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 November 30, 2011

or

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 (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).    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 December 31, 2011, there were 1,992,066 shares of common stock, par value $.01 per share, issued and outstanding.

TSR, INC. AND SUBSIDIARIES

INDEX

Part I.  Financial Information:	Page Number
Item 1.    Financial Statements:
Condensed Consolidated Balance Sheets –
November 30, 2011 and May 31, 2011	3
Condensed Consolidated Statements of Income –
For the three months and six months ended November 30, 2011 and 2010	4
Condensed Consolidated Statements of Equity –
For the six months ended November 30, 2011 and 2010	5
Condensed Consolidated Statements of Cash Flows –
For the six months ended November 30, 2011 and 2010	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	16
Part II.  Other Information	16
Item 2(c).  Unregistered Sales of Equity Securities and Use of Proceeds	16
Item 6.  Exhibits	17
Signatures	17

Page 2

Part I.  Financial Information

Item 1. Financial Statements

TSR, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

ASSETS	November 30, 2011		May 31, 2011
	(Unaudited)		(Note 1)
Current Assets:
Cash and cash equivalents	$	5,570,865	$	4,645,854
Certificates of deposit and marketable securities		2,269,460		3,016,542
Accounts receivable, net of allowance for doubtful accounts of $193,000		9,123,421		8,921,861
Other receivables		5,660		4,981
Prepaid expenses		67,197		57,781
Prepaid and recoverable income taxes		42,509		41,299
Deferred income taxes		86,000		86,000
Total Current Assets		17,165,112		16,774,318
Certificates of deposit and marketable securities		—		250,000
Equipment and leasehold improvements, net of accumulated depreciation and amortization of $279,943 and $274,890		21,406		16,249
Other assets		49,653		49,653
Deferred income taxes		48,000		51,000
Total Assets	$	17,284,171	$	17,141,220
LIABILITIES AND EQUITY
Current Liabilities:
Accounts and other payables	$	1,299,265	$	943,082
Accrued expenses and other current liabilities		1,775,544		1,935,505
Advances from customers		1,463,377		1,507,439
Total Current Liabilities		4,538,186		4,386,026
Commitments and contingencies
Equity:
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, 1,993,966 and 2,019,091 outstanding		31,142		31,142
Additional paid-in capital		5,102,868		5,102,868
Retained earnings		20,937,171		20,858,282
		26,071,181		25,992,292
Less: Treasury stock, 1,120,197 and 1,095,072 shares, at cost		13,383,339		13,279,263
Total TSR, Inc. Equity		12,687,842		12,713,029
Noncontrolling Interest		58,143		42,165
Total Equity		12,745,985		12,755,194
Total Liabilities and Equity	$	17,284,171	$	17,141,220

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

Page 3

TSR, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

For The Three Months and Six Months Ended November 30, 2011 and 2010

(UNAUDITED)

	Three Months Ended						Six Months Ended
	November 30,						November 30,
	2011			2010			2011			2010
Revenue, net	$	11,115,015		$	9,756,983		$	22,488,110		$	19,120,876
Cost of sales		9,224,544			7,853,945			18,687,175			15,510,435
Selling, general and administrative expenses		1,814,621			1,611,636			3,616,900			3,248,141
		11,039,165			9,465,581			22,304,075			18,758,576
Income from operations		75,850			291,402			184,035			362,300
Other income (expense):
Interest and dividend income		3,150			5,459			6,912			11,239
Unrealized gain (loss) on marketable securities, net		3,824			2,794			1,920			(210	)
Income before income taxes		82,824			299,655			192,867			373,329
Provision for income taxes		44,000			124,000			91,000			157,000
Consolidated net income		38,824			175,655			101,867			216,329
Less: Net income attributable to noncontrolling interest		(7,121	)		(25,244	)		(22,978	)		(44,356	)
Net income attributable to TSR, Inc.	$	31,703		$	150,411		$	78,889		$	171,973
Net income per TSR, Inc. common share	$	0.02		$	0.07		$	0.04		$	0.09
Weighted average number of common shares outstanding		2,003,981			2,019,094			2,011,533			2,020,117

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 and Six Months Ended November 30, 2011 and 2010

(UNAUDITED)

