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CSPi Reports Third-Quarter Fiscal 2018 Financial ResultsLOWELL, Mass., Aug. 13, 2018 (GLOBE NEWSWIRE) -- CSPi (NASDAQ: CSPI), a provider of managed IT services, security solutions and packet capture products, today reported financial results for the third quarter ended June 30, 2018. The Company also announced that its board of directors has voted to increase the quarterly dividend to $0.15 per share to be paid to shareholders of record on August 31, 2018, payable on September 14, 2018. “We closed an eventful third quarter in which we announced the sale of our Germany operations and continued to execute on our transformation toward capitalizing on the demand for cybersecurity products and the proliferation of wireless,” said Chief Executive Officer Victor Dellovo. “Revenues declined about 24%, primarily due to significant product purchases by one of our major customers last year in the U.S., lower multicomputer sales and a delay in the launch of the ARIA Software Defined Security (SDS) platform. On the bottom line, we reported net income per share of $0.00 compared with $0.24 a year ago, mainly due to volume leverage. We had a net income per share of $0.11 from continuing operations that was offset by a net loss of $0.11 per share from discontinued operations.” “In our High-Performance Products segment, we experienced stronger-than-expected demand for our legacy products from equipment manufacturers, which has helped stem the anticipated decline in this product line. We also continued to invest in developing our next-generation cybersecurity platform ARIA SDS to meet the needs of the Managed Security Service Provider (MSSP) market. We are encouraged by diverse market opportunities for our ARIA solution and expect to begin to realize revenue from the product early in fiscal 2019. Multicomputer sales this quarter were primarily for boards for projects within the E-2D and foreign military programs. We saw increased multicomputer orders in the third quarter compared with the first half of the year and expect this level of activity to continue in the fourth quarter.” “In Technology Solutions, revenues were down due to lower product sales in the U.S., which was partially offset by demand for our managed IT services and wireless security offerings in the U.S. At the end of the quarter, we announced the sale of our Germany operations to European IT service provider and media conglomerate Reply for €10.0 million in cash and in addition we received €2.3 million in cash from CSPi GmbH from cash on the balance sheet at the time of closing (total of approximately $14.1 million at the current exchange rate). The transaction closed on July 31, 2018. CSPi will realize a significant gain on the sale of the Germany operations.” “We continue to execute on our strategy to transform CSPi from a company focused on defense-related multicomputer business to a growing managed services business that can capitalize on the demand for cybersecurity products and the proliferation of wireless. Through the sale of the Germany operations we now have greater management time and financial resources to better capitalize on managed services opportunities,” concluded Dellovo. Financial Results Gross profit for the third quarter of fiscal 2018 was $5.2 million, or 26% of sales, compared with $6.1 million, or 23.3% of sales, a year ago. Net income for the third quarter of fiscal 2018 was $3,000, or $0.00 per diluted share, compared with net income of $664,000, or $0.24 per diluted share, for the third quarter of fiscal 2017. Cash and short-term investments of $10.4 million at the end of the third quarter of fiscal 2018 were at the same level as 2017 fiscal year end, the cash for the Germany operations of $2.5 million for the third quarter and $3.5 million for fiscal year end is included in the current assets held for sale. Conference Call Details About CSP Inc. Myricom and ARIA are trademarks of CSP Inc. All other brand names, product names or trademarks belong to their respective owners. 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, ARIA solution expect to begin to realize revenue from the product early in fiscal 2019, and multicomputer orders activity to continue in the fourth quarter. 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. Contact: Gary Levine Chief Financial Officer
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