256,400 | |
Amount of interest and penalties | 31,800 | $ 33,100 | |
Unrecognized tax benefits liability | 355,000 | $ 323,800 | |
Reconciliation of unrecognized tax benefits [Rollforward] | |||
Beginning balance of unrecognized tax benefit | 394,400 | ||
Increases related to current period tax positions | 5,200 | ||
Ending balance of unrecognized tax benefits | $ 399,600 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Sep. 27, 2015 | Sep. 27, 2014 | Sep. 27, 2015 | Sep. 27, 2014 | |
Earnings per share - Basic | ||||
Net earnings | $ 2,748,300 | $ 3,513,600 | $ 4,443,600 | $ 7,185,000 |
Less: Distributed and undistributed earnings allocated to nonvested stock | (7,000) | (19,000) | (12,000) | (39,000) |
Earnings available to common shareholders – Basic | $ 2,741,000 | $ 3,495,000 | $ 4,432,000 | $ 7,146,000 |
Weighted average common shares outstanding - Basic (in shares) | 8,238,000 | 8,279,000 | 8,219,000 | 8,252,000 |
Earnings per common share - Basic (in dollars per share) | $ 0.33 | $ 0.42 | $ 0.54 | $ 0.87 |
Earnings per share - Diluted | ||||
Net earnings | $ 2,748,300 | $ 3,513,600 | $ 4,443,600 | $ 7,185,000 |
Less: Distributed and undistributed earnings allocated to nonvested stock | 7,000 | 19,000 | 8,000 | 29,000 |
Earnings available to common shareholders – Diluted | $ 2,741,000 | $ 3,495,000 | $ 4,436,000 | $ 7,156,000 |
Weighted average common shares outstanding - Basic (in shares) | 8,238,000 | 8,279,000 | 8,219,000 | 8,252,000 |
Effect of dilutive options (in shares) | 32,000 | 106,000 | 41,000 | 106,000 |
Weighted average common shares outstanding – Diluted (in shares) | 8,270,000 | 8,385,000 | 8,260,000 | 8,358,000 |
Earnings per common share - Diluted (in dollars per share) | $ 0.33 | $ 0.42 | $ 0.54 | $ 0.86 |
Anti-dilutive equity awards not included above | 80,000 | 80,000 |
Business Segments (Details)
Business Segments (Details) | 3 Months Ended | 6 Months Ended | ||
Sep. 27, 2015USD ($) | Sep. 27, 2014USD ($) | Sep. 27, 2015USD ($)segmentproduct | Sep. 27, 2014USD ($) | |
Operating Segments | ||||
Number of reportable segments | segment | 1 | |||
Number of product categories | product | 4 | |||
Market Reporting Information [Line Items] | ||||
Revenues | $ 142,353,300 | $ 148,521,800 | $ 277,017,300 | $ 301,468,100 |
Gross profit | 33,861,700 | 35,436,000 | 66,097,600 | 70,684,800 |
Income before provision for income taxes | 4,599,200 | 5,817,200 | 7,412,400 | 11,861,200 |
Public Carrier, Contractor and Program Manager Market | ||||
Market Reporting Information [Line Items] | ||||
Revenues | 25,803,000 | 40,853,000 | 50,954,000 | 82,271,000 |
Gross profit | 5,036,000 | 7,347,000 | 10,089,000 | 14,540,000 |
Government System Operators | ||||
Market Reporting Information [Line Items] | ||||
Revenues | 8,782,000 | 8,154,000 | 16,665,000 | 16,167,000 |
Gross profit | 2,293,000 | 2,282,000 | 4,422,000 | 4,440,000 |
Private System Operators | ||||
Market Reporting Information [Line Items] | ||||
Revenues | 23,056,000 | 21,292,000 | 45,078,000 | 42,283,000 |
Gross profit | 6,065,000 | 5,800,000 | 12,228,000 | 11,555,000 |
Commercial Dealer and Reseller Market | ||||
Market Reporting Information [Line Items] | ||||
Revenues | 34,055,000 | 36,780,000 | 67,543,000 | 75,064,000 |
