CSP Inc. Reports Fiscal 2021 Third Quarter Results
CSP Inc. (NASDAQ: CSPI) reported its fiscal 2021 third quarter results, with revenues of $13.7 million, down slightly from $13.8 million year-over-year. Gross profit improved to $4.2 million, representing a 30.7% margin, marking the seventh consecutive quarter of year-over-year margin improvement. The company posted a net loss of $0.4 million, or $0.10 per share. Despite challenges, CSPi secured a multi-million-dollar cloud contract and continues to onboard ARIA ADR customers. The balance sheet remains strong with $19.7 million in cash, supporting its growth strategy.
- Secured multi-million-dollar cloud-based customer contract.
- Seventh consecutive quarter of gross margin improvement to 30.7%.
- Cash and cash equivalents increased to $19.7 million.
- Integration of ARIA ADR with managed services showing promising leads.
- Revenue declined to $13.7 million compared to $13.8 million year-over-year.
- Net loss increased to $0.4 million from $0.2 million in the same quarter last year.
Continued Year-over-Year Gross Margin Improvement Validates Business Strategy
LOWELL, Mass., Aug. 11, 2021 (GLOBE NEWSWIRE) -- CSP Inc. (NASDAQ: CSPI), an award-winning provider of security and packet capture products, managed IT and professional services and technology solutions, reported financial and operating results for the fiscal 2021 third quarter ended June 30, 2021 and provided a business update.
Third Quarter Operating Highlights and Recent Achievements
- Signed new multi-million-dollar cloud-based customer with a potential for up to 10,000 users
- Continue to on board ARIA ADR customers, demonstrating the successful integration with the MSP business; Received purchase orders from three new customers; more than two dozen targets currently evaluating ARIA proposals
- Continued positive impact of a favorable revenue mix led to a gross margin improvement compared to the year-ago fiscal third quarter
- Received numerous industry accolades:
- CRN®, a brand of The Channel Company, named CSPi Technology Solutions to its 2021 Managed Service Provider (MSP) 500 list in the Security 100 category. The list, released annually, recognizes the leading North American solution providers that have demonstrated innovative and forward-thinking approaches to managed services
- Two ARIA SDS applications for automated cyber-attack detection and response won the following awards from Cyber Defense Magazine (CDM), the industry’s leading electronic information security magazine: Cutting Edge in Advanced Persistent Threat Detection and Response and Most Innovative in Network Security and Management
- Solid balance sheet provides resources for Company to pursue growth strategy
“Our Technology Solutions (TS) business delivered another exceptional quarter, generating significant momentum and securing a multi-million-dollar cloud-based contract that will deliver meaningful results for many years,” commented Victor Dellovo, Chief Executive Officer. “Despite TS having one of its best quarters ever, realizing continued revenue growth from larger and new customers, its solid execution was offset by the performance of the High Performance Product (HPP) business. Nevertheless, we have great faith in the HPP business due to the emergence of our award-winning ARIA platform. It continued to garner tremendous interest and we currently have over two dozen leads in the sales funnel, including from several of our TS-based clients, with over
“During the quarter, we successfully integrated ARIA ADR with managed services, an important development that validates the cross-over revenue opportunities. In fact, we expect this to help propel the HPP business in fiscal 2022 and beyond, giving CSPi two best-in-class businesses capable of growing their revenue and profits. As the economy and our customers move forward and return to a more normalized business environment, we remain cautiously optimistic and continue to capitalize on those business opportunities that strengthen our long-term growth and profit ambitions.”
Fiscal Year 2021 Third Quarter Results
Revenue for the fiscal third quarter was
Gross profit for the fiscal third quarter was
The Company had cash and cash equivalents of
Fiscal Year 2021 Nine Month Results
Revenue for the fiscal nine months ended June 30, 2021 was
Conference Call Details
CSPi 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 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 877-876-9174 or 785-424-1669 and using the conference ID: CSPQ321 when greeted by the live operator. 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 CSPi
CSPi (NASDAQ: CSPI) operates two divisions, each with unique expertise in designing and implementing technology solutions to help their customers use technology to success. The High Performance Product division, including ARIA Cybersecurity Solutions, originated from supporting initiatives for the Department of Defense and Western intelligence agencies related to network monitoring, data protection, and intelligence initiatives. This focused mindset now results in foolproof data protection, enterprise wide. Our ARIA Software Defined Security solutions set provides enhanced network security, as well as accelerating incident response capabilities, while our Myricom nVoy Series appliances provide automated breach identification and notification, enabled by the 10G drop less packet capture inherent in our Myricom intelligent adapters. CSPi’s Technology Solutions division helps clients achieve their business goals and accelerate time to market through innovative IT solutions and professional services by partnering with best-in-class technology providers. For organizations that want the benefits of an IT department without the cost, we offer a robust catalog of Managed IT Services providing 24×365 proactive support. Our team of engineers have expertise across major industries supporting five key technology areas: Advanced Security; Communication and Collaboration; Data Center; Networking; and Wireless & Mobility.
