10-Q

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 August 31, 2013

o           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)

 (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).        x Yes    o No

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 September 30, 2013, there were 1,962,062 shares of common stock, par value $.01 per share, issued and outstanding.

TSR, INC. AND SUBSIDIARIES

INDEX

			Page Number
Part I.	Financial Information:
	Item 1.	Financial Statements:
		Condensed Consolidated Balance Sheets –
		August 31, 2013 and May 31, 2013	3
		Condensed Consolidated Statements of Operations –
		For the three months ended August 31, 2013 and 2012	4
		Condensed Consolidated Statements of Equity –
		For the three months ended August 31, 2013 and 2012	5
		Condensed Consolidated Statements of Cash Flows –
		For the three months ended August 31, 2013 and 2012	6
		Notes to Condensed Consolidated Financial Statements	7
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11
	Item 4.	Controls and Procedures	14
Part II.	Other Information		15
	Item 6.	Exhibits	15
Signatures			15

Page 2

Part I.          Financial Information

     Item 1. Financial Statements

TSR, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

	August 31, 2013		May 31, 2013
	(Unaudited)		(Note 1)
ASSETS
Current Assets:
Cash and cash equivalents	$	1,656,290	$	1,881,161
Certificates of deposit and marketable securities		1,760,584		2,008,424
Accounts receivable, net of allowance for doubtful accounts of $193,000		9,238,264		9,146,283
Other receivables		1,407		5,016
Prepaid expenses		97,572		70,926
Prepaid and recoverable income taxes		205,699		208,579
Deferred income taxes		86,000		86,000
Total Current Assets		13,045,816		13,406,389
Certificates of deposit		249,000		-
Equipment and leasehold improvements, net of accumulated depreciation and amortization of $248,245 and $244,868		17,260		16,784
Other assets		49,653		49,653
Deferred income taxes		132,000		146,000
Total Assets	$	13,493,729	$	13,618,826
LIABILITIES AND EQUITY
Current Liabilities:
Accounts and other payables	$	857,889	$	852,228
Accrued expenses and other current liabilities		2,246,618		2,389,006
Advances from customers		1,424,814		1,448,255
Total Current Liabilities		4,529,321		4,689,489
Commitments and contingencies
Equity:
TSR, Inc.:
Preferred stock, $1 par value, authorized 500,000 shares; none issued		-		-
Common stock, $.01 par value, authorized 12,500,000 shares; issued 3,114,163 shares, 1,962,062 outstanding		31,142		31,142
Additional paid-in capital		5,102,868		5,102,868
Retained earnings		17,316,801		17,305,883
		22,450,811		22,439,893
Less: Treasury stock, 1,152,101 shares, at cost		13,514,003		13,514,003
Total TSR, Inc. Equity		8,936,808		8,925,890
Noncontrolling Interest		27,600		3,447
Total Equity		8,964,408		8,929,337
Total Liabilities and Equity	$	13,493,729	$	13,618,826

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 Ended August 31, 2013 and 2012

(UNAUDITED)

	Three Months Ended August 31,
	2013			2012
Revenue, net	$	12,086,697		$	11,288,445
Cost of sales		9,988,849			9,438,746
Selling, general and administrative expenses		2,039,429			1,962,826
		12,028,278			11,401,572
Income (loss) from operations		58,419			(113,127	)
Other income (expense):
Interest and dividend income		1,704			3,063
Unrealized loss on marketable securities, net		(1,840	)		(808	)
Income (loss) before income taxes		58,283			(110,872	)
Provision (benefit) for income taxes		20,000			(37,000	)
Consolidated net income (loss)		38,283			(73,872	)
Less: Net income attributable to noncontrolling interest		(27,365	)		(19,562	)
Net income (loss) attributable to TSR, Inc.	$	10,918		$	(93,434	)
Basic and diluted net income (loss) per TSR, Inc. common share	$	0.01		$	(0.05	)
Weighted average number of basic and diluted common shares outstanding		1,962,062			1,981,350

                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 Three Months Ended August 31, 2013 and 2012

(UNAUDITED)

