CSP Inc. Reports Third-Quarter Fiscal 2013 Financial Results

CSP Inc. Reports Third-Quarter Fiscal 2013 Financial Results

                    Announces Dividend of $0.10 Per Share

                        Reports on Strategic Progress

BILLERICA, Mass., Aug. 7, 2013 (GLOBE NEWSWIRE) -- CSP Inc. (Nasdaq:CSPI), a
provider of IT solutions, systems integration services and dense cluster
computing systems, today reported financial results for the third quarter of
fiscal 2013 ended June 30, 2013.

The Company also announced that its board of directors has voted to pay a
quarterly dividend of $0.10 per share to shareholders of record August 21,
2013 payable August 30, 2013.

Management Comments

"While we performed well in the first half of the year, and have good
expectations for the fourth quarter, we had a difficult comparison with the
third quarter of fiscal 2012 due to the $2 million in Systems segment royalty
revenue related to the E-2D that we recorded in that quarter," said Victor
Dellovo, CSP Inc. president and chief executive officer. "At the same time, we
made significant progress in the execution of our growth strategy."

"Looking ahead to fiscal 2014 at our Systems segment, we expect to receive
royalty revenue related to five planes as part of Lot 1 of full-rate
production of the E-2D. We expect to ship the parts for those planes by the
end of the current fiscal year.

"At Service and Systems Integration, weakness in Germany due to order timing,
a slight year-over-year decline in the UK, and the negative effect of foreign
currency more than offset very strong sales growth in the US," continued
Dellovo. "As a result of our aggressive efforts to ramp up marketing efforts,
expand our sales force, and work closely with manufacturers to obtain sales
leads, we recorded more than $1 million in revenue from new customers in the
US in the quarter."

"We are focused on becoming a global partner to our customers by cross-selling
between Modcomp's geographic locations, and we are now beginning to see orders
come in from this effort. By leveraging our worldwide engineering resources
through cross-selling, we are enhancing margins and increasing utilization
rates. We also are beginning to generate a growing number of customers to our
Network Operations Center, or NOC. In addition, we see exciting opportunities
to capitalize on the trend toward cloud computing, and we have important
partnerships with host cloud providers Amazon, Google and Microsoft."

"Looking forward, we expect that our Service and Systems Integration segment
will resume the strong year-over-year growth in the fourth quarter that we had
reported in the first half of the year. While we expect that our Systems
segment will continue to be challenged for the remainder of the year, fiscal
2014 is shaping up to be a good year as a result of expected royalty payments
for the E-2D. Our new growth strategy already is starting to yield results,
and we plan to continue to leverage our ability to cross sell across the
organization to drive higher revenue and profitability," concluded Dellovo.

Financial Results

For the third quarter of fiscal 2013, revenue declined 15% year over year to
$19.0 million. For the first nine months of fiscal 2013, revenue increased 5%
year over year to $65.7 million. Foreign exchange had a positive $100,000
effect on revenue for the three-month period and a negative $100,000 effect on
revenue for the nine-month period.

Gross margin for the third quarter was 20% compared with 23% in the third
quarter of fiscal 2012, primarily due to a lower mix of sales from the Systems
business, including reduced royalty revenues. Gross margin for the first nine
months of fiscal 2013 was 21% compared with 24% in the prior-year period.

Net loss for the third quarter was $478,000, or $0.14 per share, compared with
net income of $774,000, or $0.22 per diluted share, in the third quarter of
fiscal 2012. Net income for the first nine months of fiscal 2013 was $377,000,
or $0.11 per diluted share, compared with $1.7 million or $0.48 per diluted
share in the first nine months of fiscal 2012.

Cash and short-term investments decreased from $20.5 million at fiscal year
end to $20.2 million at the end of the third quarter of 2013.The Company paid
out approximately $1.0 million in dividends in the first nine months of the
year.CSP's cash position may vary significantly from quarter to quarter due
to the high working capital requirements needed to fund large projects at both
its Systems and its Services and Systems Integration segments.