Gross profit | 9,566,000 | 10,289,000 | 19,098,000 | 20,926,000 |
Retailer, Independent Dealer Agents & Carriers | ||||
Market Reporting Information [Line Items] | ||||
Revenues | 50,657,000 | 41,443,000 | 96,777,000 | 85,683,000 |
Gross profit | $ 10,902,000 | $ 9,718,000 | $ 20,261,000 | $ 19,224,000 |
Business Segments (Details 2)
Business Segments (Details 2) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Sep. 27, 2015 | Sep. 27, 2014 | Sep. 27, 2015 | Sep. 27, 2014 | |
Revenue and Gross Profit from External Customer [Line Items] | ||||
Revenue from external customers | $ 142,353,300 | $ 148,521,800 | $ 277,017,300 | $ 301,468,100 |
Gross profit | 33,861,700 | 35,436,000 | 66,097,600 | 70,684,800 |
Base Station Infrastructure | ||||
Revenue and Gross Profit from External Customer [Line Items] | ||||
Revenue from external customers | 56,275,000 | 64,129,000 | 110,098,000 | 127,016,000 |
Gross profit | 14,938,000 | 16,817,000 | 30,257,000 | 33,892,000 |
Network Systems | ||||
Revenue and Gross Profit from External Customer [Line Items] | ||||
Revenue from external customers | 22,425,000 | 27,496,000 | 43,619,000 | 58,040,000 |
Gross profit | 3,943,000 | 4,174,000 | 7,611,000 | 8,859,000 |
Installation, Test and Maintenance | ||||
Revenue and Gross Profit from External Customer [Line Items] | ||||
Revenue from external customers | 9,012,000 | 10,663,000 | 17,630,000 | 21,585,000 |
Gross profit | 2,081,000 | 2,284,000 | 3,926,000 | 4,817,000 |
Mobile Device Accessories | ||||
Revenue and Gross Profit from External Customer [Line Items] | ||||
Revenue from external customers | 54,641,000 | 46,234,000 | 105,670,000 | 94,827,000 |
Gross profit | $ 12,900,000 | $ 12,161,000 | $ 24,304,000 | $ 23,117,000 |
Stock Buyback (Details)
Stock Buyback (Details) - USD ($) | Apr. 23, 2014 | Sep. 27, 2015 | Sep. 27, 2014 |
Stock Buyback | |||
Stock authorized to purchase on non-accelerated basis | $ 10,000,000 | ||
Stock repurchase period | 24 months | ||
Number of shares repurchased (in shares) | 0 | ||
Amount available for repurchase | $ 5,400,000 | ||
Aggregate authorized common stock repurchase limit under loan agreements | 30,000,000 | ||
Remaining authorized common stock repurchase limit under loan agreements | 11,700,000 | ||
Tax withholding for share based compensation | $ 827,000 | $ 1,411,800 |
Concentration of Risk (Details)
Concentration of Risk (Details) - Revenues [Member] | 3 Months Ended | 6 Months Ended | ||
Sep. 27, 2015 | Sep. 27, 2014 | Sep. 27, 2015 | Sep. 27, 2014 | |
Customer Concentration Risk 1 [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk percentage (in hundredths) | 9.50% | 9.80% | ||
Supplier Concentration Risk - Otter Products LLC [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk percentage (in hundredths) | 15.40% | 14.70% | ||
Supplier Concentration Risk - CommScope Incorporated [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk percentage (in hundredths) | 11.90% | 15.10% | 11.40% | 16.40% |
Subsequent Events (Details)
Subsequent Events (Details) - Secured Debt [Member] - Subsequent Event | Oct. 07, 2015USD ($) |
Subsequent Event [Line Items] | |
Principal amount | $ 4,500,000 |
Maturity date | Jul. 1, 2016 |
Extended maturity date | Oct. 1, 2020 |
Principal balance | $ 1,968,750 |