8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

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

Date of Report (Date of earliest event reported): February 12, 2020

CSP Inc.

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

Massachusetts

(State or other jurisdiction of incorporation)

| 000-10843 | 04-2441294 |

| --- | --- | | (Commission File Number) | (IRS Employer Identification No.) |

| 175 Cabot Street - Suite 210, Lowell, MA | 01854 |

| --- | --- | | (Address of principal executive offices) | (Zip Code) |

(978) 954-5038

(Registrant’s telephone number, including area code)

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:

☐  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))

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.          ☐



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

Item 2.02   Results of Operations and Financial Condition.

On February 12, 2020 CSP Inc. (the “Company”) issued a press release announcing its financial results for the first quarter of fiscal year 2020, which ended on December 31, 2019.  A copy of the press release relating to such announcement is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

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.

Item 9.01   Financial Statements and Exhibits.

(d)Exhibits

99.1Press Release Dated February 12, 2020

SIGNATURE

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.

CSP INC.

Date:  February 12, 2020

By:  /s/Gary W. Levine

Gary W. Levine

Chief Financial Officer

		cspi\_current folio\_8k\_Ex99-1	

Exhibit 99.1

CSP Inc. REPORTS FISCAL YEAR 2020 FIRST QUARTER RESULTS; BUILDS MOMENTUM FOR NEW PRODUCT LAUNCHES IN THE SECOND HALF OF FISCAL YEAR 2020

LOWELL, Mass., February 12, 2020 –CSPi (NASDAQ: CSPI), a provider of security and packet capture products, managed IT and professional services and technology solutions, reported results for the 2020 fiscal first quarter ended December 31, 2019.  The Company announced that its Board of Directors has voted to pay a quarterly dividend of $0.15 per share to shareholders of record on February 28, 2020 payable on March 13, 2020.

“I am pleased to report that our first quarter results met our expectations, and despite the unfavorable business mix, our gross margin improved over 100 basis points demonstrating our continued focus on high margin products to fuel our growth and profitability,” commented Victor Dellovo, Chief Executive Officer.  “We remain confident about our opportunity pipeline and anticipated performance throughout the year, including a more favorable product mix in addition to royalty revenue from E-2D planes in the second half of fiscal 2020.  Additionally, the launches of our exciting new offerings - ARIA and Unified-Communications-as-a-Service business (UCaaS) - are progressing as planned and will further foster our migration to a cybersecurity, wireless and managed service markets company.”

“With regard to ARIA, we continue to have advanced discussions with a leading cable company and we anticipate this will result in a purchase,” said Mr. Dellovo.

Fiscal Year 2020 First Quarter Results

Revenue for the fiscal first quarter was $16.6 million compared to $19.0 million in the year-ago fiscal first quarter. Foreign exchange had a negative effect on net loss of $0.3 million for the quarter.  Gross profit for the fiscal first quarter was $4.0 million, or 24.3% of sales, compared with $4.3 million, or 22.9% of sales in the year-ago fiscal first quarter. Net loss for the first quarter was $540,000, or $0.14 per share compared with net income of $50,000, or $0.01 per share for the first quarter of fiscal 2019.

At December 31, 2019, the Company had cash and cash equivalents of $17.6 million.

Conference Call Details

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, please visit the “Investor Relations” section of the Company’s website at www.cspi.com.  Individuals may also listen to the call via telephone, by dialing 866-894-5910 or 785-424-1736 and use the Conference ID: CSPQ120.  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.

About CSPi

CSPi (NASDAQ: CSPI) operates two divisions, each with unique expertise in designing and implementing technology solutions to help their customers use technology as a means to success. The High Performance Product division, including ARIA Cybersecurity Solutions, originated from supporting initiatives for the Department of Defense and Western intelligence agencies related to network monitoring, data protection, and intelligence initiatives. This focused mindset now results in foolproof data protection, enterprise-wide. Our ARIA Software Defined Security solutions set provides enhanced network security, as well as accelerating incident response capabilities, while our Myricom nVoy Series appliances provide automated breach identification and notification, enabled by the 10G dropless packet capture inherent in our Myricom intelligent adapters. 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.

Safe Harbor

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, we are confident about our opportunity pipeline and anticipated performance throughout the year, including a more favorable product mix in addition to royalty revenue from E-2D planes in the second half of fiscal 2020.

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.

Exhibit 99.1

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

	December 31, 2019		September 30, 2019
		(Unaudited)
Assets
Current assets:
Cash and short-term investments	$	17,627	$	18,099
Accounts receivable, net		12,470		15,114
Inventories		5,507		7,818
Other current assets		5,484		5,503
Total current assets		41,088		46,534
Property, equipment and improvements, net		1,356		1,273
Operating lease right-of-use assets		2,288		—
Other assets		11,516		11,562
Total assets	$	56,248	$	59,369
Liabilities and Shareholders’ Equity
Current liabilities	$	14,459	$	20,027
Pension and retirement plans		7,275		6,904
Operating lease liabilities		1,679		—
Notes Payable		1,838		684
Other non-current liabilities		1,199		1,326
Shareholders’ equity		29,798		30,428
Total liabilities and shareholders’ equity	$	56,248	$	59,369

Exhibit 99.1

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

	Three months ended
	December 31,		December 31,
	2019		2018
Sales:
Product	$	13,222	$	15,711
Services		3,350		3,269
Total sales		16,572		18,980
Cost of sales:
Product		11,318		13,212
Services		1,223		1,419
Total cost of sales		12,541		14,631
Gross profit		4,031		4,349
Operating expenses:
Engineering and development		672		745
Selling, general and administrative		3,761		3,589
Total operating expenses		4,433		4,334
Operating (loss) income		(402)		15
Other income (expense), net		(208)		37
(Loss) income before income taxes		(610)		52
Income tax (benefit) expense		(70)		2
Net (loss) income		(540)		50
Net (loss) income attributable to common stockholders	$	(540)	$	48
Net (loss) income per share – basic	$	(0.14)	$	0.01
Weighted average shares outstanding – basic		3,963		3,868
Net (loss) income per share – diluted	$	(0.14)	$	0.01
Weighted average shares outstanding – diluted		3,963		3,966