UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13
or 15(d) of the Securities Exchange Act
of 1934
For the period ended November 30, 2000
[ ] Transition Report Pursuant to Section
13 or 15(d) of the Securities Exchange
Act of 1934
For the transition period from ___to___
Commission File Number: 0-8656
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TSR, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 13-2635899
--------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
400 Oser Avenue, Hauppauge, NY 11788
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(Address of principal executive offices)
631-231-0333
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(Registrant's telephone number)
None
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(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
[X] Yes [ ] No
SHARES OUTSTANDING
------------------
4,423,012 shares of common stock, par value $.01 per share, as of
December 31, 2000
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<PAGE>
TSR, INC. AND SUBSIDIARIES
INDEX
Page
Number
------
Part I. Financial Information:
Item 1. Financial Statements (unaudited):
Consolidated Condensed Balance Sheets -
November 30, 2000 and May 31, 2000.................. 3
Consolidated Condensed Statements of Earnings -
For the three months and six months
ended November 30, 2000 and 1999.................... 4
Consolidated Condensed Statements of Cash Flows -
For the six months ended November 30, 2000
and 1999............................................ 5
Notes to Consolidated Condensed Financial Statements..... 6
Item 2. Management's Discussion and Analysis..................... 7
Part II. Other Information................................................ 12
Signatures................................................................. 12
Page 2
<PAGE>
Part I. Financial Information
Item 1. Financial Statements
TSR, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
November 30, May 31,
ASSETS 2000 2000
---- ----
Current Assets:
<S> <C> <C>
Cash and cash equivalents (Note 6) ......................................... $ 2,527,532 $ 4,110,283
Marketable securities (Note 7) .............................................. 2,605,877 3,279,232
Accounts receivable (net of allowance for
doubtful accounts of $173,000) ......................................... 16,049,711 12,816,762
Other receivables ........................................................... 51,696 146,318
Prepaid expenses ............................................................. 33,869 39,700
Prepaid and recoverable income taxes ....................................... 20,790 39,158
Deferred income taxes ....................................................... 59,000 59,000
----------- -----------
Total current assets ................................................... 21,348,475 20,490,453
Equipment and leasehold improvements, at cost (net of accumulated
depreciation and amortization of $639,000 and $577,000) ..................... 180,320 183,356
Other assets ..................................................................... 54,869
Deferred income taxes ........................................................... 227,000 231,000
----------- -----------
$21,810,664 $20,945,111
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts and other payables ................................................. $ 145,419 $ 178,077
Accrued and other liabilities ............................................... 3,482,470 3,563,024
Advances from customers ..................................................... 1,306,717 1,234,660
Income taxes payable ....................................................... 236,024 220,823
----------- -----------
Total current liabilities ............................................. 5,170,630 5,196,584
----------- -----------
Shareholders' Equity:
Preferred stock, $1 par value, authorized
1,000,000 shares; none issued .......................................... -- --
Common stock, $.01 par value, authorized
25,000,000 shares; issued 60,783,326 shares ............................. 60,783 60,783
Additional paid-in capital ................................................. 4,134,053 4,134,053
Retained earnings ........................................................... 24,300,026 22,165,851
----------- -----------
28,494,862 26,360,687
Less: Treasury Stock, 1,624,714 and 1,397,914 shares at cost ............... 11,854,828 10,612,160
----------- -----------
16,640,034 15,748,527
----------- -----------
$21,810,664 $20,945,111
=========== ===========
The accompanying notes are an integral part of these consolidated condensed financial statements.
