================================================================================

                                  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, 2003


     [_]       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
                             ---------------------------------------------------


                                    TSR, Inc.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

                  Delaware                                      13-2635899
--------------------------------------------------------------------------------
       (State or other jurisdiction of                      (I.R.S. Employer
        incorporation or organization)                     Identification No.)


                      400 Oser Avenue, Hauppauge, NY 11788
--------------------------------------------------------------------------------
                    (Address of principal executive offices)


                                  631-231-0333
--------------------------------------------------------------------------------
                         (Registrant's telephone number)


                                      None
--------------------------------------------------------------------------------
            (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

Indicate by check mark whether the Registrant is an accelerated filer (as
defined by Rule 12b-2 of the Exchange Act). [_]  Yes   [X]  No

                               SHARES OUTSTANDING
                               ------------------
        4,544,012 shares of common stock, par value $.01 per share, as of
                                December 31, 2003
--------------------------------------------------------------------------------
                                     Page 1

================================================================================
<PAGE>

                           TSR, INC. AND SUBSIDIARIES
                                      INDEX




                                                                            Page
                                                                          Number
                                                                          ------
Part I.  Financial Information:


         Item 1. Financial Statements:

                 Condensed Consolidated Balance Sheets -
                      November 30, 2003 and May 31, 2003...............       3


                 Condensed Consolidated Statements of Income -
                      For the three months and six months ended November
                      30, 2003 and 2002................................       4


                 Condensed Consolidated Statements of Cash Flows -
                      For the three months and six months ended November
                      30, 2003 and 2002................................       5


                 Notes to Condensed Consolidated Financial Statements..       6

         Item 2. Management's Discussion and Analysis of Financial
                      Condition and Results of Operations..............       9

         Item 3. Quantitative and Qualitative Disclosure About
                      Market Risk......................................      14

         Item 4. Procedures and Controls...............................      15

Part II.  Other Information............................................      15

          Item 6.  Exhibits and Reports on Form 8-K....................      15

Signatures.............................................................      15








                                     Page 2
<PAGE>

Part I.  Financial Information
          Item 1.  Financial Statements

                           TSR, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE><CAPTION>
                                                                               November 30,           May 31,
ASSETS                                                                             2003                2003
                                                                               ------------        ------------
                                                                                (Unaudited)
<S>                                                                            <C>                 <C>
Current Assets:
     Cash and cash equivalents (Note 3) ...............................        $  6,450,366        $  5,063,098
     Marketable securities (Note 5) ...................................           3,018,807          12,949,174
     Accounts receivable (net of allowance for
          doubtful accounts of $430,000) ..............................           9,370,298           9,238,037
     Other receivables ................................................              22,329              50,828
     Prepaid expenses .................................................              19,101              39,857
     Prepaid and recoverable income taxes .............................              96,020              60,739
     Deferred income taxes ............................................             180,000             180,000
                                                                               ------------        ------------
          Total current assets ........................................          19,156,921          27,581,733

Equipment and leasehold improvements, at cost (net of accumulated
     depreciation and amortization of $721,000 and $708,000) ..........              13,833              24,955
Other assets ..........................................................              49,653              50,804
Deferred income taxes .................................................             123,000             123,000
Acquired client relationships, (net of accumulated amorization
      of $128,706 and $100,105) .......................................              42,902              71,503
                                                                               ------------        ------------
                                                                               $ 19,386,309        $ 27,851,995
                                                                               ============        ============

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
     Accounts and other payables ......................................        $    130,426        $    230,632
     Accrued expenses and other current liabilities ...................           2,008,318           2,286,282
     Advances from customers ..........................................           1,576,223           1,793,496
     Income taxes payable .............................................             222,226             242,981
                                                                               ------------        ------------
          Total current liabilities ...................................           3,937,193           4,553,391
                                                                               ------------        ------------

Minority Interest .....................................................              78,460              40,902
                                                                               ------------        ------------

Stockholders' Equity:
     Preferred stock, $1 par value, authorized
          1,000,000 shares; none issued ...............................                --                  --
     Common stock, $.01 par value, authorized
          25,000,000 shares; issued 6,204,326 and 6,078,326 shares ....              62,043              60,783
     Additional paid-in capital .......................................           4,873,251           4,134,053
     Retained earnings ................................................          22,466,663          31,094,167
                                                                               ------------        ------------
                                                                                 27,401,957          35,289,003
     Less: Treasury Stock, 1,660,314 shares, at cost ..................          12,031,301          12,031,301
                                                                               ------------        ------------
                                                                                 15,370,656          23,257,702
                                                                               ------------        ------------