Conference Call Details

CSP 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 CSP'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) 407-5790 or (201) 689-8328.For interested parties
unable to participate in the live call, an archived version of the webcast
will be available for approximately one year on CSP's website.

About CSP Inc.

Based in Billerica, Massachusetts and founded in 1968, CSP Inc. and its
subsidiaries develop and market IT integration solutions and high-performance
computer systems to meet the diverse requirements of our industrial,
commercial, and defense customers worldwide.

CSP's Systems segment includes the MultiComputer Division, which designs and
manufactures commercial high-performance computer signal processing systems
for a variety of complex real time applications in defense and commercial
markets. The Company's MODCOMP Inc. subsidiary, also part of its Service and
Systems Integration segment was founded in 1970, and has offices in the U.S.,
U.K. and Germany. Modcomp provides solutions and services for complex IT
environments including storage and servers, unified communications solutions,
IT security solutions and consulting services. More information about CSP is
available on the company's website at www.cspi.com.

To learn more about MODCOMP, Inc., consult www.modcomp.com.

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, expect to ship the parts for
those planes by the end of the current fiscal year expect to receive royalty
revenue related to five planes as part of Lot 1 of full-rate production of the
E-2D in Fiscal Year 2014 and our Service and Systems Integration segment will
resume the strong year-over-year growth in the fourth quarter our Service and
Systems Integration segment will resume the strong year-over-year growth in
the fourth quarter.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.

CSP INC. AND SUBSIDIARIES                                            
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS                      
(Amounts in thousands)                                               
                                                                  
                                                                  
                                    June 30,  September 30,         
                                    2013      2012                  
                                                                  
Assets                                                             
                                                                  
Current assets:                                                    
Cash and short-term investments     $20,246 $20,493             
Accounts receivable, net            12,491    12,145                
Inventories                         5,192     6,276                 
Other current assets                4,295     5,792                 
Total current assets                42,224    44,706                
Property, equipment and              1,344     991                   
improvements, net
Other assets                         5,702     5,369                 
Total assets                         $49,270 $51,066             
                                                                  
                                                                  
Liabilities and Shareholders' Equity                               
                                                                  
                                                                  
Current liabilities                  $16,432 $18,168             
                                                                  
Pension and retirement plans         9,128     9,431                 
Non-current liabilities              1,101     426                   
Shareholders' equity                 22,609    23,041                
Total liabilities and shareholders'  $49,270 $51,066             
equity
                                                                  
                                                                  
                                                                  
                                                                  
CSP INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share data )
                                                                  
                                                                  
                                    Three Months Ended      Nine Months Ended
                                    June 30,  June 30,      June 30, June 30,
                                    2013      2012          2013     2012
Sales:                                                             
Product                             $14,783   $16,328       $49,625  $43,607
Services                            4,250     6,026         16,101   18,869
Total sales                         19,033    22,354        65,726   62,476
                                                                  
Cost of sales:                                                     
Product                             12,284    13,899        41,184   37,274
Services                            2,914     3,226         10,763   10,435
                                                                  
Total cost of sales                 15,198    17,125        51,947   47,709
Gross Profit                        3,835     5,229         13,779   14,767
                                                                  
Operating expenses:                                                
Engineering and development        437       444           1,261    1,301
Selling, general & administrative   4,065     3,580         11,790   10,828
                                                                  
Total operating expenses            4,502     4,024         13,051   12,129
Operating income                     (667)     1,205         728      2,638
                                                                  
Other income (expense), net          2         (32)          36       (102)
Income (loss) before income taxes    (665)     1,173         764      2,536
Provision for income tax expense    (187)     399           387      859
(benefit)
Net income (loss)                    ($478)    $774          $377     $1,677
Net income (loss) attributable to    ($468)    $759          $369     $1,647
common stockholders
Net income (loss) per share - basic  ($0.14)   $0.23         $0.11    $0.49
Weighted average shares outstanding  3,396     3,366         3,378    3,362
- basic
Net income (loss) per share-        ($0.14)   $0.22         $0.11    $0.48
diluted
Weighted average shares outstanding  3,396     3,418         3,432    3,405
- diluted
                                                                  

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

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