Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Jul. 01, 2018 | Jul. 20, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | TESSCO TECHNOLOGIES INC | |
Entity Central Index Key | 927,355 | |
Current Fiscal Year End Date | --03-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 8,426,655 | |
Document Fiscal Year Focus | 2,019 | |
Document Fiscal Period Focus | Q1 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jul. 1, 2018 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Jul. 01, 2018 | Apr. 01, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 9,000 | $ 19,400 |
Trade accounts receivable, net of allowance for doubtful accounts of $1,417,500 and $1,094,900, respectively | 92,815,800 | 87,862,300 |
Product inventory, net | 86,367,200 | 72,323,000 |
Prepaid expenses and other current assets | 5,585,400 | 4,489,100 |
Total current assets | 184,777,400 | 164,693,800 |
Property and equipment, net | 13,679,200 | 13,662,800 |
Goodwill, net | 11,677,700 | 11,677,700 |
Deferred tax assets | 713,200 | 710,500 |
Other long-term assets | 8,920,900 | 8,678,900 |
Total assets | 219,768,400 | 199,423,700 |
Current liabilities: | ||
Trade accounts payable | 82,483,900 | 67,041,100 |
Payroll, benefits and taxes | 6,645,200 | 8,291,100 |
Income and sales tax liabilities | 2,709,800 | 2,339,200 |
Accrued expenses and other current liabilities | 2,795,000 | 1,370,300 |
Revolving line of credit | 15,770,600 | 10,835,400 |
Current portion of long-term debt | 22,800 | 27,300 |
Total current liabilities | 110,427,300 | 89,904,400 |
Long-term debt, net of current portion | 2,300 | |
Other long-term liabilities | 1,475,800 | 1,465,400 |
Total liabilities | 111,903,100 | 91,372,100 |
Shareholders' equity: | ||
Preferred stock, $0.01 par value per share, 500,000 shares authorized and no shares issued and outstanding | ||
Common stock, $0.01 par value per share, 15,000,000 shares authorized, 14,143,580 shares issued and 8,422,082 shares outstanding as of July 1, 2018, and 14,111,703 shares issued and 8,396,537 shares outstanding as of April 1, 2018 | 99,300 | 99,000 |
Additional paid-in capital | 61,062,200 | 60,611,900 |
Treasury stock, at cost, 5,721,498 shares as of July 1, 2018 and 5,715,166 shares as of April 1, 2018 | (57,614,100) | (57,503,000) |
Retained earnings | 104,317,900 | 104,843,700 |
Total shareholders' equity | 107,865,300 | 108,051,600 |
Total liabilities and shareholders' equity | $ 219,768,400 | $ 199,423,700 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Jul. 01, 2018 | Apr. 01, 2018 |
Current assets: | ||
Trade accounts receivable, allowance for doubtful accounts | $ 1,417,500 | $ 1,094,900 |
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) | 14,143,580 | 14,111,703 |
Common stock, outstanding (in shares) | 8,422,082 | 8,396,537 |
Treasury stock (in shares) | 5,721,498 | 5,715,166 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) | 3 Months Ended | |
Jul. 01, 2018 | Jun. 25, 2017 | |
Consolidated Statements of Income | ||
Revenues | $ 150,919,400 | $ 140,010,800 |
Cost of goods sold | 120,221,300 | 110,844,000 |
Gross profit | 30,698,100 | 29,166,800 |
Selling, general and administrative expenses | 28,961,300 | 27,881,500 |
Income from operations | 1,736,800 | 1,285,300 |
Interest expense, net | 174,400 | 68,600 |
Income before provision for income taxes | 1,562,400 | 1,216,700 |
Provision for income taxes | 404,000 | 533,800 |
Net income | $ 1,158,400 | $ 682,900 |
Basic earnings per share (in dollars per share) | $ 0.14 | $ 0.08 |
Diluted earnings per share (in dollars per share) | $ 0.13 | $ 0.08 |
Basic weighted-average common shares outstanding (in shares) | 8,410,909 | 8,349,259 |
Effect of dilutive options and other equity instruments (in shares) | 193,911 | 53,672 |
Diluted weighted-average common shares outstanding (in shares) | 8,604,820 | 8,402,931 |
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 | |
Jul. 01, 2018 | Jun. 25, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 1,158,400 | $ 682,900 |
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | ||
Depreciation and amortization | 937,100 | 989,600 |
Non-cash stock-based compensation expense | 320,500 | 247,600 |
Deferred income taxes and other | 249,486 | 196,600 |
Change in trade accounts receivable | (4,953,500) | (15,029,100) |
Change in product inventory | (14,044,200) | (8,121,400) |
Change in prepaid expenses and other current assets | (1,096,300) | (821,600) |
Change in trade accounts payable | 15,442,800 | 9,530,400 |
Change in payroll, benefits and taxes | (1,645,900) | (1,711,100) |
Change in income and sales tax liabilities | 370,600 | 107,600 |
Change in accrued expenses and other current liabilities | 1,554,800 | (218,800) |
Net cash used in operating activities | (1,706,214) | (14,147,300) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Acquisition of property and equipment | (413,000) | (182,600) |
Purchases of internal use software licenses | (1,024,286) | (661,000) |
Net cash used in investing activities | (1,437,286) | (843,600) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Net borrowings from revolving line of credit | 4,935,200 | 8,338,100 |
Proceeds from note receivable | 15,300 | |
Payments on long-term debt | (6,800) | (6,600) |
Cash dividends paid | (1,684,200) | (1,672,400) |
Purchases of treasury stock and repurchases of stock from employees | (111,100) | (64,900) |
Net cash provided by financing activities | 3,133,100 | 6,609,500 |
Net (decrease) increase in cash and cash equivalents | (10,400) | (8,381,400) |
CASH AND CASH EQUIVALENTS, beginning of period | 19,400 | 8,540,100 |
CASH AND CASH EQUIVALENTS, end of period | $ 9,000 | $ 158,700 |
Description of Business and Bas
Description of Business and Basis of Presentation | 3 Months Ended |
Jul. 01, 2018 | |
Description of Business and Basis of Presentation | |
Description of Business and Basis of Presentation | Note 1. Description of Business and Basis of Presentation TESSCO Technologies Incorporated, a Delaware corporation (TESSCO, we, or the Company), architects and delivers innovative product and value chain solutions to support wireless 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 (the “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 April 1, 2018. |
Recently Issued Accounting Pron
Recently Issued Accounting Pronouncements | 3 Months Ended |
Jul. 01, 2018 | |
Recently Issued Accounting Pronouncements | |
