LOWELL, Mass., Feb. 23, 2017 (GLOBE NEWSWIRE) -- CSP Inc. (NASDAQ:CSPI), a provider of IT solutions and high-performance Ethernet products for diverse applications, today reported financial results for the first quarter of fiscal 2017 ended December 31, 2016.
The Company also announced that its board of directors has voted to pay its quarterly dividend of $0.11 per share to shareholders of record March 3, 2017 payable March 17, 2017.
Management Comments
“Our first-quarter performance was affected by a difficult comparison year-over year on the top line, while restructuring actions to improve our long-term operating results had a short-term negative effect on the bottom line,” said Chief Executive Officer Victor Dellovo. “First-quarter revenues were down 16% mostly due to a difficult comparison in Germany with the first quarter of the prior year, when we recognized revenues from a large product order from one of our major customers. We reported a net loss per share of $0.01 versus net income per diluted share of $0.07 a year ago, due to the realignment of our engineering team to focus on security services versus legacy offerings.”
“In our High Performance Products business, we’re gearing up to launch our new Myricom nVoy Series 10Gbit Packet Recorder and Myricom nVoy Series 1-100Gbit Packet Broker. The nVoy Series gives security teams the ability to isolate and closely monitor access to data that most matters to their organizations, such as personally identifiable information (PII) or intellectual property (IP). The nVoy series was announced at the RSA Conference in San Francisco. We received royalty revenues from one E-2D plane in addition to some additional royalty revenue on a second plane. Looking ahead, our expectation is to receive royalties from two planes in Q2 and three additional planes in the back half of the fiscal year. In our Technology Solutions business, our managed services pipeline is strong, our recurring revenue stream continues to grow, and our cross-selling strategy is taking hold.”
“Looking forward, we are expecting improved performance in the second quarter given our backlog in both of the divisions. Longer term, we are making very good progress against our strategic initiatives and we are positioning CSP to capitalize on many growth opportunities.”
Financial Results
For the first quarter of fiscal 2017, revenue was $19.9 million compared with $23.7 million in the first quarter a year ago.
Gross margin for the first quarter of fiscal 2017 grew to 22.4% from 21.9% for the prior-year period due to the product mix of the High Performance Products with increased royalty sales.
Net loss for the first quarter of fiscal 2017 was $43,000, or $0.01 per share, compared with net income of $283,000, or $0.07 per diluted share, in the first quarter of fiscal 2016.
Cash and short-term investments increased to $15.0 million at the end of the first quarter of fiscal 2017 from $13.1 million at the end of fiscal 2016.
Conference Call Details
CSPi Chief Executive Officer Victor Dellovo and Chief Financial Officer Gary W. Levine will host a conference call at 9:00 a.m. (ET) tomorrow (February 24) 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 888-632-3382 or 785-424-1677. 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 and Technology Solutions – with a shared vision for technology excellence. CSPi’s High Performance Products division offers extreme-performance Ethernet products for diverse applications, including cybersecurity, financial trading, content creation/distribution, storage networking applications, as well computer signal processing systems. CSPi’s Technology Solutions division provides innovative technology solutions for network solutions, wireless & mobility, unified communications & collaboration, data center solutions, advanced security, along with professional and managed services across those technology focus areas. CSPi Technology Solutions works with the world’s leading IT software and infrastructure companies to create solutions for the unique IT requirements of its customers. For more information, please visit www.cspi.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, those related to our expectation is to receive royalties from two planes in Q2 and three additional planes in the back half of the fiscal year. 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, | |||||||||
| 2016 | 2016 | |||||||||
| Assets | ||||||||||
| Current assets: | ||||||||||
| Cash and short-term investments | $ | 15,039 | $ | 13,103 | ||||||
| Accounts receivable, net | 16,994 | 19,564 | ||||||||
| Inventories | 6,539 | 5,580 | ||||||||
| Deferred costs | 2,107 | 635 | ||||||||
| Other current assets | 2,823 | 2,917 | ||||||||
| Total current assets | 43,502 | 41,799 | ||||||||
| Property, equipment and improvements, net | 1,586 | 1,680 | ||||||||
| Other assets | 5,614 | 5,228 | ||||||||
| Total assets | $ | 50,702 | $ | 48,707 | ||||||
| Liabilities and Shareholders' Equity | ||||||||||
| Current liabilities | $ | 19,823 | $ | 17,383 | ||||||
| Pension and retirement plans | 12,802 | 13,441 | ||||||||
| Non-current liabilities | 219 | 228 | ||||||||
| Shareholders' equity | 17,858 | 17,655 | ||||||||
| Total liabilities and shareholders' equity | $ | 50,702 | $ | 48,707 | ||||||
| CSP INC. AND SUBSIDIARIES | ||||||||||
| UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||
| (Amounts in thousands, except per share data ) | ||||||||||
| /-----Three Months Ended-----/ | ||||||||||
| December 31, | December 31, | |||||||||
| 2016 | 2015 | |||||||||
| Sales: | ||||||||||
| Product | $ | 14,638 | $ | 17,003 | ||||||
| Services | 5,278 | 6,673 | ||||||||
| Total sales | 19,916 | 23,676 | ||||||||
| Cost of sales: | ||||||||||
| Product | 12,225 | 14,236 | ||||||||
| Services | 3,239 | 4,250 | ||||||||
| Total cost of sales | 15,464 | 18,486 | ||||||||
| Gross Profit | 4,452 | 5,190 | ||||||||
| Operating expenses: | ||||||||||
| Engineering and development | 596 | 799 | ||||||||
| Selling, general & administrative | 3,958 | 4,048 | ||||||||
| Total operating expenses | 4,554 | 4,847 | ||||||||
| Operating income (loss) | (102 | ) | 343 | |||||||
| Other income (expense), net | 44 | 28 | ||||||||
| Income (loss) before income taxes | (58 | ) | 371 | |||||||
| Income tax expense (benefit) | (15 | ) | 88 | |||||||
| Net income (loss) | $ | (43 | ) | $ | 283 | |||||
| Net income (loss) attributable to common stockholders | $ | (43 | ) | $ | 274 | |||||
| Income (loss) per share - basic | $ | (0.01 | ) | $ | 0.08 | |||||
| Weighted average shares outstanding - basic | 3,671 | 3,569 | ||||||||
| Income (loss) per share - diluted | $ | (0.01 | ) | $ | 0.07 | |||||
| Weighted average shares outstanding - diluted | 3,671 | 3,726 | ||||||||