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<SEC-DOCUMENT>0000356037-03-000022.txt : 20030731
<SEC-HEADER>0000356037-03-000022.hdr.sgml : 20030731
<ACCEPTANCE-DATETIME>20030731161929
ACCESSION NUMBER:		0000356037-03-000022
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20030731
ITEM INFORMATION:		
FILED AS OF DATE:		20030731

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CSP INC /MA/
		CENTRAL INDEX KEY:			0000356037
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373]
		IRS NUMBER:				042441294
		STATE OF INCORPORATION:			MA
		FISCAL YEAR END:			0831

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-10843
		FILM NUMBER:		03814847

	BUSINESS ADDRESS:	
		STREET 1:		43 MANNING ROAD
		CITY:			BILLERICA
		STATE:			MA
		ZIP:			01821
		BUSINESS PHONE:		9786637598

	MAIL ADDRESS:	
		STREET 1:		43 MANNING ROAD
		CITY:			BILLERICA
		STATE:			MA
		ZIP:			01821
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>form8kpress.htm
<DESCRIPTION>FORM 8K PRESS RELEASE Q3 ENDING 6/30/03
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<TITLE>SECURITIES AND EXCHANGE COMMISSION</TITLE>
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<B><FONT SIZE=4><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;UNITED STATES</P>
</B></FONT><P>&#9;&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT SIZE=4>SECURITIES AND EXCHANGE COMMISSION</P>
</B></FONT><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Washington, DC 20549</P>

<B><FONT SIZE=6><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FORM 8-K</P>
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<B><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Current Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934</P>
</B>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Date of Report:     July 31, 2003</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;CSP Incorporated</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Exact name of the registrant as specified in its charter)</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Commission file number 0-10843</P>

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<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Massachusetts</B>&nbsp;</U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#9;<B><U>04-2441294</P>
</B></U><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(State or jurisdiction of &#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(IRS Employer Identification</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;incorporation or organization)&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;number)</P>

<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>43 Manning Road, Billerica, Massachusetts</B></U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>01821-3901</P>
</B></U><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Address of principal executive offices) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Zip Code)</P>

<P>&nbsp;</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>(978) 663-7598</P>
</U><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Registrant's telephone number, including area code)</P>

<P>Form 8-K</P>
<P>CURRENT REPORT dated July 31, 2003</P>

<P>CSP Inc.</P>

<B><P>Item&nbsp;&nbsp;&nbsp;Financial Statements and Exhibits.</P>
<P>7.</P>
</B><P>(c)&nbsp;&nbsp;Exhibits</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;99.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Press release announcing third quarter and year to date financial results, issued by &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;CSP Inc. on July 29, 2003.</P>

<B><P>Item&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Regulation FD Disclosure (including Item 12 information).</P>
<P>9.</P>
</B><P>In accordance with Securities and Exchange Commission Release No. 33-8216, the following information, intended to be furnished under "Item 12.  Results of Operations and Financial Condition," is instead furnished under this "Item9. Regulation FD Disclosure."</P>
<P>On July 29, 2003, CSP Inc issued a press release announcing financial results for the third quarter and year to date for 2003.  A copy of the press release is attached as Exhibit 99.1 hereto and is incorporated herein by reference.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>

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<P>Form 8-K</P>
<P>CURRENT REPORT dated July 31, 2003</P>

<P>CSP Inc.</P>

<P>SIGNATURE</P>

<P>&nbsp;</P>
<P>Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.</P>

<P>&#9;&#9;&#9;&#9;&#9;&#9;CSP INC.</P>
<P>&#9;&#9;&#9;&#9;&#9;</P>

<P>July 30, 2003</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;/s/Gary W. Levine</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;---------------------------</P>
<P>Gary W. Levine, Vice President-Finance and Principal Accounting Officer</P>
<P>&#9;</P>