                                                                               $ 19,386,309        $ 27,851,995
                                                                               ============        ============

       The accompanying notes are an integral part of these condensed consolidated financial statements.
</TABLE>
                                     Page 3
<PAGE>

                           TSR, INC. AND SUBSIDIARIES
                  CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
          FOR THE THREE AND SIX MONTHS ENDED NOVEMBER 30, 2003 AND 2002
                                   (UNAUDITED)


<TABLE><CAPTION>
                                                                         Three Months Ended                Six Months Ended
                                                                             November 30,                     November 30,
                                                                     ----------------------------    ----------------------------
                                                                         2003            2002            2003            2002
                                                                     ------------    ------------    ------------    ------------
<S>                                                                  <C>             <C>             <C>             <C>
Revenues .........................................................   $ 12,996,626    $ 13,859,074    $ 25,733,445    $ 27,539,840

Cost of  sales ...................................................     10,016,017      10,781,431      19,888,876      21,481,039
Selling, general and administrative expenses .....................      1,889,646       1,887,943       3,876,188       3,738,974
                                                                     ------------    ------------    ------------    ------------
                                                                       11,905,663      12,669,374      23,765,064      25,220,013
                                                                     ------------    ------------    ------------    ------------

Income from  operations ..........................................      1,090,963       1,189,700       1,968,381       2,319,827


Other income:
     Interest and dividend income ................................         24,656          61,848          66,266         123,839
     Unrealized gain (loss) from marketable securities, net ......          3,367           4,749          10,033          (5,688)
     Minority interest in subsidiary operating profits ...........        (19,653)        (14,834)        (37,558)        (16,742)
                                                                     ------------    ------------    ------------    ------------

Income before income taxes .......................................      1,099,333       1,241,463       2,007,122       2,421,236
Provision  for income  taxes .....................................        461,000         532,000         865,000       1,048,000
                                                                     ------------    ------------    ------------    ------------
     Net  income .................................................   $    638,333    $    709,463    $  1,142,122    $  1,373,236
                                                                     ============    ============    ============    ============

Basic and diluted net income per common share ....................   $       0.14    $       0.16    $       0.25    $       0.31
                                                                     ============    ============    ============    ============

Weighted average number of common shares outstanding .............      4,544,012       4,418,012       4,533,512       4,418,012
                                                                     ============    ============    ============    ============

Weighted average number of diluted common shares outstanding .....      4,551,732       4,418,012       4,541,286       4,418,012
                                                                     ============    ============    ============    ============




                The accompanying notes are an integral part of these condensed consolidated financial statements.

</TABLE>



                                     Page 4
<PAGE>

                           TSR, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
               FOR THE SIX MONTHS ENDED NOVEMBER 30, 2003 AND 2002
                                   (UNAUDITED)

<TABLE><CAPTION>
                                                                                                Six Months Ended
                                                                                                   November 30,
                                                                                        ---------------------------------
                                                                                            2003                 2002
                                                                                        ------------         ------------
<S>                                                                                     <C>                  <C>
Cash flows from operating activities:
     Net  income ...............................................................        $  1,142,122         $  1,373,236

     Adjustments to reconcile net income
             to net cash provided by (used in) operating activities:
        Depreciation  and amortization .........................................              41,490               69,010
        Unrealized loss (gain) from marketable securities, net .................             (10,033)               5,688
        Non-cash  compensation expense .........................................              43,520                 --
        Minority  interest in subsidiary  operating profit .....................              37,558               16,742

Changes in assets and liabilities:
          Accounts  receivable .................................................            (132,261)          (1,158,648)
          Other  receivables ...................................................              28,499                  295
          Prepaid expenses .....................................................              20,756               15,861
          Prepaid and recoverable  income taxes ................................             (35,281)              50,500
          Other  assets ........................................................               1,151                2,095
          Accounts payable and accrued expenses ................................            (378,170)            (476,808)
          Income taxes payable .................................................             (20,755)               7,641
          Advances from  customers .............................................            (217,273)            (161,805)
                                                                                        ------------         ------------

     Net cash provided by (used in) operating activities .......................             521,323             (256,193)
                                                                                        ------------         ------------

