Good day and welcome to today’s program. 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] Please note this call may be recorded. I will be standing by if you should need any assistance. It is now my pleasure to turn the conference over to Mr. Gary Levine. You may begin.

Thank you, Kevin. Good morning everyone, and thank you for joining us. With me on the call today is Victor Dellovo, CSPI’s Chief Executive Officer. Before we begin, I’d like to remind you that during today’s call we’ll 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. The Company cautions that numerous factors could cause actual results to differ materially from forward-looking statements made by the Company. Such risks include general economic conditions, market factors, competitive factors 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. During today’s call I’ll discuss the first quarter’s financials, then Victor will provide an update on our business segment and on our strategic progress. Then we’ll open it up to your question. Revenues declined by 4% to $20.4 million from $21.3 million a year ago, reflecting lower sales in the information technology solutions segment. Foreign exchange had a negative year-over-year effect of $609,000. Our total cost of sales for Q1 was $16.5 million decreased by $324,000 from the prior year. Gross profit for the quarter was $4 million compared to $4.5 million a year ago. Gross margins for the quarter were 19.4% compared to 21.2% in the prior year. The decrease was the result of $1.1 million in the high margin royalty revenues last year and no royalty revenues this year. In the High-Performance Products & Solutions segment we recorded higher than expected revenue from Myricom’s legacy products which offset the lack of revenue from E-2D royalties but obviously did not offset the margin effect. First quarter engineering and development expense…

Thanks, Gary. The results were off from last year. As expected, given that we do not expect to receive any royalty revenue from E-2D until the second half of fiscal 2015. That said, from a strategic perspective it was a very good quarter. We have executed well on each aspect of our long terms growth strategy. Myricom is performing better than expected and has good potential to help us smooth out the one thing that inherent in our High-Performance Products & Solutions segment. In the IT Solutions segment we made good progress in growing our managed service pipeline which we expect will enable us to increase our margins and recurring revenue base over the long term. With that, I will get right to segment review, starting with the High-Performance Products & Solutions segment. Revenue in the segment was up by $0.4 million in the quarter compared with last year. Strong sales of Myricom legacy products more than offset a decline in MultiComputer revenue as a result of lack of royalties compared with a year ago. In fact, this was the highest revenue quarter for Myricom since we acquired the business. While we are pleased with the performance of the legacy product, there is significant greater potential for Myricom with the next-generation products in new markets. We are making significant investment to capitalize on these opportunities. Last quarter we mentioned that we expected to shift data Myricom project to target new vertical markets around mid fiscal 2015. We are on schedule and we have two customers testing data products right now. We should have additional customers and data in the next few weeks and we are looking to formally introduce the initial products in the current second quarter with general availability in Q3. We expect to continue to push products to…

Thank you. [Operator Instructions] We’ll take our first question from Joseph Nergiz [ph] with Sturgeon [ph] Investments. Your line is now open.

Good morning gentlemen.

Good morning.

I noticed in the 10-K as well as on your website that in the High Performance division you no longer have the Series 4000, series listed? Is that – has that been continued and is that been written off?

Right now, we’re sort of we have stopped at least the current development on it and we haven’t taken a write-off on everything there, but we’re analyzing the market conditions, because the demand for it has dropped.

Now the 3000 Series is still ask [ph]?

Yes.

Okay. Thank you. Last quarter I believe you mentioned that you thought the Myricom could be a real holds on Myricom’s acquisition. What number – how many number of products that we’re introducing here, you’re planning and reducing in the next several months, [indiscernible] one, two, three, four down five different products?

Well, there is one board with two versions, the Window base and a Linux base. And then there is other product that we’re still developing roadmap for.

Okay. I notice you also and that with previous to the last conference, but you did hire new general manager for that?

That’s correct.

And primarily I guess concerned with Myricom, is that particular aspect of the program of the division focusing on Myricom?

Yes. Overall – managing the whole division, but right now, we’re putting a lot of energy and time into that Myricom product line.

All right. And the third question I hope let somebody else ask – the question is, you’ve mentioned about penetration in your IT division -- assuming that means security.

Yes.

Where you’re actually able detect penetration from outside sources, is that correct?

Yes. You’re correct. It’s all in that security area we’re just doing a lot of pen testing to analyze the customer’s networks and just try to prevent hackers from getting into their network.

And are we doing that also in the U.S., I mean, in other words, can we perform the same sales pitch in U.S. for U.S. customer too or is that…?

Yes, yes, we can. And we leverage each other’s engineering resources, because Germany has been doing this for many years. And they have more internal engineers on staff in Germany, so therefore if the U.S. finds opportunities we’ll always try to leverage our German location if possible. If not, we do have resources here in the U.S. but not to the same – not the same amount as Germany does.