Recently Issued Accounting Pronouncements | Note 2. Recently Issued Accounting Pronouncements Recently issued accounting pronouncements not yet adopted: In February 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-02, Leases. This ASU requires 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 and will adopt the standard on the first day of the Company’s 2020 fiscal year. In August 2016, the FASB issued ASU No. 2016-15, Classification of Certain Cash Receipts and Cash Payments. The new standard will change the classification of certain cash payments and receipts within the cash flow statement. Specifically, payments for debt prepayment or debt extinguishment costs, including third-party costs, premiums paid, and other fees paid to lenders that are directly related to the debt prepayment or debt extinguishment, excluding accrued interest, will now be classified as financing activities. Previously, these payments were classified as operating expenses. The guidance is effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019, with early adoption permitted, and will be applied retrospectively. The Company does not expect that the adoption of this new standard, on the first day of the Company’s 2020 fiscal year, will have a material impact on its Consolidated Financial Statements. Recently issued accounting pronouncements adopted: Effective April 2, 2018, the Company adopted the FASB ASU 2014-09, Revenue from Contracts with Customers (Topic 606), and ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of Effective Date, which deferred the effective date of ASU 2014-09 by one year. ASU 2014-09 supersedes the revenue recognition requirements in ASC 605, Revenue Recognition, and is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. It also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue, cash flows arising from customer contracts, including significant judgments and changes in judgments, and assets recognized from costs incurred to obtain or fulfill a contract. The adoption of ASU 2014-09, using the modified retrospective approach, had no significant impact on the timing of revenue recognition, our results of operations, cash flows, or financial position. Revenue continues to be recognized at a point in time for our product sales when products are shipped to or received by the customer depending on the shipping terms. The Company has changed the presentation of its returns reserve. The amount of expected returns are now recognized as a refund liability within the Accrued Expenses line item of the balance sheet. This liability represents the obligation to return customer consideration. The value of the expected goods returned by customers is now recognized as a return asset within the inventory line item of the balance sheet. The return asset value is initially measured at the former carrying amount in inventory, less any expected costs to recover the goods. The Company expects products returned by customers to be in new and salable condition, as required by our standard terms and conditions, and therefore impairment of the return asset is unlikely. Changes to the return liability are recorded as revenue adjustments and changes to the inventory asset are recorded as cost of goods sold. As of July 1, 2018, the return asset and refund liability amounts were $1.5 million and $2.0 million, respectively. Prior periods were not adjusted to reflect this change . On December 22, 2017 President Trump signed into law the “Tax Cut and Jobs Act” (the “Tax Act”. In December 2017, the Securities Exchange Commission (SEC) staff issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”), in response to the Tax Act. SAB 118 allows registrants to include a provisional amount to account for the implications of the Tax Act where a reasonable estimate can be made and requires the completion of the accounting no later than one year from the date of enactment of the Tax Act or December 22, 2018. In its financial statements for the year ended April 1 2018, the Company included a provisional tax benefit estimate of approximately $0.2 million for the re-measurement of its U.S. deferred tax assets and liabilities to a 21% effective tax rate. We continue to evaluate the implications of the Tax Act and have not made any adjustments to the provisional amounts recorded in the prior year. Additional tax impacts from the Tax Act will be recorded as they are identified in the measurement period which will not extend past December 22, 2018. The final impact of the Tax Act may differ from the provisional amounts that have been recognized, due to, among other things, changes in the Company’s interpretation of the Tax Act, legislative or administrative actions to clarify the intent of the statutory language provided that differ from the Company’s current interpretation, or any updates or changes to estimates utilized to calculate the tax impacts, including changes to estimates for permanently disallowed expenses, of the Tax Act. Additionally, the Company intends to file its 2017 U.S. income tax return in the second half of 2018, which may change our tax basis in temporary differences, and other elements of the income tax effects of the Tax Act estimated as of April 1, 2018. This may result in an adjustment to the tax provision and be reflected as a re-measurement amount recorded in the financial statements during the quarter in which the U.S. tax return is filed. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Jul. 01, 2018 | |
Stock-Based Compensation | |
Stock-Based Compensation | Note 3. Stock-Based Compensation The Company’s selling, general and administrative expenses for the fiscal quarter ended July 1, 2018 included $320,500 of non-cash stock-based compensation expense. The Company’s selling, general and administrative expenses for the fiscal quarter ended June 25, 2017 included $247,600 of non-cash stock-based compensation expense. Stock-based compensation expense is primarily related to our Performance Stock Units (PSUs), Restricted Stock Units (RSUs) and Stock Options, granted or outstanding under the Company’s Third Amended and Restated Stock and Incentive Plan (the “1994 Plan”). Performance Stock Units: The following table summarizes the activity under the Company’s PSU program under the 1994 Plan, for the first three months of fiscal 2019: Three Months Weighted Ended Average Fair July 1, Value at Grant 2018 Date (per unit) Unvested shares available for issue under outstanding PSUs, beginning of period 67,000 $ 12.65 PSU’s Granted 71,000 15.58 PSU’s Vested (14,257) 12.66 PSU’s Forfeited/Cancelled (16,750) 12.65 Unvested shares available for issue under outstanding PSUs, end of period 106,993 $ 14.59 During the first quarter of fiscal 2019, on May 10, 2018, the Compensation Committee of the Company’s Board of Directors (the “Compensation Committee”) approved the grant of PSUs to selected key employees, providing them with the opportunity to earn up to 71,000 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 2019), and assuming the performance metrics are met to a sufficient extent, any shares earned at the end of fiscal 2019 will vest 25% and be issued ratably on or about each of May 1 of 2019, 2020, 2021 and 2022, provided that the respective employees remain employed by or associated with the Company on each such date. The PSUs cancelled during fiscal 2019 related to the fiscal 2018 grant of PSUs, which had a one-year measurement period (fiscal 2018). The PSUs were cancelled because the applicable fiscal 2018 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 under the 1994 Plan. If all PSUs granted thus far in fiscal 2019 are assumed to be earned on account of the applicable performance