NAPCO Reports Bump in Q1 Profit With Strong Recurring Revenue

Recurring service revenue for the quarter increased 46% to $3.8 million, compared to $2.6 million for the same quarter last year.

AMITYVILLE, N.Y. — NAPCO Security Technologies (Nasdaq: NSSC) on Monday reported a profit for its first quarter that rose from the same period in 2017.

The company, based here, reported net sales for the quarter increased 10% to a first quarter record $23.4 million,  compared to $21.2 million for the same quarter last year.

In a press release NAPCO Chairman and President Richard Soloway states the company’s Q1 performance provided a strong start to its fiscal 2019 year as it continued on a pace of 17 consecutive quarters of increased sales growth.

“The investments we have made in the research & development and marketing of unique security, fire, communication, access control/locking and IoT product solutions, have provided the fuel for substantial, consistent growth in sales and profitability for NAPCO,” Soloway says.

Q1 financial highlights included:

  • Recurring service revenue for the quarter increased 46% to $3.8 million, compared to $2.6 million for the same quarter last year. Recurring service revenue now has a prospective annual run rate of $15.6 million based on September 2018 recurring revenues.
  • Net income for the quarter increased 69% to a first quarter record of $1.5 million from $890,000 a year ago. Diluted earnings per share (EPS) increased 60% to 8 cents, compared to 5 cents for the same period a year ago.
  • Adjusted EBITDA increased 47% to $2.1 million or 11 cents per diluted share from $1.4 million or 8 cents diluted share a year ago.

Among its latest product releases, the company launched the iBridge Video Doorbell during Q1, which allows users to know who is at the door and speak to them in real-time, remotely, from any smartphone or smart device.

As of Sept. 30, the company had $7.5 million in cash and cash equivalents, compared to $5.3 million as of June 30. NAPCO reported working capital (defined as current assets less current liabilities) of $43.7 million as of Sept. 30, compared with $44.3 million at June 30.

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