</TABLE>
Page 3
<PAGE>
<TABLE>
<CAPTION>
TSR, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
FOR THE THREE AND SIX MONTHS ENDED NOVEMBER 30, 2000 AND 1999
(UNAUDITED)
Three Months Ended Six Months Ended
November 30, November 30,
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues ................................................... $21,234,273 $ 20,680,945 $41,135,503 $41,635,639
Cost of sales .............................................. 16,607,668 15,637,241 32,002,701 31,798,934
Selling, general and administrative expenses ............... 2,828,035 3,037,298 5,602,798 5,901,385
----------- ------------ ----------- -----------
19,435,703 18,674,539 37,605,499 37,700,319
----------- ------------ ----------- -----------
Income from operations ..................................... 1,798,570 2,006,406 3,530,004 3,935,320
Other income:
Interest and dividend income ............................. 106,298 117,906 207,114 209,947
Unrealized gain (loss) from marketable securities, net ... 1,118 (2,378) 43,057 8,973
Gain from sales of assets ................................ -- 1,950 -- 1,950
----------- ------------ ----------- -----------
Income before income taxes ................................. 1,905,986 2,123,884 3,780,175 4,156,190
Provision for income taxes ................................. 830,000 910,000 1,646,000 1,787,000
----------- ------------ ----------- -----------
Net income ............................................... $ 1,075,986 $ 1,213,884 $ 2,134,175 $ 2,369,190
=========== ============ =========== ===========
Basic and diluted net income per
common share ............................................. $ 0.24 $ 0.23 $ 0.47 $ 0.45
=========== ============ =========== ===========
Weighted average number of basic and diluted
common shares outstanding ................................ 4,522,845 5,181,657 4,568,012 5,229,317
=========== ============ =========== ===========
The accompanying notes are an integral part of these consolidated condensed financial statements.
</TABLE>
Page 4
<PAGE>
<TABLE>
<CAPTION>
TSR, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED NOVEMBER 30, 2000 AND 1999
(UNAUDITED)
Six Months Ended
November 30,
----------------------------
2000 1999
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income ........................................................ $ 2,134,175 $ 2,369,190
Adjustments to reconcile net income
to net cash provided by (used in) operating activities:
Depreciation and amortization ................................ 62,524 74,055
Unrealized gain from marketable securities, net .............. (43,057) (8,973)
Deferred income taxes ........................................ 4,000 12,000
Gain on sales of assets ...................................... -- (1,950)
Changes in assets and liabilities:
Accounts receivable ......................................... (3,232,949) 733,422
Other receivables ........................................... 94,622 (41,970)
Prepaid expenses ............................................ 5,831 41,900
Prepaid and recoverable income taxes ....................... 18,368 (103,236)
Other assets ................................................ (14,567) (6,960)
Accounts payable and accrued expenses ........................ (113,212) (253,436)
Income taxes payable ........................................ 15,201 (21,822)
Advances from customers .................................... 72,057 458,624
----------- -----------
Net cash provided by (used in) operating activities ............ (997,007) 3,250,844
----------- -----------
Cash flows from investing activities:
Proceeds from maturities and sales of marketable securities .. 3,140,322 2,892,956
Purchases of marketable securities ............................ (2,423,910) (1,929,703)
Purchases of fixed assets ...................................... (59,488) (51,300)
Proceeds from sales of assets ................................ -- 1,950
----------- -----------
Net cash provided by investing activities .................... 656,924 913,903
----------- -----------
Cash flows from financing activities:
Purchases of treasury stock ................................... (1,242,668) (3,173,440)
----------- -----------
Net cash used in financing activities .......................... (1,242,668) (3,173,440)
----------- -----------
Net increase (decrease) in cash and cash equivalents .................. (1,582,751) 991,307
Cash and cash equivalents at beginning of period ...................... 4,110,283 2,234,723
----------- -----------
Cash and cash equivalents at end of period ............................ $ 2,527,532 $ 3,226,030
=========== ===========
Supplemental Disclosures:
Income tax payments ............................................ $ 1,612,000 $ 1,909,000
=========== ===========
Interest paid .................................................. $ -- $ --
=========== ===========
The accompanying notes are an integral part of these consolidated condensed financial statements.
</TABLE>
Page 5
<PAGE>
TSR, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
NOVEMBER 30, 2000
1. The accompanying unaudited consolidated condensed financial statements have
been prepared in accordance with generally accepted accounting principles
for interim financial information and with the instructions to Form 10-Q of
Regulation S-X. Accordingly, they do not include all the information and
notes required by generally accepted accounting principles for complete
financial statements. For further information refer to the Company's
consolidated financial statements and notes thereto included in the
Company's Annual Report on Form 10-K for the year ended May 31, 2000.
