Investor presentation. May 2018

Transcription

1 Investor presentation May 2018

2 Presenters & Contacts Murray Wright President & CEO Aric Spitulnik SVP, Chief Financial Officer Cindy King VP, Investor Relations Officer, Customer Transactions and Treasurer

3 Forward-looking statements Certain statements made by us during this presentation are forward-looking statements within the meaning of federal securities laws. TESSCO s actual results may differ materially from those discussed in any forward-looking statement. Additional information concerning factors that may cause such a difference can be found in TESSCO s public disclosure, including TESSCO s most recent report on Form 10-K, as well as prior and subsequently filed reports.

4 Setting the pace as a value-added distributor to the wireless world. 4

5 Tessco Facts 1982 TESSCO founded 747 Team members* 4.43% Dividend yield* $580.3M Revenue (LTM) $0.55 EPS (LTM) $12.9M Adj. EBITDA (LTM) Certified business $143.4M Market Cap* 5 Note: LTM represents the twelve months ended 4/1/2018. * As of 5/7/18

6 A Strategic, Indispensable Link In The Wireless Ecosystem Creating an efficient route to market HUNDREDS OF MANUFACTURER PARTNERS THOUSANDS OF CUSTOMERS VALUE ADD Public Network Operators Private System Operators VARs Government Retail Sales & Marketing Expertise Technical Proficiency Credit Capacity Superior Logistics Capabilities

7 7 Tessco s Wireless World

8 8 Backhaul

9 9 Remote Monitoring

10 10 Base Station

11 11 FirstNet

12 12 IoT

13 13 Coverage & Capacity

14 14 DAS

15 15 Retail

16 16

17 FirstNet construction will cost in excess of $7 Billion 4,080 net new retail doors opened in 2017 $130B to be spent on the 5G build-out by 2024 IoT devices doubling every 5 years THE FORCES OF CHANGE 1 in 5 retail purchases made via digital assistant Global IoT connections will grow from 5B to 29B by

18 Growth Opportunities in Wireless Wireless Infrastructure North American Wireless Infrastructure Spending (LTE/5G) $5.0 billion $130 billion Wireless densification Broadband competition Rural and underserved areas Expect US will run out of capacity by 2020 without upgrades Source: Deloitte, July

19 Growth Opportunities in Wireless IoT / M2M Connected Device Spending 31 million 158 million Remote monitoring and control Wireless backhaul Asset protection Source: Zion Market Research, February

20 Tessco s Presence in IoT/M2M IoT and M2M FY18 Results: 22% increase in IoT sales YOY Scada/M2M sales to Utilities/Oil/Gas customers Joined Smart Cities Connect Joined TIA-Smart Buildings Strategic Partners: Verizon, Samsung Sierra Wireless Monnit Laird 20

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22 DESIGNED & MANUFACTURED PROPRIETARY PRODUCTS 13% of total revenue 46% WIRELESS INFRASTRUCTURE Products to deploy, protect, power and improve the performance of Wi-Fi, DAS and LTE networks 54% MOBILE ACCESSORIES Accessories and components to support wireless mobile and portable device performance Site Hardware Cable Mounts Antennas Grounding Enclosures Chargers Headsets Styluses Cases & protection Power hubs SIMPLE RELIABLE PROFESSIONAL USE INNOVATIVE AWARD WINNING 22

23 DRIVERS FOR GROWTH Growing Market Opportunities; 5G, FirstNet and IoT Ventev Tessco s Proprietary Manufacturing Productivity Enhancements Investment in E-commerce Tools and Technology Laser Focus on Execution 23

24 Positioned for Success EXPANDING OPPORTUNITIES WIRELESS KNOWLEDGE OPERATIONAL EXPERTISE STRONG FINANCIAL HEALTH Forefront of new technologies and innovation (e.g. IoT) FirstNet, Turf 4.0, 5G Compelling offer and value proposition Extensive customer base Extensive expertise in sales, marketing, product management, and solutions development Supply chain and operational expertise Strong balance sheet Compelling dividend yield Scalable operating leverage 24

25 Financial results

26 Accelerating Financial Results YOY Revenue Growth for Q4FY18 21%; All Markets Grew Revenue Growth for Fiscal % Q4 Revenue Growth for Carrier Ecosystem 82% EPS of $0.07; First Profitable Q4 in 4 Years Won Multi Year Contract with MasTec Network Solutions Won Multi Year Contract with Verizon for their Minor Materials Purchases 26

27 Tessco Historical Revenue (in millions) $700 $600 $500 $560 $550 $531 $533 $149 $127 $89 $82 $580 $115 $400 $300 $200 $100 $0 $411 $423 $442 $451 $465 FY14 FY15 FY16 FY17 FY18 Non Carrier Carrier 27

