Form 8-K - Current report

0000356037false00003560372024-12-202024-12-20

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

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FORM 8-K

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Current Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934

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Date of Report (Date of earliest event reported): December 20, 2024

CSP Inc.

(Exact name of the registrant as specified in its charter)

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Massachusetts

(State or other jurisdiction of incorporation)

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000-10843	04-2441294
(Commission File Number)	(IRS Employer Identification No.)

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175 Cabot Street - Suite 210, Lowell, MA	01854
(Address of principal executive offices)	(Zip Code)

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[phone]

(Registrant’s telephone number, including area code)

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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

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☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	CSPI	Nasdaq Global Market

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Item 2.02 Results of Operations and Financial Condition.

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On December 20, 2024 CSP Inc. (the “Company”) issued a press release announcing its financial results for the fourth quarter of fiscal year 2024, which ended on September 30, 2024. A copy of the press release relating to such announcement is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

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The information set forth in this Form 8-K, including the exhibits attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that Section. The information in this Form 8-K shall not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act regardless of any general incorporation language in such filing, except as shall be expressly set forth by specific reference in such filing.

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Item 9.01 Financial Statements and Exhibits

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(d)Exhibits

99.1Press Release Dated December 20, 2024

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SIGNATURE

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Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

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CSP INC.

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Date: December 20, 2024

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By: /s/Gary W. Levine

Gary W. Levine

Chief Financial Officer

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Exhibit 99.1

CSPi Reports Fiscal Fourth Quarter and Full Year 2024 Results; Recurring Sales Continue to Rise as Percentage of Total Revenue; AZT PROTECT Market Momentum Builds; Cash Position of More Than $30 Million as of September 30, 2024

Board Declares $0.03 per Share Quarterly Dividend

LOWELL, Mass., December 20, 2024 – CSP Inc. (NASDAQ: CSPI), an award-winning provider of security and packet capture products, managed IT and professional services and technology solutions, today announced results for the fiscal fourth quarter and year ended September 30, 2024. The Company also announced that the Board of Directors declared a quarterly dividend of $0.03 per share payable January 15, 2025, to shareholders of record at the close of business on December 27, 2024.

Recent Achievements and Operating Highlights

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Cloud-based business remains strong with over 10 new customers signed in the fourth quarter.

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Recurring revenue increases to approximately 17% of total revenue.

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Strong relationship with Rockwell Automation generates over 100 new business leads for AZT PROTECT™ at recent conference.

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Cruise line business bookings and pipeline positioned for strong fiscal year 2025.

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Record cash level of $30.6 million as of September 30, 2024 allows the company to implement near and long-term business initiatives to generate sustained growth and profitability.

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"Our results for the fiscal fourth quarter and full year were in-line with our internal projections as we completed a sales force transition and built market interest in our AZT PROTECT™ product line,” commented Victor Dellovo, Chief Executive Officer. “Our business activity towards the end of the quarter was above normal and allowed us to sign several new customers during fiscal 2025 first quarter for both our Technology Solutions (TS) and High Performance Products (HPP) businesses. We believe this momentum increases our growth prospects during fiscal 2025, which is anticipated to be led by continued growth of Managed Services, an increase in our cruise line business, and new AZT PROTECT™ customers. Our partnership with Rockwell Automation is building and has substantially increased our active AZT PROTECT™ leads. We have aligned our sales strategy to maximize AZT PROTECT™ market adoption by focusing on working with partners and distributors.  These activities also complement our strategy of focusing on higher margin products and services, which has enabled us to grow the recurring business to 17% of fiscal 2024 sales compared to under 5% of sales just two years ago – with additional growth expected for fiscal 2025.”

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Fiscal 2024 Fourth Quarter Results

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Revenue for the fiscal fourth quarter ended September 30, 2024, was $13.0 million compared to revenue of $15.3 million for the fiscal fourth quarter ended September 30, 2023. Services revenue represented $4.0 million of overall sales compared to the year-ago services revenue of $4.3 million.  Gross profit for the three months ended September 30, 2024, was $3.7 million, or 28.4% of sales, compared to $5.2 million, or 33.8% of sales. The Company reported a net loss of $(1.7) million, or $(0.18) per diluted common share for the fiscal fourth quarter ended September 30, 2024, compared to net income of $1.4 million, or $0.15 per diluted common share for the fiscal fourth quarter ended September 30, 2023.

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The Company had cash and cash equivalents of $30.6 million as of September 30, 2024. The robust balance sheet ensures the Company has the resources to implement the AZT PROTECT™ product offering and other growth strategies. During the fiscal fourth quarter 2024, the Company repurchased 2,800 shares for a total cost of $34 thousand.

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Fiscal Year 2024 Full Year Results

Revenue for the fiscal year ended September 30, 2024, was $55.2 million compared with revenue of $64.6 million in the same prior year period. Gross profit for the fiscal year ended September 30, 2024, was $18.9 million, or 34.1% of sales compared with $21.9 million, or 33.9% of sales. The decline in gross profit was largely due to product mix. The Company reported a net loss of $(0.3) million, or $(0.04) per diluted common share in

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Exhibit 99.1

the fiscal year ended September 30, 2024, compared with net income of $5.2 million, or $0.55 per diluted common share for the fiscal year ended September 30, 2023.

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Conference Call Details

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CSPi Chief Executive Officer Victor Dellovo and Chief Financial Officer Gary W. Levine will host a conference call at 10:00 a.m. (ET) today to review CSPi’s financial results and provide a business update. To listen to a live webcast of the call, the event link https://www.webcaster4.com/Webcast/Page/2912/51805. Individuals also may listen to the call via telephone, by dialing 888-506-0062 or 973-528-0011 and use the Participant Access Code: 221929 when greeted by the live operator when greeted by the live operator. For interested parties unable to participate in the live call, an archived version of the webcast will be available for approximately one year on CSPi’s website.

