CSP, Inc. (CSPI) Posts Wider Q4 Loss

CSP, Inc. (NASDAQ: CSPI) reported Q4 EPS of ($0.02), versus $0.00 reported last year. Revenue for the quarter came in at $19.7 million, versus $21.9 million reported last year.

Management Comments

"We made excellent progress on our growth strategy in Fiscal 2014 as we invested in a number of areas to support future growth," said President and Chief Executive Office Victor Dellovo. "We are excited by the promise of growth and customer diversity from Myricom, which we acquired and integrated into the High-Performance Products & Solutions (HPPS) segment during the year. We also took great strides in positioning CSP to increase margins and recurring revenue by growing our managed services business. From a financial perspective, we grew net income by 263% in fiscal 2014 to $1.3 million on a 3% decrease in revenue. For the fourth quarter, we reported a slight loss as we invested heavily in new product development and sales infrastructure to support future profitable growth.

"Fourth-quarter revenue from our HPPS segment was driven by strong Myricom sales, the delivery of a sonar system for an international customer, as well as $0.6 million in royalty revenue from an additional E-2D plane. This represents royalty for the sixth E-2D plane in fiscal 2014, exceeding our initial expectation of recording revenue for five planes during the year.

"At our IT Solutions segment, we reported another strong quarter in Germany, while business in the US continues to be soft. We continue to see managed services as an exciting opportunity for profitable growth, and recently added eight engineers, who were immediately productive.

"Looking ahead, we plan to continue to advance our growth strategy in fiscal 2015. In IT Solutions, we expect that managed services will be a key revenue and earnings generator in fiscal 2015. In HPPS, we currently are having customer discussions regarding expected E-2D production, and believe we could report royalty revenue for five planes in the second half of the year. We also are investing in product development at our Myricom business, where we see excellent growth opportunities in a number of vertical markets. We expect the growth of this business will help to smooth out revenue in those quarters that have softer sales from the military side of the business, which is inherently lumpy. We expect to begin to report meaningful revenue from our new product development efforts in Myricom in the fourth quarter of fiscal year 2015," concluded Dellovo.

For earnings history and earnings-related data on CSP, Inc. (CSPI) click here.

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