	Shares of common stock		Common stock		Additional paid-in capital		Retained earnings			Treasury stock			TSR, Inc. equity			Non- controlling Interest			Total equity
Balance at May 31, 2012		3,114,163	$	31,142	$	5,102,868	$	20,796,104		$	(13,432,092	)	$	12,498,022		$	21,270		$	12,519,292
Purchases of treasury stock		-		-		-		-			(16,571	)		(16,571	)		-			(16,571	)
Net income attributable to noncontrolling interest		-		-		-		-			-			-			19,562			19,562
Distribution to noncontrolling interest		-		-		-		-			-			-			(3,500	)		(3,500	)
Net loss attributable to TSR, Inc.		-		-		-		(93,434	)		-			(93,434	)		-			(93,434	)
Balance at August 31, 2012		3,114,163	$	31,142	$	5,102,868	$	20,702,670		$	(13,448,663	)	$	12,388,017		$	37,332		$	12,425,349
Balance at May 31, 2013		3,114,163	$	31,142	$	5,102,868	$	17,305,883		$	(13,514,003	)	$	8,925,890		$	3,447		$	8,929,337
Net income attributable to noncontrolling interest		-		-		-		-			-			-			27,365			27,365
Distribution to noncontrolling interest		-		-		-		-			-			-			(3,212	)		(3,212	)
Net income attributable to TSR, Inc.		-		-		-		10,918			-			10,918			-			10,918
Balance at August 31, 2013		3,114,163	$	31,142	$	5,102,868	$	17,316,801		$	(13,514,003	)	$	8,936,808		$	27,600		$	8,964,408

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 Three Months Ended August 31, 2013 and 2012

(UNAUDITED)

	Three Months Ended August 31,
	2013			2012
Cash flows from operating activities:
Consolidated net income (loss)	$	38,283		$	(73,872	)
Adjustments to reconcile consolidated net income (loss) to net cash provided by  (used in) operating activities:
Depreciation and amortization		3,377			2,697
Unrealized loss on marketable securities, net		1,840			808
Deferred income taxes		14,000			1,000
Changes in operating assets and liabilities:
Accounts receivable		(91,981	)		138,998
Other receivables		3,609			160
Prepaid expenses		(26,646	)		55
Prepaid and recoverable income taxes		2,880			(39,580	)
Accounts and other payables and accrued expenses and other current liabilities		(136,727	)		173,177
Advances from customers		(23,441	)		(15,000	)
Net cash provided by (used in) operating activities		(214,806	)		188,443
Cash flows from investing activities:
Proceeds from maturities of marketable securities		993,000			500,000
Purchases of marketable securities		(996,000	)		(3,237,267	)
Purchases of equipment and leasehold improvements		(3,853	)		-
Net cash used in investing activities		(6,853	)		(2,737,267	)
Cash flows from financing activities:
Purchases of treasury stock		-			(16,571	)
Distribution to noncontrolling interest		(3,212	)		(3,500	)
Net cash used in financing activities		(3,212	)		(20,071	)
Net decrease in cash and cash equivalents		(224,871	)		(2,568,895	)
Cash and cash equivalents at beginning of period		1,881,161			7,514,749
Cash and cash equivalents at end of period	$	1,656,290		$	4,945,854
Supplemental disclosures of cash flow data:
Income taxes paid	$	3,000		$	1,000

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

August 31, 2013

(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 condensed consolidated interim financial statements as of and for the three months ended August 31, 2013 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, 2014.  The balance sheet at May 31, 2013 has been derived from the audited financial statements at that date.  These condensed consolidated 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, 2013.

2. Net Income (Loss) Per Common Share

Basic net income (loss) per common share is computed by dividing income (loss) available to common stockholders of TSR, Inc. by the weighted average number of common shares outstanding.  The Company 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 August 31, 2013 and May 31, 2013:

	August 31, 2013		May 31, 2013
Cash in banks	$	1,336,647	$	1,562,939
Money market funds		319,643		318,222
	$	1,656,290	$	1,881,161

4. Revenue Recognition

The Company’s contract computer programming services are generally provided under time and materials arrangements with its customers.  Revenue is recognized in accordance with Accounting Standards Codification (“ASC”) Topic 605, “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.  Revenue is recorded net of all discounts and processing fees. 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

August 31, 2013

(Unaudited)

5. Marketable Securities

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 condensed 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 as of August 31, 2013 and May 31, 2013 using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2) and significant unobservable inputs (Level 3):

August 31, 2013	Level 1		Level 2		Level 3		Total
Certificates of Deposit	$	-	$	1,992,000	$	-	$	1,992,000
Equity Securities		17,584		-		-		17,584
	$	17,584	$	1,992,000	$	-	$	2,009,584
May 31, 2013	Level 1		Level 2		Level 3		Total
Certificates of Deposit	$	-	$	1,989,000	$	-	$	1,989,000
Equity Securities		19,424		-		-		19,424
	$	19,424	$	1,989,000	$	-	$	2,008,424

Based upon the Company’s intent and ability to hold its certificates of deposit 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 market 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 a 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 August 31, 2013 and May 31, 2013 are summarized as follows:

Page 8

TSR, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, Continued

August 31, 2013

(Unaudited)

August 31, 2013	Amortized  Cost		Gross Unrealized  Holding  Gains		Gross Unrealized  Holding  Losses		Recorded  Value
Current
Certificates of Deposit	$	1,743,000	$	-	$	-	$	1,743,000
Equity Securities		16,866		718		-		17,584
	$	1,759,866	$	718	$	-	$	1,760,584
Long-Term
Certificates of Deposit	$	249,000	$	-	$	-	$	249,000

May 31, 2013	Amortized  Cost		Gross Unrealized  Holding  Gains		Gross Unrealized  Holding  Losses		Recorded  Value
Current
Certificates of Deposit	$	1,989,000	$	-	$	-	$	1,989,000
Equity Securities		16,866		2,558		-		19,424
	$	2,005,866	$	2,558	$	-	$	2,008,424

The Company’s investments in marketable securities consist primarily of investments in 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

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.

Page 9

TSR, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, Continued

August 31, 2013

(Unaudited)

7. Stockholders’ Equity

During the three months ended August 31, 2013, the Company did not purchase any shares of its common stock. During the three months ended August 31, 2012, the Company purchased a total of 3,600 shares of its common stock for $16,571. These shares were purchased in various transactions on the open market under a previously announced repurchase plan of 150,000 shares.  As of September 30, 2013, 56,318 shares remain available for purchase under the plan.

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.

9. Recent Accounting Pronouncements

The Company is not aware of any new accounting pronouncements that would have a material impact on its condensed consolidated financial statements.

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 success of the Company’s plan for internal growth, the impact of 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 August 31, 2013 compared with three months ended August 31, 2012

	(Dollar amounts in thousands) Three Months Ended
	August 31, 2013					August 31, 2012
	Amount		% of Revenue			Amount			% of Revenue
Revenue, net	$	12,087		100.0	%	$	11,289			100.0	%
Cost of sales		9,989		82.6	%		9,439			83.6	%
Gross profit		2,098		17.4	%		1,850			16.4	%
Selling, general and administrative expenses		2,040		16.9	%		1,963			17.4	%
Income (loss) from operations		58		0.5	%		(113	)		(1.0	)%
Other income, net		0		0.0	%		2			0.0	%
Income (loss) before income taxes		58		0.5	%		(111	)		(1.0	)%
Provision (benefit) for income taxes		20		0.2	%		(37	)		(0.3	)%
Consolidated net income (loss)	$	38		0.3	%	$	(74	)		(0.7	)%

Page 11

TSR, INC. AND SUBSIDIARIES

Revenue

Revenue consists primarily of revenue from computer programming consulting services.  Revenue for the quarter ended August 31, 2013 increased $798,000 or 7.1% from the prior year quarter.  The average number of consultants on billing with customers increased from approximately 254 for the quarter ended August 31, 2012 to 300 for the quarter ended August 31, 2013.  The revenue increase was somewhat muted due to reduced average billing rates for the consultants on billing with customers compared with the prior year quarter.  This resulted from a shift in the business mix as a higher percentage of new placements have been with customers where there is stronger competition due to managed vendor services programs.

Cost of Sales

Cost of sales for the quarter ended August 31, 2013, increased $550,000 or 5.8% to $9,989,000 from $9,439,000 in the prior year period.  The increase in cost of sales resulted primarily from the increase in the number of consultants on billing with clients.  Cost of sales as a percentage of revenue decreased from 83.6% in the quarter ended August 31, 2012 to 82.6% in the quarter ended August 31, 2013.  The decrease in cost of sales as a percentage of revenue was primarily attributable to increased revenue from full time placement fees which do not have associated direct costs.

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 $77,000 or 3.9% from $1,963,000 in the quarter ended August 31, 2012 to $2,040,000 in the quarter ended August 31, 2013.  This increase was primarily attributable to an increase in the number of sales personnel and expenses associated with hiring them.  Hiring new sales executives requires a significant investment to cover their costs while their non-compete agreements, which typically last a year, expire.  The Company expects selling, general and administrative expenses to continue to increase as more recruiters and sales executives are hired to stimulate growth.  Selling, general and administrative expenses, as a percentage of revenue, decreased from 17.4% in the quarter ended August 31, 2012 to 16.9% in the quarter ended August 31, 2013 as a result of the additional technical recruiters and sales executives beginning to contribute additional revenue.

Other Income

Other income for the quarter ended August 31, 2013 resulted primarily from interest and dividend income of $2,000, which decreased by $1,000 from the level realized in the quarter ended August 31, 2012 due to lower interest rates earned on the Company’s  certificates of deposit and money market accounts. The interest and dividend income was offset by a mark to market loss of $2,000 on the Company’s equity securities.

