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Wednesday, February 08, 2023 8:36:51 AM
CSPI....CSP Inc. Grows Fiscal First Quarter Revenue 48% from Prior Year First Quarter; Reports EPS of $0.21
Gross Backlog of Approximately $22.9 Million; Board Declares Cash Dividend
LOWELL, MA / ACCESSWIRE / February 8, 2023 / CSP Inc. (NASDAQ:CSPI), an award-winning provider of security and packet capture products, managed IT and professional services and technology solutions, today reported continued business momentum for the fiscal 2023 first quarter ended December 31, 2022. The Company also announced that the Board of Directors declared a quarterly dividend of $0.03 per share payable March 14, 2023, to shareholders of record on the close of business on February 24, 2023.
Fiscal First Quarter Operating Highlights and Recent Achievements
Product revenue grew 63% compared to the prior year first quarter
Services revenue grew 13% compared to the prior year first quarter
EPS of $0.21 increased significantly from a loss of $(0.09) in the prior year first quarter
Increased sales of higher margin products and services lead to gross margin of 31.7% for the quarter, nearly a 2.5 percentage point increase over the prior year first quarter
Gross backlog (backlog) as of December 31, 2022, of $22.9 million
"The continued migration of our business to offer differentiated, higher value cybersecurity, wireless and managed services offerings, is propelling our growth," commented Victor Dellovo, Chief Executive Officer. "We have now reported consecutive quarters of revenue growth in excess of 40% as the demand for our award-winning products and services builds and we are able to execute deliveries and installations. During the first quarter, we converted approximately $3.2 million of backlog to revenue while at the same time added approximately $2.9 million in new orders. We are increasing our business from existing customers while adding new customers and while the timing of potential orders is subject to movement from quarter to quarter, our business pipeline continues to be robust.
"Our Technology Solutions business continued to grow during the first quarter. At the same time, our High-Performance Products business revenue more than doubled compared to the year ago first quarter. This growth was primarily due to a sizeable customer engagement in the 2023 fiscal first quarter, and we are cautiously optimistic the HPP business will be a growing contributor as the fiscal year progresses.
"Our business, and the opportunity pipeline we have in front of us, is stronger today than at any time in our Company's history. Our strategy, combined with our financial resources provides us with the opportunity to provide our customers with attractive financing that contributes to our profitability. These transactions position CSPi to generate increased levels of future cash flow while we enhance our relationship with customers and provide us future growth opportunities."
2023 Fiscal First Quarter Results
Revenue for the fiscal 2023 first quarter was $18.3 million, a 48% increase compared to $12.4 million in the year-ago fiscal first quarter as the Company continued to achieve significantly improved operating results despite the current economic environment and continued supply chain issues with some system component providers. Despite these hurdles, management remains cautiously optimistic that its strategies and initiatives will allow it to meet its operating objectives throughout fiscal 2023.
Gross profit for the fiscal first quarter was $5.8 million, or 31.7% of sales compared with $3.6 million, or 29.2% of sales in the year-ago fiscal first quarter. The gross margin increase continues to reflect the focus on higher margin products and services, however, the disproportionate growth compared to the revenue growth was due to a mix of lower margin product sales in the 2023 fiscal first quarter. The Company reported net income of $1.0 million in the fiscal 2023 first quarter, or $0.21 per diluted common share compared with a net loss of $(0.4) million, or $(0.09) per common share for the fiscal first quarter of fiscal 2022.
The Company had cash and cash equivalents of $19.6 million as of December 31, 2022, which was equivalent to the cash and cash equivalents on December 31, 2021. Cash was approximately $4.4 million lower as compared to the September 30, 2022 level primarily due to a previously-referenced large financing customer sale recognized in the fourth quarter of fiscal year 2022 but the cost was paid for in the first quarter of fiscal year 2023.
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, February 8, 2023 to review CSPi's financial results and provide a business update. To listen to a live webcast of the call, the event link is https://www.webcaster4.com/Webcast/Page/2912/47591.. Individuals may also listen to the call via telephone, by dialing 888-506-0062 or 973-528-0011 and use the Participant Access Code: 478992 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.
