CSP Inc. (NASDAQ: CSPI), a provider of IT solutions, systems integration services and dense cluster computing systems, today reported financial results for the third quarter of fiscal 2011 ended June 30, 2011.
For the third quarter of fiscal 2011, total sales were $19.7 million compared with $28.6 million for the third quarter of 2010. For the first nine months of 2011, sales were $61.0 million compared with $71.2 million in the year-earlier period.
Gross profit for the third quarter of fiscal 2011 was 18.0% compared with 17.0% in the third quarter a year ago. For the first nine months of fiscal 2011, gross profit was 20.0% compared with 18.0% in the same period of fiscal 2010.
Net loss for the third quarter of fiscal 2011 was $0.2 million, or $0.06 per share, compared with net income of $0.6 million, or $0.17 per diluted share, in the third quarter of fiscal 2010. For the first nine months of fiscal 2011, net income was $0.5 million, or $0.13 per diluted share, compared with net income of $0.9 million, or $0.24 per diluted share, for the year-earlier period.Cash and short-term investments increased by approximately $2.0 million from fiscal year ended September 30, 2010 to $17.5 million as of June 30, 2011. CSP purchased approximately $60,000 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 “Our top- and bottom-line performance in the third quarter reflects 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. “The lower revenues are primarily attributable to significantly reduced sales to a major hosting customer at our Service and Systems Integration segment. As we reported previously, that customer had acquired one of our largest competitors in 2010. In addition, in the third quarter of 2010, our Systems business reported $1.6 million in high margin royalty revenues from Lockheed Martin related to the E2D Advanced Hawkeye aircraft compared with only $0.5 million in lower margin parts sales in the third quarter of 2011.” “Looking forward, we are optimistic about positive trends on both sides of the business,” said Lupinetti. “At our Systems segment, we are pleased that 10 E2D aircraft have received budget approval as part of phases 3 and 4 of the Low Rate Initial Production Phase, and we expect to benefit from the production of these aircraft beginning in 2012. At our Service and Systems Integration segment, we are making progress on our strategy to attract higher-margin consulting, as well as solutions and managed services business. As we begin to look toward fiscal 2012, we are bullish about our long-term growth prospects as we are poised to capitalize on exciting trends on both the Systems and Service and Systems Integration segments.”