LOWELL, Mass., Dec. 08, 2021 (GLOBE NEWSWIRE) -- CSP Inc. (NASDAQ: CSPI), an award-winning provider of security and packet capture products, managed IT and professional services and technology solutions, reported financial and operating results for the fiscal 2021 fourth quarter and full year ended September 30, 2021, and provided a business update.
Fourth Quarter/Full Year Operating Highlights and Recent Achievements
- Services revenue grew 27% compared to the year-ago fourth quarter
- Favorable revenue mix led to a quarterly and annual gross margin of 41.7% and 32.8%, respectively
- Company-wide year-end backlog reached $13 million demonstrating solid customer demand for products and services and reflects a 165% increase over the prior year
- Prudent expense management and emergence and continued acceptance of new products and services provides management with the resources to execute the multi-year growth strategy
- Recorded a one-time $465,000 gain in the fourth quarter from release of escrow money from the sale of our German subsidiary in 2018
“The demand for our products and services remain at an all-time high as we ended the fourth quarter with record backlog of $13 million, which reflects a 165% increase from the year-ago backlog,” commented Victor Dellovo, Chief Executive Officer. “This level of success validates our strategic approach to the market and gives us greater confidence to pursue our operating objectives and focus on our higher margin offerings.
With the Technology Solutions (TS) business again leading the way, our Managed Services Practice (MSP) continued to add new and larger customers while the better-than-expected activity level of Unified Communication as a Service (UCaaS) is garnering enthusiasm in the current fiscal first quarter. I believe UCaaS will turn profitable in the coming quarters, which is quite a feat since it was launched two years ago and just prior to one of the worst imaginable periods in our country. While the HPP business had a slight rebound from Q3, the signing of additional ARIA customers in the quarter and amount of interest being generated supports our view that it will dramatically change the revenue contribution from the HPP business.
Our team continues to perform at a high level. However, the effects of COVID-19, inflationary and supply chain pressures being felt across all businesses means a return to a more normalized business environment will be slower than expected. Nevertheless, we remain focused, and our sales team is putting greater emphasis on software sales since these can deliver near-term revenue and further expand our gross margin, as was the case in the fiscal fourth quarter. For fiscal 2022, we remain cautiously optimistic, and I believe it will be an exciting year for CSPi as ARIA and UCaaS gain traction. Further, we have received orders for several cruise ships, and we are optimistic of a return to executing our highly profitable cruise line business. We have a solid foundation to build from, even during these turbulent times, and will execute on opportunities that strengthen our long-term growth and profit ambitions.”
Fiscal Year 2021 Fourth Quarter Results
Revenue for the fiscal fourth quarter was $10.0 million, compared to $14.3 million in the year-ago fiscal fourth quarter as the Company continues to navigate the impact of COVID-19 and ongoing well-chronicled supply chain issues, which is extending timelines and impacting the Company’s ability to deliver customer orders.
Gross profit for the fiscal fourth quarter was $4.2 million, or 41.7% of sales, compared with $4.4 million, or 31.0% of sales, in the year-ago fiscal fourth quarter. This is the eighth consecutive quarter of year-over-year gross margin improvement as the Company is focused on selling higher margin products and services plus increased amount of net revenue. The Company reported net income from continuing operations of $353,000 in the fourth fiscal quarter, or $0.08 per share, compared with a net income of $36,000, or $0.01 per share for the fourth fiscal quarter of fiscal 2020.
Also, in Q4 the Company reported a one-time gain of $465,000 from the sale of the previously disclosed German operation (discontinued operation).
Net income for the fiscal fourth quarter of 2021 was $818,000, or $0.19 per share.
The Company had cash and cash equivalents of $20.0 million as of September 30, 2021, an increase of $700,000 from September 30, 2020.
Fiscal 2021 Full Year Results
Revenue for the full year ended September 30, 2021, was $49.2 million compared with revenue of $61.8 million in the same prior year period. Gross profit for the twelve months ended September 30, 2021, was $16.1 million, or 32.8% of sales, compared with $17.2 million, or 27.8% of sales, in the prior year reflecting a more favorable product mix. The Company reported net income from continuing operations of $234,000 for the full year ended September 30, 2021, or $0.05 per share compared with a net loss of ($1.4) million, or $(0.36) loss per share for the full year ended September 30, 2020. Including the one-time gain of $465,000 from the sale of discontinued German operation previously disclosed, net income for the full year ended September 30, 2021, was $699,000, or $0.16 per share. The 2021 full year results include a gain on forgiveness of debt of the Paycheck Protection Plan SBA Loans at the TS and HPP segment totaling $2.2 million, which was established as part of the CARES Act loan and recognized in fiscal 2021 first quarter.
Conference Call Details
CSPi Chief Executive Officer Victor Dellovo and Chief Financial Officer Gary W. Levine will host a conference call at 10:00 a.m. (ET) today to review CSPi’s financial results and provide a business update. To listen to a live webcast of the call, please visit the “Investor Relations” section of the Company’s website at www.cspi.com. Individuals may also listen to the call via telephone, by dialing 800-891-3968 or 785-424-1675 and using the conference ID: CSPQ421 when greeted by the live operator. For interested parties unable to participate in the live call, an archived version of the webcast will be available for approximately one year on CSPi’s website.
About CSPi
CSPi (NASDAQ: CSPI) operates two divisions, each with unique expertise in designing and implementing technology solutions to help their customers use technology to success. The High Performance Product division, including ARIA Cybersecurity Solutions, originated from supporting initiatives for the Department of Defense and Western intelligence agencies related to network monitoring, data protection, and intelligence initiatives. This focused mindset now results in foolproof data protection, enterprise wide. Our ARIA Software Defined Security solutions set provides enhanced network security, as well as accelerating incident response capabilities, while our Myricom nVoy Series appliances provide automated breach identification and notification, enabled by the 10G dropless packet capture inherent in our Myricom intelligent adapters. CSPi’s Technology Solutions division helps clients achieve their business goals and accelerate time to market through innovative IT solutions and professional services by partnering with best-in-class technology providers. For organizations that want the benefits of an IT department without the cost, we offer a robust catalog of Managed IT Services providing 24×365 proactive support. Our team of engineers have expertise across major industries supporting five key technology areas: Advanced Security; Communication and Collaboration; Data Center; Networking; and Wireless & Mobility.
Safe Harbor
The Company wishes to take advantage of the “Safe Harbor” provisions of the Private Securities Litigation Reform Act of 1995 with respect to statements that may be deemed to be forward-looking under the Act. Such forward-looking statements may include, but are not limited to, in addition, we just launched ARIA CloudADR to help provide organizations with COVID-19 tightened budgets, a lower entry cost solution to help protect against cybersecurity threats. As such, we believe we have a substantial opportunity ahead of us as our fiscal year unfolds, we continue to weather the COVID-19 impacts, supply chain issues have affected the timing of our sales and there is no short solution to this world-wide problem as disclosed daily in the world media and with a solid balance sheet we believe we have the resources to manage the business and are positioned to execute our operating strategies when our target customers are able to introduce new solutions into their operations.
The Company cautions that numerous factors could cause actual results to differ materially from forward-looking statements made by the Company. Such risks include general economic conditions, market factors, competitive factors and pricing pressures, and others described in the Company's filings with the Securities and Exchange Commission (“SEC”). Please refer to the section on forward-looking statements included in the Company's filings with the SEC.
