NAPCO reports record-breaking revenues in Q1 2024

AMITYVILLE, N.Y. – NAPCO Security Technologies has announced record-breaking financial results for its first quarter of fiscal year 2024.

Net sales for the quarter increased 6% to $41.7 million (the highest Q1 sales in the Company's history) as compared to $39.5 million for the same period last year. The trend follows from the previous quarter where the company broke its Q4 record with net sales of $44.7 million. Recurring service revenues (RSR) for the quarter increased 25% to $17.3 million as compared to $13.8 million for the same period last year. Recurring service revenues had a prospective annual run rate of approximately $72.5 million based on October 2023 recurring revenues.

"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,” said NAPCO Chairman and President Richard Soloway. “Our net income of $10.5 million is the largest Q1 net income in the company's history. While equipment revenues declined 5% for the quarter, gross margins on such sales increased to 28% from 9% in last year's first quarter. Recurring service revenues, which increased 25%, was also a major contributor to the year-over-year overall sales and earnings growth."

The Alarm Lock and Marks locking hardware lines received a shout-out for their continued growth in school and classroom security, healthcare, and retail loss prevention, as well as in multi-dwelling commercial and residential applications. NAPCO promised to continue its efforts in penetrating those markets.

Soloway attributed NAPCO's record-breaking results for Q1 as the result of the companies continued growth and profitability from recurring revenues, and strong sales from their Alarm Lock and Marks locking product lines. He noted that Radio sales have continued to slow down when compared to last year's first quarter, likely due to the then impending 3G Verizon sunset. As fiscal 2024 progresses, Soloway said that NAPCO expects radio sales to continue to be a key contributor to their hardware sales and continue to lead to the growth of their recurring revenues.

"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,” Soloway concluded. “Our net income margin and Adjusted EBITDA* margin of 25% and 31%, respectively, indicates the financial strength of our business. We are pleased to continue our dividend program and we will be paying another dividend of $0.08 per share on December 22, 2023. As always, we will strive to accomplish our goal of continued financial strength, product innovation, technical superiority, and strong profitability, for the rest of fiscal 2024 and beyond".

You can find the full release online at investor.napcosecurity.com.