TSR, Inc. Reports Financial Results for the Third Quarter Ended February 29, 2020
April 13 2020 - 5:00PM
Business Wire
Company Named Thomas Salerno CEO in the
Quarter
Employees are working remotely and
healthy
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
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Thomas Salerno 631-231-0333
TSR (NASDAQ:TSRI)
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