CSPI - CSPi Reports Second-Quarter 2019 Financial Results
LOWELL, Mass., May 08, 2019 (GLOBE NEWSWIRE) -- CSPi (NASDAQ: CSPI), a provider of IT managed services, security solutions and packet capture products, today reported financial results for the second quarter ended March 31, 2019.
The Company also announced that its board of directors has voted to pay a quarterly dividend of $0.15 per share to shareholders of record on May 31, 2019, payable on June 14, 2019.
Management Comments
“During the second quarter we advanced our transformation to become a cybersecurity and wireless managed services company,” said Chief Executive Officer Victor Dellovo. “Financially, strong demand for managed IT services was offset by softer multi-computers sales and resulted in essentially flat year-over-year revenue. On the bottom line, the lower volume and higher development costs for our next-generation cybersecurity ARIA SDS solution offset the benefits of cost control measures.”
“In our High-Performance Products segment, we saw continued demand for our legacy Myricom network adaptors and advanced the customer evaluation stage for our ARIA SDS cybersecurity solution,” said Dellovo. “We saw strong demand from customers using our Myricom Sniffer packet capture application, which helps improve threat detection and incident response. We formally announced the ARIA SDS Packet Intelligence application at the RSA 2019 conference in San Francisco and received positive feedback from customers. We plan to advance our testing and evaluations in Q3 and are on track to record our first ARIA revenues in the second half of fiscal 2019.”
“In Technology Solutions, our UK operations delivered a record quarter driven by new projects and a lower cost structure,” added Dellovo. “In the US, we recorded profitable results mainly from growth in managed IT services. We are expanding our managed services customer base, while increasing the overall size and scope of existing customer contracts.”
“With solid execution on cost control and confidence in our ability to deliver on our next-generation cybersecurity products, we are well positioned to deliver growth in the second half of fiscal 2019,” concluded Dellovo.
Financial Results
For the second quarter of fiscal 2019, revenue was $16.4 million compared with $16.6 million a year ago.
Gross profit for the second quarter of fiscal 2019 was $3.7 million, or 22.9% of sales, compared with $4.0 million, or 24% of sales, a year ago.
Net loss for the second quarter of fiscal 2019 was $619,000, or $0.15 per share, compared with a net loss of $594,000, or $0.16 per share, for the second quarter of fiscal 2018. The second quarter of fiscal 2018 included income of $148,000 from discontinued operations related to the Company’s Germany operations, which was sold in July of 2018.
Cash and short-term investments were $18.2 million at the end of the second quarter of fiscal 2019 compared with $25.1 million at the end of fiscal year 2018. The decrease was due to a $3.3 million increase in accounts receivable partially due to 43% of the second quarter’s sales were recorded in March 2019. We also had a reduction of $3.2 million in accounts payable and accrued expenses and $1.2 million for payment of our quarterly dividends.
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) on May 08, 2019 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 877-876-9173 or 785-424-1667. 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 CSP Inc.
CSPi (NASDAQ: CSPI) maintains two distinct and dynamic divisions – High Performance Products, including the Cybersecurity Center of Excellence, and Technology Solutions – with a shared vision for technology excellence. CSPi’s cybersecurity solutions protect an organization’s critical assets to minimize, or remove, the impact of the inevitable data breach. Our ARIA Software Defined Security platform solves the complexities associated with securing devops environments, while our Myricom nVoy Series appliances provide automated breach identification and notification, enabled by the 10G dropless packet capture inherent in our Myricom® ARC intelligent adapters. CSPi’s Technology Solutions division helps clients achieve their business goals and accelerate time to market through innovative IT solutions and security 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. For more information, please visit www.cspi.com. Myricom and ARIA are trademarks of CSPi Inc. All other brand names, product names or trademarks belong to their respective owners.
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 advance our testing and evaluations in Q3 and are on track to record our first ARIA revenues in the second half of fiscal 2019 and with solid execution on cost control and confidence in our ability to deliver on our next-generation cybersecurity products. 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 SEC. Please refer to the section on forward-looking statements included in the Company's filings with the Securities and Exchange Commission.
