WEB NEWS Research
Intouch Insight Ltd (OTC:INXSF) (INX.V) ($0.26; $9.5M market cap), announced Q3 2024 results:
Q3 sales of $6.6 million vs $5.6 million in the prior year
Q3 2024 Non-GAAP EPS of $0.01 vs $0.01 in the prior year
Net income of $366,763 vs $258,531 in the prior year
"Our financials illustrate that Intouch is a growing, profitable and financially self-sufficient business. Sales and marketing efforts are building on our thought leadership and improving brand recognition, particularly in the key target market segments of Quick Serve Restaurants and Petro Convenience, as evidenced by recent mainstage speaking invitations for four industry events," said Cameron Watt, President & Chief Executive Officer of the Company.
"This year will mark the second year in a row with revenues over $25 Million and we expect growth to continue well beyond this level into the future, " said Watt.
As is often the case with INXSF, there is more information available in the sedar filing regarding outlook. Here are the key takeaways from this quarterly filing:
Shift to slower more profitable growth is working
“As we look through the financials it is evident that there is a growing, profitable business and management expects this to continue.”
Sales pipeline healthier than it has been in years
Re-setting Ardent business model and expect growth with higher margins in 2025
Expects business to remain profitable and will be self sufficient, and ensures that there will be no dilution
Recall that in our 11/14/2024 email that we closed our LegacyTop 5 Model Portfolio to focus on our new high conviction Open Forum Focus Model Portfolio , stating this about INXSF:
“Closing INXSF from the Top Five Favorites Model Portfolio at $0.27 with a final return of -1.97% and high return of 42.62%. (the stock still resides in our Run To One Model Portfolio).
In the case of INXSF, management has decided to shift away from aggressively growing revenues at the expense of profitability (remaining around breakeven)... to dialing back revenue growth to achieve profitability. Investors are in a holding period as they wait to see if management can fully execute this strategy and how much revenue growth will need to be reduced to reach profitability. There’s also concern that the company's customer experience management services are facing a softer demand environment. We are confident that management will eventually get back on track to achieving aggressive revenue growth once profitability is attained. The stock is selling at a very low price-to-sales multiple.”
INXSF Q3 quarter has alleviated our near-term uncertainty on the timing of when their strategy to reach consistent profitability would occur. At an EV/S of 0.54x and run-rate P/E of ~9 we see significant upside from current prices.
Below is a full outlook section from the related SEDAR filing (SEDAR is the Canada’s equivalent of the SEC filings database).
“We started 2024 with plans for investment into aggressive growth and modified those plans in the spring based on market expectations. Specifically, we shifted towards slower, more profitable growth. As part of this adjustment, we discontinued the then-current Ardent business model. With three quarters now reported, we are in the middle of the adaptations being made to the business, and the impacts are apparent throughout the reported financials. For example: Q3 delivered 18% revenue growth over the prior year, while year-to-date growth is 33%.Gross margins in Q3 were up to 48.2%, compared to a year-to-date gross margin of 42.8%.
As we look through the financials, it is evident that there is a growing, profitable business, and management expects this to continue. Sales and marketing efforts are improving our brand recognition, particularly in the key target market segments of Quick Serve Restaurants and Petro Convenience. In addition to the publication of our studies and resulting media attention, we were also invited to the main stage to speak at four industry events in 2024. Looking forward, we expect to build on this success, expand our overall thought leadership in the industries we serve, and continue to improve our sales pipeline, which is healthier than it has been in years.
We are also in the middle of re-setting the Ardent business model and expect that it will be revenue-generating in 2025, with higher margins in line with our focus on profitable growth. In addition, with almost three quarters of our revenue coming from the United States, and with the election behind us, we are optimistic that business will be back to normal behavior for 2025.This year will mark the second year in a row with revenues over $25 million, and we expect growth to continue well beyond this level into the future.
While we have already indicated that we expect the business to remain profitable, it is worth stating explicitly that we are self-sufficient with our cash needs and remain committed to ensuring dilution is not required for the successful operation of the existing business.
One caveat investors could take away from this is that the revenues of over $25 million statement implies a possible down Q4 in revenue terms (to around $4 million ),given last year’s big outlier Q4 of $9 million (low margin) revenue performance.. However, as we said before, we are more focused on profitable growth, and all indications are that Q4, despite lower revenues, should have an improved bottom line. And lastly, comments suggest that 2025 and beyond should continue to improve and show a profitable growing business.
Intouch Insight Ltd. develops managed mobile software applications and software-as-a-service platforms, and delivers services for private businesses, governments, and regulators in Canada and the United States
Research
Tss Inc (OOTC:TSSI) ($9.27, $219.6M market cap) announced its shares have been approved to uplist to the Nasdaq Capital Market. Shares will begin trading on the Nasdaq at the open tomorrow morning.
Darryll Dewan, CEO of TSS Inc., commented, "Uplisting to the Nasdaq marks a significant milestone in our journey as a publicly traded company, and as a technology company, trading on this market is a logical next step. There is a strong positive outlook for our services, particularly AI-enabled rack integration, given the growing interest in AI technologies. Listing on the Nasdaq will improve liquidity for our investors, increase our visibility and help attract new investors as we continue to execute our growth strategy."
Investors should note the company is also announcing Q3 2024 results after hours, tomorrow. TSSI has by far been one of the best performing stocks in our coverage universe, with shares up 3,656% since being added to the select coverage universe in September 2017.
TSS, Inc. provides various services for the planning, design, development and maintenance of mission-critical facilities and information infrastructure, as well as integration services.