Gross Backlog of Approximately $22.9 Million; Board Declares Cash Dividend
LOWELL, MA / ACCESSWIRE / February 8, 2023 / CSP Inc. (NASDAQ:CSPI), an award-winning provider of security and packet capture products, managed IT and professional services and technology solutions, today reported continued business momentum for the fiscal 2023 first quarter ended December 31, 2022. The Company also announced that the Board of Directors declared a quarterly dividend of $0.03 per share payable March 14, 2023, to shareholders of record on the close of business on February 24, 2023.
Fiscal First Quarter Operating Highlights and Recent Achievements
Product revenue grew 63% compared to the prior year first quarter
Services revenue grew 13% compared to the prior year first quarter
EPS of $0.21 increased significantly from a loss of $(0.09) in the prior year first quarter
Increased sales of higher margin products and services lead to gross margin of 31.7% for the quarter, nearly a 2.5 percentage point increase over the prior year first quarter
Gross backlog (backlog) as of December 31, 2022, of $22.9 million
"The continued migration of our business to offer differentiated, higher value cybersecurity, wireless and managed services offerings, is propelling our growth," commented Victor Dellovo, Chief Executive Officer. "We have now reported consecutive quarters of revenue growth in excess of 40% as the demand for our award-winning products and services builds and we are able to execute deliveries and installations. During the first quarter, we converted approximately $3.2 million of backlog to revenue while at the same time added approximately $2.9 million in new orders. We are increasing our business from existing customers while adding new customers and while the timing of potential orders is subject to movement from quarter to quarter, our business pipeline continues to be robust.
"Our Technology Solutions business continued to grow during the first quarter. At the same time, our High-Performance Products business revenue more than doubled compared to the year ago first quarter. This growth was primarily due to a sizeable customer engagement in the 2023 fiscal first quarter, and we are cautiously optimistic the HPP business will be a growing contributor as the fiscal year progresses.
"Our business, and the opportunity pipeline we have in front of us, is stronger today than at any time in our Company's history. Our strategy, combined with our financial resources provides us with the opportunity to provide our customers with attractive financing that contributes to our profitability. These transactions position CSPi to generate increased levels of future cash flow while we enhance our relationship with customers and provide us future growth opportunities."
2023 Fiscal First Quarter Results
Revenue for the fiscal 2023 first quarter was $18.3 million, a 48% increase compared to $12.4 million in the year-ago fiscal first quarter as the Company continued to achieve significantly improved operating results despite the current economic environment and continued supply chain issues with some system component providers. Despite these hurdles, management remains cautiously optimistic that its strategies and initiatives will allow it to meet its operating objectives throughout fiscal 2023.
Gross profit for the fiscal first quarter was $5.8 million, or 31.7% of sales compared with $3.6 million, or 29.2% of sales in the year-ago fiscal first quarter. The gross margin increase continues to reflect the focus on higher margin products and services, however, the disproportionate growth compared to the revenue growth was due to a mix of lower margin product sales in the 2023 fiscal first quarter. The Company reported net income of $1.0 million in the fiscal 2023 first quarter, or $0.21 per diluted common share compared with a net loss of $(0.4) million, or $(0.09) per common share for the fiscal first quarter of fiscal 2022.
The Company had cash and cash equivalents of $19.6 million as of December 31, 2022, which was equivalent to the cash and cash equivalents on December 31, 2021. Cash was approximately $4.4 million lower as compared to the September 30, 2022 level primarily due to a previously-referenced large financing customer sale recognized in the fourth quarter of fiscal year 2022 but the cost was paid for in the first quarter of fiscal year 2023.
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, February 8, 2023 to review CSPi's financial results and provide a business update. To listen to a live webcast of the call, the event link is https://www.webcaster4.com/Webcast/Page/2912/47591.. Individuals may also listen to the call via telephone, by dialing 888-506-0062 or 973-528-0011 and use the Participant Access Code: 478992 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.
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