TSR, Inc. Reports Results for the Second Quarter Ended November 30, 2023
- None.
- Revenue decreased by 16.8% to $21.7 million, with net income of $460,000 or $0.20 per diluted share. The decrease in revenue was primarily due to a reduction in the number of clerical and administrative contractors on billing with customers.
Insights
The reported 16.8% decrease in revenue for TSR, Inc. is a significant contraction that can be indicative of competitive pressures or a reduction in demand for IT consulting and recruiting services. The decline in revenue has a direct impact on the net income, which has also decreased from $674,000 to $460,000. This performance must be scrutinized in the context of the company's operational efficiency and cost management strategies. The reduction in selling, general and administrative expenses by $440,000, which aligns with the revenue decrease, suggests that management is actively working to control costs in response to the downturn.
Investors should consider the company's net working capital of $14.8 million, which provides a cushion for operational liquidity and potential investments. However, the long-term growth prospects mentioned by the CEO need to be weighed against the current economic uncertainties and the company's ability to adapt to changing market conditions. The stock price may react to these financial results and investor sentiment could be influenced by the company's outlook and strategic plans for revenue growth.
The IT consulting and recruiting sector is currently facing a challenging macro-economic environment, as indicated by TSR's performance. The decrease in the number of clerical and administrative contractors suggests a possible industry-wide trend of companies reducing their external workforce, potentially due to budget constraints or shifts towards automation and in-house capabilities. This trend could affect the demand for TSR's services in the short-term.
Furthermore, the company's emphasis on maintaining strong relationships with legacy customers and progress with new customers is essential for long-term sustainability. The company's positioning within the industry, as well as its balance sheet strength, will be critical factors in its ability to weather economic headwinds and capitalize on eventual market recoveries. Stakeholders should monitor the company's client acquisition and retention strategies, as well as industry trends, to assess potential future performance.
The performance of TSR, Inc. reflects broader economic conditions that may be leading businesses to reassess their spending on IT consulting and staffing. The reduction in customer spending could be symptomatic of a wider trend in cost-saving measures amidst economic uncertainty. This situation underscores the importance of agility in business models and the ability to pivot services to align with evolving market demands.
Despite the downturn, the company's strategic focus on cost control without compromising service quality is a prudent approach that may prove beneficial in maintaining profitability. The company's optimism for long-term growth, despite the current downturn, should be viewed within the larger context of economic recovery patterns and the potential for increased IT spending as companies eventually seek to upgrade or expand their technological capabilities.
For the quarter ended November 30, 2023, revenue decreased
Thomas Salerno, our CEO, stated: “Primarily as the result of decreases in the number of clerical and administrative contractors on billing with customers, revenue decreased
We continue to navigate an uncertain macro-economic environment, but we are optimistic that revenue and income will grow in the long run. The team continues to make progress with new customers and I am proud of their effort to offer our legacy customers some of the best service in the business. We believe that TSR is well-positioned in the industry and has a strong balance sheet.”
The Company will file its Form 10-Q for the quarter ended November 30, 2023 today with further details at www.sec.gov.
About TSR, Inc.
Founded in 1969, TSR, Inc. is a leading staffing company focused on recruiting information technology professionals for short- and long-term assignments, permanent placements, and project work. For over 50 years, TSR has successfully served clients in banking, asset management, pharmaceuticals, insurance, health care, public utility, publishing, and other industries. We provide candidate screening, timely placement, and a real understanding of the right skill sets required by our clients. To learn more, please visit our website at www.tsrconsulting.com.
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 internally and through the previously announced pursuit of suitable acquisition candidates; the successful integration of announced and completed acquisitions and any related benefits therefrom; the impact of adverse economic conditions on client spending which have a negative impact on the Company’s business; 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, as amended. The Company is under no obligation to publicly update or revise forward-looking statements.
Three Months Ending November 30, |
Six Months Ending November 30, |
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2023 Unaudited |
2022 Unaudited |
2023 Unaudited |
2022 Unaudited |
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|
|
|
|
|
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Revenue, net |
$ |
21,657,000 |
$ |
26,031,000 |
|
$ |
44,171,000 |
$ |
52,230,000 |
|
||||
|
|
|
|
|
||||||||||
Cost of sales |
|
17,839,000 |
|
21,400,000 |
|
|
36,326,000 |
|
43,166,000 |
|
||||
Selling, general and administrative expenses |
|
3,185,000 |
|
3,625,000 |
|
|
6,437,000 |
|
7,303,000 |
|
||||
|
|
21,024,000 |
|
25,025,000 |
|
|
42,763,000 |
|
50,469,000 |
|
||||
|
|
|
|
|
||||||||||
Income from operations |
|
633,000 |
|
1,006,000 |
|
|
1,408,000 |
|
1,761,000 |
|
||||
Other income (expense), net |
|
35,000 |
|
(18,000 |
) |
|
34,000 |
|
(47,000 |
) |
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|
|
|
|
|
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Pre-tax income |
|
668,000 |
|
988,000 |
|
|
1,442,000 |
|
1,714,000 |
|
||||
Income tax provision |
|
181,000 |
|
301,000 |
|
|
384,000 |
|
519,000 |
|
||||
|
|
|
|
|
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Consolidated net income |
|
487,000 |
|
687,000 |
|
|
1,058,000 |
|
1,195,000 |
|
||||
Less: Net income attributable to noncontrolling interest |
|
27,000 |
|
13,000 |
|
|
51,000 |
|
26,000 |
|
||||
|
|
|
|
|
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Net income attributable to TSR, Inc. |
$ |
460,000 |
$ |
674,000 |
|
$ |
1,007,000 |
$ |
1,169,000 |
|
||||
|
|
|
|
|
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Basic net income per TSR, Inc. common share |
$ |
0.21 |
$ |
0.31 |
|
$ |
0.47 |
$ |
0.55 |
|
||||
|
|
|
|
|
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Diluted net income per TSR, Inc. common share |
$ |
0.20 |
$ |
0.30 |
|
$ |
0.45 |
$ |
0.52 |
|
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|
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Basic weighted average common shares outstanding |
2,143,712 |
2,139,861 |
2,143,712 |
2,143,155 |
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|
|
|
|
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Diluted weighted average common shares outstanding |
|
2,250,118 |
|
2,232,332 |
|
|
2,248,851 |
|
2,234,473 |
|
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View source version on businesswire.com: https://www.businesswire.com/news/home/20240111913699/en/
Thomas Salerno
631-231-0333
Source: TSR, Inc.
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