CSPI - CSP Inc. Reports Fiscal Year 2020 First Quarter Results; Builds Momentum for New Product Launches in the Second Half of Fiscal Year 2020
LOWELL, Mass., Feb. 12, 2020 (GLOBE NEWSWIRE) -- CSPi (NASDAQ: CSPI), a provider of security and packet capture products, managed IT and professional services and technology solutions, reported results for the 2020 fiscal first quarter ended December 31, 2019. The Company announced that its Board of Directors has voted to pay a quarterly dividend of $0.15 per share to shareholders of record on February 28, 2020 payable on March 13, 2020.
“I am pleased to report that our first quarter results met our expectations, and despite the unfavorable business mix, our gross margin improved over 100 basis points demonstrating our continued focus on high margin products to fuel our growth and profitability,” commented Victor Dellovo, Chief Executive Officer. “We remain confident about our opportunity pipeline and anticipated performance throughout the year, including a more favorable product mix in addition to royalty revenue from E-2D planes in the second half of fiscal 2020. Additionally, the launches of our exciting new offerings - ARIA and Unified-Communications-as-a-Service business (UCaaS) - are progressing as planned and will further foster our migration to a cybersecurity, wireless and managed service markets company.”
“With regard to ARIA, we continue to have advanced discussions with a leading cable company and we anticipate this will result in a purchase,” said Mr. Dellovo.
Fiscal Year 2020 First Quarter Results
Revenue for the fiscal first quarter was $16.6 million compared to $19.0 million in the year-ago fiscal first quarter. Foreign exchange had a negative effect on net loss of $0.3 million for the quarter. Gross profit for the fiscal first quarter was $4.0 million, or 24.3% of sales, compared with $4.3 million, or 22.9% of sales in the year-ago fiscal first quarter. Net loss for the first quarter was $540,000, or $0.14 per share compared with net income of $50,000, or $0.01 per share for the first quarter of fiscal 2019.
At December 31, 2019, the Company had cash and cash equivalents of $17.6 million.
Conference Call Details
CSPi Chief Executive Officer Victor Dellovo and Chief Financial Officer Gary W. Levine will host a conference call at 10:00 a.m. (ET) today to review CSPi’s financial results and provide a business update. To listen to a live webcast of the call, please visit the “Investor Relations” section of the Company’s website at www.cspi.com. Individuals may also listen to the call via telephone, by dialing 800-894-5910 or 785-424-1736 and use the Conference ID: CSPQ120. For interested parties unable to participate in the live call, an archived version of the webcast will be available for approximately one year on CSPi’s website.
About CSPi
CSPi (NASDAQ: CSPI) operates two divisions, each with unique expertise in designing and implementing technology solutions to help their customers use technology as a means to success. The High Performance Product division, including ARIA Cybersecurity Solutions, originated from supporting initiatives for the Department of Defense and Western intelligence agencies related to network monitoring, data protection, and intelligence initiatives. This focused mindset now results in foolproof data protection, enterprise-wide. Our ARIA Software Defined Security solutions set provides enhanced network security, as well as accelerating incident response capabilities, while our Myricom nVoy Series appliances provide automated breach identification and notification, enabled by the 10G dropless packet capture inherent in our Myricom intelligent adapters. CSPi’s Technology Solutions division helps clients achieve their business goals and accelerate time to market through innovative IT solutions and professional services by partnering with best-in-class technology providers. For organizations that want the benefits of an IT department without the cost, we offer a robust catalog of Managed IT Services providing 24×365 proactive support. Our team of engineers have expertise across major industries supporting five key technology areas: Advanced Security; Communication and Collaboration; Data Center; Networking; and Wireless & Mobility.
Safe Harbor
The Company wishes to take advantage of the “Safe Harbor” provisions of the Private Securities Litigation Reform Act of 1995 with respect to statements that may be deemed to be forward-looking under the Act. Such forward-looking statements may include, but are not limited to, we are confident about our opportunity pipeline and anticipated performance throughout the year, including a more favorable product mix in addition to royalty revenue from E-2D planes in the second half of fiscal 2020.
