AMITYVILLE, N.Y., May 14, 2012 /PRNewswire/ -- NAPCO Security Technologies, Inc., (NASDAQ: NSSC), one of the world's leading suppliers of high performance electronic security equipment for over 30 years, today announced financial results for its third quarter ended March 31, 2012.
Highlights:
Net sales for the third quarter decreased 3% to $17,236,000 as compared to $17,760,000 a year ago. Net sales for the nine months ended March 31, 2012 were up 1% to $51,056,000 from $50,695,000 in the prior year.
Adjusted EBITDA* for the third quarter was $1,247,000 as compared to $1,246,000 for the same period a year ago (see table attached). For the nine months ended March 31, 2012 Adjusted EBITDA* increased $576,000, or 23%, to $3,087,000 from $2,511,000 for the same period a year ago.
Net income for the third quarter decreased $392,000 to $303,000, or $0.02 per share, as compared to $695,000, or $0.04, per share for the same period a year ago. Net income for the nine months ended March 31, 2012 increased $727,000 to $445,000, or $0.02 per share, as compared to $(282,000), or $(0.01), per share for the same period a year ago. Per share results are based on 19,409,000 and 19,253,000 fully diluted weighted average shares for the three and nine months ended March 31, 2012, respectively, and 19,193,000 and 19,096,000 fully diluted weighted average shares for the three and nine months ended March 31, 2011, respectively.
Cash generated by operating activities was approximately $1.9 million for the quarter ended March 31, 2012 as compared to $1.0 million for the same period a year ago. For the nine months ended March 31, 2012, cash generated by operating activities was $3.0 million as compared to $2.3 million for the same period last year.
Debt, net of cash, has been reduced by $17.8 million from $35.9 million to $18.1 million since acquiring Marks USA in August of 2008.
In May 2012, NAPCO entered into a term sheet with its current primary bank. The term sheet anticipates consummation of an extension of the existing credit facilities for five years with terms and conditions that Management believes are similar to, or better than the existing facilities.
Gross Profit for the three months ended March 31, 2012 was $5,064,000, a decrease of 8% compared to $5,513,000 for same period a year ago. Gross Profit for the nine months ended March 31, 2012 was $14,115,000, an increase of 4% compared to $13,626,000 for same period a year ago.
Selling, general and administrative expenses for the three months ended March 31, 2012 decreased by 10% to $4,375,000 as compared to $4,856,000 for the same quarter a year ago. Selling, general and administrative expenses for the nine months ended March 31, 2012 decreased by 4% to $12,673,000 from $13,155,000 for the same period a year ago.
Operating income for the three months ended March 31, 2012 increased by $32,000 to $689,000 as compared to $657,000 for the same quarter a year ago. Operating income for the nine months ended March 31, 2012 increased by $971,000 to $1,442,000 as compared to $471,000 for the same period a year ago.
Richard Soloway, Chairman and President, stated, "We are very pleased to have agreed on a term sheet with our current bank regarding an extension and restructuring of our expiring credit facilities. While there is no guarantee that a definitive agreement will close, the contemplated five-year agreement offers more advantageous payment and interest terms than the existing facilities. Both the Company and our current bank are confident that this agreement will be finalized in the very near future. In addition, we were pleased that the Company's improving balance sheet resulted in offers from other banking institutions. However, management has concluded that remaining with our current bank is best for our Company."
Mr. Soloway added, "Income before taxes for the three and nine months improved over last year despite continued soft demand in the traditional mechanical door-locking products market. This market softness resulted in the 3% decrease in sales this quarter, and related primarily to the Marks door-locking products, as partially offset by increases in the Company's other divisions. We are cautiously optimistic that this business, which is primarily driven by commercial high rise construction, is improving as evidenced by the large percentage increases in new building permits issued in NYC, one of the largest areas for Marks products. In addition, we have greatly expanded the Marks range of new products to address all of the sales opportunities in the commercial building refurb market. Our goal is to supply all products for all entry and exit doors in this market."
