UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
DC  20549





FORM
10-Q





x
            Quarterly
      Report Pursuant to Section 13 or15(d)
      of the Securities Exchange Act of 1934
              
              For
      the period ended February 28, 2010




o
            Transition
      report Pursuant to Section 13 or15(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
              State
      or other jurisdiction of
                Incorporation
      or organization)
            
            13-2635899
              (I.R.S.
      Employer Identification No.)





400 Oser
Avenue, Hauppauge, NY  11788





(Address
of principal executive offices)





631-231-0333





(Registrant’s
telephone number)








(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   o  No





Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate website, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding
12 months (or for such shorter period that the registrant was required to submit
and post such files).  o  Yes   o  No (Registrant
not subject to requirement)





Indicate
by check mark whether the registrant is large accelerated filer, an accelerated
filer, a non-accelerated filer or a smaller reporting company.  See
definition of “large accelerated filer”, “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.  (Check
one):





Large
      Accelerated Filer  o
            Accelerated
      Filer  o
            Non-Accelerated
      filer  o
              (Do
      not check if a smaller reporting company)
            Smaller
      Reporting Company  x





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).   o Yes   x  No





As of
March 31, 2010, there were 4,050,488 shares of common stock, par value $.01
per share, issued and outstanding.








Page
1




TSR, INC.
AND SUBSIDIARIES


INDEX





PagePart
      I.
            Financial
      Information:
            NumberItem
      1.
            Financial
      Statements:Condensed
      Consolidated Balance Sheets –February
      28, 2010 and May 31, 2009
            3Condensed
      Consolidated Statements of Operations –For
      the three months and nine months ended February 28, 2010 and
      2009
            4Condensed
      Consolidated Statements of Equity –For
      the nine months ended February 28, 2010 and 2009
            5Condensed
      Consolidated Statements of Cash Flows –For
      the nine months ended February 28, 2010 and 2009
            6Notes
      to Condensed Consolidated Financial Statements
            7Item
      2.
            Management’s
      Discussion and Analysis of Financial Condition and Results
      of Operations
            11Item
      4T.
            Controls
      and Procedures
            18Part
      II.
            Other
      Information
            18Item
      6.
            Exhibits
            18Signatures
            
            19








Page
2


Part
      I.
              Financial
      Information
                Item 1. Financial Statements
 
 
 TSR, INC.
AND SUBSIDIARIES
 CONDENSED
CONSOLIDATED BALANCE SHEETS
 February28,
                2010
              
              
              May 31,
                2009ASSETS
              
              (Unaudited)
              
              
              (Note
      1)Current
      Assets:Cash
      and cash equivalents
              
              $
              4,865,085
              
              
              $
              4,075,213Certificates
      of deposit and marketable securities
              
              
              3,265,252
              
              
              
              4,509,346Accounts
      receivable, net of allowance for doubtful accounts of $202,000 and
      $302,000
              
              
              6,933,876
              
              
              
              6,345,374Other
      receivables
              
              
              8,991
              
              
              
              20,580Prepaid
      expenses
              
              
              71,896
              
              
              
              72,429Prepaid
      and recoverable income taxes
              
              
              122,960
              
              
              
              101,791Deferred
      income taxes
              
              
              91,000
              
              
              
              133,000Total
      Current Assets
              
              
              15,359,060
              
              
              
              15,257,733Equipment
      and leasehold improvements, net of accumulated
      depreciationand amortization of $426,243 and
      $415,963
              
              
              11,119
              
              
              
              19,115Other
      assets
              
              
              49,653
              
              
              
              49,653Deferred
      income taxes
              
              
              59,000
              
              
              
              61,000Total
      Assets
              
              $
              15,478,832
              
              
              $
              15,387,501LIABILITIES
      AND EQUITYCurrent
      Liabilities:Accounts
      and other payables
              
              $
              236,624
              
              
              $
              274,284Accrued
      expenses and other current liabilities
              
              
              1,178,145
              
              
              
              1,247,355Advances
      from customers
              
              
              1,504,640
              
              
              
              1,447,740Total
      Current Liabilities
              
              
              2,919,409
              
              
              
              2,969,379Stockholders’
      Equity:Preferred
      stock, $1 par value, authorized 1,000,000 shares; none
    issued
              
              
              —
              
              
              
              —Common
      stock, $.01 par value, authorized 25,000,000 shares; issued 6,228,326
      shares
              
              
              62,283
              
              
              
              62,283Additional
      paid-in capital
              
              
              5,071,727
              
              
              
              5,071,727Retained
      earnings
              
              
              20,655,042
              
              
              
              20,517,70725,789,052
              
              
              
              25,651,717Less:
      Treasury stock, 2,177,838 shares, at cost
              
              
              13,251,231
              
              
              
              13,251,231Total
      TSR, Inc. Stockholders’ Equity
              
              
              12,537,821
              
              
              
              12,400,486Noncontrolling
      Interest
              
              
              21,602
              
              
              
              17,636Total
      Equity
              
              
              12,559,423
              
              
              
              12,418,122Total
      Liabilities and Equity
              
              $
              15,478,832
              
              
              $
              15,387,501
 
 The
accompanying notes are an integral part of these unaudited condensed
consolidated financial statements.
 