28 Revenue Growth in 3 of 4 Quarters in FY18 (in millions) Q1 Q2 Q3 Q4 FY17 FY18 28

29 EPS Growth in Each Quarter in FY18 $0.21 $0.19 $0.12 $0.15 $0.08 $0.07 $0.01 Q1 Q2 Q3 Q4 -$

30 The Markets We Serve Carriers Program Managers Contractors Tower Owners WISPs Utilities Oil & Gas Transportation Mining Enterprise State & Local Federal GVARs Education Public Carrier 20% Private System Operators 16% Govt. 7% Value Added Resellers 24% Retail Stores 33% Carriers Stores Independent Carrier Agents Retailers etailers 30 Two-Way Dealers Network VARs

31 Breadth of Products 43% of total revenue 34% of total revenue 17% of total revenue 6% of total revenue Base Station Infrastructure Mobile Devices & Accessories Network Systems Installation, Test & Maintenance 31

32 32 Over 400 leading wireless brands

33 Key Takeaways on the mark Vital link between wireless manufacturers and customers Well positioned to participate in high-growth wireless opportunities Executing plan to accelerate revenue growth High margin Ventev Scalable operating leverage Compelling dividend yield 33

34 EMPOWERING OUR CUSTOMERS TO REACH THEIR FULL POTENTIAL IN AN INCREASINGLY CONNECTED WORLD 34

35 Appendix

36 Case Study: Wifi Solutions Providing Seamless Wi-Fi Coverage and Capacity throughout Fleets of Cruise Ships. CUSTOMER NEED Complete Wi-Fi coverage for travelers and employees on cruise ships with difficult RF environments, corrosive conditions, a high density of users, and a need for seamless aesthetics. SOLUTION Ventev high density antennas for the large concentration of passengers. Polycarbonate enclosures protect equipment from corrosive salt air and blend with the ships exteriors. Fully integrated enclosures with patch antennas allow quick installation and are paintable to match décor. OUTCOME Enhanced connectivity and traveler experience aboard ships. High performance wireless Point-of-Sale Poolside Service improved customer service and revenue opportunities. 36

37 Case Study: Ventev Infrastructure CUSTOMER Southern Company premier energy company CUSTOMER NEED Provide SCADA (industrial control system) radio enclosure with capability to remotely monitor & test backup batteries & send reports by Ethernet SOLUTION Ventev Outdoor Wireless Enclosure & custom-engineered Battery Test Remote Monitor Now, I ask others in the industry if they are remotely testing their backup batteries. And when they say they are not, I tell them to call TESSCO. -Bob Cheney, Southern Company TESSCO ADVANTAGE Pre-engineered, turnkey solution for faster, less expensive deployment 37

38 Case Study: Cellular Coverage & Capacity Enhancement CUSTOMER American Tower Corporation global provider of wireless communications infrastructure CUSTOMER NEED Managing and keeping up with the high velocity inventory requirements and logistics of their major DAS program rollout Our DAS supply chain relies on TESSCO almost entirely the TESSCO group is the engine behind all of it. -Sean Christopher, American Tower Sourcing Manager SOLUTION TESSCO acts as an extension of ATC: dealing with product manufacturers to manage the lead times, tracking, and delivery of materials, and ensuring that deployments stay on schedule TESSCO ADVANTAGE Thoroughly executed program management allows for rapid deployment in an ever changing, demanding DAS marketplace 38 38

39 Case Study: Solution for Mission Critical Communications CUSTOMER Maryland Department of Natural Resources (DNR) CUSTOMER NEED Develop a mobility solution that would result in real-time, uninterrupted streaming video from police boats. SOLUTION TESSCO s Solution Architects worked alongside the Maryland DNR to develop a wireless solution optimized for their Chesapeake Bay application. We collaborated on a design for a new video streaming application, offering more than 4 Mbps throughput for each boat while travelling at up to 200 knots across distances of up to seven miles. The cameras allow the dispatch center to send additional boats to a scene if the officer is incapacitated or the incident escalates and the officer cannot respond -Candy Thomson, DNR Spokeswoman TESSCO ADVANTAGE 39 Along with industry leading manufacturers products, TESSCO provides the technical expertise to design an optimal solution that meets our customers needs. This new system is now completely incorporated into the DNR s leading-edge Maritime Law Enforcement Information Network.

40 ($ in millions) Strong Balance Sheet $75 million credit facility Minimal CAPEX $0.20 per share quarterly dividend Assets 3/26/2017 4/1/2018 Cash and equivalents $8.5 $0.0 Accounts receivable Inventory Property & equipment Goodwill Other Total assets $174.0 $198.9 Liabilities Accounts payable $53.6 $67.0 Revolving line of credit Accrued expenses & other liabilities Total liabilities $66.0 $91.4 Equity Equity $108.0 $107.5 Total liabilities & equity $174.0 $

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