"We continue to hold down our manufacturing overhead and SG&A expenses which contributed to our profitability. Net income for the nine months ended March 31, 2012 was up significantly while net income for the three months was down due to the tax benefit recognized in the third quarter of last year as a result of R&D credits relating to prior years. "
Mr. Soloway continued, "The Company continues to invest in the future with new software-driven and IP products in key, strategic market categories and the feedback from our network of security dealers has been very positive. Our award-winning, NAPCO Commercial™ product platform continues to build market share and gives us a strong entry in the high gross-margin, commercial intrusion and fire segments of the industry."
"We are also proud of our performance at the recent ISC West trade show, where NAPCO won Best of Show – Wireless Intrusion Product, for its innovative iBridge™, Wi-Fi, 7-inch touch-screen tablet. Consumers can control their security systems, video cameras, thermostats or lighting, from anywhere in the home, wirelessly, with this device. Additionally, we continue to generate awareness, trial and adoption of our recurring revenue product entries, such as the Starlink 2™ wireless GSM communicator and the iSeeVideo™ remote viewing system. As a leader in the nascent category of wireless access control locking systems, our Networx™ product is progressing well. The product is being adopted and installed for use in many hospital and school applications. This product is cost-effective versus other access control options and enables dealers to install a system with minimal labor costs."
"In conclusion, with these exciting, new products and the stability offered by the proposed extension of our bank loans, we are laser-focused on maximizing the return on our expansive product lines. While returning to profitability over the past few years has certainly been a challenge, we feel that we have not only succeeded in that but are also poised to take full advantage of the security market as the economic conditions improve and revenue from our new products increases."
NAPCO will host a conference call for the investment community today, May 14, 2012, at 11:00 AM ET. Interested parties may participate in the call by dialing 877-407-8291; international callers dial 201-689-8345 about 5-10 minutes prior to 11:00 AM ET. The conference call will also be available on replay starting at 1:00 PM ET on May 14, 2012 and ending on May 28, 2012. For the replay, please dial 877-660-6853 (replay account # 405, replay conference #394347). The access number for the replay for international callers is 201-612-7415 (replay account # 405, replay conference #394347).
About NAPCO Security Technologies, Inc.
NAPCO Security Technologies, Inc. is one of the world's leading manufacturers of technologically advanced electronic security equipment including intrusion and fire alarm systems, access control and door locking systems. The Company consists of NAPCO plus three wholly-owned subsidiaries: Alarm Lock, Continental Instruments, and Marks USA. The products are installed by security professionals worldwide in commercial, industrial, institutional, residential and government applications. NAPCO products have earned a reputation for technical excellence, reliability and innovation, poising the Company for growth in the rapidly expanding electronic security market, a multi-billion dollar market.
For additional information on NAPCO, please visit the Company's web site at www.napcosecurity.com.
This press release contains forward-looking statements that involve numerous risks and uncertainties. Actual results, performance or achievements could differ materially from those anticipated in such forward-looking statements as a result of certain factors, including those set forth in the Company's filings with the Securities and Exchange Commission.
|