The Company cautions that numerous factors could cause actual results to differ materially from forward-looking statements made by the Company. Such risks include general economic conditions, market factors, competitive factors and pricing pressures, and others described in the Company's filings with the Securities and Exchange Commission (“SEC”). Please refer to the section on forward-looking statements included in the Company's filings with the SEC.
Contact:
Gary Levine
Chief Financial Officer
CSP Inc.
Gary.Levine@CSPi.com
| CSP INC. AND SUBSIDIARIES |
| CONDENSED CONSOLIDATED BALANCE SHEETS |
| (Amounts in thousands) |
| December 31, |
| September 30, |
| 2019 |
| 2019 |
| (Unaudited) |
| Assets |
| Current assets: |
| Cash and short-term investments |
| $ |
| 17,627 |
| $ |
| 18,099 |
| Accounts receivable, net |
| 12,470 |
| 15,114 |
| Inventories |
| 5,507 |
| 7,818 |
| Other current assets |
| 5,484 |
| 5,503 |
| Total current assets |
| 41,088 |
| 46,534 |
| Property, equipment and improvements, net |
| 1,356 |
| 1,273 |
| Operating lease right-of-use assets |
| 2,288 |
| - |
| Other assets |
| 11,516 |
| 11,562 |
| Total assets |
| $ |
| 56,248 |
| $ |
| 59,369 |
| Liabilities and Shareholders' Equity |
| Current liabilities |
| $ |
| 14,459 |
| $ |
| 20,027 |
| Pension and retirement plans |
| 7,275 |
| 6,904 |
| Operating lease liabilities |
| 1,679 |
| - |
| Notes Payable |
| 1,838 |
| 684 |
| Other non-current liabilities |
| 1,199 |
| 1,326 |
| Shareholders' equity |
| 29,798 |
| 30,428 |
| Total liabilities and shareholders' equity |
| $ |
| 56,248 |
| $ |
| 59,369 |
| CSP INC. AND SUBSIDIARIES |
| UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
| (Amounts in thousands, except per share data ) |
| /-----Three Months Ended-----/ |
| December 31, |
| December 31, |
| 2019 |
| 2018 |
| Sales: |
| Product |
| $ |
| 13,222 |
| $ |
| 15,711 |
| Service |
| 3,350 |
| 3,269 |
| Total sales |
| 16,572 |
| 18,980 |
| Cost of sales: |
| Product |
| 11,318 |
| 13,212 |
| Service |
| 1,223 |
| 1,419 |
| Total cost of sales |
| 12,541 |
| 14,631 |
| Gross Profit |
| 4,031 |
| 4,349 |
| Operating expenses: |
| Engineering and development |
| 672 |
| 745 |
| Selling, general & administrative |
| 3,761 |
| 3,589 |
| Total operating expenses |
| 4,433 |
| 4,334 |
| Operating (loss) income |
| (402 |
| ) |
| 15 |
| Other income (expense), net |
| (208 |
| ) |
| 37 |
| (Loss) income before income taxes |
| (610 |
| ) |
| 52 |
| Income taxes (benefit) expense |
| (70 |
| ) |
| 2 |
| Net (loss) income |
| (540 |
| ) |
| 50 |
| Net (loss) income attributable to common stockholders |
| $ |
| (540 |
| ) |
| $ |
| 48 |
| Net (loss) income per share -basic |
| $ |
| (0.14 |
| ) |
| $ |
| 0.01 |
| Weighted average shares outstanding - basic |
| 3,963 |
| 3,868 |
| Net (loss) income per share -diluted |
| $ |
| (0.14 |
| ) |
| $ |
| 0.01 |
| Weighted average shares outstanding - diluted |
| 3,963 |
| 3,966 |