NAPCO holds Q4 2023 earnings call

AMITYVILLE, N.Y. – NAPCO Security Technologies announced its financial results for the fourth quarter and fiscal year ended June 30, 2023.

Highlights for the quarter included the increase of net sales for the quarter 3% to $44.7 million, a Q4 record for the company as compared to $43.2 million for the same period last year. Net sales for the fiscal year increased 18% to a record $170 million as compared to $143.6 million last year.

Recurring service revenue (RSR) for the quarter increased 27% to $16.1 million as compared to $12.7 million for the same period last year. Recurring service revenue for the fiscal year increased 30% to $59.9 million as compared to $46.0 million last year.  Recurring service revenue had a prospective annual run rate of approximately $67 million based on July 2023 recurring revenues according to a release from NAPCO.

NAPCO CEO Richard Soloway said that he was pleased to inform investors about their record growth, RSR strong growth rate, strong balance sheet, and being debt free during the earnings call. “We’re working every day to continue these growth patterns” he said. Soloway also focused on the recent installation at the University of Arizona of 700 trilogy electronic locks on campus. “Now more than ever we are laser focused,” he added in NAPCO’s push towards school security and citing recent gun violence on the campus.

CFO Kevin Buchel also addressed the quarterly restatement, describing it during the Q&A session saying, “…the inventory was valued using 6-30-22 numbers”, and that the cost of the components involved had come down, using the value of it as 50 versus 5 as an example, he said. “We’re going fix this,” and “We’re going to have a system where we measure fluctuations in every quarter,” to make sure inventory valuation uses the correct price.

As for whether there would be stock buyback from the company or its upper management Buchel said, “That’s all on the table,” adding, ““Let’s get our house in order.”

The full release of financial information can be found at investor.napcosecurity.com.