 Page
3
 
 TSR, INC.
AND SUBSIDIARIES
 CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
 For The
Three Months and Nine Months Ended February 28, 2010 and 2009
 (UNAUDITED)
 
 
 
 Three
      Months Ended
              
              
              Nine
      Months EndedFebruary
      28,
              
              
              February
      28,
              
              
              February
      28,
              
              
              February
      28,2010
              
              
              2009
              
              
              2010
              
              
              2009Revenue,
      net
              
              $
              8,960,808
              
              
              $
              9,750,770
              
              
              $
              27,393,451
              
              
              $
              33,436,750Cost
      of sales
              
              
              7,419,281
              
              
              
              7,957,769
              
              
              
              22,520,244
              
              
              
              27,452,845Selling,
      general and administrative expenses
              
              
              1,543,943
              
              
              
              1,636,279
              
              
              
              4,585,988
              
              
              
              5,131,8538,963,224
              
              
              
              9,594,048
              
              
              
              27,106,232
              
              
              
              32,584,698Income
      (loss) from operations
              
              
              (2,416
              )
              
              
              156,722
              
              
              
              287,219
              
              
              
              852,052Other
      income (expense):Interest
      and dividend income
              
              
              6,223
              
              
              
              29,826
              
              
              
              38,695
              
              
              
              132,091Unrealized
      gain (loss) on marketable securities, net
              
              
              1,064
              
              
              
              (848
              )
              
              
              3,848
              
              
              
              (8,352
              )Income
      before income taxes
              
              
              4,871
              
              
              
              185,700
              
              
              
              329,762
              
              
              
              975,791Provision
      for income taxes
              
              
              8,000
              
              
              
              80,000
              
              
              
              149,000
              
              
              
              410,000Net
      income (loss)
              
              
              (3,129
              )
              
              
              105,700
              
              
              
              180,762
              
              
              
              565,791Less:
      Net income attributable to noncontrolling interest
              
              
              (2,607
              )
              
              
              (12,456
              )
              
              
              (43,427
              )
              
              
              (37,339
              )Net
      income (loss) attributable to TSR, Inc.
              
              $
              (5,736
              )
              
              $
              93,244
              
              
              $
              137,335
              
              
              $
              528,452Basic
      and diluted net income (loss) per TSR, Inc. common share
              
              $
              (
      —
              )
              
              $
              0.02
              
              
              $
              0.03
              
              
              $
              0.12Weighted
      average number of basic and diluted common shares
    outstanding
              
              
              4,050,488
              
              
              
              4,050,488
              
              
              
              4,050,488
              
              
              
              4,297,468
 
 
 The
accompanying notes are an integral part of these unaudited condensed
consolidated financial statements.
 
 
 
 
 Page
4
 
 TSR, INC.
AND SUBSIDIARIES
 CONDENSED
CONSOLIDATED STATEMENTS OF EQUITY
 For
The Nine Months Ended February 28, 2010 and 2009
 (UNAUDITED)
 
 
 Shares
      of
                common
                stock
              
              
              Common
                stock
              
              
              Additional
                paid-in
                capital
              
              
              Retained
                earnings
              
              
              Treasury
                stock
              
              
              Non-
                controlling
                Interest
              
              
              Total
                equityBalance
      at May 31, 2008
              
              
              6,228,326
              
              
              $
              62,283
              
              
              $
              5,071,727
              
              
              $
              20,663,925
              
              
              $
              (12,031,301
              )
              
              $
              53,533
              
              
              $
              13,820,167Net
      income attributable to noncontrolling interest
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              37,339
              
              
              
              37,339Distribution
      tononcontrolling
      interest
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              (77,289
              )
              
              
              (77,289
              )Purchases
      of treasury stock
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              (1,219,930
              )
              
              
              —
              
              
              
              (1,219,930
              )Dividends
      declared
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              (767,610
              )
              
              
              —
              
              
              
              —
              
              
              
              (767,610
              )Net
      income attributable toTSR,
      Inc.
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              528,452
              
              
              
              —
              
              
              
              —
              
              
              
              528,452Balance
      at Feb. 28, 2009
              
              
              6,228,326
              
              
              $
              62,283
              
              
              $
              5,071,727
              
              
              $
              20,424,767
              
              
              $
              (13,251,231
              )
              
              $
              13,583
              
              
              $
              12,321,129Balance
      at May 31, 2009
              
              
              6,228,326
              
              
              $
              62,283
              
              
              $
              5,071,727
              
              
              $
              20,517,707
              
              
              $
              (13,251,231
              )
              
              $
              17,636
              
              
              $
              12,418,122Net
      income attributable to noncontrolling interest
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              43,427
              
              
              
              43,427Distribution
      tononcontrolling
      interest
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              (39,461
              )
              
              
              (39,461
              )Net
      income attributable toTSR,
      Inc.
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              137,335
              
              
              
              —
              
              
              
              —
              
              
              
              137,335Balance
      at Feb. 28, 2010
              
              
              6,228,326
              
              
              $
              62,283
              
              
              $
              5,071,727
              
              
              $
              20,655,042
              
              
              $
              (13,251,231
              )
              
              $
              21,602
              
              
              $
              12,559,423
 
 
 
 
 
 
 The
accompanying notes are an integral part of these unaudited condensed
consolidated financial statements.
 
