Investor Presentation J u n e 2 0 2 0
FORWARD- Certain statements made by us during this presentation are forward-looking statements within LOOKING the meaning of federal securities laws. TESSCO’s actual results may differ materially from those statements 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. 2
TESSCO - TODAY A Value-Added Distributor T E C H N I C A L H U N D R E D S O F T H O U S A N D S P R O F I C I E N C Y M A N U F A C T U R E R O F C U S T O M E R S P A R T N E R S Carrier Ecosystem S A L E S & C R E D I T M A R K E T I N G C A P A C I T Y E X P E R T I S E VARs & Integrators Retailers S U P E R I O R L O G I S T I C S C A P A B I L I T I E S
Building Our Wireless World, Together C O M PA N Y FA C T S 1982 $540.3M Tessco Founded Revenue (FY2020) 8,500 350 Monthly Buying Manufacturer Customers Partners TL9000 Over 675 Certified Business Team Members $89.09M $44.6M Enterprise Market Cap Value 4
Impact of COVID-19 Carrier Ecosystem VAR & Integrator Retail • Minimal Impact Overall • Moderate Impact • Significant Impact • Projects affected (e.g. • Oil and Gas segments • Further declines/softness in-building/venue) are impacted by other factors in overall Retail segments coming back • Crew access to • Improved market venues/sites share • Improved Sales Discipline Helping Tessco manage 5 overall impact
RETAIL STRATEGY FY19 FY19 FY20 FY20 Q4 Q3 Q4 Key Customer Tessco: New Direction Global Pandemic Global Retail Decline Previously, a sizable Loss of New CEO Further tightening and profitable Key Customer of Fiscal Measures Strategic Review of business Company Assets & Reserves for Retail US Retails Close Further Decline in Growth Strategy A/R and Inventory Tessco’s Retail 9,300 Stores “Managed Decline” Implementation of Business; Global Retailers close Strict Fiscal Measures of Retail 16,000 Stores Increased Inventory and E&O Improve balance sheet and cash flow by reducing expenses and working capital tied to Retail; Redeploy capital to more profitable Commercial business 6
COMMERCIAL SEGMENT Market Dynamics
TECHNOLOGICAL CHANGE DRIVING EXPONENTIAL INDUSTRY GROWTH… $130B $16.3B to be CBRS gear to Wi-Fi 6 chipset Expect 19% to be spent on spent globally exceed $850M global CAGR in US 5G Global on Private LTE in US by 2024 shipments to industrial IoT by Buildout by 2025 more than triple 2026 by 2024 YOY in 2020 Source: ABI 8
CREATING COMPLEXITY FOR OUR CUSTOMERS… Reallocation of Material
…AND THUS CREATING GROWTH OPPORTUNITIES FOR TESSCO Deployment of new technologies is New applications of wireless technology are introducing a new level of complexity greatly increasing the addressable markets • • • Utilities Government Inside buildings, stadiums, manufacturing facilities, etc. • • Oil & Gas Manufacturing • Densification of small cells • • • Transportation Mining Requirement for improved aesthetics 10
COMMERCIAL SEGMENT Why will we win?
THREE-PRONGED APPROACH TO CAPITALIZE ON THESE OPPORTUNITIES VALUE-ADDED SOFTWARE & SERVICE DISTRIBUTION OFFERINGS 12
SUPERIOR OFFER FOR CARRIERS Master BOM Development and Advanced Stocking Virtual Allocation, Site Kitting, JIT Delivery, Consolidated Shipments Forecasting & Demand Planning Dedicated Resources to Manage Program Execution, Weekly Program Review Calls Standardized Ordering Process Order Management & Logistics Reporting Order Status Reporting, Spend Reporting, KPIs Program Management OASIS, On-Demand Pricing, Availability and Order Status Addressing Carriers’ “Spend Management” Challenges Demonstrated Market Share Gains in FY 4Q20 Well positioned for 5G in Calendar 2021
A COMPLETE OFFER FOR VARS & INTEGRATORS Helping Suppliers drive spec in the segment; Constructing full solutions needed by customers Environment Friendly and Aesthetic Solutions, ( ) From Specifications, To Solutions Dedicated Resources to Manage Program Execution, Weekly Program Review Calls OASIS and Lifecycle Services Ventev Enclosures, Power, Customization RF and Other System Design DAS, Power and Site Design Services Program Management OASIS, Lifecycle Services: Monitoring, Asset Management and Warranty Services Sales Restructuring Complete. Re-invigorating Business with End-Users (Utility, Govt). Well positioned for IoT and CBRS Growth Opportunities
INVESTING IN VENTEV TO ENABLE SMALL CELLS & COVERAGE “ By partnering with Cisco in this program, WIRELESS INFRASTRUCTURE (Cisco’s Design In Program), Ventev can offer Experts in Concealed Wireless Solutions our customers a turnkey solution, alongside accessories, software, and services .” Wi-Fi Enclosures Wi-Fi Antennas “ Ventev is pleased to begin this partnership with Cable Assemblies Rajant , providing our customers with unique, Power Systems value-added solutions that ease their pain points. These new products enable customers to Turnkey Integrated Systems maintain complete and optimal connectivity Base Site Infrastructure across any dynamic environment. This allows for Tools & Supplies continuous data monitoring in real-time, which will ultimately enhance and improve operations overall .” Product/Engineering Focus -- Higher Margins -- Industrial Solutions 15
INVESTMENTS IN TECHNOLOGY • Speed, efficiency and innovation. Enable SG&A reductions IT • Create a digital culture and processes Transformation • Project expected to complete in FY21 • Provide best in class B2B digital experience • Grow web (self-serve) business: revenue, customers and Improve repeat business tessco.com • Ambition: Trusted source of information for the wireless infrastructure construction eco-system Digital culture enabling customer intimacy and innovation “Easy to do business with”
SUMMARY
FY 2021 Company Imperatives PROFITABILITY IN FY22 Managed Decline of Retail PATHWAY TO 1. Create technology efficiencies Complete 2. Reduce debt and improve IT balance sheet Transformation 3. Establish growth trajectory for Commercial business 4. Create bandwidth to invest Improve in additional business drivers and partnerships TCOM 5. Goal: EBITDA positive in 2H of FY21 Improve Profitability Run Rate Note: Management incentives aligned with imperatives
EXPLOSIVE GROWTH IN THE WORLD OF WIRELESS FOCUS ON MORE PROFITABLE WHY COMMERCIAL BUSINESS INVEST IN WELL POSITIONED TO TESSCO? PROVIDE DISRUPTIVE ;l OFFERINGS NEW MANAGEMENT WITH PROVEN EXPERIENCE
T H A N K Y O U
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