Thu, May 15, 2:05 PM (60 days ago)
CSP Inc. (CSPI) reported a challenging quarter ending March 31, 2025. Sales decreased by $0.6 million, or 4%, to $13.1 million compared to the same period in 2024. Gross margin percentage dropped to 32% from 47%, resulting in an operating loss of $1.0 million, contrasting with a $1.2 million operating income in the prior year. Other income, net decreased by $0.3 million, and an income tax benefit of $0.7 million was recorded, compared to an income tax expense of $0.1 million in the previous year. For the six months, sales decreased by $0.3 million, or 1%, to $28.8 million. Gross margin percentage fell to 30% from 36%, leading to an operating loss of $1.3 million, compared to an operating income of $0.9 million in the prior year. Other income, net increased slightly, and an income tax benefit of $0.8 million was recorded, compared to an income tax expense of $0.1 million in the previous year. The company's liquidity remains strong with $29.5 million in cash and cash equivalents, supported by a $15.0 million line of credit. However, cash and cash equivalents decreased by $1.1 million due to increased borrowing and dividend payments. The company faces uncertainties due to geopolitical tensions and potential tariffs, which could impact its business and financial condition. Despite these challenges, management believes the company's available cash, operational cash flow, and line of credit will be sufficient to meet working capital and capital expenditure requirements for at least the next 12 months.