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 2012 ended June 30, 2012.
For the third quarter of fiscal 2012, total sales increased 19% to $22.4 million from $18.8 million for the third quarter of 2011. For the nine-month period, sales grew 10% to $62.5 million from $57 million in the year-earlier period.
Gross margin for the third quarter of fiscal 2012 increased to 23% compared with 19% in the third quarter a year ago. The year-over-year increase in gross margin was the result of greater Systems segment royalty revenue. Gross margin increased to 24% in the first nine months of fiscal 2012 from 22% in the same period of fiscal 2011.
Net income for the third quarter of fiscal 2012 increased to $758,000, or $0.22 per diluted share, compared with a net loss of $211,000, or $0.06 per share, in the third quarter of fiscal 2011. For the nine-month period, net income grew 264% to $1.6 million, or $0.48 per diluted share, from $455,000, or $0.13 per diluted share, in the same period in fiscal 2011.Cash and short-term investments increased to $18 million compared with $15.9 million at year end fiscal 2011. The increase was due to higher net income, an increase in accounts payable and accrued expenses, higher deferred revenue, and a decrease in inventory and depreciation and amortization. This was partially offset by an increase in accounts receivable, an increase in other assets and prepaid items, the purchase of PP&E, the dividend payment and the negative effect of foreign exchange. 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 performed well again in the third quarter of fiscal 2012, reporting 19% growth in revenues, a 400 basis point increase in gross margins and net income per diluted share of $0.22 compared with a loss in the third quarter last year,” said CSP Chairman and Chief Executive Officer Alexander R. Lupinetti. “Our top line was driven by a 120% increase in sales at the Systems segment and 10% growth at Service and Systems Integration.”