TSS, Inc. Reports First Quarter 2021 Results


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ROUND ROCK, Texas, May 17, 2021 (GLOBE NEWSWIRE) — TSS, Inc. (Other OTC: TSSI), a data center facilities and technology services company, reported results for its first quarter ended March 31, 2021.

First Quarter Highlights:

  • First quarter 2021 revenue of $5.2 million compared with $10.6 million in the first quarter of 2020. Reseller revenues were $2.2 million in the first quarter of 2021 compared with $6.8 million in the first quarter of 2020.
  • Gross margin of 25{1925535ef93c9dffc421d6900bc5065e73e6f572a39640a8e58aae02194bf0cb} in the first quarter of 2021 compared with 15{1925535ef93c9dffc421d6900bc5065e73e6f572a39640a8e58aae02194bf0cb} in the first quarter of 2020.
  • Operating loss of $607,000 in the first quarter of 2021 compared to operating loss of $277,000 in the first quarter of 2020.
  • Net loss of $699,000 or $0.04 per share in the first quarter of 2021 compared to net loss of $368,000 or $0.02 per share in the first quarter of 2020.
  • Adjusted EBITDA loss of $334,000 in the first quarter of 2021 compared with Adjusted EBITDA loss of $49,000 in the first quarter of 2020.

“We continue to see fluctuations in our revenue and profitability quarter to quarter. These fluctuations are primarily due to the timing of delivery of new projects We anticipate these quarterly fluctuations to continue throughout the year,” said Anthony Angelini, President and Chief Executive Officer of TSS. “We are seeing a significant number of large opportunities within all of our business units. Our expectation is the delivery of these opportunities will result in significant positive results in the second half of the year and into next year.”

Quarterly Conference Call Details

The Company has scheduled a conference call to discuss the first quarter 2021 financial results for Monday, May 17, 2021 at 4:30 PM Eastern. To participate on the conference call, please dial 877-691-2551 toll free from the U.S., or 630-691-2747 for international callers. The conference code is 50165343#. 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 one hour after the conclusion of the call and will be made available until June 17, 2021. The audio replay can be accessed at the following url: https://onlinexperiences.com/Launch/QReg/ShowUUID=303414BB-CB0A-4B6B-B9B4-0AD19D7A9ADF&LangLocaleID=1033. The passcode to access the digital playback is 50165343. 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, and provision for bad debts. 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 non-cash items that may, or could, have a disproportionate 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 is a trusted single source provider of mission-critical planning, design, system integration, deployment, maintenance and evolution of data centers facilities and information infrastructure. TSS specializes in customizable end to end solutions powered by industry experts and innovative services that include technology consulting, engineering, design, construction, operations, facilities management, technology system installation and integration, as well as maintenance for traditional and modular data centers. For more information, visit www.tssiusa.com or call 888-321-4877.

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; risks relating to operating in a highly competitive industry; risks relating to the failure to maintain effective internal control over financial reporting; 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; risks relating to our ability to meet all of the terms and conditions of our debt obligations; 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, 2020. 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,
          2021       2020  
        (unaudited)    
Assets          
Current Assets      
  Cash and cash equivalents   $ 8,903     $ 19,012  
  Contract and other receivables, net     640       915  
  Costs and estimated earnings in excess of billings on uncompleted contracts     528       806  
  Inventories, net     290       197  
  Prepaid expenses and other current assets     231       58  
  Total current assets     10,592       20,988  
Property and equipment, net     549       662  
Lease right-of-use asset     712       876  
Goodwill       780       780  
Intangible assets, net     194       217  
Other assets       316       285  
  Total assets   $ 13,143     $ 23,808  
Liabilities and Stockholders’ Equity      
Current Liabilities        
  Current portion of lease liabilities     $ 763     $ 748  
  Accounts payable and accrued expenses     2,860       13,374  
  Deferred revenues     4,607       3,962  
  Total current liabilities     8,230       18,084  
Long-term borrowings     2,282       2,234  
Non-current portion of Lease liabilities, less current portion     17       208  
Non-current portion of deferred revenues     74       99  
  Total liabilities     10,603       20,625  
Stockholders’ Equity        
  Preferred stock- $.0001 par value; 1,000 shares authorized at March 31, 2021 and December 31, 2020; none issued     –        –   
  Common stock- $.0001 par value, 49,000 shares authorized at March 31, 2021 and December 31, 2020: 19,404 and 19,055 shares issued at March 31, 2021 and December 31, 2020, respectively     2       2  
  Additional paid-in capital     70,214       70,070  
  Treasury stock 1,198 and 1,097 shares at cost at March 31, 2021 and December 31, 2020, respectively     (1,962 )     (1,874 )
  Accumulated deficit     (65,714 )     (65,015 )
  Total stockholders’ equity     2,540       3,183  
  Total liabilities and stockholders’ equity   $ 13,143     $ 23,808  

TSS, Inc. Condensed Consolidated Statements of Operations (In thousands except per-share values, unaudited)

          Three Months Ended March 31,  
          2021     2020  
Results of Operations:              
  Revenue     $ 5,170     $ 10,597  
  Cost of revenue, excluding depreciation and amortization   3,865     8,996  
               
Gross profit 1,305     1,601
  Operating expenses:              
    Selling, general and administrative   1,775     1,759  
    Depreciation and amortization   137       119    
  Total operating costs     1,912     1,878  
  Operating income (loss)     (607     (277
  Interest income (expense), net     (85   (82
  Loss before income taxes     (692   (359
  Income tax expense     7     9  
  Net loss     $ (699   $ (368
                   
Basic and diluted loss per share:              
  Basic & diluted net loss per share     $ (0.04   $ (0.02

TSS, Inc. Adjusted EBITDA Reconciliation (In thousands, unaudited)

  Three Months Ended March 31,
    2021       2020  
               
Net loss $ (699 )   $  (368 )
               
Interest expense, net   85       82  
Depreciation and amortization   137       119  
Income tax expense   7       9  
EBITDA $ (470 )   $ (158 )
               
Stock based compensation   136       109  
Provision for bad debts          
Adjusted EBITDA $  (334 )   $ (49 )
               

Source: TSS, Inc.