Dear Fellow Shareowners,

June 1, 2001

Our fiscal year 2001 came in like a lion and went out like a lamb! At the end of our third quarter, year-to-date revenues were up 41%. Then, after seven consecutive quarters of record revenues, the economy and the wireless industry slowed, impacting our fourth quarter results. We ended the year with revenue growth of 32%.

Throughout the year we were investing in growth and spending on premium fulfillment capacity to keep up with our customers' delivery expectations. As a result, when revenues slowed, operating productivity declined, and we ended the year with a 6% earnings decline over last year.

Going forward, our goal is simple: grow earnings and return on equity regardless of market conditions. We have the value proposition, balance sheet strength and operational capability to achieve this goal. All efforts will be focused on driving productivity and market share by leveraging the growth drivers I outlined in my letter to you last year. Here is how these drivers have been impacting our performance:

Growth Driver #1: Wireless communications' convergence with wireline, computing and Internet technologies and networks ... Fiscal year 2001 results were driven primarily from core PCS, cellular and paging wireless infrastructure and subscriber demand. The convergence of wireline, computing and Internet has not yet materialized into meaningful sales results for us. During the year, we configured a full end to end solution from "best of breed" products for in-building systems and last mile interconnect. This offering will allow businesses and consumers to achieve fixed broadband data, video and voice communications cost effectively, and generate a new TESSCO revenue stream when capital availability increases. Naturally, we continued to enhance our total product line and solutions offerings. Nine percent of total fiscal year 2001 revenues and 14% of fourth quarter revenues were generated from sales of new products added within the past 12 months.

Growth Driver #2: Demand for real-time knowledge for decision-making ... Knowledge to make the best-informed decisions and allocate resources to the most productive use has become extremely important due to the proliferation of new technologies and products, and capital constraints. We achieved a significant goal this year by converting our entire product data file to an Oracle-based, Wireless Product Knowledge System (WPKS). WPKS allows presentation and comparison of product and solution choices and complete "how to use" information. WPKS content is presented in print, electronically and on the Internet and provides the foundation of the TESSCO "Knowledge Tools": Buyer's Guide™, now known as the Solutions Guide, TESSCO.com^®, and The Wireless Journal^®. The TESSCO Knowledge System is the foundation of delivering our value proposition to both our manufacturers and customers.

Growth Driver #3: Quest for total solutions and improved supply chain processes and economics ... TESSCO's Vital Link™ role in the supply chain of the wireless communication industry should continue to drive market share. We believe more and more of our customers and manufacturers are looking to TESSCO to help them better deploy their capital to revenue generation projects, not inventory ownership, and lower their total costs. This value proposition should allow us to increase the number of monthly buying customers and the product categories they purchase. It should also encourage more manufacturers to utilize TESSCO for the marketing, sales and distribution of their products.

Growth Driver #4: Internet technology and the revolution itself ... During this past year, TESSCO truly advanced the deployment of Web-based ecommerce. Today TESSCO.com^® offers customers a better way of doing business and represents a significant generator of our order volume. It is now beginning to reduce our customer service and transaction expenses. Using our expertise, we also build and manage affinity partners' Web sites, and handle their inventories, deliveries and customer service. Ebusiness technology is allowing us to more efficiently organize our business and boost productivity for our customers, manufacturers and TESSCO.

Growth Driver #5: Leverage of our core knowledge, marketing, sales and delivery engine ... While we built capacity and invested in growth, we lost productivity this past year. As mentioned previously, our focus now is to regain our historical productivity levels. We are using a disciplined methodology throughout TESSCO that orchestrates resources and opportunities in tune with our overall goals. This total system allows us to manage each component of our business to maximize the performance of the company as a whole. Our new year will bring improved marketing innovation and operational excellence and, we believe, the accomplishment of our goals. Please review the next page of this report, where the members of our Leadership Operating Team discuss the critical components in achieving our fiscal year goals.

I thank you, our shareowners, team members, customers, partners and manufacturers, for your support in fiscal year 2001 and continued commitment to our vision and success. Sincerely,

Robert B. Barnhill, Jr.
Chairman, President and Chief Executive Officer
Barnhill@tessco.com