Research
Tss Inc (OOTC:TSSI) ($0.44, $9.7M market cap) - We feel it is worth noting that DELL is up strong on the heels of excellent Q4 2023 results which were fueled by demand in its AI servers.
As we have mentioned in prior notes, although the company has not disclosed this information, we believe Dell Technologies Inc. (NYSE:DELL) is its biggest customer, possibly representing up to 90% of its revenue.
From the DELL release :
“Our strong AI-optimized server momentum continues, with orders increasing nearly 40% sequentially and backlog nearly doubling, exiting our fiscal year at $2.9 billion," said Jeff Clarke, vice chairman and chief operating officer, Dell Technologies. "We've just started to touch the AI opportunities ahead of us, and we believe Dell is uniquely positioned with our broad portfolio to help customers build GenAI solutions that meet performance, cost and security requirements."
At some point DELL’s growth in AI servers/initiatives could spill over to TSSI if it can prove that it can build and deploy modular data centers quickly. To be clear, we still need more information on how much of Dell server demand is related to modular data centers.
Research
Tss Inc (OOTC:TSSI) ($0.56, $11.0M market cap), a data center facilities and technology services company announced Q1 2021 results:
Sales of $5.2 million vs $10.6 million in the prior year; Reseller revenues were $2.2 million vs $6.8 million in the prior year
Net loss of $0.04 vs net loss of $0.02 in the prior year
“We continue to see fluctuations in our revenue and profitability quarter to quarter. These fluctuations are primarily due to the timing of delivery of new projects. We anticipate these quarterly fluctuations to continue throughout the year,” said Anthony Angelini, President and Chief Executive Officer of TSS. “We are seeing a significant number of large opportunities within all of our business units. Our expectation is the delivery of these opportunities will result in significant positive results in the second half of the year and into next year.”
Research
Tss Inc (OOTC:TSSI) ($1.00, $18.4M market cap) , a data center facilities and technology services company, announced Q1 2020 results:
Q1 2020 sales of $10.5 million vs $4.6 million in the prior year
Net loss of $0.02 vs $0.00 in the prior year
TSSI will host its Q1 2020 conference call at 4:30 Pm EST today. Only the 10-Q is currently available. Management tends to offer an outlook on the next quarter during the associated call. According to the 10-Q, the company experienced minor impacts from Covid thus far:
“Revenues in our facilities segment decreased by $0.8 million or 27% compared to the first quarter of 2019 due to lower levels of modular data center deployments, caused by customer deferrals of projects and other restrictions on travel and site access primarily as a result of the COVID-19 pandemic. A significant customer of this segment restricted access to its data center sites, which prevented us from deploying new modular data centers and performing other activities for this customer.”
Research
Third Quarter 2019 Results
Sales of $4.2 million vs $6.4 million in the prior year
Loss of $0.01 vs EPS of $0.04
“Our revenues and adjusted EBITDA have been relatively consistent the first three quarters of this year. However, with the launch of our reseller program, we expect revenue in the fourth quarter to be higher than the first three quarters combined. In addition, we expect Adjusted EBITDA in the fourth quarter to be nearly double the first three quarters of 2019 combined.” said Anthony Angelini, President and Chief Executive Officer of TSS. “We are excited to have started to deliver on this program in the last week of September, and we believe this program will drive substantial growth, not only in the fourth quarter of 2019, but well into the future. Our expectations are that this will also assist us in expanding relationships with other third parties. We believe this program is a significant opportunity to substantially grow our top and bottom lines well into the future.”
Key commentary takeaways: New reseller business started later than expected; mgmt calling for strong Q4 2019 with revenues surpassing the first 3 quarters combined; adj EBITDA to nearly double the first 3 quarters combined; believe new business path will lead to substantial growth in top and bottom lines well into the future; It should be noted that the conference call suggest fluctuations in reseller activity which could lead to lumpiness in quarterly financials.
Research
Tss Inc (OTCQB:TSSI) ($0.50; $7.7M market cap), a data center and mission critical facilities and technology services company, announced Q1 2018results:
Quotes from management:
“We have started 2018 off well and we expect strong performance with solid profitability throughout the year,” said Anthony Angelini, President and Chief Executive Officer of TSS. “The foundational steps we have taken the last several years have positioned our data center lifecycle services well for continued growth and profitability into the future.”
The conference call reiterated its 2018 guidance of revenues north of $20 million and profitability to be better than 2017.
Liquidity Requirements
Our history of operating losses, continuing use of cash to fund operations, declining revenue, and declining current ratio may cause uncertainty about our ability to continue to operate our business as a going concern. We have reviewed our current and prospective sources of liquidity, significant conditions and events as well as our forecasted financial results and concluded that we have adequate resources to continue to operate as a going concern. We recently extended the term of our bank credit facility to ensure availability of this resource through May 2016. In October 2014 we entered into a customer financing program with our largest customer that allows us to accelerate the receipt of cash from receivables owed by that customer that resulted in the accelerated receipt of $3.1 million from outstanding receivables. In September 2014 we also restructured the repayment terms of our notes payable held by Mr. Gallagher, a director and our Chief Technical Officer, to defer payments of a large portion of this obligation to 2016, further reducing short term liquidity requirements on our business. These steps taken have collectively improved our liquidity position since June, 2014.
During the third quarter we also considered various sources of additional debt, convertible debt and equity financing that may be available and so we continue to negotiate with various third parties to see if such financing can be obtained in amounts and on terms acceptable to us.
Comments & Business Outlook
Fortress International Group, Inc. (PINKSHEETS: FIGI), a provider of consulting and engineering, construction management and 24/7/365 site services for mission-critical facilities, today announced that it has been awarded contracts for $27.0 million in new business through the first week of April 2010.
