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 Penver, Chief Financial Officer. Please go ahead.

Thank you, Mandeep. Good afternoon, everyone. Thank you for joining us on TSS’ conference call to discuss our fourth quarter and our fiscal ‘22 financial results. I am John Penver, the Chief Financial Officer of TSS and joining me today on the call is Darryll 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 raise after the date indicated, except as otherwise required by applicable law. For a list of the risks 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. Darryll will kick today 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 Darryll to discuss our strategy and direction. Darryll?

Thanks, John, and 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.tssiusa.com. During the fourth quarter, we experienced several important changes in our business. First, we announced the CEO transition by which I joined the company on November 14 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 delivered for our customer, which we did. I will 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 we put our execution at risk, which is not the prudent thing to do. We are experiencing higher cost 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 their 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 the company to grow within current customers while adding new customers and new market segments. I will dive into this further, but let me first turn it off back to John to provide some financial detail.

Thanks, Darryll. As Darryll said, looking back at the positive progress we made as a company in 2022 when compared to 2021. We grew our revenues in 2022 by 12% or $3.2 million to $30.6 million. We increased our gross profit by $2.6 million or 41% compared to 2021, and we improved our operating results from a loss of $831,000 in 2021 to operating income of $914,000 in 2022, a $1.7 million improvement. We increased our adjusted EBITDA by over $2 million compared to 2021. We also managed to pay off $2 million of long-term debt from our operating cash flows during 2022, leaving us with no long-term debt, except for our operating leases. Now let me turn to the P&L with some more details. Our total revenue for the fourth quarter of 2022 was $10.9 million. This compared to total revenue of $14.6 million in the fourth quarter of 2021 and up from $8.1 million in the third quarter of 2022. Changes in the level of procurement and reseller revenues are the main driver of change compared to 2021, as our reseller revenues decreased by $4.1 million from $11.7 million in the fourth quarter of 2021 to $7.6 million in the fourth quarter of 2022. This was offset by a $0.6 million increase in our systems integration revenue compared to the fourth quarter of 2021. Our facilities business, which includes our modular data center deployment and maintenance services, generated $1.2 million of revenue during the fourth quarter of 2022. This was $0.2 million or 13% lower than such revenue from the fourth quarter of 2021. This was $2.1 million or 63% lower than the $3.3 million we recorded in the third quarter of 2022. We had a temporary slowdown in deployment revenues during Q4, largely due to container availability…

Hey, John, thank you very much. Appreciate a lot of numbers. Let me make a couple of comments on what I think we’re focusing in on. So my first call with investors was my first day in the job, back in November. So now 4 months under my belt, it’s good to have this opportunity to share my point of view of our business with each of the additional what John just presented and share my excitement about the future. And then I really need to underline that. I’m very excited about our future. So as we have reported, we structured as CEO to CEO transition that lasted about 1.5 months, which ended December 31 on 2022. You can see how this impacted our financials in Q4, but it’s really hard to quantify just how helpful this handoff was. While historically valuable with the data sharing and information of what we did in the past, it also allowed – and mainly allowed me and us to more quickly formulate our go-forward tactical and strategic goals, which I will address today. I liken my role in so many words to being a head coach, player selection, game plan development, put the right people in the right jobs, you make adjustments and you communicate and you execute. That’s what we do. We’re making sure that we do that. During this time of change, we have engaged with our largest customer, and we have been challenged by them. The message to me was very clear, they value TSS far more than I would have guessed, yet they question our ability to scale our business. We are taking this challenge head on. We have short-term issues to address in order to remediate the cost issues that impacted Q4, plus we are investing in talent…

Sorry. I was about to say we should hand the call back to Mandeep to moderate any questions that anybody may have.

Okay. Very good.

[Operator Instructions] Our first question comes from the line of [Maj Soueidan from Gale Investing'. Please proceed.

Hello Darryll. Thanks. It’s been a really great call there and putting some things in perspective, I think you answered a lot of my questions. I am walking outside. I am sorry, so you might hear some noise here, Darryll. But the one question I had was this to reach your – some of your goals of like diversifying your customer base. I think you said you want to get like 10% of revenue from doing that. Is that organically? And are there opportunities from an acquisition point of view to reach those goals, because that might be the easier way to do it long really reduce that customer concentration.

Maj, I think I would answer it this way. By the way, good to hear your voice, and thanks for the question. I believe when you say organically, can we do it with – does that mean with the – our current team and in our current operating mode, is that what did you mean?

Yes.

So, the short answer is yes. It’s a step in the direction. 10% is not where we want to end up, but it’s to start.

So, what kind of – I mean, is – so that’s – you are going to do that from your current team and your current infrastructure. What type of opportunities exists outside that to grow inorganically, like through acquisitions? Is there – how does that market look right now to be able to do that? Is it the possibility in 2023?

Yes. I mean we are building that plan. I think maybe there is an expression that it’s all the facts are friendly. So, it could be anything. Right now, we are looking at what have we looked at in the past, where is the market going, who are – who is playing in that market. Ultimately, in a bigger picture, I would like us all to find ways to build a recurring revenue flow that leverages a platform of sorts, if you will, our expertise, the facilities, a combination of our people and our knowledge to either partner in new ways that opens up new avenues of revenue or acquire. So, I know that sounds kind of heady, but I am not – I don’t think anybody on the Board and the management team is against looking at ways to scale through acquisition if they makes good sense. Right now, we are building that plan. We are trying to do two things at the same time, which is tactical growth, profitable tactical growth. I need to underline that because technical growth at any cost is kind of dull. But strategic growth too, which is going to give us the bigger picture where we want to go when we grow up. So, tactical growth is clean up with our operations, build for scale, get a better demand signal from our key customer, look for new opportunities at the same time and manage that – manage our operations much better than we did in the past formally to make sure that we do this well properly and profitably.

Great. And one more question, Darryll, is your resale business can be quite volatile and lumpy. Are there some things and you might address because I missed the first few minutes of the call, but are there ways you can – you are looking at to smooth that out and make them more consistent? I think that would help evaluate too, if you can get that going.

Yes. No, another good call. Good questions. I am going to shut you off and you can’t have more than three questions. So, I am having some fun here Maj. We just - we hired a business development lady, to work alongside our efforts with our key customers, especially in the OEM space and in the Fed space. We expect that this lady and her skill set and her knowledge of our customer will allow us to build more demand that gives us the kind of, if you will, the coverage, if one thing doesn’t happen, another thing does happen. So, we are in the pipeline development game. We have got to have enough coverage to help us smooth out the demand. The lumpiness oftentimes is there is an expression of football, right. You run the wind, you throw the score. If you are throwing a score, you either win big or you lose big. We have got to establish our running game, which in effect is what we are talking about is building up pipeline.

Great. That’s all I got. Thank you.

All right. Happy to talk to you. You bet.

I would now like to turn the call over to Darryll Dewan for closing remarks.

Okay. As I have said earlier, I think I might have closed out a little ahead of schedule. But as I said earlier, I am very excited about the business and our team. We are building a team of people who want to win. And that’s exciting, and we have got some more work to do. As we mentioned, we are carefully working on ways to improve our operating costs and reduce them and then also make the investments we need to scale. I think we will emerge, as I said earlier, from this period and be stronger and more exciting as a company to not only our employees, but also to our customers hopefully and also to our shareholders. So, with that, I would like to say thank you. I am proud of our team. I appreciate everybody’s help and support here, and I will turn it back to our moderator.

Thank you, ladies and gentlemen. This does conclude today’s call. Thank you for your participation. You may now disconnect.