NAPCO SECURITY TECHNOLOGIES, INC. AND SUBSIDIARIES | |||
|
CONDENSED CONSOLIDATED BALANCE SHEETS | |||
|
ASSETS |
March 31, 2012 |
June 30, 2011 | |
|
(unaudited) |
(audited) | ||
|
(In thousands except share data) | |||
|
CURRENT ASSETS |
|||
|
Cash and cash equivalents |
$ 2,997 |
$ 3,077 | |
|
Accounts receivable, net of reserves |
13,737 |
17,640 | |
|
Inventories |
19,806 |
19,986 | |
|
Prepaid expenses and other current assets |
791 |
950 | |
|
Income tax receivable |
133 |
-- | |
|
Deferred income taxes |
543 |
528 | |
|
Total Current Assets |
38,007 |
42,181 | |
|
Inventories - non-current, net |
4,466 |
4,201 | |
|
Deferred income taxes |
1,853 |
2,083 | |
|
Property, plant and equipment, net |
7,373 |
7,741 | |
|
Intangible assets, net |
11,517 |
12,316 | |
|
Other assets |
277 |
273 | |
|
TOTAL ASSETS |
$ 63,493 |
$ 68,795 | |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|||
|
CURRENT LIABILITIES |
|||
|
Current maturities of long-term debt |
$ 12,172 |
* |
$ 3,572 |
|
Accounts payable |
3,309 |
4,649 | |
|
Accrued expenses |
1,658 |
2,553 | |
|
Income tax payable |
-- |
437 | |
|
Accrued salaries and wages |
1,426 |
1,785 | |
|
Total Current Liabilities |
18,565 |
12,996 | |
|
Long-term debt, net of current maturities |
8,926 |
20,205 | |
|
Accrued income taxes |
120 |
165 | |
|
Total Liabilities |
27,611 |
33,366 | |
|
COMMITMENTS AND CONTINGENCIES |
|||
|
STOCKHOLDERS' EQUITY |
|||
|
Common Stock, par value $0.01 per share; 40,000,000 shares authorized; 20,095,713 shares issued; 19,095,713 shares outstanding |
201 |
201 | |
|
Additional paid-in capital |
14,080 |
14,072 | |
|
Retained earnings |
27,216 |
26,771 | |
|
41,497 |
41,044 | ||
|
Less: Treasury Stock, at cost (1,000,000 shares) |
(5,615) |
(5,615) | |
|
TOTAL STOCKHOLDERS' EQUITY |
35,882 |
35,429 | |
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
$ 63,493 |
$ 68,795 | |
|
* Our existing revolving line of credit expires in August 2012. The Company has signed a term sheet with its primary bank which provides for extending both this line and the Company's term loan through 2017. However, there is no guarantee that this agreement will close. Accordingly, we have classified its balance as a current liability as of March 31, 2012. | |||
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NAPCO SECURITY TECHNOLOGIES, INC. AND SUBSIDIARIES | |||||||||
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
| |||||||||
|
Three months ended March 31, |
Nine months ended March 31, | ||||||||
|
2012 |
2011 |
2012 |
2011 | ||||||
|
(In thousands, except share and per share data) | |||||||||
|
Net sales |
$ 17,236 |
$ 17,760 |
$ 51,056 |
$ 50,695 | |||||
|
Cost of sales |
12,172 |
12,247 |
36,941 |
37,069 | |||||
|
Gross Profit |
5,064 |
5,513 |
14,115 |
13,626 | |||||
|
Selling, general, and administrative expenses |
4,375 |
4,856 |
12,673 |
13,155 | |||||
|
Operating Income |
689 |
657 |
1,442 |
471 | |||||
|
Other expense: |
|||||||||
|
Interest expense, net |
287 |
328 |
889 |
1,333 | |||||
|
Other, net |
15 |
14 |
42 |
41 | |||||
|
302 |
341 |
931 |
1,374 | ||||||
|
Income (Loss) before Provision (Benefit) for Income Taxes |
387 |
316 |
511 |
(903) | |||||
|
Provision (Benefit) for income taxes |
84 |
(379) |
66 |
(621) | |||||
|
Net Income (Loss) |
$ 303 |
$ 695 |
$ 445 |
$ (282) | |||||
|
Income (Loss) per share: |
|||||||||
|
Basic |
$ 0.02 |
$ 0.04 |
$ 0.02 |
$ (0.01) | |||||
|
Diluted |
$ 0.02 |
$ 0.04 |
$ 0.02 |
$ (0.01) | |||||
|
Weighted average number of shares outstanding: |
|||||||||
|
Basic |
19,096,000 |
19,096,000 |
19,096,000 |
19,096,000 | |||||
|
Diluted |
19,409,000 |
19,193,000 |
19,253,000 |
19,096,000 | |||||
|
NAPCO SECURITY TECHNOLOGIES, INC. AND SUBSIDIARIES | |||
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
| |||
|
Nine months ended March 31, | |||
|
2012 |
2011 | ||
|
(in thousands) | |||
|
CASH FLOWS FROM OPERATING ACTIVITIES |
|||
|
Net Income (Loss) |
$ 445 |
