CSP Inc. Reports First-Quarter Fiscal 2017 Financial Results
February 23 2017 - 4:12PM
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.
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CSP INC. AND SUBSIDIARIES |
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UNAUDITED CONDENSED CONSOLIDATED BALANCE
SHEETS |
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(Amounts in thousands) |
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December
31, |
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September 30, |
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2016 |
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2016 |
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Assets |
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Current assets: |
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Cash and
short-term investments |
$ |
15,039 |
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$ |
13,103 |
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Accounts
receivable, net |
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16,994 |
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19,564 |
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Inventories |
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6,539 |
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5,580 |
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Deferred
costs |
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2,107 |
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|
635 |
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Other
current assets |
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2,823 |
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2,917 |
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Total current assets |
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43,502 |
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41,799 |
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Property, equipment and
improvements, net |
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1,586 |
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1,680 |
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Other assets |
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5,614 |
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5,228 |
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Total assets |
$ |
50,702 |
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$ |
48,707 |
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Liabilities and
Shareholders' Equity |
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Current
liabilities |
$ |
19,823 |
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$ |
17,383 |
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Pension and retirement
plans |
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12,802 |
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13,441 |
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Non-current
liabilities |
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219 |
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228 |
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Shareholders'
equity |
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17,858 |
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17,655 |
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Total liabilities and
shareholders' equity |
$ |
50,702 |
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$ |
48,707 |
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CSP INC. AND
SUBSIDIARIES |
UNAUDITED CONSOLIDATED STATEMENTS OF
OPERATIONS |
(Amounts in thousands, except per share data
) |
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/-----Three Months Ended-----/ |
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December 31, |
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December 31, |
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2016 |
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2015 |
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Sales: |
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Product |
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$ |
14,638 |
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$ |
17,003 |
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Services |
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5,278 |
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6,673 |
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Total sales |
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19,916 |
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23,676 |
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Cost of sales: |
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Product |
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12,225 |
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14,236 |
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Services |
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3,239 |
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4,250 |
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Total cost of sales |
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15,464 |
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|
18,486 |
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Gross
Profit |
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4,452 |
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5,190 |
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Operating expenses: |
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Engineering and development |
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|
596 |
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|
799 |
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Selling,
general & administrative |
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3,958 |
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4,048 |
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Total operating expenses |
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4,554 |
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4,847 |
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Operating income (loss) |
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(102 |
) |
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|
343 |
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Other income (expense), net |
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44 |
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28 |
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Income
(loss) before income taxes |
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(58 |
) |
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|
371 |
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Income
tax expense (benefit) |
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(15 |
) |
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|
88 |
|
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Net income
(loss) |
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$ |
(43 |
) |
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$ |
283 |
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Net income
(loss) attributable to common stockholders |
|
|
$ |
(43 |
) |
|
$ |
274 |
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Income (loss) per
share - basic |
|
|
$ |
(0.01 |
) |
|
$ |
0.08 |
|
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Weighted average shares
outstanding - basic |
|
|
|
3,671 |
|
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|
3,569 |
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Income (loss) per
share - diluted |
|
|
$ |
(0.01 |
) |
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$ |
0.07 |
|
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Weighted average shares
outstanding - diluted |
|
|
|
3,671 |
|
|
|
3,726 |
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Contact:
Gary Levine
Chief Financial Officer
CSP Inc.
Tel: 978-954-5040
Fax: 978-455-3251
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