Tessco (TESS) 10-Q 4 Aug 16 2017 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Jun. 26, 2016	Jul. 29, 2016
Document and Entity Information [Abstract]
Entity Registrant Name	TESSCO TECHNOLOGIES INC
Entity Central Index Key	927,355
Current Fiscal Year End Date	--03-26
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		8,309,241
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q1
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 26, 2016

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($)	Jun. 26, 2016	Mar. 27, 2016
Current assets:
Cash and cash equivalents	$ 12,571,800	$ 16,882,800
Trade accounts receivable, net of allowance for doubtful accounts of $817,500 and $841,400, respectively	61,316,400	58,315,700
Product inventory, net	58,295,500	53,903,900
Prepaid expenses and other current assets	5,954,400	5,917,100
Total current assets	138,138,100	135,019,500
Property and equipment, net	19,309,500	19,895,400
Goodwill, net	11,684,700	11,684,700
Other long-term assets	2,976,500	2,816,400
Total assets	172,108,800	169,416,000
Current liabilities:
Trade accounts payable	49,443,500	41,986,000
Payroll, benefits and taxes	4,032,600	4,927,900
Income and sales tax liabilities	1,256,800	1,456,800
Accrued expenses and other current liabilities	3,877,300	3,874,100
Current portion of long-term debt	26,300	251,100
Total current liabilities	58,636,500	52,495,900
Deferred tax liabilities	372,100	379,400
Long-term debt, net of current portion	49,700	1,706,500
Other long-term liabilities	2,159,100	2,306,900
Total liabilities	61,217,400	56,888,700
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, 14,015,086 shares issued and 8,304,703 shares outstanding as of June 26, 2016, and 13,970,394 shares issued and 8,272,124 shares outstanding as of March 27, 2016	98,100	97,600
Additional paid-in capital	58,246,300	58,113,800
Treasury stock, at cost, 5,710,383 shares outstanding as of June 26, 2016 and 5,698,270 shares outstanding as of March 27, 2016	(57,432,800)	(57,245,200)
Retained earnings	109,979,800	111,561,100
Total shareholders' equity	110,891,400	112,527,300
Total liabilities and shareholders' equity	$ 172,108,800	$ 169,416,000

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - USD ($)	Jun. 26, 2016	Mar. 27, 2016
Assets, Current [Abstract]
Trade accounts receivable, allowance for doubtful accounts	$ 817,500	$ 841,400
Stockholders' Equity Attributable to Parent [Abstract]
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)	14,015,086	13,970,394
Common stock, outstanding (in shares)	8,304,703	8,272,124
Treasury stock (in shares)	5,710,383	5,698,270

Consolidated Statements of Inco

Consolidated Statements of Income - USD ($)	3 Months Ended
	Jun. 26, 2016	Jun. 28, 2015
Consolidated Statements of Income
Revenues	$ 128,860,000	$ 134,664,000
Cost of goods sold	101,754,000	105,682,100
Gross profit	27,106,000	28,981,900
Selling, general and administrative expenses	26,955,700	26,122,400
Income from operations	150,300	2,859,500
Interest expense, net	11,400	46,300
Income before provision for income taxes	138,900	2,813,200
Provision for income taxes	58,400	1,117,900
Net income	$ 80,500	$ 1,695,300
Basic earnings per share (in dollars per share)	$ 0.01	$ 0.21
Diluted earnings per share (in dollars per share)	$ 0.01	$ 0.20
Basic weighted-average common shares outstanding (in shares)	8,289,700	8,199,700
Effect of dilutive options (in shares)	27,900	68,900
Diluted weighted-average common shares outstanding (in shares)	8,317,600	8,268,600
Cash dividends declared per common share (in dollars per share)	$ 0.20	$ 0.20