Income Taxes

The income tax provision (benefit) included in the Company’s results of operations for the quarters ended August 31, 2013 and 2012 reflect the Company’s estimated effective tax rate for the years ending May 31, 2014 and 2013, respectively. These rates were (33.3) % for the quarter ended August 31, 2012 and 34.5% for the quarter ended August 31, 2013.

Consolidated Net Income (Loss)

Consolidated net income increased $112,000 from a loss of $74,000 in the quarter ended August 31, 2012 to net income of $38,000 in the quarter ended August 31, 2013.  This increase was primarily attributable to the increase in revenue as a result of the additional recruiters and sales executives contributing additional revenue.  Gradual improvement is expected to continue as the Company’s plan for internal growth begins to generate a sufficient increase in revenue.

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TSR, INC. AND SUBSIDIARIES

Liquidity and Capital Resources

The Company expects that 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 August 31, 2013, the Company had working capital (total current assets in excess of total current liabilities) of $8,516,000 including cash and cash equivalents and certificates of deposit and marketable securities of $3,417,000 as compared to working capital of $8,717,000 including cash and cash equivalents and certificates of deposit and marketable securities of $3,890,000 at May 31, 2013.

For the three months ended August 31, 2013, net cash used in operating activities was $215,000 compared to net cash provided by operating activities of $188,000 for the three months ended August 31, 2012.  The cash used in operating activities in the three months ended August 31, 2013 resulted primarily from an increase in accounts receivable of $92,000 and a decrease in accounts and other payables and accrued expenses and other current liabilities of $137,000.  The increase in accounts receivable is attributable to the increased revenue.  The decrease in accounts and other payable and accrued expenses and other current liabilities is attributable to a decrease in the accrued payroll at the end of the current quarter. The cash provided by operating activities in the three months ended August 31, 2012 primarily resulted from a decrease in accounts receivable of $139,000 and an increase in accounts and other payables and accrued expenses and other current liabilities of $173,000 which were offset, to some extent, by the consolidated net loss of $74,000.

Net cash used in investing activities of $7,000 for the three months ended August 31, 2013 resulted primarily from the purchase of fixed assets.  Net cash used in investing activities of $2,737,000 for the three months ended August 31, 2012 primarily resulted from new investments in US Treasury securities and certificates of deposit.

Net cash used in financing activities resulted from distributions to the noncontrolling interest of $3,000 in the three months ended August 31, 2013.   Net cash used in financing activities resulted from distributions to the noncontrolling interest of $3,500 and the purchases of 3,600 shares of common stock for $17,000 in the three months ended August 31, 2012.

The Company’s capital resource commitments at August 31, 2013 consisted of lease obligations on its branch and corporate facilities.  The Company intends to satisfy these lease commitments from cash flow provided by operations, available cash and short-term marketable securities.

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TSR, INC. AND SUBSIDIARIES

Recent Accounting Pronouncements

The Company is not aware of any new accounting pronouncements that would have a material impact on its condensed consolidated financial statements.

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, 2013 Annual Report on Form 10-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 August 31, 2013.

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 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, as amended (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.

Page 14

TSR, INC. AND SUBSIDIARIES

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

Exhibit 101 – The following financial information from the Company’s Quarterly Report on Form 10-Q for the quarter ended August 31, 2013, formatted in Extensible Business Reporting Language (XBRL): (i) the Balance Sheets, (ii) the Statements of Income, (iii) the Statements of Equity, (iv) the Statements of Cash Flows, and (v) the Notes to Financial Statements. *

* Users of this data are advised pursuant to Rule 406T of Regulation S-T that this interactive data file is deemed not filed or part of a registration statement or prospectus for the purpose of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

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:       October 8, 2013	/s/ J.F. Hughes
	J.F. Hughes, Chairman and President
Date:       October 8, 2013	/s/ John G. Sharkey
	John G. Sharkey, Vice President Finance and Principal Accounting Officer

Page 15

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, J.F. Hughes, Chairman of the Board, Chief Executive Officer and Director, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of TSR, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies or material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  October 8, 2013

/s/ J.F. Hughes

Chairman of the Board,

Chief Executive Officer and Director

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, John G. Sharkey, Vice President-Finance and Principal Accounting Officer, certify that:

1.  I have reviewed this Quarterly Report on Form 10-Q of TSR, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;  and

d. Disclosed in this report any change in registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies or material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  October 8, 2013

/s/ John G. Sharkey

Vice President-Finance

and Principal Accounting Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of TSR, Inc. (the “Company”) on Form 10-Q for the quarter ended August 31, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, J.F. Hughes, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.  The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.  The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

The foregoing certification is incorporated solely for the purposes of complying with the provisions of Section 906 of the Sarbanes-Oxley Act and is not intended to be used for any other purpose.

