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High Performance Embedded High Performance Embedded Systems Systems IT Integration Solutions IT Integration Solutions Investor Presentation 1 February, 2011 CSP Inc. The Company wishes to take advantage of the safe harbor provisions

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SLIDE 1

High Performance Embedded High Performance Embedded Systems Systems IT Integration Solutions IT Integration Solutions

1

Investor Presentation February, 2011

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SLIDE 2

CSP Inc.

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- l ki d h A S h f d l ki looking statements under the Act. Such forward-looking statements may include, but are not limited to, statements regarding the future growth of the CSP Inc., and the success of the Company’s and its subsidiary’s products and services The the Company s and its subsidiary s products and services. The Company cautions that numerous factors could cause actual results to differ materially from any forward-looking statements made by the Company. Please refer to the section on forward- made by the Company. Please refer to the section on forward looking statements included in the Company’s filings with the Securities and Exchange Commission.

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SLIDE 3

Corporate Overview

  • Diversified multinational technology company founded in 1968:
  • Leading supplier of cutting edge IT Integration solutions and rugged

high performance cluster computer systems.

– 2 Segments 2 Segments

  • Service and Systems Integration
  • Systems

– 139 People

  • Businesses Include:
  • Businesses Include:

MODCOMP MultiComputer 91% 9%

3

91% 9%

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SLIDE 4

Investment Highlights

  • Differentiated Systems Integration business model with ability

to grow and increase market share when the market rebounds.

  • Open systems technology based high performance cluster

systems with the ability to meet the unique requirements of military applications.

  • Financial Strength: Strong balance sheet - no debt
  • Experienced Management with proven acquisition integration

success.

  • Positioned to grow profitably.

g p y

4

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SLIDE 5

CSP Inc.

95 0 76.8 83.4 95.0

60 80 100

$ Millions 22.1

20 40 60

Revenue - $ FY 2008 FY 2009 FY 2010 FY 2011 Q1

1.00 1.25

d $0.25 $0.11

0 00 0.25 0.50 0.75 00

hare - Diluted ($0.11)

(0.75) (0.50) (0.25) 0.00

1 2 3 4

arnings per Sh

5

($1.05)

(1.25) (1.00)

Ea

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SLIDE 6

Strategy

d d l f l T

  • Provide cutting edge integration solutions for complex IT

environments.

  • Develop architecturally superior high performance cluster systems

p y p g p y based on open systems technologies for military applications.

  • Leverage core competencies to extend key technologies to new

growth markets like unified communications and “value added” growth markets like unified communications and value added cluster systems.

  • Attract a greater percentage of higher margin consulting, solutions

d d i b i and managed services business.

  • Provide pipeline of innovative products and services to maintain

strong customer relationships. g p

  • Seek opportunities for growth through acquisitions and strategic

partners.

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SLIDE 7

Partnerships

Dense Clusters Systems Integration Services

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SLIDE 8

MODCOMP

A leading provider of solutions and services for complex IT environments that include storage and servers, network security, unified communications, unified computing and managed and consulting services.

Network Cloud Compute Cloud 8

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SLIDE 9

The Security Landscape

Vulnerability Scanning Intrusion Detection Patch Management Firewall Monitoring

Penetration tion Exterior trusion Detect External Access Int Anti-Virus 9

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SLIDE 10

Network Operations Center for Managed Services

  • The NOC monitors key

T e N C

  • s ey

elements of a customer’s network infrastructure on a 24x7x365 basis

  • Value proposition to

customers is to “leverage the skill of a team of experts for less than the cost of one high- level employee”

  • Recurring revenue model

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SLIDE 11

The Big IT Story:

“New” IT Spending

11 Source: IDC Directions 2007

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SLIDE 12

MultiComputer Division

A leading supplier of High-Performance dense and rugged Cluster A leading supplier of High Performance dense and rugged Cluster computing systems based on open systems technologies for military applications.

Highlights Highlights – Excellent Customer references – 40 years experience – Technology leadership in open systems software model

Sonar Systems

Blades Rugged

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Systems

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SLIDE 13

Defense Market

  • Environments

– Air, Land and Sea Platforms – Extended Temperature, Humidity, Sand, Dust, Shock, Vibration and

  • Programs

– E2-D

  • Digital Signal Processing Applications

– Radar

Corrosive Elements

– GASS – HYDRA – SAPPS – C4ISR/AJCN d – Sonar – C4ISR

  • Command, Control, Communications, Computers, Intelligence,

Surveillance and Reconnaissance

– Raytheon

  • CSPI MultiComputer

– Dense / High Performance Clusters g – Open – Linux / VxWorks – Commercial (VME), Rugged and Conduction Cooled Solutions

  • Preserve customer software investment
  • E

i i ti d d t t t ’ i 13

  • Engineering expertise needed to meet customer’s unique

requirements

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SLIDE 14

The Challenges of Today’s Warfare

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SLIDE 15

COTS Defense Market

COTS in Defense

Defense Electronics Market COTS

$27.0 $0.7 $2 3 $3.0

(Boards)