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($)	3 Months Ended
	Jun. 26, 2016	Jun. 28, 2015
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 80,500	$ 1,695,300
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	1,176,700	1,131,300
Non-cash stock-based compensation expense	115,800	131,700
Deferred income taxes and other	(201,800)	(136,400)
Change in trade accounts receivable	(3,000,700)	(3,904,100)
Change in product inventory	(4,391,600)	(5,656,000)
Change in prepaid expenses and other current assets	(37,300)	2,490,000
Change in trade accounts payable	7,457,500	8,247,000
Change in payroll, benefits and taxes	(895,300)	(196,700)
Change in income and sales tax liabilities	(269,100)	(221,300)
Change in accrued expenses and other current liabilities	89,500	(1,788,500)
Net cash provided by operating activities	124,200	1,792,300
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment	(590,800)	(906,400)
Net cash used in investing activities	(590,800)	(906,400)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments of debt issuance costs	(113,400)
Payments on long-term debt	(1,881,600)	(62,700)
Cash dividends paid	(1,661,800)	(1,653,400)
Purchases of treasury stock and repurchases of common stock from employees and directors for minimum tax withholdings	(187,600)	(826,900)
Excess tax benefit from stock-based compensation		510,400
Net cash used in financing activities	(3,844,400)	(2,032,600)
Net decrease in cash and cash equivalents	(4,311,000)	(1,146,700)
CASH AND CASH EQUIVALENTS, beginning of period	16,882,800	7,524,000
CASH AND CASH EQUIVALENTS, end of period	$ 12,571,800	$ 6,377,300

Business Description and Basis

Business Description and Basis of Presentation	3 Months Ended
	Jun. 26, 2016
Business Description and Basis of Presentation
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 27, 2016 .

Reclassification of Items in St

Reclassification of Items in Statement of Income and Supplemental Results Summary	3 Months Ended
	Jun. 26, 2016
Reclassification of Items in Statement of Income and Supplemental Results Summary
Reclassification	Note 2. Reclassification of Items in Statement of Income and Supplemental Results Summary The accompanying Consolidated Statements of Income for the three months ended June 28, 2015, along with the supplemental financial information provided in Note 10, have been adjusted to correct an immaterial error in the classification of indirect inventory costs in the income statement. Prior to the third quarter of fiscal 2016, the Company classified indirect costs relieved from inventory upon a sale as selling, general and administrative expenses, as opposed to cost of goods sold. The income statements and supplemental financial information presented here correctly reflect indirect costs relieved from inventory as cost of goods sold for all periods. This resulted in an increase in cost of goods sold, and a corresponding decrease in selling, general and administrative expenses of $3.3 million for the three month period ended June 28, 2015. These corrections have no impact on previously reported revenues, operating margin, net income, earnings per share, or on previously reported Consolidated Balance Sheets or Consolidated Statements of Cash Flows.

Recently Issued Accounting Pron

Recently Issued Accounting Pronouncements	3 Months Ended
	Jun. 26, 2016
Recently Issued Accounting Pronouncements
Recently Issued Accounting Pronouncements	Note 3. Recently Issued Accounting Pronouncements In February 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-02, Leases. This ASU require lessees to recognize most leases on their balance sheets related to the rights and obligations created by those leases. The ASU also requires additional qualitative and quantitative disclosures related to the nature, timing and uncertainty of cash flows arising from leases. The guidance is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact the adoption of this new standard will have on its Consolidated Financial Statements. In March 2016, the FASB issued Accounting Standards Update No. 2016-09, Compensation – Stock Compensation. The new standard will modify several aspects of the accounting and reporting for employee share-based payments and related tax accounting impacts, including the presentation in the statements of operations and cash flows of certain tax benefits or deficiencies and employee tax withholdings, as well as the accounting for award forfeitures over the vesting period. The new standard is effective for fiscal years beginning after December 15, 2016 and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact the adoption of this new standard will have on its Consolidated Financial Statements. In November 2015, the FASB issued Accounting Standards Update No. 2015-17, Income Taxes. Current GAAP requires an entity to separate deferred income tax liabilities and assets into current and noncurrent amounts in a classified statement of financial position. The new standard simplifies the presentation of deferred tax assets and liabilities and requires that deferred tax assets and liabilities be classified as noncurrent in a classified statement of financial position. This ASU is effective for financial statements issued for fiscal years beginning after December 15, 2015, with early adoption permitted. This ASU affected our disclosures relating to deferred tax assets and liabilities. The Company has applied this guidance retrospectively. 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. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers: Deferral of the Effective Date, as a revision to ASU 2014-09, which revised the effective date to fiscal years, and interim periods within those years, beginning after December 15, 2017. Early adoption is permitted but not prior to periods beginning after December 15, 2016 (i.e. the original adoption date per ASU 2014-09). In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers: Principal versus Agent Considerations, which clarifies certain aspects of the principal-versus-agent guidance, including how an entity should identify the unit of accounting for the principal versus agent evaluation and how it should apply the control principle to certain types of arrangements, such as service transactions. The amendments also reframe the indicators to focus on evidence that an entity is acting as a principal rather than as an agent. In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing, which clarifies how an entity should evaluate the nature of its promise in granting a license of intellectual property, which will determine whether it recognizes revenue over time or at a point in time. The amendments also clarify when a promised good or service is separately identifiable (i.e., distinct within the context of the contract) and allow entities to disregard items that are immaterial in the context of a contract. We are currently in the process of assessing what impact this new standard may have on our ongoing financial reporting and determining what transition method will be used.