2. In the opinion of the Company, the accompanying unaudited consolidated
condensed financial statements contain all adjustments (consisting of only
normal recurring accruals) necessary to present fairly the consolidated
financial position, the consolidated results of operations, and
consolidated cash flows for the periods presented.
3. The Company is primarily engaged in the business of providing computer
programming consulting services. The Company provides technical computer
personnel to companies to supplement their in-house information technology
capabilities. In addition, the Company provided services converting
software applications to be year 2000 compliant utilizing Catch/21 a year
2000 software solution which automated to a significant extent the
conversion process.
4. The consolidated condensed financial statements include the accounts of
TSR, Inc. and its wholly-owned subsidiaries. All significant intercompany
balances and transactions have been eliminated in consolidation.
5. The Company recognizes computer programming consulting services revenues as
services are provided. Provided that acceptance was probable, revenue from
Catch/21 code conversion was recognized when the converted code was
delivered.
6. The Company considers short-term highly liquid investments with maturities
of three months or less at the time of purchase to be cash equivalents.
Cash and cash equivalents were comprised of the following as of November
30, 2000:
Cash in banks ............................. $ --
Money Market Funds......................... 1,050,542
United States Treasury Bills............... 1,476,990
-----------
$ 2,527,532
===========
7. Marketable securities consists of United States Treasury Bills and equity
securities. The treasury bills with maturities at acquisition in excess of
90 days, are classified as held to maturity investments. The Company's
equity securities are classified as trading securities. The amortized cost,
gross unrealized holding gains, gross unrealized holding losses and
carrying value for marketable securities by major security type at November
30, 2000 are as follows:
<TABLE>
<CAPTION>
Gross Gross
Unrealized Unrealized
Amortized Holding Holding Carrying
Cost Gains Losses Value
---------- -------- ----------- ----------
<S> <C> <C> <C> <C>
United States Treasury Bills $2,423,910 -- -- 2,423,910
Equity Securities .......... 133,289 51,407 (2,729) 181,967
---------- -------- ----------- ----------
$2,557,199 $ 51,407 $ (2,729) $2,605,877
========== ======== =========== ==========
</TABLE>
8. In October 2000, the Board of Directors authorized an additional buy-back
of up to 250,000 shares of the Company's common stock. During the six
months ended November 30, 2000, the Company repurchased 226,800 shares of
its common stock at a cost of $1,242,668.
Page 6
<PAGE>
Part I. Financial Information
Item 2.
TSR, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
The following discussion and analysis should be read in conjunction with the
consolidated condensed financial statements and the notes to the consolidated
condensed financial statements.
Results of Operations
The following table sets forth for the periods indicated certain financial
information derived from the Company's consolidated statements of earnings.
There can be no assurance that trends in sales growth or operating results will
continue in the future:
Three months ended November 30, 2000 compared with three months ended November
30, 1999
<TABLE>
<CAPTION>
3 Months Ended
November 30,
(Dollar amounts in Thousands)
-----------------------------------------
2000 1999
------------------- ------------------
% of % of
Amount Revenues Amount Revenues
------ -------- ------ --------
<S> <C> <C> <C> <C>
Revenues ....................................... $21,234 100.0 $20,681 100.0
Cost of Sales .................................. 16,607 78.2 15,637 75.6
------- ----- ------- -----
Gross Profit ................................... 4,627 21.8 5,044 24.4
Selling, General, and Administrative expenses .. 2,828 13.3 3,038 14.7
------- ----- ------- -----
Income from Operations ......................... 1,799 8.5 2,006 9.7
Other Income ................................... 107 0.5 118 0.6
------- ----- ------- -----
Income Before Income Taxes ..................... 1,906 9.0 2,124 10.3
Provision for Income Taxes ..................... 830 3.9 910 4.4
------- ----- ------- -----
Net Income ..................................... $ 1,076 5.1 $ 1,214 5.9
======= ===== ======= =====
</TABLE>
Revenues
Revenues for the quarter ended November 30, 2000 increased $553,000 or 2.7% from
the comparable period in fiscal 2000. For the current quarter 100% of revenues
were derived from computer programming consulting services as compared with
96.6% from computer programming consulting services and 3.4% from Year 2000
services in fiscal 2000.
