BILLERICA, Mass., May 8 /PRNewswire-FirstCall/ -- CSP Inc. (NASDAQ:CSPI), a provider of IT solutions, systems integration services and dense cluster computing systems, today reported financial results for the second quarter of fiscal 2007 ended March 31, 2007.
For the first six months of fiscal 2007, CSP Inc. sales increased to $39.9 million from $32.7 million for the first six months of fiscal 2006. Net income for the first six months of fiscal 2007 was $1.2 million, or $0.32 per diluted share, compared with net income of $487 thousand, or $0.13 per diluted share, in first six months of fiscal 2006.
For the second quarter of fiscal 2007, CSP Inc. sales increased to $18.8 million from $17.6 million in the second quarter of fiscal 2006. Net income for the second quarter of fiscal 2007 was $255,000, or $0.07 per diluted share, compared with net income of $1.0 million, or $0.27 per diluted share, in the second quarter of fiscal 2006.
"The strong performance of our Service and Systems Integration segment enabled us to report another quarter of year-over-year sales growth even though our systems shipments to Raytheon were not significant during the quarter," stated Alexander R. Lupinetti, CSP chairman and chief executive officer. "CSP's net income declined on a year-over-year basis as a result of a lower level of higher-margin systems revenues in the quarter."
"During the second quarter, our Systems segment received a follow-on order from Raytheon related to our existing contract to supply FastCluster 220R MultiComputers," said Lupinetti. "This brings the total value of the contract to $18 million. Thus far, we have shipped $5.1 million of product and services to Raytheon and expect to ship the remaining systems under the contract by the end of the fiscal year. The vast majority of our systems revenue in the second quarter was related to systems shipped to an international defense contractor for a continuing deployment."
"MODCOMP's Systems and Solutions Division (SDD) reported excellent sales growth," added Lupinetti. "We continue to see healthy demand for our cutting edge IT infrastructure solutions and we are focused on hiring salespeople to capitalize on this market opportunity. At the same time, our German subsidiary continues to perform well on the strength of its professional consulting services. The demand outlook in Germany is improving and we plan to capitalize on this higher margin business in the coming quarters."
"Our prospects for the remainder of fiscal 2007 are bright. We are on schedule to complete our FastCluster 200R shipments to Raytheon and we are confident in the quality and performance of our multicomputer product suite. We also expect to continue to capitalize on strong demand for MODCOMP's IT products and services," concluded Lupinetti.
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, the follow-on order from Raytheon, the timing of shipments to Raytheon, and the strong demand environment for MODCOMP's SSD and Germany subsidiary. The Company cautions that numerous factors could cause actual results to differ materially from any 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.
About CSP Inc.
Based in Billerica, Massachusetts and founded in 1968, CSP Inc. and its subsidiaries develop and market best-of-breed IT solutions, systems integration services, and high-performance computer systems. CSP's Systems segment includes the MultiComputer Division, which supplies high-performance Linux cluster systems for a broad array of defense applications, including radar, sonar and surveillance signal processing. The Company's MODCOMP, Inc. subsidiary, also part of its Service and Systems Integration segment founded in 1970 and which includes the fiscal 2003 acquisition of Technisource, is a leading provider of IT solutions and systems integration services. MODCOMP works with fourth parties to develop customized solutions in the global IT markets and has offices in the U.S., U.K. and Germany. More information about CSP is available on the company's website at www.cspi.com. To learn more about MODCOMP, Inc., consult www.modcomp.com.
CSP INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
March 31, September 30,
2007 2006
Assets
Current assets:
Cash and short-term investments $12,969 $10,856
Accounts receivable, net 10,890 10,316
Inventories 9,336 7,407
Other current assets 2,940 3,036
Total current assets 36,135 31,615
Property, equipment and
improvements, net 1,120 1,141
Other assets 5,704 5,694
Total assets $42,959 $38,450
Liabilities and Shareholders' Equity
Current liabilities 14,047 12,016
Pension and retirement plans 7,662 7,283
Deferred income taxes 251 236
Shareholders' equity 20,999 18,915
Total liabilities and
shareholders' equity $42,959 $38,450
CSP INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(Amounts in thousands, except per share data )
/---Three Months Ended---/ /---Six Months Ended---/
March 31 March 31 March 31 March 31
2007 2006 2007 2006
Sales:
Product $15,422 $14,936 $33,058 $26,874
Service 3,396 2,711 6,891 5,869
Total sales 18,818 17,647 39,949 32,743
Cost of sales:
Product 12,219 10,936 25,380 20,801
Service 2,439 1,944 4,726 4,126
Total cost
of sales 14,658 12,880 30,106 24,927
Gross Profit 4,160 4,767 9,843 7,816
Operating expenses:
Engineering and
development 628 568 1,173 1,080
Selling, general
& administrative 3,173 3,216 6,555 6,260
Total operating
expenses 3,801 3,784 7,728 7,340
Operating income 359 983 2,115 476
Other income, net 101 181 170 236
Income before
income taxes 460 1,164 2,285 712
Provision for
income taxes 205 131 1,052 225
Net income $255 $1,033 $1,233 $487
Net income per
share - basic $0.07 $0.28 $0.33 $0.13
Weighted average
shares outstanding
- basic 3,748 3,682 3,737 3,680
Net income per
share - diluted $0.07 $0.27 $0.32 $0.13
Weighted average
shares outstanding
- diluted 3,917 3,767 3,905 3,781
Source: CSP Inc.
