To say that Napco Security Technologies (NASDAQ: NSSC) is on a roll would be an understatement. The Amityvile, N.Y.-based maker of intrusion security, school safety lock down systems, Internet of Things (IoT) smart home, video and fire systems, and enterprise-class access control and door locking products, just announced its 18th consecutive quarter of record-setting sales.
Net sales for the quarter ending December 31, 2018 increased 18 percent to $24.8 million as compared to $21.1 million for the same quarter last year. Net sales for the six months increased 14 percent to $48.2 million, as compared to $42.3 million for the same period last year.
Recurring service revenue for the quarter increased 46 percent to $4.1 million as compared to $2.8 million for the same quarter last year and for the six months increased 46 percent to $7.9 million from $5.4 million last year.
The company reports its recurring service revenue now has a prospective annual run rate of $17.2 million based on December 2018 recurring revenues.
All those revenues meant a spectacular bottom line for Q2. Napco’s net income for the quarter increased 133 percent to a second quarter record of $2.9 million from $1.2 million a year ago. Net income for the six months increased 106 percent to $4.4 million from $2.1 million a year ago.
In CE Pro's recent analysis of 2018 stock performance, Napco outperformed the rest of the industry by a wide margin, with a 82 percent stock price gain last year. That is compared to an average -19 drop for the other 51 companies that CE Pro analyzed.
Richard Soloway, chairman and president comments, “This past quarter saw our company reach record milestones in both sales and profits and we were particularly encouraged by our ability to continue to build upon and expand our stable of RSR (recurring service revenue) generating product offerings.
“Our strategic targeting of high-growth, professionally-installed, primarily commercial markets, such as wireless fire and intrusion alarm communicators, fire alarm control panels, school security products, IoT smart business/home solutions and access control locking products, has supplied us with the necessary fuel required for incremental future growth.”
Soloway singled out the company’s StarLink line of universal fire alarm, intrusion alarm and IoT communicators as a contributor of $17.2 million annual run rate of RSR income to the company.
He also touted Napco’s all-in-one FireLink eight- to 32-zone fire alarm control panel with a built-in cellular LTE as a successful product, as well as its universal StarLink Connect IoT cellular communicator, and the recently launched, Napco iBridge Video Doorbell, which lets consumers know who is at the door and speak to them, real-time, remotely, from a smartphone or smart device.
Soloway concludes, “We are confident that our investments in the engineering and marketing of unique, innovative products, positioned in high-sales-growth market sectors, along with an emphasis on driving marketing business models which deliver substantial RSR growth for our company, should propel us to strong incremental future growth for the foreseeable future. We are encouraged by our growth in sales and profits for Fiscal 2019 to-date and look forward to a strong second-half of our year and beyond.”