CSP Inc. Fiscal Fourth Quarter Revenue Increases 67%; EPS of $0.31; Gross Backlog of $23.2 Million Remains Near Record Level
CSP Inc. (NASDAQ:CSPI) reported strong financial results for its fiscal 2022 fourth quarter and full year ended September 30, 2022. Product revenue surged by 98.5%, while service revenue increased by 24.6% year-over-year. For the full year, total revenue rose 10.5%, with EPS jumping 161.7%. The gross margin improved to 34.6%, supported by a high backlog of $23.2 million. CSPi also announced a quarterly dividend of $0.03 per share. Despite ongoing supply chain challenges, the company remains optimistic about fiscal 2023 growth prospects.
- Product revenue increased by 98.5% in Q4 compared to the prior year.
- Service revenue grew by 24.6% in Q4 year-over-year.
- Total revenue grew 10.5% for the full year.
- EPS increased by 161.7% for the full year.
- Gross margin improved to 34.6% for the full year, up from 32.8%.
- Record backlog of $23.2 million as of September 30, 2022.
- Gross profit margin decreased to 36.2% in Q4 from 41.7% due to higher sales of low-margin products.
- Supply chain issues continue to impact revenue growth.
Insights
Analyzing...
Full Year Gross Margin Increase Reflects Continued Demand for High Margin Products and Services
LOWELL, MA / ACCESSWIRE / December 6, 2022 / CSP Inc. (NASDAQ:CSPI), an award-winning provider of security and packet capture products, managed IT and professional services and technology solutions, reported significantly improved financial and operating results for the fiscal 2022 fourth quarter and full year ended September 30, 2022, and provided a business update.
The Company also announced that its board of directors has voted to pay a quarterly dividend of
Fourth Quarter and Full Year Operating Highlights and Recent Achievements
- Product revenue grew
98.5% compared to the year-ago fourth quarter - Service revenue grew
24.6% compared to the year-ago fourth quarter - The Technology Solutions (TS) business segment generated significant revenue growth during the quarter, which reflects rising demand from both new and existing customers
- For the full year, revenue grew
10.5% and EPS grew161.7% - Increased sales of higher margin products and services led to record gross margin as a percentage of sales of
34.6% for the full year, nearly 2 percentage points over the FY 2021 gross margin as a percentage of sales - Gross backlog (backlog) of
$23.2 million as of September 30, 2022 was near a record level and grew significantly compared to$13.0 million as of September 30, 2021
"Our team, and our operations, achieved exceptional results during our fiscal fourth quarter. The TS business segment hit on all cylinders during the period demonstrating the strength of the CSPi product and services offerings," commented Victor Dellovo, Chief Executive Officer. "I can say, unequivocally, we are executing our plan in every operating division, allowing us to achieve significant revenue growth of
"Our
While supply chain issues continue to challenge the revenue growth of our TS and HPP businesses, we have successfully managed these issues and converted a substantial portion of our backlog to revenue during the quarter. At the same time, our new business pipeline continued to build, and we finished with a near record backlog at the end of our fiscal year. As a result of this transaction, as well as others either signed or nearing execution, we expect our fourth quarter momentum to continue during the first half of fiscal 2023 and are cautiously optimistic that the entire year will lead to growth over fiscal 2022."
Fiscal Year 2022 Fourth Quarter Results
Revenue for the fiscal 2022 fourth quarter was
Gross profit for the fiscal fourth quarter was
Full Year Fiscal 2022 Results
Revenue for the full year ended September 30, 2022, was
The Company had cash and cash equivalents of
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, December 6, 2022, 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 877-545-0523 or 973-528-0016 and use the Participant Access Code: 283982 and use when greeted by the live operator. To listen to a live webcast of the call, the event link is https://www.webcaster4.com/Webcast/Page/2912/47262. 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 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, predictions of greater success and growth in fiscal year 2023.
