Business Wire | Aug 17, 2020 05:00PM EDT

TSR, Inc. Reports Financial Results for the Fourth Quarter and Fiscal Year Ended May 31, 2020

Aug. 17, 2020

HAUPPAUGE, N.Y.--(BUSINESS WIRE)--Aug. 17, 2020--TSR, Inc. (Nasdaq: TSRI), a provider of information technology consulting and recruiting services, today announced financial results for the fourth quarter and fiscal year ended May 31, 2020.

For the quarter ended May 31, 2020, revenue decreased 5.0% from the same quarter last year to $14.8 million. Operating income for the current quarter was $350,000 as compared to an operating loss of $855,000 in the prior year quarter. Net income attributable to TSR for the current quarter was $421,000 as compared to net loss attributable to TSR of $601,000 in the prior year quarter. Additionally, net income per share for the current quarter was $0.21 compared to net loss per share of $0.31 in the prior year quarter.

For the year ended May 31, 2020, revenue decreased 6.7% from last year to $59.1 million. Net loss attributable to TSR for the current year was $1,126,000 as compared to net loss attributable to TSR of $1,336,000 in the prior year. Additionally, net loss per share for the current year was $0.57 compared to a net loss per share of $0.68 in the prior year.

Thomas Salerno, CEO, stated, "Revenue decreased 5.0% for the fourth 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 $1,141,000 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 $350,000 as compared to an operating loss of $855,000 in the prior year quarter.

The Company benefited from a tax provision of the CARES Act which allows for the carryback of net operating losses. The Company had calculated the income tax benefit from the net operating loss for fiscal 2019 at the federal income tax rate of 21%, however, in prior years, taxes were paid at 34%. The new tax legislation created an additional income tax benefit in excess of $200,000. The combination of these changes resulted in net income of $421,000 in the fourth quarter of the current fiscal year compared with a loss of $601,000 in the prior year quarter."

"Revenue decreased 6.7% for the year due to a decrease in the average number of consultants on billing with customers. Selling, general and administrative expenses decreased by $744,000 for the year. The decrease in SG&A was offset by the decrease in gross profit of $647,000 from the reduced revenue and by the interest expense incurred from the line of credit established in November 2019 and the Paycheck Protection Program Loan received in April 2020. The Company also had an additional tax benefit in excess of $200,000 as described above. This resulted in a reduced loss of $1,126,000 in the current fiscal year compared with a loss of $1,336,000 in the prior year."

"Like the whole US economy, the landscape for our services remains uneven and unpredictable. Even with the backdrop, one highlight I want to share is how proud I am of all the TSR employees who stepped up and created our Feed the Heroes program at the onset of the Corona Virus Pandemic. Through monetary donations from our employees and Board of Directors, we were able to raise thousands of dollars and feed approximately 2,000 front line workers that were battling COVID-19 at ten local hospitals, local police departments, and local transit and sanitation departments. As hard as this time has been for everyone, I am pleased the TSR team scored a small win for local restaurants while supporting our hometown heroes."

The Company will file its Form 10-K for the fiscal year ended May 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 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.

Three Months Ended Year Ended

May 31, May 31, May 31, May 31,

2020 2019 2020 2019

Revenue, net $14,796,000 $15,574,000 $59,121,000 $63,340,000



Cost of sales 12,363,000 13,235,000 49,943,000 53,515,000

Selling, general and

administrative expenses 2,083,000 3,224,000 10,929,000 11,673,000

14,446,000 16,459,000 60,872,000 65,188,000



Income (loss) from 350,000 (885,000) (1,751,000) (1,848,000)operations



Other income, net (35,000) 1,000 (59,000) 11,000



Pre-tax income (loss) 315,000 (884,000) (1,810,000) (1,837,000)



Income tax provision (121,000) (291,000) (712,000) (538,000)(benefit)



Consolidated net income 436,000 (593,000) (1,098,000) (1,299,000)(loss)



Less: Net incomeattributable to 15,000 8,000 28,000 37,000noncontrolling interest



Net income (loss) $ 421,000 $ (601,000) $ $attributable to TSR, Inc. (1,126,000) (1,336,000)



Basic and diluted netincome (loss) per TSR, Inc. $ 0.21 $ (0.31) $ (0.57) $ (0.68)common share



Basic and diluted weightedaverage common shares 1,962,062 1,962,062 1,962,062 1,962,062outstanding

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CONTACT: Thomas Salerno 631-231-0333