 
 
 
 Page
5
  TSR, INC.
AND SUBSIDIARIES
 CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
 For The
Nine Months Ended February 28, 2010 and 2009
 (UNAUDITED)
 
 Nine
      Months EndedFebruary
      28,
                2010
              
              
              February
      28,
                2009Cash
      flows from operating activities:Net
      income
              
              $
              180,762
              
              
              $
              565,791Adjustments
      to reconcile net income to net cash provided by (used in) operating
      activities:Depreciation
      and amortization
              
              
              10,280
              
              
              
              14,620Unrealized
      (gain) loss on marketable securities, net
              
              
              (3,848
              )
              
              
              8,352Deferred
      income taxes
              
              
              44,000
              
              
              
              14,000Changes
      in operating assets and liabilities:Accounts
      receivable
              
              
              (588,502
              )
              
              
              1,525,379Other
      receivables
              
              
              11,589
              
              
              
              29,597Prepaid
      expenses
              
              
              533
              
              
              
              (15,607
              )Prepaid
      and recoverable income taxes
              
              
              (21,169
              )
              
              
              (54,976
              )Accounts
      and other payables and accrued expenses and other current
      liabilities
              
              
              (106,870
              )
              
              
              (667,254
              )Advances
      from customers
              
              
              56,900
              
              
              
              (75,946
              )Net
      cash provided by (used in) operating activities
              
              
              (416,325
              )
              
              
              1,343,956Cash
      flows from investing activities:Proceeds
      from maturities of marketable securities
              
              
              3,997,133
              
              
              
              8,915,637Purchases
      of marketable securities
              
              
              (2,749,191
              )
              
              
              (5,212,494
              )Purchases
      of equipment and leasehold improvements
              
              
              (2,284
              )
              
              
              (9,635
              )Net
      cash provided by investing activities
              
              
              1,245,658
              
              
              
              3,693,508Cash
      flows from financing activities:Purchases
      of treasury stock
              
              
              —
              
              
              
              (1,219,930
              )Cash
      dividends paid
              
              
              —
              
              
              
              (767,610
              )Distribution
      to noncontrolling interest
              
              
              (39,461
              )
              
              
              (77,289
              )Net
      cash used in financing activities
              
              
              (39,461
              )
              
              
              (2,064,829
              )Net
      increase in cash and cash equivalents
              
              
              789,872
              
              
              
              2,972,635Cash
      and cash equivalents at beginning of period
              
              
              4,075,213
              
              
              
              1,588,443Cash
      and cash equivalents at end of period
              
              $
              4,865,085
              
              
              $
              4,561,078Supplemental
      disclosures of cash flow data:Income
      taxes paid, net of refunds
              
              $
              126,000
              
              
              $
              451,000
 
 The
accompanying notes are an integral part of these unaudited condensed
consolidated financial statements.
 
 Page
6
  TSR, INC.
AND SUBSIDIARIES
 NOTES TO
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 February
28, 2010
 (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 three months and nine months ended February 28, 2010 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,
2010.  The balance sheet at May 31, 2009 has been derived from the
audited financial statements at that date.  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, 2009.
 
 2.
              Net
      Income (Loss) Per Common Share
 Basic net
income (loss) 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.  The Company has had no stock options or other common
stock equivalents outstanding during any of the periods presented.
 
 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 February 28, 2010 and May 31,
2009:
  February
      28,
                2010
              
              
              May
      31,
                2009Cash
      in banks
              
              $
              1,943,359
              
              
              $
              2,008,349Money
      market funds
              
              
              2,921,726
              
              
              
              2,066,864$
              4,865,085
              
              
              $
              4,075,213
  4.
              Revenue
      Recognition
 The
Company’s contract computer programming services are generally provided under
time and materials agreements with customers.  Revenue is recognized
in accordance with Staff Accounting Bulletin (SAB) 104, “Revenue Recognition,”
when persuasive evidence of an arrangement exists, the services have been
rendered, the price is fixed or determinable, and collectability is reasonably
assured.  These conditions occur when a customer agreement is effected
and the consultant performs the authorized services.  Advances from
customers represent amounts received from customers prior to the Company’s
provision of the related services and credit balances from
overpayments.
 
 Reimbursements
received by the Company for out-of-pocket expenses are characterized as
revenue.
 
 
 Page
7
 
 TSR, INC.
AND SUBSIDIARIES
 NOTES TO
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, Continued
 February
28, 2010
 (Unaudited)
 
 5.
              Marketable
      Securities
 In fiscal
2009, the Company adopted new accounting standards related to fair value
measurements. The Company has characterized its investments in marketable
securities, based on the priority of the inputs used to value the investments,
into a three-level fair value hierarchy. The fair value hierarchy gives the
highest priority to quoted prices in active markets for identical assets or
liabilities (Level 1), and lowest priority to unobservable
inputs   (Level 3). If the inputs used to measure the investments
fall within different levels of the hierarchy, the categorization is based on
the lowest level input that is significant to the fair value measurement of the
instrument.
 
 Investments
recorded in the accompanying consolidated balance sheets are categorized based
on the inputs to valuation techniques as follows:
 
 Level 1-
These are investments where values are based on unadjusted quoted prices for
identical assets in an active market the Company has the ability to
access.
 
 Level 2-
These are investments where values are based on quoted market prices that are
not active or model derived valuations in which all significant inputs are
observable in active markets.
 
 Level 3-
These are investments where values are derived from techniques in which one or
more significant inputs are unobservable.
 
