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TSS, Inc. Reports Fourth Quarter and Fiscal 2021 Results

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TSS, Inc. (TSSI) reported its fourth quarter and fiscal year results for 2021, revealing significant changes compared to 2020. Q4 revenue rose to $14.6 million, up from $7.2 million, driven by reseller revenues of $11.7 million. However, gross margin decreased to 12% from 23%. The company faced a net loss of $264,000 in Q4 vs. a net income of $637,000 last year. For the fiscal year, total revenue fell to $27.4 million from $45.1 million, and the net loss was $1.297 million. Despite challenges, the company noted a strong project backlog and positive adjusted EBITDA.

Positive
  • Fourth quarter revenue increased to $14.6 million, up from $7.2 million year-over-year.
  • Reseller revenues rose to $11.7 million in Q4 2021 from $3.1 million in Q4 2020.
  • Adjusted EBITDA income was $138,000 in Q4 2021 compared to $1,047,000 in Q4 2020.
Negative
  • Q4 gross margin decreased to 12% from 23% year-over-year.
  • Net loss of $264,000 in Q4 2021 compared to net income of $637,000 in Q4 2020.
  • Full year revenue declined to $27.4 million from $45.1 million in 2020.

ROUND ROCK, Texas, March 30, 2022 (GLOBE NEWSWIRE) -- TSS, Inc. (Other OTC: TSSI), a data center facilities and technology services company, reported results for its fourth quarter and fiscal year ended December 31, 2021.

Fourth Quarter Highlights:

  • Fourth quarter 2021 revenue of $14.6 million compared with $7.2 million in the fourth quarter of 2020. Reseller revenues were $11.7 million in the fourth quarter of 2021 compared with $3.1 million in the fourth quarter of 2020.
  • Gross margin of 12% in the fourth quarter of 2021 compared with 23% in the fourth quarter of 2020.
  • Operating loss of $100,000 in the fourth quarter of 2021 compared to an operating loss of $140,000 in the fourth quarter of 2020.
  • Net loss of $264,000 or $0.01 per share in the fourth quarter of 2021 compared to net income of $637,000 or $0.04 per share in the fourth quarter of 2020. The 2020 result included $897,000 gain on forgiveness of PPP Loan.
  • Adjusted EBITDA income of $138,000 in the fourth quarter of 2021 compared with Adjusted EBITDA income of $1,047,000 in the fourth quarter of 2020. 2020 included a $897,000 gain on forgiveness of PPP loan.

FY 2021 Highlights:

  • 2021 revenue of $27.4 million compared with $45.1 million in 2020. Reseller revenues were $14.7 million in 2021 compared to $28.8 million in 2020.
  • Gross margin of 23% in 2021 compared with 15% in 2020.
  • Operating loss of $831,000 in 2021 compared to operating loss of $400,000 in 2020.
  • Net loss of $1,297,000 or $0.07 per share in 2021 compared to net income of $79,000 or $0.00 per share in 2020. The 2020 results included $897,000 gain on forgiveness of PPP Loan.
  • Adjusted EBITDA income of $174,000 in 2021 compared with Adjusted EBITDA income of $1,417,000 in 2020. 2020 included a $897,000 gain on forgiveness of PPP loan.

“Despite the significant impact of supply chain shortages, we achieved fourth quarter and annual positive Adjusted EBITDA,” said Anthony Angelini, President and Chief Executive Officer of TSS. “The decline in revenue year over year was primarily related to our opportunistic reseller revenues. This decline in revenue had a very small impact on our overall gross profits as we benefited from a favorable revenue mix and cost management initiatives. Our current backlog of projects is very large and we expect to see a large improvement in our 2022 results as supply chain shortages improve and we deliver our backlog.”

