Second-quarter Engineering and Development expense was approximately $500,000 compared with $400,000 a year ago. As a percentage of sales, Q2 2011 Engineering and Development was at about 2.6% of sales compared with 1.8% last year. Our target range for Engineering and Development expenses is 2.4% to 2.6% of sales.
SG&A expenses decreased on a real-dollar basis to $3.3 million in the quarter from $3.4 million a year ago as a result of lower commissions in the Systems business. SG&A was 17.2% of sales in Q2 of fiscal 2011, compared with 14.2% of sales in Q2 last year. Our target range for SG&A expense is between 16.1% to 16.6%.
Our effective tax rate for the quarter was 33%. We expect our effective tax rate will be approximately 37% for the third quarter of fiscal 2011.
Net income for the second quarter was $300,000, or $0.08 per diluted share, compared with net income of $1 million, or $0.28 per share, in the second quarter of fiscal 2010.Let’s now turn to the balance sheet . . .Cash and short-term investments decreased by approximately $1.1 million from fiscal year end September 30, 2010 to $14.4 million as of March 31, 2011. The decrease was primarily due to an increase in inventory of $2.3 million to support sales to our large hosting customer, and the purchase of $395,000 in CSP stock.As we have discussed in the past, CSP’s cash position can vary significantly from quarter to quarter due to the high working capital requirements needed to fund large projects at both our Systems and our Services and Systems Integration segments. This was the case this quarter with the significant increase in our inventory.Going forward, our financial priorities remain the same. We will manage the company cautiously with a strict focus on controlling expenses and efficient working capital management, all while driving toward long-term profitable growth. Read the rest of this transcript for free on seekingalpha.com
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV