CSP Inc. Reports Fiscal Fourth Quarter and Full Year 2019 Financial Results; Increased Direct Sales Capabilities for Aria Software-Defined Security (SDS) Solution Position Company for Growth in Fiscal 2020


LOWELL, Mass., Dec. 10, 2019 (GLOBE NEWSWIRE) -- CSP Inc. (NASDAQ: CSPI), a provider of security and packet capture products, managed IT and professional services and technology solutions, reported revenue growth of 12.8% and 8.4% for the fiscal fourth quarter and fiscal 2019 full year ended September 30, 2019, respectively.

The Company also announced that its board of directors has voted to pay a quarterly dividend of $0.15 per share to shareholders of record on December 31, 2019, payable on January 15, 2020.

“We had a solid year end and I believe our goal to transform CSPi to a cybersecurity and wireless managed services company is coming to fruition and we are well-positioned to achieve our near and long-term objectives,” commented Victor Dellovo, Chief Executive Officer.  “I am pleased with the initial roll-out of our ARIA™ Software-defined Security (SDS) solution and we are highly encouraged by the customer feedback.  Their positive experience validates CSPi’s vision and our efforts to increase the direct sales capabilities for ARIA will allow us to maintain this momentum.  Additionally, I believe the recent acknowledgement from CyberDefense Magazine, the premier source of IT security information, will create new revenue opportunities as in-bound requests have increased. We entered fiscal 2020 with a strong tailwind and this success gives me greater confidence that we will continue to execute our goals to further develop applications and enhance the performance of ARIA to drive customer adoption.  I also believe we are in a much stronger position today to deliver significant revenue growth and increased profitability, not only this year, but in the years to come.”

Fiscal 2019 Fourth Quarter Results

Revenue for the fiscal fourth quarter increased to $22.2 million from $19.6 million a year ago. Gross profit for the fiscal fourth quarter of 2019 was $5.1 million, or 23% of sales, compared with $4.8 million, or 24.7% of sales in the year-ago fiscal fourth quarter. Net loss for the fourth quarter of fiscal 2019 was $334 thousand, or $0.08 per diluted share, compared with net income of $16.2 million, or $3.95 per diluted share for the fourth quarter of fiscal 2018.  The year-ago net income included a gain on sale of discontinued operations, related to the Germany sale, of $16.8 million. Excluding the gain, the Company’s continuing operations would have reported a net loss of $0.7 million, or $0.18 per share.

Fiscal 2019 Full Year Results

Revenue for the fiscal year ended September 30, 2019 increased 8.4% to $79.1 million compared to revenue of $72.9 million in fiscal year 2018. Gross profit for fiscal year 2019 was $18 million, or 22.8% of sales, compared with $18.4 million, or 25.2% of sales in 2018. Net loss for the twelve months ended September 30, 2019 was $371 thousand, or $0.09 per share, compared with net income of $14.4 million, or $3.55 per diluted share for fiscal 2018, which includes the gain on sale of the Company’s German operations.  Excluding the gain, the Company’s continuing operations would have reported a net loss of $2 million, or $0.52 per share.

At September 30, 2019, the Company had cash and cash equivalents of $18.1 million. 

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) on December 10, 2019 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 866-342-8591 or 203-518-9713.  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 as a means 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 dropless 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: “We entered fiscal 2020 with a strong tailwind and this success gives me greater confidence that we will continue to execute our goals to further develop applications and enhance the performance of ARIA to drive customer adoption.  I also believe we are in a much stronger position today to deliver significant revenue growth and increased profitability, not only this year, but in the years to come.” 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.

Contact:

Gary Levine
Chief Financial Officer
CSPi
Tel: 978.954.5040
Fax: 978.616.9065


CSP INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)

 September 30, September 30,
 2019 2018
    
Assets   
    
Current assets:   
Cash and short-term investments$  18,099 $  25,107
Accounts receivable, net 15,114  13,146
Inventories 7,818  7,558
Other current assets 5,503  2,604
    
Total current assets 46,534  48,415
Property, equipment and improvements, net 1,273  847
Other assets 11,562  6,013
    
Total assets$  59,369 $  55,275
    
    
Liabilities and Shareholders' Equity   
    
Current liabilities$  20,027 $  14,061
    
Pension and retirement plans 6,904  6,168
Non-current liabilities   2,010    1,244
Shareholders' equity 30,428  33,802
    
Total liabilities and shareholders' equity$  59,369 $  55,275
      

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,
  2019    2018    2019    2018  
Sales:       
Product$18,627  $15,863  $66,017  $59,661 
Service 3,534   3,775   13,044   13,255 
        
Total sales 22,161   19,638   79,061   72,916 
        
Cost of sales:       
Product 15,846   13,527   55,836   50,000 
Service 1,223   1,270   5,199   4,517 
        
Total cost of sales 17,069   14,797   61,035   54,517 
        
Gross Profit 5,092   4,841   18,026   18,399 
        
Operating expenses:       
Engineering and development 691   925   2,800   3,277 
Selling, general & administrative 4,616   5,041   16,052   16,723 
        
Total operating expenses 5,307   5,966   18,852   20,000 
        
Operating loss (215)  (1,125)  (826)  (1,601)
        
Other income (expense), net 276   82   384   495 
        
Net income (loss) before income taxes and discontinued operations 61   (1,043)  (442)  (1,106)
        
Income taxes expense (benefit) 395   (343)  (71)  882 
        
Net loss from continuing operations$(334) $(700) $(371) $(1,988)
Discontinued operations:        
Gain from sale of discontinued operations -   16,838   -   16,838 
Income (loss) from discontinued operations -   93   -   (410)
Net income from discontinued operations -   16,931   -   16,428 
Net income (loss)$(334) $16,231  $(371) $14,440 
Net income (loss) attributable to common stockholders$(334) $15,596  $(371) $13,842 
        
Net loss from continuing operations per share - basic$(0.08) $(0.18) $(0.09) $(0.52)
Net income from discontinued operations per share - basic$0.00  $4.39  $0.00  $4.30 
Net income (loss) per share -basic$(0.08) $4.04  $(0.09) $3.62 
Weighted average shares outstanding - basic 4,063   3,857   3,924   3,822 
        
Net loss from continuing operations per share - diluted$(0.08) $(0.18) $(0.09) $(0.52)
Net income from discontinued operations per share - diluted$0.00  $4.29  $0.00  $4.21 
Net income (loss) per share -diluted$(0.08) $3.95  $(0.09) $3.55 
Weighted average shares outstanding - diluted 4,063   3,944   3,924   3,901