metrics being fully met, total unrecognized compensation costs on these PSUs would be approximately $1.0 million, as of July 1, 2018, and would be expensed through fiscal 2022. To the extent the maximum number of PSUs granted in fiscal 2019 are not earned, stock-based compensation related to these awards will differ from this amount. Restricted Stock Units: The Company has made annual RSU awards under the 1994 Plan to its non-employee directors over recent years. On May 10, 2018, the Compensation Committee approved the grant of an aggregate of 18,000 RSUs, ratably to the five non-employee directors of the Company, and to Mr. Barnhill. In addition to this, effective June 6, 2018 Paul J. Gaffney was appointed to the Board of Directors and was granted 3,000 RSUs. These RSU awards to non-employee directors and to Mr. Barnhill provide for the issuance of shares of the Company’s common stock in four equal installments, beginning on May 1 of the year following the award and continuing on May first of each of the following three years, provided that the director remains associated with the Company (or meets other criteria as prescribed in the applicable award agreement) on each date. On August 8, 2017, the Compensation Committee approved the grant of an aggregate of up to 56,000 RSUs to several senior executives. The number of shares earned by a recipient will be determined by multiplying the number of RSUs covered by the award by a fraction, the numerator of which is the cumulative amount of dividends (regular, ordinary and special) declared and paid, per share, on the Common Stock, over an earnings period of up to four years, and the denominator of which is $3.20. Subject to earlier issuance upon the occurrence of certain events (as described in the applicable award agreement), any earned shares are issued and distributed to the recipient upon the fourth anniversary of the award date. As of July 1, 2018, 8,000 of these 56,000 RSUs have been canceled due to employee departures, leaving 48,000 of these RSUs outstanding. As of July 1, 2018, there was approximately $1.0 million of total unrecognized compensation cost related to all outstanding RSUs, assuming all shares are earned. Unrecognized compensation costs are expected to be recognized ratably over a weighted average 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. The Company now accounts for forfeitures as they occur rather than estimate expected forfeitures. To the extent that forfeitures occur, stock based compensation related to the restricted awards may be different from the Company’s expectations. Stock Options: As summarized below, in the first quarter of fiscal 2019, stock options for an aggregate of 49,000 shares of common stock were granted, all under the 1994 Plan. These stock options have exercise prices equal to the market price of the Company’s stock on the grant date, and the terms thereof provide for 25% vesting after one year and then 1/36 per month over the following three years. The grant date value of the Company’s stock options is determined using the Black-Scholes-Merton pricing model, based upon facts and assumptions existing at the date of grant. The value of each option at the date of grant is amortized as compensation expense over the service period. This occurs without regard to subsequent changes in stock price, volatility, or interest rates over time, provided the option remains outstanding. The following tables summarize the pertinent information for outstanding options. Three Months Weighted Ended Average Fair July 1, Value at Grant 2018 Date (per unit) Unvested options, beginning of period 392,500 $ 2.21 Options Granted 49,000 4.70 Options Vested (63,542) 2.24 Options Forfeited/Cancelled — — Unvested options, end of period 377,958 $ 3.29 July 1, 2018 Grant Fiscal Year Options Granted Option Exercise Price Options Outstanding Options Exercisable 49,000 $ 17.55 49,000 - 230,000 $ 15.12 170,000 40,417 410,000 $ 12.57 330,000 141,458 100,000 $ 22.64 40,000 29,167 Total 589,000 211,042 Grant Fiscal Year Expected Stock Price Volatility Risk-Free Interest rate Expected Dividend Yield Average Expected Term Resulting Black Scholes Value 2019 % % % 4.0 $ 4.70 2018 % % % 4.0 $ 2.57 2017 % % % 4.0 $ 1.85 2016 % % % 4.0 $ 3.43 As of July 1, 2018, there was approximately $0.9 million of total unrecognized compensation costs, related to these awards. These unrecognized compensation costs are expected to be recognized ratably over a period of approximately three years. |
Borrowings Under Revolving Cred
Borrowings Under Revolving Credit Facility | 3 Months Ended |
Jul. 01, 2018 | |
Borrowings Under Revolving Credit Facility | |
Borrowings Under Revolving Credit Facility | Note 4. 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 and Lender, and Wells Fargo Bank, National Association, as a Lender, for a senior asset based secured revolving credit facility of up to $35 million (the “Revolving Credit Facility”). This replaced our then existing $35 million unsecured revolving credit facility with both SunTrust Bank and Wells Fargo Bank, National Association, which had no outstanding principal balance at the time of replacement. The secured Revolving Credit Facility, as it was initially established, included terms providing for its maturity after five years, on June 24, 2021, and for a $5.0 million sublimit for the issuance of standby letters of credit and a $10.0 million sublimit for swing line loans. Borrowing Availability under the secured Revolving Credit Facility as it was initially established was determined in part in accordance with a Borrowing Base, defined in the Credit Agreement, generally, as 85% of Eligible Receivables minus Reserves, as those terms were defined in the Credit Agreement. The Credit Agreement included financial and other covenants, and pursuant to a related Guaranty and Security Agreement by and among the Company, the other Company affiliate borrowers under the Credit Agreement and other subsidiaries of the Company, referred to collectively as the Loan Parties, and SunTrust Bank, as Administrative Agent, the Loan Parties’ obligations, which included the obligations under the Credit Agreement, were guaranteed by those 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 in all documents, instruments, general intangibles, letter of credit rights and chattel paper, in each case to the extent relating to inventory and accounts, and all proceeds of the foregoing. The security interests were 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. On October 19, 2017, the Company and its primary operating subsidiaries, as co-borrowers, and SunTrust Bank, as Administrative Agent and Lender, and Wells Fargo Bank, National Association, as a Lender, entered into an Amended and Restated Credit Agreement (the “Amended and Restated Credit Agreement”). Pursuant to the Amended and Restated Credit Agreement, the Credit Agreement for the secured Revolving Credit Facility was amended and restated in order to, among other things, increase the Company’s borrowing limit from up to $35 