Cash flows from investing activities:
        Proceeds from maturities and sales of marketable securities ............          12,925,210            8,915,150
        Purchases of marketable securities .....................................          (2,984,810)          (8,937,559)
        Purchases of fixed  assets .............................................              (1,767)                --
                                                                                        ------------         ------------

    Net cash provided by (used in) investing activities ........................           9,938,633              (22,409)
                                                                                        ------------         ------------

Cash flows from financing activities:
       Proceeds  from  exercise of stock options ...............................             696,938                 --
        Cash dividends paid ....................................................          (9,769,626)                --
                                                                                        ------------         ------------
    Net cash used in financing  activities .....................................          (9,072,688)                --
                                                                                        ------------         ------------

Net increase (decrease) in cash and cash equivalents ...........................           1,387,268             (278,602)
Cash and cash equivalents at beginning of period ...............................           5,063,098            5,793,896
                                                                                        ------------         ------------

Cash and cash equivalents at end of period .....................................        $  6,450,366         $  5,515,294
                                                                                        ============         ============

Supplemental Disclosures:
       Income tax payments .....................................................        $    921,000         $    990,000
                                                                                        ============         ============



              The accompanying notes are an integral part of these condensed consolidated financial statements.
</TABLE>
                                     Page 5
<PAGE>

                           TSR, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                NOVEMBER 30, 2003
                                   (UNAUDITED)

1.   Basis of Presentation
     ---------------------
     The accompanying condensed consolidated interim financial statements
     include the accounts of TSR, Inc. and its subsidiaries (the "Company"). All
     significant inter-company balances and transactions have been eliminated in
     consolidation. These interim financial statements have been prepared in
     accordance with accounting principles generally accepted in the United
     States of America applying to interim financial information and with the
     instructions to Form 10-Q of Regulation S-X of the Securities and Exchange
     Commission. Accordingly, certain information and footnote disclosures
     required by accounting principles generally accepted in the United States
     of America and normally included in the Company's annual financial
     statements have been condensed or omitted. These interim financial
     statements as of and for the six months ended November 30, 2003, are
     unaudited; however, in the opinion of management, such statements include
     all adjustments (consisting of normal recurring accruals) necessary to
     present fairly the consolidated financial position, results of operations,
     and cash flows of the Company for the periods presented. The results of
     operations for the interim periods presented are not necessarily indicative
     of the results that might be expected for future interim periods or for the
     full year ending May 31, 2004. These interim financial statements should be
     read in conjunction with 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, 2003.

2.   Net Income Per Common Share
     ---------------------------
     Basic net income per common share is computed by dividing income available
     to common stockholders (which for the Company equals its net income) by the
     weighted average number of common shares outstanding, and diluted net
     income per common share adds the dilutive effect of stock options and other
     common stock equivalents. Options covering 26,280 and 26,226 shares of
     common stock have been omitted from the calculations of diluted net income
     per common share for the three and six month periods ended November 30,
     2003 respectively, as their effect would have been antidilutive. Options
     covering 160,000 shares of common stock have been omitted for the
     calculation of diluted net income per common shares for the three and six
     month periods ended November 30, 2002 as their effect would have been
     antidilutive.

3    Cash and Cash Equivalents
     -------------------------
     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, 2003:

                 Cash in banks .....................   $  769,009
                 Money Market Funds ................    3,686,032
                 US Treasury Funds .................    1,995,325
                                                       ----------
                                                       $6,450,366
                                                       ==========
4.   Revenue Recognition
     -------------------
     The Company's contract computer programming services are generally provided
     under time and materials agreements with customers. Accordingly, the
     Company recognizes such revenues as services are provided. Advances from
     customers represent amounts received from customers prior to the Company's
     provision of the related services and credit balances from overpayments.

                                     Page 6
<PAGE>

                           TSR, INC. AND SUBSIDIARIES
         NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
                                NOVEMBER 30, 2003
                                   (UNAUDITED)


5.   Marketable Securities
     ---------------------
     The Company accounts for its marketable securities in Accordance with
     Statement of Financial Accounting Standards No. 115 "Accounting for Certain
     Investments in Debt and Equity Securities." Accordingly, the Company
     classifies its marketable securities at acquisition as either (i)
     held-to-maturity, (ii) trading, or (iii) available-for-sale. Based upon the
     Company's intent and ability to hold its US Treasury securities to maturity
     (which maturities range between three months and two years), such
     securities have been classified as held-to -maturity and are carried at
     amortized cost. The Company's equity securities are classified as trading
     securities, which are carried at fair value with unrealized gains and
     losses included in earnings. The Company's marketable securities are
     summarized as follows:

