8-K

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

May 1 8 , 20 20

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<br><br> <br>incorporation)	(Commission File Number)	(I.R.S. Employer<br><br> <br>Identification No.)
110 E. Old Settlers Road
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Round Rock, Texas	78664
(Address of principal executive offices)	(Zip Code)
( 512 ) 310-1000
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(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))

Securities registered pursuant to Section 12(b) of this Act: None.

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of  the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the  extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

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Item 2.02.	Results of Operations and Financial Condition.

On Monday, May 18, 2020, TSS, Inc. (the “Company”), issued a press release reporting certain financial results of the Company for the three months ended March 31, 2020. A copy of the press release is being furnished herewith as Exhibit 99.1.

The Company’s press release contains non-GAAP financial measures. Pursuant to the requirements of Regulation G, the Company has provided reconciliations within the press release of the non-GAAP financial measures to the most directly comparable GAAP financial measures. Disclosure regarding definitions of these measures used by the Company and why the Company’s management believes the measures provide useful information to investors is also included in the press release.

The Company will conduct a conference call to discuss its financial results on Monday, May 18, 2020, at 4:30 p.m. Eastern Time.

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 this report contain “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,” “prospects,” “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “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 may not have sufficient resources to fund its business and may need to issue 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, including the impact of the COVID-19 pandemic, 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, 2019. 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 May 18, 2020

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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.

TSS, INC.
By:	/s/ John Penver
	John Penver
	Chief Financial Officer

Date: May 18, 2020

ex_187184.htm

Exhibit 99.1

TSS, INC. REPORTS FIRST QUARTER 2020 RESULTS

ROUND ROCK , TX – Ma y 1 8 , 2020 **– TSS, Inc. (**Other OTC: TSSI), ****** a data center facilities and technology services company, reported results for its first quarter ended March 31, 2020.

First Quarter Highlights:

●	First quarter 2019 revenue of $10.6 million compared with $4.7 million in the first quarter of 2019.
●	Gross margin of 15% in the first quarter of 2020 compared with 35% in the first quarter of 2019.
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●	Operating loss of $277,000 in the first quarter of 2020 compared to operating income of $50,000 in the first quarter of 2019.
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●	Net loss of $368000 or $0.02 per share in the first quarter of 2020 compared to net loss of $31,000 or $0.00 per share in the first quarter of 2019.
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●	Adjusted EBITDA loss of $49,000 compared with Adjusted EBITDA income of $203,000 in the first quarter of 2019.
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“Even though our reseller business drove strong revenue growth this quarter, we saw the impacts of the COVID-19 pandemic on our business as travel and other restrictions impacted our ability to deliver services to our customers and supply chain issues impacted our integration services capabilities.” said Anthony Angelini, President and Chief Executive Officer of TSS. “Although the magnitude and duration of the pandemic and its financial impact on our business is still unknown, we anticipate an increase in revenue and profitability in the second quarter and believe that we are in a solid position to operate profitability through this uncertainty.”

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Quarterly Conference Call Details

The Company has scheduled a conference call to discuss the first quarter 2020 financial results for Monday, May 18, 2020 at 4:30 PM Eastern. To participate on the conference call, please dial 877-691-2551 toll free from the U.S., or 630-691-2747 for international callers. The conference code is 49685408#. Investors may also access a live audio web cast of this conference call under the “events” tab on the investor relations section of the Company's website at www.tssiusa.com.

An audio replay of the conference call will be available approximately one hour after the conclusion of the call and will be made available until June 18, 2020. The audio replay can be accessed at the following url: https://onlinexperiences.com/Launch/QReg/ShowUUID=3FE07793-FA3F-456F-8E0B-0B5AC19A4B45&LangLocaleID=1033 The passcode to access the digital playback is 49685408. Additionally, a replay of the webcast will be available on the Company’s website approximately two hours after the conclusion of the call and will remain available for 30 calendar days.