million to up to $75 million. Capitalized terms used but not otherwise defined in this and the following three paragraphs have the meanings ascribed to each in the Amended and Restated Credit Agreement. In addition to expanding the Company’s borrowing limit, the secured Revolving Credit Facility maturity date was extended to October 19, 2021. The Amended and Restated Credit Agreement otherwise includes representations, warranties, affirmative and negative covenants (including restrictions) and other terms generally consistent with those applicable to the facility as existing prior to the execution and delivery of the Amended and Restated Credit Agreement, but with certain modifications. Borrowings under the Amended and Restated Credit Agreement initially accrue interest from the applicable borrowing date at an Applicable Rate equal to the Eurodollar Rate plus the Applicable Margin. The Eurodollar Rate is the rate per annum obtained by dividing (i) LIBOR by (ii) a percentage equal to 1.00 minus the Eurodollar Reserve Percentage. When the Applicable Rate is the Eurodollar Rate plus the Applicable Margin, the Applicable Margin is 1.50% if Average Availability is greater than or equal to $15 million, and 1.75% otherwise. On July 1, 2018, the interest rate applicable to borrowings under the replacement Revolving Credit Facility was 3.49%. Under certain circumstances, the Applicable Rate is subject to change at the Lenders’ option from the Eurodollar Rate plus the Applicable Margin to the Base Rate plus the Applicable Margin. Following an Event of Default, in addition to changing the Applicable Rate to the Base Rate plus the Applicable Margin, the Lenders’ may at their option set the Applicable Margin at 0.50% if the Base Rate applies or 1.75% if the Eurodollar Rate applies, and increase the Applicable Rate by an additional 200 basis points. The Applicable Rate adjusts on the first Business Day of each calendar month. The Company is required to pay a monthly Commitment Fee on the average daily unused portion of the Revolving Credit Facility provided for pursuant to the Amended and Restated Credit Agreement, at a per annum rate equal to 0.25%. In connection with the entering into of the Amended and Restated Credit Agreement, the Company and other Loan Parties, executed and delivered to SunTrust Bank, as Administrative Agent, a Reaffirmation Agreement, pursuant to which the obligations of the Loan Parties under the Guaranty and Security Agreement delivered by them in connection with the secured credit facility as previously existing (including the previously existing guaranty by the Loan Parties not otherwise Borrowers and the previously existing grant by the Company and the other Loan Parties of a continuing first priority security interest in inventory, accounts receivable and deposit accounts, and on all documents, instruments, general intangibles, letter of credit rights, and all proceeds) were ratified and confirmed as respects the Obligations arising under the Amended and Restated Credit Facility from time to time. Borrowings may be used for working capital and other general corporate purposes, and as further provided in, and subject to the applicable terms of, the Amended and Restated Credit Agreement. As of July 1, 2018, borrowings under this Revolving Credit Facility totaled $15.8 million and, therefore, the Company had $59.2 million available for borrowing as of July 1, 2018, subject to the Borrowing Base limitation and compliance with the other applicable terms of the Amended and Restated Credit Agreement, including the covenants referenced above. The line of credit has a lockbox arrangement associated with it and therefore the outstanding balance is classified as a current liability on our balance sheet. As of April 1, 2018, borrowings under this Revolving Credit Facility totaled $10.8 million and, therefore, the Company had $64.2 million available on its revolving line of credit facility as of April 1, 2018. |
Income Taxes
Income Taxes | 3 Months Ended |
Jul. 01, 2018 | |
Income Taxes | |
Income Taxes | Note 5. Income Taxes As of July 1, 2018, the Company had a gross amount of unrecognized tax benefits of $116,200 ($91,800 net of federal benefit). As of April 1, 2018, the Company had a gross amount of unrecognized tax benefits of $112,700 ($87,200 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 2019 was an expense of $10,000 (net of federal benefit). The cumulative amount included in the consolidated balance sheet as of July 1, 2018 was $255,900 (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 2018 was an expense of $10,800 (net of federal benefit). The cumulative amount of interest and penalties included as a liability in the consolidated balance sheet as of April 1, 2018 was $250,500 (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 April 1, 2018 of unrecognized tax benefit $ 112,700 Increases related to current period tax positions 3,500 Reductions as a result of a lapse in the applicable statute of limitations — Ending balance at July 1, 2018 of unrecognized tax benefits $ 116,200 |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Jul. 01, 2018 | |
Earnings Per Share | |
Earnings Per Share | Note 6. Earnings Per Share The Company presents the computation of earnings per share (“EPS”) on a basic and diluted basis. Basic EPS is computed by dividing net income by the weighted average number of shares outstanding during the reported period. Diluted earnings per share are computed similarly to basic earnings per share, except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential additional common shares that were dilutive had been issued. Common shares are excluded from the calculation if they are determined to be anti-dilutive. At July 1, 2018, stock options with respect to 589,000 shares of common stock were outstanding, of which 60,000 were anti-dilutive. At June 25, 2017, stock options with respect to 620,000 shares of common stock were outstanding, of which 240,000 were anti-dilutive. There were no anti-dilutive PSUs or RSUs outstanding as of July 1, 2018 or June 25, 2017, respectively. |
Business Segments
Business Segments | 3 Months Ended |
Jul. 01, 2018 | |
Business Segments | |