Stock-Based Compensation

Stock-Based Compensation	3 Months Ended
	Jun. 26, 2016
Stock-Based Compensation
Stock-Based Compensation	Note 4. Stock-Based Compensation The Company’s selling, general and administrative expenses for the fiscal quarters ended June 26, 2016 and June 28, 2015 includes $115,800 and $131,700 , 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 , primarily related to the PSUs which vested during the three months ended June 28, 2015. No excess tax benefit related to vesting PSUs was recorded during the three months ended June 26, 2016. On July 26, 2016, subsequent to the end of the Company’s first fiscal quarter, the Company’s shareholders approved the Third Amended and Restated 1994 Stock and Incentive Plan (the Amended and Restated 1994 Plan), which amended and restated the Company’s Second Amended and Restated 1994 Stock and Incentive Plan, as previously amended (the 1994 Plan), in its entirety. The material amendments to the 1994 Plan reflected by the Amended and Restated 1994 Plan are as follows: · Extension of Plan Term. The date through which awards may be granted was extended to July 21, 2021. Prior to this extension, the 1994 Plan was scheduled to expire on July 21, 2016. · Increase in Aggregate Share Limit. The Amended and Restated 1994 Plan increases the number of shares available for awards by 650,000 shares. The 1994 Plan had previously limited the aggregate number of shares of the Company's common stock that may have been delivered pursuant to all awards granted under the 1994 Plan to 3,553,125 shares. The Amended and Restated 1994 Plan increases the number of shares available for awards to 4,203,125 shares. · Elimination of Liberal Share Recycling. The Amended and Restated 1994 Plan, at Section 5(a)(iii), now prohibits liberal share recycling in respect of shares tendered by participants in payment of the exercise price for awards, or for payroll tax withholding obligations, and provides that such tendered shares shall not be available for purposes of the Amended and Restated 1994 Plan. Although the 1994 Plan could have been construed to permit it, the Company has not historically included such tendered shares as shares available for awards under the 1994 Plan. Performance Stock Units: The following table summarizes the activity under the Company’s PSU program for the first three months of fiscal 2017: Three Months Weighted Ended Average Fair June 26, Value at Grant 2016 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 200,189 unvested shares available for issue under outstanding PSUs as of June 26, 2016, 9,189 shares were previously earned in respect of the applicable measurement year, and will vest and be issued on or about May 1, 2017, assuming the respective participants remain employed by or associated with the Company on this date. During fiscal 2017, the Compensation Committee of the Board of Directors with concurrence of the full Board of Directors, granted PSUs to select key employees, providing them with the opportunity to earn up to 194,000 shares of the Company’s common stock in the aggregate, depending upon whether and to the extent which certain earnings per share targets and other Company and individual performance metrics are met. These not-yet-earned PSUs have a one year measurement period (fiscal 2017), and assuming the performance metrics are met to a sufficient extent, any shares earned at the end of fiscal 2017 will vest and be issued ratably on or about May 1 of 2017, 2018, 2019 and 2020, provided that the respective employees remain employed by or associated with the Company on each date. Due to an employee departure, 3,000 of these shares were subsequently canceled, leaving 191,000 unvested shares available for issue under outstanding PSUs as of June 26, 2016. The PSUs cancelled during fiscal 2017 related primarily to the fiscal 2016 grant of PSUs, which had a one year measurement period (fiscal 2016). The PSUs were cancelled because the applicable fiscal 2016 performance targets were not attained to any extent. 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, now under the Amended and Restated 1994 Plan. If the entire number of PSUs granted in fiscal 2017 is assumed to be earned, on account of the applicable performance metrics being fully met, total unrecognized compensation costs, on these PSUs and all earned but unvested PSUs, net of estimated forfeitures, would be approximately $2.0 million, as of June 26, 2016, and would be expensed through fiscal 2020. To the extent the actual forfeiture rate is different from what is anticipated or the maximum number of PSUs granted in fiscal 2017 is not earned, stock-based compensation related to these awards will differ from this amount. Restricted Stock Units: The Company has over recent years made annual restricted stock unit (RSU) awards to its non-employee directors. On May 11, 2016, the Compensation Committee, with the concurrence of the full Board of Directors, awarded an aggregate of 10,000 RSUs, ratably 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, following 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 anniversary date. As of June 26, 2016, 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, 2016 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. 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: The Company currently has a total of 80,000 stock options outstanding. As of June 26, 2016, there was approximately $0.2 million of total unrecognized compensation cost, net of estimated forfeitures, related to all outstanding stock options. As of June 26, 2016, none of the outstanding stock options have vested.

