CSP (CSPI) 6 Dec 222022 Q4 Earnings call transcript

Good morning, ladies and gentlemen. And welcome to the CSPI’s Fourth Quarter Fiscal Year 2022 Financial and Operating Results Conference Call. At this time, all participants have been placed on a listen-only mode and we will open the floor for your questions and comments after the presentation. It is now my pleasure to turn the floor over to your host Michael Polyviou. Sir, the floor is yours.

Matthew. you, Thank Hello, everyone. us year and XX, results, joining review fiscal XXXX. for CSPI’s to which quarter you full fourth thank And ended September Chief With Victor Levine, call the Chief Executive CSPI’s CSPI’s me Gary Officer; Officer. today Financial and on Dellovo, is conclude Victor we will for opening then After their remarks, the open Gary call and questions. historical management identified statements forward-looking as term is CSPI’s on the by maybe call made regarding business facts company's federal securities laws. in Statements today's that are not the estimate believe, forward-looking expect, as anticipate, will, and may, intend, are identify continue as plan, to words statements. expressions similar The well project, intended

Forward-looking a control guarantee future company company's statements or of that of other and number company's current should of which Form cautions not accuracy future The the to Commission. may be include, are the about performance Factors read uncertainties, statements are the risks or the report section reflect the as projection and results. statements beyond many statements the expectations of may influences, a events you and which the Risk not these are with that influence subject of performance uncertainties but the Securities the affect risks the discussed limited to, in on annual XX-K on upon and and filed Exchange Form and segment quarterly report the that XX-Q company's the and Factors based. results are

please future thereof. or result CSPI ahead. the any belief I'll All to of available forward-looking cautionary the qualified time events. With and statements those of call Dellovo, Officer. otherwise or are after their as obligation and no new whether with statements, the information good the on update Vic, by at in statements the date faith Executive undertakes based this statements as Chief publicly Forward-looking are that, are Victor made over go respect statement turn the forward-looking management's revise entirety a events future information, time to to

finish to backlog, fiscal everyone. XX% fiscal to XXXX. This to revenue an sizable record of morning to were At quarter. our the contributed able hit earnings share year a good and $X.XX quarter the we we exceptional ship per QX year fourth We for same which reported continuing TS year common the our diluted and Michael, morning, in fourth Thanks growth achieved business fiscal cylinders of all the portion to in compared time, while on quarter new generate fiscal segment orders. prior

at as lines you on in team XXXX. solid As last made the When inflationary $XX we backlog we a a with offerings and with a result, turn pressure. the and fiscal record we cash, talked a services entered finished comment meeting product in the all to across million started year by ongoing corner level supply the near our momentum chain presented August, challenges I had that

supply in While we been we've chain, them. around able still challenges have to of work our some

be past a fact product for period as our taken to solutions, the have and have of that components during a as we supply testimonial backlog lost is role well and our from a behind the half, backlog the critical year The performance and some our challenges for During a customers. our unique shipped. the not they order exceptional and to play features a single full in growth big critical of our have factor systems the chain year been our

team supply chain to our elevate able we most the were revenue deliveries and some critical of to issues, As worked accelerate growth.

the and the prior during an TS by year technology revenue the business XX% solutions fiscal revenue or practice. was increase Our quarter quarter. We generated service million, managed fourth of its driven growth $XX.X from

use who driven existing during existing came service on by XX.X% from needs. of quarter grew customers while and increased installation the year business quarter our customers practice customers. or implementation, earning was training growth from from practice increase capabilities. prior new service rely The managed revenue systems The winning to MSP the critical CSPI and managed are a and customer's We meet

recent -- welcome existing and so from our generated valued. there's customers modest expanding customers, performance is During relationships the also we business initiating both MSP this contribution from growth component we from growth critical exciting. time, highly and are financial experienced same our revenue who team our quarters, is new have also At with to

any year reassigned the view boost to staffing cruise be of as this to new line they seen they been within as pursue need for will the as CSPI. goals. other overall upside business from We the quarter, remains remain the performance we projects the While business have our to unchanged ready as our opportunity arise, internal prior a during maintained in have

Regarding the and we during orders practice, secured current UCaaS is UCaaS the additional pace quarter the encouraging.

