CSPI - Earnings call transcript Q1 2018

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Operator

Good day, everyone, and welcome to today's CSP Incorporated First Quarter Fiscal 2018 Conference Call. [Operator Instructions] It is now my pleasure to turn the conference over to Gary Levine, Chief Financial Officer. Please go ahead, sir.

Gary Levine

Thank you. Good afternoon, everyone, and thank you for joining us. call Victor the Executive CSPi's on Officer. me today Dellovo, is Chief With

refer I'd you deemed Harbor to call, we statements Act like Before begin, respect with remind Private Litigation company's excludes with the and non-GAAP take to section our of of XXXX Securities the release and per the the may we advantage that in the described the net measures of to non-GAAP the Safe be included of filings provisions that Securities Reform to will of the refer today's company's during The general measures XXXX forward-looking SEC. factors economic and to in Exchange press Such results to actual be the QX, the The Commission. act. cause others earnings competitive company. income factors, forward-looking Forward-Looking financial legislation. market the in company materially conditions, share on could to statements from factors are under Statements effect filings new risks will reconciliation pressures website. by the On include cautions tax non-GAAP the that available numerous Please pricing made CSPi's GAAP comparison today’s differ and to which results with on we call

after Victor. then and your it over an on progress turn our update it introduction, During I'll and Victor for back our With discuss open Victor strategic questions. an call, provides you I'll up financials. business today's come the to first that, will quarter we'll on to segment

Victor Dellovo

the to our performance quarter fiscal for execute were issues. to of of the due expected first what high strategy. relatively up solution first achieved to continue in both year at XX.X% U.K. would technology performed solutions effectively we sales sales primarily due and timing Financially Gary. well growth We Thanks, the we as revenues the quarter technology for in first better than product half we segment on the the end growth our business. be on We expected soft year

we line share bottom versus per the a ago. year $X.XX reported loss GAAP $X.XX On of a

was on $X.X million tax later to loss impact the describe legislation quarterly from new call. Gary which primarily will This the the due

tax results last our with wireless the year in for advance of as our business impact, expected Gary? see segment. for $X.XX and we of better service our security new had financial I'll essentially received distinguished increased share High were results to a the and Performance we next-generation we Excluding division, our these our first than with quarter, line each in product growth Gary XXXX. awards and achievement our detail offerings. per QX of reviews for In for continue cybersecurity next-generation review two to products platform. in ARIA Solutions, progress the drove revenue our In the continue back security demand Technology our come managed quarter After

Gary Levine

Thanks Victor.

first For million fiscal $XX $XX.X revenues to XX.X% million increased the of a ago. year XXXX, quarter from

profit for was a XX.X% from from Gross of XX.X% or ago. XX.X% quarter or in million, the prior-year the sales year X.X% of on cost sales the of million the total Our million increased increase %X.X XX.X% $XX.X to revenue. $X.X up sales

ago. engineering up from was development XX.X% XXX,XXX year and First expense quarter $XXX,XXX a

X.X% expected As XX.X% $X of million $X.X year a year's This percentage of SG&A last sales or products staff is of our development from expense sales, the to to year. range QX High of compared to or the X% given for were X% business. engineering million expense in previous our increased and year. increase X.X% in sales XX.X% the of within QX Performance expenses

to the range XXXX. year expect expenses XX.X% continue SG&A for fiscal in to of We XX.X% the

statement $XXX,XXX QX The legislation tax to during describe legislation million of resulted impact on the share moment $X.XX to enacted the a QX. earnings. like XX%. of of new was I'd our $X.X paid second, eight tax remeasurement rate first, per This charge And the $XXX,XXX included new as XX% charge one-time foreign for or in repatriation deferred years. The the a operations. of to will undistributed the income assets of for from in tax liabilities take be Now December over reduced next and our

Including a effects we Going tax share in forward, net will tax the or ago. XX% be rate million that to legislation, of an a year or range new tax of $XX,XXX was our $X.X the legislation, loss are $X.XX per share $X.XX net compared assessing XX%. of overall with of the the effect a loss estimate per

QX Excluding accounts loss investments the to the million from short-term the been - per $X.XX would tax XXXX impact fiscal $X.XX increased for XXXX. fiscal of receivable. share million and EPS, $XX.X end $XX.X of collections to mainly on Cash at loss year to have our

Lastly, on February our to dividend XXXX. payable XX, March Board of Directors of per shareholders record voted XXXX XX, a to of share pay on quarterly $X.XX

priorities the [technical over products financial of XXXX be and Our I'll of turn and now the for performance to bottom-line remainder organization. Victor. our level increasing improve QX will difficulty] high-margin by call the

Victor Dellovo

Thanks Gary.

