Hot Features
Premium
Level up your trading with our powerful tools and real-time insights all in one place.
Click to find out more
CSP Inc. (NASDAQ:CSPI), a provider of IT solutions and high-performance Ethernet products for diverse applications, today reported financial results for the fourth quarter and full year fiscal 2015 ended September 30, 2015.
The Company also announced that its board of directors has voted to pay its quarterly dividend of $0.11 per share to shareholders of record December 31, 2015 payable January 11, 2016.
Management Comments
“We implemented significant and positive changes during fiscal 2015 in the products and services we provide our customers,” said President and Chief Executive Officer Victor Dellovo. “In addition, to ensure our ability to capitalize on the growth potential in front of us, we upgraded a high percentage of our personnel, across the globe, in sales, engineering and management. The year was also a financial success across all of our divisions with the exception of the UK. However, we are confident this geography is heading in the right direction under new management and a sound strategy.”
“For the fourth quarter, we reported strong financial results with revenues increasing 48% year over year and net income growing to $0.19 per diluted share from a net loss per share of $0.02 a year ago,” said Dellovo. “Our High Performance Products (HPP) division received the expected quarterly royalty revenue for two E-2D planes, and we anticipate receiving royalties from five planes in fiscal 2016. The legacy Myricom™ product line continues to perform ahead of our initial expectations, and the next-generation products have the potential to expand our commercial market reach while becoming the primary growth driver for HPP. Market traction for our recently launched 10G network adapter for packet capture applications has been very positive. Meanwhile, our financial services product line is performing well for our customers and is in use for production trading at multiple sites. Other customers continue to wait for the next refresh cycle and the completed testing of our next-generation product. Therefore, it will take longer to generate meaningful revenue in this market.”
“At our Technology Solutions (TS) division, we are encouraged by the growth of our managed services pipelines in both Germany and the United States,” continued Dellovo. “Growing managed services sales is an important part of our growth strategy and we expect it to result in an increasingly larger recurring revenue stream with higher margins than our traditional sales in this business.”
“Looking ahead to fiscal 2016, we plan to execute on our strategy as we capitalize on the positive changes we made in 2016 to establish a foundation for long-term growth and profitability,” concluded Dellovo.
Financial Results
For the fourth quarter of fiscal 2015, revenue was $27.7 million compared with $19.7 million in the fourth quarter a year ago. Foreign exchange had a negative effect on revenue of $1.3 million for the quarter. For full year fiscal 2015, revenue was $89.3 million compared with $84.6 million for full year fiscal 2014. Foreign exchange had a negative effect on revenue of $4.5 million for the full year.
Gross margin for the fourth quarter of fiscal 2015 was 21.4% compared with 25.8% for the prior-year period. For the full year, gross margin was 21.4% compared with 24.6% for the prior year. The decrease for both periods was primarily the result of the loss in the UK and a change in revenue recognition policy for HPP.
Net income for the fourth quarter of fiscal 2015 was $653,000, or $0.19 per diluted share, compared with a net loss of $78,000, or $0.02 per share, in the fourth quarter of fiscal 2014. For the full year fiscal 2015, net loss was $210 thousand, or $0.06 per share, compared with net income of $1.3 million, or $0.37 per diluted share, for fiscal year 2014.
Cash and short-term investments decreased to $11.2 million at year end fiscal 2015 from $16.4 million at year end fiscal 2014. The decrease was primarily due to a $8.2 million increase in accounts receivable as a result of a high level of sales received late in the quarter at our US Technology Solutions division as well as a strong Q4 in Germany compared with a year ago combined with dividends paid of $1.6 million and partially offset by an increase in accounts payables of $4.5 million.
