BusinessWire

TSR, Inc. Reports Financial Results for the Third Quarter Ended February 29, 2020

Company Named Thomas Salerno CEO in the Quarter

Employees are working remotely and healthy

HAUPPAUGE, N.Y.--(BUSINESS WIRE)--TSR, Inc. (Nasdaq:TSRI), a provider of computer programming consulting services, today announced financial results for the third quarter ended February 29, 2020.

For the quarter ended February 29, 2020, revenue decreased 4.3% from the same quarter last year to $14.1 million. Net loss attributable to TSR for the third quarter was $945,000 as compared to net loss attributable to TSR of $676,000 in the prior year quarter. The third quarter included recognizing an $818,000 expense to finalize long standing issues with the Company’s largest investor. Net loss per share for the third quarter was $0.48 compared to net loss per share of $0.34 in the prior year quarter.

Bradley Tirpak, Chairman, stated, “During the quarter, five members of the Board resigned in accordance with the Settlement Agreement entered into in August 2019. The new Board, consisting on Tim Eriksen, Robert Fitzgerald and myself have been working diligently to improve the Company. We are committed to working with and for shareholders rather than spending money to fight against them. As part of that we have implemented a number of changes, including appointing Thomas Salerno CEO and settling the matter with the Company’s largest investor.”

Thomas Salerno, CEO, stated, “Revenue decreased 4.3% for the third quarter. The revenue decrease was primarily due to a reduction in the number of consultants on billing with customers and a decrease in average billing rates for IT consultants on billing with customers resulting from a shift in business mix with fewer placements for high end skills. Selling, general and administrative expenses increased by $224,000 for the quarter. The increase in SG&A was due to a settlement with the Company’s largest shareholder, with an estimated present value of $818,000, to reimburse expenses incurred during its solicitations in connection with the Company’s annual meeting in 2018 and 2019, the costs incurred in connection with litigation initiated by and against the Company, as well as execution and enforcement of the Settlement and Release Agreement by and between the Company, the shareholder and certain other parties. There was also a decrease in the Company’s professional and advisory fees of $625,000 due to the settlement of various lawsuits and the contested proxy solicitation relating to our 2018 annual meeting, which had been rescheduled and was held on October 22, 2019. Additionally, our business is holding up well in light of the COVID-19 pandemic. Currently, in excess of 95% of our IT consultants and 75% of our administrative workers on billing with customers have been able to transition to working from home. However, there can be no assurance that the customers will continue this arrangement.”

Bradley Tirpak stated, “COVID has presented unique challenges for all businesses, including ours. I am extremely thankful that, thus far, all of our employees have remained healthy. I applaud their efforts to adjust during this difficult time.”

The Company will file its Form 10-Q for the quarter and nine months ended February 29, 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, which may significantly reduce client spending and which may 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. The Company is under no obligation to publicly update or revise forward-looking statements.

 

 

Three Months Ended

 

Nine Months Ended

 

 

February 29,

2020

 

February 28,

2019

 

February 29,

2020

 

February 28,

2019

 

Revenue, net

$

14,145,000

 

$

14,783,000

 

$

44,325,000

 

$

47,766,000

 

 

 

 

 

 

Cost of Sales

 

12,125,000

 

 

12,652,000

 

 

37,580,000

 

 

40,280,000

 

Selling, general and administrative expenses

 

3,271,000

 

 

3,047,000

 

 

8,846,000

 

 

8,449,000

 

 

 

15,396,000

 

 

15,699,000

 

 

46,426,000

 

 

48,729,000

 

 

 

 

 

 

Loss from operations

 

(1,251,000

)

 

(916,000

)

 

(2,101,000

)

 

(963,000

)

 

 

 

 

 

Other income (expense), net

 

(43,000

)

 

6,000

 

 

(24,000

)

 

10,000

 

 

 

 

 

 

Pre-tax loss

 

(1,294,000

)

 

(910,000

)

 

(2,125,000

)

 

(953,000

)

 

 

 

 

 

Benefit from income taxes

 

(352,000

)

 

(235,000

)

 

(591,000

)

 

(247,000

)

 

 

 

 

 

Consolidated net loss

 

(942,000

)

 

(675,000

)

 

(1,534,000

)

 

(706,000

)

 

 

 

 

 

Less: Net income attributable to noncontrolling interest

 

3,000

 

 

1,000

 

 

13,000

 

 

29,000

 

 

 

 

 

 

Net loss attributable to TSR, Inc.

$

(945,000

)

$

(676,000

)

$

(1,547,000

)

$

(735,000

)

 

 

 

 

 

Basic and diluted net loss per TSR, Inc. common share

$

(0.48

)

$

(0.34

)

$

(0.79

)

$

(0.37

)

 

 

 

 

 

Basic and diluted weighted average common shares outstanding

 

1,962,000

 

 

1,962,000

 

 

1,962,000

 

 

1,962,000

 

 


Contacts

Thomas Salerno
631-231-0333