<TABLE><CAPTION>
                                                                        Gross              Gross
                                                                      Unrealized         Unrealized
                                                   Amortized           Holding            Holding               Fair
                                                     Cost               Gains              Losses               Value
                                                  -----------        -----------         -----------         -----------
<S>                                               <C>                <C>                 <C>                 <C>
       United States Treasury Securities .....    $ 2,988,008               --                  --             2,988,008
       Equity Securities .....................         28,287              9,965              (7,453)             30,799
                                                  -----------        -----------         -----------         -----------
                                                  $ 3,016,295        $     9,965         $    (7,453)        $ 3,018,807
                                                  ===========        ===========         ===========         ===========
</TABLE>

6.   Recent Accounting Pronouncements
     --------------------------------
     In January 2003, the FASB issued Interpretation No. 46 "Consolidation of
     Variable Interest Entities" ("Interpretation 46"). Interpretation 46
     clarifies the application of Accounting Research Bulletin No. 54
     "Consolidated Financial Statements", and applies immediately to any
     variable interest entities created after January 31, 2003 and to variable
     interest entities in which an interest is obtained after the date. The
     Company holds no interest in variable interest entities.





















                                     Page 7
<PAGE>

                           TSR, INC. AND SUBSIDIARIES
         NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
                                NOVEMBER 30, 2003
                                   (UNAUDITED)

7.   Stock Options
     -------------
     On July 28, 2003 the Company paid a large nonrecurring cash dividend of
     $2.00 per share to shareholders of record as of July 11, 2003. The dividend
     paid amounted to $9,088,024. Guidance under Emerging Issues Task Force
     (EITF) 00-23, ISSUES RELATED TO THE ACCOUNTING FOR STOCK COMPENSATION UNDER
     APB OPINION NO.25 AND FASB INTERPRETATION NO.44, requires modification for
     outstanding stock options by adjusting the price and/or the number of
     shares under a fixed stock option award as a result of a large nonrecurring
     cash dividend. The Company did not adjust the terms of any outstanding
     stock options and, given the circumstances, a new measurement date and
     variable accounting treatment was required for its outstanding options at
     the dividend payment date. The Company had 34,000 such outstanding options,
     all of which were vested, as of November 30, 2003 which are now subject to
     variable accounting treatment. Accordingly, the Company recorded a non-cash
     compensation charge for $43,520 for the six months ended November 30, 2003
     and will continue to adjust the compensation charge associated with these
     options through the earlier of their exercise, forfeiture or expiration
     dates.

     The Company has one stock-based employee compensation plan in effect. The
     Company accounts for all transactions under which employees receive shares
     of stock or other equity instruments in the Company based on the price of
     its stock in accordance with the provisions of Accounting Principles Board
     Opinion No. 25, ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES. All options
     granted under the plan had an exercise price equal to the market value of
     the underlying common stock, and the number of shares represented by such
     options were known and fixed, on the date of grant. However, as a result of
     the large nonrecurring cash dividend, the remaining outstanding 34,000
     options are now treated as variable options. The following table
     illustrates the effect on net income and earnings per share if the Company
     had applied the fair value recognition provisions of Statement of Financial
     Accounting Standards (SFAS) No. 123 ACCOUNTING FOR STOCK-BASED
     COMPENSATION.

<TABLE><CAPTION>
                                                     Quarter Ended November 30,      Six Months Ended November 30,
                                                    ----------------------------     ----------------------------
                                                        2003            2002             2003            2002
                                                    ------------    ------------     ------------    ------------
<S>                                                 <C>             <C>              <C>             <C>
       Net income:
         As reported ...........................    $    638,333    $    709,463     $  1,142,122    $  1,373,236
       Deduct: Total stock-based  employee
       compensation expense determined under
       fair value method for all awards, net
       of minority interest and related tax
       effects
                Proforma net income ............            --            (3,463)            --            (7,236)
                                                    ------------    ------------     ------------    ------------
                                                    $    638,333    $    706,000     $  1,142,122    $  1,366,000
                                                    ============    ============     ============    ============

       Basic net income per share:
         As reported ...........................    $       0.14    $       0.16     $       0.25    $       0.31
                                                    ============    ============     ============    ============
       Proforma ................................    $       0.14    $       0.16     $       0.25    $       0.31
                                                    ============    ============     ============    ============
</TABLE>

There were no options granted in fiscal 2004 and 2003.