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, in addition, we just launched ARIA CloudADR to help provide organizations with COVID-19 tightened budgets, a lower entry cost solution to help protect against cybersecurity threats. As such, we believe we have a substantial opportunity ahead of us as our fiscal year unfolds, we continue to weather the COVID-19 impacts, and with a solid balance sheet we believe we have the resources to manage the business and are positioned to execute our operating strategies when our target customers are able to introduce new solutions into their operations.
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 Securities and Exchange Commission (“SEC”). Please refer to the section on forward-looking statements included in the Company's filings with the SEC.
| CSP INC. AND SUBSIDIARIES | |||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | |||||
| (Amounts in thousands) | |||||
| June 30, 2021 | September 30, 2020 | ||||
| (Unaudited) | |||||
| Assets | |||||
| Current assets: | |||||
| Cash and short-term investments | $ | 19,653 | $ | 19,264 | |
| Accounts receivable, net | 16,301 | 13,362 | |||
| Inventories | 5,177 | 5,285 | |||
| Other current assets | 4,632 | 3,678 | |||
| Total current assets | 45,763 | 41,589 | |||
| Property, equipment and improvements, net | 842 | 1,047 | |||
| Operating lease right-of-use assets | 1,523 | 2,014 | |||
| Long-term receivable | 8,117 | 3,642 | |||
| Other assets | 4,311 | 5,353 | |||
| Total assets | $ | 60,556 | $ | 53,645 | |
| Liabilities and Shareholders’ Equity | |||||
| Current liabilities | $ | 16,414 | $ | 12,977 | |
| Pension and retirement plans | 6,423 | 6,471 | |||
| Operating lease liabilities | 939 | 1,390 | |||
| Notes Payable | 954 | 2,485 | |||
| Other non-current liabilities | 5,173 | 788 | |||
| Shareholders’ equity | 30,653 | 29,534 | |||
| Total liabilities and shareholders’ equity | $ | 60,556 | $ | 53,645 | |
| 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, | |||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Sales: | ||||||||||||||||
| Product | $ | 10,142 | $ | 10,399 | $ | 29,526 | $ | 37,104 | ||||||||
| Services | 3,579 | 3,381 | 9,671 | 10,417 | ||||||||||||
| Total sales | 13,721 | 13,780 | 39,197 | 47,521 | ||||||||||||
| Cost of sales: | ||||||||||||||||
| Product | 8,176 | 8,600 | 23,678 | 31,237 | ||||||||||||
| Services | 1,316 | 956 | 3,544 | 3,546 | ||||||||||||
| Total cost of sales | 9,492 | 9,556 | 27,222 | 34,783 | ||||||||||||
| Gross profit | 4,229 | 4,224 | 11,975 | 12,738 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Engineering and development | 700 | 693 | 2,191 | 2,081 | ||||||||||||
| Selling, general and administrative | 3,886 | 3,924 | 10,799 | 11,595 | ||||||||||||
| Total operating expenses | 4,586 | 4,617 | 12,990 | 13,676 | ||||||||||||
| Operating loss | (357 | ) | (393 | ) | (1,015 | ) | (938 | ) | ||||||||
| Other income (expense), net | (31 | ) | 193 | 1,764 | 565 | |||||||||||
| Income (loss) before income taxes | (388 | ) | (200 | ) | 749 | (373 | ) | |||||||||
| Income tax expense | 35 | 10 | 868 | 1,109 | ||||||||||||
| Net loss | (423 | ) | (210 | ) | (119 | ) | (1,482 | ) | ||||||||
| Net loss attributable to common shareholders | $ | (423 | ) | $ | (210 | ) | $ | (119 | ) | $ | (1,482 | ) | ||||
| Net loss per share – basic | $ | (0.10 | ) | $ | (0.05 | ) | $ | (0.03 | ) | $ | (0.37 | ) | ||||
| Weighted average shares outstanding – basic | 4,179 | 4,048 | 4,137 | 4,015 | ||||||||||||
| Net income loss per share – diluted | $ | (0.10 | ) | $ | (0.05 | ) | $ | (0.03 | ) | $ | (0.37 | ) | ||||
| Weighted average shares outstanding – diluted | 4,179 | 4,048 | 4,137 | 4,015 | ||||||||||||
Contact:
Gary W. Levine
CFO and Secretary
CSPi
gary.levine@cspi.com
978.954-5040
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