CSP Inc. Reports Fiscal 2021 Third Quarter Results
11 Agosto 2021 - 7:30AM
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 30% of these in the latter stages.”
“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 $13.7
million, compared to $13.8 million in the year-ago fiscal third
quarter as the Company continues to navigate the impact of
COVID-19.
Gross profit for the fiscal third quarter was
$4.2 million, or 30.7% of sales, compared with $4.2 million, or
30.4% of sales, in the year-ago fiscal third quarter. This is the
seventh consecutive quarter of year-over-year gross margin
improvement as the Company is focused on selling higher margin
products and services. The Company reported a net loss of $0.4
million in the third fiscal quarter, or $0.10 loss per share,
compared with a net loss of $0.2 million, or $0.05 loss per share
for the third quarter of fiscal 2020.
The Company had cash and cash equivalents of
$19.7 million as of June 30, 2021, an increase of approximately
$0.4 million from September 30, 2020.
Fiscal Year 2021 Nine Month
Results
Revenue for the fiscal nine months ended June
30, 2021 was $39.2 million compared with revenue of $47.5 million
in the prior year period. Gross profit for the fiscal nine months
ended June 30, 2021 was $12.0 million, or 30.7% of sales, compared
with $12.7 million, or 26.7% of sales, reflecting a more favorable
product mix. The Company reported a net loss of $0.1 million in the
fiscal nine months ended June 30, 2021, or $0.03 loss per share
compared with a net loss of $1.5 million, or $0.37 loss per share
for the fiscal nine months ended June 30, 2020. The 2021 nine month
results include a gain on forgiveness of debt of the Paycheck
Protection Plan SBA Loans at the TS and HPP segment totaling $2.2
million, which was established as part of the CARES Act loan and
recognized in fiscal 2021 first quarter.
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. LevineCFO and
SecretaryCSPigary.levine@cspi.com978.954-5040
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