Business Segments | Note 7. Business Segments The Company evaluates its business within two segments: commercial and retail. The commercial segment consists of the following customer markets: (1) public carriers, that are generally responsible for building and maintaining the infrastructure system and provide airtime service to individual subscribers; (2) government including federal agencies and state and local governments that run wireless networks for their own use as well as value-added resellers who specialize in selling to the government; (3) private system operators including commercial entities such as enterprise customers, major utilities and transportation companies; and (4) value-added resellers that sell, install and/or service cellular telephone, wireless networking, broadband and two-way radio communications equipment primarily for the enterprise market. The retail segment consists of the retail market which includes 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. Base station infrastructure service offerings include 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 the segment level. Certain cost of sales and other applicable expenses have been allocated to each segment based on a percentage of revenues and/or gross profit, where appropriate. Segment activity for the first quarter of fiscal years 2019 and 2018 are as follows (in thousands): Three Months Ended July 1, 2018 June 25, 2017 Commercial Retail Commercial Retail Segment Segment Total Segment Segment Total Revenues Public Carrier $ 40,360 $ — $ 40,360 $ 26,598 $ — $ 26,598 Government 9,231 — 9,231 8,445 — 8,445 Private System Operators 21,634 — 21,634 21,042 — 21,042 Value-Added Resellers 34,682 — 34,682 35,040 — 35,040 Retail — 45,012 45,012 — 48,886 48,886 Total revenues $ 105,907 $ 45,012 $ 150,919 $ 91,125 $ 48,886 $ 140,011 Gross Profit Public Carrier $ 5,626 $ — $ 5,626 $ 4,128 $ — $ 4,128 Government 2,137 — 2,137 2,004 — 2,004 Private System Operators 4,865 — 4,865 4,607 — 4,607 Value-Added Resellers 8,915 — 8,915 8,961 — 8,961 Retail — 9,155 9,155 — 9,467 9,467 Total gross profit $ 21,543 $ 9,155 $ 30,698 $ 19,700 $ 9,467 $ 29,167 Directly allocable expenses 8,081 3,809 11,890 8,522 3,750 12,272 Segment net profit contribution $ 13,462 $ 5,346 18,808 $ 11,178 $ 5,717 16,895 Corporate support expenses 17,246 15,678 Income before provision for income taxes $ 1,562 $ 1,217 Supplemental revenue and gross profit information by product category for the first quarter of fiscal years 2019 and 2018 are as follows (in thousands): Three Months Ended July 1, 2018 June 25, 2017 Revenues Base station infrastructure $ 74,314 $ 59,070 Network systems 22,777 23,837 Installation, test and maintenance 7,431 6,993 Mobile device accessories 46,397 50,111 Total revenues $ 150,919 $ 140,011 Gross Profit Base station infrastructure $ 15,716 $ 14,057 Network systems 3,663 3,829 Installation, test and maintenance 1,473 1,419 Mobile device accessories 9,846 9,862 Total gross profit $ 30,698 $ 29,167 |
Shares Withheld
Shares Withheld | 3 Months Ended |
Jul. 01, 2018 | |
Shares Withheld | |
Shares Withheld | Note 8. Shares Withheld The Company withholds shares of common stock from its employees and directors at their request, equal to the minimum federal and state tax withholdings related to vested PSUs, stock option exercises and vested RSUs. For the three months ended July 1, 2018 and June 25, 2017, the aggregate value of the shares withheld totaled $111,100 and $64,800, respectively. |
Concentration of Risk
Concentration of Risk | 3 Months Ended |
Jul. 01, 2018 | |
Concentration of Risk | |
Concentration of Risk | Note 9. 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 July 1, 2018 and June 25, 2017, no customer accounted for more than 10.0% of total consolidated revenues. For the fiscal quarter ended July 1, 2018, sales of products purchased from the Company’s largest wireless infrastructure supplier and mobile device accessories supplier accounted for 14.2% and 8.0% of consolidated revenue, respectively. For the fiscal quarter ended June 25, 2017, sales of products purchased from the Company’s largest wireless infrastructure supplier and largest mobile device accessories supplier accounted for 11.8% and 11.1% of consolidated revenue, respectively. |
Recently Issued Accounting Pr15
Recently Issued Accounting Pronouncements (Policies) | 3 Months Ended |
Jul. 01, 2018 | |
Recently Issued Accounting Pronouncements | |
Recently Issued Accounting Pronouncements | Recently issued accounting pronouncements not yet adopted: In February 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-02, Leases. This ASU requires 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 and will adopt the standard on the first day of the Company’s 2020 fiscal year. In August 2016, the FASB issued ASU No. 2016-15, Classification of Certain Cash Receipts and Cash Payments. The new standard will change the classification of certain cash payments and receipts within the cash flow statement. Specifically, payments for debt prepayment or debt extinguishment costs, including third-party costs, premiums paid, and other fees paid to lenders that are directly related to the debt prepayment or debt extinguishment, excluding accrued interest, will now be classified as financing activities. Previously, these payments were classified as operating expenses. The guidance is effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019, with early adoption permitted, and will be applied retrospectively. The Company does not expect that the adoption of this new standard, on the first day of the Company’s 2020 fiscal year, will have a material impact on its Consolidated Financial Statements. Recently issued accounting pronouncements adopted: Effective April 2, 2018, the Company adopted the FASB ASU 2014-09, Revenue from Contracts with Customers (Topic 606), and ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of Effective Date, which deferred the effective date of ASU 2014-09 by one year. ASU 2014-09 supersedes the revenue recognition requirements in ASC 605, Revenue Recognition, and is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. It also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue, cash flows arising from customer contracts, including significant judgments and changes in judgments, and assets recognized from costs incurred to obtain or fulfill a contract. The adoption of ASU 2014-09, using the modified retrospective approach, had no significant impact on the timing of revenue recognition, our results of operations, cash flows, or financial position. Revenue continues to be recognized at a point in time for our product sales when products are shipped to or received by the customer depending on the shipping terms. The Company has changed the presentation of its returns reserve. The amount of expected returns are now recognized as a refund liability within the Accrued Expenses line item of the balance sheet. This liability represents the obligation to return customer consideration. The value of the expected goods returned by customers is now recognized as a return asset within the inventory line item of the balance sheet. The return asset value is initially measured at the former carrying amount in inventory, less any expected costs to recover the goods. The Company expects products returned by customers to be in new and salable condition, as required by our standard terms and conditions, and therefore impairment of the return asset is unlikely. Changes to the return liability are recorded as revenue adjustments and changes to the inventory asset are recorded as cost of goods sold. As of July 1, 2018, the return asset and refund liability amounts were $1.5 million and $2.0 million, respectively. Prior periods were not adjusted to reflect this change . |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Jul. 01, 2018 | |
Stock-Based Compensation | |
