CSP Inc.

Good morning, everybody, and welcome to CSPI's second quarter fiscal year 2023 results conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your phone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Mr. Michael Polyview. You may begin.

Thank you, Jenny. Hello, everyone, and thank you for joining us to review CSPI's fiscal 2023 second quarter results, which ended March 31, 2023. With me on the call today is Victor DeLobo, CSPI's Chief Executive Officer, and Gary Levine, CSPI's Chief Financial Officer. After Victor and Gary conclude their opening remarks, we will then open the call for questions. Statements made by CSPI's management on today's call regarding the company's business that are not historical facts may be forward-looking statements as determined as identified in federal securities laws. The words may, will, expect, believe, anticipate, project, plan, intend, estimate, and continue, as well as similar expressions are intended to identify forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance or results. The company cautions you that these statements reflect current expectations about the company's future performance or events and are subject to several uncertainties, risks, and other influences, many of which are beyond the company's control, that may influence the accuracy of the statements and the projections upon which the segment and statements are based. Factors that may affect the company's results include, but are not limited to, the risks and uncertainties discussed in the risk factors section, of the annual report on Form 10-K and the quarterly reports on Form 10-Q, File, Securities, and Exchange Commission. Forward-looking statements are based on the information available at the time those statements are made and management's good faith belief as of the time with respect to future events. All forward-looking statements are qualified in their entirety by this cautionary statement, and CSPI takes no obligation to publicly revise or update any forward-looking statements, whether as a result of new information future events or otherwise after the date they're up. With that, I'll turn the call over to Victor DeLobo, Chief Executive Officer. Victor, please go ahead.

Thanks, Michael, and good morning, everyone. Today, we reported our third consecutive quarter of solid growth with revenue up 11% and earnings per share more than doubled from a year ago. The growth is a direct result of our team's successful effort to build both our recurring revenue customer base and a pipeline of million-dollar-plus business opportunities. Despite an increase in competitive operating environment for the customer's budget dollars, the demand for our services and solutions results in another quarter and backlog of more than $22 million, and we again increased our gross margins from a year ago fiscal second quarter. We are at the midway point of our fiscal year. We believe that we will be able to generate positive results during the third and fourth fiscal quarters. Once again, our technology solution business continued to lead the way with sales growth of 9%. Meanwhile, our high-performance products or our HPP business revenue continued its strong ascent with a growth of 29% compared to a year ago fiscal second quarter. Of particular note for this segment, the Aria product line is gaining traction with customers around the world. We have continually growing our Aria products and our team has more than doubled the pipeline for this product. We could potentially expand our marketing capabilities for this product line in key international markets through the establishment of a reseller agreement. We have signed an Australian MSP, and we have multiple deals that are underway. Turning to some of the financial results, our fiscal second quarter mark the beginning of the budget year for most of our customers and therefore can be a challenging period for our company. Despite this historic seasonality, total revenue for the period grew to $13.3 million from $12.0 million in the year ago fiscal second quarter. Our TS business revenue totaled $11.8 million. The segment of our operation continued to be the driver of by our customers' increased use of our implementation, installation, and training capabilities. Our HPP revenues were $1.5 million compared to $1.1 million in the year-ago fiscal second quarter, and were driven by Mericom and Aria. The Aria customer base continues to grow, and the pipeline is at an all-time high. During the quarter, we continue to manage the business in a cost-efficient, high-return manner. Gross management percentage over the period year... year ago period of 35% continue to expand and reach 38% while we gain leverage from our operations and generating net income of 321,000 or seven cents per common share. While we continue to invest in our programs to build a long-term growth, we are once again paying a cash dividend to shareholders of four cents per share, a one cent increase from prior quarter. We continue to manage our balance sheet to yield optimal returns. We continue to achieve record-setting levels of pipeline for most of our product lines, and the opportunities ahead of us continue to expand. Our focus over the past few years of offering differentiated, value-enhanced solutions for a challenging face by our customers, as well as an increasingly effective go-to-market strategy, are the key factors to our growth. At the same time, we continue to invest in our top-notch engineering team and R&D efforts to enhance the existing offering as well as create new solutions for our customers. ARIA is an example of the result from our development efforts, and we are working to create others in a not-so-distant future. In the cybersecurity space, new threats and challenges are faced by our customers all the time, and our solutions are providing solutions to the adaptable, flexible answers to those threats. While we have strong momentum and our opportunities in the marketplace continue to expand, we do have hurdles to overcome to realize our full potential. The supply chain continues to be a hurdle, and although we have created workarounds for most of these hurdles, gaining acceptance for these solutions often require extensive review by our customers, which delays shipments. Our customers continue to remain loyal to our solutions, often because of our most effective cost-efficient answers to these needs. At the same time, our team constantly interacts with our customers to keep them abreast of supplier timelines and options. The supply chain issue continues to improve, but slower than we would like, and it requires constant attention by our team. At the top of the call, I mentioned an increase in competitive operating environments for the client's budget dollars. The situation in is being driven by customer needs to maximize the return from their technology investments. Across our product lines, we were able to meet this challenge quite effectively. However, the internal process followed by many of our clients is resulting in an extended timeframe for order decisions, which in turn is extending decisions on several major opportunities we are pursuing. Another challenge for us has been the absence of any significant recent revenue from the cruise line industry. We are beginning to see signs that this drought is starting to end as we are currently retrofitting one large ship and several other ships that we could begin work on during the next couple of quarters. To summarize, we have generated substantial growth during the first half of the fiscal year. And if we execute and the market cooperates, we believe the second half of fiscal year performance will be even better. With that, I will now ask Gary to provide a brief overview of the fiscal first quarter financial performance. Gary?