On November 6, 2023, NAPCO Security Technologies Inc (NSSC, Financial) released its earnings for the first quarter of fiscal 2024. The company reported record revenues, net income, and adjusted EBITDA for the quarter. The net sales for the quarter increased by 6% to $41.7 million, while the net income for the quarter soared by 239% to $10.5 million. The adjusted EBITDA for the quarter also saw a significant increase of 174% to $12.9 million.
Financial Performance
Richard Soloway, Chairman and President of NAPCO, commented on the company's performance, stating,
Fiscal 2024 began with record first quarter sales of $41.7 million, which was the twelfth consecutive quarter we achieved record sales for a quarterly reporting period. Our net income of $10.5 million is the largest Q1 net income in the Company's history."He also noted that while equipment revenues declined by 5% for the quarter, gross margins on such sales increased to 28% from 9% in last year's first quarter.
Financial Highlights
Net sales for the quarter increased by 6% to $41.7 million, marking the highest Q1 in the company's history. Operating income for the quarter increased by 222% to $11.6 million compared to $3.6 million for the same period last year. Net income for the quarter increased by 239% to a Q1 record of $10.5 million, representing 25% of net sales. Adjusted EBITDA for the quarter increased by 174% to a Q1 record of $12.9 million, equating to an Adjusted EBITDA margin of 31%.
Balance Sheet Summary
As of September 30, 2023, the company had $74.6 million in cash and cash equivalents, other investments, and marketable securities compared to $66.7 million as of June 30, 2023. Working capital was $115.9 million at September 30, 2023, compared with working capital of $111.7 million at June 30, 2023. The current ratio was 6.3:1 at September 30, 2023, and 6.7:1 at June 30, 2023.
Looking Ahead
Mr. Soloway concluded,
As we begin fiscal year 2024, we are encouraged with the improved gross margin for hardware sales of 28%, and, based on historical seasonal trends, we believe this could improve further as the fiscal year progresses."He added that the company is pleased to continue its dividend program and will be paying another dividend of $0.08 per share on December 22, 2023.
Explore the complete 8-K earnings release (here) from NAPCO Security Technologies Inc for further details.
