Revenue Performance - Total revenue for the nine-month period ended September 30, 2023, was $30.0 million, an increase of $10.3 million or 52% compared to $19.7 million in the same period of 2022[75]. - Systems integration segment revenues increased by 31% during the first nine months of 2023 compared to the same period in 2022, contributing to a $13.7 million increase in total revenue[69]. - Procurement and reseller services revenues for the nine-month period ended September 30, 2023, were approximately $17.7 million, up 216% or $12.1 million from $5.6 million in the comparable period of 2022[77]. - Revenue for the three-month period ended September 30, 2023, was $8.9 million, an increase of $0.8 million or 10% compared to the third quarter of 2022[74]. Profitability and Expenses - Gross profit margin for the three-month period ended September 30, 2023, was 32%, down from 34% in the third quarter of 2022, primarily due to increased costs in the integration business[84]. - Cost of revenue as a percentage of revenue was 68% for the three-month period ended September 30, 2023, compared to 66% for the third quarter of 2022[79]. - Selling, general and administrative expenses increased by $217,000 or 12% for the three-month period ended September 30, 2023, primarily due to higher compensation costs[85]. - Operating income for the three-month period ended September 30, 2023, was $715,000, compared to $871,000 in the third quarter of 2022[86]. - Net income for Q3 2023 was $209,000 ($0.01 per share), down from $605,000 ($0.03 per share) in Q3 2022; for the nine-month period, a net loss of $262,000 was recorded compared to a net income of $1,068,000 in the same period of 2022[88]. Cash Flow and Financial Position - Cash and cash equivalents increased to $28.7 million as of September 30, 2023, from $20.4 million at the end of 2022[93]. - Cash provided by operating activities was $8.6 million for the nine-month period ended September 30, 2023, compared to $3.6 million in the same period of 2022[94]. - Deferred revenue increased by approximately $11 million and accounts payable rose by about $10 million at September 2023 compared to September 2022, reflecting higher procurement activities[94]. - Cash used in investing activities was $240,000 for the nine-month period ended September 30, 2023, primarily for leasehold improvements[95]. - Cash used in financing activities was $33,000 in the nine-month period ended September 30, 2023, significantly lower than $1.7 million in the same period of 2022[96]. - The company has an accumulated deficit of $66.6 million as of September 30, 2023, with a history of annual operating and net losses[90]. Future Outlook - Management believes profitability is achievable in the next quarter and for the year ending December 31, 2023, despite previous delays in customer transactions[91]. - The company plans to implement cost reductions if future results do not meet expectations, which may impact product offerings and financial results[98]. Operational Challenges - The facilities business saw a $3.5 million decrease in revenues from Modular Data Center (MDC) deployments in the first nine months of 2023 compared to the same period in 2022[68]. - Supply chain disruptions continue to impact the timing of systems integration and MDC deployment revenue, with expectations of ongoing issues for several quarters[76]. - Interest expense for Q3 2023 was $661,000, up from $263,000 in Q3 2022, driven by an increase in factored transactions from $27.4 million to $61.4 million[87].
TSS Inc(TSSI) - 2023 Q3 - Quarterly Report