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CSP Inc. Reports Second-Quarter Fiscal 2011 Financial Results

Stocks in this article: CSPI

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 2011 ended March 31, 2011.

For the second quarter of fiscal 2011, total sales were $19.2 million compared with $23.9 million for the second quarter of 2010. For the first six months of 2011, sales were $41.3 million compared with $42.6 million in the year-earlier period.

Gross profit for the second quarter of fiscal 2011 was 22.1% compared with 23% in the second quarter a year ago. For the first half of fiscal 2011, gross profit was 21.2% compared with 18.3% in same period of fiscal 2010.

Net income for the second quarter of fiscal 2011 was $0.3 million, or $0.08 per diluted share, compared with net income of $1.0 million, or $0.27 per diluted share, in the second quarter of fiscal 2010. For the first six months of fiscal 2011, net income was $0.7 million, or $0.19 per diluted share, compared with net income of $0.2 million, or $0.07 per diluted share for the year-earlier period.

Cash and short-term investments decreased by approximately $1.2 million from fiscal year ended September 30, 2010 to $14.4 million as of March 31, 2011. CSP purchased approximately $200,000 of common stock during the quarter. CSP’s cash position may vary significantly from quarter to quarter due to the high working capital requirements needed to fund large projects at both its Systems and its Services and Systems Integration segments.

Management Comments

“We are pleased with our financial performance in the second quarter, notwithstanding unusually difficult year-over-year comparisons in both our Systems and our Service and Systems Integration businesses,” said CSP Chairman and Chief Executive Officer Alexander R. Lupinetti. “Coupled with our stellar performance in the first quarter, we are running significantly ahead of our expectations for the first half of the year, especially on the bottom line.”

“The highlight of the quarter at our Systems business was the budget approval of 10 new E2D Advanced Hawkeye intelligence, surveillance and reconnaissance aircraft,” said Lupinetti. “We expect that these aircraft will be built during the next few years. At our Service and Systems Integration business, we were able to overcome much of the year-over-year revenue deficit caused by reduced sales to a major hosting customer, as well as improve our gross margin for the quarter. Even though sales were down 13% in the segment, gross profit actually increased 4% and gross margin grew 300 basis points to 16%.”

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