Napco Security Technologies (NASDAQ: NSSC) on Monday reported fourth-quarter net income of $5 million, after reporting a loss in the same period a year earlier.
Net sales for the quarter increased 54% to a fourth-quarter record of $35.4 million, as compared to $23 million for the same period a year earlier. Net sales for the fiscal year ended June 30 increased 13% to a record $114 million, as compared to $101.4 million for the same period a year ago.
Adjusted EBITDA for the quarter increased 344% to $6.6 million, or 36 cents per share, as compared to $1.5 million, or 8 cents per share for the same period last year. Adjusted EBITDA for the fiscal year ended June 30 increased 32% to $19.5 million or $1.06 per share, as compared to $14.7 million, or 80 cents per share for the same period last year.
Napco came out with quarterly earnings of 27 cents per share, beating the Zacks Consensus Estimate of 25 cents per share. This compares to break-even earnings per share a year ago. The figures are adjusted for non-recurring items.
The quarterly report represents an earnings surprise of 8%. A quarter ago, it was expected the company would post earnings of 19 cents per share when it actually produced earnings of 24 cents, delivering a surprise of 26.3%.
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Over the last four quarters, the company has surpassed consensus earnings per share estimates four times. Napco shares have climbed 45% since the beginning of the year. The stock has risen 69% in the last 12 months.
Recurring service revenue for the quarter increased 43% to $9.5 million as compared to $6.7 million for the same period last year. Recurring service revenue for the fiscal year increased 41% to $33.9 million as compared to $24 million for the same period last year. Recurring service revenue now has a prospective annual run rate of $40.1 million based on July 2021 recurring revenues.
“The robust growth in recurring service revenue and the associated gross margin as well as sales of the Starlink radios [which generate the recurring service revenues] continues to be primarily attributable to our commercial intrusion and fire alarm business, which was not significantly affected by COVID-19 as commercial buildings must be kept secure,” states Richard Soloway, chairman and president.
He continues, “Additionally, the commercial fire alarm business is a ‘mandated, non-discretionary business’ which means, in order to receive a certificate of occupancy for a building, a fire alarm system is mandatory and must always function in compliance with fire codes. Because of the essential nature and high profitability of this sector, the commercial fire alarm business continues to be one of the key areas on which we focus our resources.”
On June 30 the company had $40.2 million in cash and cash equivalents and marketable securities as compared to $18.2 million as of June 30, 2020. Working capital (defined as current assets less current liabilities) was $75.8 million on June 30 as compared with working capital of $61.0 million the prior year on the same date.
This article originally appeared on our sister publication Security Sales & Integration‘s website.
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