Computer programming consulting services revenues increased $1,260,000 or 6.3%
from $19,975,000 in the quarter ended November 30, 1999 to $21,234,000 in the
quarter ended November 30, 2000. This increase resulted primarily from an
increase in billing rates. The Company had approximately 530 consultants on
billing at November 30, 1999. The Company experienced a low-point in the number
of consultants on billing of approximately 450 in March 2000 and since April
2000 the Company has experienced an increase in new business to approximately
520 consultants on billing as of November 30, 2000. The Company believes that
the consulting business will continue to strengthen; however, there is
uncertainty in the levels of IT budgets for 2001 due to the current economic
climate.
Revenues from the Company's Catch/21 Year 2000 compliance services, were
$705,000 for the fiscal 2000 second quarter while there were no Year 2000
revenues in the fiscal 2001 second quarter. The Company's Year 2000 projects
have been completed.
Page 7
<PAGE>
Cost of Sales
Cost of sales as a percentage of revenues increased from 75.6% in the quarter
ended November 30, 1999 to 78.2% in the quarter ended November 30, 2000. This
increase is primarily attributable to the decrease in Year 2000 revenues for
which cost of sales as a percentage of revenues is less than the computer
programming consulting services business.
In the computer programming consulting services business, cost of sales as a
percentage of sales increased from 77.1% in the quarter ended November 30, 1999
to 78.2% in the quarter ended November 30, 2000. This increase is partly
attributable to a change in the Company's consultant sourcing mix. The number of
consultant subcontractors have increased, which decreased the payroll tax
benefits usually realized at the end of the calendar year. This increase is also
attributable to increases in amount being paid to qualified programming
professionals outpacing the Company's ability to pass the increases onto
customers due to competitive markets pressures in the industry.
The Year 2000 business incurred no cost of sales in the quarter ended November
30, 2000 versus $241,000 in the prior year quarter.
Selling, General and Administrative Expenses
Selling, general and administrative expenses consist primarily of expenses
relating to account executives, technical recruiters, facilities costs,
management and corporate overhead. These expenses decreased $209,000 or 6.9%
from $3,037,000 in the quarter ended November 30, 1999 to $2,828,000 in the
quarter ended November 30, 2000. Selling, general and administrative expenses
related to computer programming consulting services decreased $166,000 from the
prior year period to $2,828,000. This decrease was primarily attributable to
lower commission based compensation as a result of lower gross profits.
In the quarter ended November 30, 2000, no selling, general and administrative
expenses were attributable to Year 2000 services. Year 2000 selling, general and
administrative expenses in the quarter ended November 30, 1999 were $43,000.
Income from Operations
In the quarter ended November 30, 2000, the computer programming consulting
service business contributed $1,799,000 or 100% of the income from operations.
In the prior year quarter, the computer programming consulting service business
contributed $1,585,000 or 79.0% of income from operations and the Year 2000
business $421,000 or 21.0%. The Company believes that continued growth in
contract computer programming services will, over time, offset the loss of
income from operations from Year 2000 services.
Other Income
Other income resulted primarily from interest and dividend income which
decreased by $11,000 to $107,000 due to lower average investable funds in the
quarter ended November 30, 2000.
Income Taxes
The effective income tax rate increased to 43.5% in the quarter ended November
30, 2000 from 42.8% in the quarter ended November 30, 1999 because of higher
state and local taxes.
Page 8
<PAGE>
Six months ended November 30, 2000 compared with six months ended November 30,
1999.
