UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
February 11, 2016
Date of Report (Date of earliest event reported)
TSS, INC.
(Exact name of registrant as specified in
its charter)
Delaware |
000-33627 |
20-2027651 |
(State or other jurisdiction of
incorporation) |
(Commission File Number) |
(I.R.S. Employer
Identification No.) |
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110 E. Old Settlers Blvd. |
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Round Rock, Texas |
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78664 |
(Address of principal executive offices) |
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(Zip Code) |
(512) 310-1000 |
(Registrant’s telephone number, including area code) |
Not Applicable
(Former name, former address, and former
fiscal year, if changed since last report.)
Check the appropriate box below if the
Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the
Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the
Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c)
under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. |
Results of Operations and Financial Condition. |
On Thursday, February
11, 2016, TSS, Inc. (the “Company”), issued a press release reporting certain preliminary financial results of the
Company for the three and twelve months ended December 31, 2015. The Company also reported in the press release that it expects
to conduct a conference call to discuss its financial results near the end of March at the conclusion of the 2015 audit. A copy
of the press release is being furnished herewith as Exhibit 99.1.
The
Company has provided unaudited preliminary results of revenue, gross margin and adjusted EBITDA because its financial closing procedures
for the fourth quarter and full year 2015 are not yet complete, and these estimates are subject to the completion of its financial
closing procedures, final adjustments and other developments that may arise between now and the time the 2015 financial results
are finalized. The preliminary fourth quarter and full year 2015 estimates are based upon the most current information available
to management and assumptions the Company believes to be reasonable but include information that is subject to further review,
verification and adjustment. It is possible that the Company’s final reported results may materially differ from these expected
results after the completion of the audit of its fiscal year 2015 financial statements by its independent registered public
accounting firm and completion of its annual impairment testing of goodwill and other intangible assets for fiscal year 2015, or
as the result of unexpected adjustments arising during completion of the financial closing process for fiscal year 2015.
Adjusted EBITDA is
a supplemental financial measures not defined under Generally Accepted Accounting Principles (GAAP). The Company defines Adjusted
EBITDA as net income (loss) before interest expense, income taxes, depreciation and amortization, impairment loss on goodwill and
other intangibles, stock-based compensation, and provision for bad debts. The Company presents Adjusted EBITDA because it believes
this supplemental measure of operating performance is helpful in comparing its operating results across reporting periods on a
consistent basis by excluding non-cash items that may, or could, have a disproportionate positive or negative impact on its results
of operations in any particular period. The Company also uses Adjusted EBITDA as a factor in evaluating the performance of certain
management personnel when determining incentive compensation.
Adjusted EBITDA may
not be comparable to similarly titled measures reported by other companies. Adjusted EBITDA, while providing useful information,
should not be considered in isolation or as an alternative to net income or cash flows as determined under GAAP. The Company has
not reconciled Adjusted EBITDA to net income (loss) because it is not yet able to calculate income taxes, depreciation and amortization,
impairment loss on goodwill and other intangibles, and stock-based compensation, which are reconciling items between Adjusted EBITDA
and net income (loss). Accordingly, a reconciliation of Adjusted EBITDA to net income (loss) is not available at this time without
unreasonable effort. The Company will provide GAAP results and the applicable reconciliations when it announces its final results
at the end of March.
The information in
this Report, including Exhibit 99.1 attached hereto, is furnished pursuant to Item 2.02 of this Current Report on Form 8-K. Such
information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall
it be deemed incorporated by reference into any filing under the Securities Act of 1933, except as shall be expressly set forth
by specific reference in such filing.
