TSR, Inc. Reports Financial Results for the First Quarter Ended August 31, 2020

Rhea-AI Summary

TSR, Inc. (Nasdaq: TSRI) reported Q1 results for the quarter ended August 31, 2020. Revenue decreased by 2.9% year-over-year to $14.5 million, attributed to a reduced number of consultants billing. However, the company achieved an operating income of $60,000, a significant improvement from a loss of $914,000 in the previous year. Net loss narrowed to $3,000 or less than $0.01 per share compared to a loss of $663,000 or $0.34 per share last year. Additionally, TSR announced the acquisition of Geneva Consulting Group to drive growth.

Positive

• Operating income improved to $60,000, compared to an operating loss of $914,000 last year.
• Net loss decreased to $3,000 from $663,000, indicating better financial health.

Negative

• Revenue declined by 2.9% year-over-year to $14.5 million.

HAUPPAUGE, N.Y.--(BUSINESS WIRE)--TSR, Inc. (Nasdaq: TSRI), a provider of information technology consulting and recruiting services, today announced financial results for the first quarter ended August 31, 2020.

For the quarter ended August 31, 2020, revenue decreased 2.9% from the same quarter last year to $14.5 million. Operating income for the current quarter was $60,000 as compared to an operating loss of $914,000 in the prior year quarter. Net loss attributable to TSR for the current quarter was $3,000 as compared to net loss attributable to TSR of $663,000 in the prior year quarter. Additionally, net loss per share for the current quarter was less than $0.01 compared to net loss per share of $0.34 in the prior year quarter.

Thomas Salerno, CEO, stated, “Revenue decreased 2.9% for the first quarter due to a decrease in the average number of consultants on billing with customers. However, cost of sales decreased at a greater rate than revenue, yielding an increase in gross profit. Selling, general and administrative expenses decreased by $919,000 for the quarter. The decrease in SG&A was due to a significant decrease in legal expenses which had been incurred in connection with litigation and the contested proxy solicitation related to our 2018 annual meeting. Operating income for the current quarter was $60,000 as compared to an operating loss of $914,000 in the prior year quarter.

After the end of the first quarter, on September 1, 2020, TSR announced the acquisition of Geneva Consulting Group, a provider of temporary and permanent information technology personnel based in Port Washington, New York. Geneva has been a well-respected, top tier firm in the staffing industry since 1997 and we look forward to welcoming their highly skilled team to our family. We will seamlessly continue to provide exceptional service to their clients and offer them additional services to further support their staffing needs. We believe this acquisition fits very well with TSR’s new Board of Directors’ overall strategic vision of accelerating growth and improving returns for shareholders.”

The Company will file its Form 10-Q for the fiscal quarter ended August 31, 2020 today with further details at www.sec.gov.

Certain statements contained herein, including statements as to the Company’s plans, future prospects and future cash flow requirements are forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those set forth in the forward-looking statements due to known and unknown risks and uncertainties, including but not limited to, the following: the statements concerning the success of the Company’s plan for growth, both internal and through the previously announced pursuit of suitable acquisition candidates; the successful integration of announced acquisitions and any anticipated benefits therefrom; the impact of adverse economic conditions on client spending which have a negative impact on the Company’s business, which includes, but is not limited to, the current adverse economic conditions associated with the COVID-19 global health pandemic and the associated financial crisis, stay-at-home and other orders; risks relating to the competitive nature of the markets for contract computer programming services; the extent to which market conditions for the Company’s contract computer programming services will continue to adversely affect the Company’s business; the concentration of the Company’s business with certain customers; uncertainty as to the Company’s ability to maintain its relations with existing customers and expand its business; the impact of changes in the industry such as the use of vendor management companies in connection with the consultant procurement process; the increase in customers moving IT operations offshore; the Company’s ability to adapt to changing market conditions; the risks, uncertainties and expense of the legal proceedings to which the Company is a party; and other risks and uncertainties described in the Company’s filings under the Securities Exchange Act of 1934. The Company is under no obligation to publicly update or revise forward-looking statements.

	August 31, 2020				August 31, 2019
Revenue, net	$	14,514,000			$	14,947,000
Cost of sales		12,183,000				12,671,000
Selling, general and administrative expenses		2,271,000				3,190,000
		14,454,000				15,861,000
Income (loss) from operations		60,000				(914,000	)
Other income, net		(62,000	)			8,000
Pre-tax loss		(2,000	)			(906,000	)
Income tax benefit		(5,000	)			(247,000	)
Consolidated net income (loss)		3,000				(659,000	)
Less: Net income attributable to noncontrolling interest		6,000				4,000
Net loss attributable to TSR, Inc.	$	(3,000	)		$	(663,000	)
Basic and diluted net loss per TSR, Inc. common share	$	(0.00	)		$	(0.34	)
Basic and diluted weighted average common shares outstanding		1,962,062				1,962,062