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CSP INC. ANNOUNCES INCREASED THIRD QUARTER RESULTS

 CSP INC. ANNOUNCES INCREASED THIRD QUARTER RESULTS
 BILLERICA, Mass., June 17 /PRNewswire/ -- CSP Inc. (NASDAQ: CSPI)


announced third quarter sales of $4,084,000, an increase of 19 percent over the prior year and a 21 percent increase year-to-date over the same period last year. Even more dramatically, operating profit has more than tripled ($451,000 for the quarter, $113,000 year-to-date) and continues to over-compensate for reduced income from investments. Overall, the quarter's EPS of 16 cents is a 78 percent increase over prior year.
 MasterScan sales included an installation at the prestigious Insitute Pasteur, the French equivalent to our National Institutes of Health. In addition, agreements have been finalized with members of COMBIO, a Europe-wide consortia of bio-instrumentation distributors.
 SuperCard sales were especially strong and continue to benefit from the world-wide push towards COTS (commercial-off-the-shelf) solutions for defense contracts. Shipments this quarter included multiple units to be used in the shipboard deployment of the US Navy's DTC-2 tactical command computer. Other, non-military, vector processor sales included both oil exploration and medical imaging markets.
 President and CEO David Botten also commented, "By concentrating on our internal controls we have been able to realize these additional sales without increasing our headcount. In fact year-to-date operating expenses decreased from 59.5 percent/sales to 54.5 percent/sales compared compared to prior year and inventory turns have increased from 2.2 to 3.9. Continued emphasis on streamlining the product lines has resulted in a slight improvement in gross margin.
 "In addition, CSPI has agreed to license the SuperCard Vector Processor design to DY 4 Systems, Ottawa, Canada. Many defense contractors who would formerly have designed in-house solutions to their high-speed processing needs are now being directed to commercial alternatives such as SuperCard. However, there remain many applications requiring full MIL-Spec certification for final deployment and we do not want to burden our regular commercial business with the onerous requirements of complying with full MIL-Spec manufacturing. The solution is for DY 4 Systems to build a MIL-Spec version of SuperCard, to our design and once they begin shipping next year, we will have all the options required to participate fully in the military market.
 "Secondarily, many of our SuperCards are sold to users who build dedicated systems for signal processing applications. The development of these applications is a difficult, time consuming task and has been a limitation to the popularity of the vector processor approach. Dynetics, Huntsville, Ala., offers a software package, called DataFlo, to speed up this bottleneck and will incorporate the SuperCard as part of their total system." As Marketing Manager Geoff Cohler explains, "Instead of laboriously programming numerous alternatives, the scientist draws a diagram of the desired signal processing path on his computer screen from a series of icons. He can then test the design and check the results, without ever writing a line of code." CSPI has signed an agreement with Dynetics to distribute DataFlo, which will utilize SuperCard exclusively and provides us with a significant competitive edge.
 Looking to the future, we are completing development of both the next generation SuperCard and CellScan, our exciting entry into the field of 3D microscopy. Both products can be expected to begin shipping in the fall of this year and help maintain our momentum."
 CSPI was founded in 1968 with specific strengths in digital signal processing and computer technology. Today, CSPI is recognized as a leading manufacturer of vector processors, which enhance a computer's ability to perform high-speed arithmetic. Markets served include science and engineering applications in signal processing, sonar/radar/ASW, image processing, seismic research, medical imaging, electronic publishing and others. In addition to its vector processor products, CSPI recently formed a new division, Scanalytics, for the development and marketing of turnkey imaging systems. CSPI in a public company with stock traded OTC via NASDAQ.
 CSP INC. AND SUBSIDIARIES
 CONDENSED STATEMENT OF OPERATIONS
 (Unaudited)
 (Dollars in Thousands)
 Three Months Ended Nine Months Ended
 May 31, May 31,
 1992 1991 1992 1991
 Sales $4,084 $3,440 $11,854 $9,810
 Cost of sales 1,383 1,231 4,265 3,647
 Engineering and
 development 748 763 2,224 2,155
 Marketing and sales 967 923 2,735 2,491
 General and
 administrative 535 394 1,499 1,190
 Total costs and
 expenses 3,633 3,311 10,723 9,483
 Operating profit 451 129 1,131 327
 Investment income, net 130 223 503 693
 Income before taxes $581 $352 $1,634 $1,020
 Net income $436 $248 $1,133 $700
 Primary earnings per
 share 16 cents 9 cents 42 cents 26 cents
 Weighted average
 shares outstanding 2,756,415 2,694,867 2,748,023 2,684,278
 -0- 6/16/92
 /CONTACT: Gary Levine, vice president of finance, CSP Inc., 617-262-6020/
 (CSPI) CO: CSP Inc. ST: Massachusetts IN: CPR SU: ERN


DH -- NE002 -- 0946 06/17/92 09:03 EDT
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Copyright 1992 Gale, Cengage Learning. All rights reserved.

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Date:Jun 17, 1992
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