-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OBmBvJ2ZyGZeiYVFtXjjnGSZJ45Mol3dUeHPkZfbI4uZD5HKcnkeLWQ+mRSp1P0M insVE8mrbQ0VXkAXeX7RqQ== 0000950123-05-013827.txt : 20051117 0000950123-05-013827.hdr.sgml : 20051117 20051117172138 ACCESSION NUMBER: 0000950123-05-013827 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20051117 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20051117 DATE AS OF CHANGE: 20051117 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NAPCO SECURITY SYSTEMS INC CENTRAL INDEX KEY: 0000069633 STANDARD INDUSTRIAL CLASSIFICATION: COMMUNICATIONS EQUIPMENT, NEC [3669] IRS NUMBER: 112277818 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-10004 FILM NUMBER: 051213416 BUSINESS ADDRESS: STREET 1: 333 BAYVIEW AVE CITY: AMITYVILLE STATE: NY ZIP: 11701 BUSINESS PHONE: 5168429400 MAIL ADDRESS: STREET 1: 333 BAYVIEW AVE STREET 2: XXXXXXXXXXXXXXXXXXX CITY: AMITYVILLE STATE: NY ZIP: 11701 8-K 1 y14958e8vk.txt NAPCO SECURITY SYSTEMS, INC. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 -------- FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) November 17, 2005 NAPCO SECURITY SYSTEMS, INC. (Exact name of registrant as specified in charter) Delaware 0-10004 11-2277818 - --------------- ------------ ------------------- (State or other (Commission (IRS Employer jurisdiction of File Number) Identification No.) incorporation) 333 Bayview Avenue, Amityville, New York 11701 (Address of principal executive offices) Registrant's telephone number, including area code (631) 842-9400 Check the appropriate box below if the Form 8-K filing is intended to satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Page 1 INFORMATION TO BE INCLUDED IN THE REPORT ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION On November 17, 2005, the registrant issued a press release to report results for the three months ended September 30, 2005. This press release is furnished as Exhibit 99.1. The information in this Current Report on Form 8-K, including the exhibits attached hereto, is furnished pursuant to Item 2.02 and shall not be deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liabilities of that section. ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS (c) Exhibits: 99.1 Press Release issued by Napco Security Systems, Inc. dated November 17, 2005. Page 2 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunder duly authorized. NAPCO SECURITY SYSTEMS, INC. ------------------------------------ (Registrant) Date: November 17, 2005 By: /s/ Kevin S. Buchel -------------------------------- Kevin S. Buchel Senior Vice President and Chief Financial Officer Page 3 EX-99.1 2 y14958exv99w1.txt PRESS RELEASE Exhibit 99.1 FOR IMMEDIATE RELEASE CONTACT: Richard L. Soloway, CEO Kevin S. Buchel, Senior VP Stephen D. Axelrod, CFA NAPCO SECURITY SYSTEMS, INC. WOLFE AXELROD WEINBERGER ASSOC. LLC (631) 842-9400 ext. 120 (212) 370-4500; (212) 370-4505 fax steve@wolfeaxelrod.com NAPCO SECURITY SYSTEMS, INC. ANNOUNCES RECORD FIRST QUARTER SALES AND STRONG PROFITABILITY - SEVENTH CONSECUTIVE QUARTER OF YEAR-OVER-YEAR GROWTH IN SALES AND EARNINGS - AMITYVILLE, NEW YORK - NOVEMBER 17, 2005 -- 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 financial results for its first quarter ended September 30, 2005. Net sales for the first quarter ended September 30, 2005 increased 6% to $14.2 million from $13.4 million reported for the same quarter a year earlier. The net income for the quarter increased 59% to $815,000 or $0.09 per share, compared to net income of $513,000, or $0.06 per share, for the same year ago period. Results were paced by sales increases from our line of NAPCO intrusion and fire alarm systems for businesses and homes and Continental Instruments' higher margin line of access control products for buildings of all sizes. Alarm Lock's suite of industrial electronic locking devices continues to show vitality. Altogether, the favorable sales results once again demonstrate the customers' strong acceptance of the NAPCO Group's product line. Gross margins rose to 36% in the current quarter compared to 32% in the year earlier period. R&D expenditures, always a strong Company focus, were $1.1 million in the quarter, which represents 8% of sales. NEW PRODUCTS Of the many new products coming out of NAPCO's R&D efforts, several are particularly exciting: NAPCO's Freedom 8, a patented, code-free alarm system has surpassed all previous milestones, with regard to distributor pre-orders. This unique security system, available this fall, is the most user-friendly alarm on the market because it works unobtrusively as consumers lock and unlock their doors. This easy-to-use, intuitive system dramatically reduces a user's learning curve and virtually eliminates accidental alarms. The NAPCO Freedom 8 is highly anticipated by the security marketplace and is viewed as a breakthrough product at industry trade shows, distributor conferences and preliminary customer presentations as an important way for the security industry to capture more of the approximately 80% of all residences which do not have a monitored security system. - MORE - Page 4 Another well-regarded product, NAPCO's Internet video product, the VIP Video Gateway, continues to garner market share in the burgeoning Remote Video Monitoring Category. The product enables any home or business owner to look-in on their premises from any PC or internet-ready cell phone. Consumers can look in on their children or pets and business owners on their employees, either "live" or from