XXX ranks recognizing as want channels’ I as on, of Before XXXX most provider the for brand move a CRNs, by of successful and I standard congratulate list. revenue solution XXX TS annual its largest the North solution CRN's serves company to gold providers some named provider solution Technology team Solutions to channel a America the companies.

below or Our QX chain segment, ongoing year which high impacted also issues by during approximately ago revenue million, the fiscal fiscal QX reported supply above performance HPP $X.X the of amount. and quarter products,

have expanded the interest believe and customer we increased the is entered for going segment. segment’s We phase momentum fiscal with an we story be of the backlog, year to However, is the XXXX exciting and a activity. we segment as believe

last a This the a in had total be financing continues quarter and customers, backlog business quarter, a the near performance ARIA arrangement of end with to the of record our a added mentioned the million in fourth fiscal few with finished of installments new in the recorded occurring During with fiscal one to was at consistent level the over sale past two we We year. XXXX. large revenue new with I payment net. three quarters. build $XX.X that we received pipeline earlier

of sizable testimony XXXX As sale the company, first XXXX’s million of XX, of September the to the sheet cost at the in cash balance strong a for quarter. will fiscal the $XX we in portion realize

objective of to continue for customer. this for of type A revenue is key orders We CSPI's to have services. and team executed successfully product the migration our margin higher similar

full-year, margins XX.X%. we goal evidence this the gross executed our of For by as of

margin quarter Our which was for fourth practice XX.X%, from gross and XX% our resulted service the managed business. of a growth mix strong of revenue

share. was $X.X growth revenue of driver income overall per net for quarter Our the or behind our chief million diluted $X.XX the

being also tight to by We Back increased in wages inflationary led forces from exchange, pressure our on a will Gary the in market. employment currency moments. This which in favorable we noted review a benefit put cost pressure the labor incentives. in few August,

the had During pressure our relief we began it's we has and pressure. Don't needs To been it somewhat, model. from fiscal fourth to get made year. to we the within business quarter, summarize, wrong, finish there able meet staffing our experience to but me a still have some our great upward this

Our lost engagement this offering, of strategy period backlog of demonstrates highlights since have that revenue, a from third not yet, converting is single continued product our each strength quarter. some also the backlog. customer progress focusing the during services increased order we the customer and it of solid on our margin Despite the and met yielding the loyalty quarter. we from higher demand This older backlog

margin of an the the overview provide high today ask strategy to we we believe brief and and active business With a that, player transitioned successfully period our will We our withal and the I to and in the Gary financial growth unprecedented performance. are the we realize resources fourth quarter business, during have have Gary? now fiscal potential.

Victor. Thank you,

our opening $X $X.X year year million profits quarter sales as $X.X was compared the average to We in higher revenues quarter, or compared fiscal or his MSP million XX% combination the from As million, $XX.X fourth growth remarks, reported Victor and well of ago selling XX% is of up third ago price. year as revenue fiscal was the our Service quarter. XX.X% increase of the fiscal ago of quarter in grew XX.X% million a which mentioned in quarter. fourth fourth or over a fourth gross the fiscal sales to a

and the $XXX,XXX the engineering Our to $XXX,XXX period. in compared ago were expenses for fourth development quarter year

increase outside discussed consultants. have is the include higher due to we costs, personnel primarily which previously, As

of in $X.X share with net reflected XXXX million million, fourth to installment Our exchange hitting million the reported $X.X or key fourth The from of objectives of order operating primarily XXXX million equivalents the XXXX, the fiscal share. the fourth year XX, sale $X.X net fourth due in million due a ago diluted We September variable impact of as quarter $X.X net share $X per to was million year increase quarter. the while September -- quarter of expenses income diluted quarter nearly fiscal a from fourth up for bonuses million cash a for operations which year. the for with share period We from a included or quarter was and results SG&A financing full common $X.XX QX which and from $X.X the increased fourth from of gain diluted $X.XX income income, XX, fiscal compensation prior compared our foreign XXXX, discontinued currency XXXX fiscal per quarter. was of the large payment $XX of and $X receipt in or an full an million the rates of ended gain year cash $X.XX per the

fiscal XXXX, purchased the we year repurchase program. stock the During from shares common XX,XXX

We Common of as XXX,XXX XXth, of Shares an September have CSPI buy authorization to shares additional XXXX.

are payable the you the also Directors XXXX growing believe price of We highlight that share factor December when current to value, on on dividend business January the especially quarterly backlog. the at a continue per we of and Board margin the level generating X, shares shareholders I $X.XX XXXX. record XX, to in close of approved the to of want expansion represent

CSPI It greater the to for Before of we highlight while to I Victor benefit interest an sheet balance This offer conclude to will what profitability. us growth achieve orders. the customer earlier, allow enable mentioned remarks, will had the accelerate opportunity is to leverage have us want rates financing I for us. top twofold attractive to strength my how line

that, However, over expense the vigilant execute we With this resource will your multi-year to to service the and we I to it management growth and want prudent of change not take be our to stress questions. transforming I to the managed have wireless, ensure turn strategy company. cybersecurity, to will operator a that will

