IT staffing provider TSR Inc. (NASDAQ: TSRI) reported revenue fell 0.5% year over year to $24.3 million in its fiscal third quarter ended Feb. 28. However, gross margin improved, and the firm posted a profit. It had recorded a net loss in the year-ago quarter.

“Continued strategic business development efforts, additional investment in our higher profit margin permanent placement business and continued focus on controlling costs helped us swing to profitability in the fiscal third quarter for the first time in many years,” CEO Thomas Salerno said.

The Hauppauge, New York-based IT staffing firm noted revenue fell primarily due to decreased activity with clients for clerical and administrative contractors. The number of clerical and administrative contractors decreased to 173 in the third quarter from 278 in the same period last year. However, the number of IT contractors rose to 467 in the third quarter from 443 in the third quarter of last year.

TSR noted the change in the business mix toward the higher revenue IT contractors mitigated much of the decrease in revenue.