 The
following are the major categories of assets measured at fair value on a
recurring basis during the fiscal year ended May 31, 2010 using quoted prices in
active markets for identical assets (Level 1), significant other observable
inputs (Level 2) and significant unobservable inputs (Level 3):
 
 February
      28, 2010
              
              Level
      1
              
              
              Level
      2
              
              
              Level
      3
              
              
              TotalUS
      Treasury Securities
              
              $
              999,191
              
              
              $
              —
              
              
              $
              —
              
              
              $
              999,191Certificates
      of Deposit
              
              
              —
              
              
              
              2,249,637
              
              
              
              —
              
              
              
              2,249,637Equity
      Securities
              
              
              16,424
              
              
              
              —
              
              
              
              —
              
              
              
              16,424$
              1,015,615
              
              
              $
              2,249,637
              
              
              $
              —
              
              
              $
              3,265,252
 
 Based
upon the Company’s intent and ability to hold its US Treasury securities to
maturity (which maturities range up to twenty-four months at purchase), such
securities have been classified as held-to-maturity and are carried at amortized
cost, which approximates fair value. The Company’s equity securities are
classified as trading securities, which are carried at fair value, as determined
by quoted market prices, which is Level 1 input, as established by the fair
value hierarchy. The related unrealized gains and losses are included in
earnings.  The Company’s marketable securities at February 28, 2010
and May 31, 2009 are summarized as follows:
 
 February
      28, 2010
                Current
              
              Amortized
                Cost
              
              
              Gross
                Unrealized
                Holding
                Gains
              
              
              Gross
                Unrealized
                Holding
                Losses
              
              
              Recorded
                ValueUS
      Treasury Securities
              
              $
              999,191
              
              
              $
              —
              
              
              $
              —
              
              
              $
              999,191Certificates
      of Deposit
              
              
              2,249,637
              
              
              
              —
              
              
              
              —
              
              
              
              2,249,637Equity
      Securities
              
              
              16,866
              
              
              
              —
              
              
              
              442
              
              
              
              16,424$
              3,265,694
              
              
              $
              —
              
              
              $
              442
              
              
              $
              3,265,252
  
 Page
8
  TSR, INC.
AND SUBSIDIARIES
 NOTES TO
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, Continued
 February
28, 2010
 (Unaudited)
 
 May
      31, 2009
                Current
              
              Amortized
                Cost
              
              
              Gross
                Unrealized
                Holding
                Gains
              
              
              Gross
                Unrealized
                Holding
                Losses
              
              
              Recorded
                ValueUS
      Treasury Securities
              
              $
              2,497,133
              
              
              $
              —
              
              
              $
              —
              
              
              $
              2,497,133Certificates
      of Deposit
              
              
              1,999,637
              
              
              
              —
              
              
              
              —
              
              
              
              1,999,637Equity
      Securities
              
              
              16,866
              
              
              
              —
              
              
              
              4,290
              
              
              
              12,576$
              4,513,636
              
              
              $
              —
              
              
              $
              4,290
              
              
              $
              4,509,346
  The
Company’s investments in marketable securities consist primarily of investments
in US Treasury securities and certificates of deposit. Market values were
determined for each individual security in the investment
portfolio.  When evaluating the investments for other-than temporary
impairment, the Company reviews factors such as length of time and extent to
which fair value has been below cost basis, the financial condition of the
issuer, and the Company’s ability and intent to hold the investment for a period
of time, which may be sufficient for anticipated recovery in market
values.
 
 6.
              Fair
      Value of Financial Instruments
 Accounting
Standards Codification (“ASC”) Topic 825, “Financial Instruments”, requires
disclosure of the fair value of certain financial instruments. For cash and cash
equivalents, accounts receivable, accounts and other payables, accrued
liabilities and advances from customers, the amounts presented in the condensed
consolidated financial statements approximate fair value because of the
short-term maturities of these instruments.
 
 7.
              Stockholders’
      Equity
 During
the nine months ended February 28, 2009, the Company purchased a total of
517,524 shares of its common stock for $1,219,930.  This consisted of
61,001 shares purchased in various transactions on the open market for $169,927
under a previously announced repurchase plan of 300,000 shares and an additional
456,523 shares purchased in a private transaction for $1,050,003.  The
Company has not made any purchases under its repurchase plan since September
2008.
 
 8.
              Other
      Matters
 From time
to time, the Company is party to various lawsuits, some involving material
amounts. Management is not aware of any lawsuits that would have a material
adverse impact on the consolidated financial position of the
Company.
 
 
 
 Page
9
  TSR, INC.
AND SUBSIDIARIES
 NOTES TO
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, Continued
 February
28, 2010
 (Unaudited)
 