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)
| September 30, 2022 | September 30, 2021 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and short-term investments | $ | 23,982 | $ | 20,007 | ||||
Accounts receivable, net | 22,993 | 18,698 | ||||||
Inventories | 4,372 | 3,989 | ||||||
Other current assets | 8,110 | 6,340 | ||||||
Total current assets | 59,457 | 49,034 | ||||||
Property, equipment and improvements, net | 647 | 764 | ||||||
Operating lease right-of-use assets | 1,160 | 1,358 | ||||||
Long-term receivable | 7,412 | 7,522 | ||||||
Other assets | 6,386 | 4,296 | ||||||
Total assets | $ | 75,062 | $ | 62,974 | ||||
Liabilities and Shareholders' Equity | ||||||||
Current liabilities | $ | 30,182 | $ | 17,827 | ||||
Pension and retirement plans | 1,337 | 4,097 | ||||||
Operating lease liabilities | 623 | 821 | ||||||
Notes Payable | 449 | 876 | ||||||
Other non-current liabilities | 3,508 | 5,307 | ||||||
Shareholders' equity | 38,963 | 34,046 | ||||||
Total liabilities and shareholders' equity | $ | 75,062 | $ | 62,974 | ||||
CSP INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share data )
| Three months ended | Year ended | |||||||||||||||
| September 30, | September 30, | September 30, | September 30, | |||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
Sales: | ||||||||||||||||
Product | $ | 11,313 | $ | 5,700 | $ | 36,688 | $ | 35,226 | ||||||||
Services | 5,372 | 4,311 | 17,673 | 13,982 | ||||||||||||
Total sales | 16,685 | 10,011 | 54,361 | 49,208 | ||||||||||||
Cost of sales: | ||||||||||||||||
Product | 8,887 | 4,346 | 28,977 | 28,024 | ||||||||||||
Services | 1,759 | 1,491 | 6,557 | 5,035 | ||||||||||||
Total cost of sales | 10,646 | 5,837 | 35,534 | 33,059 | ||||||||||||
Gross profit | 6,039 | 4,174 | 18,827 | 16,149 | ||||||||||||
Operating expenses: | ||||||||||||||||
Engineering and development | 856 | 696 | 3,084 | 2,887 | ||||||||||||
Selling, general and administrative | 4,822 | 3,825 | 15,783 | 14,624 | ||||||||||||
Total operating expenses | 5,678 | 4,521 | 18,867 | 17,511 | ||||||||||||
Operating income (loss) | 361 | (347 | ) | (40 | ) | (1,362 | ) | |||||||||
Other income (expense), net | 1,076 | 276 | 1,979 | 2,040 | ||||||||||||
Income (loss) before income taxes | 1,437 | (71 | ) | 1,939 | 678 | |||||||||||
Income tax expense (benefit) | 22 | (424 | ) | 50 | 444 | |||||||||||
Net income from continuing operations | $ | 1,415 | $ | 353 | $ | 1,889 | $ | 234 | ||||||||
Discontinued operations: | ||||||||||||||||
Gain from sale of discontinued operations | $ | - | $ | 465 | $ | - | $ | 465 | ||||||||
Net income | $ | 1,415 | $ | 818 | $ | 1,889 | $ | 699 | ||||||||
Net income attributable to common shareholders | $ | 1,334 | $ | 781 | $ | 1,789 | $ | 666 | ||||||||
Net income per share from continuing operations - basic | $ | 0.31 | $ | 0.08 | $ | 0.42 | $ | 0.05 | ||||||||
Gain per share from sale of discontinued operations - basic | $ | - | $ | 0.11 | $ | - | $ | 0.11 | ||||||||
Net income per share - basic | $ | 0.31 | $ | 0.19 | $ | 0.42 | $ | 0.16 | ||||||||
Weighted average shares outstanding - basic | 4,289 | 4,192 | 4,261 | 4,151 | ||||||||||||
Net income per share from continuing operations - diluted | $ | 0.31 | $ | 0.08 | $ | 0.42 | $ | 0.05 | ||||||||
Gain per share from sale of discontinued operations - diluted | $ | - | $ | 0.11 | $ | - | $ | 0.11 | ||||||||
Net income per share - diluted | $ | 0.31 | $ | 0.19 | $ | 0.42 | $ | 0.16 | ||||||||
Weighted average shares outstanding continuing operations - diluted | 4,296 | 4,214 | 4,278 | 4,220 | ||||||||||||
Weighted average shares outstanding discontinued operations - diluted | - | 4,214 | - | 4,220 | ||||||||||||
Weighted average shares outstanding net income - diluted | 4,296 | 4,214 | 4,278 | 4,220 | ||||||||||||
CONTACT:
CSP Inc.
Gary Levine, 978-954-5040
Chief Financial Officer
SOURCE: CSP Inc.
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