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

BILLERICA, MA, April 28, 2004 - CSP Inc. (Nasdaq:CSPI), a provider of eBusiness solutions, IT systems integration services and dense cluster computing systems, today reported financial results for the second quarter of fiscal 2004 ended March 31, 2004.

For the second quarter of fiscal 2004, sales increased 90% to $12.2 million from $6.4 million for the year-earlier quarter. CSP Inc. posted net income of $478,000, or $0.13 per diluted share, compared with a net loss of $(204,000), or $(0.06) per share, for the second quarter of fiscal 2003.

For the six-month period ended March 31, 2004, the Company increased sales to $24.0 million compared with sales of $14.6 million for the six-month period of fiscal 2003. CSP reported net income of $250,000, or $0.07 per diluted share, for the first six months of fiscal 2004 compared with a net loss of $(599,000), or $(0.17) per share, for the first six months of fiscal 2003.

Chairman, President and Chief Executive Officer Alexander R. Lupinetti said, "We returned to profitability and posted CSP's strongest revenue quarter in more than three years. To accomplish this performance, we executed on our strategy and capitalized on an improving demand environment."

"At our MultiComputer Division, we followed up our previously announced major contract to supply 2000 SERIES MultiComputers for the U.S. Navy's E-2C Hawkeye aircraft by securing two additional defense-related contracts for products that included our suite of Linux-based multicomputers and our newly introduced StarGate I/O Blade. We also completed the delivery of our FastCluster processors to Array Systems Computing for use in its Sonar Acoustic Post Processing System (SAPPS) for the Swedish Royal Navy," continued Lupinetti.

"Our customers are constantly seeking higher-performance, open-source technologies for complex digital signal processing (DSP) in military applications," stated Lupinetti. "To stay at the forefront of the technology curve and meet the increasing demands of the market, we plan to enhance our research and development capabilities. To this end, we will be adding engineering personnel at our MultiComputer Division. In addition, we will be bringing our multicomputer products higher up the value ladder in response to the trend toward the use of ruggedized DSP systems in airborne surveillance."

Said Lupinetti, "At our MODCOMP subsidiary's Systems and Solutions Division, our strategy to combine cutting-edge integration solutions and best-of-breed hardware with superb service offerings yielded positive results in the first quarter. In line with our initiative to enhance our service capabilities, MODCOMP recently was selected for membership in the EMC Authorized Services Network. As a member of the network, MODCOMP is qualified by EMC to deliver a range of information storage networking professional services for EMC's CLARiiON platform.

"Our steadily improving financial performance demonstrates our success in positioning CSP for the current upturn in IT spending, and our ability to continually introduce state-of-the-art multicomputer systems that meet the stringent specifications of modern defense applications. Our visibility into our revenue pipeline continues to grow, increasing our optimism about the remainder of the fiscal year" concluded Lupinetti.

Forward-Looking
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, those relating to the Company's plan to increase investment in R&D capabilities, hiring additional engineering personnel, ruggedizing its multicomputer products, introducing state-of-the-art multicomputer products, growing visibility into the revenue pipeline, and the Company's expectation that it will remain profitable and report solid financial results for fiscal 2004. 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 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 Financial Table, Consolidated statements of operations and Consolidated balance sheet.