(Mark One)

[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended            November 30, 2000      

or

[  ]  Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from                        to                      

                             Massachusetts                                                            04-2441294
                  (State or other jurisdiction of                                               (I.R.S. Employer
                  incorporation or organization)                                              Identification No.)

                 43 Manning Road, Billerica, Massachusetts                               01821-3901
                (Address of principal executive offices)                                         (Zip Code)

                                                                 (978) 663-7598 
                                      (Registrant's telephone number, including area code)

                                                                         None                                                                        
                      (Former name, former address, former fiscal year, if changed since last report)

     Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports). And (2) has been subject to such filing requirements for the past 90 days.        [X]  Yes            [  ]  No

                                    APPLICABLE ONLY TO CORPORATE ISSUERS:
     Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

                                Class                                                               Outstanding January 10, 2001
           Common Stock, $.01 par value                                                 3,514,906 shares

See accompanying notes to consolidated financial statements.

See accompanying notes to consolidated financial statements.

The accompanying financial statements have been prepared by the Company, without audit, and reflect all adjustments which, in the opinion of management, are necessary for a fair statement of the results of the interim periods presented. All adjustments were of a normal recurring nature. Certain information and footnote disclosures normally included in the annual financial statements, which are prepared in accordance with generally accepted accounting principles, have been condensed or omitted. Accordingly, the Company believes that although the disclosures are adequate to make the information presented not misleading, the financial statements should be read in conjunction with the footnotes contained in the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 2000.

Each segment is broken down by related business activities, which crosses different business operations. These segments are based on the different customer activity of the Company. CSPI has four major segments: systems which includes company manufactured hardware products, systems integration and services which includes maintenance of the Company and other systems sold and integration and sale of third party hardware products and services, E-Commerce software, and other software products which are developed by the Company.

Profit from operations is sales less cost of sales, engineering and development, selling, general and administrative expenses but is not affected by either non-operating charges/income or by income taxes. Non operating charges/income consists principally of investment income and interest expense.

In calculating profit from operations for individual operating segments, sales and administration expenses incurred at the operating level for CSP and Scanalytics are allocated to the Systems and Other Software segments, respectively. Sales and administrative expenses incurred at the operating level for MODCOMP are allocated to the E-Commerce segment based upon employee headcount and the remaining balance is allocated to the Systems and System and Service Integration segments based upon sales revenue.

All intercompany transactions have been eliminated.

Identifiable assets include deferred income tax assets and other financial instruments managed by the Company. Capital expenditures common to more than one segment are allocated on a sales basis.

In November 2000, the Company sold the remaining assets of MODCOMP's France subsidiary to Eurilogic and incurred additional expenses for the disposal of assets, primarily leasehold improvements and severance costs totaling $327,000. The Company has sublet the space but remains contingently liable for the remaining lease obligations which extend through March 10, 2005. Aggregate lease obligations approximate $1.1 million.

         A summary of the period to period changes in principal items included in the Statements of Operations is shown in Schedules I and II (pages 17 and 18).

        The discussion below contains certain forward-looking statements related to, among others, but not limited to, statements concerning future revenues and future business plans. Actual results may vary from those contained in such forward-looking statements.

        CSPI considers its products to be in four segment classifications. Each segment is broken down by related business activities, which crosses different business operations. These segments are based on the different customer activity of the Company. CSPI has four major segments: Systems which includes company manufactured hardware products, System and Service Integration which includes maintenance of the Company and other systems sold and integration and sale of third party hardware products and services, E-Commerce software which includes WAP66™ and ViewMax®, and Other Software products which are developed by the Company primarily in the Scanalytics operation.

        The following table details the Company's sales by operating segment for the three months ended November 30, 2000 and 1999.

        The Company reported net sales of $11.4 million for the quarter ended November 30, 2000 compared to $15.7 million for the same period of fiscal 2000. This represented a decrease of 27% or $4.3 million. The reduction in revenue was due to the following factors: sale of MODCOMP France which represents 44% or $1.9 million, the decline in foreign currency exchange rates versus the U.S. dollar which represents 34% or $1.5 million, and a reduction in system and service integration sales which represents the balance compared to the last fiscal year. MODCOMP reported net sales of $9.2 million for the first quarter of fiscal year 2001 compared to $13.8 million for the first quarter of fiscal 2000. This represented a decrease of $4.6 million or 33%.