Statements contained
in the press release include estimates (including the preliminary estimates for the fourth quarter and fiscal year ended December
31, 2015) or projections that constitute “forward-looking statements” within the meaning of the Private Securities
Litigation Reform Act of 1995. In this context, forward-looking statements may address matters such as our expected future business
and financial performance and often contain words such as “guidance,” “expects,” “anticipates,”
“intends,” “plans,” “believes,” “seeks,” “feels”, “should,”
or “will.” Forward-looking statements by their nature address matters that are, to different degrees, uncertain. Particular
uncertainties that could adversely or positively affect the Company’s future results include: the Company’s independent
registered public accounting firm’s report on the Company’s 2014 financial statements contains an explanatory paragraph
that expresses substantial doubt about the Company’s ability to continue as a going concern; the Company may not have sufficient
resources to fund its business and may need to issue additional debt or equity to obtain additional funding; the Company’s
reliance on a significant portion of its revenues from a limited number of customers; risks relating to operating in a highly competitive
industry; risks relating to the failure to maintain effective internal control over financial reporting; risks relating to rapid
technological, structural, and competitive changes affecting the industries the Company serves; risks involved in properly managing
complex projects; risks relating to the possible cancellation of customer contracts on short notice; risks relating to the Company’s
ability to continue to implement its strategy, including having sufficient financial resources to carry out that strategy; risks
relating to the Company’s ability to meet all of the terms and conditions of its debt obligations; uncertainty related to
current economic conditions and the related impact on demand for the Company’s services; and other risks and uncertainties
disclosed in the Company’s filings with the Securities and Exchange Commission, including the Annual Report on Form 10-K
for the fiscal year ended December 31, 2014. These uncertainties may cause the Company’s actual future results to be materially
different than those expressed in the Company’s forward-looking statements. The Company does not undertake to update its
forward-looking statements.
Item 9.01. |
Financial Statements and Exhibits. |
99.1 Press Release, dated February 11, 2016.
S I G N A T U R E S
Pursuant to the requirements
of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
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TSS, INC. |
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By: |
/s/ John K. Penver |
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John K. Penver |
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Chief Financial Officer |
Date: February 11, 2016
Exhibit 99.1
TSS Provides Preliminary Fourth Quarter
and 2015 Results
ROUND ROCK, TX – February 11,
2016 – TSS, Inc. (Other OTC: TSSI), a data center and mission critical facilities and technology
services company, is providing preliminary results for its fourth quarter and fiscal year ended December 31, 2015.
While our results for the fourth quarter
and fiscal year will not be final until the conclusion of our audit and the announcement of our final results at the end of March,
the following are preliminary estimates for the fourth quarter and full year ended December 31, 2015:
Fourth Quarter Highlights:
| ● | Fourth quarter 2015 revenue of approximately $10 million compared with $8.4 million in the fourth
quarter of 2014 and $6.3 million in the third quarter of 2015. |
| ● | Gross margin of approximately 25% in the fourth quarter of 2015 compared with 31% in the fourth
quarter of 2014. |
| ● | Reduced operating expenses by 10% compared to the fourth quarter of 2014. |
| ● | Adjusted EBITDA income of approximately $400,000 compared with Adjusted EBITDA income of $201,000
in the fourth quarter of 2014 and an Adjusted EBITDA loss of $93,000 in the third quarter of 2015. |
Fiscal Year Highlights:
| ● | 2015 revenue of approximately $29 million compared to $28 million in 2014. |
| ● | Gross margin of 28% in 2015 and 31% in 2014. |
| ● | Reduced operating expenses by approximately 7% compared to 2014. |
| ● | Adjusted EBITDA loss of approximately $0.8 million compared to an Adjusted EBITDA loss of $1.5
million in 2014 |
“As we anticipated, our expected
fourth quarter results showed improvements in revenue and a return to positive adjusted EBITDA. While not finalized, we feel these
expected results are indicative of the positive trends occurring within our business.” said Anthony Angelini, President and
Chief Executive Officer of TSS. “Due to the time necessary to complete our year-end financial closing procedures,
we are providing preliminary results to investors. We plan to hold our regular conference call near the end of March when we will
share our audited 2015 results.”
About TSS, Inc.
TSS is a trusted single
source provider of mission-critical planning, design, system integration, deployment, maintenance and evolution of data centers
facilities and information infrastructure. TSS specializes in customizable end to end solutions powered by industry experts and
innovative services that include technology consulting, engineering, design, project management, operations, facilities management,
technology system installation and integration, as well as maintenance for traditional and modular data centers. www.totalsitesolutions.com
or call 888-321-4877.