 
 9.
              Recent
      Accounting Pronouncements
 In April
2009, the FASB issued an accounting standard to require that disclosures
concerning the fair value of financial instruments be presented in interim as
well as in annual financial statements. This accounting standard was
subsequently codified into ASC Topic 825, “Financial Instruments.” In addition,
the FASB issued an accounting standard to provide additional guidance for
determining the fair value of a financial asset or financial liability when the
volume and level of activity for such asset or liability have decreased
significantly and to also provide guidance for determining whether a transaction
is an orderly one. This accounting standard was subsequently codified into ASC
Topic 820, “Fair Value Measurements and Disclosures.” The FASB also issued an
accounting standard which revised and expanded the guidance concerning the
recognition and measurement of other-than-temporary impairments of debt
securities classified as available-for-sale or held-to-maturity. In addition, it
required enhanced disclosures concerning such impairment for both debt and
equity securities. This accounting standard was subsequently codified into ASC
Topic 320, “Investments – Debt and Equity Securities.” The requirements of these
three accounting standards are effective for interim reporting periods ending
after June 15, 2009. Early adoption is permitted for interim periods ending
after March 15, 2009, but only if the election is made to adopt all these
accounting standards. Disclosures for earlier periods presented for comparative
purposes at initial adoption are not required. In periods after initial
adoption, comparative disclosures are required only for periods ending after
initial adoption. The Company has adopted the accounting standards for the first
quarter of fiscal 2010.
  On April
1, 2009, new guidance was adopted which establishes general standards of
accounting for and disclosure of, events that occur after the balance sheet date
but before financial statements are issued or are available to be issued. This
guidance was subsequently amended on February 24, 2010 to no longer require
disclosure of the date through which an entity has evaluated subsequent events.
This accounting standard was subsequently codified into ASC Topic 855,
“Subsequent Events.” The effect of the adoption was not
material.
  In
June 2009, the FASB issued an accounting standard which established the
Codification to become the single source of authoritative accounting principles
generally accepted in the United States of America (“GAAP”) recognized by the
FASB to be applied by nongovernmental entities, with the exception of guidance
issued by the SEC and its staff. All guidance contained in the Codification
carries an equal level of authority. The Codification is not intended to change
GAAP, but rather is expected to simplify accounting research by reorganizing
current GAAP into approximately 90 accounting topics and providing all the
authoritative literature related to a topic in one place. The Company adopted
this accounting standard in preparing the condensed consolidated financial
statements for the quarter ended November 30, 2009 and all subsequent public
filings will reference the Codification as the sole source of authoritative
literature.  The adoption of this accounting standard, which was
subsequently codified into ASC Topic 105, “Generally Accepted Accounting
Principles,” had no impact on retained earnings and will have no impact on the
Company’s statements of income.
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 Page
10
  TSR, INC.
AND SUBSIDIARIES
 MANAGEMENT’S
DISCUSSION AND ANALYSIS
 OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
 Part
      I.
              Financial
      Information
                Item 2.
 
 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:  the impact
of current adverse conditions in the credit markets and current adverse economic
conditions on the Company’s business; risks relating to the competitive nature
of the markets for contract computer programming services; the extent to which
market conditions for the Company’s contract computer 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
consultant procurement process, 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.  The Company is under no
obligation to publicly update or revise forward looking statements.
 
 Results
of Operations
 The
following table sets forth, for the periods indicated, certain financial
information derived from the Company’s condensed consolidated statements of
operations.  There can be no assurance that trends in operating
results will continue in the future:
 
 Three
months ended February 28, 2010 compared with three months ended February 28,
2009
 
 (Dollar
      amounts in thousands)
                Three
      Months EndedFebruary
      28,
                2010
              
              
              February
      28,
                2009Amount
              
              
              %
      of
                Revenue
              
              
              Amount
              
              
              %
      of
                RevenueRevenue,
      net
              
              $
              8,961
              
              
              
              100.0
              %
              
              $
              9,751
              
              
              
              100.0
              %Cost
      of sales
              
              
              7,419
              
              
              
              82.8
              %
              
              
              7,958
              
              
              
              81.6
              %Gross
      profit
              
              
              1,542
              
              
              
              17.2
              %
              
              
              1,793
              
              
              
              18.4
              %Selling,
      general and administrative expenses
              
              
              1,544
              
              
              
              17.2
              %
              
              
              1,636
              
              
              
              16.8
              %Income
      (loss) from operations
              
              
              (2
              )
              
              
              0.0
              %
              
              
              157
              
              
              
              1.6
              %Other
      income, net
              
              
              7
              
              
              
              0.1
              %
              
              
              29
              
              
              
              0.3
              %Income
      before income taxes
              
              
              5
              
              
              
              0.1
              %
              
              
              186
              
              
              
              1.9
              %Provision
      for income taxes
              
              
              8
              
              
              
              0.1
              %
              
              
              80
              
              
              
              0.8
              %Net
      income (loss)
              
              $
              (3
              )
              
              
              (0.0
              )%
              
              $
              106
              
              
              
              1.1
              %
 
 
 
 Page
11
  TSR, INC.
AND SUBSIDIARIES
 
 Revenue
 Revenue
consists primarily of revenue from computer programming consulting
services.  Revenue for the quarter ended February 28, 2010 decreased
$790,000 or 8.1% from the prior year quarter.  The average number of
consultants on billing with customers decreased from approximately 250 for the
quarter ended February 28, 2009 to 217 for the quarter ended February 28,
2010.  The majority of this decrease was experienced in the quarter
ending May 31, 2009. The continuing impact of the broad based economic downturn
has significantly decreased the number of consultants on billing with customers
and also decreased the opportunities to place new consultants on billing with
customers. The revenue decrease is also the result of the continued reduction in
consultants placed with AT&T and lower billing rates caused by discounts and
other rate reductions instituted by customers. The current quarter was also
impacted by the loss of billing days due to the severe winter weather in the New
York metropolitan area.
 
 As a
result of the merger of AT&T with SBC Communications, Inc., the Company
experienced a decrease in new placements with AT&T beginning in the second
quarter of fiscal 2007.  This has reduced the number of consultants on
billing with AT&T from 50 at February 28, 2008 to 20 at February 28, 2009
and to 4 at February 28, 2010.  The Company expects that these changes
will continue to impact the Company’s business relationship with AT&T,
resulting in few, if any, opportunities to place new consultants at
AT&T.
 
