Exhibit 99.1
FOR IMMEDIATE RELEASE
CONTACT:
Richard L. Soloway, CEO Stephen D. Axelrod, CFA
Kevin S. Buchel, Senior VP Alisa D. Steinberg (Media)
NAPCO SECURITY SYSTEMS, INC. WOLFE AXELROD WEINBERGER ASSOC. LLC
(631) 842-9400 ext. 120 (212) 370-4500; (212) 370-4505 fax
steve@wolfeaxelrod.com
alisa@wolfeaxelrod.com
NAPCO SECURITY SYSTEMS, INC. REPORTS RECORD-BREAKING
THIRD QUARTER SALES AND PROFITS
- THIRD QUARTER REVENUES AND NET INCOME HIGHEST IN COMPANY'S HISTORY -
- NINTH CONSECUTIVE QUARTER OF YEAR-OVER-YEAR GROWTH IN SALES AND EARNINGS -
AMITYVILLE, NEW YORK - MAY 8, 2006 - NAPCO SECURITY SYSTEMS, INC.,(NASDAQ:
NSSC), one of the world's leading suppliers of high performance electronic
security equipment for over 30 years, today announced record-breaking results
for the third quarter ended March 31, 2006.
Net sales for the three months ended March 31, 2006 increased 9% to $17.1
million from $15.7 million reported for the same quarter a year earlier. Net
income for the quarter increased 46% to $1.5 million, or $0.11 per diluted
share, as compared to net income of $1.0 million, or $0.07 per diluted share,
for the same period last year.
Net sales for the nine months ended March 31, 2006 increased 7% to $48.5 million
from $45.2 million for the prior year period. Net income for the nine months
ended March 31, 2006 increased 57% to $3.8 million or $0.27 per diluted share as
compared to $2.4 million or $0.18 per diluted share in the prior year period.
FINANCIAL HIGHLIGHTS
THIRD QUARTER
- Net Income increases 46% to $1.5 million
- EPS increases 57% to $0.11 per diluted share
- Operating income increases 39% to $2.3 million
- EBITDA* increases 39% to $2.6 million
NINE MONTHS
- Net Income increases 57% to $3.8 million
- EPS increases 50% to $0.27 per diluted share
- Operating Income increases 45% to $5.8 million
- EBITDA** increases 44% to $6.8 million
- MORE -
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Richard Soloway, Chairman and President, stated "Our record third quarter
performance is especially gratifying as it is the ninth consecutive quarter of
year-over-year growth in sales and profits. Our success is the result of the
improved and highly motivated distribution network, the ever expanding line of
cutting edge security products and the continued focus on marketing our
commercial, industrial and governmental products."
Soloway added, "Furthermore, feedback on our patented second generation
wireless/hardwire code-free alarm systems branded as "Safewatch E-Z" and
"Freedom", has been very positive. The same can be said for our new video
product, the VIP-Gateway, which allows a homeowner or business owner to visually
check, at any time, on what is happening in their home or office through their
cell phone or computer from anywhere in the world. We believe that there could
be significant contributions from these state-of-the-art systems in the future."
"We look forward to significant future growth in a world in which safety and
security are mounting priorities," Mr. Soloway concluded.
NAPCO SECURITY SYSTEMS, INC. is one of the world's leading manufacturers of
technologically advanced electronic security equipment including intrusion and
fire alarm systems, access control systems and electronic locking devices. The
Company's products, including those of Alarm Lock and Continental Instruments,
feature some of the most popular and best-selling security control panels and
sensors, locking devices and access control products. They are used in
residential, commercial, institutional, industrial and governmental
applications. NAPCO security products have earned a reputation for technical
excellence, reliability and innovation, poising the Company for revenue growth
in the rapidly expanding electronic security market, a market whose current size
exceeds $30 billion.
For additional information on NAPCO, please visit the Company's web site at
www.napcosecurity.com.