Preliminary Unaudited Selected
Financial Data
The
Company has provided unaudited preliminary results of revenue, gross margin and adjusted EBITDA because our financial closing procedures
for the fourth quarter and full year 2015 are not yet complete, and these estimates are subject to the completion of our financial
closing procedures, final adjustments and other developments that may arise between now and the time the 2015 financial results
are finalized. The preliminary fourth quarter and full year 2015 estimates are based upon the most current information available
to management and assumptions we believe to be reasonable but include information that is subject to further review, verification
and adjustment. It is possible that our final reported results may materially differ from these expected results after the completion
of the audit of our fiscal year 2015 financial statements by our independent registered public accounting firm and completion of
our annual impairment testing of goodwill and other intangible assets for fiscal year 2015, or as the result of unexpected adjustments
arising during completion of the financial closing process for fiscal year 2015.
About Non-GAAP Financial Measures
Adjusted EBITDA is
a supplemental financial measures not defined under Generally Accepted Accounting Principles (GAAP). We define Adjusted EBITDA
as net income (loss) before interest expense, income taxes, depreciation and amortization, impairment loss on goodwill and other
intangibles, stock-based compensation, and provision for bad debts. We present Adjusted EBITDA because we believe this supplemental
measure of operating performance is helpful in comparing our operating results across reporting periods on a consistent basis by
excluding non-cash items that may, or could, have a disproportionate positive or negative impact on our results of operations in
any particular period. We also use Adjusted EBITDA as a factor in evaluating the performance of certain management personnel when
determining incentive compensation.
Adjusted EBITDA may
not be comparable to similarly titled measures reported by other companies. Adjusted EBITDA, while providing useful information,
should not be considered in isolation or as an alternative to net income or cash flows as determined under GAAP.
We have not reconciled Adjusted EBITDA to net income (loss) because we are not yet able to calculate income taxes, depreciation
and amortization, impairment loss on goodwill and other intangibles, and stock-based compensation, which are reconciling items
between Adjusted EBITDA and net income (loss). Accordingly, a reconciliation of Adjusted EBITDA to net income (loss) is not available
at this time without unreasonable effort. We will provide GAAP results and the applicable reconciliations when we announce our
final results at the end of March.
Forward Looking Statements
This press release
includes estimates (including the preliminary estimates for the fourth quarter and fiscal year ended December 31, 2015) or projections
that constitute “forward-looking statements” within the meaning of the U.S. federal securities laws -- that is, statements
related to future -- not past -- events, plans, and prospects. In this context, forward-looking statements may address matters
such as our expected future business and financial performance, and often contain words such as “guidance,” “expects,”
“anticipates,” “intends,” “plans,” “believes,” “seeks,” “feels,”
“should,” or “will.” Forward-looking statements by their nature address matters that are, to different
degrees, uncertain. Although the Company believes that the assumptions upon which its forward-looking statements are based are
reasonable, it can give no assurance that these assumptions will prove to be correct. Important factors that could cause actual
results to differ materially from the Company’s historical experience and present preliminary results and expectations are
disclosed in the Company’s filings with the Securities and Exchange Commission (“SEC”), including in the section
entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2014. Particular uncertainties
that could adversely affect the Company's future results include: our independent registered public accounting firm's report on
our 2014 financial statements contains an explanatory paragraph that expresses substantial doubt about our ability to continue
as a going concern; we may not have sufficient resources to fund our business and may need to issue additional debt or equity to
obtain additional funding; our reliance on a significant portion of our revenues from a limited number of customers; risks relating
to operating in a highly competitive industry; risks relating to the failure to maintain effective internal control over financial
reporting; risks relating to rapid technological, structural, and competitive changes affecting the industries we serve; risks
involved in properly managing complex projects; risks relating the possible cancellation of customer contracts on short notice;
risks relating our ability to continue to implement our strategy, including having sufficient financial resources to carry out
that strategy; risks relating to our ability to meet all of the terms and conditions of our debt obligations; uncertainty related
to current economic conditions and the related impact on demand for our services; and other risks and uncertainties disclosed in
our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the fiscal year ended December
31, 2014. These uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking
statements. All forward-looking statements in this release are
expressly qualified by such cautionary statements and by reference to the underlying assumptions. You should not place undue reliance
on forward-looking statements, which speak only as of the date they are made. We do not undertake to update forward-looking statements,
whether as a result of new information, future events or otherwise.
Company Contact:
TSS, Inc.
John Penver, CFO
Phone: (512) 310-1000
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