Napco Security Technologies Releases Q3 Earnings Results

Recurring monthly revenue for the third quarter increased 68% compared to the same quarter a year ago and grew 14% sequentially.

AMITYVILLE, N.Y. – Napco Security Technologies (NASDAQ: NSSC) reported Monday that its net income fell 8.8% for its fiscal third quarter in spite of increasing revenues, as a new product launch improved selling expenses.

The company, based here, reported net income of $952,000 for the three months ending March 31, compared with $1.04 million the year prior.

Napco Q3 Highlights:

  • Net sales were $20.8 million, as compared to $19.8 million for the same quarter last year.
  • Recurring monthly revenue (RMR) for the third quarter increased 68% compared to the same quarter a year ago and grew 14% sequentially.
  • Gross margin for the third quarter increased to 32.% as compared to 30.8% for the same quarter last year.
  • Earnings per share (diluted) for the third quarter was $0.05 as compared to $0.06 for the same quarter last year.

“Our investments in our future continue to position Napco solidly, for optimal sales growth. This past quarter saw the massive launch of our StarLink Connect Series of universal alarm communicators with connected home services,” comments Napco Chairman and President Richard Soloway. “One of the largest product introductions in our company’s history, the StarLink product entry considerably extends our market presence in the RMR-oriented alarm/event communication and remote connected home services category.”

Net sales rose 5% compared with the year-ago period, to $20.8 million. Napco reported that its subscription-based recurring revenues jumped by 68% compared with a year earlier.

The company’s selling, general and administrative expenses for the quarter were $5.5 million, or 26.6% of sales. A year earlier, the company’s expenses were $4.9 million, or 24.7% of sales.

The company reported diluted earnings per share of 5 cents for the quarter, down from 6 cents a year earlier.

Napco’s stock price fell by just under 5.3% in early trading, to $9.90. The company’s stock price has risen 72% over the past 12 months.

“Our fiscal 2017 is progressing well and our strategic direction in focusing on key growth markets, many of them with substantial RMR growth potential, is meeting with success,” Soloway says. “We look forward to a continuation of systematic, steady increases in our business and a strong finish to our fiscal year.”

Napco is a diversified manufacturer of security products including access control systems, door-locking products, intrusion and fire alarm systems, video surveillance and home automation systems. In the following video, check out recent product releases the company featured at ISC West 2017.


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About the Author


Although Bosch’s name is quite familiar to those in the security industry, his previous experience has been in daily newspaper journalism. Prior to joining SECURITY SALES & INTEGRATION in 2006, he spent 15 years with the Los Angeles Times, where he performed a wide assortment of editorial responsibilities, including feature and metro department assignments as well as content producing for Bosch is a graduate of California State University, Fresno with a degree in Mass Communication & Journalism. In 2007, he successfully completed the National Burglar and Fire Alarm Association’s National Training School coursework to become a Certified Level I Alarm Technician.

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