Revenue Growth - Revenue for the quarter ended February 28, 2021 increased by approximately $3,015,000 or 21.3% compared to the same quarter in 2020, primarily due to new business development within the existing Geneva client base [113]. - Revenue for the nine months ended February 28, 2021 increased by approximately $3,418,000 or 7.7% compared to the same period in 2020, primarily due to new business development within the existing Geneva client base [122]. Consultant Metrics - The average number of consultants on billing increased from 361 in the quarter ended February 29, 2020 to 418 in the quarter ended February 28, 2021, with Geneva contributing 68 of the 418 [113]. Cost of Sales - Cost of sales for the quarter ended February 28, 2021 increased by approximately $2,290,000 or 18.9% to $14,415,000, while the percentage of cost of sales to revenue decreased from 85.7% to 84.0% [115]. - Cost of sales for the nine months ended February 28, 2021 increased by approximately $2,251,000 or 6.0% to $39,831,000, with the percentage of cost of sales to revenue decreasing from 84.8% to 83.4% [124]. Expenses - Selling, general and administrative expenses decreased by approximately $187,000 or 5.7% from $3,271,000 in the prior year to $3,084,000 in the current quarter, with expenses as a percentage of revenue decreasing from 23.1% to 18.0% [116]. - Selling, general and administrative expenses for the nine months ended February 28, 2021 decreased by approximately $432,000 or 4.9% to $8,414,000, with expenses as a percentage of revenue decreasing from 20.0% to 17.6% [125]. Net Loss - Net loss attributable to TSR, Inc. was approximately $305,000 in the quarter ended February 28, 2021, a decrease from a net loss of $945,000 in the same quarter of the previous year [119]. - Net loss attributable to TSR, Inc. for the nine months ended February 28, 2021 was approximately $555,000, compared to a loss of $1,547,000 in the same period of the previous year [130]. - The company reported a consolidated net loss of $555,000 for the nine months ended February 28, 2021 [133]. Cash Flow and Working Capital - Net cash flow from operations for the nine months ended February 28, 2021 was approximately $510,000, compared to a net cash flow used in operations of $1,614,000 in the prior year [133]. - As of February 28, 2021, the company had working capital of approximately $8,784,000, a decrease from $12,239,000 at May 31, 2020 [132]. PPP Loan and Financial Support - The company utilized 100% of the PPP Loan funds to support payroll and other allowable expenses, avoiding salary reductions, furloughs, and layoffs during the covered period [114]. - The company secured a PPP Loan of $6,659,000, fully utilized for payroll and allowable expenses, to avoid salary reductions and layoffs [131]. - The Company received loan proceeds of $6,659,220 under the Paycheck Protection Program (PPP) on April 15, 2020 [157]. - The application for forgiveness of the PPP loan was filed on March 29, 2021, with no guarantee of receiving forgiveness for any amount [160]. - The use of the loan proceeds is restricted to payroll costs, covered rent, and covered utility payments, with potential reductions in payroll costs affecting forgiveness eligibility [159]. - The U.S. Treasury and SBA will review all PPP loans equal to or exceeding $2.0 million, which may lead to audits and penalties if the Company is found non-compliant [160]. - Failure to obtain forgiveness of the PPP loan may adversely impact the Company's loan covenants and could necessitate amendments or waivers to debt agreements [161]. Acquisition - The company used approximately $3,133,000 in investing activities, primarily for the acquisition of Geneva Consulting Group, Inc. for $3,100,000 [135]. - The company completed the acquisition of Geneva Consulting Group, Inc. on September 1, 2020, aiming to diversify its business [156]. Legal Matters - The company is subject to ongoing litigation with its former CEO, which may result in significant monetary damages [150]. Financial Reporting Changes - The financial impact of adopting ASU No. 2016-02 increased total assets and total liabilities by approximately $690,000 [139]. Debt and Borrowings - The company had net borrowings of approximately $28,000 against its line of credit, with a maximum borrowing capacity of $2,000,000 [131].
TSR(TSRI) - 2021 Q3 - Quarterly Report