 The
Company’s revenue from programmers on billing continue to be affected by
discounts, such as prompt payment and volume discounts, required by major
customers as a condition to remaining on their approved vendor lists and the
reduction in the number of vendors on the approved vendor lists to increase
pricing competition among the remaining vendors.  In addition, most of
the Company’s major customers have retained third parties to provide vendor
management services and centralize the consultant hiring
process.  Under this system, the third party retains the Company to
provide contract computer programming services, the Company bills the third
party and the third party bills the ultimate customer.  This process
has weakened the relationships the Company has built with its client contacts,
the project managers, who the Company would normally work directly with to place
consultants.  Instead, the Company is required to interface with the
vendor management provider, making it more difficult to maintain its
relationships with its customers and preserve and expand its
business.  These changes have also reduced the Company’s profit
margins because the vendor management company is retained for the purpose of
keeping costs down for the end client and receives a processing fee which is
deducted from the payment to the Company.  Revenue has also been
impacted by the increased use of offshore development companies, particularly in
India, over the past few years to provide technology related work and
projects.  The Company is unable to predict the long-term effects of
these changes.
 
 As a
result of the broad based economic downturn, the Company has experienced a
decrease in the number of consultants on billing with
customers.  These economic conditions have also reduced the
opportunities to place new consultants on billing with customers. While
customers’ IT spending during the 2010 fiscal year does not appear to be
declining the way it had in prior fiscal years during the economic downturn, any
improvements appear to be slow and uncertain and the Company expects that the
economic conditions will continue to affect the number of consultants on billing
with customers and the Company’s revenue.
 
 Cost
of Sales
 Cost of
sales for the quarter ended February 28, 2010, decreased $539,000 or 6.8% to
$7,419,000 from $7,958,000 in the prior year period.  The decrease in
cost of sales resulted primarily from the decrease in the number of consultants
on billing with clients.  Cost of sales as a percentage of revenue
increased from 81.6% in the quarter ended February 28, 2009 to 82.8% in the
quarter ended February 28, 2010.  The increase in cost of sales as a
percentage of revenue was primarily attributable to lower revenue generated from
a few of the Company’s major accounts due to increased competitive
pressures.
 
 
 
 
 
 
 
 Page
12
  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 decreased $92,000 or 5.6%
from $1,636,000 in the quarter ended February 28, 2009 to $1,544,000 in the
quarter ended February 28, 2010.  This decrease was primarily
attributable to a reduction in the number of sales and recruiting personnel and
lower commissions paid to the remaining sales and recruiting personnel due to
lower revenue. Technical recruiters and account executives have been terminated
in order to lessen the impact of the Company’s reduced level of business
activity. However, while selling, general and administrative expenses decreased,
these expenses as a percentage of revenue increased from 16.8% in the quarter
ended February 28, 2009 to 17.2% in the quarter ended February 28, 2010 as a
result of lower revenue.
 
 Income
(Loss) from Operations
 Income
from operations decreased $159,000 from $157,000 in the quarter ended February
28, 2009 to a loss of $2,000 in the quarter ended February 28, 2010. The
decrease was primarily attributable to the reduced revenue from the decrease in
the number of consultants on billing with customers and the loss of work days in
the current quarter due to the severe winter weather.
 
 Other
Income
 Other
income for the quarter ended February 28, 2010 resulted primarily from interest
and dividend income of $6,000, which decreased by $24,000 from the level
realized in the quarter ended February 28, 2009 due to lower interest rates
earned on the Company’s US Treasury securities, certificates of deposit and
money market accounts as well as lower average investable assets.
 
 Income
Taxes
 The
effective income tax rate was 43.0% in the quarter ended February 28,
2009.  The income tax provision included in the Company’s results of
operations for the quarter ended February 28, 2010 reflects the Company’s
estimated effective tax rate for the year ending May 31, 2010.
 
 Net
Income (Loss)
 Net
income decreased $109,000 from $106,000 in the quarter ended February 28, 2009
to a loss of $3,000 in the quarter ended February 28, 2010.  Net
income decreased primarily due to lower revenue from a decreased number of
consultants on billing with clients and lower interest income earned on the
Company’s US Treasury securities and money market accounts.
 
 
 
 
 
 
 
 
 
 
 Page
13
  TSR, INC.
AND SUBSIDIARIES
 
 
 Nine
months ended February 28, 2010 compared with nine months ended February 28,
2009
 
 (Dollar
      amounts in thousands)
                Nine
      Months EndedFebruary
      28,
                2010
              
              
              February
      28,
                2009Amount
              
              
              %
      of
                Revenue
              
              
              Amount
              
              
              %
      of
                RevenueRevenue,
      net
              
              $
              27,393
              
              
              
              100.0
              %
              
              $
              33,437
              
              
              
              100.0
              %Cost
      of sales
              
              
              22,520
              
              
              
              82.2
              %
              
              
              27,453
              
              
              
              82.1
              %Gross
      profit
              
              
              4,873
              
              
              
              17.8
              %
              
              
              5,984
              
              
              
              17.9
              %Selling,
      general and administrative expenses
              
              
              4,586
              
              
              
              16.8
              %
              
              
              5,132
              
              
              
              15.4
              %Income
      from operations
              
              
              287
              
              
              
              1.0
              %
              
              
              852
              
              
              
              2.5
              %Other
      income, net
              
              
              43
              
              
              
              0.2
              %
              
              
              124
              
              
              
              0.4
              %Income
      before income taxes
              
              
              330
              
              
              
              1.2
              %
              
              
              976
              
              
              
              2.9
              %Provision
      for income taxes
              
              
              149
              
              
              
              0.5
              %
              
              
              410
              
              
              
              1.2
              %Net
      income
              
              $
              181
              
              
              
              0.7
              %
              
              $
              566
              
              
              
              1.7
              %
 
 Revenue
 Revenue
consists primarily of revenue from computer programming consulting
services.  Revenue for the nine months ended February 28, 2010
decreased $6,044,000 or 18.1% from the prior year period.  The average
number of consultants on billing with customers decreased from approximately 276
for the nine months ended February 28, 2009 to 218 for the nine months ended
February 28, 2010.  The majority of this decrease was experienced in
the quarter ending May 31, 2009. The continuing impact of the broad based
economic downturn has significantly decreased the number of consultants on
billing with customers and also decreased the opportunities to place new
consultants on billing with customers. The revenue decrease is also the result
of the continued reduction in consultants placed with AT&T and lower billing
rates caused by discounts and other rate reductions instituted by
customers.
 
