Tessco Technologies Inc. said it has obtained an Ex Parte injunction enjoining Andrew Corp. from terminating its Distributor Agreement with the company.
The Sparks, Md.-based distributor disclosed in its earnings release for the fourth quarter and fiscal year-end that it had received a 30-day notice of termination from Andrew. The distribution agreement reportedly was supposed to run until October of next year.
“Andrew’s action is very unfortunate,” said Robert Barnhill, Jr., Tessco’s chairman and chief executive officer as his company filed the injunction plus a lawsuit seeking a declaration that Andrew violated the Maryland Antitrust Act.
“Andrew has*…*apparently taken exception to Tessco’s growth and global strategy of offering the market a `total source’ choice of product alternatives,” he said.
Tessco attorney Steve Shadowen added, “The complaint alleges that the termination resulted from Tessco’s decision not to carry Andrew’s products exclusively and that Andrew’s insistence on an exclusive distributorship is part of a plan to exclude its competitors from the marketplace.”
Barnhill noted that his company has been reducing its dependence on Andrew products by building sales in other product classes as well as alternative offerings. Nevertheless, he warned that Tessco’s revenue and earnings could be negatively impacted.
The company reported record revenues and net income for fiscal 1996 ending March 29.
Revenues for the fourth quarter totaled $27.3 million, up 50 percent from $18.2 million for the corresponding prior year quarter. Net income for the quarter was $1.1 million, or 24 cents per share, up from $687,000, or 15 cents per share, for the corresponding prior year quarter.
Year-end revenues were $92.3 million, a 24 percent increase from $74.5 million for fiscal 1995. Net income was $4 million, or 88 cents per share, up from $2.5 million, or 64 cents per share, in 1995.