/s/ J.F. Hughes

Chairman of the Board,

Chief Executive Officer

and Director

October 8, 2013

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of TSR, Inc. (the “Company”) on Form 10-Q for the quarter ended August 31, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John G. Sharkey, Principal Accounting Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.  The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.  The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

The foregoing certification is incorporated solely for the purposes of complying with the provisions of Section 906 of the Sarbanes-Oxley Act and is not intended to be used for any other purpose.

/s/ John G. Sharkey

Vice President-Finance

and Principal Accounting Officer

October 8, 2013

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Cash and Cash Equivalents (Tables)

3 Months Ended

Aug. 31, 2013

Cash and Cash Equivalents [Abstract]

Summary of cash and cash equivalents

	August 31, 2013		May 31, 2013
Cash in banks	$	1,336,647	$	1,562,939
Money market funds		319,643		318,222
	$	1,656,290	$	1,881,161

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Condensed Consolidated Statements of Operations (Unaudited) (USD $)	3 Months Ended
	Aug. 31, 2013	Aug. 31, 2012
Statements Of Operations [Abstract]
Revenue, net	$ 12,086,697	$ 11,288,445
Cost of sales	9,988,849	9,438,746
Selling, general and administrative expenses	2,039,429	1,962,826
Cost and expenses, total	12,028,278	11,401,572
Income (loss) from operations	58,419	(113,127)
Other income (expense):
Interest and dividend income	1,704	3,063
Unrealized loss on marketable securities, net	(1,840)	(808)
Income (loss) before income taxes	58,283	(110,872)
Provision (benefit) for income taxes	20,000	(37,000)
Consolidated net income (loss)	38,283	(73,872)
Less: Net income attributable to noncontrolling interest	(27,365)	(19,562)
Net income (loss) attributable to TSR, Inc.	$ 10,918	$ (93,434)
Basic and diluted net income (loss) per TSR, Inc. common share	$ 0.01	$ (0.05)
Weighted average number of basic and diluted common shares outstanding	1,962,062	1,981,350

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Revenue Recognition

3 Months Ended

Aug. 31, 2013

Revenue Recognition [Abstract]

Revenue Recognition

4.      Revenue Recognition

The Company’s contract computer programming services are generally provided under time and materials arrangements with its customers.  Revenue is recognized in accordance with Accounting Standards Codification (“ASC”) Topic 605, “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.  Revenue is recorded net of all discounts and processing fees. 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.

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Marketable Securities (Tables)

3 Months Ended

Aug. 31, 2013

Marketable Securities [Abstract]

Summary of assets measured at fair value on recurring basis

August 31, 2013	Level 1		Level 2		Level 3		Total
Certificates of Deposit	$	-	$	1,992,000	$	-	$	1,992,000
Equity Securities		17,584		-		-		17,584
	$	17,584	$	1,992,000	$	-	$	2,009,584
May 31, 2013	Level 1		Level 2		Level 3		Total
Certificates of Deposit	$	-	$	1,989,000	$	-	$	1,989,000
Equity Securities		19,424		-		-		19,424
	$	19,424	$	1,989,000	$	-	$	2,008,424

Summary of marketable securities

August 31, 2013 Current	Amortized  Cost		Gross Unrealized  Holding  Gains		Gross Unrealized  Holding  Losses		Recorded  Value
Certificates of Deposit	$	1,743,000	$	-	$	-	$	1,743,000
Equity Securities		16,866		718		-		17,584
	$	1,759,866	$	718	$	-	$	1,760,584

Long-Term
Certificates of Deposit	$	249,000	$	-	$	-	$	249.000

May 31, 2013 Current	Amortized  Cost		Gross Unrealized  Holding  Gains		Gross Unrealized  Holding  Losses		Recorded  Value
Certificates of Deposit	$	1,989,000	$	-	$	-	$	1,989,000
Equity Securities		16,866		2,558		-		19,424
	$	2,005,866	$	2,558	$	-	$	2,008,424

