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TSS Inc(TSSI) - 2024 Q1 - Quarterly Report
TSSITSS Inc(TSSI)2024-05-14 20:33

Revenue Growth - Revenue for the three-month period ended March 31, 2024, was 15.9million,anincreaseof15.9 million, an increase of 9.3 million or 142% compared to 6.6millioninthefirstquarterof2023[78]−Procurementservicesrevenueincreasedsignificantlyfrom6.6 million in the first quarter of 2023[78] - Procurement services revenue increased significantly from 1.7 million in Q1 2023 to 11.6millioninQ12024,contributingtotheoverallrevenuegrowth[80]CostandProfitability−Costofrevenueasapercentageofrevenuewas8311.6 million in Q1 2024, contributing to the overall revenue growth[80] Cost and Profitability - Cost of revenue as a percentage of revenue was 83% for Q1 2024, up from 74% in Q1 2023, reflecting higher costs associated with procurement services[81] - Gross profit margin for Q1 2024 was 17%, down from 26% in Q1 2023, primarily due to the higher percentage of revenue from procurement services[85] - Operating income improved by 0.9 million or 138% in Q1 2024, reaching 253,000comparedtoanoperatinglossof253,000 compared to an operating loss of 665,000 in Q1 2023[87] - Net income for Q1 2024 was 15,000or15,000 or 0.00 per share, compared to a net loss of 786,000or786,000 or (0.04) per share in Q1 2023[89] Expenses and Financial Management - Selling, general and administrative expenses increased by 127,000or6127,000 or 6% in Q1 2024, primarily due to higher compensation and professional fees[86] - The company anticipates that as the percentage of revenues from procurement services increases, gross profit margins will decrease due to lower margins associated with these services[82] - Management plans to implement cost reductions if future results do not meet expectations, which may affect product offerings and financial results[97] Cash Flow and Liquidity - Cash provided by operating activities was 2.6 million for the three-month period ended March 31, 2024, a significant improvement compared to cash used of 13.5millioninthesameperiodof2023[94]−Cashandcashequivalentsincreasedto13.5 million in the same period of 2023[94] - Cash and cash equivalents increased to 14.4 million as of March 31, 2024, up from 11.8millionattheendof2023[93]−Cashusedininvestingactivitieswas11.8 million at the end of 2023[93] - Cash used in investing activities was 39,000 for the three-month period ended March 31, 2024, compared to 185,000inthesameperiodof2023[95]−Cashusedinfinancingactivitieswas185,000 in the same period of 2023[95] - Cash used in financing activities was 55,000 for the three-month period ended March 31, 2024, primarily for stock purchases related to tax obligations[96] - The company believes it will continue to be profitable on a quarterly and annual basis in 2024 and beyond, indicating confidence in future cash flows[92] - The company may require additional capital for business acquisitions or to introduce new lines of business, which could impact liquidity[98] - The company has no off-balance sheet arrangements as of March 31, 2024[99] Operational Challenges - The company faced ongoing supply chain issues that impacted the timing of systems integration revenue, expected to continue for several quarters[79] - As of March 31, 2024, the company had an accumulated deficit of $66.3 million, despite recording operating and net income in the last four quarters[91] Accounting Policies - There have been no material changes to critical accounting policies since the last annual report[100]