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<U><FONT FACE="Courier"><P>&nbsp;</P>
</U><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Exhibit 99.1</P>
</B><U><P>Contact:&#9;Gary Levine</P>
</U><P>Chief Financial Officer</P>
<P>CSP Inc.</P>
<P>Tel:  978.663.7598 ext. 1200</P>
<P>Fax: 978.663.0150</P>
<B><P ALIGN="CENTER"></P>
<P>&nbsp;&nbsp;CSP INC. REPORTS THIRD-QUARTER FISCAL 2003 FINANCIAL RESULTS</P>
</FONT><I><FONT SIZE=3><P ALIGN="CENTER"></P>
</B></I><P>BILLERICA, MA, July 29, 2003 - CSP Inc. (NASDAQ: CSPI), a provider of eBusiness solutions, IT systems integration services and dense cluster computing systems, today reported financial results for the third quarter of fiscal 2003 ended June 30, 2003.</P>

<P>For the third quarter of fiscal 2003, CSP Inc. reported sales of $7.0 million compared with $7.8 million for the year-earlier quarter.  The Company reported a third-quarter net loss of $340,000, or $(0.10) per share, compared with a net loss of $84,000, or $(0.02) per share, for the third quarter of fiscal 2002.   </P>

<P>For the nine-month period ended June 30, 2003, the Company reported sales of $21.6 million for the nine months ended June 30, 2003, compared with sales of $20.5 million in the year-earlier nine-month period.  For the first nine months of 2003, the Company reported a net loss of $.9 million, or $(0.27) per share.  This compares with net loss of $1.9 million, or $(0.55)  per share, for the nine months ended June 30, 2002. </P>
<B>
</B><P>Stated Chairman, President and Chief Executive Officer, Alexander R. Lupinetti, &quot;While the weak global economy continued to affect our financial results, we made significant progress in enhancing our capabilities to provide IT services on a global scale.  At our Multicomputer business, we continued to move forward on the acquisition process for large, defense-related opportunities for our Linux-based multicomputers.&quot;    </P>

<P>&nbsp;</P>
<P>CSP Reports Third-Quarter Financial Results/2</P>

<P>&quot;The highlight of the quarter was the acquisition of Technisource Hardware,&quot; continued Lupinetti.  Technisource Hardware is a reseller of software and hardware products for IT infrastructure requirements and provides professional services related to systems integration.  &quot;The integration of Technisource into MODCOMP as its Systems and Solutions Division is proceeding as planned and the company's move into MODCOMP's Ft. Lauderdale headquarters was completed last week.&quot;</P>

<P>&quot;The acquisition of Technisource complements our strategy to leverage MODCOMP's business process integration expertise to capitalize on opportunities created by the trend toward open systems,&quot; explained Lupinetti.  &quot;We have significant capabilities in IT systems integration and follow-on services through MODCOMP's German and UK subsidiaries.  We now plan to use our expertise in high-value IT systems integration and our new U.S. capabilities through Technisource Hardware to raise our value proposition domestically.&quot;  </P>

