May 17, 2010 - AMITYVILLE, N.Y.--(BUSINESS WIRE)--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 fiscal quarter ended March 31, 2010.
* Net sales for the third quarter were $16,015,000, a 14% increase from the net sales for the same quarter a year ago. Net sales for the nine months were $47,121,000, a 7% decrease from the net sales for the same nine months a year ago. As previously reported, the financial crisis continues to have an adverse impact on our distributors although backlog levels remain higher than historical levels which is an indication of improved demand levels from that of a year ago. .
* Adjusted EBITDA* for the three months ended March 31, 2010 was $218,000 as compared to $(4,399,000) for the same period a year ago (see table attached).
* The Company recorded a non-cash adjustment for goodwill impairment of $923,000.
* Net income for the quarter ended March 31, 2010 was $(1,864,000), or $(0.10) per fully diluted share, an improvement of $0.16 from $(5,015,000), or $(0.26) per fully diluted share last year. Per share results are based on 19,095,713 basic and fully diluted weighted average shares outstanding for the three months ended March 31, 2010 and 2009, respectively.
* Cash generated from operations was approximately $4.6 million for the nine months ended March 31, 2010.
* Inventory reduction in the nine months ended March 31, 2009 was approximately $2.8 million as a result of the aggressive utilization of existing inventories. Inventory reduction for the last twelve months amounts to $8.7 million.
* Debt, net of cash, was reduced by $11.0 million from $35.9 million to $24.9 million since acquiring Marks USA in August of 2008. $4.4 million of this reduction occurred in the nine months ended March 31, 2010.
Gross Profit for the three months ended March 31, 2010 was $4,151,000, an increase of $4,347,000 compared to a loss of $196,000 for the same period a year ago. Gross margin, which has now increased for four consecutive quarters, was 25.9% for the three months ended March 31, 2010. In August 2009, the Company completed the move of all of the operations of the Marks subsidiary, acquired in August 2008, into its headquarters and its production facility in the Dominican Republic. The Company expects to complete the integration of production from the U.S. to its Dominican plant during 2010. Upon completion of the integration of Marks, NAPCO’s cost savings should approximate $2 million per year.
Operating income for the quarter ended March 31, 2010, which reflects the items discussed above was ($1,751,000) an improvement of $3,509,000 from ($5,260,000) for the quarter ended March 31, 2009.
Richard Soloway, Chairman and President, stated, “The third quarter of fiscal 2010 saw that the sales levels held steady at the same rate as last quarter. Our backlog level which amounted to approximately $2.9 million at the end of the quarter remains higher than normal historical levels. We are also continuing the transition of production of the Marks product to our cost-effective plant in the Dominican Republic. This, along with the several cost containment measures we implemented during the past year puts NAPCO in a position for improved profitability when economic conditions improve and are reflected in our sales levels.”