CSPi Reports Third-Quarter 2019 Financial Results

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LOWELL, Mass., Aug. 07, 2019 (GLOBE NEWSWIRE) -- CSPi (NASDAQ: CSPI), a provider of IT managed services, security solutions and packet capture products, today reported financial results for the third quarter ended June 30, 2019.

The Company also announced that its board of directors has voted to pay a quarterly dividend of $0.15 per share to shareholders of record on August 30, 2019, payable on September 13, 2019.

“Our third quarter was marked by solid revenue growth as we continued to move forward with our transformation to a cybersecurity and wireless managed services company,” said Chief Executive Officer Victor Dellovo. “Strong demand for our managed IT services was partially offset by softer multi-computer sales. We continued to invest in our cybersecurity products and pipeline, including our new ARIA cybersecurity platform, which began shipping in the third quarter and is poised for growth over the next fiscal year.”

“Initial feedback from our ARIA customers has been very positive, particularly with respect to its ease of deployment and ease of use,” said Dellovo. “We plan to expand our sales resources to support this high-growth-potential product. At the same time, we will pursue a number of integration opportunities to enhance ARIA’s capabilities for the benefit of security teams that require speed with a high degree of automation and push-button functionality in identifying and isolating cyber threats.”

Gross profit for the third quarter of fiscal 2019 quarter was $4.8 million, or 22.4% of sales, compared with $5.2 million, or 26.0% of sales, a year ago.

Net income for the third quarter of fiscal 2019 was $532,000, or $0.12 per diluted share, compared with net income of $3,000, or $0.00 per diluted share, for the third quarter of fiscal 2018. The third quarter of fiscal 2018 included a loss of $428,000, or $0.11 per share, from discontinued operations. The Company had a tax benefit of $326,000 for the third quarter of fiscal 2019. The high effective tax rate was due in part to no tax expense recorded for U.K. income due to a large pension contribution, adjustments of taxes payable and reconciliation of tax provision to the prior year tax returns and the benefit of the research and development credit.

Cash and short-term investments were $16.8 million at the end of the third quarter, down from $25.1 million at the close of fiscal year 2018. The decrease was due to a $3.6 million increase in accounts receivable due to order timing, a $2.7 million increase in inventory, and $1.8 million paid in dividends.

The Company wishes to take advantage of the “Safe Harbor” provisions of the Private Securities Litigation Reform Act of 1995 with respect to statements that may be deemed to be forward-looking under the Act. Such forward-looking statements may include, but are not limited to, invest in our cybersecurity products and pipeline, including our new ARIA cybersecurity platform, which began shipping in the third quarter and is poised for growth over the next fiscal year. The Company cautions that numerous factors could cause actual results to differ materially from forward-looking statements made by the Company. Such risks include general economic conditions, market factors, competitive factors and pricing pressures, and others described in the Company's filings with the SEC. Please refer to the section on forward-looking statements included in the Company's filings with the Securities and Exchange Commission.

 

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Globe Newswire: 13:30 GMT Wednesday 7th August 2019

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