<P>&quot;While the spending environment in Europe continues to be very sluggish, we are seeing opportunities for IT outsourcing solutions as well as for our network security solutions.   We will continue to invest in our technologies in order to position the Company for growth when the economy rebounds,&quot; concluded Lupinetti.</P>
<B>
<P>Safe Harbor Statement</P>
</B></FONT><P>The Company wishes to take advantage of the 'Safe Harbor' provisions of the Private Securities Litigation Reform Act of 1995 with respect to statements that may be deemed to be forward-looking under the Act.  Such forward-looking statements may include, but are not limited to, the integration of Technisource into MODCOMP, opportunities for MODCOMP's network security and IT outsourcing solutions, expectations for CSP's MultiComputer business, investment in the Company's technologies, and the future growth of the Company.  The Company cautions that numerous factors could cause actual results to differ materially from any forward-looking statements made by the Company.  Such risks include general economic conditions, market factors, competitive factors and pricing pressures, and others described in the Company's filings with the SEC.  Please refer to the section on forward-looking statements included in the Company's filings with the Securities and Exchange Commission.</P>
<B><FONT SIZE=3><P>&nbsp;&nbsp;&nbsp;</B>CSP Reports Third-Quarter Financial Results/3</P>
</FONT><B><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">About CSP Inc.</P>
</B><P>Based in Billerica, Massachusetts and founded in 1968, CSP Inc. (NASDAQ: CSPI) and its subsidiaries develop and market Internet software for e-commerce solutions, image processing software, network management integration services, and high-performance computer systems.  The MultiComputer Division supplies high-performance Linux cluster systems for a broad array of defense applications, including radar, sonar and surveillance signal processing.  The Company's MODCOMP, Inc. subsidiary, founded in 1970, is a leading provider of Internet software solutions and systems integration.  MODCOMP works with third parties to develop customized application solutions in the global e-commerce markets and has offices in the U.S., U.K., and Germany.  More information about CSP is available on the company's Web site at www.cspi.com.  To learn more about MODCOMP, Inc., consult www.modcomp.com.  More information about Scanalytics, Inc., is available at www.scanalytics.com.</P>
<I>
</I><B><FONT FACE="Courier"><P>The consolidated statements of operations and consolidated balance sheets follow.</P>
</B><I>
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</I></FONT><B><FONT SIZE=3><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;CSP INC. AND SUBSIDIARIES<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;CONSOLIDATED BALANCE SHEETS<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Amounts in thousands, except par value)</P></B></FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=690>
<TR><TD WIDTH="66%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=17>
<B><FONT SIZE=3><P ALIGN="CENTER">June 30</B></FONT></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=17>
<B><FONT SIZE=3><P ALIGN="CENTER">September 30</B></FONT></TD>
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<TR><TD WIDTH="66%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=17>
<B><U><FONT SIZE=3><P ALIGN="CENTER">2003</B></U></FONT></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=17>
<B><U><FONT SIZE=3><P ALIGN="CENTER">2002</B></U></FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=17>
<B><FONT SIZE=3><P ALIGN="CENTER">(Unaudited)</B></FONT></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" HEIGHT=17>
<B><FONT SIZE=3><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Assets</U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=17><P></P></TD>
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<FONT SIZE=3><P>Current assets:</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>&nbsp;&nbsp;&nbsp;Cash and short-term investments</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">$12,474</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">$15,826</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>&nbsp;&nbsp;&nbsp;Accounts receivable, net</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">4,099</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">2,500</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" HEIGHT=17>
<P>&nbsp;&nbsp;<FONT SIZE=3>Inventories</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">2,190</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">2,834</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>&nbsp;&nbsp;&nbsp;Other current assets</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">&nbsp;&nbsp;1,482   </U></FONT></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">    1,133</U></FONT></TD>
</TR>
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<FONT SIZE=3><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">20,245</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">22,293</FONT></TD>
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<TR><TD WIDTH="66%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>Property, equipment and improvements, net</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">855</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">1,182</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>Other assets:</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">    5,142</U></FONT></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">    2,287</U></FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">$26,242</U></FONT></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">$25,762</U></FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" HEIGHT=17>
<B><FONT SIZE=3><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Liabilities and Shareholders' Equity</B></U></FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>Current liabilities:</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>&nbsp;&nbsp;Accounts payable and accrued expenses</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">$5,852</U></FONT></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">$4,081</U></FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">5,852</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">4,081</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>Deferred compensation and retirement plans</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">7,936</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">7,373</FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>Shareholders' equity</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">  12,454</U></FONT></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">  14,308</U></FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities and shareholders' equity</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">$26,242</U></FONT></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">$25,762</U></FONT></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="66%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
</TABLE>

