false 0001320760 0001320760 2024-05-14 2024-05-14
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
 
May 14, 2024
Date of Report (Date of earliest event reported)
 
TSS, INC.
(Exact name of registrant as specified in its charter)
 
 
Delaware
000-33627
20-2027651
(State or other jurisdiction of
incorporation)
(Commission File Number)
(I.R.S. Employer
Identification No.)
     
110 E. Old Settlers Road
    
Round Rock, Texas
  
78664
(Address of principal executive offices)
  
(Zip Code)
 
(512) 310-1000
(Registrant’s telephone number, including area code)
 
Not Applicable
(Former name, former address, and former fiscal year, if changed since last report.)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
Securities registered pursuant to Section 12(b) of this Act: None.
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
Emerging growth company  ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐
 
 
 
 
Item 2.02.
Results of Operations and Financial Condition.
 
On Tuesday, May 14, 2024, TSS, Inc. (the “Company”), issued a press release reporting certain financial results of the Company for the three months ended March 31, 2024. A copy of the press release is being furnished herewith as Exhibit 99.1.
 
The Company’s press release contains non-GAAP financial measures. Pursuant to the requirements of Regulation G, the Company has provided reconciliations within the press release of the non-GAAP financial measures to the most directly comparable GAAP financial measures. Disclosure regarding definitions of these measures used by the Company and why the Company’s management believes the measures provide useful information to investors is also included in the press release.
 
The Company will conduct a conference call to discuss its financial results on Tuesday, May 14, 2024, at 4:30 p.m. Eastern Time.
 
The information in this Report, including Exhibit 99.1 attached hereto, is furnished pursuant to Item 2.02 of this Current Report on Form 8-K. Such information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.
 
This report may contain “forward-looking statements” – that is, statements related to future – not past – events, plans, and prospects. In this context, forward-looking statements may address matters such as our expected future business and financial performance, and often contain words such as “guidance,” “prospects,” “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “should,” or “will.” Forward-looking statements by their nature address matters that are, to different degrees, uncertain. Particular uncertainties that could adversely or positively affect the Company's future results include: we may not have sufficient resources to fund our business and may need to issue debt or equity to obtain additional funding; our reliance on a significant portion of our revenues from a limited number of customers and our ability to diversify our customer base; risks relating to operating in a highly competitive industry; risks relating to supply chain challenges; risk related to changes in labor market conditions; risks related to the implementation of a new enterprise resource IT system; risk related to the development of our procurement and reseller services business; risks relating to rapid technological, structural, and competitive changes affecting the industries we serve; risks involved in properly managing complex projects; risks relating to the possible cancellation of customer contracts on short notice; risks relating our ability to continue to implement our strategy, including having sufficient financial resources to carry out that strategy; uncertainty related to current economic conditions including the impact of the COVID-19 pandemic and the related impact on demand for our services; and other risks and uncertainties disclosed in our filings with the Securities and Exchange Commission, including the Annual Report on Form 10-K for the fiscal year ended December 31, 2023. These uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking statements. We do not undertake to update our forward-looking statements.
 
Item 9.01.
Financial Statements and Exhibits.
 
99.1
104
Cover Page Interactive Data File (embedded within the Inline XBRL document).
 
 
 
 
S I G N A T U R E S
 
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
TSS, INC.
     
     
 
By:
/s/ John Penver
   
John Penver
   
Chief Financial Officer
 
 
Date: May 14, 2024
 
 

Exhibit 99.1

 

tss01.jpg

 

TSS, INC. REPORTS FIRST QUARTER 2024 RESULTS

 

 

142% revenue growth, 138% operating profit growth and 209% improvement in Adjusted EBIDTA compared to the first quarter of 2023

 

 

ROUND ROCK, TX – May 14, 2024 – TSS, Inc. (Other OTC: TSSI), a data center services company that integrates high-performance computing infrastructure and software, reported results for its first quarter ended March 31, 2024.

 

“We continued to deliver solid financial results with strong growth in revenues, gross profits, operating profits, and Adjusted EBITDA compared to the prior year,” said Darryll Dewan, CEO of TSS. “Executing our strategic growth initiatives is positioning our company to take advantage of the increase in demand for Generative AI computing solutions. Our production capacity has increased to capitalize on this trend, and we will drive further growth in revenues and profits in 2024”.

 

First Quarter Highlights (unaudited):

 

 

●

First quarter 2024 revenue of $15.9 million compared with $6.6 million in the first quarter of 2023. Procurement revenues were $11.6 million in the first quarter of 2024 compared to $1.7 million in the first quarter of 2023.
 