Borrowings Under Revolving Cred

Borrowings Under Revolving Credit Facility	3 Months Ended
	Jun. 26, 2016
Borrowings Under Revolving Credit Facility
Borrowings Under Revolving Credit Facility	Note 5. Borrowings Under Revolving Credit Facility On June 24, 2016, the Company and its primary operating subsidiaries entered into a Credit Agreement (the “Credit Agreement”) with SunTrust Bank, as Administrative Agent. The Credit Agreement provides for a senior asset based revolving credit facility of up to $35 million (the “Revolving Credit Facility”), and replaces the Company’s previously existing $35 million unsecured revolving credit facility with both SunTrust Bank and Wells Fargo Bank, National Association, and which had no outstanding principal balance at the time of replacement. The new Revolving Credit Facility matures in five years, on June 24, 2021, and includes a $5.0 million sublimit for the issuance of standby letters of credit and a $10.0 million sublimit for swingline loans. The Credit Agreement also includes a provision permitting the Company, subject to certain conditions and approval of the Lenders, to increase the aggregate amount of the commitments under the Revolving Credit Facility to up to $50 million with optional additional commitments from existing Lenders or new commitments from additional lenders, although no Lender is obligated to increase its commitment. Borrowing availability is determined in part in accordance with a borrowing base, which is generally 85% of eligible receivables minus reserves. The Credit Agreement also contains financial covenants, including a fixed charge coverage ratio that must be maintained at any time during which the borrowing availability is otherwise less than $10 million. The Credit Agreement also may limit our ability to engage in specified transactions or activities, including (but not limited to) investments and acquisitions, sales of assets, payment of dividends, issuance of additional debt and other matters. Borrowings initially accrue interest from the applicable borrowing date, generally the Eurodollar rate plus an applicable margin ranging from 1.5% to 1.75% . Under certain circumstances, the applicable interest rate is subject to change from the Eurodollar rate plus the applicable margin to the base rate plus the applicable margin. Borrowings under the Revolving Credit Facility may be used for working capital and other general corporate purposes, and as further provided in, and subject to the applicable terms of, the Credit Agreement. As of June 26, 2016, we had a zero balance on the Revolving Credit Facility. Pursuant to a related Guaranty and Security Agreement, by and among the Company, the other borrowers under the Credit Agreement and the other subsidiaries of the Company (collectively, the “Loan Parties”), and SunTrust Bank, as Administrative Agent, the Loan Parties’ obligations, which include the obligations under the Credit Agreement, are guaranteed by the Loan Parties not otherwise borrowers, and secured by continuing first priority security interests in the Company’s and the other Loan Parties’ (including both borrowers and guarantors) inventory, accounts receivable, and deposit accounts, and on all documents, instruments, general intangibles, letter of credit rights, and chattel paper, in each case to the extent relating to inventory and accounts, and to all proceeds of the foregoing. The security interests are granted in favor of the Administrative Agent, for the benefit of the Lenders party to the Credit Agreement from time to time. The obligations secured also include certain other obligations of the Loan Parties to the Lenders and their affiliates arising from time to time, relating to swaps, hedges and cash management and other bank products.

Extinguishment of Debt

Extinguishment of Debt	3 Months Ended
	Jun. 26, 2016
Extinguishment of Debt Disclosures [Abstract]
Extinguishment of Debt	Note 6. Extinguishment of Debt Simultaneously with entering into the senior asset based Revolving Credit Facility described in Note 5, the Company terminated its $35 million unsecured revolving credit facility with SunTrust Bank and Wells Fargo Bank, National Association, which had no outstanding principal balance at the time of termination. The Company also repaid in full its obligations under its Term Loan in the original principal amount of $4.5 million from Wells Fargo Bank, National Association and SunTrust Bank. The Term Loan was secured by a first position deed of trust encumbering Company-owned real property in Hunt Valley, Maryland and had an outstanding principal balance of $1 .9 million at the time of repayment.

