CSP (CSPI) 12 Feb 202020 Q1 Earnings call transcript

Good day everyone and welcome to CSPi Fiscal 2020 First Quarter Conference Call. At this time, all participants are in a listen-only mode. Later you will have the opportunity to ask questions during the question-and-answer session. [Operator Instructions].

And it's my pleasure to turn the conference over to Michael Polyviou. ahead. go Please

Chief Hello to Keith. XX, thank for Dellovo, you With CSPi's Gary Thank Financial Chief CSPi's everyone fiscal us Officer. CSPi's Victor is review on December Officer first joining and me Levine, you, call and Executive quarter XXXX. ended

factors statements during Litigation with the filings company's begin, pressures then forward-looking the the section provisions Safe and described call could statements I made that of Victor in by to to may the differ Please included Reform with to will XXXX will others in pricing we that the remind like the the we materially filings call, to opening remarks, actual to economic cause company the company. Such take under competitive Securities Act deemed include and Harbor company's respect of act. questions. Before risks and forward-looking for the we statements from open results the general you factors and refer their cautions with Private Exchange be would Securities on Gary Commission. today's conclude After be factors, conditions, SEC. advantage of numerous that market forward-looking The

over I will ahead. turn Victor With go that, Executive the to Victor, Chief please call Officer. Dellovo,

on fiscal revenue and investments to to have the develop profitability. our internal past of Thanks like quarter, for year of margins gross a everyone wish this made over To despite focused $XX improved as reflects despite driving Michael and to the that to we XXXX, business good total million. the morning pleased believe new mix, revenues everyone. Since happy $XX.X this years products a ahead remained million $X.X since I I I'm we was ago is the our higher-margin would couple decrease. our compared projections million, Slightly begin, first year. quarter call compared

a few benefit a In our as quarter business I with minutes and a unified first Solution make our I'll have today on with ARIA, topline to our Additionally, will business. results we service progress a platform greater discuss disproportionate or But driving bottom-line. in to a communication will continue Gary first, growth offerings review our begin our UCaaS Technology segments, detail. will and financial higher-margin

For is $XX.X our closely. as the service well services expand high or performed we monthly track our on new our quarter, a customer continue customers TS something to revenue we well as million, was due managed base our to satisfaction, which MSP current spend customer as practice

time, we off industry who someone has this investment it's been As basis to team. consistent high a entire for our so our hats to a do maintain let level alone but in long this on difficult achieve for

And to revenue cruise growth Other opportunity. areas the significant the represents such of quarters. currently two industry have commitments next as we

to XXXX. The surpass experienced in XXXX. in XXX% in increase XXX strengthen current rate the business. to Microsoft fiscal number growth can practice we that ways our in our a steadfast is addition licenses further I a believe performance And Based line, as exploring trend of on we Office

all data redundant Texas. in hard centers and including which located technical Florida one UCaaS an for XX/X support security Our soft is and with and in phones, service

in of so a which is in players. market, growing participate our years. developed startup have CSPi something XX I get large billion piece at market in is believe to Everyone capture testament an few the estimated eager we we unique, to and dominated can few pie This innovative our underway by a mentality. reach to is this a this

open portion of leaves to cutter adjustable service. the offering cookie to However, I believe CSPi big market that a

and as CSPi. This nimble companies centric customer smaller, an more provides opening such for

secure our new both to they customized appreciate continue mention, can to the fit they strong pipeline specific to We their have existing needs. products. and Not as be customers,

each beta mentioned, performing As users. conference two over have the on we companies call, QX we X,XXX testing

I'm feel From of had support earliest recognized forward pleased the will to report a something few our one we I confident made demand. infrastructure developed other progress them updates have weeks. the so few in days, sign we the providing has coming expected that the sure we contract to signed months. and we the special can ones look over

reflects Now a division. revenue, Myricom. over Revenue the quarter product X million I'll product our high for performance primarily decline to move the was in and

However, for to the year second improve throughout the anticipated half military which in we do of business legacy EXD. our foreign royalties the expect year, also includes

gives offerings segments. next potential business award new of optimistic be to terms ARIA, us winning about our for ACP platform In reason growth generation cybersecurity the

several have a discussions sales the as in funnel, We for of advanced phases leader categorize few stages. being various that would including

we fact, company multi-million leading two be could positioned dollar In believe this are within a well cable and opportunities.