Contact:
Gary Levine
Chief Financial Officer
CSPi
Tel: 978.954.5040
Fax: 978.616.9065
| CSP INC. AND SUBSIDIARIES |
| UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS |
| (Amounts in thousands) |
| March 31, |
| September 30, |
| 2019 |
| 2018 |
| Assets |
| Current assets: |
| Cash and short-term investments |
| $ |
| 18,188 |
| $ |
| 25,107 |
| Accounts receivable, net |
| 16,456 |
| 11,980 |
| Unbilled accounts receivable |
| - |
| 1,166 |
| Inventories |
| 5,857 |
| 7,558 |
| Other current assets |
| 3,971 |
| 2,604 |
| Total current assets |
| 44,472 |
| 48,415 |
| Property, equipment and improvements, net |
| 916 |
| 847 |
| Other assets |
| 6,942 |
| 6,013 |
| Total assets |
| $ |
| 52,330 |
| $ |
| 55,275 |
| Liabilities and Shareholders' Equity |
| Current liabilities |
| $ |
| 12,743 |
| $ |
| 14,061 |
| Pension and retirement plans |
| 5,634 |
| 6,168 |
| Non-current liabilities |
| 1,278 |
| 1,244 |
| Shareholders' equity |
| 32,675 |
| 33,802 |
| Total liabilities and shareholders' equity |
| $ |
| 52,330 |
| $ |
| 55,275 |
| CSP INC. AND SUBSIDIARIES |
| UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
| (Amounts in thousands, except per share data ) |
| /-----Three Months Ended-----/ |
| /-----Six Months Ended-----/ |
| March 31 |
| March 31 |
| March 31 |
| March 31 |
| 2019 |
| 2018 |
| 2019 |
| 2018 |
| Sales: |
| Product |
| $ |
| 13,603 |
| $ |
| 14,049 |
| $ |
| 29,314 |
| $ |
| 27,718 |
| Service |
| 2,747 |
| 2,555 |
| 6,016 |
| 5,516 |
| Total sales |
| 16,350 |
| 16,604 |
| 35,330 |
| 33,234 |
| Cost of sales: |
| Product |
| 11,371 |
| 11,667 |
| 24,583 |
| 22,947 |
| Service |
| 1,233 |
| 954 |
| 2,652 |
| 1,941 |
| Total cost of sales |
| 12,604 |
| 12,621 |
| 27,235 |
| 24,888 |
| Gross Profit |
| 3,746 |
| 3,983 |
| 8,095 |
| 8,346 |
| Operating expenses: |
| Engineering and development |
| 781 |
| 759 |
| 1,526 |
| 1,457 |
| Selling, general & administrative |
| 3,736 |
| 4,088 |
| 7,325 |
| 7,588 |
| Total operating expenses |
| 4,517 |
| 4,847 |
| 8,851 |
| 9,045 |
| Operating loss |
| (771 |
| ) |
| (864 |
| ) |
| (756 |
| ) |
| (699 |
| ) |
| Other income (expense), net |
| 10 |
| (38 |
| ) |
| 47 |
| (45 |
| ) |
| Net loss before income taxes and discontinued operations |
| (761 |
| ) |
| (902 |
| ) |
| (709 |
| ) |
| (744 |
| ) |
| Income taxes expense (benefit) |
| (142 |
| ) |
| (160 |
| ) |
| (140 |
| ) |
| 993 |
| Net loss from continuing operations |
| (619 |
| ) |
| (742 |
| ) |
| (569 |
| ) |
| (1,737 |
| ) |
| Net income (loss) from discontinued operations |
| - |
| 148 |
| - |
| (57 |
| ) |
| Net loss |
| $ |
| (619 |
| ) |
| $ |
| (594 |
| ) |
| $ |
| (569 |
| ) |
| $ |
| (1,794 |
| ) |
| Net loss attributable to common stockholders |
| $ |
| (619 |
| ) |
| $ |
| (594 |
| ) |
| $ |
| (569 |
| ) |
| $ |
| (1,794 |
| ) |
| Net loss from continuing operations per share - basic |
| $ |
| (0.15 |
| ) |
| $ |
| (0.20 |
| ) |
| $ |
| (0.15 |
| ) |
| $ |
| (0.46 |
| ) |
| Net income (loss) from discontinued operations per share - basic |
| $ |
| - |
| $ |
| 0.04 |
| $ |
| - |
| $ |
| (0.01 |
| ) |
| Net loss per share -basic |
| $ |
| (0.15 |
| ) |
| $ |
| (0.16 |
| ) |
| $ |
| (0.15 |
| ) |
| $ |
| (0.47 |
| ) |
| Weighted average shares outstanding - basic |
| 4,015 |
| 3,823 |
| 3,898 |
| 3,795 |
| Net loss from continuing operations per share - diluted |
| $ |
| (0.15 |
| ) |
| $ |
| (0.20 |
| ) |
| $ |
| (0.15 |
| ) |
| $ |
| (0.46 |
| ) |
| Net income (loss) from discontinued operations per share - diluted |
| $ |
| - |
| $ |
| 0.04 |
| $ |
| - |
| $ |
| (0.01 |
| ) |
| Net loss per share -diluted |
| $ |
| (0.15 |
| ) |
| $ |
| (0.16 |
| ) |
| $ |
| (0.15 |
| ) |
| $ |
| (0.47 |
| ) |
| Weighted average shares outstanding - diluted |
| 4,015 |
| 3,823 |
| 3,898 |
| 3,795 |