	Shares of common stock			Common stock			Additional paid-in capital		Retained earnings		Treasury stock			Non- controlling Interest			Total equity
Balance at May 31, 2010		6,228,326		$	62,283		$	5,071,727	$	20,661,190	$	(13,253,523	)	$	27,820		$	12,569,497
Reverse stock split 1:2		(3,114,163	)		(31,141	)		31,141		—		—			—			—
Adjusted May 31, 2010		3,114,163			31,142			5,102,868		20,661,190		(13,253,523	)		27,820			12,569,497
Net income attributable to noncontrolling interest		—			—			—		—		—			44,356			44,356
Distribution to noncontrolling interest		—			—			—		—		—			(7,000	)		(7,000	)
Purchases of treasury stock		—			—			—		—		(25,726	)		—			(25,726	)
Net income attributable to TSR, Inc.		—			—			—		171,973		—			—			171,973
Balance at November 30, 2010		3,114,163		$	31,142		$	5,102,868	$	20,833,163	$	(13,279,249	)	$	65,176		$	12,753,100
Balance at May 31, 2011		3,114,163		$	31,142		$	5,102,868	$	20,858,282	$	(13,279,263	)	$	42,165		$	12,755,194
Net income attributable to noncontrolling interest		—			—			—		—		—			22,978			22,978
Distribution to noncontrolling interest		—			—			—		—		—			(7,000	)		(7,000	)
Purchases of treasury stock		—			—			—		—		(104,076	)		—			(104,076	)
Net income attributable to TSR, Inc.		—			—			—		78,889		—			—			78,889
Balance at November 30, 2011		3,114,163		$	31,142		$	5,102,868	$	20,937,171	$	(13,383,339	)	$	58,143		$	12,745,985

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 Six Months Ended November 30, 2011 and 2010

(UNAUDITED)

	Six Months Ended
	November 30,
	2011			2010
Cash flows from operating activities:
Consolidated net income	$	101,867		$	216,329
Adjustments to reconcile consolidated net income to net cash provided by (used in) operating activities:
Depreciation and amortization		5,053			3,051
Unrealized (gain) loss on marketable securities, net		(1,920	)		210
Deferred income taxes		3,000			3,000
Changes in operating assets and liabilities:
Accounts receivable		(201,560	)		(1,885,810	)
Other receivables		(679	)		(547	)
Prepaid expenses		(9,416	)		56,927
Prepaid and recoverable income taxes		(1,210	)		84,271
Accounts and other payables and accrued expenses and other current liabilities		196,222			296,228
Advances from customers		(44,062	)		(58,750	)
Net cash provided by (used in) operating activities		47,295			(1,285,091	)
Cash flows from investing activities:
Proceeds from maturities of certificates of deposit and marketable securities		2,748,534			2,748,253
Purchases of certificates of deposit and marketable securities		(1,749,532	)		(3,847,739	)
Purchases of equipment and leasehold improvements		(10,210	)		(2,394	)
Net cash provided by (used in) investing activities		988,792			(1,101,880	)
Cash flows from financing activities:
Purchases of treasury stock		(104,076	)		(25,726	)
Distribution to noncontrolling interest		(7,000	)		(7,000	)
Net cash used in financing activities		(111,076	)		(32,726	)
Net increase (decrease) in cash and cash equivalents		925,011			(2,419,697	)
Cash and cash equivalents at beginning of period		4,645,854			5,669,972
Cash and cash equivalents at end of period	$	5,570,865		$	3,250,275
Supplemental disclosures of cash flow data:
Income taxes paid	$	89,000		$	70,000

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

November 30, 2011

(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 and six months ended November 30, 2011 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, 2012.  The balance sheet at May 31, 2011 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, 2011.

2.   Net Income Per Common Share

-----------------------------------------

Net income per common share is computed by dividing net income attributable to TSR by the weighted average number of common shares outstanding.  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 November 30, 2011 and May 31, 2011:

	November 30, 2011		May 31, 2011
Cash in banks	$	2,028,453	$	2,006,200
Money market funds		3,542,412		2,639,654
	$	5,570,865	$	4,645,854

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

November 30, 2011

(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 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 November 30, 2011 and May 31, 2011 using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2) and significant unobservable inputs (Level 3):

November 30, 2011	Level 1		Level 2		Level 3		Total
US Treasury Securities	$	1,499,532	$	—	$	—	$	1,499,532
Certificates of Deposit		—		750,000		—		750,000
Equity Securities		19,928		—		—		19,928
	$	1,519,460	$	750,000	$	—	$	2,269,460
May 31, 2011	Level 1		Level 2		Level 3		Total
US Treasury Securities	$	1,998,534	$	—	$	—	$	1,998,534
Certificates of Deposit		—		1,250,000		—		1,250,000
Equity Securities		18,008		—		—		18,008
	$	2,016,542	$	1,250,000	$	—	$	3,266,542

Based upon the Company’s intent and ability to hold its US Treasury securities and 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 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 November 30, 2011 and May 31, 2011 are summarized as follows:

Page 8

TSR, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, Continued

November 30, 2011

                                                                         (Unaudited)

November 30, 2011 Current	Amortized Cost		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses		Recorded Value
US Treasury Securities	$	1,499,532	$	—	$	—	$	1,499,532
Certificates of Deposit		750,000		—		—		750,000
Equity Securities		16,866		3,062		—		19,928
	$	2,266,398	$	3,062	$	—	$	2,269,460

