TSS (NASDAQ:TSSI) Releases Quarterly Earnings Results, Misses Estimates By $0.03 EPS

TSS (NASDAQ:TSSI) announced its quarterly earnings results on Thursday. The company reported $0.05 earnings per share for the quarter, missing analysts’ consensus estimates of $0.08 by ($0.03), FiscalAI reports. The company had revenue of $35.14 million during the quarter. TSS had a net margin of 7.14% and a return on equity of 25.27%.

Here are the key takeaways from TSS’s conference call:

• Higher-margin businesses continued to grow strongly: systems integration revenue increased 46% year over year and facilities management revenue rose 84%, driving an 11% increase in gross profit and a 12% increase in Adjusted EBITDA despite lower total revenue.
• Management expects procurement revenue to return to its historical $30 million–$40 million quarterly range in Q3 and reaffirmed full-year Adjusted EBITDA guidance toward the upper end of $20 million–$22 million, with the second half expected to be stronger than the first.
• TSS is investing approximately $17 million to expand power and cooling capacity for NVIDIA’s Vera Rubin platform, with most of the investment expected to be completed by mid-September and to begin contributing revenue primarily in Q4.
• Second-quarter revenue declined 20% to $35.1 million because procurement revenue fell 45% to $18.2 million, highlighting the volatility of customer ordering and infrastructure deployment timing, even as the company’s higher-margin revenue mix improved.
• Net income decreased to $1.4 million, or $0.05 per diluted share, from $1.5 million, or $0.06, as the company began recognizing a fuller income-tax burden following the removal of its deferred-tax valuation allowance.

TSS Price Performance

TSS stock traded down $2.30 during midday trading on Friday, reaching $9.66. The company’s stock had a trading volume of 2,500,144 shares, compared to its average volume of 1,381,811. The firm has a market capitalization of $271.16 million, a PE ratio of 19.69 and a beta of 2.09. TSS has a fifty-two week low of $6.87 and a fifty-two week high of $21.77. The stock’s 50 day simple moving average is $11.39 and its 200 day simple moving average is $11.70. The company has a debt-to-equity ratio of 0.16, a quick ratio of 1.99 and a current ratio of 2.18.

Insiders Place Their Bets

In other news, SVP Kieran Brennan sold 10,000 shares of the stock in a transaction dated Monday, June 1st. The shares were sold at an average price of $16.00, for a total value of $160,000.00. Following the completion of the transaction, the senior vice president owned 271,333 shares in the company, valued at $4,341,328. This trade represents a 3.55% decrease in their position. The sale was disclosed in a document filed with the SEC, which is available through this hyperlink. Also, Director Peter H. Woodward sold 200,000 shares of the firm’s stock in a transaction dated Friday, May 29th. The shares were sold at an average price of $16.07, for a total transaction of $3,214,000.00. Following the completion of the sale, the director owned 983,521 shares of the company’s stock, valued at $15,805,182.47. This trade represents a 16.90% decrease in their position. The disclosure for this sale is available in the SEC filing. Over the last ninety days, insiders have sold 310,000 shares of company stock worth $4,922,000. Corporate insiders own 15.97% of the company’s stock.

Institutional Inflows and Outflows

A number of hedge funds have recently added to or reduced their stakes in the stock. Vanguard Group Inc. boosted its stake in shares of TSS by 31.2% during the 3rd quarter. Vanguard Group Inc. now owns 1,240,958 shares of the company’s stock worth $22,474,000 after acquiring an additional 294,971 shares in the last quarter. Millennium Management LLC increased its stake in TSS by 81.9% in the 4th quarter. Millennium Management LLC now owns 865,350 shares of the company’s stock valued at $6,118,000 after purchasing an additional 389,497 shares in the last quarter. Geode Capital Management LLC increased its stake in TSS by 8.3% in the 4th quarter. Geode Capital Management LLC now owns 539,359 shares of the company’s stock valued at $3,814,000 after purchasing an additional 41,536 shares in the last quarter. Value Aligned Research Advisors LLC raised its holdings in TSS by 6.8% during the fourth quarter. Value Aligned Research Advisors LLC now owns 460,510 shares of the company’s stock worth $3,256,000 after purchasing an additional 29,247 shares during the last quarter. Finally, UBS Group AG raised its holdings in TSS by 188.1% during the fourth quarter. UBS Group AG now owns 316,456 shares of the company’s stock worth $2,237,000 after purchasing an additional 206,600 shares during the last quarter.

Wall Street Analyst Weigh In

TSSI has been the subject of several research analyst reports. Needham & Company LLC decreased their price objective on TSS from $16.00 to $13.00 and set a “buy” rating for the company in a report on Friday. Weiss Ratings downgraded TSS from a “hold (c+)” rating to a “hold (c)” rating in a report on Wednesday, June 17th. Finally, Wall Street Zen lowered shares of TSS from a “sell” rating to a “strong sell” rating in a research report on Saturday, May 16th. Two research analysts have rated the stock with a Buy rating and two have given a Hold rating to the company. According to MarketBeat, the stock presently has an average rating of “Moderate Buy” and an average price target of $16.17.

TSS Company Profile

TSS, Inc offers planning, design, engineering, construction management, commissioning and maintenance services. It provides these services primarily for specialized facilities such as data centers, communications rooms, call centers, laboratories, trading floors, network operations centers, medical facilities and similar environments. TSS Inc, formerly known as Fortress International Group, Inc, is based in Columbia, United States.