CSP (CSPI) - 2024 Q2 - Quarterly Results

CSP Inc. Fiscal Second Quarter 2024 Operating Results CSP Inc. reported strong Q2 FY2024 results, driven by services revenue growth and strategic focus on its HPP division Overview and Business Highlights CSP Inc. achieved strong Q2 2024 results with significant services revenue growth and margin expansion, driven by its AZT offering and market expansion efforts - The company's strategy focuses on leveraging the consistent performance of its Technology Solutions (TS) business to fund sales and marketing investments for the High Performance Products (HPP) business, particularly the AZT offering[3] - A multi-pronged market awareness strategy for the AZT offering is showing success, evidenced by a new major contract with a global pharmaceutical company and an expanded sales team to address mid-market opportunities[3] - Recent achievements include publishing a case study in Rockwell Automation's 'The Journal', being named to the CRN® MSP 500 list, and winning multiple cybersecurity product awards for AZT PROTECT[5] - The Board of Directors declared a quarterly dividend of $0.03 per share, payable on June 12, 2024, to shareholders of record on May 24, 2024[1] Financial Performance CSPi's Q2 FY2024 saw slight revenue growth, driven by a 23% increase in services revenue, improving gross margins and net income Fiscal 2024 Second Quarter Results Q2 FY2024 revenue grew slightly to $13.7 million, with services revenue up 23%, expanding gross margin to 47% and increasing net income to $1.6 million Q2 FY 2024 Financial Metrics | Financial Metric | Q2 FY 2024 | Q2 FY 2023 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $13.7M | $13.3M | +3.0% | | Services Revenue | $5.2M | $4.3M | +23.0% | | Gross Profit | $6.5M | $5.0M | +30.0% | | Gross Margin % | 47% | 38% | +9 p.p. | | Net Income | $1.6M | $0.3M | +433.3% | | Diluted EPS | $0.16 | $0.03 | +433.3% | - The significant improvement in gross margin percentage was attributed to higher-margin services revenue and a high-margin AZT sale during the quarter[7] Fiscal Year 2024 Six-Month Results For the six months ended March 31, 2024, revenue decreased to $29.1 million, yet gross margin improved to 36%, and net income increased to $1.5 million Six Months FY 2024 Financial Metrics | Financial Metric | Six Months FY 2024 | Six Months FY 2023 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $29.1M | $31.6M | -7.9% | | Gross Profit | $10.6M | $10.8M | -1.9% | | Gross Margin % | 36% | 34% | +2 p.p. | | Net Income | $1.5M | $1.3M | +15.4% | | Diluted EPS | $0.16 | $0.14 | +14.3% | Financial Statements The unaudited consolidated financial statements detail CSPi's financial position as of March 31, 2024, and operating results for the periods then ended Condensed Consolidated Balance Sheets As of March 31, 2024, CSPi reported $27.1 million in cash, $64.2 million in total assets, $15.9 million in total liabilities, and $48.2 million in shareholders' equity Condensed Balance Sheet Data (in thousands) | Balance Sheet Item (in thousands) | March 31, 2024 | September 30, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $27,119 | $25,217 | | Total current assets | $50,862 | $50,364 | | Total assets | $64,200 | $65,904 | | Total current liabilities | $12,535 | $15,659 | | Total liabilities | $15,953 | $19,756 | | Shareholders' equity | $48,247 | $46,148 | Condensed Consolidated Statements of Operations The statement of operations details Q2 FY2024 total sales of $13.7 million and net income of $1.6 million, with six-month sales at $29.1 million and net income at $1.5 million Q2 FY 2024 Condensed Consolidated Statements of Operations (in thousands) | (Amounts in thousands) | Three months ended Mar 31, 2024 | Three months ended Mar 31, 2023 | | :--- | :--- | :--- | | Total sales | $13,706 | $13,269 | | Gross profit | $6,478 | $4,990 | | Operating income | $1,234 | $237 | | Net income | $1,588 | $321 | Six Months FY 2024 Condensed Consolidated Statements of Operations (in thousands) | (Amounts in thousands) | Six months ended Mar 31, 2024 | Six months ended Mar 31, 2023 | | :--- | :--- | :--- | | Total sales | $29,081 | $31,613 | | Gross profit | $10,573 | $10,807 | | Operating income | $891 | $1,601 | | Net income | $1,515 | $1,282 | Corporate Information and Safe Harbor CSPi will host a conference call to discuss results, operates through two divisions, and includes a Safe Harbor statement for forward-looking information - The company will host a conference call at 10:00 a.m. (ET) on May 8, 2024, to review financial results and provide a business update[10] - CSPi operates two distinct divisions: The High Performance Product division, featuring ARIA Cybersecurity solutions like AZT, and the Technology Solutions division, which offers managed IT services and professional services across key technology areas[11] - The report contains forward-looking statements, such as building a strong pipeline and executing a growth strategy, which are subject to risks and uncertainties as detailed in the company's SEC filings[12][13][14]