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Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $)	3 Months Ended
	Aug. 31, 2013	Aug. 31, 2012
Cash flows from operating activities:
Consolidated net income (loss)	$ 38,283	$ (73,872)
Adjustments to reconcile consolidated net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization	3,377	2,697
Unrealized loss on marketable securities, net	1,840	808
Deferred income taxes	14,000	1,000
Changes in operating assets and liabilities:
Accounts receivable	(91,981)	138,998
Other receivables	3,609	160
Prepaid expenses	(26,646)	55
Prepaid and recoverable income taxes	2,880	(39,580)
Accounts and other payables and accrued expenses and other current liabilities	(136,727)	173,177
Advances from customers	(23,441)	(15,000)
Net cash provided by (used in) operating activities	(214,806)	188,443
Cash flows from investing activities:
Proceeds from maturities of marketable securities	993,000	500,000
Purchases of marketable securities	(996,000)	(3,237,267)
Purchases of equipment and leasehold improvements	(3,853)
Net cash used in investing activities	(6,853)	(2,737,267)
Cash flows from financing activities:
Purchases of treasury stock		(16,571)
Distribution to noncontrolling interest	(3,212)	(3,500)
Net cash used in financing activities	(3,212)	(20,071)
Net decrease in cash and cash equivalents	(224,871)	(2,568,895)
Cash and cash equivalents at beginning of period	1,881,161	7,514,749
Cash and cash equivalents at end of period	1,656,290	4,945,854
Supplemental disclosures of cash flow data:
Income taxes paid	$ 3,000	$ 1,000

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Net Income (Loss) Per Common Share

3 Months Ended

Aug. 31, 2013

Net Income (Loss) Per Common Share [Abstract]

Net Income (Loss) Per Common Share

2.      Net Income (Loss) Per Common Share

Basic net income (loss) per common share is computed by dividing income (loss) available to common stockholders of TSR, Inc. by the weighted average number of common shares outstanding.  The Company had no stock options or other common stock equivalents outstanding during any of the periods presented.

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Marketable Securities

3 Months Ended

Aug. 31, 2013

Marketable Securities [Abstract]

Marketable Securities

5.      Marketable Securities

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 condensed 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 as of August 31, 2013 and May 31, 2013 using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2) and significant unobservable inputs (Level 3):

August 31, 2013	Level 1		Level 2		Level 3		Total
Certificates of Deposit	$	-	$	1,992,000	$	-	$	1,992,000
Equity Securities		17,584		-		-		17,584
	$	17,584	$	1,992,000	$	-	$	2,009,584

May 31, 2013	Level 1		Level 2		Level 3		Total
Certificates of Deposit	$	-	$	1,989,000	$	-	$	1,989,000
Equity Securities		19,424		-		-		19,424
	$	19,424	$	1,989,000	$	-	$	2,008,424

Based upon the Company’s intent and ability to hold its certificates of deposit 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 market 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 a 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 August 31, 2013 and May 31, 2013 are summarized as follows:

August 31, 2013 Current	Amortized  Cost		Gross Unrealized  Holding  Gains		Gross Unrealized  Holding  Losses		Recorded  Value
Certificates of Deposit	$	1,743,000	$	-	$	-	$	1,743,000
Equity Securities		16,866		718		-		17,584
	$	1,759,866	$	718	$	-	$	1,760,584

Long-Term
Certificates of Deposit	$	249,000	$	-	$	-	$	249.000

May 31, 2013 Current	Amortized  Cost		Gross Unrealized  Holding  Gains		Gross Unrealized  Holding  Losses		Recorded  Value
Certificates of Deposit	$	1,989,000	$	-	$	-	$	1,989,000
Equity Securities		16,866		2,558		-		19,424
	$	2,005,866	$	2,558	$	-	$	2,008,424

The Company’s investments in marketable securities consist primarily of investments in 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.

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Cash and Cash Equivalents

3 Months Ended

Aug. 31, 2013

Cash and Cash Equivalents [Abstract]

Cash and Cash Equivalents

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 August 31, 2013 and May 31, 2013:

	August 31, 2013		May 31, 2013
Cash in banks	$	1,336,647	$	1,562,939
Money market funds		319,643		318,222
	$	1,656,290	$	1,881,161

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $)	Aug. 31, 2013	May 31, 2013
Balance Sheets [Abstract]
Allowance for doubtful accounts related to accounts receivable	$ 193,000	$ 193,000
Accumulated depreciation and amortization related to equipment and leasehold improvements	$ 248,245	$ 244,868
Preferred stock, par value	$ 1	$ 1
Preferred stock, shares authorized	500,000	500,000
Preferred stock, shares issued
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	12,500,000	12,500,000
Common stock, shares issued	3,114,163	3,114,163
Common stock, shares outstanding	1,962,062	1,962,062
Treasury stock, shares	1,152,101	1,152,101

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Other Matters

3 Months Ended

Aug. 31, 2013

Other Matters Abstract [Abstract]

Othermatters [Text Block]

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.

