TSS, Inc.

Ladies and gentlemen, thank you for standing by and welcome to the TSS fourth quarter and fiscal 2022 earnings call. I would now like to turn the call over to John Pember, Chief Financial Officer. Please go ahead.

Thank you, Mandeep. Good afternoon, everyone. Thank you for joining us on TSS's conference call to discuss our fourth quarter and our fiscal 2022 financial results. I am John Pember, the Chief Financial Officer of TSS. And joining me today on the call is Darryl Dewan, the President and Chief Executive Officer of TSS. As we begin the call, I would like to remind everyone to take note of the cautionary language regarding forward-looking statements contained in the press release we issued today. That same language applies to comments and statements made on today's conference call. This call will contain time-sensitive information as well as forward-looking statements. which are only accurate as of today, April 3, 2023. TSS expressly disclaims any obligations to update, amend, supplement, or otherwise review any information or forward-looking statements made on this conference call or replay to reflect events or circumstances that may arise after the date indicated, except as otherwise required by applicable law. For a list of the risk and uncertainties which may affect future performance, please refer to the company's periodic filings with the Securities and Exchange Commission. In addition, we will be referring to non-GAAP financial measures and a reconciliation of the differences between these measures with the most directly comparable financial measures calculated in accordance with GAAP is included in today's press release. Darrell will kick today's call off with an overview. Then I will provide a review of our fourth quarter and our fiscal 2022 results. and then turn the call over to Daryl to discuss our strategy and direction. Daryl?

Thanks, John. Hello, everybody. Earlier today, as John pointed out, we issued a press release announcing our financial results for the fourth quarter and for fiscal 2022. A copy of that release will be made available on our website at www.tsiusa.com. During the fourth quarter, we experienced several important changes in our business. First, we announced a CEO transition by which I joined the company on November 14th as president and CEO. There were other changes in leadership within business units and operating roles, all of which occurred during a period of very busy customer program activity. Further, the complexity of certain new customer programs in our systems integration business required extra labor and overtime. beyond what we had projected. The absolute requirement was that we deliver for our customer, which we did. I'll have more to say on this later, but suffice it to say, now we're working out these issues. We expect this inflated level of cost to continue into Q1 of 2023. The labor markets remain very tight. Cutting costs now would put our execution at risk, which is not the prudent thing to do. We are experiencing higher costs in Q1, but we are taking steps to remediate them and to not persist materially past Q1. We do expect to continue to be adjusted EBITDA positive going forward. There were many positive trends in 2022 that point to a strong base of business for the future. our modular data center or MDC deployments increased by 3.9 million or 262% during 2022 versus the prior year. The improved supply chain climate also allowed our systems integration revenues to grow by 27% compared to 2021 as components that were difficult to source or carried long lead times became more readily available. As a smaller company, our business can be lumpy, and we showed that in Q4. Our MDC business was down, but our reseller and systems integration business were solid. As a result, our revenue for the fourth quarter was strong, but our bottom line suffered from the operational cost overruns and executive transition. Still, we managed to report positive adjusted EBITDA in the quarter. We are focused on three objectives. Number one, Making the needed changes to manage the current business to improve profitability. Let me restate that. Making the needed changes to manage the current business to improve profitability. Number two, investing in the business to be able to scale it further. And number three, strategically positioning a company to grow within current customers while adding new customers and new market segments. I'll dive into this further. But let me first turn it off back to John to provide some financial detail.