May 31, 2011 Current	Amortized Cost		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses		Recorded Value
US Treasury Securities	$	1,998,534	$	—	$	—	$	1,998,534
Certificates of Deposit		1,000,000		—		—		1,000,000
Equity Securities		16,866		1,142		—		18,008
	$	3,015,400	$	1,142	$	—	$	3,016,542
Long - Term
Certificates of Deposit	$	250,000	$	—	$	—	$	250,000

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

----------------------------------------------

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

November 30, 2011

(Unaudited)

7.   Stockholders’ Equity

----------------------------

On November 10, 2010, the Board of Directors and shareholders of the Company approved a 1:2 reverse stock split to be effective on November 29, 2010. The authorized preferred stock was reduced from 1,000,000 to 500,000 shares. There continues to be no preferred shares issued or outstanding. The authorized common stock was reduced from 25,000,000 to 12,500,000 shares. The issued common shares were reduced from 6,228,326 to 3,114,163. The outstanding common shares were reduced from 4,038,188 to 2,019,091. The effect of the reverse stock split has been effected in all prior periods presented.

During the six months ended November 30, 2011, the Company purchased a total of 25,125 shares of its common stock for $104,076. During the six months ended November 30, 2010, the Company purchased a total of 5,700 shares of its common stock for $25,726. These shares were purchased in various transactions on the open market under a previously announced repurchase plan of 150,000 shares.  As of December 31, 2011, 88,222 shares remain available for purchase under the plan. The number of shares noted above has been adjusted for the 1:2 reverse split effected November 29, 2010.

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 consolidated financial statements.

Page 10

TSR, INC. AND SUBSIDIARIES

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

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

Forward-Looking Statements

--------------------------------------

Certain statements contained in Management’s Discussion and Analysis of Financial Condition and Results of Operations, including statements concerning the Company’s future prospects and the Company’s future cash flow requirements are forward looking statements, as defined in the Private Securities Litigation Reform Act of 1995.  Actual results may differ materially from those projections in the forward looking statements which statements involve risks and uncertainties, including but not limited to the following:  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 income.  There can be no assurance that trends in operating results will continue in the future:

Three months ended November 30, 2011 compared with three months ended November 30, 2010

------------------------------------------------------------------------------------------------------------------------------

	(Dollar amounts in thousands)
	Three Months Ended
	November 30,					November 30,
	2011					2010
	Amount		% of Revenue			Amount		% of Revenue
Revenue, net	$	11,115		100.0	%	$	9,757		100.0	%
Cost of sales		9,224		83.0	%		7,854		80.5	%
Gross profit		1,891		17.0	%		1,903		19.5	%
Selling, general and administrative expenses		1,815		16.3	%		1,611		16.5	%
Income from operations		76		0.7	%		292		3.0	%
Other income, net		7		0.1	%		8		0.1	%
Income before income taxes		83		0.8	%		300		3.1	%
Provision for income taxes		44		0.4	%		124		1.3	%
Consolidated net income	$	39		0.4	%	$	176		1.8	%

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TSR, INC. AND SUBSIDIARIES

Revenue

------------

Revenue consists primarily of revenue from computer programming consulting services.  Revenue for the quarter ended November 30, 2011 increased $1,358,000 or 13.9% from the prior year quarter.  The average number of consultants on billing with customers increased from approximately 232 for the quarter ended November 30, 2010 to 265 for the quarter ended November 30, 2011.

Beginning with the broad based economic downturn in 2008 and continuing for several years, the Company experienced a decrease in the number of consultants on billing with customers and reduced the opportunities to place new consultants on billing with customers. In the past year, the level of business activity has picked up, resulting in an increase in opportunities to place consultants on billing with customers. Although customers’ IT spending may be increasing and consultants on billing with customers has increased, the Company is still experiencing the impact of the economic downturn.  The Company believes that the economic outlook remains uncertain and any improvements in the Company’s number of consultants on billing with customers appear to be slow and uncertain. The turmoil in the world economy has added to the uncertainty.

Cost of Sales

-----------------

Cost of sales for the quarter ended November 30, 2011, increased $1,370,000 or 17.4% to $9,224,000 from $7,854,000 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 increased from 80.5% in the quarter ended November 30, 2010 to 83.0% in the quarter ended November 30, 2011.  The increase in cost of sales as a percentage of revenue was primarily attributable to more demanding client specifications, pricing and other competitive pressures across our customer base.