Schedule of Performance Stock Unit activity | Three Months Weighted Ended Average Fair July 1, Value at Grant 2018 Date (per unit) Unvested shares available for issue under outstanding PSUs, beginning of period 67,000 $ 12.65 PSU’s Granted 71,000 15.58 PSU’s Vested (14,257) 12.66 PSU’s Forfeited/Cancelled (16,750) 12.65 Unvested shares available for issue under outstanding PSUs, end of period 106,993 $ 14.59 |
Schedule of Stock Options | Three Months Weighted Ended Average Fair July 1, Value at Grant 2018 Date (per unit) Unvested options, beginning of period 392,500 $ 2.21 Options Granted 49,000 4.70 Options Vested (63,542) 2.24 Options Forfeited/Cancelled — — Unvested options, end of period 377,958 $ 3.29 July 1, 2018 Grant Fiscal Year Options Granted Option Exercise Price Options Outstanding Options Exercisable 49,000 $ 17.55 49,000 - 230,000 $ 15.12 170,000 40,417 410,000 $ 12.57 330,000 141,458 100,000 $ 22.64 40,000 29,167 Total 589,000 211,042 |
Schedule of assumptions of Black-Scholes-Merton option pricing model | Grant Fiscal Year Expected Stock Price Volatility Risk-Free Interest rate Expected Dividend Yield Average Expected Term Resulting Black Scholes Value 2019 % % % 4.0 $ 4.70 2018 % % % 4.0 $ 2.57 2017 % % % 4.0 $ 1.85 2016 % % % 4.0 $ 3.43 |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Jul. 01, 2018 | |
Income Taxes | |
Reconciliation of changes in unrecognized tax benefit amounts, net of interest | Beginning balance at April 1, 2018 of unrecognized tax benefit $ 112,700 Increases related to current period tax positions 3,500 Reductions as a result of a lapse in the applicable statute of limitations — Ending balance at July 1, 2018 of unrecognized tax benefits $ 116,200 |
Business Segments (Tables)
Business Segments (Tables) | 3 Months Ended |
Jul. 01, 2018 | |
Business Segments | |
Schedule of Revenue and Gross Profit by Market | Segment activity for the first quarter of fiscal years 2019 and 2018 are as follows (in thousands): Three Months Ended July 1, 2018 June 25, 2017 Commercial Retail Commercial Retail Segment Segment Total Segment Segment Total Revenues Public Carrier $ 40,360 $ — $ 40,360 $ 26,598 $ — $ 26,598 Government 9,231 — 9,231 8,445 — 8,445 Private System Operators 21,634 — 21,634 21,042 — 21,042 Value-Added Resellers 34,682 — 34,682 35,040 — 35,040 Retail — 45,012 45,012 — 48,886 48,886 Total revenues $ 105,907 $ 45,012 $ 150,919 $ 91,125 $ 48,886 $ 140,011 Gross Profit Public Carrier $ 5,626 $ — $ 5,626 $ 4,128 $ — $ 4,128 Government 2,137 — 2,137 2,004 — 2,004 Private System Operators 4,865 — 4,865 4,607 — 4,607 Value-Added Resellers 8,915 — 8,915 8,961 — 8,961 Retail — 9,155 9,155 — 9,467 9,467 Total gross profit $ 21,543 $ 9,155 $ 30,698 $ 19,700 $ 9,467 $ 29,167 Directly allocable expenses 8,081 3,809 11,890 8,522 3,750 12,272 Segment net profit contribution $ 13,462 $ 5,346 18,808 $ 11,178 $ 5,717 16,895 Corporate support expenses 17,246 15,678 Income before provision for income taxes $ 1,562 $ 1,217 |
Schedule of Revenue and Gross Profit by Product | Supplemental revenue and gross profit information by product category for the first quarter of fiscal years 2019 and 2018 are as follows (in thousands): Three Months Ended July 1, 2018 June 25, 2017 Revenues Base station infrastructure $ 74,314 $ 59,070 Network systems 22,777 23,837 Installation, test and maintenance 7,431 6,993 Mobile device accessories 46,397 50,111 Total revenues $ 150,919 $ 140,011 Gross Profit Base station infrastructure $ 15,716 $ 14,057 Network systems 3,663 3,829 Installation, test and maintenance 1,473 1,419 Mobile device accessories 9,846 9,862 Total gross profit $ 30,698 $ 29,167 |
Description of Business and B19
Description of Business and Basis of Presentation (Details) | 3 Months Ended |
Jul. 01, 2018 | |
US | Geographic Concentration Risk | Revenue | |
Concentration Risk | |
Concentration risk (as a percent) | 98.00% |
Recently Issued Accounting Pr20
Recently Issued Accounting Pronouncements (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Apr. 01, 2018 | Apr. 01, 2018 | Jul. 01, 2018 | |
Recently Issued Accounting Pronouncements | |||
Return asset | $ 1.5 | ||
Refund liability | $ 2 | ||
Income tax benefit to re-measure deferred tax liabilities | $ 0.2 | ||
Federal statutory rate (as a percent) | 21.00% |
Stock-Based Compensation - Expe
Stock-Based Compensation - Expense (Details) - USD ($) | 3 Months Ended | |
Jul. 01, 2018 | Jun. 25, 2017 | |
Selling, general and administrative expenses | ||
Stock-based compensation | ||
Stock-based compensation (in dollars) | $ 320,500 | $ 247,600 |
Stock-Based Compensation - PSUs
Stock-Based Compensation - PSUs (Details) - Performance Stock Units - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended |
Jul. 01, 2018 | Apr. 01, 2018 | |
PSU Activity | ||
Unvested shares available for issue under outstanding PSUs, beginning of period (in shares) | 67,000 | |
Granted (in shares) | 71,000 | |
Vested (in shares) | (14,257) | |
Forfeited/cancelled (in shares) | (16,750) | |
Unvested shares available for issue under outstanding PSUs, end of period (in shares) | 106,993 | 67,000 |
Unvested PSUs, Weighted-Average Fair Value at Grant Date | ||
Unvested shares available for issue under outstanding PSUs, beginning of period (in dollars per share) | $ 12.65 | |
Granted (in dollars per share) | 15.58 | |
Vested (in dollars per share) | 12.66 | |
Forfeited/cancelled (in dollars per share) | 12.65 | |
Unvested shares available for issue under outstanding PSUs, end of period (in dollars per share) | $ 14.59 | $ 12.65 |
Additional stock based compensation information | ||
Measurement period | 1 year | 1 year |
Annual vesting percentage | 25.00% | |
Grant Fiscal Year 2019 | ||
Additional stock based compensation information | ||
Unrecognized compensation costs (in dollars) | $ 1 |
Stock-Based Compensation - RSUs
Stock-Based Compensation - RSUs (Details) $ / shares in Units, $ in Millions | Jun. 06, 2018shares | May 10, 2018itemindividualshares | Aug. 08, 2017$ / sharesshares | Jul. 01, 2018USD ($)shares |
Non-employee directors | ||||
Stock-based compensation | ||||
Granted (in shares) | 3,000 | |||
RSU awards | ||||
Stock-based compensation | ||||
Unrecognized compensation costs (in dollars) | $ | $ 1 | |||
Unrecognized compensation costs, period for recognition | 3 years | |||
RSU awards | Non-employee directors and Executive Chairman | ||||
Stock-based compensation | ||||
Granted (in shares) | 18,000 | |||
Number of equal installments of vesting | item | 4 | |||
Number of anniversaries after first vesting date on which share-based compensation awards vest | item | 3 | |||
RSU awards | Non-employee directors | ||||
Stock-based compensation | ||||
Number of individuals that received stock awards | individual | 5 | |||
RSU awards | Senior executives | ||||
Stock-based compensation | ||||
Granted (in shares) | 56,000 | |||
Denominator in fraction used to calculate number of awards earned | $ / shares | $ 3.20 | |||
RSU awards | Senior executives | Maximum | ||||
Stock-based compensation | ||||
