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DI

DSS, INC. (DSS)·Q1 2021 Earnings Summary

Executive Summary

  • Revenue grew 17% year over year to $4.94M, driven by Printed Products (+21%) and Direct Marketing (+6%), while Technology Sales rose 2% .
  • Operating loss widened to $(3.23)M from $(0.92)M on higher SG&A (up 158%), professional fees, and R&D tied to new business segments; net loss from continuing operations was $(3.90)M vs. $(0.92)M YoY .
  • Balance sheet strengthened via equity offerings in Jan–Feb 2021, lifting cash to $52.06M and stockholders’ equity to $133.62M as of Mar 31, 2021 .
  • No formal quantitative guidance or earnings call transcript found for Q1; subsequent events included sale of DSS Digital (May 7, 2021) and a $30M SHRG convertible note funded in April (potential strategic catalysts) .

What Went Well and What Went Wrong

What Went Well

  • Printed Products revenue rose to $3.85M (+21% YoY) on increased packaging sales and new customers; Direct Marketing revenue reached $0.61M (+6% YoY) .
  • Liquidity and capital structure improved: cash increased to $52.06M; stockholders’ equity rose to $133.62M after $61.07M net equity issuance in Q1 .
  • Management emphasized transformation: “We made tremendous progress in 2020… 12% revenue growth, and a 522% surge in stockholders’ equity… well positioned to drive sustainable growth in 2021” — CEO Frank D. Heuszel .

What Went Wrong

  • Operating loss widened to $(3.23)M (vs. $(0.92)M YoY), reflecting higher SG&A, professional fees and R&D as new segments scaled .
  • Other income turned negative: $(1.51)M, including a $0.58M equity-method loss (SHRG) and $(1.08)M losses on marketable securities .
  • Material weaknesses in disclosure controls persisted as of Q1 2021; remediation is ongoing .

Financial Results

MetricQ1 2020Q3 2020Q1 2021
Revenue ($USD Millions)$4.221 $4.169 $4.943
Operating Income ($USD Millions)$(0.917) $(2.389) $(3.229)
Net Income - Continuing Ops ($USD Millions)$(0.920) $5.366 $(3.898)
Diluted EPS - Continuing Ops ($USD)$(1.28) $0.70 $(0.20)

Segment revenue breakdown:

SegmentQ1 2020 ($USD Millions)Q1 2021 ($USD Millions)YoY Change
Printed Products$3.169 $3.846 +21%
Technology Sales/Services/Licensing$0.479 $0.489 +2%
Direct Marketing$0.573 $0.608 +6%

KPIs and balance sheet highlights (quarter-end):

KPIQ1 2021
Cash and cash equivalents$52.061M
Accounts receivable, net$3.806M
Inventory$2.556M
Current portion of long-term debt$0.498M
Long-term debt$1.661M
Total stockholders’ equity$133.616M
Net cash used in operating activities (Q1)$(7.793)M
Shares outstanding (as of May 7, 2021)27,670,125

Guidance Changes

No quantitative revenue, margin, or EPS guidance was disclosed in the Q1 2021 10-Q or the March 31, 2021 press release; no guidance ranges were identified for OpEx, OI&E, tax rate, or segment-specific metrics .

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY/Q1 2021None disclosed None disclosed N/A
Margins (Gross/EBIT/EBITDA)FY/Q1 2021None disclosed None disclosed N/A
OpEx / OI&E / Tax rateFY/Q1 2021None disclosed None disclosed N/A
Segment guidanceFY/Q1 2021None disclosed None disclosed N/A
DividendsFY/Q1 2021Not discussed Not discussed N/A

Earnings Call Themes & Trends

No Q1 2021 earnings call transcript was found; themes below reflect management commentary in filings/press releases.

TopicPrevious Mentions (Q3 2020)Current Period (Q1 2021)Trend
Direct Marketing executionEntry and strong growth contributed to revenue; significant sales & marketing ramp Continued growth (+6% YoY); SG&A and platform investments continued Scaling with higher cost base
Printed Products/PackagingRecovery post-COVID; +40% YoY in Q3 2020 +21% YoY; increased customer sales/new customers Sustained growth
Equity investments/marketable securitiesLarge unrealized gains in Q3 (Alset Intl., SHRG) fueling net income Unrealized losses and equity-method loss (SHRG) drove other income negative Volatility reversed
COVID-19 impactsDiscontinued Plastics; impairment taken; operational impacts Ongoing effects noted; fixed cost leverage visible in SG&A and operations Lingering pressures
Controls and governanceMaterial weaknesses; remediation plan underway Material weaknesses persisted; remediation ongoing Ongoing remediation
Strategic portfolio movesImpact BioMedical acquisition closed Aug 2020 Subsequent sale of DSS Digital; SHRG $30M convertible funded in April Portfolio reshaping

Management Commentary

  • “We made tremendous progress in 2020… generating a $5.7 million increase in net income from continuing operations, 12% revenue growth, and a 522% surge in stockholders’ equity. We continue to build on the successes of 2020… to further accelerate revenue and profit growth in the quarters ahead.” — Frank D. Heuszel, CEO .
  • “We remain relentlessly focused on strengthening DSS by exiting unprofitable business lines, investing in and continuing to revive our core businesses, improving top line revenues and net margins, controlling costs and creating new long-term scalable, recurring revenue streams.” — Jason Grady, COO .

Q&A Highlights

No Q1 2021 earnings call transcript found in the document set; no Q&A themes available [List: earnings-call-transcript returned 0 for Jan–Jun 2021].

Estimates Context

Wall Street consensus estimates via S&P Global for Q1 2021 were unavailable to retrieve at this time due to access limits; as such, we cannot compare results to consensus. Values retrieved from S&P Global.

Key Takeaways for Investors

  • Near-term: Revenue momentum in Packaging and Direct Marketing is intact, but operating losses widened on higher SG&A and reduced investment gains; absent guidance and call, trading likely keys off liquidity strength and subsequent portfolio actions (Digital sale; SHRG note funding) .
  • Cost structure: SG&A and professional fees step-up reflect segment scaling; watch for operating leverage and cost normalization to narrow losses in coming quarters .
  • Investment exposures: Equity-method and marketable security swings materially affect other income; monitor SHRG performance and Alset Intl. valuation impacts on reported earnings volatility .
  • Balance sheet: $52.06M cash and $133.62M equity provide runway to execute strategy; modest debt balances reduce financial risk .
  • Governance/controls: Material weaknesses remain; successful remediation is a prerequisite for sustained investor confidence .
  • Strategic repositioning: Sale of DSS Digital and capital infusion into SHRG may signal focus on higher-potential verticals; evaluate execution milestones post-Q1 .
  • Catalysts: Any future disclosures on BioHealth commercialization, packaging capacity expansion (e.g., Heidelberg press), and segment monetization could re-rate the narrative .