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 $204,000 or 12.7% from $1,611,000 in the quarter ended November 30, 2010 to $1,815,000 in the quarter ended November 30, 2011.  This increase was primarily attributable to an increase in the number of recruiting personnel. During the past fiscal year, the Company established a program to hire and train recent college graduates to become recruiters. The initial costs associated with the hiring and training of such personnel have increased selling, general and administrative expenses.  Technical recruiters have been hired in order to address increased requests by clients for submissions of technical personnel for potential position. Such increased submissions have not yet led to the expected increases in placements.  The Company expects these expenses to continue to increase as more recruiting trainees and sales executives are hired to stimulate growth.  Selling, general and administrative expenses, as a percentage of revenue, decreased from 16.5% in the quarter ended November 30, 2010 to 16.3% in the quarter ended November 30, 2011 as a result of increased revenue.

Other Income

-----------------

Other income for the quarter ended November 30, 2011 resulted primarily from interest and dividend income of $3,000, which decreased by $2,000 from the level realized in the quarter ended November 30, 2010 due to lower interest rates earned on the Company’s US Treasury securities, certificates of deposit and money market accounts.

Income Taxes

------------------

The income tax provision included in the Company’s results of operations for the quarters ended November 30, 2011 and 2010 reflect the Company’s estimated effective tax rate for the years ending May 31, 2012 and 2011, respectively. These rates were 53.0% for the quarter ended November 30, 2011 and 41.3% for the quarter ended November 30, 2010. The tax rate in the current quarter was impacted by the increased effects of state minimum taxes and non-deductible expenses on lower taxable income.

Consolidated Net Income

----------------------------------

Net income decreased $137,000 from $176,000 in the quarter ended November 30, 2010 to $39,000 in the quarter ended November 30, 2011.  The decrease was primarily attributable to the increase in costs of sales, which increased at a greater rate than revenue.

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TSR, INC. AND SUBSIDIARIES

Six months ended November 30, 2011 compared with six months ended November 30, 2010

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	(Dollar amounts in thousands)
	Six Months Ended
	November 30,					November 30,
	2011					2010
	Amount		% of Revenue			Amount		% of Revenue
Revenue, net	$	22,488		100.0	%	$	19,121		100.0	%
Cost of sales		18,687		83.1	%		15,511		81.1	%
Gross profit		3,801		16.9	%		3,610		18.9	%
Selling, general and administrative expenses		3,617		16.1	%		3,248		17.0	%
Income from operations		184		0.8	%		362		1.9	%
Other income, net		9		0.1	%		11		0.0	%
Income before income taxes		193		0.9	%		373		1.9	%
Provision for income taxes		91		0.4	%		157		0.8	%
Consolidated net income	$	102		0.5	%	$	216		1.1	%

Revenue

------------

Revenue consists primarily of revenue from computer programming consulting services.  Revenue for the six months ended November 30, 2011 increased $3,367,000 or 17.6% from the prior year period.  The average number of consultants on billing with customers increased from approximately 227 for the six months ended November 30, 2010 to 260 for the six months ended November 30, 2011.

Beginning with the broad based economic downturn in 2008 and continuing for several years, the Company experienced a decrease in the number of consultants on billing with customers and reduced the opportunities to place new consultants on billing with customers. In the past year, the level of business activity has picked up, resulting in an increase in opportunities to place consultants on billing with customers. Although customers’ IT spending may be increasing and consultants on billing with customers has increased, the Company is still experiencing the impact of the economic downturn.  The Company believes that the economic outlook remains uncertain and any improvements in the Company’s number of consultants on billing with customers appear to be slow and uncertain. The turmoil in the world economy has added to the uncertainty.

Cost of Sales

-----------------

Cost of sales for the six months ended November 30, 2011, increased $3,176,000 or 20.5% to $18,687,000 from $15,511,000 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 increased from 81.1% in the six months ended November 30, 2010 to 83.1% in the six months ended November 30, 2011.  The increase in cost of sales as a percentage of revenue was primarily attributable to more demanding client specifications, pricing and other competitive pressures across our customer base.

Page 13

TSR, INC. AND SUBSIDIARIES

Selling, General and Administrative Expenses

------------------------------------------------------------

Selling, general and administrative expenses consist primarily of expenses relating to account executives, technical recruiters, facilities costs, management and corporate overhead.   These expenses increased $369,000 or 11.4% from $3,248,000 in the six months ended November 30, 2010 to $3,617,000 in the six months ended November 30, 2011.  This increase was primarily attributable to an increase in the number of recruiting personnel.  During the past fiscal year, the Company established a program to hire and train recent college graduates to become recruiters. The initial costs associated with the hiring and training of such personnel have increased selling, general and administrative expenses.  Technical recruiters have been hired in order to address increased requests by clients for submissions of technical personnel for potential position. Such increased submissions have not yet led to the expected increases in placements.  The Company expects these expenses to continue to increase as more recruiting trainees and sales executives are hired to stimulate growth. Selling, general and administrative expenses, as a percentage of revenue, decreased from 17.0% in the six months ended November 30, 2010 to 16.1% in the six months ended November 30, 2011 as a result of increased revenue.