                                     Page 8
<PAGE>

PART I.  FINANCIAL INFORMATION
         ITEM 2.

                           TSR, INC. AND SUBSIDIARIES
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with the
condensed consolidated financial statements and the notes to such financial
statements.

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 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 contract computer programming services;
the extent to which market conditions for the Company's contract computer
consulting 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 contract computer consulting services business; the impact of
changes in the industry, such as the use of vendor management companies in
connection with the consulting procurement process and the increase in customers
moving IT operations offshore, and other risks and uncertainties set forth in
the Company's filings with the Securities and Exchange Commission.

Results of Operations
---------------------
The following table sets forth for the periods indicated certain financial
information derived from the Company's condensed consolidated statements of
earnings. There can be no assurance that trends in operating results will
continue in the future:

Three months ended November 30, 2003 compared with three months ended November
------------------------------------------------------------------------------
30, 2002
--------
<TABLE><CAPTION>
                                                                             Three Months Ended
                                                                                November 30,
                                                                        (Dollar amounts in Thousands)
                                                                       2003                      2002
                                                               ---------------------     ---------------------
                                                                              %of                       %of
                                                                Amount      Revenues      Amount      Revenues
                                                               --------     --------     --------     --------
<S>                                                            <C>             <C>       <C>             <C>
Revenues .................................................     $ 12,997        100.0     $ 13,859        100.0
Cost of sales ............................................       10,016         77.1       10,781         77.8
                                                               --------     --------     --------     --------
Gross profit .............................................        2,981         22.9        3,078         22.2

Selling, general, and administrative expenses ............        1,890         14.5        1,888         13.6
                                                               --------     --------     --------     --------
Income from operations ...................................        1,091          8.4        1,190          8.6

Other income .............................................            8          0.0           51          0.3
                                                               --------     --------     --------     --------
Income before income taxes ...............................        1,099          8.4        1,241          8.9
Provision for income taxes ...............................          461          3.5          532          3.8
                                                               --------     --------     --------     --------
Net income ...............................................     $    638          4.9     $    709          5.1
                                                               ========     ========     ========     ========
</TABLE>


                                     Page 9
<PAGE>

                           TSR, INC. AND SUBSIDIARIES


Revenues
--------
Revenues consist primarily of revenues from computer programming consulting
services. Revenues for the quarter ended November 30, 2003 decreased $862,000 or
6.2% from the comparable period in fiscal 2003. Due to the continuing weak
economic environment, almost all of our customers have severely cut back on
their IT spending during the past few years. This has limited our opportunities
to place new consultants on billing and decreased demand for new consultants. In
addition, we are also seeing an increasing use of offshore development companies
which also decreases demand for placements. As a result of decreased demand,
there has been an overall industry wide decrease in rates charged for computer
programming services. The Company has recently experienced a slight increase in
the average number of consultants on billing from approximately 365 for the
quarter ended November 30, 2002 to 389 for the quarter ended November 30, 2003.
We cannot yet determine whether the increase in the number of consultants will
continue. Further, due to the decrease in the rates charged for the Company's
services, revenues declined.

Cost of Sales
-------------
Cost of sales for the quarter ended November 30, 2003, decreased $765,000 or
7.1% to $10,016,000 from $10,781,000 in the prior year period. Cost of sales as
a percentage of revenues decreased from 77.8% in the quarter ended November 30,
2002 to 77.1% in the quarter ended November 30, 2003. These decreases are
primarily attributable to the Company's ability to reduce rates paid to
consultants in response to decreases in rates charged to the Company's
customers. The reduction in rates paid to the Company's consultants was not
sufficient to fully offset the decreases in rates paid by the Company's
customers even after taking into account the small increase in consultants on
billing.

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 increased $2,000 or 0.1% from
$1,888,000 in the quarter November 30, 2002 to $1,890,000 in the quarter ended
November 30, 2003. This increase was primarily attributable to increased
technical recruiting and legal expenses. The increased legal expenses primarily
relate to one employment-related litigation brought by one of the Company's
consultants and are expected to continue.

Other Income
------------
Other income resulted primarily from interest and dividend income, which
decreased by $37,000 to $25,000 due to lower interest rates and lower investable
balances in the quarter ended November 30, 2003. Additionally, the Company had a
net unrealized gain of $3,000 in the quarter ended November 30, 2003 versus a
gain of $5,000 in the quarter ended November 30, 2002 from marketable securities
due to mark to market adjustments of its trading securities equity portfolio.

