Group 1: Elite Pharmaceuticals Inc. (ELTP) - ELTP is a manufacturer of generic drugs, focusing on controlled-release products which require higher manufacturing skills and vertical integration, differentiating itself in a price-sensitive market [2] - The company holds strong positions in the mixed Amphetamine Immediate Release (IR) and Extended Release (ER) markets, with significant growth driven by the ADHD market [3][6] - According to IQVIA data, ELTP commands approximately 20% of the $400 million generic Adderall IR market and 16% of the $800 million Adderall ER market [4] - In Q4 fiscal 2025, total revenues reached approximately $31.9 million, a 78.3% increase from $17.9 million in the previous year, with operating income rising to roughly $11.2 million from $3.7 million [5] - ELTP entered the lisdexamfetamine (Vyvanse generic) market in early 2025, capturing an estimated 8-10% market share despite competition [6] - The company experienced a pull-back in stock price post-earnings due to a $7.2 million warrant charge affecting EPS and increased competition in the ADHD generic space [7][8] Group 2: TSS, Inc. (TSSI) - TSSI's core business includes systems integration, facilities management, and IT procurement services, with a focus on AI-enabled computer racks [12][13] - The company reported a sales growth of 262% to $44 million in recent Q2, raising its 2025 adjusted EBITDA growth guidance from at least 50% to at least 75% [13] - Despite strong growth, TSSI's stock has pulled back nearly 30%, attributed to investor expectations for better leverage and elevated depreciation expenses from facility build-out [14] - TSSI began production at a new 213,000-square-foot facility in Georgetown, TX, optimized for high-volume AI rack integration, with management expecting profitability within a two-year payback period [15] - The stock is currently trading at a trailing EV/Sales multiple of 1.84x, which is reasonable for a business with multi-year sales visibility and proven growth [16][18]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number: 001-33627 TSS, INC. (Exact name of registrant as specified in its charter) Delaware 20-2027651 (State or other jurisdiction of incorporation or organization) 1800 Avi ...

Shares of TSS, Inc. (TSSI) have declined 23.7% since reporting results for the second quarter of 2025, while the S&P 500 index rose 0.7% over the same period. Over the past month, the stock has fallen 10.1% against the S&P 500’s 1.8% growth.In the June-end quarter, TSS posted revenues of $44 million, skyrocketing 262% year over year, while diluted EPS held flat at 6 cents per share. Net income rose by $0.1 million to $1.5 million, and gross profit increased 72% to $7.8 million. The company’s adjusted EBITDA ...

TSS (TSSI) Q2 2025 Earnings Call August 06, 2025 05:00 PM ET Speaker0Greetings. Welcome to the TSS Inc. Second Quarter twenty twenty five Financial Results Conference Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation.I will now turn the conference over to your host, James Carbonara. You may begin.Speaker1Thank you, operator, and good afternoon, everyone. Thank you for joining us for TSS's conference call to discuss the company's ...

EX-99.1 2 tssi_ex991.htm PRESS RELEASE "The outlook for our industry remains exceptionally strong, and demand across our core markets—particularly in data center infrastructure and AI rack integration—continues to accelerate, reinforcing our belief that we are in a significant and sustained growth cycle. With the strategic groundwork in place, we are positioned to scale capacity and address complexity to capitalize on opportunities before us and meet the growing demand for advanced, AI-driven systems." Seco ...

Core Viewpoint - TSS, Inc. (TSSI) has experienced significant stock price appreciation and robust financial performance driven by increasing demand for AI infrastructure, with a notable 523% revenue growth in Q1 2025 compared to the previous year [1][2]. Financial Performance - For Q1 2025, TSS reported revenues of $99 million, a 523% increase from $15.9 million in Q1 2024, and net income rose to $3 million from $15,000 [2]. - Diluted earnings per share reached 12 cents, up from breakeven, and adjusted EBITDA increased over tenfold to $5.2 million from $475,000 [2]. Segment Performance - Procurement services generated $90.2 million in revenues, a 676% increase from $11.6 million in Q1 2024, accounting for 77% of total procurement revenues for 2024 [3]. - Systems Integration revenues surged 253% to $7.5 million, with gross margins improving to 32% when excluding non-cash rent costs [4]. - Facilities Management revenues declined 40% year over year to $1.3 million, but the company sees potential for recovery in this segment [5]. Management Insights - CEO Darryll Dewan described the quarter as "extraordinary" and a pivotal moment for the company, emphasizing strong execution in AI infrastructure [6]. - CFO Daniel Chism noted the low consolidated gross margin of 9.3% was due to the procurement mix, with expectations for improvement in future quarters as production ramps up [7]. Growth Drivers - Revenue growth was primarily driven by increased AI investments from enterprise clients and infrastructure spending from OEM partners [8]. - The complexity of AI rack integration, including demands for direct liquid cooling and power testing, is enhancing TSS's value proposition as a strategic integrator [9]. Future Guidance - TSS expects first-half 2025 revenues to surpass those of the second half of 2024 and anticipates adjusted EBITDA for 2025 to be at least 50% higher than in 2024 [10][11]. Operational Developments - In May 2025, TSS commenced production at a new 213,000-square-foot facility in Georgetown, TX, designed for high-volume AI rack integration [12]. - The company invested $14.9 million in the quarter as part of a planned $25-$30 million capital build-out, expecting profitability within a two-year payback period [13]. Strategic Positioning - TSS's Q1 results reflect its transformation into a key infrastructure enabler for the AI era, with aggressive capacity expansion and long-term contracts supporting sustained growth despite some margin pressures [14].