the you tight to. other is they up all what would a As and it's imagine, know knit small community

companies. other has similar with So this discussions open

In we addition direct our to program. for channel partners to official team, vet continue potential sales

increase our others a ensures have for currently our other chances speaking are we We a success. partners robust which to roster, channel with and several and increase

our to will from you increase our integrations as base are capabilities. impact These well customer market reach with partners, go-to-market addition, These these and weeks. multiple our partners vendors access solutions security leveraging the whose coming see solution prospects. integrations by benefit announcements In in as from will

summary, no and our and new quarter. progress In staring was I and solid made offering. HPP QX anticipated the UCaaS a ramp surprises business. and launched We were was There exchange up foreign

especially half in So we year. fiscal the to remaining expect improvements second fiscal over see of of quarters the XXXX

that, fiscal overview our first provide With on brief performance. to financial a ask quarter I'll Gary

Victor. Thanks,

fiscal of to quarter. revenue of declines the our mentioned, is our Victor and first division in $XX.X and revenue first the equal in $XX million, million Myricom of As ago year product revenue products. was a compared decrease decrease million The in quarter $X.X UK $XXX,XXX in multi-computer result

to to quarter year compared due slightly which was lower ago profit of the is gross Our sales. lower $X million, the

HPP basis of ago XXX year up TS from business segments. margin to despite point was higher However, revenues the to service margin compared gross and combined gross XX%, due of the our XX%

and development fiscal out first a at expense recovery of to to expenses ago. the and $XXX,XXX to foundation of in last not due where our platform build were compared quarter a For help trend year contract to ARIA completed. year $XXX,XXX, lower a reduction and labor This continue is the engineering required the software consulting services

fiscal the euro pound ago impacted negatively quarter, of charge to for benefit part foreign $X,XXX reported year $X.X recorded The relative non-cash was for product share of and tax first lower benefit $XX.X $XXX,XXX quarter QX. to the XX.X%. in had Due slight a launch the QX, compared tax favorable minimal ended for this during tax ago short-term in income or of quarter expense per compared of first the of to year rate loss for to the exchange investments expenses cash sales quarter. share for $X.X fiscal current per compared XXXX. fiscal of a net with compared the ARIA million last prepare U.S. the a QX, were SG&A we is were tax in and XX,XXX of The $XX,XXX was in for due to We no increase or year's to fiscal Our the fiscal year. million. of dollar personnel due to additional million, a the adjustments. quarter to XXXX a the we UK QX rate as British We $X.XX $X.XX the effective strength in tax to the quarter, in $XXX,XXX QX, first effective benefit impact by the in net the We

Our has focused we March and and We our XX, to per XXXX. our XXXX, voted shareholders payable on a share costs. products. a driving on of boost XX, to solid bottom-line have foundation In to Board higher-margin record financial the our continue on manage sales of $X.XX of pay quarterly summary, of remain Directors performance dividend February to

your turn that, operator over take the With it questions. I'll to to

question CSPi. James And [Operator Stewart our from take we first with Instructions]

who to primary with strategies the collaboration going significance Palo you with of be as and you But are question Networks. been users local them a people many a there's to going year? governments I data focus gearing is doing it's end the hacked up Yes, your to know And to this I where be. But funds. the so have lot businesses as Alto direct and a going of you're or focusing traditional sales know main and a so. I be and actual also serious I'm Are for kind if on of and stolen curious Victor. either have of problem.

that our reach. in or we We more that currently on customers current direct we channel through the people channel are set partner security the we that program either with area focus sales and are we to have up could to partners so looking talking through brought contacts have direct and have

bringing be security a it'll more it'll sales these combination So of hiring of a partners and combination both. be people internal also, of on

you addition collaborations in to Palo do other providers any Do Alto? have to any IT plans with other

Yes.

As we'll few new I mentioned in have next coming the in some ago, weeks. couple a script minutes announcements of

question is Investments. Segren next from Nerges Our with Joseph

quick of questions. Just a couple

just you for contract did a UCaaS You recently. signed say

quarter. I I'm So of start that through correct? revenue of And the assuming course, of the current Am the some will year. continue remainder

Correct. Yes.

we will bringing XX with offices on X,XXX next these said, they users, request. companies different be I As as are over a over months the

the over X, year next we the that. out sign a X and roll then with try either X-year it'll or to So that contracts contracts

if basically Signing you of that. the site, test one find call saying you that not second too possibility the we beta to distant want And future? anticipate it you're in And now.

promising. dozen in right next hoping We're stages looking and have so are the we correct. probably that That's various at another of now pipeline couple within the weeks or

you bit just just you you mentioned that added? the some product in unique Can or develop you on have a think some just unique elaborate, add, capabilities. color? just that launch Can what's you've teeny UCaaS slightly You unique, more

back-end. whether Well, where to and out needs, We're able into to There it's other financial that three fit Cisco it, there customize do the categories. their use different able into where of do customization. are integrate foundation that the the instance. kind integration system, or to like players that to phone of applications that to that for automakers some custom have would need their We're customers they it we for

their on worry mimicking any issues. to have they the own security around those truly phone the premise. that it's basically So, would support about have the maintenance of or don't or They system it, our

at Have not the this security we all? into of line this is ARIA mean, I integrated product any really.

