Napco Security Systems Inc. (NSSC) filed Quarterly Report for the period ended 2009-03-31.

NAPCO SECURITY SYSTEMS is engaged in the development manufacture distribution and sale of security alarm products and door security devices for commercial and residential installations. Napco Security Systems Inc. has a market cap of $24.1 million; its shares were traded at around $1.26 with and P/S ratio of 0.3. Napco Security Systems Inc. had an annual average earning growth of 13.1% over the past 10 years. Highlight of Business Operations:Non-cash Investing activities:
Adjustment to Retained earnings relating
to adoption of FIN 48 $ - $ 485
= =
Accrued Business Acquisition costs $ 295 $ -
= =
Debt assumed in the Acquisition $ 1,000 $ -
= =



The Company's acquisition of substantially all of the assets and certain
liabilities of Marks included intangible assets with a fair value of
$16,440,000 on the date of acquisition. In accordance with the requirements
of SFAS No. 141, "Business Combinations", the Company recorded the
estimated value of $9,800,000 related to the customer relationships,
$340,000 related to a non-compete agreement and $6,300,000 related to the
Marks trade name within intangible assets. The remaining excess of the
purchase price of $922,000 was assigned to Goodwill. In accordance with the
provisions of SFAS No. 142, "Goodwill and Other Intangible Assets", the
intangible assets will be amortized over their estimated useful lives of
twenty years (customer relationships) and seven years (non-compete
agreement). The Marks USA trade name was deemed to have an indefinite life.
The goodwill recorded as a result of the acquisition is deductible for
Federal and New York State income tax purposes over a period of 15 years.



The Company has established two share incentive programs as discussed in
more detail in the Consolidated Financial Statements and related notes
contained in the Company's annual report on Form 10-K for the year ended
June 30, 2008. The Company accounts for its stock options and share units
granted in accordance with SFAS No. 123(R), "Share-Based Payment" ("SFAS
No. 123(R)") which requires that all stock-based compensation must be
recognized as an expense in the financial statements and that cost be
measured at the fair market value of the award. SFAS No. 123(R) also
requires that excess tax benefits related to stock option exercises be
reflected as financing cash inflows instead of operating cash inflows.
Stock-based compensation costs of $73,000 and $64,000 were recognized in
three months ended March 31, 2009 and 2008, respectively. Stock-based
compensation costs of $280,000 and $216,000 were recognized in nine months
ended March 31, 2009 and 2008, respectively. Unearned stock-based
compensation cost was $370,000 as of March 31, 2009.



Basic EPS
-
Net income, as reported $ 3,277 19,092 $ 0.17
Effect of dilutive securities
Employee Stock Options $ - 534 $ -
- - -
Diluted EPS
-
Net income, as reported and
assumed option exercises $ 3,277 19,626 $ 0.17
= = =



Nine months ended March 31, 2009
-
Net (Loss) Shares Per Share
(numerator) (denominator) Amounts
- - -
Basic EPS
-
Net loss, as reported $ (4,360) 19,096 $ (0.23)
Effect of dilutive securities
Employee Stock Options $ - - $ -
- - -
Diluted EPS
-
Net loss, as reported and
assumed option exercises $ (4,360) 19,096 $ (0.23)
= = =



Basic EPS
-
Net income, as reported $ 4,824 19,320 $ 0.25
Effect of dilutive securities
Employee Stock Options $ - 554 $ (0.01)
- - -
Diluted EPS
-
Net income, as reported and
assumed option exercises $ 4,824 19,874 $ 0.24
= = =



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