Other Income

------------------

Other income for the six months ended November 30, 2011 resulted primarily from interest and dividend income of $7,000, which decreased by $4,000 from the level realized in the six months ended November 30, 2010 due to lower interest rates earned on the Company’s US Treasury securities, certificates of deposit and money market accounts.

Income Taxes

------------------

The income tax provision included in the Company’s results of operations for the six months ended November 30, 2011 and 2010 reflect the Company’s estimated effective tax rate for the years ending May 31, 2012 and 2011, respectively. These rates were 47.2% for the six months ended November 30, 2011 and 42.1% for the six months ended November 30, 2010.  The tax rate in the current period was impacted by the increased effects of state minimum taxes and non-deductible expenses on lower taxable income.

Consolidated Net Income

----------------------------------

Net income decreased $114,000 from $216,000 in the six months ended November 30, 2010 to $102,000 in the six months ended November 30, 2011.  The decrease was primarily attributable to the increase in cost of sales, which increased at a greater rate than revenue.

Page 14

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 November 30, 2011, the Company had working capital (total current assets in excess of total current liabilities) of $12,627,000 including cash and cash equivalents and certificates of deposit and marketable securities of $7,840,000 as compared to working capital of $12,388,000 including cash and cash equivalents and certificates of deposit and marketable securities of $7,662,000 at May 31, 2011.

For the six months ended November 30, 2011, net cash provided by operating activities was $47,000 compared to cash used in operating activities of $1,285,000 for the six months ended November 30, 2010, or an increase in cash provided by operating activities of $1,332,000.  The cash provided by operating activities primarily resulted from consolidated net income. An increase in accounts receivable of $202,000 was offset by increase in accounts and other payables and accrued expenses and other current liabilities of $196,000.  The cash used in operating activities in the six months ended November 30, 2010, resulted primarily from an increase in accounts receivable.

Net cash provided by investing activities of $989,000 for the six months ended November 30, 2011 primarily resulted from the maturities of US Treasury securities and certificates of deposit.

Net cash used in financing activities resulted from distributions to the noncontrolling interest of $7,000 and the purchases of 25,125 shares of common stock for $104,076 in the six months ended November 30, 2011.  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 89,122 shares remain available for purchase under this plan.  The number of shares purchased and the remaining shares authorized to be purchased have been adjusted for a 1:2 reverse split effective November 29, 2010.  In the six months ended November 30, 2010, net cash used in financing activities resulted from a distribution to the noncontrolling interest of $7,000 and the purchases of 5,700 shares of common stock for $25,726.

The Company’s capital resource commitments at November 30, 2011 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 three months ended November 30, 2011.

Tabular Disclosure of Contractual Obligations

------------------------------------------------------------

	Payments Due By Period
Contractual Obligations	Total		Less than 1 Year		1-3 Years		3-5 Years		More than  5 Years
Operating Leases	$	653,000	$	317,000	$	257,000	$	79,000	$	—
Employment Agreements		1,025,000		525,000		400,000		100,000		—
Totals	$	1,678,000	$	842,000	$	657,000	$	179,000	$	—

Page 15

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 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, 2011 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 November 30, 2011.

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 (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 2(c)       Unregistered Sales of Equity Securities and Use of Proceeds

The following table sets forth information concerning any purchase of the Company’s common stock made by or on behalf of the Company or any “affiliated purchaser,” as defined in Rule 10b-18(a)(3) under the Securities Exchange Act of 1934 during the Company’s second fiscal quarter:

ISSUER PURCHASES OF EQUITY SECURITIES

Period	Total Number of Shares (or Units) Purchased		Average Price Paid per Share (or Unit)		Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs (1)		Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchase Under the Plans or Programs
August, 2011		475	$	4.93		475		112,872
September, 2011		1,400		4.81		1,400		111,472
October, 2011		21,750		4.05		21,750		89,722
November, 2011		1,500	$	4.64		1,500		88,222
Total		25,125	$	4.14		25,125		88,222

___________________

(1)   The repurchase plan was authorized by the Board of Directors and publicly announced on December 17, 2007 and re-authorized by the Board in January 2010.  The plan does not have an expiration date.

Page 16

TSR, INC. AND SUBSIDIARIES

Item 6.        Exhibits

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

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

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

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

Exhibit 101 – The following financial information from the Company’s Quarterly Report on Form 10-Q for the six months ended November 30, 2011, 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:    January 10, 2012	/s/ J.F. Hughes
	J.F. Hughes, Chairman and President

Date:    January 10, 2012	/s/ John G. Sharkey
	John G. Sharkey, Vice President Finance and Chief Financial Officer

Page 17

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 Quarterly 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 Quarterly Report;

3.   Based on my knowledge, the financial statements, and other financial information included in this Quarterly 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 Quarterly Report;

4.   The registrant’s other certifying officers 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 we 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 Quarterly 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 Quarterly Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Quarterly Report based on such evaluation;

d.   disclosed in this Quarterly Report any change in registrant’s internal controls over financial reporting that occurred during the registrant’s fourth fiscal quarter that materially affected, or is reasonably likely to materially affect, the registrant’s internal controls over financial reporting; and

5.   The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a.   all significant deficiencies or material weaknesses in the design or operation of internal controls 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 controls over financial reporting.