$2.3

(Systems)

All amounts are in Billions of dollars

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Sources: Venture Development Corp. Embedded COTS in Military, Aerospace and Defense Study, 2008 COTS Journal October 2008

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SLIDE 16

DoD program example: E-2D Advanced Hawkeye

$70.0 $10.0

Revenue Stream

$50.0 $60.0 $7.0 $8.0 $9.0 Millions) Millions) $20.0 $30.0 $40.0 $3.0 $4.0 $5.0 $6.0 ative Revenue (in $ nual Revenue (in $ M

Pilot Production LRIP $3 - 10M EDM and SD&D $3.5M

$- $10.0 $- $1.0 $2.0 Y05 Y06 Y07 Y08 Y09 Y10 Y11 Y12 Y13 Y14 Y15 Y16 Y17 Y18 Y19 Y20 Cumula Ann

$3.5M

$4M $2M $1 5M

FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY

Note: Revenue opportunity in 2012 and beyond is subject to DoD funding and schedule decisions

$4M $2M $1.5M

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SLIDE 17

Financial Review

  • Strong Balance Sheet
  • Leverageable model

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SLIDE 18

Annual Sales

83.4 95.0

100

76.8

80

illions

40 60

enue - $ Mi

22.1

20

Reve

FY 2008 FY 2009 FY 2010 FY 2011 Q1

Fi lY

18

Fiscal Year

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SLIDE 19

Annual Earnings per Share (Diluted)

1 25 0.75 1.00 1.25

d

$0.25 $0.11

0.25 0.50 0.75

e - Diluted

($0.11) $0.11

(0.25) 0.00

gs per Share

(0.75) (0.50)

Earning

($1.05)

(1.25) (1.00)

FY 2008 FY 2009 FY 2010 FY 2011 Q1

FiscalYear

19

Fiscal Year

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SLIDE 20

Net Income (loss)

3.00 3.50 4.00 4.50

0.91 0.39

0 50 1.00 1.50 2.00 2.50

Millions

(0.41) 0.39

(1 50) (1.00) (0.50) 0.00 0.50

ncome - $

(3 80)

(3 50) (3.00) (2.50) (2.00) (1.50)

Net I

(3.80)

(4.00) (3.50)

FY 2008 FY 2009 FY 2010 FY 2011 Q1

Fiscal Year

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SLIDE 21

Fiscal Year Ended September 30, 2010

Sales by Geography

71% Americas Europe Asia 28% 1% Asia

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SLIDE 22

Fiscal Year Ended September 30, 2010

Sales by Segment & Gross Margin

91%

Service and Systems Integration

(GM @ 13%)

Blended GM of 18 %

9%

Systems

(GM @ 67%)

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SLIDE 23

Balance Sheet Highlights

Dollars in Millions 9/30/2009 9/30/2010 12/31/2010 Dollars in Millions 9/30/2009 9/30/2010 12/31/2010 Assets Cash & Short Term Investments 18 9 $ 15 5 $ 16 0 $ Cash & Short Term Investments 18.9 $ 15.5 $ 16.0 $ Accounts Receivable 7.4 $ 12.2 $ 11.5 $ Inventory 5.9 $ 5.9 $ 6.2 $ Other current assets 3.7 $ 2.4 $ 2.4 $ C A 35 9 $ 36 0 $ 36 1 $ Current Assets 35.9 $ 36.0 $ 36.1 $ Long-term assets 4.6 $ 5.4 $ 5.4 $ Total Assets 40.5 $ 41.4 $ 41.5 $ Liabilities & Shareholders' Equity Current Liabilities 13.2 $ 13.9 $ 13.9 $ Pensions & Other Long Term Liabilities 8.6 $ 9.0 $ 8.9 $ Shareholders' equity 18.7 $ 18.5 $ 18.7 $ Total Liabilities & Shareholders' Equity 40.5 $ 41.4 $ 41.5 $

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Working Capital 22.7 $ 22.1 $ 22.2 $

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SLIDE 24

Goals

Increase Market Share

– MODCOMP

  • Expand “solution” offerings to growth markets

like network security management and unified like network security management and unified communications

  • Increase sales force and forge new supplier

partnerships to leverage success in infrastructure solutions

  • Increase higher margin consulting services and

leverage NOC to expand managed services

– CSPI MultiComputer CSPI MultiComputer

  • Win a Deployment phase from a current program
  • Ramp up sales of FastCluster 4000 SERIES and

OpenVPX 3000 SERIES product lines.

– Evaluate acquisition opportunities

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SLIDE 25

Investment Highlights

  • Differentiated Systems Integration business model with ability

to grow and increase market share when the market rebounds.

  • Open systems technology based high performance cluster

systems with the ability to meet the unique requirements of military applications.

  • Financial Strength: Strong balance sheet - no debt
  • Experienced Management with proven acquisition integration

success.

  • Positioned to grow profitably

g p y

25