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TSR net revenue edges down; loss widens amid shareholder row

April 12, 2019

Net revenue edged down 1.8% at IT staffing provider TSR Inc. (NASD: TSRI) in its fiscal third quarter ended Feb. 28, reflecting a decrease in average billing rates for consultants on billing with customers and a higher discount plan put in place for a major customer. 

Gross margin narrowed as sales decreased at a lower rate.

(US$) Q3 2019 Q3 2018 % growth
Net revenue $14,782,706 $15,057,682 -1.8%
Gross profit $2,131,126 $2,286,096 -6.8%
Gross margin  14.4% 15.2%  
Net loss attributable to TSR ($679,234) ($18,846) nm

The Hauppauge, NY-based company reported net loss increased to $676,000 from $19,000 in the year-ago quarter as selling, general and administrative expenses increased by $723,000. CEO Christopher Hughes said the increase was due to stockholder lawsuits and an ongoing proxy contest.

Quote

“The increase in SG&A was due to a significant increase in professional and advisory fees in connection with various stockholder lawsuits and our ongoing contested proxy solicitation relating to our annual meeting, which we postponed to a date to be determined as a result of these lawsuits and the stockholder proposals to be brought before the annual meeting,” Hughes said.

TSR in December filed a complaint against several shareholders, alleging they violated federal securities laws by failing to disclose their formation of a group that intends to seize control of TSR. In November, TSR rejected a nonbinding buyout offer from shareholder QAR Industries. The company subsequently announced it will pursue at least one strategic acquisition following its review of strategic alternatives.

Share price and market cap

TSR shares were up 0.02% to $5.00 at 11:31 a.m. Eastern time; the company had a market cap of $9.81 million, according to FT.com.

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