 Revenues
for the nine months ended February 28, 2010 were affected by the same factors as
previously described in the discussion of the three months ended February 28,
2010.  See page 12.
 
 Cost
of Sales
 Cost of
sales for the nine months ended February 28, 2010, decreased $4,933,000 or 18.0%
to $22,520,000 from $27,453,000 in the prior year period.  The
decrease in cost of sales resulted primarily from the decrease in the number of
consultants on billing with clients.  Cost of sales as a percentage of
revenue increased from 82.1% in the nine months ended February 28, 2009 to 82.2%
in the nine months ended February 28, 2010.  The increase in cost of
sales as a percentage of revenue was primarily attributable to lower revenue
generated from a few of the Company’s major accounts due to increased
competitive pressures.
 
 
 
 
 
 Page
14
  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 decreased $546,000 or 10.6%
from $5,132,000 in the nine months ended February 28, 2009 to $4,586,000 in the
nine months ended February 28, 2010.  This decrease was primarily
attributable to a reduction in the number of sales and recruiting personnel and
lower commissions paid to the remaining sales and recruiting personnel due to
lower revenue. Technical recruiters and account executives have been terminated
in order to lessen the impact of the Company’s reduced level of business
activity. However, while selling, general and administrative expenses decreased,
these expenses as a percentage of revenue increased from 15.4% in the nine
months ended February 28, 2009 to 16.8% in the nine months ended February 28,
2010 as a result of lower revenue.
 
 Income
from Operations
 Income
from operations decreased $565,000 or 66.3% from $852,000 in the nine months
ended February 28, 2009 to $287,000 in the nine months ended February 28, 2010.
The decrease was primarily attributable to the reduced revenue from the decrease
in the number of consultants on billing with customers.
 
 In
November 2009, the Company settled a preference claim asserted by the trustee in
bankruptcy of a vendor management company relating to payments received by the
Company during the 90 days prior to the bankruptcy filing for
$100,000.  The Company had provided for this contingency in prior
periods as part of its allowance for doubtful accounts and, as a result, the
charge was applied to this reserve. Accordingly, there was no impact on income
from operations.
 
 Other
Income
 Other
income for the nine months ended February 28, 2010 resulted primarily from
interest and dividend income of $39,000, which decreased by $93,000 from the
level realized in the nine months ended February 28, 2009 due to lower interest
rates earned on the Company’s US Treasury securities, certificates of deposit
and money market accounts as well as lower average investable
assets.
 
 Income
Taxes
 The
effective income tax rate increased from 42.0% in the nine months ended February
28, 2009 to 45.2% in the nine months ended February 28,
2010.  Additional income taxes were provided in the current period as
the result of certain state income taxes and additional income taxes due when
filing the May 31, 2009 returns.
 
 Net
Income
 Net
income decreased $385,000 or 68.0% from the nine months ended February 28, 2009
to the nine months ended February 28, 2010.  Net income decreased
primarily due to lower revenue from a decreased number of consultants on billing
with clients and lower interest income earned on the Company’s US Treasury
securities and money market accounts.
 
 
 
 
 
 
 
 
 
 Page
15
  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 at least the next 12
months.
 
 At
February 28, 2010, the Company had working capital of $12,440,000 including cash
and cash equivalents and certificates of deposit and marketable securities of
$8,130,000 as compared to working capital of $12,288,000 including cash and cash
equivalents and certificates of deposit and marketable securities of $8,584,000
at May 31, 2009.
 
 For the
nine months ended February 28, 2010, net cash used in operating activities was
$416,000 compared to cash provided by operating activities of $1,344,000 for the
nine months ended February 28, 2009, or a decrease of $1,760,000.  The
cash used in operating activities primarily resulted from an increase in
accounts receivable of $589,000 and a decrease in accounts and other payables
and accrued expenses and other current liabilities of $107,000, offset by net
income. The increase in accounts receivable resulted primarily from additional
accounts extending their payment terms from sixty to ninety days. The decrease
in accounts and other payables and accrued expenses resulted primarily from a
decrease in accrued payroll resulting from the decrease in consultants on
billing with customers. The cash provided by operating activities in the nine
months ended February 28, 2009, resulted primarily from net income and a
decrease in accounts receivable.
 
 Net cash
provided by investing activities of $1,246,000 for the nine months ended
February 28, 2010 primarily resulted from the maturity of US Treasury
securities.
 
