Press release

TSR, Inc. Reports Record Revenues for the Fourth Quarter Ended May 31, 2021

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TSR, Inc. (Nasdaq: TSRI) (“TSR or “The Company”), a provider of information technology consulting and recruiting services, today announced financial results for the fourth quarter and fiscal year ended May 31, 2021.

For the quarter ended May 31, 2021, revenue increased 42.5% from the same quarter last year to $21.1 million. Operating income for the current quarter was $15,000 as compared to $350,000 in the prior year quarter. Net loss attributable to TSR for the current quarter was $46,000, or ($0.02) per share, as compared to net income of $421,000, or $0.21 per share, in the prior year quarter.

For the year ended May 31, 2021, revenue increased 16.4% from last year to $68.8 million. Net loss attributable to TSR for the current year was $601,000, or ($0.31) per share, as compared to net loss attributable to TSR of $1,126,000, or ($0.57) per share, in the prior year.

Thomas Salerno, our CEO, stated “Revenue increased 42.5% for the fourth quarter due to new business development, our recent acquisition, and organic growth. While operating income for the current quarter was only $15,000 as compared to $350,000 in the prior year quarter, this was largely due to an increase in selling, general and administrative expenses of $1,311,000 for the quarter. The increase in SG&A compared with the prior year quarter was due in large part to a systems upgrade and implementation of a new applicant tracking and CRM system, a relaunch in our corporate web site, and the additional expenses from the acquisition of Geneva Consulting Group, Inc. (“Geneva”).

“The entire TSR team has tenaciously delivered strong results in a very challenging environment. We are beginning to see the tangible results of these efforts and the skills and resiliency that we developed in these unprecedented times have positioned our team members for greater opportunity for success in a normalized market. Revenue increased 16.4% for the year due to the Geneva acquisition as well as organic growth and new business development within the existing Geneva client base. This helped reduce the net loss attributable to TSR to $601,000 from $1,126,000 in the prior year. The gains in revenue and gross profit were offset to an extent by an increase in selling, general and administrative expenses of $880,000 for the year, which included $210,000 for additional earnout payments to the Geneva sellers, a right-of-use impairment charge of $137,000, and non-cash interest expense of $68,000 related to our PPP loan. The Company expects the investments made in fiscal 2021 to lay the groundwork for consistent profitability in fiscal 2022.”

The integration of the Geneva and TSR teams has continued to go smoothly and we believe the acquisition has helped us accelerate growth and will improve returns for shareholders. We are in the process of upgrading and modernizing several of our back-office systems that we believe will help improve efficiencies and allow the business to continue to scale. As we expect a gradual return to normalcy from the COVID-19 pandemic, we are guardedly optimistic of continued revenue growth in the improving business climate.”

Subsequent to the fiscal year end, on July 7, 2021, the Company received notice from our PPP lender that the SBA had fully forgiven our PPP Loan in the amount of $6,659,220, plus accrued interest. This will be reflected in the Company’s results for the quarter ending August 31, 2021.

The Company will file its Form 10-K for the fiscal year ended May 31, 2021 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, which include, but are 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 Ending May 31,

 

Year Ending May 31,

2021

 

2020

 

2021

 

2020

 

 

Revenue, net

$

21,078,000

 

$

14,796,000

 

$

68,821,000

 

$

59,121,000

 

 

 

 

 

 

Cost of sales

 

17,669,000

 

 

12,363,000

 

 

57,500,000

 

 

49,943,000

 

Selling, general and administrative expenses

 

3,394,000

 

 

2,083,000

 

 

11,809,000

 

 

10,929,000

 

 

 

21,063,000

 

 

14,446,000

 

 

69,309,000

 

 

60,872,000

 

 

 

 

 

 

Income (loss) from operations

 

15,000

 

 

350,000

 

 

(488,000

)

 

(1,751,000

)

Other expense, net

 

(41,000

)

 

(35,000

)

 

(198,000

)

 

(59,000

)

 

 

 

 

 

Pre-tax income (loss)

 

(26,000

)

 

315,000

 

 

(686,000

)

 

(1,810,000

)

Income tax provision (benefit)

 

5,000

 

 

(121,000

)

 

(109,000

)

 

(712,000

)

 

 

 

 

 

Consolidated net income (loss)

 

(31,000

)

 

436,000

 

 

(577,000

)

 

(1,098,000

)

Less: Net income attributable to noncontrolling interest

 

15,000

 

 

15,000

 

 

24,000

 

 

28,000

 

 

 

 

 

 

Net income (loss) attributable to TSR, Inc.

$

(46,000

)

$

421,000

 

$

(601,000

)

$

(1,126,000

)

 

 

 

 

 

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

$

(0.02

)

$

0.21

 

$

(0.31

)

$

(0.57

)

 

 

 

 

 

Basic and diluted weighted average common shares outstanding

 

1,962,062

 

 

1,962,062

 

 

1,962,062

 

 

1,962,062