TESSCO Technologies, Inc. (TESS)’s Q3 2015 Earnings Conference Call Transcript

Ted Winslow VP has assumed the role of market director for our carrier organization unit and as a senior sales and business development leader with more than two decades of experience, had the proven track record of achieving exceptional results of strategic relationships with all levels Kleinwort organization.  Ted joined Tessco in May 2014 and was previously with Canvas Communications and specially packaged products. His accountability is to guide the sales team to better serve decision-makers within the carrier organizations.  Under Ted’s Leadership and our focus on product and supply-chain solution selling we believe we’re well positioned to improve our market share and drive growth when the market rebounce. The second topic is a private system operator and retail growth, a major priority is to continue to invest in and pursue new opportunities in the emerging industrial and enterprise private system operator market for making excellent progress.  Revenues grew 22% over last year’s third quarter. However there has been some gross margin compression which Erick will address shortly, well we are pleased with the growth in the opportunities we are seeing in expected continued growth.

Retailers also performed well this year growing 19% over last year’s third quarter, new products in the iPhone six and the other smart phones that launches in our training  and procurement assistance offering has generated new customers in sales. While it’s two markets are growing their contribution was not significant enough to offset the weakness in the carrier commercial reseller in government markets. The third key area that I want to review to you is our strategic growth initiatives and organizational changes. We continue to invest in talent and technology while improving efficiency, reducing expenses and optimizing our organization and leadership.  As we discussed we have several important strategic growth initiatives underway we’ve made considerable progress but it’s taking more time than expected for these initiatives to generate the full benefits we expect. We are now prioritizing three key initiates to speed up execution and reduce cost. The first is a transitioning from reactive selling to proactive end-to-end solution selling.  We believe this model will improve the customer experience while growing customer relationships in overall sales.

To accelerate the transition and better capitalize on market opportunities we have appointed Mark Weimer vice president to be the head of entire market development and sales group and to be a member of our senior leadership executive team reporting directly to me. Mark is tasked with developing marketing strategy and leading the sales organization to meet the corporate growth targets. Mark joined in May 2014 and was previously with AOL and use Network Systems. Mark has extensive background in business development and marketing operations with a proven track record of business growth. The second key initiative is to expand our offering to architect and deliver the knowledge and end-to-end product supply chain solutions that enable our customers to build, use and maintain voice data and video systems. Today we export a major cellular WiFi broadband connectivity two way systems and today we are also exploring new systems to support within our remote monitory petrol area, complete monitoring asset tracking and asset tracking.  Within our mobile device performance area we are spending to the home automation and mobile device privacy through encryption.