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NAPCO Security Technologies Shatters Records with Stellar Quarterly Financials

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Michael Chen

May 6, 2024 - 11:17 am

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NAPCO Security Technologies Announces Robust Quarterly Financial Results

AMITYVILLE, N.Y., May 6, 2024 /PRNewswire/ -- NAPCO Security Technologies, Inc. (NASDAQ: NSSC), renowned for its innovative design and production of high-tech electronic security solutions, wireless communication devices, and comprehensive school safety solutions, has proudly released its financial outcomes for the third fiscal quarter of 2024.

Remarkable Sales and Income Growth Leads to Record-Breaking Quarter

The third fiscal quarter has been historic for NAPCO, showcasing unparalleled sales and profit. With net sales soaring to $49.3 million, this achievement marks the highest quarterly sales in the company's history, reflecting a significant 13% rise compared to the $43.5 million reported for the corresponding period last year. This growth trajectory continues with the nine-month record showing a 10% increase in net sales, hitting $138.5 million compared to the previous year's $125.3 million.

Net income, meanwhile, jumped by an impressive 38% for the quarter, setting another company record at $13.2 million. Over the nine months, this figure swelled by a staggering 119%, tallying at $36.3 million. Earnings per diluted share mirrored this growth with notable increments of 38% for the quarter and 118% for the nine-month period.

The remarkable performance is further highlighted by Adjusted EBITDA* statistics. Quarterly Adjusted EBITDA* leaped by 37% to a new high of $15.6 million, while the nine-month period experienced a more than double increase of 105%, reaching a record of $43.5 million.

Optimizing Revenue Streams and Margin Expansion

NAPCO has cultivated a diversified revenue stream, with recurring service revenue ("RSR") playing a major role. The third quarter saw RSR expanding by 29% to $19.5 million with an extraordinary gross margin of 92%. The annual RSR run rate advanced to approximately $81 million, based on April 2024 revenues.

The company maintained consistently robust gross margins for equipment revenues at 29% for both the third quarter and nine months, indicating steady financial health and efficiency.

Strong Balance Sheet and Rewarding Shareholders

The strength of NAPCO's balance sheet can be witnessed through a 31% increase in cash and cash equivalents, other investments, and marketable securities, totaling $87.5 million. It's important to note that the company holds no debt, underscoring its robust financial position. The board has declared a quarterly dividend of $0.10 per share, emphasizing confidence in the company's liquidity and profitability.

Product Innovation and Market Penetration

NAPCO has not only demonstrated fiscal excellence but has also exhibited growth across its product lines, including its Alarm Lock and Marks locking hardware lines. The release of Prima by NAPCO, an all-in-one panel catering to multiple segments of the security market, underlines the company's commitment to innovation and its mission to augment recurring-revenue generating accounts.

The company's success this quarter is a testament to the strength and growth potential of its recurring revenues and the robust sales of its locking product lines and radio sales. With a constant eye on both market trends and technological advancements, NAPCO is well-positioned to continue its pattern of growth and profitability well into the future.

Future Outlook and Continued Commitment

With nine months of fiscal 2024 behind them, NAPCO remains definitive in its mission to sustain its financial vigor, innovative prowess, and profitability. The company eagerly anticipates further improving in hardware sales margins in the fourth quarter and aims to uphold its robust net income and Adjusted EBITDA* margins.

Conference Call and Webcast Information

Stakeholders and interested parties looking to gain insights on this quarter's financial results are invited to join the conference call scheduled for today at 11 a.m. ET. For webcast access, visit the Investor Relations section of NAPCO's website at https://investor.napcosecurity.com. For those unable to join, a replay will be available on the website.

About NAPCO Security Technologies, Inc.

NAPCO Security Technologies is a front-runner in the manufacture and design of technologically advanced electronic security devices and wireless communication services. The company's portfolio includes intrusion and fire alarm systems, school safety solutions, and a suite of services with broad applications across commercial, industrial, institutional, residential, and government sectors. Headquartered in Amityville, New York, NAPCO's products are a testament to innovation, technical excellence, and reliability. For further details, explore http://www.napcosecurity.com.

*Non-GAAP Financial Measures: To provide investors with additional information regarding financial results, NAPCO presents non-GAAP measures such as Adjusted EBITDA, representing net income plus income tax expenses, interest expenses, stock-based compensation, legal expenses, and depreciation. These measures are not recognized under generally accepted accounting principles and should not be considered in isolation or as a substitute for the financial information provided in accordance with GAAP.

For additional financial tables and information on this press release, including the condensed consolidated balance sheet and statements of income, refer to the tables provided in the full announcement.

Contact Information

Francis J. Okoniewski - VP of Investor Relations NAPCO Security Technologies, Inc. Office: 800-645-9445 x 374, Mobile: 516-404-3597, Email: [email protected]

Source: NAPCO Security Technologies, Inc.