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Condensed Consolidated Statements of Equity (Unaudited) (USD $)	Total	Common Stock	Additional paid-in capital	Retained earnings	Treasury stock	TSR, Inc. equity	Non-controlling Interest
Beginning Balance at May. 31, 2012	$ 12,519,292	$ 31,142	$ 5,102,868	$ 20,796,104	$ (13,432,092)	$ 12,498,022	$ 21,270
Beginning Balance, shares at May. 31, 2012		3,114,163
Purchases of treasury stock	(16,571)				(16,571)	(16,571)
Net income attributable to noncontrolling interest	19,562						19,562
Distribution to noncontrolling interest	(3,500)						(3,500)
Net loss attributable to TSR, Inc.	(93,434)			(93,434)		(93,434)
Balance at Aug. 31, 2012	12,425,349	31,142	5,102,868	20,702,670	(13,448,663)	12,388,017	37,332
Balance, shares at Aug. 31, 2012		3,114,163
Beginning Balance at May. 31, 2013	8,929,337	31,142	5,102,868	17,305,883	(13,514,003)	8,925,890	3,447
Beginning Balance, shares at May. 31, 2013		3,114,163
Net income attributable to noncontrolling interest	27,365						27,365
Distribution to noncontrolling interest	(3,212)						(3,212)
Net loss attributable to TSR, Inc.	10,918			10,918		10,918
Balance at Aug. 31, 2013	$ 8,964,408	$ 31,142	$ 5,102,868	$ 17,316,801	$ (13,514,003)	$ 8,936,808	$ 27,600
Balance, shares at Aug. 31, 2013		3,114,163

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Condensed Consolidated Balance Sheets (USD $)	Aug. 31, 2013	May 31, 2013
Current Assets:
Cash and cash equivalents	$ 1,656,290	$ 1,881,161
Certificates of deposit and marketable securities	1,760,584	2,008,424
Accounts receivable, net of allowance for doubtful accounts of $193,000	9,238,264	9,146,283
Other receivables	1,407	5,016
Prepaid expenses	97,572	70,926
Prepaid and recoverable income taxes	205,699	208,579
Deferred income taxes	86,000	86,000
Total Current Assets	13,045,816	13,406,389
Certificates of deposit	249,000
Equipment and leasehold improvements, net of accumulated depreciation and amortization of $248,245 and $244,868	17,260	16,784
Other assets	49,653	49,653
Deferred income taxes	132,000	146,000
Total Assets	13,493,729	13,618,826
Current Liabilities:
Accounts and other payables	857,889	852,228
Accrued expenses and other current liabilities	2,246,618	2,389,006
Advances from customers	1,424,814	1,448,255
Total Current Liabilities	4,529,321	4,689,489
Commitments and contingencies
Equity: TSR Inc.:
Preferred stock, $1 par value, authorized 500,000 shares; none issued
Common stock, $0.01 par value, authorized 12,500,000 shares; issued 3,114,163 shares; 1,962,062 outstanding	31,142	31,142
Additional paid-in capital	5,102,868	5,102,868
Retained earnings	17,316,801	17,305,883
Shareholder's equity before treasury stock	22,450,811	22,439,893
Less: Treasury stock, 1,152,101 shares, at cost	13,514,003	13,514,003
Total TSR, Inc. Equity	8,936,808	8,925,890
Noncontrolling Interest	27,600	3,447
Total Equity	8,964,408	8,929,337
Total Liabilities and Equity	$ 13,493,729	$ 13,618,826

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Stockholders' Equity

3 Months Ended

Aug. 31, 2013

Stockholders' Equity [Abstract]

Stockholders' Equity

7.      Stockholders’ Equity

During the three months ended August 31, 2013, the Company did not purchase any shares of its common stock. During the three months ended August 31, 2012, the Company purchased a total of 3,600 shares of its common stock for $16,571. These shares were purchased in various transactions on the open market under a previously announced repurchase plan of 150,000 shares.  As of September 30, 2013, 56,318 shares remain available for purchase under the plan.

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Revenue Recognition (Policies)

3 Months Ended

Aug. 31, 2013

Revenue Recognition [Abstract]

Revenue Recognition

The Company’s contract computer programming services are generally provided under time and materials arrangements with its customers.  Revenue is recognized in accordance with Accounting Standards Codification (“ASC”) Topic 605, “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.  Revenue is recorded net of all discounts and processing fees. 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.

Fair Value of Financial Instruments

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.

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Fair Value of Financial Instruments

3 Months Ended

Aug. 31, 2013

Fair Value Of Financial Instruments [Abstract]

Fair Value of Financial Instruments

6.      Fair Value of Financial Instruments

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.