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About CSPi

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CSPi (NASDAQ:CSPI) operates two divisions, each with unique expertise in designing and implementing technology solutions to help customers use technology to success. The High Performance Product division, including ARIA Cybersecurity Solutions, recognizes that better, stronger, more effective cybersecurity starts with a smarter approach. ARIA's solutions provide new ways for organizations to protect their most critical assets—they can shield their critical applications from cyberattack with the AZT solution, while monitoring internal traffic, device-level logs, and alert output with our ARIA ADR solution to substantially improve threat detection and surgically disrupt cyberattacks and data exfiltration. Rounding out the portfolio, Aria's AZT Gateway Software allows us to interrogate network packets at 100mbps line-rate to enforce forwarding and capture policies on the fly. Customers in a range of industries rely on our solutions to accelerate incident response, automate breach detection, and protect their most critical assets and applications—no matter where they are stored, used, or accessed. 

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CSPi's Technology Solutions division helps clients achieve their business goals and accelerate time to market through innovative IT solutions and professional services by partnering with best-in-class technology providers. For organizations that want the benefits of an IT department without the cost, we offer a robust catalog of Managed IT Services providing 24×365 proactive support. Our team of engineers have expertise across major industries supporting five key technology areas: Advanced Security; Communication and Collaboration; Data Center; Networking; and Wireless & Mobility.

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Safe Harbor

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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, projections or guidance concerning business performance, revenue, earnings, cash flow, the current economic environment, liquidity, strategic decisions and actions, and other financial and operational measures.

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 Securities and Exchange Commission (“SEC”). Please refer to the section on forward-looking statements included in the Company's filings with the SEC.

SOURCE: CSP Inc.

CONTACT:

CSP Inc.
Gary Levine, 978-954-5040
Chief Financial Officer

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Exhibit 99.1

CSP INC. AND SUBSIDIARIES
CONDENSED UNAUDITED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)

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​		September 30, 2024			September 30, 2023
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Assets		​	​		​
Current assets:		​			​
Cash and cash equivalents	​	$	30,585	​	$	25,217
Accounts receivable, net	​		14,494	​		12,955
Financing receivables, net	​	​	4,384	​	​	7,171
Inventories	​		2,293	​		2,542
Other current assets	​		3,093	​		2,479
Total current assets	​		54,849	​		50,364
Financing receivables due after one year, net	​		2,922	​		4,224
Cash surrender value of life insurance	​	​	5,589	​	​	5,356
Other assets	​		6,076	​		5,960
Total assets	​	$	69,436	​	$	65,904
​	​	​	​	​	​	​
Liabilities and Shareholders’ Equity	​			​
Current liabilities	​	$	18,682	​	$	15,659
Pension and retirement plans	​		1,306	​		1,251
Other non-current liabilities	​		2,178	​		2,846
Shareholders’ equity	​		47,270	​		46,148
Total liabilities and shareholders’ equity	​	$	69,436	​	$	65,904

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Exhibit 99.1

CSP INC. AND SUBSIDIARIES
CONDENSED UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share data)

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Three months ended

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Year ended

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September 30,

September 30,

September 30,

September 30,

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2024

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2023

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2024

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2023

Sales:

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Product

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$

9,083

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$

11,006

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$

36,793

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$

47,149

Services

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3,950

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4,320

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18,426

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17,498

Total sales

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13,033

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15,326

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55,219

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64,647

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Cost of sales:

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Product

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7,633

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8,213

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28,800

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35,524

Services

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1,700

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1,927

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7,564

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7,203

Total cost of sales

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9,333

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10,140

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36,364

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42,727

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Gross profit

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3,700

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5,186

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18,855

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21,920

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Operating expenses:

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Engineering and development

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793

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705

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2,956

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3,140

Selling, general and administrative

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4,950

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4,787

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17,771

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16,910

Total operating expenses

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5,743

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5,492

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20,727

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20,050

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Operating (loss) income

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(2,043)

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(306)

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(1,872)

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1,870

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Other income, net

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221

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2,733

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1,453

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2,865

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(Loss) income before income taxes

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(1,822)

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2,427

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(419)

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4,735

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Income tax (benefit) expense

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(166)

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1,019

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(93)

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(469)

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Net (loss) income

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$

(1,656)

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$

1,408

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$

(326)

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$

5,204

Net (loss) income attributable to common shareholders

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$

(1,656)

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$

1,320

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$

(326)

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$

4,884

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Net (loss) income per common share - basic

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$

(0.18)

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$

0.15

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$

(0.04)

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$

0.56

Weighted average shares outstanding – basic

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9,121

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8,853

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9,041

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8,762

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Net (loss) income per common share - diluted

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$

(0.18)

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$

0.15

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$

(0.04)

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$

0.55

Weighted average shares outstanding net income - diluted

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9,121

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9,053

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9,041

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8,941

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Document and Entity Information	Dec. 20, 2024
Document and Entity Information [Abstract]
Document Type	8-K
Document Period End Date	Dec. 20, 2024
Securities Act File Number	000-10843
Entity Registrant Name	CSP Inc.
Entity Incorporation, State or Country Code	MA
Entity Tax Identification Number	04-2441294
Entity Address, Address Line One	175 Cabot Street
Entity Address, Address Line Two	Suite 210
Entity Address, City or Town	Lowell
Entity Address, State or Province	MA
Entity Address, Postal Zip Code	01854
City Area Code	978
Local Phone Number	954-5038
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, par value $0.01 per share
Trading Symbol	CSPI
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false
Entity Central Index Key	0000356037
Amendment Flag	false

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