<TABLE>
<CAPTION>
6 Months Ended
November 30,
(Dollar amounts in Thousands)
--------------------------------------------
2000 1999
------------------- ------------------
% of % of
Amount Revenues Amount Revenues
------ -------- ------ --------
<S> <C> <C> <C> <C>
Revenues ....................................................... $41,136 100.0 $41,636 100.0
Cost of Sales .................................................. 32,003 77.8 31,799 76.4
------- ----- ------- -----
Gross Profit ................................................... 9,133 22.2 9,837 23.6
Selling, General, and Administrative expenses .................. 5,603 13.6 5,902 14.2
------- ----- ------- -----
Income from Operations ......................................... 3,530 8.6 3,935 9.4
Other Income ................................................... 250 0.6 221 0.6
------- ----- ------- -----
Income Before Income Taxes ..................................... 3,780 9.2 4,156 10.0
Provision for Income Taxes ..................................... 1,646 4.0 1,787 4.3
------- ----- ------- -----
Net Income ..................................................... $ 2,134 5.2 $ 2,369 5.7
======= ===== ======= =====
</TABLE>
Revenues
Revenues for the six months ended November 30, 2000 decreased $500,000 or 1.2%
from the comparable period in fiscal 2000. For the current period 99.8% of
revenues were derived from computer programming consulting services and 0.2%
from Year 2000 services, as compared with 96.8% and 3.2% respectively in fiscal
2000.
Computer programming consulting services revenues increased $780,000 or 1.9%
from $40,289,000 in the six months ended November 30, 1999 to $41,069,000 in the
six months ended November 30, 2000. This increase resulted primarily from an
increase in billing rates. The Company had approximately 530 consultants on
billing at November 30, 1999. The Company experienced a low-point in the number
of consultants on billing of approximately 450 in March 2000 and since April
2000 the Company has experienced an increase in new business to approximately
520 consultants on billing as of November 30, 2000. The Company believes that
the consulting business will continue to strengthen; however, there is
uncertainty in the levels of IT budgets for 2001 due to the current economic
climate.
Revenues from the Company's Catch/21 Year 2000 compliance services, were $67,000
for the current period versus $1,346,000 in the fiscal 2000 six month period.
The Company's Year 2000 projects have been completed.
Page 9
<PAGE>
Cost of Sales
Cost of sales as a percentage of revenues increased from 76.4% in the six months
ended November 30, 1999 to 77.8% in the six months ended November 30, 2000. This
increase is primarily attributable to the decrease in Year 2000 revenues for
which cost of sales as a percentage of revenues is less than the computer
programming consulting services business.
In the computer programming consulting services business, cost of sales as a
percentage of sales increased from 77.7% in the six months ended November 30,
1999 to 77.8% in the six months ended November 30, 2000. This increase is
primarily attributable to increases in amounts being paid to qualified
programming professionals outpacing the Company's ability to pass the increases
onto customers due to competitive market pressures in the industry.
The Year 2000 business incurred cost of sales of $30,000 in the six months ended
November 30, 2000 versus $501,000 in the prior year period.
Selling, General and Administrative Expenses
Selling, general and administrative expenses consist primarily of expenses
relating to account executives, technical recruiters, facilities costs,
management and corporate overhead. These expenses decreased $299,000 or 5.1%
from $5,902,000 in the six months ended November 30, 1999 to $5,603,000 in the
six months ended November 30, 2000. Selling, general and administrative expenses
related to computer programming consulting services decreased $219,000 from the
prior year period to $5,587,000. This decrease was primarily attributable to
lower commission based compensation as a result of lower gross profits.
In the six months ended November 30, 2000, approximately $16,000 in selling,
general and administrative expenses were attributable to Year 2000 services.
These expenses consist primarily of general overhead, and facilities expenses.
Comparable Year 2000 selling, general and administrative expenses in the six
months ended November 30, 1999 were $95,000.
Income from Operations
In the six months ended November 30, 2000, the computer programming consulting
service business contributed $3,509,000 or 99.4% of the income from operations,
while the Year 2000 business contributed the remaining $21,000 or 0.6%. In the
prior year period, the computer programming consulting service business
contributed $3,185,000 or 80.9% of income from operations and the Year 2000
business $750,000 or 19.1%. The Company believes that continued growth in
contract computer programming services will, over time, offset the loss of
income from operations from Year 2000 services.
Other Income
Other income resulted primarily from interest and dividend income of $207,000.
The increase of $29,000 in other income was primarily attributable to a net
unrealized gain of $43,000 from marketable securities due to mark to market
adjustments of its equity portfolio in the current period.
Income Taxes
The effective income tax rate increased to 43.5% in the six months ended
November 30, 2000 from 43.0% in the six months ended November 30, 1999 because
of higher state and local taxes.
