Concentration of Risk

12 Months Ended

Apr. 01, 2012

Concentration of Risk [Abstract]

Concentration of Risk

Note 18. Concentration of Risk

Sales to customers and purchases from vendors are largely governed by individual sales or purchase orders, so there is no guarantee of future business. In some cases, the Company has more formal agreements with significant customers or vendors, but they are largely administrative in nature and are terminable by either party upon several months' or otherwise short notice and they typically contain no obligation to make purchases from TESSCO. In the event a significant customer decides to make its purchases from another source, experiences a significant change in demand internally or from its own customer base, becomes financially unstable, or is acquired by another company, the Company's ability to generate revenues from these customers may be significantly affected, resulting in an adverse affect on its financial position and results of operations.

The Company is dependent on third-party equipment manufacturers, distributors and dealers for all of its supply of wireless communications equipment. For fiscal years 2012, 2011 and 2010, sales of products purchased from the Company's top ten vendors accounted for 43%, 40% and 40% of total revenues, respectively. In fiscal year 2012 and fiscal year 2011, sales of product purchased from the Company's largest vendor, Otter Products LLC, a significant portion of which are sold to the Company's largest customer AT&T Mobility, accounted for approximately 17% and 13% of total revenues, respectively. In fiscal year 2010, the Company did not have any vendors that accounted for 10% of more of its total revenues. The Company is dependent on the ability of its vendors to provide products on a timely basis and on favorable pricing terms. Although the Company believes that alternative sources of supply are available for many of the product types it carries, the loss of certain principal suppliers, or the loss of one or more of certain ongoing affinity relationships, could have a material adverse effect on the Company.

As noted, the Company's future results could also be negatively impacted by the loss of certain customers, and/or vendor relationships. For fiscal years 2012, 2011 and 2010, sales of products to the Company's top ten customer relationships accounted for 45%, 37% and 40% of total revenues, respectively. In fiscal years 2012, 2011 and 2010, sales to the Company's top customer relationship, AT&T Mobility, a top tier cellular carrier purchasing phone accessories classified in the Retail segment, accounted for approximately 36%, 28% and 32% of total revenues, respectively (also see Note 19).