Fair Value Disclosure

Fair Value Disclosure	3 Months Ended
	Jun. 26, 2016
Fair Value Disclosure
Fair Value Disclosure	Note 7. 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 June 26, 2016 or as of March 27, 2016. 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 June 26, 2016 and March 27, 2016 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 June 26, 2016 and March 27, 2016 is estimated as follows: June 26, 2016 March 27, 2016 Carrying Fair Carrying Fair Amount Value Amount Value Note payable to Baltimore County $ $ $ $

Income Taxes

Income Taxes	3 Months Ended
	Jun. 26, 2016
Income Taxes
Income Taxes	Note 8. Income Taxes As of June 26, 2016, the Company had a gross amount of unrecognized tax benefits of $290,800 ($191,900 net of federal benefit). As of March 27, 2016, the Company had a gross amount of unrecognized tax benefits of $290,400 ($188,800 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 three months of fiscal 2017 was $13,400 (net of federal benefit). The cumulative amount included in the consolidated balance sheet as of June 26, 2016 was $350,600 (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 three months of fiscal 2016 was $15,900 (net of federal benefit). The cumulative amount of interest and penalties included in the consolidated balance sheet as of March 27, 2016 was $339,800 (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 27, 2016 of unrecognized tax benefit $ Increases related to current period tax positions Reductions as a result of a lapse in the applicable statute of limitations — Ending balance at June 26, 2016 of unrecognized tax benefits $

Earnings Per Share

Earnings Per Share	3 Months Ended
	Jun. 26, 2016
Earnings Per Share
Earnings Per Share	Note 9. 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. As of June 26, 2016 the company had no participating securities outstanding and no distributed or undistributed earnings allocated to nonvested stock. As of June 28, 2015, the company had 68,900 shares that qualified as participating securities. As such, the following table presents the calculation of basic and diluted earnings per common share for the fiscal quarter ended June 28, 2015: Fiscal Quarter Ended Amounts in thousands, except per share amounts June 28, 2015 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 — There were no stock options with respect to shares of common stock outstanding as of June 28, 2015. At June 26, 2016, stock options with respect to 80,000 shares of common stock were outstanding, all of which were anti-dilutive. There were no anti-dilutive PSUs or RSUs outstanding as of June 26, 2016 .

Business Segments

Business Segments	3 Months Ended
	Jun. 26, 2016
Business Segments
Business Segments	Note 10. 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. 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 first quarter of fiscal years 2017 and 2016 are as follows 1 (in thousands): Three Months Ended June 26, 2016 June 28, 2015 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 $ $ 1 See Note 2 for a discussion of the reclassification of indirect inventory costs from selling, general, and administrative expenses to cost of goods sold, as it relates to the three months ended June 28, 2015. The financial information presented above in this Note 10 reflects such reclassification. Supplemental revenue and gross profit information by product category for the first quarter of fiscal years 2017 and 2016 are as follows 2 (in thousands): Three months ended Three months ended June 26, 2016 June 28, 2015 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 $ $ 2 See Note 2 for a discussion of the reclassification of indirect inventory costs from selling, general, and administrative expenses to cost of goods sold, as it relates to the three months ended June 28, 2015. The financial information presented above in this Note 10 reflects such reclassification.

Stock Buyback

Stock Buyback	3 Months Ended
	Jun. 26, 2016
Stock Buyback
Stock Buyback	Note 11. Stock Buyback On April 23, 2014, the Board of Directors expanded the Company’s then 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, which ended in April 2016. No shares were purchased during the first three months of fiscal year 2016 and the stock buyback program has now expired. 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 three months ended June 26, 2016 and June 28, 2015, the allocated value of the shares withheld totaled $187,600 and $827,000 , respectively.

Concentration of Risk

Concentration of Risk	3 Months Ended
	Jun. 26, 2016
Concentration of Risk
Concentration of Risk	Note 12. 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 quarters ended June 26, 2016 and June 28, 2015, no customer accounted for more than 10.0% of total consolidated revenues. For the fiscal quarter ended June 26, 2016, sales of Otter Products LLC and CommScope Incorporated products accounted for 12.3% and 10.1% of consolidated revenue, respectively. For the fiscal quarter ended June 28, 2015, sales of Otter Products LLC and CommScope Incorporated products accounted for 13.9% and 10.9% of consolidated revenue, respectively.

