CSP Inc. Reports Fourth-Quarter Fiscal 2013 Financial Results

CSP Inc. Reports Fourth-Quarter Fiscal 2013 Financial Results

  Board Votes to Increase Quarterly Dividend by 10% Beginning in Q1 FY 2014

                        Reports on Strategic Progress

BILLERICA, Mass., Dec. 17, 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 fourth quarter and
year end fiscal 2013 ended September 30, 2013.

The Company also announced that its board of directors has voted to pay its
quarterly dividend of $0.10 per share to shareholders of record December 27,
2013 payable January7, 2014. In addition, the board has voted to increase the
quarterly dividend by 10%, beginning in the first quarter of fiscal 2014, to
$0.11 per share.

Management Comments

"Fiscal 2013 turned out to be successful for CSP on the strength of the
Service and Systems Integration business even though the year initially looked
to be challenging due to the tough year-over-year comparisons at our Systems
business," said President and Chief Executive Officer Victor Dellovo. "We also
distributed $1.4 million in dividends in fiscal 2013, and raised the quarterly
dividend from $0.03 per share to $0.10 per share during the year. The board
continued to demonstrate its commitment to enhancing shareholder value and its
belief in our strategic direction by recently voting to raise the quarterly
dividend again beginning in the first quarter of fiscal 2014 by 10% from $0.10
to $0.11.

"The year-over-year comparison for the fourth quarter was challenging from
both a top- and bottom-line standpoint due to the lack of royalties from the
E-2D. However, in the fourth quarter we received an order and began to ship
parts in support of production beyond Lot 1, and we believe that fiscal 2014
will include royalty payments for five E-2D planes.

"Throughout the fiscal year we made progress in the execution of our growth
strategy, and the fourth quarter was no exception," said Dellovo. "At our
Systems segment, the recent Myricom acquisition gives us ownership of the
interconnect technology that is critical to our latest generation
MultiComputer products and protects our ability to support our military and
aerospace customers going forward. It also gives us a strong base of new
customers in commercial growth markets, reinforcing our strategy to develop
products in the Systems segment that are synergistic with the Service and
Systems Integration segment. In line with that strategy, during the quarter
the Systems business introduced the KeyDSP product line for energy efficient
computing and signal processing that addresses commercial opportunities.

"At our Service and Systems Integration segment, we made excellent progress on
our strategy to increase our margin profile by growing sales of managed
services," added Dellovo. "During the quarter we closed on 11 new managed
services customers and the level of recurring revenue in our pipeline is
increasing quickly. As we grow this business, we expect to sell additional
products to our managed services customers. We also made progress in our
strategy to cross-sell between Modcomp's geographic locations. In fact, about
half of the revenue at the UK business came through our US operation in the
fourth quarter.

"Looking forward to fiscal 2014, we expect that that next year will be better
than fiscal 2013 on both the top and bottom lines. We continue to see
significant growth potential for CSP and we believe we have the right strategy
to unlock the value in our Company," concluded Dellovo.

Financial Results

For the fourth quarter of fiscal 2013, revenue declined 2% year over year to
$21.9 million. For full-year fiscal 2013, revenue increased 3% year over year
to $87.6 million.

Gross margin for the fourth quarter was 22% compared with 25% in the fourth
quarter of fiscal 2012, primarily due to a lower mix of sales from the Systems
business, including reduced royalty revenues. Gross margin for fiscal 2013 was
21% compared with 24% in the prior-year period.

Net loss for the fourth quarter was $8,000, or $0.00 per share, compared with
net income of $4.9 million, or $1.43 per diluted share, in the fourth quarter
of fiscal 2012. Net income for full year fiscal 2013 was $368,000, or $0.10
per diluted share, compared with $6.6 million or $1.91 per diluted share in
fiscal 2012. The decline was again due to the lower royalty revenues in fiscal
2013 and no proceeds from officer life insurance settlement and tax benefit
for reversal of valuation allowance for the deferred tax asset as recorded in
the previous fiscal year.

Cash and short-term investments decreased from $20.5 million at fiscal
year-end 2012 to $18.6 million at the end of fiscal 2013.The Company paid out
approximately $1.4 million in dividends during the fiscal 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, we believe that fiscal 2014
will include royalty payments for five E-2D planes and looking forward to
fiscal 2014, we expect that that next year will be better than fiscal 2013 on
both the top and bottom lines. 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)
                                                          
                                             September 30, September 30,
                                             2013          2012
Assets                                                     
                                                          
Current assets:                                            
Cash and short-term investments              $18,619     $20,493
Accounts receivable, net                     13,529        12,145
Officer life insurance settlement receivable --           2,172
Inventories                                  4,791         6,276
Other current assets                         3,979         3,620
Total current assets                         40,918        44,706
Property, equipment and improvements, net     1,420         991
Other assets                                  5,155         5,369
Total assets                                  $47,493     $51,066
                                                          
                                                          
Liabilities and Shareholders' Equity                       
                                                          
Current liabilities                           $15,125     $18,168
                                                          
Pension and retirement plans                  8,660         9,431
Non-current liabilities                       673           426
                                                          
Shareholders' equity                          23,035        23,041
                                                          
Total liabilities and shareholders' equity    $47,493     $51,066
                                                          

                                                              
CSP INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share data )
                                                              
                          Three Months Ended        Twelve Months Ended
                          September 30 September 30 September 30 September 30
                          2013         2012         2013         2012
Sales:                                                         
Product                   $16,219      $15,976      $65,844      $59,583
Service                  5,674        6,355        21,775       25,224
                                                              
Total sales               21,893       22,331       87,619       84,807
                                                              
Cost of sales:                                                 
Product                   12,838       12,952       54,023       50,226
Service                  4,251        3,725        15,013       14,160
                                                              
Total cost of sales       17,089       16,677       69,036       64,386
                                                              
Gross Profit              4,804        5,654        18,583       20,421
                                                              
Operating expenses:                                            
Engineering and           596          419          1,857        1,720
development
Selling, general &        4,234        5,019        16,025       15,847
administrative
                                                              
Total operating expenses  4,830        5,438        17,882       17,567
Proceeds from officer     --          2,115        --          2,115
life insurance settlement
Operating income (loss)    (26)         2,331        701          4,969
                                                              
Other income (expense),    (48)         2            (12)         (100)
net
                                                              
Income (loss)before       (74)         2,333        689          4,869
income taxes
                                                              
Income taxes expense      (66)         (2,600)      321          (1,740)
(benefit)
Net income (loss)         ($8)         $4,933       $368         $6,609
                                                              
Net income (loss) per      ($0.00)      $1.44        $0.11        $1.93
share - basic
                                                              
Weighted average shares    3,422        3,362        3,389        3,362
outstanding - basic
                                                              
Net income (loss) per      ($0.00)      $1.43        $0.10        $1.91
share - diluted
                                                              
Weighted average shares    3,422        3,405        3,441        3,405
outstanding - diluted
                                      `                        

CONTACT: Gary Levine
         Chief Financial Officer
         CSP Inc.
         Tel: 978.663.7598 ext. 1200
         Fax: 978.663.3992

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