CSP Inc. Reports First-Quarter Fiscal 2014 Financial Results
Company Continues to Make Progress on Managed Services and Cross-Selling
BILLERICA, Mass., Feb. 12, 2014 (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 first quarter of
fiscal year 2014 ended December 31, 2013.
The Company also announced that its board of directors has voted to pay a
quarterly dividend of $0.11 per share to shareholders of record February 27,
2014 payable March 11, 2014.
"We began fiscal 2014 with a solid quarter, reporting $21.3 million in revenue
and $0.10 in earnings per diluted share," said President and Chief Executive
Officer Victor Dellovo. "Across both of our operating segments we are
executing well on our growth strategies."
"At our Systems segment, we reported $1.1 million in royalty revenue related
to the E-2D aircraft from Lockheed Martin to support the first phase of
Full-Rate Production as well as spares for Lots three and four of Low Rate
Initial Production," continued Dellovo. "We expect to receive total royalty
revenues related to five planes in FY 2014.The integration of our Myricom
acquisition is progressing well, and during the first quarter we announced the
addition of the first of several next-generation products in that business. We
continue to be enthusiastic about the growth possibilities arising from
Myricom, which for the first time provides our MultiComputer business with a
base of customers in commercial growth markets. Myricom also offers the
possibility of cross-selling opportunities with Modcomp."
"At our Service and Systems Integration segment we continued to make progress
toward both our cross-selling and managed services strategies," said
Dellovo."Our UK business, which doubled revenue in the quarter, benefitted
from our cross-selling strategy. In addition to other cross-selling
opportunities, our sales team is working on selling our managed services
offerings, which provides us with higher-margin recurring revenue.We continue
to gain traction in this area."
"Looking forward, we continue to expect that our financial results in fiscal
2014 will surpass that of fiscal 2013 both on the top and bottom lines. As we
continue to execute on our growth strategies, we also are sharply focused on
streamlining costs in order to enhance margins and improve our earnings
performance," concluded Dellovo.
For the first quarter of fiscal 2014, revenue increased 2% year over year to
$21.3 million. Foreign exchange had a positive effect on revenue of $300,000
for the period.
Gross margin for the first quarter was 21% compared with 20% in the first
quarter of fiscal 2013, primarily due to a higher mix of MultiComputer sales,
including increased royalty revenues. Net income for the first quarter
increased to $346,000, or $0.10 per diluted share, from net income of
$115,000, or $0.03 per diluted share, in the first quarter of fiscal 2013.The
increase was primarily due to a $462,000 bargain purchase gain, which is net
of income taxes, related to the Myricom asset acquisition. The bargain
purchase gain resulted because of the higher fair value of the acquired assets
over the acquisition consideration.The gain was recognized against operating
expenses on the acquisition date.
Cash and short-term investments decreased by $4.7 million to $13.9 million
from fiscal year-end. This was largely due to an increase in accounts
receivable because of large orders received at the end of the quarter for
which we have now been paid. 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 of its 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, Inc'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 recently acquired Myricom, a pioneer in high
performance computing interconnect technology. Founded in 1970, Modcomp, Inc.
is part of CSPI's Service and Systems Integration segment, and has offices in
North America and Europe. Modcomp provides solutions and services for complex
IT environments including disaster recovery, mobility, managed services,
security, data center management, and collaboration. More information about
CSP, Inc. is available at www.cspi.com.To learn more about Myricom or
Modcomp, Inc., please visit www.myricom.com and www.modcomp.com.
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, expectations that the Company
will receive total royalty revenues related to five planes in FY 2014, growth
prospects of Myricom and cross-selling opportunities with Modcomp, enhancing
margins and improving earnings performance, and that its financial results in
fiscal 2014 will surpass that of fiscal 2013 both on 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)
December 31, September 30,
Cash and short-term investments $13,942 $18,619
Accounts receivable, net 16,963 13,529
Inventories 6,599 4,791
Other current assets 4,767 3,979
Total current assets 42,271 40,918
Property, equipment and improvements, 1,510 1,420
Other assets 5,097 4,887
Total assets $48,878 $47,225
Liabilities and Shareholders' Equity
Current liabilities 16,396 15,125
Pension and retirement plans 8,714 8,660
Non-current liabilities 518 405
Shareholders' equity 23,250 23,035
Total liabilities and shareholders' $48,878 $47,225
CSP INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share data )
/---------Three Months Ended----------/
December 31, December 31,
Product $14,749 $15,305
Services 6,583 5,565
Total sales 21,332 20,870
Cost of sales:
Product 12,720 13,224
Services 4,079 3,469
Total cost of sales 16,799 16,693
Gross Profit 4,533 4,177
Engineering and development 635 444
Selling, general & administrative 4,020 3,560
Total operating expenses 4,655 4,004
Bargain purchase gain on acquisition 462 --
Operating income 340 173
Other income, net (26) 59
Incomebefore income taxes 314 232
Income tax expense (benefit) (32) 117
Net income $346 $115
Net income attributable to common $335 $113
Incomeper share - basic $0.10 $0.03
Weighted average shares outstanding - 3,431 3,363
Incomeper share- diluted $0.10 $0.03
Weighted average shares outstanding - 3,474 3,407
CONTACT: Gary Levine
Chief Financial Officer
Tel: 978.663.7598 ext. 1200
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