$ (282) | |
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|||
|
Depreciation and amortization |
1,638 |
1,703 | |
|
Provision for doubtful accounts |
-- |
32 | |
|
Charge to obsolescence reserve |
-- |
500 | |
|
Deferred income taxes |
215 |
(134) | |
|
Stock based compensation expense |
8 |
52 | |
|
Changes in operating assets and liabilities: |
|||
|
Accounts receivable |
3,903 |
2,261 | |
|
Inventories |
(85) |
(404) | |
|
Prepaid expenses and other current assets |
159 |
81 | |
|
Income tax receivable |
(133) |
(440) | |
|
Other assets |
(44) |
(32) | |
|
Accounts payable and accrued expenses |
(3,077) |
(1,086) | |
|
Net Cash Provided by Operating Activities |
3,029 |
2,251 | |
|
CASH FLOWS FROM INVESTING ACTIVITIES |
|||
|
Purchases of property, plant, and equipment |
(430) |
(454) | |
|
Net Cash Used in Investing Activities |
(430) |
(454) | |
|
CASH FLOWS FROM FINANCING ACTIVITIES |
|||
|
Principal payments on long-term debt |
(2,679) |
(3,679) | |
|
Net Cash Used in Financing Activities |
(2,679) |
(3,679) | |
|
Net Decrease in Cash and Cash Equivalents |
(80) |
(1,882) | |
|
CASH AND CASH EQUIVALENTS - Beginning |
3,077 |
5,522 | |
|
CASH AND CASH EQUIVALENTS - Ending |
$ 2,997 |
$ 3,640 | |
|
SUPPLEMENTAL CASH FLOW INFORMATION |
|||
|
Interest paid, net |
$ 938 |
$ 1,247 | |
|
Income taxes paid |
$ 467 |
$ 5 | |
|
NAPCO SECURITY TECHNOLOGIES, INC. | ||||
|
NON-GAAP MEASURES OF PERFORMANCE* (Unaudited) | ||||
|
(in thousands) | ||||
|
3 months ended March 31, |
9 months ended March 31, | |||
|
2012 |
2011 |
2012 |
2011 | |
|
Net income (loss) (GAAP) |
$ 303 |
$ 695 |
$ 445 |
$ (282) |
|
Add back provision (benefit) for income taxes |
84 |
(379) |
66 |
(621) |
|
Add back interest and other expense |
302 |
341 |
931 |
1,374 |
|
Operating income (GAAP) |
689 |
657 |
1,442 |
471 |
|
Adjustments for non-GAAP measures of performance: |
||||
|
Add back amortization of acquisition-related intangibles |
266 |
290 |
799 |
866 |
|
Add back stock-based compensation expense |
-- |
14 |
8 |
52 |
|
Add back costs relating to Marks acquisition and consolidation |
-- |
-- |
-- |
216 |
|
Add back costs associated with waivers and amendments to credit facilities |
-- |
-- |
-- |
69 |
|
Adjusted non-GAAP operating income |
955 |
961 |
2,249 |
1,674 |
|
Add back depreciation |
292 |
285 |
838 |
837 |
|
Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) |
$ 1,247 |
$ 1,246 |
$ 3,087 |
$ 2,511 |
|
* Non-GAAP Information. Certain non-GAAP measures are included in this press release, including EBITDA, non-GAAP operating income and Adjusted EBITDA. We define EBITDA as GAAP net income (loss) plus income tax expense (benefit), net interest expense and depreciation and amortization expense. Non-GAAP operating income does not include impairment of goodwill, amortization of intangibles, restructuring charges, stock-based compensation expense and other infrequent or unusual charges. These non-GAAP measures are provided to enhance the user's overall understanding of our financial performance. By excluding these charges our non-GAAP results provide information to management and investors that is useful in assessing NAPCO's core operating performance and in comparing our results of operations on a consistent basis from period to period. The presentation of this information is not meant to be a substitute for the corresponding financial measures prepared in accordance with generally accepted accounting principles. Investors are encouraged to review the reconciliation of GAAP to non-GAAP financial measures included in the above. | ||||
INVESTOR INQUIRIES:
Brett Maas
Hayden IR
(646) 536-7331
brett@haydenir.com
James Carbonara, Regional Vice President
Hayden IR
(646)-755-7412
Email: james@haydenir.com
Donald Weinberger
Wolfe Axelrod Weinberger Assoc. LLC
(212) 370-4500
don@wolfeaxelrod.com
SOURCE NAPCO Security Technologies, Inc.
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