Income Taxes
------------
The effective income tax rate of 41.9% for the quarter ended November 30, 2003
decreased from a rate of 42.9% in the quarter ended November 30, 2002.








                                     Page 10
<PAGE>

                           TSR, INC. AND SUBSIDIARIES

Six months ended November 30, 2003 compared with six months ended November 30,
------------------------------------------------------------------------------
2002
----

<TABLE><CAPTION>
                                                                             Six Months Ended
                                                                                November 30,
                                                                        (Dollar amounts in Thousands)
                                                                       2003                      2002
                                                               ---------------------     ---------------------
                                                                              %of                       %of
                                                                Amount      Revenues      Amount      Revenues
                                                               --------     --------     --------     --------
<S>                                                            <C>             <C>       <C>             <C>
Revenues .................................................     $ 25,733        100.0     $ 27,540        100.0
Cost of sales ............................................       19,889         77.3       21,481         78.0
                                                               --------     --------     --------     --------
Gross profit .............................................        5,844         22.7        6,059         22.0

Selling, general, and administrative expenses ............        3,876         15.1        3,739         13.6
                                                               --------     --------     --------     --------
Income from operations ...................................        1,968          7.6        2,320          8.4

Other income .............................................           39          0.2          101          0.4
                                                               --------     --------     --------     --------
Income before income taxes ...............................        2,007          7.8        2,421          8.8
Provision for income taxes ...............................          865          3.4        1,048          3.8
                                                               --------     --------     --------     --------
Net income ...............................................     $  1,142          4.4     $  1,373          5.0
                                                               ========     ========     ========     ========
</TABLE>

Revenues
--------
Revenues consist primarily of revenues from computer programming consulting
services. Revenues for the six months ended November 30, 2003 decreased
$1,807,000 or 6.6% from the comparable period in fiscal 2003. Due to the
continuing weak economic environment, almost all of our customers have
significantly cut back on their IT spending during the past year. This has
limited our opportunities to place new consultants on billing and decreased
demand for new consultants. In addition, we are also seeing an increasing use of
offshore development companies which also decreases the demand for placements.
As a result of decreased demand, there has been an overall industry wide
decrease in rates charged for computer processing services. The Company has
recently experienced a slight increase in the average number of programmers on
billing with clients from approximately 360 during the six months ended November
30, 2002 to approximately 380 during the six months ended November 30, 2003. We
cannot yet determine whether the increase in the number of consultants will
continue. Further, due to the decrease in rates charged for the Company's
services, revenues declined.

Cost of Sales
-------------
Cost of sales for the six months ended November 30, 2003, decreased $1,592,000
or 7.4% to $19,889,000 from $21,481,000 in the prior year period. Cost of sales
as a percentage of revenues decreased from 78.0% in the six months ended
November 30, 2002 to 77.3% in the six months ended November 30, 2003. These
decreases are primarily attributable to the Company's ability to reduce rates
paid to consultants in regard to decreases in rates charged to the Company's
customers. The reduction in rates paid to the Company's consultants was not
sufficient to fully offset the decreases in rates paid by the Company's
customers, even after taking into account the small increase in consultants on
billing.



                                     Page 11
<PAGE>

                           TSR, INC. AND SUBSIDIARIES


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 increased $137,000 or 3.7%
from $3,739,000 in the six months ended November 30, 2002 to $3,876,000 in the
six months ended November 30, 2003. This increase was primarily attributable to
increased technical recruiting and legal expenses. The increased legal expenses
primarily related to one employment-related litigation brought by one of the
Company's consultants and are expected to continue.


Other Income
------------
Other income resulted primarily from interest and dividend income, which
decreased by $58,000 to $66,000 due to lower interest rates and lower investable
balances in the six months ended November 30, 2003. Additionally, the Company
also had a net unrealized gain of $10,000 in the six months ended November 30,
2003 versus a net unrealized loss of $6,000 in the six months ended November 30,
2002 from marketable securities due to mark to market adjustments of its trading
securities equity portfolio. Other income also decreased due to an increase in
the minority interest allocation of operating profits of the Company's majority
owned subsidiary. Operating profits in that subsidiary increased from $84,000 in
the six months ended November 30, 2002 to $188,000 in the six months ended
November 30, 2003.

