CSP (US:CSPI)2025-12-16 22:17Financial Performance - Revenue increased by approximately $3.5 million, or 6%, to $58.7 million for the fiscal year ended September 30, 2025, compared to $55.2 million for the fiscal year ended September 30, 2024[120]. - Gross profit margin percentage decreased to 32% for the fiscal year ended September 30, 2025, compared to 34% for the fiscal year ended September 30, 2024[120]. - Operating loss was $(3.1) million for the fiscal year ended September 30, 2025, compared to an operating loss of $(1.9) million for the fiscal year ended September 30, 2024[120]. - The net loss for the fiscal year ended September 30, 2025, was $(91) thousand, compared to a net loss of $(326) thousand for the fiscal year ended September 30, 2024[121]. - Total costs and expenses increased to $61.8 million for the fiscal year ended September 30, 2025, compared to $57.1 million for the fiscal year ended September 30, 2024[121]. Revenue Breakdown - TS segment revenue increased by approximately $5.7 million, with a $5.5 million increase in the U.S. division and a $0.2 million increase in the U.K. division[124]. - HPP segment revenue decreased by approximately $2.2 million, or 54%, primarily due to decreased ARIA AZT revenue of $1.7 million[126]. - The Americas revenue increased by $3.8 million for the fiscal year ended September 30, 2025, primarily due to increased revenue from the TS-US division[130]. Expenses and Costs - Research and development expenses increased by $0.3 million from $3.0 million in fiscal year 2024 to $3.3 million in fiscal year 2025, primarily for product engineering expenses related to ARIA cyber security products[135]. - SG&A expenses for the TS segment increased by $0.6 million (5%) to $13.8 million, while the HPP segment remained flat at $4.6 million for the fiscal year ended September 30, 2025[136]. - Total other income for the year ended September 30, 2025 was $1.448 million, a decrease of $5, primarily due to a foreign exchange gain increase of $0.5 million[137]. - Interest expense rose by $0.1 million to $0.357 million for the year ended September 30, 2025, attributed to multi-year vendor agreements in the TS U.S. division[138]. - Interest income decreased by $0.2 million to $1.854 million for the year ended September 30, 2025, due to lower average balances and interest rates[139]. Taxation - The effective tax rate for the fiscal year ended September 30, 2025, was 94.5%, compared to 22.2% for the fiscal year ended September 30, 2024[120]. - The company recorded an income tax benefit of $(1.6) million, resulting in an effective tax rate of 94.5% for the year ended September 30, 2025[140]. Cash Flow and Liquidity - Cash and cash equivalents decreased by $3.2 million to $27.4 million as of September 30, 2025, from $30.6 million as of September 30, 2024[145]. - Cash provided by operating activities was $2.3 million for the year ended September 30, 2025, down from $4.2 million in the prior year[147]. - Cash used in investing activities increased to $(428) thousand for the year ended September 30, 2025, compared to $(256) thousand in the prior year[148]. - Cash used in financing activities was $(5.0) million for the year ended September 30, 2025, compared to $1.4 million provided in the prior year[149]. - The company maintained a line of credit with a capacity of up to $15.0 million, with $14.1 million available as of September 30, 2025[152]. Accounting Policies - Revenue recognition is recorded as gross when the company is the principal party, and net when acting as a broker, affecting the overall revenue reported[163]. - The company recognizes deferred tax assets and liabilities based on enacted tax rates, with adjustments made for changes in tax rates impacting income[166]. Pension and Retirement Plans - Pension and retirement plans are recognized on the balance sheet, with gains and losses recorded in accumulated other comprehensive loss until amortized[169]. - Defined benefit plans in the U.K. are closed to new hires, while defined contribution plans cover most employees, impacting future pension obligations[170]. - Pension expense calculations involve estimates for expected return on assets and compensation increases, with changes in these estimates affecting overall pension expense[171]. - The company funds its pension plans to meet legal requirements, with liabilities for excess funding levels accrued on the balance sheet[172].