sales In our to starting one Let's revenue, strong the services business, million coming support from and product of our with multicomputer into segment $X.X High royalty our we were sale Performance down XX% products. last jump Myricom revenues revenues from HPP year multicomputer received domestic legacy E-XD point. review product right division. the with E-XD equivalent

for for program boards sales We and within to military project continue the orders program. the anticipate for E-XD E-XD foreign the receiving are

the of be the Although we a regarding XXXX. of fiscal back difficulty], indication been the expect half haven't given will specific the in total [technical orders we bulk

better adapter and side, little ARC entertainment continue of we capture quarter see products in performed decline network in packet On sales expected but a to the media market. XX than the for Series gig Myricom legacy the for

that investigative Series, companies but only also the potential the is we you XXXX of products us products not in nVoy which seamlessly allow or been integrate decline. quarter Series, data began of on generation information international reducing As the laws Fabric-Ready next-generation of activities companies state firewall the that breach exact to The. breaches notification development in Myricom our frames give the cybersecurity we of helping with solution gain simple nVoy stages full and this federal files the focus determine solution. further and combination to this allow teams the hours of generate a investing cost-effective a which and research automated identifiable response clients the joined needed to nVoy next response the We're instead firewalls Myricom this nVoy of our matter detect efforts information nVoy Fortinet to our the compromised. advance were a Partner weeks. the encouraged application of early data know, exposed. FortiGate as stringent to records product become at more the their in investigation focused contain when - any personal counter interest files early enables These this has include application will the with to impact the time by Fortinet the To program of Series damage. detailed automatically the security to Fortinet way

into In by for premise. platform. newest it During ARIA that software-defined VMWorld's on the In security products category be in that Golden of December, for set plot security earned the This every peer capabilities need at XXXX critical major to in to industry. was end and line What January, Bridge named market an the ARIA Best allows be prestigious security and differentiates the cybersecurity the data conference. companies ARIA the launched is protection to Product in quarter, recognition ARIA specific it and expert Gold application those the policies status first annual platform assets to security accessed user our in also Award, New best and provides advanced cybersecurity industry build a we applications. that without application developers both enables honors their program the cloud finalist the in enterprises having our Security

We cybersecurity part continue market. year the product by later revenue of excited the the be our potential first in from to are on the in this track and to realize

Technology our increased contract our in service and year-over-year We manage of number quarter. renewed by we first reported a Quarterly now for Germany revenues increase Turning provider up services large multinational slight an a business. were sales with assets. strong and revenues U.K. managed service a to In the saw business Solution this of fraction to in the driven XX.X% continued telecommunication

We also closed space. on client contract with the a service new operator in managed mobile the

supporting We platform will and including be this equipment. managing and network all security

mainly success U.K. expanded due we our client the position geographic cross-selling Germany. region. we In to now team members further of higher quarter, our We revenues related Frankfurt demonstrating our During to support strategies. significantly last sales and have us U.S.-based that expect customers than year this the engineering and continued in in were presence to in in activity growth the two

cruise we manager the won affect what typically team two install expect the our we During new security the at our strong business of customers quarter engineering ship. their in grow. pipeline. were in the will security, sales continues in forward. to a cruise When hired major moving wireless and members we in hired managed a we contracts in account sales hired In nine the our with line quarter sales which pace quarter. our U.S. service very soft positively and keep the closed the is to XXXX, two were In contract third U.S. We performance business to wireless contract new of new

services mentioned to networks. be XX ships of range between quarter's to of X the from on installation we wireless that we call, full the flight surveys On to expect on last working

over very Japan, U.S. XX and are including the growth projects excited Europe we for We and and ships potential awarded been next continue in installation the three remediation, see now to have Australia, years. around

executing strategy. results We about organization. Technology we that our other areas the our Overall, within are Solution are the in on technology successfully talks also demonstrates in

Our traction continues new to managed products momentum. are service gain and our gaining

our will revenue to geographies. expect continue bring cross-selling new all initiatives across We

anticipating and your our to - and and we to the the for go as sales first few our fiscal expected and questions, the year security quarter of better to key We're our driven of from we soft Technology the confident but with half by me entered gain We a cybersecurity year strategy managed leave service a business cybersecurity new offers half than first in second profitability revenues a products offerings, wireless continue traction. growth products XXXX multicomputer Before Solutions. increased expect let continue and thoughts. in delivered you

Finally, we at exciting period changes are company. of the the in

operator quarter our cybersecurity move on demand multicomputer the capitalize can first focused to executing the the that for growing on that during successfully company performance we business from Our managed service a defense-related the of are advance demonstrates With strategy questions. to XXXX to fiscal technology that, proliferation in We to in transformation turn your we and progress to take solutions. as further new wireless. it products I'll look forward our over

Operator

comes Please Our Segren Joseph Instructions] with first [Operator from question Nerges Investments. go ahead.

Joseph Nerges

one release question in that Gary, and press was $XXX,XXX. mentioned repatriation here. you gave you the Just accounting number $XXX,XXX, the

Gary Levine

That's $XXX,XXX, correct.