Income Taxes
------------
The effective income tax rate of 43.1% for the six months ended November 30,
2003 decreased from a rate of 43.3% in the six months ended November 30, 2002.
























                                     Page 12
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                           TSR, INC. AND SUBSIDIARIES

Liquidity and Capital Resources
-------------------------------
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 liquidity requirements for the foreseeable
future.

At November 30, 2003, the Company had working capital of $15,220,000 and cash
and cash equivalents of $6,450,000 as compared to working capital of $23,028,000
and cash and cash equivalents of $5,063,000 at May 31, 2003. Working capital
decreased primarily due to the large nonrecurring cash dividend of $2.00 per
share, totalling $9,088,024, paid in the current six month period. The Company
has also announced a policy of declaring dividends at the rate of $0.15 per
quarter for its 2004 fiscal year. The Company also announced that the Company
intends to maintain an ongoing dividend rate of $0.15 beyond the fiscal year
provided it is able to maintain cash flow from operations at current levels.
During the six month period ended November 30, 2003, the Company paid $681,602
in regular quarterly dividends. The dividends being paid during the Company's
2004 fiscal year have exceeded, and are expected to continue to exceed, the cash
flow provided by the Company's operations. The Company has disposed of
short-term marketable securities to meet these cash requirements.

Net cash provided by operating activities amounted to $521,000 for the six
months ended November 30, 2003, compared to cash used of $256,000 for the six
months ended November 30, 2002. The cash provided by operating activities
resulted primarily from the Company's net income. The cash used in the prior
fiscal year resulted primarily from an increase in accounts receivables. The
prior year increase in accounts receivable resulted primarily from delayed
collections at two major accounts. The delay at one account occurred because of
the implementation of a vendor management system and the delay at the other
account was due to a change in the head of the IT department.

Net cash provided by investing activities amounted to $9,939,000 for the six
months ended November 30, 2003, primarily resulted from allowing U.S. Treasury
Bills to mature and not being reinvested.

Net cash used in financing activities resulted primarily for the payment of cash
dividends of $9,770,000 offset, to some extent, by the proceeds received from
the exercise of stock options in the amount of $697,000.

The Company's capital resource commitments at November 30, 2003 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. A summary of non-cancelable long-term
operating lease commitments as of November 30, 2003 follows:

<TABLE><CAPTION>
                             FY 04         FY 05         FY 06         FY 07       Thereafter      Total
<S>                        <C>           <C>           <C>           <C>            <C>          <C>
    Operating Leases       $172,000      $349,000      $170,000      $101,000       $17,000      $809,000
</TABLE>

The Company's cash and marketable securities were sufficient to enable it to
meet its cash requirements during the six months ended November 30, 2003. The
Company has available a revolving line of credit of $5,000,000 with a major
money center bank through October 6, 2005. As of November 30, 2003, no amounts
were outstanding under this line of credit.

Recent Accounting Pronouncements
--------------------------------
In January 2003, the FASB issued Interpretation No. 46 "Consolidation of
Variable Interest Entities" ("Interpretation 46"). Interpretation 46 clarifies
the application of Accounting Research Bulletin No. 54 "Consolidated Financial
Statements", and applies immediately to any variable interest entities created
after January 31, 2003 and to variable interest entities in which an interest is
obtained after the date. The Company holds no interest in variable interest
entities.

                                     Page 13
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                           TSR, INC. AND SUBSIDIARIES


Critical Accounting Policies
----------------------------
The Securities and Exchange Commission ("SEC") issued disclosure guidance for
"critical accounting policies." The SEC defines "critical accounting policies"
as those that require the application of management's most difficult, subjective
or complex judgments, often as a result of the need to make estimates about the
effect of matters that are inherently uncertain and may change in subsequent
periods.

The Company's significant accounting policies are described in Note 1 to the
Company's consolidated financial statements, contained in its May 31, 2003
Annual Report on Form 10-K, as filed with the SEC. The Company believes that the
following accounting policies require the application of management's most
difficult, subjective or complex judgments:

ESTIMATING ALLOWANCES FOR DOUBTFUL ACCOUNTS RECEIVABLE
We perform ongoing credit evaluations of our customers and adjust credit limits
based upon payment history and the customer's current credit worthiness, as
determined by our review of their current credit information. We continuously
monitor collections and payments from our customers and maintain a provision for
estimated credit losses based upon our historical experience and any specific
customer collection issues that we have identified. While such credit losses
have historically been within our expectations and the provisions established,
we cannot guarantee that we will continue to experience the same credit loss
rates that we have in the past. A significant change in the liquidity or
financial position of any of our significant customers could have a material
adverse effect on the collectibility of our accounts receivable and our future
operating results.

