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ADDvantage Technologies Group announced that its subsidiary, Tulsat, has entered into a new system integrator/master agent agreement with the networking major Cisco. The master agent agreement enables Tulsat to sell both IT and service provider video technology group related products in the U.S.

This agreement replaces its prior distributor agreement with Cisco (News - Alert), which expired December 20, 2010, company officials said.

The main advantage of the new agreement is that as a Cisco Premier Partner, Tulsat will be able to sell both IT and SPVTG-related products as compared to only SPVTG products.

According to the new agreement, Tulsat will purchase Cisco products through a primary stocking distributor as against purchasing directly from Cisco under the previous agreement.

The change in agreement conditions will result in marginal increase in product costs, according to company officials. However, it will reduce the company's inventory, storage, shipping and handling costs.

The new agreement will change parts of Tulsat's distribution model. Tulsat is looking at implementing an effective distribution process with Cisco's primary stocking distributor to ensure their customers' equipment needs are met.

The company is confident that the change in the distribution model will not affect the revenues of Tulsan as the company had started making changes some time ago. These changes were in line with Cisco's earlier agreements.

As part of this agreement, Tulsat will become a Cisco Premier Partner. Tulsat has already committed the manpower and resources to achieve the Cisco certifications.

“This new model is expected to reduce our inventory levels required for Cisco equipment, decreasing our costs associated with carrying inventory and increasing our liquidity position,” said Ken Chymiak, president and CEO of ADDvantage Technologies, in a statement.

“While we will need to adjust our sales and marketing model for Cisco products under this agreement, we are confident in our sales team's established network of customers and high level of customer service to drive sales under this new structure,” Chymiak added

ADDvantage Technologies recently announced that its revenue for the three month period ended September 30, 2010 was $11.7 million compared to $10.2 million in the same period a year ago, an increase of 15 percent.