And just one more thing, is the location or monitoring in the U.S. is that where we monitor from, or is there a base place for that, or is it scattered?

Well, we monitor from Germany in Deerfield Beach, Florida.

Okay.

Those are the two major locations.

So, its two locations.

Yes.

Thank you very much. Appreciate it.

Thank you.

[Operator Instructions] We’ll take our question from the line of William Kidston with North & Webster. Your line is now open.

Good morning, gentlemen. Wondering if you can comment on Myricom revenues, you said it’s the highest since you purchased the company about a year ago, I guess?

Yes. For the quarter it was almost $2.5 million.

Thank you. Can you breakout segment earnings High Performance Products and IT Solutions and revenue if you could?

Yes. So, the revenues for the IT Solutions was $17.8 and they had a loss of $53,000 at the operating level.

And then, for High Performance Products?

The High Performance Products were $2.5 million and within that there was a loss of at the operating level was $850,000, but that includes corporate expenses. Sam [ph] Hello.

Those are just allocated expenses from the corporate level. You guys allocate those across both of the segments I would assume?

We do, but that’s below the operating line.

Okay. Can you also comment a little bit you mentioned the R&D credit, can you highlight what benefits that is going to bring you guys over the coming years here?

Well, I can’t be – it’s a calculated amount based on what you spend, so going forward. Within that – for last year it would be approximately about $60,000 credit.

Perfect. Thank you. Over the last couple of years as we followed you guys, we’ve noticed that the DSOs, it seems like when you guys you have no pension you don’t have revenue coming in from the royalty stream related to E-2D. It seems like your day sales outstanding kind of balloon. Is that because you guys are losing your credit terms to meet revenue goals?

No. We run the business that’s exact same regardless. The way we extend [ph] credit we have certain policies and we follow those policies quarter after quarter.

All right. That’s good. And in terms of growth what are you guys projecting for growth for the remainder of the year? You say you’re executing on the growth strategy but overall revenue is down year-over-year. Can you just comment on that a little bit?

We’ve got a growth strategy, Sam [ph] but we really don’t disclose what that would be. We’re projecting sales will be greater than last year’s sales.

Okay. And then, you talked about hiring to I guess backup that growth strategy. Can you also comment on expense control a little bit, it seems like especially on the engineering development side year-over-year obviously purchase Myricom, but OpEx has grown and revenues have declined, so.

Well, we look at where we’re making contributions within the organization and we’re putting more resources into the Myricom and we’ve also taken some action where we’ve decreased resources in the old MultiComputer. So we’ve made some personal changes where we had to. So if people aren’t contributing towards the new growth areas, we’ve had to make changes.

Okay. That sounds great. And then, my final question, you guys are going to make money next quarter?

It’s still going to be difficult, but we’re working towards that because we see some growth and the opportunities out there. As we said, the second half of the year should be more robust with the royalties but it’s a challenge.

Okay. So on that do you guys when you’re forecasting and planning to run the business do you look at it as ex royalties because you got that in order to have a sustainable business you have to run the company like you’re not going to be receiving 100% gross margin royalties forever. So can you comment or just touch on that?

And that’s the reason why we are investing heavily on the Myricom products today, so as over the next three, four years we have sustainable business with the new product line that can sell into the government space, but also is very commercialize where those sales cycles are not years. And Sam [ph], we do – we look at each segment of the business and look at the opportunities and do look at where the business is coming from and evaluate that and then put resources where we feel the best opportunity is for us to get growth and profitability out. And that’s where we’re deploying our assets in that vein. So we’re taking actions where we’re underperforming and mobilizing towards the performance areas.

And that’s way also a bit emphasis has been on the managed service piece of it where it’s more of a recurring revenue model and revenue you can count on a monthly quarterly basis.

Can you just touch on the managed services growth and what that segment was I guess year-over-year and quarter-over-quarter?

Well, two years ago it didn’t exist, so it’s pretty much last year we built it from the ground zero, invested in and back end systems and software that can manage customer’s infrastructure. And then engineering resources and talent to manage it, and both in Germany and in the U.S. total revenue I got to believe is a little over $1 million now, maybe $1.5 million in growing.

Okay. Perfect. Thank you. I’ll back out.

And it appears we have no further questions at this time. I’ll turn it back to management for any closing remarks.

Thank you for joining us today and for your support of CSPI. We look forward to speaking with you all again on Q2 call.

This does conclude today’s teleconference. You may now disconnect. Thank you and have a great day.