Vesting period | 4 years | |||
Award Date August 8, 2017 | RSU awards | Senior executives | ||||
Stock-based compensation | ||||
Cancelled (in shares) | 8,000 | |||
Shares outstanding (in shares) | 48,000 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Options (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | ||
Jul. 01, 2018 | Apr. 01, 2018 | Mar. 26, 2017 | Mar. 27, 2016 | |
Shares | ||||
Unvested options, beginning of period | 392,500 | |||
Options Granted (in shares) | 49,000 | |||
Options Vested (in shares) | (63,542) | |||
Unvested options, end of period | 377,958 | 392,500 | ||
Weighted Average Fair Value at Grant | ||||
Unvested shares available for issue under outstanding options, beginning of period | $ 2.21 | |||
Options Granted | 4.70 | |||
Options Vested | 2.24 | |||
Unvested shares available for issue under outstanding options, end of period | $ 3.29 | $ 2.21 | ||
Additional Disclosures | ||||
Options Outstanding (in shares) | 589,000 | |||
Options Exercisable (in shares) | 211,042 | |||
Valuation assumptions | ||||
Resulting Black Scholes Value (in dollars per share) | $ 4.70 | |||
Grant Fiscal Year 2019 | ||||
Shares | ||||
Options Granted (in shares) | 49,000 | |||
Weighted Average Fair Value at Grant | ||||
Options Granted | $ 4.70 | |||
Additional Disclosures | ||||
Option Exercise Price (in dollars per share) | $ 17.55 | |||
Options Outstanding (in shares) | 49,000 | |||
Valuation assumptions | ||||
Expected Stock Price Volatility (as a percent) | 35.80% | |||
Risk-Free Interest rate (as a percent) | 3.04% | |||
Expected Dividend Yield (as a percent) | 4.56% | |||
Average Expected Term | 4 years | |||
Resulting Black Scholes Value (in dollars per share) | $ 4.70 | |||
Grant Fiscal Year 2018 | ||||
Shares | ||||
Options Granted (in shares) | 230,000 | |||
Weighted Average Fair Value at Grant | ||||
Options Granted | $ 2.57 | |||
Additional Disclosures | ||||
Option Exercise Price (in dollars per share) | $ 15.12 | |||
Options Outstanding (in shares) | 170,000 | |||
Options Exercisable (in shares) | 40,417 | |||
Valuation assumptions | ||||
Expected Stock Price Volatility (as a percent) | 32.63% | |||
Risk-Free Interest rate (as a percent) | 1.96% | |||
Expected Dividend Yield (as a percent) | 5.34% | |||
Average Expected Term | 4 years | |||
Resulting Black Scholes Value (in dollars per share) | $ 2.57 | |||
Grant Fiscal Year 2017 | ||||
Shares | ||||
Options Granted (in shares) | 410,000 | |||
Weighted Average Fair Value at Grant | ||||
Options Granted | $ 1.85 | |||
Additional Disclosures | ||||
Option Exercise Price (in dollars per share) | $ 12.57 | |||
Options Outstanding (in shares) | 330,000 | |||
Options Exercisable (in shares) | 141,458 | |||
Valuation assumptions | ||||
Expected Stock Price Volatility (as a percent) | 32.85% | |||
Risk-Free Interest rate (as a percent) | 1.32% | |||
Expected Dividend Yield (as a percent) | 6.30% | |||
Average Expected Term | 4 years | |||
Resulting Black Scholes Value (in dollars per share) | $ 1.85 | |||
Grant Fiscal Year 2016 | ||||
Shares | ||||
Options Granted (in shares) | 100,000 | |||
Weighted Average Fair Value at Grant | ||||
Options Granted | $ 3.43 | |||
Additional Disclosures | ||||
Option Exercise Price (in dollars per share) | $ 22.64 | |||
Options Outstanding (in shares) | 40,000 | |||
Options Exercisable (in shares) | 29,167 | |||
Valuation assumptions | ||||
Expected Stock Price Volatility (as a percent) | 26.40% | |||
Risk-Free Interest rate (as a percent) | 1.67% | |||
Expected Dividend Yield (as a percent) | 3.50% | |||
Average Expected Term | 4 years | |||
Resulting Black Scholes Value (in dollars per share) | $ 3.43 | |||
Stock Options | ||||
Stock Options: | ||||
Unrecognized compensation costs (in dollars) | $ 0.9 | |||
Unrecognized compensation costs, period for recognition | 3 years | |||
First year vesting | Stock Options | Grant Fiscal Year 2019 | ||||
Stock Options: | ||||
Vesting percentage | 25.00% | |||
Vesting period | 1 year | |||
Monthly vesting over 36 months | Stock Options | Grant Fiscal Year 2019 | ||||
Stock Options: | ||||
Monthly percentage of vesting of share based compensation | 2.78% | |||
Additional vesting period after the initial period | 3 years |
Borrowings Under Revolving Cr25
Borrowings Under Revolving Credit Facility (Details) - USD ($) $ in Millions | Oct. 19, 2017 | Jun. 24, 2016 | Jul. 01, 2018 | Apr. 01, 2018 | Oct. 18, 2017 | Jun. 23, 2016 |
Previous Revolving Credit Facility | ||||||
Credit Facility | ||||||
Maximum borrowing capacity | $ 35 | |||||
Outstanding principal balance | $ 0 | |||||
Revolving Credit Facility | ||||||
Credit Facility | ||||||
Maximum borrowing capacity | $ 75 | $ 35 | $ 35 | |||
Maturity period | 5 years | |||||
Borrowing base as a percent of eligible receivables | 85.00% | |||||
Value from which Eurodollar Reserve Percentage is subtracted | 1 | |||||
Interest rate spread on variable rate when average availability is greater or equal to $15 million | 1.50% | |||||
Average availability threshold | $ 15 | |||||
Interest rate spread on variable rate when average availability otherwise | 1.75% | |||||
Interest rate (as a percent) | 3.49% | |||||
Increase of applicable rate upon event of default (as a percent) | 2.00% | |||||
Fee commitment (as a percent) | 0.25% | |||||
Outstanding principal balance | $ 15.8 | $ 10.8 | ||||
Available borrowing capacity | $ 59.2 | $ 64.2 | ||||
Revolving Credit Facility | Base rate | ||||||
Credit Facility | ||||||
Interest rate spread on variable rate basis upon event of default (as a percent) | 0.50% | |||||
Revolving Credit Facility | Eurodollar rate | ||||||
Credit Facility | ||||||
Interest rate spread on variable rate basis upon event of default (as a percent) | 1.75% | |||||
Revolving Credit Facility | Standby letters of credit | ||||||
Credit Facility | ||||||
Maximum borrowing capacity | $ 5 | |||||
Revolving Credit Facility | Swingline loan | ||||||
Credit Facility | ||||||
Maximum borrowing capacity | $ 10 |
Income Taxes - Unrecognized tax
Income Taxes - Unrecognized tax benefits (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Jul. 01, 2018 | Jun. 25, 2017 | Apr. 01, 2018 | |
Income Taxes | |||
Gross amount of unrecognized tax benefits | $ 116,200 | $ 112,700 | |
Unrecognized tax benefits, net of federal benefit | 91,800 | 87,200 | |
Amount of interest and penalties expense (benefit) related to tax uncertainties recognized, net of federal expense/benefit | 10,000 | $ 10,800 | |
Cumulative amount of interest and penalties related to tax uncertainties, net of federal expense/benefit | $ 255,900 | $ 250,500 |
Income Taxes - Changes in unrec
Income Taxes - Changes in unrecognized tax benefits (Details) | 3 Months Ended |
Jul. 01, 2018USD ($) | |
Reconciliation of unrecognized tax benefit amounts | |
Beginning balance of unrecognized tax benefit | $ 112,700 |
Increases related to current period tax positions | 3,500 |
Ending balance of unrecognized tax benefits | $ 116,200 |
Earnings Per Share (Details)
Earnings Per Share (Details) - shares | 3 Months Ended | |