●

Increased gross profits by $1 million or 61% compared to the first quarter of 2023
 

●

Improved Operating income by $918,000 to income of $253,000 in the first quarter of 2024 compared to an operating loss of $665,000 in the first quarter of 2023.
 

●

Net income of $15,000 or $0.00 per share in the first quarter of 2024 compared to a net loss of $786,000 or $(0.04) per share in the first quarter of 2023.
 

●

Adjusted EBITDA of $475,000 in the first quarter of 2024 compared with Adjusted EBITDA loss of $436,000 in the first quarter of 2023.

 

 

Darryll Dewan, CEO of TSS, continued, “TSS is prepared to benefit from the growth in data center infrastructure spending that we are witnessing. New service offerings have been created that are extensions of our core capabilities. As a result of our operational improvements and investments in growth and given the state of this vibrant technology environment, we will continue to drive improved financial results in 2024 and beyond.”

 

 
 

 

Quarterly Conference Call Details

 

The Company has scheduled a conference call to discuss the first quarter 2024 financial results for Tuesday, May 14, 2024, at 4:30 PM Eastern. To participate on the conference call, please dial 1-888-596-4144 toll free from the U.S., or 1-646-968-2525 for international callers. The event ID number is 5752570. Investors may also access a live audio web cast of this conference call under the “events” tab on the investor relations section of the Company's website at www.tssiusa.com.

 

An audio replay of the conference call will be available approximately four hours after the conclusion of the call and will be made available until June 14, 2024. The audio replay can be accessed at the following url: EVENT | ECHO PLAYBACK (registrations.events)

 

The conference ID to access the digital playback is 5752570. Additionally, a replay of the webcast will be available on the Company’s website approximately two hours after the conclusion of the call and will remain available for 30 calendar days.

 

 

About Non-GAAP Financial Measures

 

Adjusted EBITDA is a supplemental financial measure not defined under Generally Accepted Accounting Principles (GAAP). We define Adjusted EBITDA as net income (loss) before interest expense, income taxes, depreciation and amortization, impairment loss on goodwill and other intangibles, stock-based compensation, provision for bad debts and certain extraordinary items. We present Adjusted EBITDA because we believe this supplemental measure of operating performance is helpful in comparing our operating results across reporting periods on a consistent basis by excluding items that may, or could, have a disproportionately positive or negative impact on our results of operations in any particular period. We also use Adjusted EBITDA as a factor in evaluating the performance of certain management personnel when determining incentive compensation.

 

Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies. Adjusted EBITDA, while providing useful information, should not be considered in isolation or as an alternative to net income or cash flows as determined under GAAP. Consistent with Regulation G under the U.S. federal securities laws, Adjusted EBITDA has been reconciled to the nearest GAAP measure, and this reconciliation is located under the heading “Adjusted EBITDA Reconciliation” following the Consolidated Statements of Operations included in this press release.

 

 

About TSS, Inc.

 

TSS specializes in simplifying the complex. The TSS mission is to streamline the integration and deployment of high-performance computing infrastructure and software, ensuring that end users quickly receive and efficiently utilize the necessary technology. Known for flexibility, the company builds, integrates, and deploys custom, high-volume solutions that empower data centers and catalyze the digital transformation of generative AI and other leading-edge technologies essential for modern computing, data, and business needs. TSS’s reputation is built on passion and experience, quality, and fast time to value. As trusted partners of the world's leading data center technology providers, the company manages and deploys billions of dollars in technology each year. For more information, visit www.tssiusa.com.

 

 
 

 

Forward Looking Statements

 

This press release may contain “forward-looking statements” -- that is, statements related to future -- not past -- events, plans, and prospects. In this context, forward-looking statements may address matters such as our expected future business and financial performance, and often contain words such as “guidance,” “prospects,” “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “should,” or “will.” Forward-looking statements by their nature address matters that are, to different degrees, uncertain. Particular uncertainties that could adversely or positively affect the Company's future results include: we may not have sufficient resources to fund our business and may need to issue debt or equity to obtain additional funding; our reliance on a significant portion of our revenues from a limited number of customers and our ability to diversify our customer base; risks relating to operating in a highly competitive industry; risks relating to supply chain challenges; risk related to changes in labor market conditions; risks related to the implementation of a new enterprise resource IT system; risk related to the development of our procurement services business; risks relating to rapid technological, structural, and competitive changes affecting the industries we serve; risks involved in properly managing complex projects; risks relating to the possible cancellation of customer contracts on short notice; risks relating our ability to continue to implement our strategy, including having sufficient financial resources to carry out that strategy; uncertainty related to current economic conditions including the impact of the COVID-19 pandemic and the related impact on demand for our services; and other risks and uncertainties disclosed in our filings with the Securities and Exchange Commission, including the Annual Report on Form 10-K for the fiscal year ended December 31, 2023. These uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking statements. We do not undertake to update our forward-looking statements.