Joseph Nerges

over an correct, By on rate the that if eight-year period that a way we're million, is in of gets tax that's $X.X repatriating around repatriation, counting that… other time, XX% is my words

Gary Levine

then on assets. XX% on other and cash generated X%

Joe. it's mix So a

Joseph Nerges

And that period over time? done will an eight-year of

Victor Dellovo

XXX,XXX year and… plus say a Let's

Gary Levine

heavy very back-ended. It's

first So, years money can dividends repatriate received something you it's few you if offset very deduction which plus liability. small get amount

Joseph Nerges

it So years and eventually cost accounted take of eight this period over for report. in place basically of a will the we've

Victor Dellovo

it's done reasonable is But what - this methodology - we least our such short outside estimate. now a worked We've and at believe the as with well period could this we a an point. best I more detailed it's at of we in analysis. consultants Yes,

to look we at detail information. and Now go have the

Joseph Nerges

announced interest area. security to press market can said you softer you for elaborate, in Victor recently grow our continues solution Maybe the release

does - beta know or the we're all… we that it I at we're getting still we're on are testing not Now inquiries interest. how - we're mean getting in

Victor Dellovo

with a did to needs and hopefully through their we our and of companies started lot find could as conferences those sat Joe, fill so what and what lot a down with we product before what software. developing Yes, out technologists before, we we needs the we I mentioned were different went of

developing developing and he development out went talking a of this, testing Gary as and product is he as and a interested we that's names through and to got it it the conferences of spoke who division a lot So are numbers on. Southwell those started people beta about as we running which lot was conferences, of

large that to the companies lot we’re now to I mention interest a close but - releasing it, can't a we're of couple talking So there's some there. which

folks. names So and getting the being with we with that of as said, shows and trade numbers doing the talking keep shows these lot and are a trade we're

Joseph Nerges

understand I as is outstanding advertised if product. product the Well, it's - an it works

my all because you're all from Let's And - obviously interest put conferences been these getting of getting you've the feedback at. these that you're it from perspective anyway.

sites sites you, we how we multiple not me or Let are on customers? are are - ask testing beta beta test undertaking, - many this they multiple

Victor Dellovo

multiple Yes, there pretty right a that this lot but - specific be organization there very well good. are doing there large now, goes we’re of is is would one work in that it with everything

Joseph Nerges

So speak? as we it's testing under beta

Victor Dellovo

of is the there's that lot customers developing that it but Yes, a functionality of we’re process right of still warning these the base are now. in some of

Joseph Nerges

calling XX-K, basically it available explanation what - saying we're the - SDI think under right? at, I you're pretty And pretty going it widespread of was instances through is what's or calling is, you're your this

Victor Dellovo

SDS.

Joseph Nerges

- guess general the essentially licensed a on is which with And that orchestrator. - be manager then the will that you SDS works orchestrator, have yearly that's the I everything SDS the basis,

we're about as as Now how understand the - many talking to going They and and the we about XX-K. be from what talking sold be as I built-into our there, numbers be said I'm customer it talking that's instances, are when sold will product instances line? wants. could could widespread I the number What the this talking as of we that are about about be

Victor Dellovo

just It people how have and how how the many applications people big it. are on touch many to customers, developing depends

Joseph Nerges

per per really are instances the going So or…? container - to they be or VM

Victor Dellovo

Per VM, per whether server or… it’s virtual yes

Joseph Nerges

at want spun individual that instance Everything so large? that to entity, is extremely if out an an or call you

Victor Dellovo

XX,XXX be could it instances. servers XX,XXX has someone Yes,

Joseph Nerges

Really large. really exciting. really, That's

Okay, to of Servers week million you with press expansion Broward of last the let’s College early agreement $X.X expansion announced and of go release Managed the them, agreement?

Victor Dellovo

Correct.

Joseph Nerges

over how to some I going three with it is that of is of be? is that stuff the time and - part its mean - doing frontloaded that of a part Now year period we’re was or some

Victor Dellovo

three a for years have The it three way we it - of is all. contract year top Joe, one with more on

one, another three then years that after at there renegotiate. So point have and we would is one, one to

Joseph Nerges

contract correct? is this that previous is to with the you have there? have And this out but - a added the So you already this is contract college,

Victor Dellovo

Yes.

Joseph Nerges

as so automatic as that course I over instance far that is the to Cisco other So there suppliers the gone correct? only of responses, far right now as are to be firewall, far Fortinet for the well firewall, we’ve as And tie-in? is nVoy assume two responses the the the we're the going the firewalls product as as going additional

Victor Dellovo

We’re their now talking to other ones right - IP.

Joseph Nerges

seminars Lauderdale product Gary I Fort believe Cisco next - Gary and has next Tampa in this particular line? week with on three Orlando,

Gary Levine

Cisco Yes sir, people, Cisco and sales to and Cisco that’s customers. team going the be team with

Joseph Nerges

if out Okay, the somebody let there now right is step and ask questions. let other else question me any

Gary Levine

you too tomorrow see will Joe right. I

Joseph Nerges

Yes, I'm couple away feet you. hundred from

Gary Levine

Okay.

Operator

remarks. and this we have it [Operator additional or time. additional Instructions] questions appears any turn I at closing to It back Victor no will for Gary

Victor Dellovo

call. our you Thank you joining to all look evening. for with next this on speaking forward us again We

Operator

conclude does conference. participation. This today's your you. Thank We appreciate

at may wonderful have And You day. a anytime. disconnect

CSP (CSPI) 12 Feb 182018 Q1 Earnings call transcript