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TSS, Inc. Reports Second Quarter 2018 Results

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ROUND ROCK, Texas, Aug. 14, 2018 (GLOBE NEWSWIRE) -- TSS, Inc. (OTC:TSSI), a data center facilities and technology services company, reported results for its second quarter ended June 30, 2018.

Second Quarter Highlights:

  • Second quarter 2018 revenue of $5.4 million compared with $4.2 million in the second quarter of 2017 and $4.8 million in the first quarter of 2018.
  • Gross margin of 38% in the second quarter of 2018 compared with 42% in the second quarter of 2017.
  • Reduced selling, general and administrative expenses by $39,000 or 3% compared to the second quarter of 2017.
  • Achieved operating income of $449,000 in the second quarter of 2018 compared to operating income of $74,000 in the second quarter of 2017.
  • Net income of $319,000 or $0.02 per share in the second quarter of 2018 compared to a net loss of $24,000 or $0.00 per share in the second quarter of 2017.
  • Adjusted EBITDA of $615,000 compared with Adjusted EBITDA of $223,000 in the second quarter of 2017.

"We continue to see the growth in revenue and profitability as we anticipated and are pleased with our results," said Anthony Angelini, President and Chief Executive Officer of TSS. "We are anticipating opportunities to accelerate our growth rate further as we complete 2018 and move into 2019."

Quarterly Conference Call Details

The Company has scheduled a conference call to discuss the second quarter 2018 financial results for Tuesday, August 14, 2018 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 47324669#. 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 http://ir.totalsitesolutions.com/events.cfm.

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 September 14, 2018. The audio replay can be accessed by dialing 1-888-843-7419 in the U.S. or 630-652-3042 toll free then enter conference ID number 4732 4669#. 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 measures 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.totalsitesolutions.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: our independent registered public accounting firm's reports on our 2016 and 2017 financial statements contain an explanatory paragraph that expresses substantial doubt about our ability to continue as a going concern; 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 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, 2017. 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)

      June 30,     December 31,
      2018   2017
      (unaudited)    
Assets          
Current Assets      
Cash and cash equivalents   $ 3,312     $ 2,268  
Contract and other receivables, net     1,524       990  
Costs and estimated earnings in excess of billings on uncompleted contracts     325       223  
Inventories, net     97       134  
Prepaid expenses and other current assets     270       114  
Total current assets     5,528       3,729  
Property and equipment, net     423       418  
Goodwill       1,907       1,907  
Intangible assets, net     494       561  
Other assets       109       112  
Total assets   $ 8,461     $ 6,727  
Liabilities and Stockholders' Equity      
Current Liabilities        
Accounts payable and accrued expenses   $ 2,901     $ 2,841  
Deferred revenues     3,406       2,494  
Total current liabilities     6,307       5,335  
Convertible notes, less current portion, net     1,748       1,656  
Deferred revenues – noncurrent portion     150       -  
Other liabilities     48       41  
Total liabilities     8,253       7,032  
Stockholders' Equity (Deficit)        
Preferred stock- $.0001 par value; 1,000 shares authorized at March 31, 2018 and December 31, 2017; none issued     -       -  
Common stock- $.0001 par value, 49,000 shares authorized at June 30, 2018 and December 31, 2017: 16,286 and 16,316 shares issued at June 30, 2018 and December 31, 2017, respectively     2       2  
Additional paid-in capital     69,001       68,886  
Treasury stock 769 shares at cost at June 30, 2018 and December 31, 2017, respectively     (1,536 )     (1,536 )
Accumulated deficit     (67,259 )     (67,657 )
Total stockholders' equity (deficit)     208       (305 )
Total liabilities and stockholders' equity (deficit)   $ 8,461     $ 6,727  
 


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


        Three Months Ended
 June 30,
  Six Months Ended
 June 30,
         2018     2017      2018     2017 
Results of Operations:                        
Revenue       $   5,367     $   4,198     $ 10,216     $ 8,587  
Cost of revenue, excluding depreciation and amortization   3,302       2,444       6,285       4,974  
Gross profit, excluding depreciation and amortization   2,065       1,754       3,931       3,613  
Operating expenses:                              
Selling, general and administrative      1,516       1,555         3,093       3,298  
Depreciation and amortization         100         125         206         263  
Gain on sale of business component       -       -       -       (321 )
Total operating costs         1,616         1,680       3,299         3,240  
Operating income       449         74       632       373  
Interest income (expense), net         (111 )       (74 )       (204 )       (151 )
Other income (expense), net             (3 )           (3 )
Income (loss) before income taxes        338         (3 )      428       219  
Income tax expense       19       21       30       (10 )
Net income (loss)      $   319     $ (24 )   $ 398     $   229  
                 
Basic net income (loss) per Share:     $   0.02     $ (0.00 )   $ 0.02     $ 0.01  
 Diluted net income (loss) per share     $   0.02     $   (0.00 )   $   0.02     $   0.01  
 


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

      Three Months Ended June 30,   Six Months Ended June 30,
      2018   2017   2018   2017
                   
Net income (loss)   $ 319   $ (24)   $ 398   $ 229
                   
Interest income, net   111     74     204     151
Depreciation and amortization   100     125     206     263
Income tax expense     19     21     30     (10)
 EBITDA profit $ 549   $ 196   $ 838   $ 633


Stock based compensation
    66     27     115     37
Provision for bad debts     -     -     -     2
Adjusted EBITDA   $   615   $   223   $    953   $    672 

 

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