TSS (TSSI) Q1 2025 Earnings Call May 15, 2025 05:00 PM ET Company Participants James Carbonara - PartnerDarryll Dewan - CEO, President & DirectorDanny Chism - CFOKris Tuttle - Head of Research & Chief Investment Officer Conference Call Participants None - Analyst Operator Afternoon, and welcome to the TSS Inc. First Quarter twenty twenty five Financial Results Conference Call. At this time, all participants have been placed on a listen only mode, and the floor will be opened for your questions and comments ...

Financial Data and Key Metrics Changes - Total revenue grew by 523% year over year to $99 million, up from $15.9 million in Q1 2024 [19][20] - Diluted earnings per share increased to $0.12, a significant improvement from breakeven a year ago [29] - Net income for Q1 2025 was $3 million, compared to $15,000 in Q1 2024 [28] - Consolidated gross margin was 9.3%, down from 17.1% in the prior year quarter [24] Business Line Data and Key Metrics Changes - Procurement services revenue surged by 676% to $90.2 million, representing 77% of total procurement revenues for all of 2024 [22] - Systems integration revenue increased by 253% to $7.5 million, driven by AI-enabled rack integration [20][21] - Facilities management revenue declined by 40% to $1.3 million, representing just over 1% of total revenue [10][21] Market Data and Key Metrics Changes - The demand for AI infrastructure is rapidly growing, with significant capital flowing into high-performance compute environments [17] - The modular data center market is evolving, with expectations for increased adoption of modular solutions for AI [12] Company Strategy and Development Direction - The company is focused on scaling operations to capture a significant share of the AI infrastructure market [6] - A new facility in Georgetown, Texas, is being built to support increased demand for AI rack integration, with a planned investment of $25 million to $30 million [17][30] - The company anticipates a payback period of approximately two years for the new facility, indicating a strong return on investment [17] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about sustained high growth in AI infrastructure as customers ramp up investments [9][36] - The company is closely monitoring the impact of tariffs on IT hardware costs and supply chain dynamics [33] - Management expects total revenue in the first half of 2025 to exceed that of the second half of 2024, reflecting strong customer demand [36] Other Important Information - Cash flow from operations for Q1 2025 was $20.6 million, significantly higher than $2.6 million in Q1 2024 [30] - The company is actively optimizing its facilities management segment to focus on high-growth opportunities [21] Q&A Session Summary Question: How is the company managing the transition to the new facility? - Management acknowledged the complexity of the transition but emphasized successful execution and commitment from the team [39][40] Question: How does the company view competition from NVIDIA and Dell in integration services? - Management believes that the increasing complexity of AI integration will maintain the need for their services, despite advancements from competitors [41][42] Question: What is the outlook for facilities management revenue? - Management remains optimistic about the facilities management segment, which is transitioning to support AI applications [75][76] Question: What visibility does the company have on demand from AI clients? - Management indicated good visibility on demand, with a fluctuating but generally positive outlook for the rack integration business [108]

