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CSP Inc. Reports Fourth-Quarter Fiscal 2016 Financial Results

LOWELL, Mass., Jan. 12, 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 fourth quarter of fiscal 2016 ended September 30, 2016.

/EIN News/ -- 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 January 27, 2017 payable February 8, 2017.

Management Comments

“We performed well in fiscal 2016,” said President and Chief Executive Office Victor Dellovo.  “Total revenues increased 16%, with High Performance Products up 17%, and Technology Solutions up 15%. In Technology Solutions, we continue to execute our growth strategy and build upon the positive changes we implemented in 2015.  We enhanced our managed services portfolio and continued to develop new products in the High Performance Products division to take us into new commercial markets.  All while advancing our cross-selling efforts to add more value to our end customer and drive higher sales per transaction.  We also added talented sales and engineering personnel across the globe, positioning us to better capitalize on our many growth opportunities.” 

“In the fourth quarter, revenues were down 7%, reflecting short-term softness in the Technology Solutions division due to large orders in Germany that were pushed out until Q1. We reported EPS of $0.14 versus $0.18 a year ago. However, our managed services pipeline in Technology Solutions remains strong, recurring revenue is growing, and our cross-selling strategy has been a great success.”

“In High Performance Products, while the FPGA network adapter product for the financial services market has been slow to gain traction thus far, we have multiple customers that are excited about the product and we hope to build from that customer base in the new fiscal year. Most of our investment resources are now focused on advancing the 10Gb Ethernet adaptors for the network sensors market. We received royalty revenues from two E-2D planes in the quarter. We expect to record royalty revenue from one plane in Q1 with a total of six planes in fiscal 2017.”

“Looking forward, we have created many opportunities for CSP, and we are seeking to continue our momentum in the new fiscal year.”

Financial Results
For the fourth quarter of fiscal 2016, revenue was $25.6 million compared with $27.7 million in the fourth quarter a year ago. For full year fiscal 2016, revenue was $103.4 million compared with $89.3 million for fiscal year 2015.

Gross margin in Q4 increased to 24.6% from 21.4% in the prior year as a result of higher margin product and service sales. For the full year, gross margin was 24.2% compared with 21.5% for the prior year due to leverage on higher volumes.

Net income for the fourth quarter of fiscal 2016 was $561,000, or $0.14 per diluted share, compared with net income of $653,000, or $0.18 per share, in the fourth quarter of fiscal 2015. For the full year fiscal 2016, net income was $2.6 million, or $0.67 per diluted share, compared with a net loss of $210,000, or $0.06 per share, for fiscal year 2015.

Cash and short-term investments increased to $13.1 million from $11.2 million at year end.

Conference Call Details
CSPi Chief Executive Officer Victor Dellovo and Chief Financial Officer Gary W. Levine will host a conference call  tomorrow (January 13, 2017) at 10:00 a.m. (ET) 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 877-876-9177 or 785-424-1666.  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 that we expect  to record royalty revenue from one plane in Q1 with a total of six planes in fiscal 2017. 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,        
    2016       2015        
             
Assets              
               
Current assets:              
  Cash and short-term investments $   13,103     $   11,181        
  Accounts receivable, net   19,564       19,888        
  Inventories   6,148       5,749        
  Other current assets   3,002       3,264        
  Total current assets   41,817       40,082        
Property, equipment and improvements, net   1,680       1,564        
Other assets   5,210       5,350        
               
Total assets $   48,707     $   46,996        
               
               
Liabilities and Shareholders' Equity              
               
Current liabilities $   17,383     $   17,382        
Pension and retirement plans   13,441       10,009        
Non-current liabilities     228         15        
               
Shareholders' equity   17,655       19,590        
               
Total liabilities and shareholders' equity $   48,707     $   46,996        
               
               
               
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
    2016       2015     2016       2015  
Sales:              
  Product $ 19,515     $ 20,903   $ 77,835     $ 66,447  
  Service    6,125       6,809     25,532       22,859  
               
  Total sales   25,640       27,712     103,367       89,306  
               
Cost of sales:              
  Product   15,789       17,504     63,539       55,478  
  Service    3,538       4,285     14,787       14,641  
               
  Total cost of sales   19,327       21,789     78,326       70,119  
               
  Gross Profit   6,313       5,923     25,041       19,187  
               
Operating expenses:              
  Engineering and development    616       521     2,984       2,826  
  Selling, general & administrative   4,970       4,311     18,256       16,135  
               
  Total operating expenses   5,586       4,832     21,240       18,961  
               
               
Operating income   727       1,091     3,801       226  
               
               
Other income (expense), net   (36 )     65     (201 )     (210 )
               
Income (loss) before income taxes   691       1,156     3,600       16  
               
  Income taxes expense   130       503     996       226  
               
Net income (loss)  $ 561     $ 653   $ 2,604     ($ 210 )
               
Net income (loss) attributable to common stockholders $ 536     $ 653   $ 2,495     ($ 210 )
               
Net income (loss) per share - basic $ 0.15     $ 0.18   $ 0.69     ($ 0.06 )
               
Weighted average shares outstanding - basic   3,638       3,568     3,609       3,548  
               
Net income (loss) per share - diluted $ 0.14     $ 0.18   $ 0.67     ($ 0.06 )
               
Weighted average shares outstanding - diluted   3,763       3,661     3,734       3,548  

 

 

Contact:
Gary Levine
Chief Financial Officer
CSP Inc.
Tel: 978-9584-5040                 
Fax: 978-455-3251

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