VALUATION OF DEFERRED TAX ASSETS
We regularly evaluate our ability to recover the reported amount of our deferred
income taxes considering several factors, including our estimate of the
likelihood of the Company generating sufficient taxable income in future years
during the period over which temporary differences reverse. Presently, the
Company believes that it is more likely than not that it will realize the
benefits of its deferred tax assets based primarily on the Company's history of
and projections for taxable income in the future. In the event that actual
results differ from our estimates or we adjust these estimates in future
periods, we may need to establish a valuation allowance against a portion or all
of our deferred tax assets, which could materially impact our financial position
or results of operations.

VALUATION OF LONG-LIVED AND INTANGIBLE ASSETS
We assess the recoverability of long-lived assets and intangible assets whenever
we determine that events or changes in circumstances indicate that their
carrying amount may not be recoverable. Our assessment is primarily based upon
our estimate of future cash flows associated with these assets. Although there
has been a sustained weakness in our operating results, through November 30,
2003, we have continued to generate net income. Accordingly, we have not
determined that there has been an indication of impairment of any of our assets.
However, should our operating results deteriorate, we may determine that some
portion of our long-lived assets or intangible assets are impaired. Such
determination could result in non-cash charges to income that could materially
affect our financial position or results of operations for that period.


Item 3.    Quantitative and Qualitative Disclosure About Market Risk
           ---------------------------------------------------------
The Company's earnings and cash flows are subject to fluctuations due to (i)
changes in interest rates primarily affecting its income from the investment of
available cash balances in money market funds and (ii) changes in market values
of its investments in trading equity securities. Under its current policies, the
Company does not use interest rate derivative instruments to manage exposure to
interest rate changes. The Company's present exposure to changes in the market
value of its investments in equity securities is not significant.


                                     Page 14
<PAGE>

                           TSR, INC. AND SUBSIDIARIES



Item 4.    Controls and Procedures
           -----------------------

DISCLOSURE CONTROLS AND PROCEDURES. The Company conducted an evaluation, under
the supervision and with the participation of the principal executive officer
and principal financial officer, of the Company's disclosure controls and
procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of
1934 (the "Exchange Act")). Based on this evaluation, the principal executive
officer and principal financial officer concluded that, as of the end of the
period covered by this report, the Company's disclosure controls and procedures
are effective.

INTERNAL CONTROL OVER FINANCIAL REPORTING. There was no change in the Company's
internal control over financial reporting (as such term is defined in Rule
13a-15(f) under the Exchange Act) during the Company's most recently reported
completed fiscal quarter that has materially affected, or is reasonably likely
to materially affect, the Company's internal control over financial reporting.

Part II.   Other Information

Item 6.    Exhibits and Reports on Form 8K
           -------------------------------

           (a).   Exhibit 31.1 - Certification by J.F. Hughes pursuant to 18
                  U.S.C. Section 1350, as adopted pursuant to Section 302 of the
                  Sarbanes-Oxley Act of 2002.

                  Exhibit 31.2 - Certification by John G. Sharkey pursuant to 18
                  U.S.C. Section 1350, as adopted pursuant to Section 302 of the
                  Sarbanes-Oxley Act of 2002.

                  Exhibit 32.1 - Certification by J.F. Hughes pursuant to 18
                  U.S.C. Section 1350, as adopted pursuant to Section 906 of the
                  Sarbanes-Oxley Act of 2002.

                  Exhibit 32.2 - Certification by John G. Sharkey pursuant to 18
                  U.S.C. Section 1350, as adopted pursuant to Section 906 of the
                  Sarbanes-Oxley Act of 2002.

           (b).   Reports on Form 8K:

                  -  On September 29, 2003 the Company furnished a Form 8-K
                     announcing financial results for the quarter ended August
                     31, 2003.


                                   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 6, 2004             /s/ J.F. Hughes
                                  ----------------------------------------------
                                  J.F. Hughes, Chairman, President and Treasurer


Date:     January 6, 2004            /s/ John G. Sharkey
                                  ----------------------------------------------
                                  John G. Sharkey, Vice President Finance

                                     Page 15