[PART I – FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%E2%80%93FINANCIAL%20INFORMATION) This section details the company's unaudited consolidated financial statements, including balance sheets, income statements, cash flows, and related notes on accounting policies, segment performance, debt, and internal controls [Item 1. Consolidated Financial Statements](index=3&type=section&id=Item%201.%20Consolidated%20Financial%20Statements) This section presents TSS, Inc.'s unaudited consolidated financial statements as of March 31, 2025, highlighting significant revenue and net income growth driven by AI rack integration services - **Consolidated Balance Sheet Highlights (in thousands)** | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $27,339 | $23,222 | | Total current assets | $61,082 | $58,197 | | Property and equipment, net | $23,276 | $8,591 | | **Total assets** | **$113,539** | **$96,568** | | Total current liabilities | $72,205 | $56,919 | | **Total liabilities** | **$104,148** | **$89,430** | | **Total stockholders' equity** | **$9,391** | **$7,138** | - **Consolidated Statement of Operations Highlights (in thousands, except per-share amounts)** | Account | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | **Total revenues** | **$98,959** | **$15,892** | | Gross profit | $9,210 | $2,714 | | Income from operations | $4,113 | $253 | | **Net income** | **$2,979** | **$15** | | Earnings per common share – Basic | $0.13 | $0.00 | | Earnings per common share – Diluted | $0.12 | $0.00 | - **Consolidated Statement of Cash Flows Highlights (in thousands)** | Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $20,637 | $2,646 | | Net cash used in investing activities | ($14,873) | ($39) | | Net cash used in financing activities | ($1,647) | ($55) | | **Net increase in cash** | **$4,117** | **$2,552** | [Note 1 – Significant Accounting Policies](index=5&type=section&id=Note%201%20%E2%80%93%20Significant%20Accounting%20Policies) The company enhanced its data center services to include AI-enabled server rack integration, with a single OEM customer accounting for nearly all revenue and receivables - The company's services have been enhanced to include the integration of **Artificial Intelligence (AI) enabled data center server racks**[23](index=23&type=chunk) - A single US-based IT OEM customer accounted for **100% of revenues** for the three months ended March 31, 2025, and **99% of trade accounts receivable** at March 31, 2025[48](index=48&type=chunk) - The company sold approximately **$121.1 million in receivables** under a non-recourse factoring agreement in Q1 2025, resulting in **$1.5 million in financing fees**[51](index=51&type=chunk) [Note 2 – Supplemental Balance Sheet Information](index=11&type=section&id=Note%202%20%E2%80%93%20Supplemental%20Balance%20Sheet%20Information) This note details key balance sheet accounts, showing a significant increase in Property and Equipment, net, driven by construction in process for a new facility, and growth in inventories - **Property and Equipment (in thousands)** | Category | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Construction in Process | $21,526 | $6,701 | | Total Gross P&E | $27,168 | $12,295 | | **Property and equipment, net** | **$23,276** | **$8,591** | - **Inventories, net (in thousands)** | Category | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Procurement inventories | $19,845 | $17,493 | | **Inventories, net** | **$20,396** | **$17,673** | [Note 3 - Long-Term Debt](index=13&type=section&id=Note%203%20-%20Long-Term%20Debt) The company secured a **$20.0 million** term loan in December 2024 to fund improvements at its new Georgetown, Texas facility, with **$8.7 million** outstanding as of March 31, 2025 - On December 31, 2024, the company entered a new Credit Agreement for a **$20.0 million term loan facility** to fund the build-out of its new headquarters and production facility in Georgetown, Texas[79](index=79&type=chunk) - Upon closing, the company borrowed **$8.7 million**, with no additional draw-downs made in the quarter ended March 31, 2025[79](index=79&type=chunk) - The remaining available funds for construction at March 31, 2025, were **$11.3 million**, which were fully drawn down in May 2025[82](index=82&type=chunk)[99](index=99&type=chunk) [Note 6 - Segment Reporting](index=15&type=section&id=Note%206%20-%20Segment%20Reporting) The company reorganized into three segments: Procurement, Systems Integration, and Facilities Management, with Procurement being the largest contributor to Q1 2025 revenue and pre-tax income - Effective Q4 2024, the company reorganized into three reportable segments: **Procurement, Systems Integration, and Facilities Management**[90](index=90&type=chunk)[91](index=91&type=chunk) - **Segment Performance for Three Months Ended March 31, 2025 (in thousands)** | Segment | Total Revenue | Gross Profit | Pre-tax Income | | :--- | :--- | :--- | :--- | | Procurement | $90,177 | $7,028 | $5,662 | | Systems Integration | $7,484 | $1,651 | $259 | | Facilities Management | $1,298 | $531 | $366 | | **Total Segments** | **$98,959** | **$9,210** | **$6,287** | - **Segment Total Assets (in thousands)** | Segment | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Procurement | $24,845 | $19,319 | | Systems Integration | $33,707 | $25,855 | | Facilities Management | $739 | $932 | | **Total Segments** | **$59,291** | **$46,106** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=17&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2025's significant operational and financial developments, including strategic focus on AI-enabled rack integration, substantial revenue growth, and strong liquidity [Overview](index=18&type=section&id=Overview) The company is expanding its AI-enabled server rack integration services through a multi-year