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	3 Months Ended
	Jun. 26, 2016
Stock-Based Compensation
Schedule of Performance Stock Unit activity	Three Months Weighted Ended Average Fair June 26, Value at Grant 2016 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)	3 Months Ended
	Jun. 26, 2016
Fair Value Disclosure
Fair Value of Long-term Debt	June 26, 2016 March 27, 2016 Carrying Fair Carrying Fair Amount Value Amount Value Note payable to Baltimore County $ $ $ $

Income Taxes (Tables)

Income Taxes (Tables)	3 Months Ended
	Jun. 26, 2016
Income Taxes
Reconciliation of changes in unrecognized tax benefit amounts, net of interest	Beginning balance at March 27, 2016 of unrecognized tax benefit $ Increases related to current period tax positions Reductions as a result of a lapse in the applicable statute of limitations — Ending balance at June 26, 2016 of unrecognized tax benefits $

Earnings Per Share (Tables)

Earnings Per Share (Tables)	3 Months Ended
	Jun. 26, 2016
Earnings Per Share
Calculation of Basic and Diluted Earnings Per Common Share	Fiscal Quarter Ended Amounts in thousands, except per share amounts June 28, 2015 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)	3 Months Ended
	Jun. 26, 2016
Business Segments
Revenue and Gross Profit by Market	Market unit activity for the first quarter of fiscal years 2017 and 2016 are as follows 1 (in thousands): Three Months Ended June 26, 2016 June 28, 2015 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 $ $ 1 See Note 2 for a discussion of the reclassification of indirect inventory costs from selling, general, and administrative expenses to cost of goods sold, as it relates to the three months ended June 28, 2015. The financial information presented above in this Note 10 reflects such reclassification.
Revenue and Gross Profit by Product	Supplemental revenue and gross profit information by product category for the first quarter of fiscal years 2017 and 2016 are as follows 2 (in thousands): Three months ended Three months ended June 26, 2016 June 28, 2015 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 $ $ 2 See Note 2 for a discussion of the reclassification of indirect inventory costs from selling, general, and administrative expenses to cost of goods sold, as it relates to the three months ended June 28, 2015. The financial information presented above in this Note 10 reflects such reclassification.

Description of Business and Bas

Description of Business and Basis of Presentation (Details)	3 Months Ended
	Jun. 26, 2016
US | Geographic Concentration Risk | Revenues
Concentration Risk
Concentration risk (as a percent)	98.00%

Reclassification of Items in 24

Reclassification of Items in Statement of Income and Supplemental Results Summary (Details) - USD ($)	3 Months Ended
	Jun. 26, 2016	Jun. 28, 2015
Adjustment to correct immaterial error
Cost of goods sold	$ 101,754,000	$ 105,682,100
Selling, general and administrative expenses	$ 26,955,700	26,122,400
Reclassification of indirect inventory costs
Adjustment to correct immaterial error
Cost of goods sold		3,300,000
Selling, general and administrative expenses		$ (3,300,000)

Stock-Based Compensation - Expe

Stock-Based Compensation - Expense (Details) - USD ($)	3 Months Ended
	Jun. 26, 2016	Jun. 28, 2015
Stock-based compensation
Income tax benefit from share-based compensation (in dollars)	$ 0	$ 510,400
Selling, general and administrative expenses
Stock-based compensation
Stock-based compensation (in dollars)	$ 115,800	$ 131,700

