DSS, Inc. Issues Letter to Shareholders

Rhea-AI Summary

DSS, Inc. (NYSE American: DSS) announced significant operational improvements in their Q3 2024 financial performance. The company reported an 8% decrease in operating loss for both the three and nine-month periods ended September 30, 2024, compared to 2023. The net loss declined by 52% ($17.3 million) year-over-year for the nine months and 15% ($1.0 million) for the three-month period.

Cash flow from operations improved by $11.8 million (56%), with net cash position strengthening from $6.9 million to $11.8 million. The company completed the spin-off of Impact BioMedical in September 2024. Under new Interim CEO Jason Grady, DSS plans to reduce costs by 15-20% in the upcoming fiscal year, focus on expanding Premier Packaging, and enhance R&D initiatives in biomedical technologies and sustainable packaging.

Positive

• Operating loss decreased by $1.3 million (8%) for nine months ended September 30, 2024
• Net loss reduced by $17.3 million (52%) year-over-year
• Cash flow from operations improved by $11.8 million (56%)
• Net cash position increased from $6.9 million to $11.6 million
• Planned cost reduction of 15-20% in upcoming fiscal year

Negative

• Company still operating at a loss despite improvements
• Restructuring and potential divestment of underperforming segments ahead

Insights

Financial Restructuring Analyst

The financial turnaround strategy presented by DSS demonstrates promising early results, with the 8% reduction in operating losses and 52% decrease in net losses signaling effective cost management and operational optimization. The 56% improvement in operational cash flow, resulting in a strengthened cash position of $11.6 million, provides important financial flexibility for executing strategic initiatives.

The Impact BioMedical spin-off represents a strategic move to unlock value by allowing each entity to focus on core competencies and attract specialized investors. This restructuring aligns with industry best practices for maximizing shareholder value through corporate simplification.

The ambitious cost reduction target of 15-20% appears achievable given the comprehensive approach to efficiency improvements across procurement, production and logistics. However, the success will largely depend on execution and maintaining service quality while implementing these cuts.

The focus on Premier Packaging expansion indicates a shift toward stable, revenue-generating business units with proven market demand. This strategic pivot, combined with the exploration of new markets and R&D initiatives, suggests a balanced approach between immediate profitability and long-term growth potential.

The emphasis on metrics-driven accountability and operational excellence signals a mature management approach that should resonate well with institutional investors seeking evidence of disciplined execution and sustainable improvement.

NEW YORK, Feb. 03, 2025 (GLOBE NEWSWIRE) -- DSS, Inc. (NYSE American: DSS) a multinational company operating businesses within diversified market sectors that strategically acquires and develops assets to increase shareholder value, today issued the following letter to shareholders:

Dear Esteemed Shareholders,

I am pleased to provide you with significant updates regarding the leadership of DSS, Inc. and to outline the strategic direction we are pursuing as a Company.

It is with great honor that I announce my appointment as Interim Chief Executive Officer of DSS, Inc., effective August 23, 2024. With over 25 years of experience in leadership roles across diverse sectors—ranging from Chief Operating Officer of DSS to President at Premier Packaging Corporation, CEO and Director of DSS Biohealth Holdings, and Chief Business Officer at Impact Biomedical, Inc.—I am eager to guide DSS through its next phase of growth, operational refinement, and market leadership.

A Clear Vision for the Future

As we embark on this new chapter, my immediate focus is to optimize operational efficiencies, realign resources, and position DSS, Inc. for sustainable long-term growth. To this end, we have already initiated a series of decisive actions, the results of which are reflected in our most recent earnings report. Below, I have highlighted our key accomplishments and prioritized initiatives moving forward:

Q3 Financial Performance Highlights – Strengthening Our Business Model

• Immediate executive action and swift decision making, allowed for DSS to report operating loss for the nine months ended September 30, 2024 had decreased by approximately $1.3 million (8%) compared to the same period in 2023, with a $0.4 million (8%) reduction for the three months ended September 30, 2024, relative to the same period in 2023.
• The net loss for the nine months ended September 30, 2024, declined by $17.3 million (52%) year-over-year, with a reduction of $1.0 million (15%) for the three-month period.
• Cash flow from operations showed marked improvement, increasing by $11.8 million (56%) for the nine months ended September 30, 2024. Our net cash position strengthened from $6.9 million to $11.6 million.
• The successful spin-off of Impact BioMedical, Inc. in September has positioned both entities for future growth within their respective markets.

