CSP Inc. (NASDAQ: CSPI), a provider of IT solutions, systems integration services and dense cluster computing systems, today reported financial results for the first quarter of fiscal 2012 ended December 31, 2011.
For the first quarter of fiscal 2012, total sales increased to $21.1 million compared with $20.6 million for the first quarter of 2011.
Gross margin for the first quarter of fiscal 2012 increased to 23.0% compared with 22.0% in the first quarter a year ago. The year-over-year increase in gross margin was the result of a greater mix of higher-margin consulting as well as solutions and managed service business, partially offset by less Systems royalty revenues.
Net income for the first quarter of fiscal 2012 increased to $461 thousand, or $0.13 per diluted share, compared with net income of $389 thousand or $0.11 per diluted share, in the first quarter of fiscal 2011.Cash and short-term investments decreased to $14.6 million compared with $15.9 million at year end fiscal 2011. The decrease was primarily due to an increase in accounts receivable. 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 began the fiscal year with a strong first-quarter performance, reporting a 19% increase in net income on 2% revenue growth,” said CSP Chairman and Chief Executive Officer Alexander R. Lupinetti. “We are particularly pleased with our 100 basis point increase in gross margin, which demonstrates the success of our strategy to generate more high-margin service revenues at our Service and Systems Integration segment. This achievement was particularly noteworthy, given that we reported significantly less royalty revenues at our Systems segment during the quarter on a year-over-year basis.” “At our Service and Systems Integration segment, revenues were driven by our large hosting customer as well as consulting on the build-out of a Global Security Operations Center for one of the largest mobile telecommunications network companies in the world,” added Lupinetti. “Our expertise continues to be in demand as companies seek solutions for their storage, network security and unified communications needs.”