                                                                                                                          Date:  January 10, 2012

                                                                                                                           /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 Chief Financial Officer, certify that:

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

2.   Based on my knowledge, this Quarterly 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 Quarterly Report;

3.   Based on my knowledge, the financial statements, and other financial information included in this Quarterly 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 Quarterly Report;

4.   The registrant’s other certifying officers 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 we 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 Quarterly 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 Quarterly Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Quarterly Report based on such evaluation;

d.   disclosed in this Quarterly Report any change in registrant’s internal controls over financial reporting that occurred during the registrant’s fourth fiscal quarter that materially affected, or is reasonably likely to materially affect, the registrant’s internal controls over financial reporting; and

5.   The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a.   all significant deficiencies or material weaknesses in the design or operation of internal controls 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 controls over financial reporting.

                                                                                                                                Date:  January 10, 2012

                                                                                                                                /s/ John G. Sharkey

                                                                                                                                     -----------------------------------

                                                                                                                                     Vice President-Finance

                                                                                                                                     and Chief Financial 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 period ended November 30, 2011 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

                                                                                                                                     January 10, 2012

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 period ended November 30, 2011 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John G. Sharkey, Chief Financial 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 Chief Financial Officer

                                                                                                                                        January 10, 2012

XML

Net Income Per Common Share

6 Months Ended

Nov. 30, 2011

Net Income Per Common Share [Abstract]

Net Income Per Common Share

2. Net Income Per Common Share

Net income per common share is computed by dividing net income attributable to TSR by the weighted average number of common shares outstanding. The Company has had no stock options or other common stock equivalents outstanding during any of the periods presented.

XML

Basis Of Presentation

6 Months Ended

Nov. 30, 2011

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 interim financial statements as of and for the three and six months ended November 30, 2011 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, 2012. The balance sheet at May 31, 2011 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, 2011.

XML

Condensed Consolidated Balance Sheets (USD $)	Nov. 30, 2011	May 31, 2011
ASSETS
Cash and cash equivalents	$ 5,570,865	$ 4,645,854
Certificates of deposit and marketable securities.	2,269,460	3,016,542
Accounts receivable, net of allowance for doubtful accounts of $193,000	9,123,421	8,921,861
Other receivables.	5,660	4,981
Prepaid expenses	67,197	57,781
Prepaid and recoverable income taxes.	42,509	41,299
Deferred income taxes.	86,000	86,000
Total Current Assets.	17,165,112	16,774,318
Certificates of deposit and marketable securities		250,000
Equipment and leasehold improvements, net of accumulated depreciation and amortization of $279,943 and $274,890.	21,406	16,249
Other assets.	49,653	49,653
Deferred income taxes	48,000	51,000
Total Assets.	17,284,171	17,141,220
LIABILITIES AND EQUITY
Accounts and other payables.	1,299,265	943,082
Accrued expenses and other current liabilities	1,775,544	1,935,505
Advances from customers.	1,463,377	1,507,439
Total Current Liabilities.	4,538,186	4,386,026
Commitments and contingencies
Equity:
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,1,993,966 and 2,019,091 outstanding	31,142	31,142
Additional paid-in capital	5,102,868	5,102,868
Retained earnings.	20,937,171	20,858,282
Shareholder's equity before treasury stock	26,071,181	25,992,292
Less: Treasury stock, 1,120,197 and 1,095,072 shares, at cost.	13,383,339	13,279,263
Total TSR, Inc. Equity	12,687,842	12,713,029
Noncontrolling Interest	58,143	42,165
Total Equity	12,745,985	12,755,194
Total Liabilities and Equity.	$ 17,284,171	$ 17,141,220

XML

Condensed Consolidated Statements Of Equity (Parenthetical)	12 Months Ended
	May 31, 2010
Condensed Consolidated Statements Of Equity [Abstract]
Reverse stock split, conversion ratio numerator	1
Reverse stock split, conversion ratio denominator	2

XML

Condensed Consolidated Statements Of Cash Flows (USD $)	6 Months Ended
	Nov. 30, 2011	Nov. 30, 2010
Cash flows from operating activities:
Consolidated net income	$ 101,867	$ 216,329
Adjustments to reconcile consolidated net income to net cash provided by (used in) operating activities:
Depreciation and amortization	5,053	3,051
Unrealized (gain) loss on marketable securities, net.	(1,920)	210
Deferred income taxes.	3,000	3,000
Changes in operating assets and liabilities:
Accounts receivable.	(201,560)	(1,885,810)
Other receivables	(679)	(547)
Prepaid expenses	(9,416)	56,927
Prepaid and recoverable income taxes.	(1,210)	84,271
Accounts and other payables and accrued expenses and other current liabilities	196,222	296,228
Advances from customers	(44,062)	(58,750)
Net cash provided by (used in) operating activities.	47,295	(1,285,091)
Cash flows from investing activities:
Proceeds from maturities of certificates of deposit and marketable securities.	2,748,534	2,748,253
Purchases of certificates of deposit and marketable securities.	(1,749,532)	(3,847,739)
Purchases of equipment and leasehold improvements	(10,210)	(2,394)
Net cash provided by (used in) investing activities.	988,792	(1,101,880)
Cash flows from financing activities:
Purchases of treasury stock.	(104,076)	(25,726)
Distribution to noncontrolling interest.	(7,000)	(7,000)
Net cash used in financing activities.	(111,076)	(32,726)
Net increase (decrease) in cash and cash equivalents.	925,011	(2,419,697)
Cash and cash equivalents at beginning of period.	4,645,854	5,669,972
Cash and cash equivalents at end of period.	5,570,865	3,250,275
Supplemental disclosures of cash flow data:
Income taxes paid	$ 89,000	$ 70,000

XML

Condensed Consolidated Balance Sheets (Parenthetical) (USD $)	Nov. 30, 2011	May 31, 2011
Condensed Consolidated Balance Sheets [Abstract]
Accounts receivable, allowance for doubtful accounts	$ 193,000	$ 193,000
Equipment and leasehold improvements, accumulated depreciation and amortization	$ 279,943	$ 274,890
Preferred stock, par value	$ 1	$ 1
Preferred stock, shares authorized	500,000	500,000
Preferred stock, shares issued	0	0
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	1,993,966	2,019,091
Treasury stock, shares	1,120,197	1,095,072

XML

Document And Entity Information	6 Months Ended
	Nov. 30, 2011	Dec. 31, 2011
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Nov. 30, 2011
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q2
Entity Registrant Name	TSR INC
Entity Central Index Key	0000098338
Current Fiscal Year End Date	--05-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		1,992,066

XML

Condensed Consolidated Statements Of Income (USD $)	3 Months Ended		6 Months Ended
	Nov. 30, 2011	Nov. 30, 2010	Nov. 30, 2011	Nov. 30, 2010
Condensed Consolidated Statements Of Income [Abstract]
Revenue, net.	$ 11,115,015	$ 9,756,983	$ 22,488,110	$ 19,120,876
Cost of sales.	9,224,544	7,853,945	18,687,175	15,510,435
Selling, general and administrative expenses	1,814,621	1,611,636	3,616,900	3,248,141
Cost and expenses	11,039,165	9,465,581	22,304,075	18,758,576
Income from operations	75,850	291,402	184,035	362,300
Other income (expense):
Interest and dividend income	3,150	5,459	6,912	11,239
Unrealized gain (loss) on marketable securities, net	3,824	2,794	1,920	(210)
Income before income taxes.	82,824	299,655	192,867	373,329
Provision for income taxes.	44,000	124,000	91,000	157,000
Consolidated net income	38,824	175,655	101,867	216,329
Less: Net income attributable to noncontrolling interest	(7,121)	(25,244)	(22,978)	(44,356)
Net income attributable to TSR, Inc	$ 31,703	$ 150,411	$ 78,889	$ 171,973
Net income per TSR, Inc. common share	$ 0.02	$ 0.07	$ 0.04	$ 0.09
Weighted average number of common shares outstanding.	2,003,981	2,019,094	2,011,533	2,020,117

XML

Marketable Securities

6 Months Ended

Nov. 30, 2011

Marketable Securities [Abstract]

Marketable Securities

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 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 November 30, 2011 and May 31, 2011 using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2) and significant unobservable inputs (Level 3):

November 30, 2011		Level 1		Level 2			Level 3		Total
US Treasury Securities	$	1,499,532	$	-		$	-	$	1,499,532
Certificates of Deposit		-		750,000			-		750,000
Equity Securities		19,928		-			-		19,928
	$	1,519,460	$	750,000	$		-	$	2,269,460
May 31, 2011		Level 1		Level 2			Level 3		Total
US Treasury Securities	$	1,998,534	$	-		$	-	$	1,998,534
Certificates of Deposit		-		1,250,000			-		1,250,000
Equity Securities		18,008		-			-		18,008
	$	2,016,542	$	1,250,000		$	-	$	3,266,542

Based upon the Company's intent and ability to hold its US Treasury securities and 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 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 November 30, 2011 and May 31, 2011 are summarized as follows:

