CSP (US:CSPI)2023-12-12 18:38Financial Data and Key Metrics Changes - The company reported a revenue growth of 19% for fiscal 2023 compared to fiscal 2022, achieving a total revenue of $54.4 million [13][21] - For Q4, revenue was $15.3 million, down from $16.7 million in the previous year, with a significant revenue increase of 66% in last year's Q4 due to backlog reduction [20][21] - Gross profit for the fiscal year was $21.9 million, representing 34% of sales, compared to $18.8 million or 35% of sales in fiscal 2022, indicating a slight decrease in gross margin [21][22] - Net income for the fiscal year was $5.2 million or $1.09 per diluted share, compared to $1.9 million or $0.42 per diluted share in the previous year [22][61] Business Line Data and Key Metrics Changes - The Technology Solutions (TS) business continued to perform well, contributing significantly to revenue growth, with a focus on implementation, installation, and training capabilities [15][38] - The High-Performance Products (HPP) business recorded total revenue of $6.9 million for the fiscal year, up from $3.8 million in fiscal 2022, driven by the launch of the AZT PROTECT solution [34][38] Market Data and Key Metrics Changes - The company noted a reduction in backlog to approximately $7.6 million, returning to pre-pandemic levels, which is expected to facilitate normal business operations moving forward [33][43] - The company is actively engaging with Fortune 500 companies and has received orders from significant clients, including a chemical manufacturing company and a Western Intelligence Agency [37][38] Company Strategy and Development Direction - The company aims to transition to higher-margin products and services, with a focus on the AZT cybersecurity solution, which is expected to drive future growth [32][38] - The management emphasized the importance of marketing and sales efforts to enhance brand recognition and market penetration, particularly in the cybersecurity space [134][135] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing positive momentum in the TS and HPP businesses and the successful conversion of backlog to revenue [13][32] - The company is addressing supply chain challenges and is confident in its ability to grow despite a reduction in backlog [33][43] Other Important Information - The Board of Directors approved a quarterly dividend of $0.04 per share, payable on January 9, 2024 [23] - The company has significantly increased its marketing budget and hired industry-leading salespeople to enhance its market presence [134][135] Q&A Session Summary Question: What is the expected growth for the Technology Solutions business in 2024? - Management confirmed that they budgeted for significant growth in 2024 despite the drop in backlog, indicating confidence in business operations [25][44] Question: How is the AZT product expected to contribute to future growth? - Management highlighted that the AZT product is dynamic and has the potential to significantly impact future business, with ongoing efforts to grow the sales pipeline [46][47] Question: What is the market opportunity for AZT? - Management indicated that the market opportunity for AZT is multibillion, reflecting strong potential for growth [78] Question: How does the company plan to enhance shareholder value? - Management acknowledged the need for improved communication with the market and plans to enhance marketing efforts to better convey the company's opportunities [132][135] Question: Will the company consider a stock split in the future? - Management confirmed that they have discussed the possibility of a stock split at the Board level [154]