On August 26, 2024, NAPCO Security Technologies Inc (NSSC, Financial) released its 8-K filing reporting record revenues, net income, and adjusted EBITDA for the fourth quarter and fiscal year ended June 30, 2024. NAPCO Security Technologies Inc manufactures security products, including access control systems, door-locking products, intrusion and fire alarm systems, and video surveillance products, serving commercial, residential, institutional, industrial, and governmental markets.
Quarterly and Annual Financial Highlights
NAPCO Security Technologies Inc reported a 13% increase in net sales for the quarter, reaching a record $50.3 million, surpassing the analyst estimate of $50.28 million. Net income for the quarter rose by 28% to $13.5 million, or $0.36 per diluted share, exceeding the estimated earnings per share of $0.35. For the fiscal year, net sales increased by 11% to $188.8 million, slightly above the estimated $188.63 million, while net income surged by 84% to $49.8 million, or $1.34 per diluted share, exceeding the annual earnings estimate.
Key Financial Metrics and Achievements
The company's recurring service revenues, which grew by 27% in Q4 to $20.3 million with a gross margin of 90%, were a significant contributor to overall sales and earnings growth. Equipment revenue also saw a 5% increase for the quarter, with gross margins improving to 31% from 29% in the previous quarters. The total gross margin for Q4 was 55%, up from 52% in the same period last year.
NAPCO's balance sheet strengthened considerably, with cash and cash equivalents, other investments, and marketable securities increasing by 46% to $97.7 million as of June 30, 2024, compared to $66.7 million a year earlier. The company reported no debt and a robust net cash provided by operating activities of $45.4 million, an 84% increase over the previous year's $24.7 million.
Income Statement Summary
| Metric | Q4 2024 | Q4 2023 | FY 2024 | FY 2023 |
|---|---|---|---|---|
| Net Sales | $50.3M | $44.6M | $188.8M | $170M |
| Net Income | $13.5M | $10.6M | $49.8M | $27.1M |
| Adjusted EBITDA | $15.4M | $13M | $58.9M | $34.3M |
Balance Sheet and Cash Flow Highlights
As of June 30, 2024, NAPCO reported total assets of $207.8 million, up from $166.7 million the previous year. The company's working capital increased to $146.5 million from $111.7 million, and the current ratio improved to 7.6:1 from 6.7:1. The company also declared a quarterly dividend of $0.125 per share, reflecting its strong financial position.
Commentary and Future Outlook
"Fiscal 2024 concluded with record revenue and net income for both the 4th quarter and the full fiscal year. Our record quarterly net income of $13.5 million represents 27% of sales. Adjusted EBITDA was $15.4 million for Q4 and $58.9 million for the full fiscal year, equating to a 31% EBITDA margin," said Richard Soloway, Chairman and CEO.
NAPCO's focus on recurring service revenues and the introduction of new products like Prima by NAPCO, an all-in-one panel for security, fire, video, and connected home, are expected to drive future growth. The company aims to further penetrate markets such as school and classroom security, healthcare, and retail loss-prevention.
For more detailed financial information and analysis, visit the full 8-K filing.
Explore the complete 8-K earnings release (here) from NAPCO Security Technologies Inc for further details.