customer agreement and a **$25-$30 million** investment in a new facility, funded by a **$20 million** construction loan and landlord contribution - The company signed a multi-year agreement with its largest customer to provide systems integration services for **AI-enabled computer racks** at an expected minimum monthly volume[107](index=107&type=chunk) - To support this agreement, the company is moving to a new facility and anticipates capital expenditures of approximately **$25 million to $30 million** for improvements[107](index=107&type=chunk) - Funding for the new facility includes a **$20 million construction loan** from Susser Bank, a **$6.8 million contribution** from the landlord, and cash on hand[107](index=107&type=chunk) [Results of Operations](index=19&type=section&id=Results%20of%20Operations) Total revenues surged **523%** to **$99.0 million** in Q1 2025, driven by **676%** growth in Procurement and **253%** in Systems Integration, leading to a net income of **$3.0 million** - **Revenue by Segment (in millions)** | Segment | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | Procurement | $90.2 | $11.6 | +676% | | Systems Integration | $7.5 | $2.1 | +253% | | Facilities Management | $1.3 | $2.1 | -40% | | **Total** | **$99.0** | **$15.9** | **+523%** | - The gross value of all procurement transactions increased **431% to $106.0 million**, with the segment's contribution to pre-tax income increasing **807% to $5.7 million**[121](index=121&type=chunk) - Systems Integration gross profit increased **173% to $1.7 million**, and excluding non-cash rent, the segment's gross margin would have improved from **28% to 32%**[123](index=123&type=chunk) - Net income for Q1 2025 was **$3.0 million ($0.12 per diluted share)**, a significant improvement from **$15,000 ($0.00 per diluted share)** in Q1 2024[130](index=130&type=chunk) [Liquidity and Capital Resources](index=23&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains robust liquidity with cash increasing to **$27.3 million**, supported by **$20.6 million** in operating cash flow and the utilization of a receivables factoring program - **Cash Flow Summary (in millions)** | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Cash from Operations | $20.6 | $2.6 | | Cash from Investing | ($14.9) | ($0.04) | | Cash from Financing | ($1.6) | ($0.06) | - Investing activities consisted of **$14.9 million in capital expenditures**, primarily for the build-out of the new leased integration facility[137](index=137&type=chunk) - Subsequent to quarter-end, on May 5, 2025, the company borrowed the remaining **$11.3 million** available on its construction loan, bringing total borrowed funds to **$20.0 million**[132](index=132&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=24&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company has indicated that this section is not applicable - The company states that this item is **'Not applicable'**[143](index=143&type=chunk) [Item 4. Controls and Procedures](index=24&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were ineffective as of March 31, 2025, due to a material weakness in internal control over financial reporting, with remediation efforts ongoing - Management concluded that disclosure controls and procedures were **ineffective** as of March 31, 2025[146](index=146&type=chunk) - The ineffectiveness is due to a **material weakness** identified during the 2024 audit, relating to the ineffective design of certain management review controls[147](index=147&type=chunk) - Remediation efforts have begun in Q1 2025, including enhancing controls and engaging external experts, but the process is **ongoing**[148](index=148&type=chunk)[151](index=151&type=chunk) [PART II – OTHER INFORMATION](index=25&type=section&id=PART%20II%E2%80%93OTHER%20INFORMATION) This section covers other required disclosures, including unregistered sales of equity securities and a list of exhibits filed with the Form 10-Q [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=25&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q1 2025, the company repurchased **124,205 shares** at an average price of **$13.32** per share, primarily from employees for tax withholding obligations - **Share Repurchases in Q1 2025** | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | Jan 2025 | 58,241 | $14.63 | | Feb 2025 | 63,658 | $12.30 | | Mar 2025 | 2,306 | $8.25 | | **Total** | **124,205** | **$13.32** | - All share purchases were from associates to satisfy tax withholding requirements and were **not open market trades**, with no publicly announced share buyback program[152](index=152&type=chunk) [Item 6. Exhibits](index=27&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications and Inline XBRL financial data files - Filed exhibits include **CEO and CFO certifications** under Sarbanes-Oxley Sections 302 and 906[153](index=153&type=chunk)[154](index=154&type=chunk) - The filing includes **Inline XBRL documents** for interactive data[155](index=155&type=chunk) [Signatures](index=28&type=section&id=SIGNATURES) This section confirms the official signing and submission of the Form 10-Q by the company's Chief Financial Officer - The report was duly signed on **May 15, 2025**, by **Daniel M. Chism**, the Chief Financial Officer of TSS, Inc[159](index=159&type=chunk)

EX-99.1 2 tssi_ex991.htm PRESS RELEASE EXHIBIT 99.1 TSS Reports First Quarter 2025 Revenue of $99.0 Million, Up 523% EPS of $0.12, Up from $0.00 ROUND ROCK, TEXAS – May 15, 2025 – TSS, Inc. (Nasdaq: TSSI), a data center services company that provides AI and high- performance computing integration, deployment and related services, today reported results for its first quarter ended March 31, 2025. "We are off to a strong start in 2025, with exponential increases in both our top and bottom lines, driven by rob ...