Quarterly Conference Call Details
The Company has scheduled a conference call to discuss the fourth quarter and fiscal 2021 financial results for Wednesday, March 30, 2022, at 4:30 PM Eastern. To participate on the conference call, please dial 866-791-7194 toll free from the U.S., or 847-619-6774 for international callers. The conference code is 50288188#. 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 December 16, 2021. The audio replay can be accessed at the following url: https://onlinexperiences.com/Launch/QReg/ShowUUID=ECAA273E-77D5-4EFB-B0D6-ED56C4FD27FE&LangLocaleID=1033. The passcode to access the digital playback is 50288188. 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, 2021. 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)

   December 31,December 31,
    2021   2020 
      
Assets    
Current Assets   
 Cash and cash equivalents $7,992  $19,012 
 Contract and other receivables, net  1,846   915 
 Costs and estimated earnings in excess of billings on uncompleted contracts  573   806 
 Inventories, net  847   197 
 Prepaid expenses and other current assets  550   58 
 Total current assets  11,808   20,988 
Property and equipment, net  281   662 
Lease right-of-use assets  5,566   876 
Goodwill  780   780 
Intangible assets, net  126   217 
Other assets  720   285 
 Total assets $19,281  $23,808 
Liabilities and Stockholders’ Equity   
Current Liabilities    
 Accounts payable and accrued expenses $7,016  $13,374 
 Deferred revenues  2,435   3,962 
 Convertible Notes  2,023   - 
 Current portion of lease liabilities  644   748 
 Total current liabilities  12,118   18,084 
Convertible notes, less current portion, net  -   2,234 
Lease liabilities, less current portion  4,938   208 
Non-current portion of deferred revenues  22   99 
 Total liabilities  17,078   20,625 
Stockholders’ Equity    
 Preferred stock- $.0001 par value; 1,000 shares authorized at December 31, 2021 and 2020; none issued  -   - 
 Common stock- $.0001 par value, 49,000 shares authorized at December 31, 2021 and 2020: 20,286 and 19,055 shares issued at December 31, 2021 and 2020, respectively  2   2 
 Additional paid-in capital  70,584   70,070 
 Treasury stock 1,424 and 1,097 shares at cost at December 31, 2021 and 2020, respectively  (2,071)  (1,874)
 Accumulated deficit  (66,312)  (65,015)
 Total stockholders' equity  2,203   3,183 
 Total liabilities and stockholders’ equity $19,281  $23,808 
          


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

   Three Months Ended Years Ended
   December 31, December 31,
    2021   2020   2021   2020 
Results of Operations:        
 Revenue $14,585  $7,248  $27,410  $45,062 
 Cost of revenue  12,902   5,586   21,049   38,259 
 Gross profit  1,683   1,662   6,361   6,803 
          
 Operating expenses:        
 Selling, general and administrative expenses  1,654   1,663   6,656   6,674 
 Depreciation and amortization  129   139   536   529 
 Total operating costs  1,783   1,802   7,192   7,203 
 Income (loss) from operations  (100)  (140)  (831)  (400)
 Interest income (expense), net  (130)  (96)  (401)  (367)
 Other income (expense), net  -   896   -   896 
 Income (loss) from operations before income taxes  (230)  660   (1,232)  129 
 Income tax expense  34   23   65   50 
 Net income (loss) $(264) $637  $(1,297) $79 
                  
Basic net income (loss) per share: $(0.01) $0.04  $(0.07) $0.01 
Diluted net income (loss) per share: $
(0.01) $0.03  $
(0.07) $0.00 
          

 

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

  Three Months Ended
Dec. 31,
  Years Ended
Dec. 31,
 
  2021  2020  2021  2020 
             
Net income (loss) $(264) $637  $(1,297) $79 
             
Interest expense (income), net 130  96  401  367 
             
Depreciation and amortization 129  139  536  529 
Income tax expense 34  23  65  50 
EBITDA profit (loss) $29  $895  $(295) $1,025 
             
Stock based compensation 109  152  469  392 
Adjusted EBITDA profit (loss) $138  $1,047  $174  $1,417  
             
Forgiveness of PPP Loan -  (897) -  (897)
Normalized Adjusted EBITDA profit $138  $150  $174  $520 

 


FAQ

What were TSSI's fourth quarter 2021 revenue results?

TSSI reported fourth quarter revenue of $14.6 million, up from $7.2 million in Q4 2020.

How did TSSI's net income change in Q4 2021?

TSSI experienced a net loss of $264,000 in Q4 2021, compared to a net income of $637,000 in Q4 2020.

What is TSSI's outlook for 2022?

TSSI expects a significant improvement in 2022 results as supply chain shortages improve and they deliver their large backlog of projects.

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Information Technology Services
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Round Rock