Jul. 01, 2018 | Jun. 25, 2017 | |
Antidilutive Securities | ||
Options outstanding (in shares) | 589,000 | 620,000 |
Stock Options | ||
Antidilutive Securities | ||
Anti-dilutive equity awards (in shares) | 60,000 | 240,000 |
Performance Stock Units | ||
Antidilutive Securities | ||
Anti-dilutive equity awards (in shares) | 0 | 0 |
RSU awards | ||
Antidilutive Securities | ||
Anti-dilutive equity awards (in shares) | 0 | 0 |
Business Segments - Segment Act
Business Segments - Segment Activity (Details) | 3 Months Ended | |
Jul. 01, 2018USD ($)segmentproduct | Jun. 25, 2017USD ($) | |
Business Segments | ||
Number of reportable segment | segment | 2 | |
Number of product categories | product | 4 | |
Market unit activity | ||
Revenues | $ 150,919,000 | |
Gross Profit | 30,698,100 | $ 29,166,800 |
Directly allocable expenses | 17,246,000 | 15,678,000 |
Income before provision for income taxes | 1,562,400 | 1,216,700 |
Calculated under Revenue Guidance in Effect before Topic 606 | ||
Market unit activity | ||
Revenues | 140,011,000 | |
Segments | ||
Market unit activity | ||
Directly allocable expenses | 11,890,000 | 12,272,000 |
Income before provision for income taxes | 18,808,000 | 16,895,000 |
Public Carrier | ||
Market unit activity | ||
Revenues | 40,360,000 | |
Gross Profit | 5,626,000 | 4,128,000 |
Public Carrier | Calculated under Revenue Guidance in Effect before Topic 606 | ||
Market unit activity | ||
Revenues | 26,598,000 | |
Government | ||
Market unit activity | ||
Revenues | 9,231,000 | |
Gross Profit | 2,137,000 | 2,004,000 |
Government | Calculated under Revenue Guidance in Effect before Topic 606 | ||
Market unit activity | ||
Revenues | 8,445,000 | |
Private System Operators | ||
Market unit activity | ||
Revenues | 21,634,000 | |
Gross Profit | 4,865,000 | 4,607,000 |
Private System Operators | Calculated under Revenue Guidance in Effect before Topic 606 | ||
Market unit activity | ||
Revenues | 21,042,000 | |
Value-Added Resellers | ||
Market unit activity | ||
Revenues | 34,682,000 | |
Gross Profit | 8,915,000 | 8,961,000 |
Value-Added Resellers | Calculated under Revenue Guidance in Effect before Topic 606 | ||
Market unit activity | ||
Revenues | 35,040,000 | |
Retail | ||
Market unit activity | ||
Revenues | 45,012,000 | |
Gross Profit | 9,155,000 | 9,467,000 |
Retail | Calculated under Revenue Guidance in Effect before Topic 606 | ||
Market unit activity | ||
Revenues | 48,886,000 | |
Commercial Segment | ||
Market unit activity | ||
Revenues | 105,907,000 | |
Gross Profit | 21,543,000 | 19,700,000 |
Commercial Segment | Calculated under Revenue Guidance in Effect before Topic 606 | ||
Market unit activity | ||
Revenues | 91,125,000 | |
Commercial Segment | Segments | ||
Market unit activity | ||
Directly allocable expenses | 8,081,000 | 8,522,000 |
Income before provision for income taxes | 13,462,000 | 11,178,000 |
Commercial Segment | Public Carrier | ||
Market unit activity | ||
Revenues | 40,360,000 | |
Gross Profit | 5,626,000 | 4,128,000 |
Commercial Segment | Public Carrier | Calculated under Revenue Guidance in Effect before Topic 606 | ||
Market unit activity | ||
Revenues | 26,598,000 | |
Commercial Segment | Government | ||
Market unit activity | ||
Revenues | 9,231,000 | |
Gross Profit | 2,137,000 | 2,004,000 |
Commercial Segment | Government | Calculated under Revenue Guidance in Effect before Topic 606 | ||
Market unit activity | ||
Revenues | 8,445,000 | |
Commercial Segment | Private System Operators | ||
Market unit activity | ||
Revenues | 21,634,000 | |
Gross Profit | 4,865,000 | 4,607,000 |
Commercial Segment | Private System Operators | Calculated under Revenue Guidance in Effect before Topic 606 | ||
Market unit activity | ||
Revenues | 21,042,000 | |
Commercial Segment | Value-Added Resellers | ||
Market unit activity | ||
Revenues | 34,682,000 | |
Gross Profit | 8,915,000 | 8,961,000 |
Commercial Segment | Value-Added Resellers | Calculated under Revenue Guidance in Effect before Topic 606 | ||
Market unit activity | ||
Revenues | 35,040,000 | |
Retail Segment | ||
Market unit activity | ||
Revenues | 45,012,000 | |
Gross Profit | 9,155,000 | 9,467,000 |
Retail Segment | Calculated under Revenue Guidance in Effect before Topic 606 | ||
Market unit activity | ||
Revenues | 48,886,000 | |
Retail Segment | Segments | ||
Market unit activity | ||
Directly allocable expenses | 3,809,000 | 3,750,000 |
Income before provision for income taxes | 5,346,000 | 5,717,000 |
Retail Segment | Retail | ||
Market unit activity | ||
Revenues | 45,012,000 | |
Gross Profit | $ 9,155,000 | 9,467,000 |
Retail Segment | Retail | Calculated under Revenue Guidance in Effect before Topic 606 | ||
Market unit activity | ||
Revenues | $ 48,886,000 |
Business Segments - Product Cat
Business Segments - Product Category (Details) - USD ($) | 3 Months Ended | |
Jul. 01, 2018 | Jun. 25, 2017 | |
Revenue and Gross Profit from External Customers | ||
Revenues | $ 150,919,000 | |
Gross Profit | 30,698,100 | $ 29,166,800 |
Calculated under Revenue Guidance in Effect before Topic 606 | ||
Revenue and Gross Profit from External Customers | ||
Revenues | 140,011,000 | |
Base station infrastructure | ||
Revenue and Gross Profit from External Customers | ||
Revenues | 74,314,000 | |
Gross Profit | 15,716,000 | 14,057,000 |
Base station infrastructure | Calculated under Revenue Guidance in Effect before Topic 606 | ||
Revenue and Gross Profit from External Customers | ||
Revenues | 59,070,000 | |
Network systems | ||
Revenue and Gross Profit from External Customers | ||
Revenues | 22,777,000 | |
Gross Profit | 3,663,000 | 3,829,000 |
Network systems | Calculated under Revenue Guidance in Effect before Topic 606 | ||
Revenue and Gross Profit from External Customers | ||
Revenues | 23,837,000 | |
Installation, test and maintenance | ||
Revenue and Gross Profit from External Customers | ||
Revenues | 7,431,000 | |
Gross Profit | 1,473,000 | 1,419,000 |
Installation, test and maintenance | Calculated under Revenue Guidance in Effect before Topic 606 | ||
Revenue and Gross Profit from External Customers | ||
Revenues | 6,993,000 | |
Mobile device accessories | ||
Revenue and Gross Profit from External Customers | ||
Revenues | 46,397,000 | |
Gross Profit | $ 9,846,000 | 9,862,000 |
Mobile device accessories | Calculated under Revenue Guidance in Effect before Topic 606 | ||
Revenue and Gross Profit from External Customers | ||
Revenues | $ 50,111,000 |
Shares Withheld (Details)
Shares Withheld (Details) - USD ($) | 3 Months Ended | |
Jul. 01, 2018 | Jun. 25, 2017 | |
Shares Withheld | ||
Tax withholding for share based compensation | $ 111,100 | $ 64,800 |
Concentration of Risk (Details)
Concentration of Risk (Details) - Revenue - Supplier Concentration Risk | 3 Months Ended | |
Jul. 01, 2018 | Jun. 25, 2017 | |
Largest wireless infrastructure suppliers | ||
Concentration Risk | ||
Concentration risk (as a percent) | 14.20% | 11.80% |
Largest mobile device accessories suppliers | ||
Concentration Risk | ||
Concentration risk (as a percent) | 8.00% | 11.10% |