<B><FONT SIZE=3>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
</B></FONT><FONT FACE="Courier"><P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
</FONT><B><FONT SIZE=3><P>&nbsp;</P>
<P>&nbsp;</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;CSP INC. AND SUBSIDIARIES<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Amounts in thousands, except for per share data)<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
</B><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <B>/-For the three months ended-//-For the nine months ended-/</P></B></FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=666>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<B><FONT SIZE=3><P ALIGN="CENTER">June 30,</B></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<B><FONT SIZE=3><P ALIGN="CENTER">June 30,</B></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<B><FONT SIZE=3><P ALIGN="CENTER">June 30,</B></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<B><FONT SIZE=3><P ALIGN="CENTER">June 30,</B></FONT></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<B><U><FONT SIZE=3><P ALIGN="CENTER">2003</B></U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<B><U><FONT SIZE=3><P ALIGN="CENTER">2002</B></U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<B><U><FONT SIZE=3><P ALIGN="CENTER">2003</P>
</U><P ALIGN="CENTER"></B></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<B><U><FONT SIZE=3><P ALIGN="CENTER">2002</B></U></FONT></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17>
<B><FONT SIZE=3><P>Sales:</B></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>&nbsp;&nbsp;&nbsp;Systems</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">$1,869</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">$3,075</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">$4,135</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">$6,449</FONT></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>&nbsp;&nbsp;&nbsp;Service and system integration</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">4,510</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">3,719</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">15,503</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">11,385</FONT></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>&nbsp;&nbsp;&nbsp;E-business software</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">293</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">578</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">946</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">1,465</FONT></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>&nbsp;&nbsp;&nbsp;Other software</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">   289      </U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">   443</U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">     969     </U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">    1,206</U></FONT></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total sales</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">6,961</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">7,815</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">21,553</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">20,505</FONT></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17>
<B><FONT SIZE=3><P>Cost of Sales:</B></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>&nbsp;&nbsp;&nbsp;Systems</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">770</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">1,728</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">2,052</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">4,215</FONT></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>&nbsp;&nbsp;&nbsp;Service and systems integration</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">3,667</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">2,893</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">12,369</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">8,999</FONT></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>&nbsp;&nbsp;&nbsp;E-business software</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">159</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">373</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">511</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">851</FONT></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>&nbsp;&nbsp;&nbsp;Other software</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">     43    </U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">   122</U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">     202    </U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">        345</U></FONT></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total cost of sales</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">4,639</U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">5,116</U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">15,134</U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">   14,410</U></FONT></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>&nbsp;&nbsp;   &nbsp;Gross profit</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">2,322</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">2,699</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">6,419</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">6,095</FONT></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17>
<B><FONT SIZE=3><P>Operating expenses:</B></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>&nbsp;&nbsp;&nbsp;Engineering and development</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">873</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">901</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">2,722</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">2,792</FONT></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>&nbsp;&nbsp;&nbsp;Selling, general &amp; administrative</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">2,011</U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">2,058</U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">5,590  </U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">   6,365</U></FONT></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">2,884</U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">2,959</U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">8,312  </U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">   9,157</U></FONT></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17>
<B><FONT SIZE=3><P>Operating loss</B></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">(562)</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">(260)</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">(1,893)</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">(3,062)</FONT></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17>
<B><FONT SIZE=3><P>Other income(expense):</B></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>&nbsp;&nbsp;&nbsp;Other income</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">    158      </U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">      64</U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT"> 1,392</U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">      168</U></FONT></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other income, net</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">158</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">64</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">1,392</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">168</FONT></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>Income (loss) before income taxes</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">(404)</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">(196)</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">(501)</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P ALIGN="RIGHT">(2,894)</FONT></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>Income tax expense (benefit)</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">   (64)   </U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">  (112)</U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">     438     </U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">    (960)</U></FONT></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Net loss</B></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">$(340)</U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">  $(84)</U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">$(939)</U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">$(1,934)</U></FONT></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>Net loss per share - basic and diluted</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">$(0.10)</U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">$(0.02)</U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">$(0.27)</U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT"> $(0.55)</U></FONT></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>Weighted average shares outstanding - basic</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">  3,537   </U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">  3,523</U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">   3,533   </U></FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17>
<U><FONT SIZE=3><P ALIGN="RIGHT">    3,522</U></FONT></TD>
</TR>
<TR><TD WIDTH="42%" VALIGN="TOP" HEIGHT=17>
<FONT SIZE=3><P>&nbsp;&nbsp;&nbsp;And diluted</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=17><P></P></TD>
</TR>
</TABLE>

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