Gary Levine
Chief Financial Officer 
CSP Inc.
Tel: (978) 663-7598 ext. 1200 
Fax: (978) 663- 0150
glevine@cspi.com

CSP Inc. Reports Third-Quarter Fiscal 2003 Financial Results

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.

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.

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.

Stated Chairman, President and Chief Executive Officer, Alexander R. Lupinetti, " 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."

"The highlight of the quarter was the acquisition of Technisource Hardware," continued Lupinetti. Technisource Hardware is a reseller of software and hardware products for IT infrastructure requirements and provides professional services related to systems integration. "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."

"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," explained Lupinetti. "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."

"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," concluded Lupinetti.

Safe Harbor Statement
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.

About CSP Inc.
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

Also see the consolidated statements of operations and consolidated balance sheet.