TSS, Inc.

Thank you for standing by and welcome to the TSS fourth quarter and fiscal 2023 earnings call. I would now like to welcome John K. Penber, Chief Financial Officer, to begin the call. John, over to you.

Thank you, Mandeep. Good afternoon, everyone. Thank you for joining us on TSS's conference call to discuss our fourth quarter and our fiscal 2023 financial results. I'm John Penber, the Chief Financial Officer of TSS. And joining me today on the call is Daryl 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 that's contained in the press release we issued today. That same language applies to comments and statements made on this conference call. This call will contain time-sensitive information as well as forward-looking statements. which are accurate as of today, March 28th, 2024. TSS expressly disclaims any obligations to update, amend, supplement, or otherwise review any information or forward-looking statements made on this conference call or the replay to reflect events or circumstances that may arise after today's date, 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 those measures with the most directly comparable financial measures calculated in accordance with GAAP is included in today's press release. Darrell will kick off today's call with an overview and then I will provide more of a review of our fourth quarter and fiscal 23 results and then I will turn the call back over to Darrell to discuss our strategy and direction. Daryl?

Hey, great. Thanks, John. Earlier today, we released a press release announcing our financial results for the fourth quarter and for the full year of 2023. A copy of that release will be made available on our website at www.tssiusa.com. On behalf of the entire TSS team, I'm very pleased to report that we achieved very strong financial results in Q4 and fiscal year that contributed to a strong 2023 as well. As I forecasted in our last earnings call, we anticipated a strong fourth quarter in revenues, operating income, net income, and EBITDA, and we delivered. We achieved our plan and recorded $24.4 million in revenue in our fourth quarter, our highest quarter revenue ever, which helped drive our full year 2023 revenues to 54.4 million. This was a 78% increase compared to our 2022 revenues of 30.6 million. This increase in revenue drove year-over-year improvements in our gross profits, which were up 68% compared to the fourth quarter of 2022, and 1.4 million increase in our operating profits compared to the fourth quarter of 2022 as well, as a $1.5 million improvement in our net income compared to the fourth quarter of 2022. For the year, we increased our operating profits by 91% compared to 2022, and we increased our adjusted EBITDA by 60% compared to 2022. We achieved these strong results while making operational and go-to-market strategic investments in the business throughout the year. Our results convince me that we are taking the right steps to enable TSS to aggressively scale and serve the growing demand for our configuration services business. We have introduced several new services since our last call, including infield rack integration and cabling services, where based on customer requirements, we can build and integrate racks and systems onsite at customer locations. We're excited about this growth opportunity as it will leverage our in-house expertise and extend to a more broad market for delivering that quality service onsite at a customer facility. We also introduced a formalized data center move service to enable enterprise customers to outsource the management of data center facility relocation or consolidation. We can arrange the physical movement of sophisticated IT equipment from one location to another using our specialized project management personnel. As we listen to the challenges of our customers, have been optimizing their investment in IT infrastructure, we will continue to identify additional ways in which we can profitably help our customers. We are witnessing an increase in demand for genitive AI-based computing technology from a variety of technology providers, and we are prepared to scale our capacity to meet an increase in this demand. We have modeled plans to scale our data center rack integration business up to 10X over our 10 times, that is, over our 2023 rack integration results, and we're positioned to implement them in 60 days. We expect to benefit from this growth beginning in the second half of this year, 2024. So with that, let me turn it back over to John to provide additional financial info. I appreciate you listening.