Revenue Performance - Revenue for the three-month period ended June 30, 2023, was $14.5 million, an increase of $8.1 million or 126% compared to the second quarter of 2022[78]. - Year-to-date revenue for the six-month period ended June 30, 2023, was $21.1 million, an increase of $9.5 million or 82% compared to the first six months of 2022[79]. - Systems integration revenues grew by 46% in the first half of 2023 compared to the first half of 2022, driven by an $11.3 million increase in this segment[79]. - Revenues from procurement and reseller services were approximately $10.6 million in the second quarter of 2023, compared to $0.8 million in the second quarter of 2022[81]. Profitability and Income - Gross profit margin for the three-month period ended June 30, 2023, was 22%, down from 41% in the second quarter of 2022, primarily due to increased costs in the integration business[88]. - Operating income for the three-month period ended June 30, 2023, was $975,000, compared to $939,000 in the second quarter of 2022[90]. - For the three-month period ended June 30, 2023, the company recorded a net income of $315,000 or $0.01 per share, compared to a net income of $771,000 or $0.04 per share for the same period in 2022[93]. - For the six-month period ended June 30, 2023, the company reported a net loss of $471,000 or $(0.02) per share, contrasting with a net income of $463,000 or $0.02 per share in the first half of 2022[93]. - The company anticipates being profitable in the next quarter and for the year ended December 31, 2023, based on improved revenue growth and order backlog[96]. Expenses and Costs - Cost of revenue as a percentage of revenue was 78% for the three-month period ended June 30, 2023, compared to 59% for the second quarter of 2022[83]. - Selling, general and administrative expenses increased by $556,000 or 35% for the three-month period ended June 30, 2023, compared to the second quarter of 2022[89]. - The company plans to implement reductions in selling, general, and administrative expenses if future results do not meet expectations to improve profitability and cash flows[95]. Cash Flow and Financial Position - As of June 30, 2023, the company had cash and cash equivalents of $24.2 million, an increase from $20.4 million at December 31, 2022[98]. - Cash provided by operating activities was $4 million for the six-month period ended June 30, 2023, significantly up from $0.5 million for the same period in 2022[99]. - Cash used in investing activities was $205,000 for the six-month period ended June 30, 2023, primarily for leasehold improvements, compared to $122,000 in the same period of 2022[101]. - Cash used in financing activities was $10,000 for the six-month period ended June 30, 2023, compared to cash provided of $27,000 in the same period of 2022[102]. - The company had an accumulated deficit of $66.9 million as of June 30, 2023, with a history of annual operating and net losses attributed to COVID-19 and supply chain constraints[95]. Supply Chain and Future Outlook - The company expects ongoing supply chain issues to persist for at least the next several quarters, affecting the timing of revenue recognition[80]. - Interest expense for the three-month period ended June 30, 2023, was $672,000, an increase from $162,000 in the same period of 2022, due to more agent-type transactions[92]. - The company has no off-balance sheet arrangements as of June 30, 2023[105].
TSS Inc(TSSI) - 2023 Q2 - Quarterly Report