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Basis of Presentation

3 Months Ended

Aug. 31, 2013

Basis Of Presentation [Abstract]

Basis of Presentation

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 condensed consolidated interim financial statements as of and for the three months ended August 31, 2013 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, 2014.  The balance sheet at May 31, 2013 has been derived from the audited financial statements at that date.  These condensed consolidated 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, 2013.

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Cash and Cash Equivalents (Details) (USD $)	Aug. 31, 2013	May 31, 2013	Aug. 31, 2012	May 31, 2012
Summary of cash and cash equivalents
Cash in banks	$ 1,336,647	$ 1,562,939
Money market funds	319,643	318,222
Total	$ 1,656,290	$ 1,881,161	$ 4,945,854	$ 7,514,749

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Recent Accounting Pronouncements

3 Months Ended

Aug. 31, 2013

Recent Accounting Pronouncements [Abstract]

Recent Accounting Pronouncements

9.      Recent Accounting Pronouncements

The Company is not aware of any new accounting pronouncements that would have a material impact on its condensed consolidated financial statements.

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Stockholders' Equity (Details) (USD $)	3 Months Ended
	Aug. 31, 2012	Sep. 30, 2013
Stockholders' Equity (Textual)
Number of common stock purchased, Shares	3,600
Purchases of common stock, Value	$ 16,571
Previously announced repurchase plan, Shares	150,000
Shares remain available for purchase		56,318

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Marketable Securities (Details) (USD $)	Aug. 31, 2013	May 31, 2013
Summary of assets measured at fair value on recurring basis
Assets measured at fair value, Total	$ 2,009,584	$ 2,008,424
Fair Value, Measurements, Recurring [Member] | Certificates of Deposit [Member]
Summary of assets measured at fair value on recurring basis
Assets measured at fair value, Total	1,992,000	1,989,000
Fair Value, Measurements, Recurring [Member] | Equity Securities [Member]
Summary of assets measured at fair value on recurring basis
Assets measured at fair value, Total	17,854	19,424
Fair Value, Measurements, Recurring [Member] | Level 1 [Member]
Summary of assets measured at fair value on recurring basis
Assets measured at fair value, Total	17,854	19,424
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Certificates of Deposit [Member]
Summary of assets measured at fair value on recurring basis
Assets measured at fair value, Total
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Equity Securities [Member]
Summary of assets measured at fair value on recurring basis
Assets measured at fair value, Total	17,854	19,424
Fair Value, Measurements, Recurring [Member] | Level 2 [Member]
Summary of assets measured at fair value on recurring basis
Assets measured at fair value, Total	1,992,000	1,989,000
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Certificates of Deposit [Member]
Summary of assets measured at fair value on recurring basis
Assets measured at fair value, Total	1,992,000	1,989,000
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Equity Securities [Member]
Summary of assets measured at fair value on recurring basis
Assets measured at fair value, Total
Fair Value, Measurements, Recurring [Member] | Level 3 [Member]
Summary of assets measured at fair value on recurring basis
Assets measured at fair value, Total
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | Certificates of Deposit [Member]
Summary of assets measured at fair value on recurring basis
Assets measured at fair value, Total
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | Equity Securities [Member]
Summary of assets measured at fair value on recurring basis
Assets measured at fair value, Total

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Document and Entity Information	3 Months Ended
	Aug. 31, 2013	Sep. 30, 2013
Document and Entity Information [Abstract]
Entity Registrant Name	TSR INC
Entity Central Index Key	0000098338
Amendment Flag	false
Current Fiscal Year End Date	--05-31
Document Type	10-Q
Document Period End Date	Aug. 31, 2013
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2014
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		1,962,062

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Marketable Securities (Details 1) (USD $)	0 Months Ended
	Aug. 31, 2013	May 31, 2013
Current
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	$ 1,759,886	$ 2,005,866
Gross Unrealized Holding Gains	718	2,558
Gross Unrealized Holding Losses
Recorded Value, Current	1,760,584	2,008,424
Certificates of Deposit [Member] | Current
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	1,743,000	1,989,000
Gross Unrealized Holding Gains
Gross Unrealized Holding Losses
Recorded Value, Current	1,743,000	1,989,000
Certificates of Deposit [Member] | Long-Term
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	249,000
Gross Unrealized Holding Gains
Gross Unrealized Holding Losses
Recorded Value, Long term	249,000
Equity Securities [Member] | Current
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	16,866	16,866
Gross Unrealized Holding Gains	718	2,558
Gross Unrealized Holding Losses
Recorded Value, Current	$ 17,854	$ 19,424