 

Company Contact:

TSS, Inc.

John Penver, CFO

Phone: (512) 310-1000

 

 
 

 

TSS, Inc.

Consolidated Balance Sheets

(In thousands except par values)

 

   

March 31,

    

December 31,

  
   

2024

    

2023

  
   

(unaudited)

          

Assets

                

Current Assets

                

Cash and cash equivalents

   $ 14,383     $ 11,831  

Contract and other receivables, net

     4,570       3,527  

Costs and estimated earnings in excess of billings on uncompleted contracts

     487       1,310  

Inventories, net

     848       2,343  

Prepaid expenses and other current assets

     202       302  

Total current assets

     20,490       19,313  

Property and equipment, net

     617       628  

Lease right-of-use assets

     3,973       4,062  

Goodwill

     780       780  

Intangible assets, net

     -       35  

Other assets

     931       817  

Total assets

   $ 26,791     $ 25,600  

Liabilities and Stockholders’ Equity

                

Current Liabilities

                

Accounts payable and accrued expenses

   $ 16,290     $ 14,362  

Deferred revenues

     2,605       3,370  

Current portion of lease liabilities

     745       688  

Total current liabilities

     19,640       18,420  

Non-current portion of lease liabilities

     3,492       3,631  

Total liabilities

     23,132       22,051  

Stockholders’ Equity

                

Preferred stock- $.0001 par value; 1,000 shares authorized at March 31, 2024 and December 31, 2023; none issued

     -       -  

Common stock- $.0001 par value, 49,000 shares authorized at March 31, 2024 and December 31, 2023: 23,909 and 23,533 shares issued at March 31, 2024 and December 31, 2023, respectively

     2       2  

Additional paid-in capital

     72,253       71,103  

Treasury stock 1,882 and 1,762 shares at cost at March 31, 2024 and December 31. 2023, respectively

     (2,300 )     (2,245 )

Accumulated deficit

     (66,296 )     (66,311 )

Total stockholders' equity

     3,659       3,549  

Total liabilities and stockholders’ equity

   $ 26,791     $ 25,600  

 

 
 

 

TSS, Inc.

Condensed Consolidated Statements of Operations

(In thousands except per-share values, unaudited)

 

   

Three Months Ended

March 31,

  
    2024     2023  

Results of Operations:

                

Revenue

   $ 15,892     $ 6,574  

Cost of revenue

     13,178       4,888  

Gross profit

     2,714       1,686  

Operating expenses:

                

Selling, general and administrative

     2,389       2,262  

Depreciation and amortization

     72       89  

Total operating costs

     2,461       2,351  

Operating income (loss)

     253       (665 )

Interest expense, net

     (228 )     (112 )

Income (loss) before income taxes

     25       (777 )

Income tax expense

     10,5       9  

Net income (loss)

   $ 15     $ (786 )
                 

Basic and diluted net income (loss) per share

   $ 0.00     $ (0.04 )

 

 
 

 

TSS, Inc.

Adjusted EBITDA Reconciliation

(In thousands, unaudited)

 

   

Three Months Ended

March 31,

  
    2024    

2023

  
                 

Net income (loss)

   $ 15     $ (786 )
                 

Interest expense (income), net

     228       112  

Depreciation and amortization

     72       89  

Income tax expense

     10       9  

EBITDA profit (loss)

   $ 325     $ (576 )

Stock based compensation

     150       140  

Adjusted EBITDA profit (loss)

   $ 475     $ (436 )

 

 
v3.24.1.1.u2
Document And Entity Information
May 14, 2024
Document Information [Line Items]  
Entity, Registrant Name TSS, INC.
Document, Type 8-K
Document, Period End Date May 14, 2024
Entity, Incorporation, State or Country Code DE
Entity, File Number 000-33627
Entity, Tax Identification Number 20-2027651
Entity, Address, Address Line One 110 E. Old Settlers Road
Entity, Address, City or Town Round Rock
Entity, Address, State or Province TX
Entity, Address, Postal Zip Code 78664
City Area Code 512
Local Phone Number 310-1000
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Entity, Emerging Growth Company false
Amendment Flag false
Entity, Central Index Key 0001320760
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