* For the three months ended March 31, 2006 and 2005, respectively,
EBITDA has been calculated by adding depreciation and amortization
($291,000 and $281,000), interest expense ($68,000 and $50,000) and
provision for income taxes ($775,000 and $538,000) to net income
($1,475,000 and $1,013,000).
** For the nine months ended March 31, 2006 and 2005, respectively,
EBITDA has been calculated by adding depreciation and amortization
($811,000 and $844,000), interest expense ($166,000 and $176,000) and
provision for income taxes ($2,004,000 and $1,280,000) to net income
($3,773,000 and $2,398,000).
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.
- TABLES TO FOLLOW -
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NAPCO SECURITY SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
(UNAUDITED)
Three Months Ended Nine Months Ended
March 31, March 31,
------------------------- -------------------------
2006 2005 2006 2005
----------- ----------- ----------- -----------
Net Sales $ 17,085 $ 15,743 $ 48,488 $ 45,202
Cost of Sales 10,729 10,647 30,958 30,915
----------- ----------- ----------- -----------
Gross profit 6,356 5,096 17,530 14,287
Selling, General and Administrative Expenses 4,032 3,423 11,690 10,263
----------- ----------- ----------- -----------
Operating income 2,324 1,673 5,840 4,024
----------- ----------- ----------- -----------
Interest Expense, net 68 50 166 176
Other Expenses, net 4 72 10 170
----------- ----------- ----------- -----------
Other expenses 72 122 176 346
----------- ----------- ----------- -----------
Income before minority interest and
provision for income taxes 2,252 1,551 5,664 3,678
Minority interest in net (income) loss of subsidiary, net (2) -- 113 --
----------- ----------- ----------- -----------
Income before provision for income taxes 2,250 1,551 5,777 3,678
Provision for income taxes 775 538 2,004 1,280
----------- ----------- ----------- -----------
Net income $ 1,475 $ 1,013 $ 3,773 $ 2,398
=========== =========== =========== ===========
Net income per share*:
Basic $ 0.11 $ 0.08 $ 0.29 $ 0.19
=========== =========== =========== ===========
Diluted $ 0.11 $ 0.07 $ 0.27 $ 0.18
=========== =========== =========== ===========
Weighted average number of shares outstanding*:
Basic 13,245,385 12,865,689 13,153,431 12,804,585
=========== =========== =========== ===========
Diluted 13,807,626 13,583,310 13,720,926 13,463,438
=========== =========== =========== ===========
* The 3:2 stock split declared on November 29, 2005 has been retroactively
reflected in all 2005 share and per share data.
- MORE -
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NAPCO SECURITY SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
March 31, June 30,
2006 2005
----------- --------
(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $ 988 $ 1,178
Accounts receivable, less allowance for doubtful accounts 20,729 21,899
Inventories, net 23,115 16,242
Prepaid expenses and other current assets 953 799
Deferred income taxes 1,567 1,356
------- -------
Total current assets 47,352 41,474
Property, Plant and Equipment, net 9,186 8,533
Goodwill 9,686 9,686
Other assets 145 214
------- -------
$66,369 $59,907
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 5,758 $ 5,249
Accrued expenses 1,150 1,156
Accrued salaries and wages 2,077 2,518
Accrued income taxes 1,315 1,534
------- -------
Total current liabilities 10,300 10,457
Long-term debt 3,700 1,950
Accrued income taxes 2,243 2,243
Deferred income taxes 1,707 1,579
------- -------
Total liabilities 17,950 16,229
------- -------
Stockholders' Equity*:
Common stock, par value $.01 per share; 40,000,000 and
21,000,000 shares authorized, 13,300,185 and 12,982,665
shares issued and outstanding, respectively 133 130
Additional paid-in capital 13,280 11,585
Unearned stock-based compensation (730) --
Retained earnings 35,736 31,963
------- -------
Total stockholders' equity 48,419 43,678
------- -------
$66,369 $59,907
======= =======
* The 3:2 stock split declared on November 29, 2005 has been retroactively
reflected in Stockholders' Equity.
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