[Brett Instructions] coming first Your is [Operator Davidson]. question from

to find couple able questions. installment you got well. that a I things hope I wasn't keep up with I payment.

of So booked quarter? I statement fourth in that side -- it, the side sheet balance was income of it, got the sales the was

Yes.

already through. that's So run

or there the are that installment So additional was final payment coming? payments

will hit payment QX, and three. the The then and in QX, be two will first installment year remaining be

say. So be let's it'll month month XX and then a XX,

first the the January be it'll said you -- next -- it'll So one?

to had the pay that be full we No, will payment. the and next and -- the next following October will in then then the XX, be it in payment, October final

to going similar they're amounts? be And

Correct.

You take XX by X. million the divide

I products, kind impact. that impact the there's Did starting finally ARIA still know or The ease. chain of some is that that shipments to of those supply

ease. to Starting

some should see So QX. shipments we in

you do backlog And million? talking the a million, ballpark X We have couple of talking is? that on a we what of

million. couple a Yes,

million I of like a X total. think total is little over

know, to going in you're to what’s and remaining ship mean that's year. in all ship ship you're to right scheduled you And available that ship quarters that's the you of have said be you QX now, the the additional QX. going or able to in product to Does just

and QX. QX go Correct. to Yes, it'll

pretty all got. That's much I

good a you we'll quarter. holiday, You have talk guys and next to

Brett. Happy one. Thanks, a too. to holidays you Have great

you. Thank

is from coming Joseph. question next Your

is Your live. line

about Is had the very or on One, conference being an delivery quick or that You for October or inline expecting of good government was call, cybersecurity quarter, delayed? last timeframe October -- the here large or we’re quarter A $X.X last that million delivered last year. for October, past couple that first talked order. questions. in a but you that delivery first quarter, still is

in No, the quarter. it was first delivered

it fourth So report quarter. be it’ll the the wasn't in then next next -- reflected in the the fourth,

and year, in comment webinar the from you're progress Interesting Okay, year of maybe division is great. an the this some webinar? you -- point June from that hopefully. the was correctly HPP some Am interest the that on expecting had I you NVIDIA back assuming amount your generated did that's about with of assignment exciting in that

take a of combination sales the not organizations that with to stuff a get large doing, product you a just from their into it's of as The think line. those Joe, NVIDIA. know, while lot I we're activities embedded

we're forward. So progress it's it's making but but moving slow,

So on webinar. you’re that from still working -- that with

saying… lengthy a with time that what is takes Some -- that, the it’s lead period just group you're of

that customers NVIDIA’s we're They're talking with. Yes.

So they're pushing are. the sales cycle more than we

So overall we're the a of just piece solution.

of you since conference conference Well, or partners in Again, about lot last NVIDIA’s we progressing level. you're some added call that's that right. that channel Have mentioned on any adding last partners all a customers. additional got call?

sure, but talking probably five that with I three I think Not new exactly and to ones say we've would signed. three been

that too, we're level the partner even progressing on that Also level… channel

definitely… Yes,

guess be quarter, first quarter I the the last Was included year? you conference you we fiscal mentioned are or any would thought in just case And year. that fourth in call that the revenue the that EXD this of royalty the also last in the last quarter of expecting

in quarter more some and had fourth We and quarter. the in expecting some second first we’re the

the that's So expecting road. more down you're good. Well, pretty

even report, quarter. than solve quarters can Sounds a the pretty backlog a if Hopefully, good very forward going be will better was which the lot exciting. this we

good again, So lot thanks holiday. a a have again, And guys.

Joe. you, Thank

you. conference back ahead. hand will CEO, Dellovo concludes Please [Operator closing Instructions] session. Q&A the Victor remarks. Thank now our to for That I go

you. Thank

further strong progress forward fiscal stay look first drive to then, enough balance sharing thank will to the for season. always, not grew Be holiday gross I issues, pressure, ending a XXXX revenue I while secure backlog to with and As supply operating sheet want enjoy pandemic year without inflationary record Until thank our continued and Gary margins. shareholders revenue support. the well, gross safe. and and yet chain was we challenges, that interest results and orders and our you, and margins, its February. in the Fiscal quarter our XXXX

and you, Thank today's event. gentlemen. This ladies concludes

Thank disconnect may at a for time, your you participation. this and day. You wonderful have