Ladies and gentlemen, thank you for standing by. My name is Brent, and I will be your conference operator today. At this time, I would like to welcome everyone to the TSS Second Quarter 2023 Earnings Call. All lines have placed on mute to prevent any background noise. After the speakers remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. It is now my pleasure to turn today's call over to Mr. John Penver, Chief Financial Officer. Sir, please go ahead.

Thank you, Brent. Good afternoon, everyone. Thank you for joining us on TSS' conference call to discuss our second quarter 2023 financial results. I'm John Penver, the Chief Financial Officer for TSS. And joining me today on the call is Darryll Dewan, the President and Chief Executive Officer for 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 that 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, August 14, 2023. TSS expressly disclaims any obligation to update, amend, supplement or otherwise review any information or forward-looking statements made on this conference call or the replay to reflect events or circumstances that may arise after today's date, 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. 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. Darryl will kick today's call off with an overview, and then I will provide a review of our second quarter '23 results and then turn the call over to Darryll to further discuss our strategy and company direction. Darryll?

Thank you, John. Earlier today, we released a press release announcing our financial results for the second quarter of 2023. A copy of that release will be made available on our website at www.tssiusa.com. Overall, we achieved very good financial results in Q2. We announced in our last earnings call that we would focus on three key areas, and we're glad to report solid progress in each. Number one, improve our systems integration processes and business model. Number two, pursue and place talent to prepare for and accelerate our growth. And number three, to develop a strategy to capitalize on emerging markets. First, through successful restructuring of our systems integration business, where we were formally in a loss-making position, we have proven our capability to cater to complex and demanding customer build requirements and adapt our business to changes in demand. Our efforts have led to increased efficiency and profitability in Q2 and have paved the way for continued growth and success. Second, we committed that we will selectively invest in our leadership team, and we announced the addition of Janet Morrison as our Chief People Officer and Corporate Communications Leader. Janet is working closely with our team to assess our talent needs to drive and support our growth. She will also lead our effort to publicly share news about our key wins, company awards and major accomplishments. Third and very exciting for us all is we embarked on a plan to enhance our core selling strengths and develop new capabilities to tap into fresh markets for sustained growth. We are evaluating multiple go-to-market routes for the modular data center business that we expect will drive significant long-term growth. We're already making progress with our sales plan. Jim Olivier, the Senior VP of Sales, is leading the effort, working closely…

Thanks, Darryll. As Darryll said, looking at our second quarter, the results were very strong with year-over-year growth in revenue, gross and operating profit and adjusted EBITDA. The two reseller transactions that we mentioned on our last quarter that had slipped from Q1, both closed during the second quarter and helped drive these strong results. Our revenues were up 126% compared to the second quarter of 2022, and despite higher operating expenses, we were able to improve our adjusted EBITDA as well. So let me go into the details. Our total revenue for the second quarter of 2023 was $14.5 million. This represented growth of $8.1 million or 126% compared to the total revenue of $6.4 million that we had in the second quarter of 2022. This also compares favorably with the $6.6 million of revenue we had in the first quarter of 2023. This growth was primarily from a $9.8 million increase in our procurement and reseller activities compared to 2022 and an increase of 16% or $0.3 million in our integration business. This was offset by a $2 million decrease in our facilities revenue as the number of modular data center deployments has fallen since 2022. As I just indicated, the most significant change in the second quarter was from the growth in revenue and profits from our procurement and reseller services. The timing and volume of these resell and procurement transactions is often beyond our control. During the second quarter of 2023, we had 45 reseller transactions, 34 of which were what we call agent-type transactions where we recognized GAAP revenue at the amount of any fee or commission that we were paid. Now the gross value of some of these agent transactions can be quite large. So the gross value of all the procurement and reseller…

Okay. John, thank you. At the outset of this call, we have a plan for TSS and we're working quickly and moving quickly on all fronts. Let's begin with our Integration business. This business was the one in the most challenging condition when I started. We lacked the ability to scale up or back with volumes that can vary dramatically. More importantly, when we approached our key OEM customer for additional volumes, concern was expressed about our ability to scale. That has completely changed in the first half of this year. We have managed our overall cost down while cleaning up our process. We can now service more business, even twice the level of business at less cost than before. Labor is critical for us, and we have restructured our approach to hiring for our Integration business. Balancing our labor force between direct employees and temporary workers is critical to have capacity for growth while maintaining profitability. We have accomplished this with significant reductions in labor costs overall. This enables us to be more nimble and to quickly react to periods of lower and/or higher demand. Second, we continue to build out our A-team of players. I mentioned Todd Marrott in Q1. He continues to lead the transformation of our Integration business. He is doing a great job. We hired Jim Olivier in Q2 to lead our modular data center revenue activities, and his first three months with TSS, he’s uncovered new routes to market and a handful of important opportunities. We have most recently decided to move 100% of all of our TSS revenue generation under Jim. Kieran Brennan, who formerly managed this, will refocus his attention on new customer expansion and partner selection and management. And we recently hired Janet Morrison to lead our Talent Development and Selection…

Questions, Brent?

[Operator Instructions] There are no further -- sorry, there are no questions at this time. I will now turn the call back over to the CEO, Mr. Darryll Dewan.

Okay. I think that summarizes our call. Thank you for your attention and participation. I'm looking forward to an exciting future. Stay tuned for some announcements. And have a good afternoon. Thank you very much.

Ladies and gentlemen, thank you for participating. This does conclude today's conference call. You may now disconnect.