No. the UCaaS. Not into

call And a feel any have know this for number I but said of But, us, does to product want will how looking probably look that into do go here, some you the people this you idea? too I the Okay. at pipeline or early customization? XX% have package you like But, is have people assuming. something mean, it or know, XX% many you might Do I'm be at standard might no line. you

have else To else no can I idea. but is what be We everyone kind does, us what offer from everyone of still customization. separates that, honest,

people I more why a number understand that's want for I'm If customization. of and it. reaching

You'll be surprised.

offered, it's when know it. You they need

So, that's kind selling. of

Okay.

some They need But it’s ring in needed they just that's a to cookie-cutter. phones just truly in cases, and the and it.

So, that's case. the

than to more also. be them glad will out help We

assume great. market calls. And, that referring company. and carrier correct? last lean about release conference to the MSO you carrier of been That's you have we your in are that's and Is anticipating I slowing course, press a the several talked cable the

correct. Yeah, correct. That's

being the next signed. something you not-too-distant future And hopefully that on in are anticipating

That's correct.

I I were I this you cable doing made read as wrong? what seem with think here are the people company. to Also, that other aware inquiring, that other referred correct you a of people that contact you've am of be to did Or result because

with doing as the they let in first inquiring. for it second mentioned, to all We're and people other. I've do able on was other easier you know are of a It's conversation one. what leaders out and We're the third know each the initially and we the kind based started lot than know of that reach the targeting industry. Not what because one with company

each follow of kind in that all area. they other because just So,

Terrific. Alright.

just I'm here a of Kalo this with company. involved was So, assume a customization might be of I assuming bit that. there there quite lot

I'll way Well, I'll well, more give color. more details. the If everything goes give

it put that way. Let's

seems it. Okay. you. from no I Alright. there conference I move last starts is be, Thank call. change and along appreciate to the to Things

most still to generate second start of revenue You of anticipating will the fiscal are year. in half this our

Correct.

appreciate I guys. lot a Thanks Alright. it.

We Private Davidson. question will go from Please next take ahead. our Brett Investor,

here? have channel quick regarding partners channel sales got Just one of this of the question that any morning through the any there partners ARIA been

bringing we're right them educating No, on just them now. board

it. Got

yet. gear into kicked hasn't that So

obviously of so type year? the start of set occurring with then the the And half stuff guiding was in with second that

pipeline talking is the to things the we're partners and hoping, customers. growing with that We're

brought they very our customers the of Some large into us organizations.

the talking a as interested. know, and market longer take big So to smaller. those you of they're us or some little than But they're

So I where like in we right particular on now customer. of we're is phases the customer had each who depending phases different each we're, of are, mentioned and sales, different

to [Operator Instructions]. next [indiscernible] We're going Private to Investor. Jonathan

the in if evaluating of information for but a right and could comment like you. stock is know kind end question being of terribly get stock I Is about company I you the a valuation? X-year on sense you terms to think the what's you Do into that how which stock, valued higher not it's thanks overvalued? the in the the go Thank guys ask Hi liquid, where a And marketplace? the of of markets do the your wanted why a range. now? it's on beta undervalued? Where is,

believe is a to I think we've certainly offer phase. undervalued lot I startup Well, Jonathan, in we it a think But because we're got here.

So reap company. the doing as forward going we looking to have within And the the we're the will information out I going to successes benefits what get on. upside public we is more these of think

So product as we lines. talk about these new

So good areas. we're us. not for there's are believe growth opportunity these areas and But known where these in we intriguing

who So through we market the we're what of educational are educating do. going and an process of can we

any floor appear does closing will remarks. have the for it speakers no I our And additional further we questions. return to

you. Thank

to want the for interest shareholders thank I continued our support. always, and As

on you. changing our fiscal to look higher the of and bottom-line products, business core I sales for next XXXX. call continue exciting. remains of in Financially in our Gary in in our our costs conference much UCaaS sharing offerings to focus strong you are fiscal performance the and progress game Our to margin stronger Thank QX position our we extremely we the launching dry organizationally, while on objectives will managing forward meet with May. and

program. This participation. today's conclude will Thank your for you

a have and disconnect now great may You day.