				Gross		Gross
November 30, 2011				Unrealized		Unrealized
		Amortized		Holding		Holding		Recorded
Current		Cost		Gains		Losses		Value
US Treasury Securities	$	1,499,532	$	-	$	-	$	1,499,532
Certificates of Deposit		750,000		-		-		750,000
Equity Securities		16,866		3,062		-		19,928
	$	2,266,398	$	3,062	$	-	$	2,269,460
				Gross		Gross
May 31, 2011				Unrealized		Unrealized
Current		Amortized		Holding		Holding		Recorded
		Cost		Gains		Losses		Value
US Treasury Securities	$	1,998,534	$	-	$	-	$	1,998,534
Certificates of Deposit		1,000,000		-		-		1,000,000
Equity Securities		16,866		1,142		-		18,008
	$	3,015,400	$	1,142	$	-	$	3,016,542
Long - Term
Certificates of Deposit	$	250,000	$	-	$	-	$	250,000

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.

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Revenue Recognition

6 Months Ended

Nov. 30, 2011

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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Other Matters

6 Months Ended

Nov. 30, 2011

Other Matters [Abstract]

Other Matters

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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Fair Value Of Financial Instruments

6 Months Ended

Nov. 30, 2011

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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Stockholders' Equity

6 Months Ended

Nov. 30, 2011

Stockholders' Equity [Abstract]

Stockholders' Equity

7. Stockholders' Equity

On November 10, 2010, the Board of Directors and shareholders of the Company approved a 1:2 reverse stock split to be effective on November 29, 2010. The authorized preferred stock was reduced from 1,000,000 to 500,000 shares. There continues to be no preferred shares issued or outstanding. The authorized common stock was reduced from 25,000,000 to 12,500,000 shares. The issued common shares were reduced from 6,228,326 to 3,114,163. The outstanding common shares were reduced from 4,038,188 to 2,019,091. The effect of the reverse stock split has been effected in all prior periods presented.

During the six months ended November 30, 2011, the Company purchased a total of 25,125 shares of its common stock for $104,076. During the six months ended November 30, 2010, the Company purchased a total of 5,700 shares of its common stock for $25,726. These shares were purchased in various transactions on the open market under a previously announced repurchase plan of 150,000 shares. As of December 31, 2011, 88,222 shares remain available for purchase under the plan. The number of shares noted above has been adjusted for the 1:2 reverse split effected November 29, 2010.

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Recent Accounting Pronouncements

6 Months Ended

Nov. 30, 2011

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 consolidated financial statements.

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Condensed Consolidated Statements Of Equity (USD $)	Common Stock [Member]	Additional Paid-In Capital [Member]	Retained Earnings [Member]	Treasury Stock [Member]	Non-controlling Interest [Member]	Total
Balance, value at May. 31, 2010 (Scenario, Previously Reported [Member])	$ 62,283	$ 5,071,727	$ 20,661,190	$ (13,253,523)	$ 27,820	$ 12,569,497
Balance, value at May. 31, 2010	31,142	5,102,868	20,661,190	(13,253,523)	27,820	12,569,497
Balance, shares at May. 31, 2010 (Scenario, Previously Reported [Member])	6,228,326
Balance, shares at May. 31, 2010	3,114,163
Reverse stock split 1:2, value (Reverse Stock Split [Member])	(31,141)	31,141
Reverse stock split 1:2, shares (Reverse Stock Split [Member])	(3,114,163)
Net income attributable to noncontrolling interest					44,356	44,356
Distribution to noncontrolling interest					(7,000)	(7,000)
Purchases of treasury stock				(25,726)		(25,726)
Net income attributable to TSR, Inc.			171,973			171,973
Balance, value at Nov. 30, 2010	31,142	5,102,868	20,833,163	(13,279,249)	65,176	12,753,100
Balance, shares at Nov. 30, 2010	3,114,163
Balance, value at May. 31, 2011	31,142	5,102,868	20,858,282	(13,279,263)	42,165	12,755,194
Balance, shares at May. 31, 2011	3,114,163					3,114,163
Net income attributable to noncontrolling interest					22,978	22,978
Distribution to noncontrolling interest					(7,000)	(7,000)
Purchases of treasury stock				(104,076)		(104,076)
Net income attributable to TSR, Inc.			78,889			78,889
Balance, value at Nov. 30, 2011	$ 31,142	$ 5,102,868	$ 20,937,171	$ (13,383,339)	$ 58,143	$ 12,745,985
Balance, shares at Nov. 30, 2011	3,114,163					3,114,163

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Cash And Cash Equivalents

6 Months Ended

Nov. 30, 2011

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 November 30, 2011 and May 31, 2011:

		November 30,		May 31,
		2011		2011
Cash in banks.	$	2,028,453	$	2,006,200
Money market funds.		3,542,412		2,639,654
	$	5,570,865	$	4,645,854