Driving Revenue Growth and Operational Excellence

• Expanding High-Impact Business Lines: We are focusing on the strategic expansion of promising business units, such as Premier Packaging, to fuel continued growth.
• Exploring Untapped Markets: Our commitment to identifying and investing in high-growth markets will drive the creation of scalable and recurring revenue streams.
• Enhancing Accountability: We will institute robust, metrics-driven accountability systems across business units to ensure consistent execution on high-priority opportunities.
  

Eliminating Inefficiencies and Optimizing Cost Structure

• Comprehensive Review and Streamlining: A thorough evaluation of all business units is underway to identify underperforming segments. We will restructure, streamline, or divest from non-core areas to reinforce our primary strengths.
• Process and Technology Optimization: New operational tools and processes will be introduced to reduce inefficiencies, eliminate waste, and increase productivity in procurement, production, and logistics.
• Targeted Cost Reduction: Our goal is to reduce costs by 15-20% in the upcoming fiscal year, significantly enhancing profitability and reinforcing our financial stability.
  

Pioneering Innovation for Competitive Advantage

• Advancing R&D Initiatives: We will leverage our research and development capabilities to drive cutting-edge solutions in emerging sectors, such as biomedical technologies and sustainable packaging.
• Cultivating Strategic Partnerships: We are actively forging alliances with key industry players to accelerate the market introduction of innovative products and solutions.
• Pilot Program Launches: We plan to deploy targeted pilot programs in select regions or sectors to validate new initiatives, enabling us to scale these innovations company-wide.
  

Maximizing Shareholder Value with Discipline and Transparency

• Disciplined Financial Stewardship: We remain unwavering in our focus on delivering consistent growth, profitability, and returns for our shareholders.
• Commitment to Transparency: You can expect regular, transparent updates on our progress, milestones, and strategic objectives to ensure you remain well-informed at every stage.
• Exploring Shareholder Rewards: We are actively exploring initiatives designed to directly reward our shareholders for their continued trust and support.
  

Leadership Transition

This moment marks a pivotal turning point for DSS, Inc. With a clear vision, a focused strategy, and an unwavering commitment to execution, we are poised to unlock new opportunities and create sustainable, long-term value for our shareholders.

Thank you for your ongoing support and confidence in DSS, Inc. I look forward to keeping you informed on our progress in the months ahead. Should you require additional information, please do not hesitate to reach out to our Investor Relations team.

Sincerely,

Jason Grady
Interim Chief Executive Officer
DSS, Inc.

Contact: DSS Inc. Investor Relations
Email: IR@dssworld.com
Phone: +1 (585) 565-2422

FAQ

What financial improvements did DSS report in Q3 2024?

DSS reported an 8% decrease in operating loss, a 52% reduction in net loss year-over-year, and a 56% improvement in cash flow from operations, with net cash position increasing from $6.9M to $11.6M.

What cost reduction target has DSS announced for the upcoming fiscal year?

DSS announced a target to reduce costs by 15-20% in the upcoming fiscal year to enhance profitability and financial stability.

When did Jason Grady become the Interim CEO of DSS?

Jason Grady was appointed as Interim Chief Executive Officer of DSS, effective August 23, 2024.

What strategic initiatives is DSS implementing to drive growth?

DSS is focusing on expanding Premier Packaging, exploring untapped markets, enhancing R&D in biomedical technologies and sustainable packaging, and forming strategic partnerships.

When did DSS complete the spin-off of Impact BioMedical?

DSS completed the spin-off of Impact BioMedical, Inc. in September 2024.