an archived selection of previously recorded, specified events. NAPCO's Internet video product also provides dealers with a new source of monthly, recurring service revenue. Chosen as one of the Editors' top products at the American Society of Industrial Security Annual Trade Show, NAPCO's NetLink provides TCP/IP communication of alarm signals over the Internet. NetLink enables any conventional security system to report alarms over the Internet, versus conventional telephone lines. Continental Instruments Access Products now includes the super fast processing Super Two intelligent access controller. One of the most successful new product introductions in Continental history, this 2-door access panel supports up to 20,000 ID badges, expansive memory and provides for ultra-quick communications and remote downloading of programming by dealers. Richard Soloway, Chairman and President, stated, "Over the years, the first quarter has historically been our softest. Unlike the first quarter in other years, last year we reported a meaningful profit due to our business decision of realigning our intrusion and fire distribution network, and our corporate focus on higher margined commercial and industrial security products. The current first quarter reinforces the profit breakthrough with a comfortable increase and we anticipate this trend will continue. We also are convinced that NAPCO's growing list of new products, some of which are noted above, should generate significant future returns for us for many years to come." "Contract manufacturing showed a meaningful contribution in the first quarter with larger alarm companies such as ADT and others and we view this as a positive indicator that that this activity will become a significant contributor to both sales and earnings." "We are very confident," Mr. Soloway concluded, "that we have all the necessary pieces in place to satisfy our customers' most demanding security needs. We have just completed our seventh consecutive quarter of year-over-year improved sales and earnings and have once again generated profits in our historically softest quarter. NAPCO's businesses are strong and growing and our financial strength assures us that we will have the resources to take advantage of those particular opportunities that will enhance our growth prospects and increase shareholder values." NAPCO's balance sheet is strong with a current ratio of 4.3 to 1, and EBITDA* (Earnings before interest, taxes, depreciation and amortization) increased 36% to approximately $1.6 million as compared to $1.2 million in the year ago period. - MORE - Page 5 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. 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. * For the three months ended September 30, 2005 and 2004, respectively, EBITDA has been calculated by adding depreciation and amortization ($254,000 and $292,000), interest expense ($38,000 and $68,000) and provision for income taxes ($456,000 and $277,000) to net income ($815,000 and $513,000). - TABLES TO FOLLOW - Page 6 NAPCO SECURITY SYSTEMS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (IN THOUSANDS, EXCEPT PER SHARE DATA)
Three Months Ended September 30, 2005 2004 ------- ------- Net Sales $14,180 $13,440 Cost of Sales 9,055 9,167 ------- ------- Gross profit 5,125 4,273 Selling, General and Administrative Expenses 3,873 3,372 ------- ------- Operating income 1,252 901 ------- ------- Interest Expense, net 38 68 Other Expenses, net 4 43 ------- ------- Other expenses 42 111 ------- ------- Income before minority interest and provision for income taxes 1,210 790 Minority interest in net loss, net 61 - ------- ------- Income before provision for income taxes 1,271 790 Provision for income taxes 456 277 ------- ------- Net income $ 815 $ 513 ======= ======= Net income per share*: Basic $ 0.09 $ 0.06 ======= ======= Diluted $ 0.09 $ 0.06 ======= =======
* The 20% stock dividend declared on November 8, 2004, has been retroactively reflected in all 2004 share and per share data. - MORE - Page 7 NAPCO SECURITY SYSTEMS, INC AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (IN THOUSANDS, EXCEPT SHARE DATA)
September 30, June 30, ASSETS 2005 2005 ------ ---- ---- (unaudited) Current Assets: Cash $ 929 $ 1,178 Accounts receivable, less allowance for doubtful accounts 20,890 21,899 Inventories, net 18,780 16,242 Prepaid expenses and other current assets 892 799 Deferred income taxes 1,428 1,356 --------- --------- Total current assets 42,919 41,474 Property, Plant and Equipment, net 8,751 8,533 Goodwill 9,686 9,686 Other assets 183 214 --------- --------- $ 61,539 $ 59,907 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------ Current Liabilities: Accounts payable $ 6,049 $ 5,249 Accrued expenses 850 1,156 Accrued salaries and wages 2,010 2,518 Accrued income taxes 1,174 1,534 --------- --------- Total current liabilities 10,083 10,457 Long-term debt 2,600 1,950 Accrued income taxes 2,243 2,243 Deferred income taxes 1,627 1,579 --------- --------- Total liabilities 16,553 16,229 --------- --------- Stockholders' Equity: Common stock, par value $.01 per share; 21,000,000 shares authorized, 8,779,910 and 8,655,110 shares issued and outstanding, respectively 87 87 Additional paid-in capital 12,493 11,628 Unearned stock-based compensation costs (373) - Retained earnings 32,779 31,963 --------- --------- Total stockholders' equity 44,986 43,678 --------- --------- $ 61,539 $ 59,907 ========= =========
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