        System sales represented 23% of total sales for the quarter ended November 30, 2000, which increased by 14%. The increased system sales was due to the continued success of the 2000 series products. The Company sold a number of development systems during the quarter. The extended deployment incubation periods for the defense industry has not changed. The CSPI SuperCard and Series 2000 product lines accounted for 14% and 52% of system sales, respectively, for the quarter ended November 30, 2000 compared to 47% and 19%, respectively, for the prior comparable quarter. The MultiComputer Division introduced its newest product, a Linux based FastCluster™ system. The system was designed to meet the high performance computing requirements of mission critical military application and highly scalable data mining applications. FastCluster™ is powered by the newest PowerPC processors, including those incorporating Altivec™ technology from Motorola. Systems may be configured with 16 to 1,000 processor nodes interconnected with high speed Myrinet switches from Myricom, Inc. MODCOMP continues to ship its real-time process control classic product line to existing customers, which represented 32% of the current quarter system sales compared to 33% for the prior comparable quarter.

        Sales for System and Service Integration represented 68% of total sales for the quarter ended November 30, 2000, a decrease from the prior comparable quarter of $4.9 million or 39%. This decrease was due to three factors: a large system sales by MODCOMP Germany in the telecommunications market in the quarter ended November 30, 1999, the change in foreign currency rates which represented 29% of the reduction, and the erosion of the MODCOMP service business due to customers switching MODCOMP products to newer technologies.

        E-commerce software sales increased 52% although it represented 5% of total sales for the quarter ended November 30, 2000 compared to 3% for the prior comparable quarter. This segment's growth has centered on MODCOMP's ViewMax® Web-to-Host software and WAP66™ wireless access protocol portal server products. During the quarter MODCOMP had sales successes at Cornell University which selected ViewMax to provide purchasing department employees with web access to information stored on the university's mainframe system. MdinTouch chose ViewMax to provide physicians and other health professionals with secure and instant web access to time-critical patient information using desktop computers or handheld devices such as a WAP phone or Palm VII PDA.

        Other software sales represented 4% of total sales for the three months ended November 30, 2000. Sales revenue increased from the prior comparable quarter by 7%. The other software sales are primarily from Scanalytics.

        European sales account for 67% of total sales for fiscal 2000 compared to 77% for the prior year. European sales were primarily from MODCOMP's subsidiaries in Germany and the United Kingdom. The decrease from the prior year was primarily due to the large outsourcing orders in Germany in fiscal year 2000.

        The following table details the Company's sales by geographic region for the three months ended November 30, 2000 and 1999:

        Cost of sales as a percentage of revenue decreased to 71% for the three months ended November 30, 2000 compared to 77% for the prior comparable quarter. The decrease in cost of sales resulted primarily from the significant revenue decline in the system and service integration segment that has higher costs due to the large component of third party products.

        The following table details the Company's sales and gross margin by operating segment for the quarters ended November 30, 2000 and 1999 (amounts in thousands):

The following table details engineering and development expenses by operating segment and subsidiary for the quarters ended November 30, 2000 and 1999 (amounts in thousands):

        Selling, general and administrative expense decreased $869,000 or 27% to $2.3 million for the quarter ended November 30, 2000 compared to $3.2 million for quarter ended November 30, 1999.

        The following table sets forth selling, general and administrative expense by Company subsidiary for the three months ended November 30, 2000 and 1999:

        MODCOMP's selling, general and administrative expense for the three months ended November 30, 2000 decreased $666,000 or 37% from the prior year. Approximately $358,000 of this decline is attributable to the disposal of the French operation. MODCOMP France's selling, general and administrative expense for the three months ended November 30, 2000 was $33,000 compared to $391,000 for the same period of fiscal year 2000. In addition MODCOMP Germany's selling, general and administrative expenses for the three months ended November 30, 2000 declined approximately $109,000 or 25% from the prior comparable quarter. MODCOMP America's expense for the three month period ended November 30, 2000 declined $135,000 or 19% which was due to reductions in personnel.