Page 10
<PAGE>
Liquidity, Capital Resources and Changes in Financial Condition
The Company expects that cash flow generated from operations together with its
cash and marketable securities will be sufficient to provide the Company with
adequate resources to meet its cash requirements.
At November 30, 2000, the Company had working capital of $16,178,000 and cash
and cash equivalents of $2,528,000 as compared to working capital of $15,294,000
and cash and cash equivalents of $4,110,000 at May 31, 2000. Working capital
increased primarily due to the Company's net income of $2,134,000 in the six
months ended November 30, 2000.
The Company had negative net cash flow of $997,000 from operations during the
six months ended November 30, 2000 as compared to positive net cash flow from
operations of $3,251,000 in the six months ended November 30, 1999. The Company
had net income of $2,134,000 in the six months ended November 30, 2000. However,
the Company used cash to support an increase in accounts receivable of
$3,233,000. The increase in accounts receivable occurred primarily because of a
temporary slowness in collections due to system changes at several customers.
Cash flow provided by investing activities resulted primarily from the maturity
of United States Treasury Bills in the current period.
Cash flow used in financing activities of $1,243,000 in the six months ended
November 30, 2000 resulted from the repurchase of 226,800 shares of common
stock. As of November 30, 2000, the Company has repurchased a total of 1,624,714
shares at an average price of $7.30 or a total cost of $11,854,828. The Company
has completed the buy back authorizations totaling 1,600,000 shares and the
Company's board of directors has authorized the repurchase of up to an
additional 250,000 shares of its common stock. No time limit has been placed on
the duration of the share repurchases. Subject to applicable securities laws,
such purchases will be at times and in amounts as the Company deems appropriate
and may be discontinued at any time. The Company has no obligation or commitment
to repurchase all or any portion of the shares covered by the authorization.
The Company's capital resource commitments at November 30, 2000 consisted of
lease obligations on its branch and corporate facilities. The Company intends to
finance these lease commitments from cash flow provided by operations, available
cash and short-term marketable securities.
The Company's cash and marketable securities were sufficient to enable it to
meet its cash requirements during the period ended November 30, 2000. The
Company has available a revolving line of credit of $5,000,000 with a major
money center bank, which the Company believes provides sufficient financing if
the need arose. As of November 30, 2000 no amounts were outstanding under this
line of credit.
Recent Accounting Pronouncements
Effective June 1, 2001, the Company will adopt SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities," as amended. This statement
requires companies to record derivatives on the balance sheet as assets or
liabilities at their fair value. In certain circumstances changes in the value
of such derivatives may be required to be recorded as gains or losses. The
impact of this statement is not expected to have a material effect on the
Company's consolidated financial statements.
Page 11
<PAGE>
Forward-Looking Statements
Certain statements contained in "Management's Discussion and Analysis of
Financial Condition and Results of Operations", including statements concerning
the Company's future prospects, the anticipated increase in consulting projects,
and the Company's 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 projections in the forward looking
statements which statements involve risks and uncertainties, including but not
limited to the following: risks relating to the competitive nature of the
markets for computer programming consulting services, the extent to which growth
in the Company's contract computer programming services will offset the
anticipated loss of Year 2000 profits, concentration of the Company's business
with certain customers and uncertainty as to the Company's ability to bring in
new customers.
Item 3. Quantitative and Qualitative Disclosure About Market Risk
The Company's earnings and cash flows are subject to fluctuations due to changes
in interest rates primarily from its investment of available cash balances in
money market funds and marketable securities. Under its current policies, the
Company does not use interest rate derivative instruments to manage exposure to
interest rate changes.
TSR, INC. AND SUBSIDIARIES
Part II. Other Information
Item 6. Exhibits and Reports on Form 8K
(a). Exhibit 27: Financial Data Schedule
(b). Reports on Form 8K: None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TSR, INC.
--------------------------------------------------
(Registrant)
Date: January 4, 2001 /s/ J.F. HUGHES
--------------------------------------------------
J.F. Hughes, Chairman, President and Treasurer
Date: January 4, 2001 /s/ JOHN G. SHARKEY
--------------------------------------------------
John G. Sharkey, Vice President, Finance
Page 12