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CSP Inc. Responds to Criticisms From Samuel Kidston of North & Webster Opportunities Fund in Letter to Shareholders

CSP Inc. Responds to Criticisms From Samuel Kidston of North & Webster
Opportunities Fund in Letter to Shareholders

        Outlines Kidston's Track Record as Chairman of Three Companies

     Reviews Success of New CSP CEO Victor Dellovo at Service and Systems
          Integration Business Segment, CSP's Primary Growth Vehicle

               Requests Shareholders Vote for Company Directors

BILLERICA, Mass., Feb. 7, 2013 (GLOBE NEWSWIRE) -- CSP Inc. (Nasdaq:CSPI), a
provider of IT solutions, systems integration services and dense cluster
computing systems, has sent a letter to shareholders responding to criticisms
from Sam Kidston and reviewing the success of new CSP CEO Victor Dellovo at
the Company's Service and Systems Integration business.

Dear Fellow CSP Stockholder:

We feel obliged to provide you with supplemental information, in response to a
letter from Samuel Kidston, of North & Webster Opportunities Fund, which
contained criticisms of business acquisitions CSP made years ago, as far back
as the year 2000.

Please first be aware that the current proxy contest against your Company is
being led by Mr. Kidston, who previously threatened proxy fights against at
least two small public companies, and now acts as Chairman of the Board at
three such companies. Here are some salient facts about Mr. Kidston's history
with these companies (all of the information cited below is from publicly
available SEC filings or in press releases of the companies involved):

  *Mr. Kidston's most recent threatened proxy fight led to a settlement
    agreement dated as of June 30, 2010, under which he was appointed, in
    January of 2011, to the Board of Ezenia! Inc., a communications software
    development company.Mr. Kidston became Chairman of the Board of Ezenia!
    on June 9, 2011.On September 29, 2011, Ezenia! filed to deregister its
    common stock with the SEC.On September 30, 2011, Ezenia! filed for
    Chapter 11 bankruptcy.
    
  *In April of 2009, Mr. Kidston was appointed to the Board of Sport-Haley
    Holdings, Inc., a golf apparel distributor.On June 8, 2009, this company
    voluntarily delisted from NASDAQ and filed to deregister its common stock
    with the SEC.Sport-Haley's stock now trades on the "pink sheets."Mr.
    Kidston has been serving as Chairman of the Board since January of 2010
    and Interim CEO of Sport-Haley since October of 2011.
    
  *In December of 2008, Mr. Kidston and J.K. Hage III were appointed to the
    Board of SED International Holdings, Inc., a supply chain management
    services company.At that same time, as part of a settlement agreement
    dated December 18, 2008 intended to avoid a proxy contest, Mr. Kidston and
    certain related persons and entities received a $112,500 payment from SED
    as reimbursement for expenses.As a director, Mr. Kidston received
    compensation worth $160,000 during SED's Fiscal 2012 year.Last August,
    Mr. Kidston was appointed Executive Chairman of SED, under new
    compensation arrangements that have yet to be publicly disclosed.
    
  *An SED shareholder group, Gad Partners Funds LP and Paragon Technologies,
    recently issued a letter which is critical of Samuel Kidston's
    compensation during his four years as an SED director.Among other things,
    the Gad group contends that the SED Board's compensation has been
    excessive, during a time when the stock price performance of SED shares
    has been dismal in the group's view.The principal of the Gad group has no
    business or financial affiliations of any kind with CSP, and contacted CSP
    on his own initiative.

Your Company's new management is committed to CSP's continued improvement in
financial performance, and the creation of sustainable long-term value for CSP
stockholders.We believe there is good reason to be optimistic about CSP's
future growth prospects:

  *CSP's new President and Chief Executive Officer, Victor Dellovo, who was
    just promoted this past August, has overseen the growth of your Company's
    Service and Systems Integration business segment (SSI).
    
  *SSI has been your Company's primary growth business since its acquisition
    in 2003.
    
  *For Fiscal 2012, SSI's gross operating profit was more than 800% higher
    than it was in the first year after its acquisition.
    
  *For Fiscal 2012, SSI's revenues were $73.7 million, with a gross operating
    profit of $1.7 million.
    
  *During Fiscal 2013, your management is implementing a new strategy to
    leverage SSI's historical growth by pursuing cross-selling opportunities
    with our Systems multicomputer business.

WE URGE YOU TO PROTECT YOUR INVESTMENT IN CSP!

PLEASE COMPLETELY DISREGARD ANY PROXY MATERIALS YOU RECEIVED FROM NORTH &
WEBSTER OR SAMUEL KIDSTON.

PLEASE KNOW THAT YOUR VOTE IS EXTREMELY IMPORTANT, NO MATTER HOW FEW SHARES OF
CSP YOU OWN.

CSP'S ANNUAL MEETING IS SCHEDULED FOR TUESDAY FEBRUARY 12th.

THE TIME IS EXTREMELY SHORT.

PLEASE VOTE YOUR CSP SHARES BY TELEPHONE OR INTERNET TODAY.

For your further convenience, if you have any questions or need any assistance
with voting your shares, please contact The Proxy Advisory Group, LLC, who is
assisting your Company in this matter.

For Proxy Voting Assistance, you may call toll-free at (888) 337-7799 or
(888)33-PROXY.

Your new CEO and his management team are committed to CSP's continued
improvement in financial performance, and the creation of sustainable
long-term value for CSP stockholders.

We are optimistic about CSP's future.Thank you very much for your support.

Sincerely,              Sincerely,
Victor Dellovo          C. Shelton James
Chief Executive Officer Chairman of the Board
CSP INC.                CSP INC.

CONTACT: Gary Levine
         Chief Financial Officer
         CSP Inc.
         Tel:  978.663.7598 ext. 1200
         Fax: 978.663.0150

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