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About Non-GAAP Financial Measures

Adjusted EBITDA is a supplemental financial measure 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. Consistent with Regulation G under the U.S. federal securities laws, Adjusted EBITDA has been reconciled to the nearest GAAP measure, and this reconciliation is located under the heading “Adjusted EBITDA Reconciliation” following the Consolidated Statements of Operations included in this press release.

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, construction, operations, facilities management, technology system installation and integration, as well as maintenance for traditional and modular data centers. For more information, visit www.tssiusa.com or call 888-321-4877.

Forward Looking Statements

This press release may contain “forward-looking statements” -- 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,” “prospects,” “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “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: we may not have sufficient resources to fund our business and may need to issue 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 to 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 including the impact of the COVID-19 pandemic 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 the Annual Report on Form 10-K for the fiscal year ended December 31, 2019. These uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking statements. We do not undertake to update our forward-looking statements.

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Company Contact:

TSS, Inc.

John Penver, CFO

Phone: (512) 310-1000

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TSS, Inc.

Consolidated Balance Sheets

( I n thousands except par values)

			December 31,
			2019
Assets
Current Assets
Cash and cash equivalents	5,321		$	8,678
Contract and other receivables, net	958			3,865
Costs and estimated earnings in excess of billings on uncompleted contracts	211			181
Inventories, net	122			1,353
Prepaid expenses and other current assets	213			108
Total current assets	6,825			14,185
Property and equipment, net	786			705
Lease right-of-use asset	1,337			1,481
Goodwill	780			780
Intangible assets, net	284			307
Other assets	109			109
Total assets	10,121		$	17,567
Liabilities and Stockholders’ Equity
Current Liabilities
Lease liabilities	670		$	645
Accounts payable and accrued expenses	1,838			8,851
Deferred revenues	2,199			2,104
Total current liabilities	4,707			11,600
Convertible notes, less current portion, net	2,079			2,028
Lease liabilities, less current portion	780			956
Deferred revenues – noncurrent portion	113			114
Total liabilities	7,679			14,698
Stockholders’ Equity
Preferred stock- .0001 par value; 1,000 shares authorized at December 31, 2019 and 2018; none issued	-			-
Common stock- .0001 par value, 49,000 shares authorized at March 31, 2020 and December 31, 2019: 18,940 and 18,524 shares issued at March 31, 2020 and December 31, 2019, respectively	2			2
Additional paid-in capital	69,772			69,661
Treasury stock 1,092 and 962 shares at cost at March 31, 2020 and December 31, 2019, respectively	(1,870	)		(1,700	)
Accumulated deficit	(65,462	)		(65,094	)
Total stockholders' equity	2,442			2,869
Total liabilities and stockholders’ equity	10,121		$	17,567

All values are in US Dollars.

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TSS, Inc.

Condensed Consolidated Statements of Operations

(In thousands except per-share values, unaudited)

	Three Months Ended March 31,
	2020			2019
Results of Operations:
Revenue	$	10,597		$	4,660
Cost of revenue, excluding depreciation and amortization		8,996			3,024
Gross profit		1,601			1,636
Operating expenses:
Selling, general and administrative		1,759			1,505
Depreciation and amortization		119			81
Total operating costs		1,878			1,586
Operating income (loss)		(277	)		50
Interest income (expense), net		(82	)		(73	)
Loss before income taxes		(359	)		(23	)
Income tax expense		9			8
Net loss	$	(368	)	$	(31	)
Basic and diluted loss per share:
Basic & diluted net loss per share	$	(0.02	)	$	0.00

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TSS, Inc.

Adjusted EBITDA Reconciliation

(In thousands, unaudited)

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	Three Months Ended March 31,
	2020			2019
Net loss	$	(368	)	$	(31	)
Interest income (expense), net		82			73
Depreciation and amortization		119			81
Income tax expense (benefit)		9			8
EBITDA	$	(158	)	$	131
Stock based compensation		109			72
Provision for bad debts		-			-
Adjusted EBITDA	$	(49	)	$	203

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