CSP (US:CSPI)2022-12-07 16:00Revenue and Profitability - Revenue increased by approximately $5.2 million, or 10%, to $54.4 million for the fiscal year ended September 30, 2022, compared to $49.2 million for the fiscal year ended September 30, 2021[158]. - Gross profit margin percentage increased from 33% of revenues for the fiscal year ended September 30, 2021, to 35% for the fiscal year ended September 30, 2022[158]. - Total gross margin increased by $2.7 million to $18.8 million for fiscal year 2022, with total gross margin as a percentage of revenue increasing to 35%[171]. - The TS segment's GM as a percentage of revenue rose to 33% in fiscal year 2022 from 30% in fiscal year 2021, driven by a $3,474 thousand increase in revenue[174]. - The HPP segment's GM as a percentage of revenue decreased to 51% in fiscal year 2022 from 59% in fiscal year 2021, primarily due to a $796 thousand decline in revenue[175]. Segment Performance - The TS segment revenue increased by approximately $5.9 million, with a $7.1 million increase in the U.S. division, partially offset by a $1.2 million decrease in the U.K. division[164]. - HPP segment revenue decreased by approximately $0.8 million, or 17%, primarily due to a $0.6 million decrease in Multicomputer product line shipments[164]. Operating Loss and Expenses - The Company recorded an operating loss of $40 thousand for the fiscal year ended September 30, 2022, compared to an operating loss of approximately $1.4 million for the fiscal year ended September 30, 2021[160]. - Selling, general and administrative (SG&A) expenses totaled $15,783 thousand in fiscal year 2022, an 8% increase from $14,624 thousand in fiscal year 2021[178]. - The TS segment's SG&A expenses increased by $1,842 thousand, primarily due to a $1,500 thousand rise in variable compensation[178]. - Engineering and development expenses in the HPP segment increased by $200 thousand to $3,100 thousand in fiscal year 2022, mainly due to higher consulting costs[177]. Tax and Financial Position - The income tax provision was approximately $50 thousand for the fiscal year ended September 30, 2022, reflecting an effective tax rate of 3%[162]. - The income tax provision for fiscal year 2022 was approximately $50 thousand, reflecting an effective tax rate of 2.6%, a significant decrease from $444 thousand and 38.8% in fiscal year 2021[187]. - Cash and cash equivalents increased by $4,000 thousand to $24,000 thousand as of September 30, 2022, compared to $20,000 thousand as of September 30, 2021[192]. - The company maintained a line of credit with a capacity of up to $15,000 thousand, with $11,900 thousand available as of September 30, 2022[196]. - Management believes that available cash, cash equivalents, and cash generated from operations will be sufficient for working capital and capital expenditure requirements for at least 12 months[199]. Contracts and Future Revenue - The Company secured a $1.8 million contract for real-time networking monitoring for cyber attack detection, with revenue expected to be recognized in fiscal year 2023[155]. Stock and Dividends - The Company suspended its stock repurchase program and quarterly cash dividends until further economic clarity, with dividends reinstated on August 10, 2022[151]. Foreign Exchange and Gains - The company recorded a foreign exchange gain of $1,692 thousand in fiscal year 2022, a significant increase of $2,180 thousand compared to a loss of $488 thousand in fiscal year 2021[180]. Inventory and Warranty - The Company utilizes the first-in, first-out method for inventory valuation, with potential write-downs for estimated obsolescence[216]. - The Company accrues for estimated warranty costs based on prior actual warranty costs for similar products[209]. Pension and Employee Benefits - Pension expense is based on actuarial computations, with management reviewing discount rates and expected returns to ensure reasonableness[219]. - The Company has defined benefit and defined contribution plans in the U.K. and U.S., with certain plans closed to newly hired employees[218]. - The funded status of pension plans is recognized on the balance sheet, with liabilities accrued for amounts exceeding funding requirements[220]. Economic Factors - Inflation and changing prices have not significantly impacted sales or revenues, although there is a trend of increasing prices from integrated circuit vendors[222].