Kris Tuttle from Blue Caterpillar LLC asked for clarification on the operational status and capacity of the new Georgetown, Texas facility.
President & CEO Darryll Dewan confirmed that the new Georgetown facility is now '100%... full capacity, full production capability' after a transition that began around May and is now complete.
Kris Tuttle asked about the durability of TSS's value proposition in rack integration, questioning if efforts by partners like Dell and NVIDIA to simplify integration could eventually render TSS's services obsolete.
Executive Darryll Dewan countered that AI rack technology is becoming significantly more complex, not simpler, citing increased power requirements, server weight, and the shift to direct liquid cooling (DLC). He asserted this growing complexity strengthens TSS's role as a specialized integrator. Executive Daniel Chism added that the new Georgetown facility was purpose-built with expanded DLC capacity to address these advanced, future requirements, positioning the company for continued growth.
Kris Tuttle from Bluecaterpillar asked about the company's plans for its existing facility after moving to the new one and questioned if there was further room to improve turnaround times in the rack integration business.
Darryll Dewan (executive) outlined two options for the old facility: subleasing it at a potential profit due to favorable rates, or repurposing it for an expanding part of their integration business. CFO Daniel Chism added that the EBITDA forecast conservatively assumes no sublease income until the next year. Regarding efficiency, Dewan stated that while the biggest gains in cycle times have been made (from weeks to days), his team is constantly seeking further optimization, especially with new direct liquid cooling concepts.
Kris Tuttle of Blue Caterpillar asked for a qualitative perspective on the long-term attractiveness of the Facilities Management business and whether it could become as significant as the integration business in the coming years.
Executive Darryll Dewan highlighted the market's potential, citing IDC forecasts of 12-13% CAGR growth. He noted that while long lead times for modular data center (MDC) containers are a current challenge, he is optimistic about new AI-related opportunities that will drive revenue in 2025 and 2026, though it may not reach the same scale as rack integration.