NAPCO Security Systems, a 30-plus year-old company in the electronic security systems market, announced its third quarter results. The company's quarter ended March 31, and despite a profitable quarter, NAPCO's chief says he's seeing trouble in the residential security market.
Net sales were down 6 percent compared to the same quarter one year ago, from $17.1 million to $15.6 million, part of an overall trend that saw the last nine months total sales of $45.7 million, compared to $48.5 million in sales for the same nine months a year ago. Those numbers translated to earnings per share of $.06, compared to $.07 EPS a year ago.
The company indicated that the 6 percent decline in net sales depended upon two primary factors, a slip in sales of intrusion products in the European market and a softening U.S. housing market. While intrusion was down, the decrease was somewhat offset by reported increases in sales among the company's commercial access control and door-lock products.
NAPCO President Richard Soloway said the company has already begun to "realign" its European sales efforts, which he said is already visible in the fact that the company beat its second quarter sales figures for the European market. He also sounded positive that while the residential market was seeing slowing, the commercial products division was ramping up.
"The lower domestic residential intrusion alarm sales have been affected by the significant decline in housing starts and residential installations," said Soloway in a statement about the company's earnings. "While housing starts have had an affect on our residential sales, the impact has been significantly lessened because a large and growing portion of our sales are commercial."
NAPCO also reported higher inventory levels, which was at least partially driven by the launch of its Freedom 64 intrusion alarm system and its Video Gateway product line.