Stock-Based Compensation - PSUs

Stock-Based Compensation - PSUs (Details) - USD ($) $ / shares in Units, $ in Millions	Jul. 26, 2016	Jun. 26, 2016
Performance Stock Units
PSU Activity
Unvested shares available for issue under outstanding PSUs, beginning of period (in shares)		138,925
Granted (in shares)		194,000
Vested (in shares)		(26,736)
Forfeited/cancelled (in shares)		(106,000)
Unvested shares available for issue under outstanding PSUs, end of period (in shares)		200,189
Unvested PSUs, Weighted-Average Fair Value at Grant Date
Unvested shares available for issue under outstanding PSUs, beginning of period (in dollars per share)		$ 21.46
Granted (in dollars per share)		10.78
Vested (in dollars per share)		19.40
Forfeited/cancelled (in dollars per share)		21.82
Unvested shares available for issue under outstanding PSUs, end of period (in dollars per share)		$ 11.19
Additional stock based compensation information
Shares earned, but not yet vested (in shares)		9,189
Measurement period		1 year
Canceled shares, employee departures (in shares)		3,000
Unvested shares not-yet-earned (in shares)		191,000
Unrecognized compensation costs (in dollars)		$ 2
1994 Plan
Stock-based compensation
Number of shares authorized (in shares)		3,553,125
Subsequent Event | 1994 Plan
Stock-based compensation
Number of additional shares authorized (in shares)	650,000
Number of shares authorized (in shares)	4,203,125

Stock-Based Compensation - RSUs

Stock-Based Compensation - RSUs (Details) - RSU awards - USD ($) $ in Millions	May 11, 2016	Jun. 26, 2016
Stock-based compensation
Unrecognized compensation costs (in dollars)		$ 0.5
Unrecognized compensation costs, period for recognition		3 years
Non-employee director
Stock-based compensation
Granted (in shares)	10,000
Vesting period	4 years

Stock-Based Compensation - Stoc

Stock-Based Compensation - Stock Options (Details) - Stock Options $ in Millions	3 Months Ended
	Jun. 26, 2016USD ($)shares
Stock Options:
Options outstanding (in shares)	80,000
Unrecognized compensation costs (in dollars) | $	$ 0.2
Outstanding options vested (in shares)	0

Borrowings Under Revolving Cr29

Borrowings Under Revolving Credit Facility (Details) - USD ($) $ in Millions	Jun. 26, 2016	Jun. 24, 2016	Jun. 23, 2016
Revolving Credit Facility
Credit Facility
Maximum borrowing capacity	$ 35
Outstanding principal balance	0
Maturity period		5 years
Maximum aggregate commitment amount	$ 50
Borrowing base as a percent of Eligible Receivables minus Reserves	85.00%
Borrowing availability threshold	$ 10
Standby letters of credit
Credit Facility
Maximum borrowing capacity	5
Swingline loan
Credit Facility
Maximum borrowing capacity	$ 10
Minimum | Eurodollar rate | Revolving Credit Facility
Credit Facility
Interest rate spread on variable rate basis (as a percent)	1.50%
Maximum | Eurodollar rate | Revolving Credit Facility
Credit Facility
Interest rate spread on variable rate basis (as a percent)	1.75%
Revolving Credit Facility, Wells Fargo Bank, National Association and SunTrust Bank
Credit Facility
Maximum borrowing capacity			$ 35
Outstanding principal balance			$ 0

Extinguishment of Debt (Details

Extinguishment of Debt (Details) $ in Millions	Jun. 23, 2016USD ($)
Revolving Credit Facility, Wells Fargo Bank, National Association and SunTrust Bank
Extinguishment of Debt
Maximum borrowing capacity	$ 35
Principal balance	0
Term Loan, Wells Fargo Bank, National Association and SunTrust Bank
Extinguishment of Debt
Original principal amount	4.5
Principal balance	$ 1.9

Fair Value Disclosure (Details)

Fair Value Disclosure (Details) - Term Loan, Baltimore County Economic Development Revolving Loan Fund - USD ($)	Jun. 26, 2016	Mar. 27, 2016
Carrying Amount
Fair Value
Long-term debt, fair value	$ 76,000	$ 82,600
Fair Value
Fair Value
Long-term debt, fair value	$ 72,800	$ 78,700

Income Taxes - Unrecognized Tax

Income Taxes - Unrecognized Tax Benefits (Details) - USD ($)	3 Months Ended		12 Months Ended
	Jun. 26, 2016	Jun. 28, 2015	Mar. 27, 2016	Jun. 26, 2016	Mar. 27, 2016
Income Taxes
Gross amount of unrecognized tax benefits	$ 290,400		$ 290,400	$ 290,800	$ 290,400
Unrecognized tax benefits, net of federal benefit	191,900		188,800
Amount of interest and penalties expense (benefit) related to tax uncertainties recognized, net of federal expense/benefit	13,400	$ 15,900
Unrecognized tax benefits that would impact effective tax rate				$ 350,600	$ 339,800
Reconciliation of unrecognized tax benefit amounts
Beginning balance of unrecognized tax benefit	290,400
Increases related to current period tax positions	400
Ending balance of unrecognized tax benefits	$ 290,800		$ 290,400