 Net cash
used in financing activities resulted from distributions to the noncontrolling
interest of $39,000 in the nine months ended February 28, 2010.  In
the nine months ended February 28, 2009, net cash used in financing activities
resulted from purchases of treasury stock of $1,220,000 and cash dividends paid
of $768,000.  In December 2009, the Board of Directors of the Company
reaffirmed a plan previously approved in December 2007 authorizing the
repurchase of shares of Common Stock and approximately 239,000 shares remain
available for purchase under this plan. The Company has not made any purchases
under this plan since September 2008.  The Board of Directors
determined to suspend the payment of further dividends effective after the
dividend paid on February 9, 2009 for the second quarter of fiscal
2009.  The Board of Directors may reevaluate the Company’s dividend
policy once the economic conditions stabilize.
 
 The
Company’s capital resource commitments at February 28, 2010 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 nine months ended February 28,
2010.  The Company has available a revolving line of credit of
$5,000,000 with a major money center bank through April 30, 2010.  As
of February 28, 2010, no amounts were outstanding under this line of credit. The
Company has decided not to extend this line of credit past April 30, 2010. The
Company has never drawn on this revolving line of credit and does not believe it
is necessary to meet its liquidity requirements in the next twelve
months.
 
 Tabular
Disclosure of Contractual Obligations
 Payments
      Due By PeriodContractual
      Obligations
              
              Total
              
              
              Less
      than
                1
      Year
              
              
              1-3
      Years
              
              
              3-5
      Years
              
              
              More
      than
                5
      YearsOperating
      Leases
              
              $
              940,000
              
              
              $
              350,000
              
              
              $
              512,000
              
              
              $
              78,000
              
              
              $
              —Employment
      Agreements
              
              
              556,000
              
              
              
              356,000
              
              
              
              200,000
              
              
              
              —
              
              
              
              —Totals
              
              $
              1,496,000
              
              
              $
              706,000
              
              
              $
              712,000
              
              
              $
              78,000
              
              
              $
              —
 
 
 Page
16
  TSR, INC.
AND SUBSIDIARIES
 
 Recent
Accounting Pronouncements
 In April
2009, the FASB issued an accounting standard to require that disclosures
concerning the fair value of financial instruments be presented in interim as
well as in annual financial statements. This accounting standard was
subsequently codified into ASC Topic 825, “Financial Instruments.” In addition,
the FASB issued an accounting standard to provide additional guidance for
determining the fair value of a financial asset or financial liability when the
volume and level of activity for such asset or liability have decreased
significantly and to also provide guidance for determining whether a transaction
is an orderly one. This accounting standard was subsequently codified into ASC
Topic 820, “Fair Value Measurements and Disclosures.” The FASB also issued an
accounting standard which revised and expanded the guidance concerning the
recognition and measurement of other-than-temporary impairments of debt
securities classified as available-for-sale or held-to-maturity. In addition, it
required enhanced disclosures concerning such impairment for both debt and
equity securities. This accounting standard was subsequently codified into ASC
Topic 320, “Investments – Debt and Equity Securities.” The requirements of these
three accounting standards are effective for interim reporting periods ending
after June 15, 2009. Early adoption is permitted for interim periods ending
after March 15, 2009, but only if the election is made to adopt all these
accounting standards. Disclosures for earlier periods presented for comparative
purposes at initial adoption are not required. In periods after initial
adoption, comparative disclosures are required only for periods ending after
initial adoption. The Company has adopted the accounting standards for the first
quarter of fiscal 2010.
  On
April 1, 2009, new guidance was adopted which establishes general standards of
accounting for and disclosure of, events that occur after the balance sheet date
but before financial statements are issued or are available to be issued. This
guidance was subsequently amended on February 24, 2010 to no longer require
disclosure of the date through which an entity has evaluated subsequent events.
This accounting standard was subsequently codified into ASC Topic 855,
“Subsequent Events.” The effect of the adoption was not material.
  In
June 2009, the FASB issued an accounting standard which established the
Codification to become the single source of authoritative accounting principles
generally accepted in the United States of America (“GAAP”) recognized by the
FASB to be applied by nongovernmental entities, with the exception of guidance
issued by the SEC and its staff. All guidance contained in the Codification
carries an equal level of authority. The Codification is not intended to change
GAAP, but rather is expected to simplify accounting research by reorganizing
current GAAP into approximately 90 accounting topics and providing all the
authoritative literature related to a topic in one place. The Company adopted
this accounting standard in preparing the condensed consolidated financial
statements for the quarter ended November 30, 2009 and all subsequent public
filings will reference the Codification as the sole source of authoritative
literature.  The adoption of this accounting standard, which was
subsequently codified into ASC Topic 105, “Generally Accepted Accounting
Principles,” had no impact on retained earnings and will have no impact on the
Company’s statements of income.
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Page
17
  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, 2009
Annual Report on Form10-K, as filed with the SEC.  The Company
believes that those accounting policies require the application of management’s
most difficult, subjective or complex judgments.  There have been no
changes in the Company’s significant accounting policies as of February 28,
2010.
 
 Item
4T. 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 accounting officer, of the Company’s disclosure controls and
procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934 (the “Exchange Act”)).  Based on this evaluation,
the principal executive officer and principal accounting 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 Rules 13a-15(f) and
15d-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
 (a).
                Exhibit
      31.1 – Certification by J.F. Hughes pursuant to 18 U.S.C. Section 1350, as
      adopted pursuant toSection
      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
  Page
18








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 thereto
duly authorized.




TSR
      Inc.
                (Registrant)Date:  April
      8, 2010
              /s/
      J.F. Hughes
                J.F.
      Hughes, Chairman and PresidentDate:  April
      8, 2010
              /s/
      John G. Sharkey
                John
      G. Sharkey, Vice President Finance and Chief Financial
    Officer


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19