North & Webster Responds to CSP Inc.'s Letter to Stockholders

Tue Feb 5, 2013 2:27pm EST

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Highlights Misleading Statements Regarding CSP's Fourth Quarter Results
NEW YORK,  Feb. 5, 2013  /PRNewswire/ -- North & Webster, LLC ("North &
Webster") issued a statement today expressing its disappointment with the Board
of Directors of CSP Inc. (NasdaqGM: CSPI) ("CSP" or the "Company") for its
apparent attempt to paint a rosier picture than reality of CSP's Fiscal 2012
fourth quarter results in a letter sent to the Company's stockholders on 
February 4, 2013.  In the letter, CSP claims to have achieved  $4.9 million  in
fourth quarter net income, but North & Webster believes these numbers do not
hold up to scrutiny when you consider that:

* $2.6 million, or more than half, of this  $4.9 million  number was merely the
non-cash write-up of a deferred tax asset, not actual earned income, and is thus
misleading for the Company to use in its attempt to boost management's
performance and credibility;  
* $1.1 million  of this  $4.9 million  came directly from life insurance
proceeds, as stated by CFO  Gary Levine  on the  December 13, 2012  earnings
conference call; and  
* North & Webster estimates that at least  $1.34 million  of this  $4.9 million 
came from "stuffing the channel" as the Company freely admitted in a  December
13, 2012  press release where President and Chief Executive Officer,  Victor
Dellovo, stated, "Looking ahead, we expect that the recording of royalties for
nine E-2D planes in 2012 versus only five that we had expected for fiscal 2012
will create a difficult year-over-year comparison in fiscal 2013."  The Company
booked revenues from nine planes in 2012, and two in the 4th  quarter.

North & Webster estimates that the real income number for the 4th  quarter was
more like a loss of  $140,000  and earnings for the full Fiscal 2012 were more
like  $1.1 million. To throw more salt on stockholder wounds, the CSP Board
granted management approximately  $1,314,693  in bonuses (ranging from 150-367%
of targeted bonuses) based on what North & Webster believes were inflated
numbers. These Board-approved bonuses doubled management's yearly compensation. 

North & Webster would also like to correct the misleading statements by CSP
about our practices.  North & Webster has run three proxy contests and has
successfully achieved board representation and pro-shareholder change in all
three situations.  These statements about us are a continuation of CSP's
strategy to mislead stockholders and distract from the long history of poor
performance at the Company.

We urge stockholders not to be misled by the CSP Board's home-spun financial
results and misleading statements and to instead vote for a slate of directors
who will seek, if elected, to maximize stockholder value by selling the Company
to the highest bidder.   Vote your Gold Proxy Card Today.

Please note, any shares voted on the Company's proxy card, even if you vote
against every item, will count as a vote against our slate. If you have already
voted on the Company's proxy card please see the instructions in the proxy
statement or call our proxy solicitor, whose information is listed below.

If you have any questions or require any assistance with your vote, please
contact  Steve Balet  at SCB Advising, Inc., who is assisting us, at
1-877-786-3323 or 1-646-290-5243.  

North & Webster
Sam Kidston, 617-395-8121  

SOURCE  North & Webster, LLC

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