Earnings Per Share (Details)

Earnings Per Share (Details) - USD ($)	3 Months Ended
	Jun. 26, 2016	Jun. 28, 2015
Participating securities, Distributed and undistributed earnings
Participating securities (in shares)	0	68,900
Earnings per share - Basic
Net earnings	$ 80,500	$ 1,695,300
Less: Distributed and undistributed earnings allocated to nonvested stock	$ 0	(4,000)
Earnings available to common shareholders – Basic		$ 1,691,000
Weighted average common shares outstanding - Basic (in shares)	8,289,700	8,199,700
Basic earnings per share (in dollars per share)	$ 0.01	$ 0.21
Earnings per share - Diluted
Net earnings		$ 1,695,000
Less: Distributed and undistributed earnings allocated to nonvested stock	$ 0	(4,000)
Earnings available to common shareholders – Diluted		$ 1,691,000
Weighted average common shares outstanding - Basic (in shares)	8,289,700	8,199,700
Effect of dilutive options (in shares)	27,900	68,900
Diluted weighted-average common shares outstanding (in shares)	8,317,600	8,268,600
Diluted earnings per share (in dollars per share)	$ 0.01	$ 0.20
Stock Options
Earnings per share - Diluted
Anti-dilutive equity awards	80,000	0
Performance Stock Units
Earnings per share - Diluted
Anti-dilutive equity awards	0
Restricted Stock
Earnings per share - Diluted
Anti-dilutive equity awards	0

Business Segments - Market Unit

Business Segments - Market Unit Activity (Details)	3 Months Ended
	Jun. 26, 2016USD ($)segmentproduct	Jun. 28, 2015USD ($)
Operating Segment
Number of reportable segment | segment	1
Number of product categories | product	4
Market unit activity
Revenues	$ 128,860,000	$ 134,664,000
Gross Profit	27,106,000	28,981,900
Public Carriers, Contractors & Program Managers
Market unit activity
Revenues	16,578,000	25,151,000
Gross Profit	3,017,000	4,414,000
Government System Operators
Market unit activity
Revenues	9,852,000	7,883,000
Gross Profit	2,140,000	1,947,000
Private System Operators
Market unit activity
Revenues	21,515,000	22,022,000
Gross Profit	4,964,000	5,659,000
Commercial Dealers & Resellers
Market unit activity
Revenues	33,430,000	33,488,000
Gross Profit	8,983,000	8,771,000
Retailer, Independent Dealer Agents & Carriers
Market unit activity
Revenues	47,485,000	46,120,000
Gross Profit	$ 8,002,000	$ 8,191,000

Business Segments - Product Cat

Business Segments - Product Category (Details) - USD ($)	3 Months Ended
	Jun. 26, 2016	Jun. 28, 2015
Revenue and Gross Profit from External Customers
Revenues	$ 128,860,000	$ 134,664,000
Gross Profit	27,106,000	28,981,900
Base station infrastructure
Revenue and Gross Profit from External Customers
Revenues	52,395,000	53,823,000
Gross Profit	13,428,000	14,096,000
Network systems
Revenue and Gross Profit from External Customers
Revenues	18,430,000	21,194,000
Gross Profit	2,898,000	3,111,000
Installation, test and maintenance
Revenue and Gross Profit from External Customers
Revenues	8,755,000	8,618,000
Gross Profit	1,568,000	1,630,000
Mobile device accessories
Revenue and Gross Profit from External Customers
Revenues	49,280,000	51,029,000
Gross Profit	$ 9,212,000	$ 10,145,000

Stock Buyback (Details)

Stock Buyback (Details) - USD ($)	Apr. 23, 2014	Jun. 26, 2016	Jun. 28, 2015
Stock Buyback
Tax withholding for share based compensation		$ 187,600	$ 827,000
Stock Buyback Program
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

Concentration of Risk (Details)

Concentration of Risk (Details) - Revenues - Supplier Concentration Risk	3 Months Ended
	Jun. 26, 2016	Jun. 28, 2015
Otter Products LLC
Concentration Risk
Concentration risk (as a percent)	12.30%	13.90%
CommScope Incorporated
Concentration Risk
Concentration risk (as a percent)	10.10%	10.90%