        CSP MultiComputer division selling, general and administrative expense for the three months ended November 30, 2000 decreased $99,000 or 10% from the prior comparable quarter. Approximately $60,000 of this decrease is due to a reduction in labor expenses related to attrition. Approximately $42,000 of the decrease is due to a decline in outside consulting fees related to the restructure of the MODCOMP foreign operation completed in fiscal year 2000.

        Scanalytics selling, general and administrative expense for the three months ended November 30, 2000 decreased $104,000 or 28% from the prior year. This decline is mainly attributable to a decrease in labor expense due to a reduction in headcount.

        Other income/expenses, exclusive of the loss on disposal of French operation, remained fairly consistent with the prior comparable quarter of fiscal year 2000.

        In July 2000, the Company sold substantially all of the assets and transferred the personnel of MODCOMP's French subsidiary to France-based-Eurilogic. A loss on disposal of French operation of $240,000 was recognized as other expense in the fourth quarter of fiscal year 2000. In November 2000, the Company sold the remaining assets of the French operation to Eurilogic and incurred additional expenses for the disposal of assets, primarily leasehold improvements and severance costs of $327,000 for the period ended November 30, 2000. The decision to sell the assets and transfer its personnel was based on the fact that the French legacy business no longer represented a good strategic fit with CSPI and had incurred a loss. The sale allowed CSPI to exit the business without incurring restructuring costs that could have exceeded $2 million.

        The Company has an effective tax rate of 45%. The Company's effective tax rate has declined from 60% for last fiscal year, due in part to the reduction in the Germany statutory rate and MODCOMP's reorganization.

        Working capital at November 30, 2000 increased to $23.2 million compared to $21.6 million at August 31, 2000.

        The Company's consolidated capital expenditures were $289,000 for the three months ended November 30, 2000 compared to $111,000 in the prior comparable quarter. The majority of the expenditures for the current quarter relate to leasehold improvements at the new corporate facility.

        Management believes that the Company's available cash and cash generated from operations and investments will be sufficient to provide for the Company's working capital and capital expenditure requirements for the foreseeable future.

        Management does not believe that inflation and changing prices had significant impact on sales, revenues or income from continued operations during the three month periods ended November 30, 2000 or 1999. There is no assurance that the Company's business will not be materially and adversely affected by inflation and changing prices in the future.

        This document contains forward-looking statements based on current expectations that involve a number of risks and uncertainties. The factors that could cause actual results to differ materially include the following: general economic conditions and growth rates in the peripheral and computer products, biological imaging software, and the instruments and machine code readers industries; competitive factors and pricing pressures; changes in product mix; the timely development and acceptance of new products; inventory risks due to shifts in market demand; and component constraints and shortages. In response to competitive pressures or new product introductions, the Company may take certain pricing or marketing actions that could adversely affect the Company's operating results. In addition, changes in the mix of old products may cause fluctuations in the Company's gross margin. Due to the potential quarterly fluctuations in operating results, the Company believes that quarter-to-quarter comparisons of its results of operations are not necessarily an indicator of future performance.

        Markets for the Company's products are characterized by rapidly changing technology, new product introductions and short product life cycles. These changes can adversely affect the business and operating results. The Company's success will depend upon its ability to enhance its existing products and to develop and introduce, on a timely and cost effective basis, new products that keep pace with technological developments and address increasing customer requirements. The inability to meet these demands could adversely affect the Company's business and operating results.

             The Company held its Annual meeting of Stockholders on Tuesday, January 9, 2001. The following matter was approved by the shareholders:

1)   J. David Lyons was elected as Class II director for a term of three years.

            The following matter was not approved by the shareholders:

2)   Approval for the adoption of the 2000 Stock Option Plan was defeated by the shareholders, 483,104 in favor, 485,052 against and 1,865,133 either abstained or did not vote.

1. Exhibits

27.0 Financial Data Schedule

2. Reports on Form 8-K

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

CSP Inc.
(Registrant)

Date: January 11, 2001                                         By: /s/ Alexander R. Lupinetti
                                                                                         Chief Executive Officer,
                                                                                         President and Chairman

Date: January 11, 2001                                         By: /s/ Gary W. Levine
                                                                                         Vice President of Finance,
                                                                                         Chief Financial Officer

                                                     /-------------------For the three months ended-----------------------/

                                                     /--For the three months ended---/
                                              November 30, 2000 vs. November 30, 1999