8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 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): May 10, 2005

NORTH PITTSBURGH SYSTEMS, INC.

(Exact name of registrant as specified in its charter)

Pennsylvania

(State or other jurisdiction of incorporation)

0-13716	25-1485389
(Commission File Number)	(IRS Employer Identification No.)

4008 Gibsonia Road Gibsonia, PA	15044-9311
(Address of principal executive offices)	(Zip Code)

(724) 443-9600

(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously 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))

Item 2.02. Results of Operations and Financial Condition

On May 10, 2005, North Pittsburgh Systems, Inc. (the Company) issued a press release announcing earnings for the first quarter of 2005, the text of which is attached hereto as Exhibit 99.1.

The information in this Current Report on Form 8-K, including the exhibit, is furnished pursuant to Item 2.02 and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.

In addition to historic information, this report, including the exhibit, contains forward-looking statements regarding events, performance and financial trends. Various factors could affect future results and could cause actual results to differ materially from those expressed in or implied by the forward-looking statements. Some of those factors are identified in the Company’s periodic reports filed with the Securities and Exchange Commission, the most recent of which is the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2005.

Item 9.01. Financial Statements and Exhibits

(c) Exhibits

Exhibit	Description
99.1	Press release issued by North Pittsburgh Systems, Inc., dated May 10, 2005.

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 hereunto duly authorized.

	North Pittsburgh Systems, Inc.
	(Registrant)
Date: May 10, 2005	/s/ H. R. Brown
	H. R. Brown, President and Chief Executive Officer

EX-99.1

Exhibit 99.1

NORTH PITTSBURGH SYSTEMS, INC.

4008 GIBSONIA ROAD

GIBSONIA, PA 15044-9311

Contact: Harry R. Brown Phone: (724) 443-9456 Fax: (724) 443-9431

FOR IMMEDIATE RELEASE

NORTH PITTSBURGH SYSTEMS, INC.

REPORTS FIRST QUARTER 2005 EARNINGS

May 10, 2005: Gibsonia, Pennsylvania – North Pittsburgh Systems, Inc. [NASDAQ:NPSI] today announced net income of $4,689,000, or $.31 per share, on operating revenues of $27,661,000 for the first quarter of 2005. This compares to net income of $4,397,000, or $.29 per share, on operating revenues of $27,446,000 for the comparable period last year. NPSI’s President, Harry R. Brown, stated that the 6.6% increase in earnings was attributable for the most part to increased investment earnings recorded from the Company’s limited partner interests in three wireless partnerships.

Mr. Brown reported that operating revenues increased $215,000, or 0.8%, during first quarter 2005 as compared to first quarter 2004. He said the Company’s ability to continue to effectively penetrate its Competitive Local Exchange Carrier’s (CLEC) edge-out markets and the further expansion of its broadband service offerings were primarily responsible for the revenue increase. This ability to grow end-user customer revenues was offset in large part by decreases in the Company’s access revenues. In this regard, Mr. Brown explained that access revenues were negatively impacted by the phase down of the Company’s CLEC interstate access rates pursuant to the Federal Communication Commission’s (FCC) Access Charge Reform Order, decreases in effective rates charged for wireless traffic and a decrease in revenues realized from the National Exchange Carrier Association (NECA) pooling arrangements in which the Company’s Incumbent Local Exchange Carrier (ILEC) participates. Mr. Brown also noted that telecommunication equipment sales were $290,000 lower in first quarter 2005 as compared to first quarter 2004.

Operating expenses for first quarter 2005 increased $524,000, or 2.6%, over the comparable prior year period. Mr. Brown reported that the increase in operating expenses was predominately due to increases in the direct costs associated with the growth in access lines and access line equivalents, such as fees paid for leasing unbundled network elements in the portions of the CLEC edge-out markets that the Company does not wholly provision over its own facilities and fees paid to terminate the increased local, toll and Internet traffic generated by the Company’s growing customer base. In addition, depreciation expense increased as a result of a 4.3% increase in the Company’s depreciable asset base over the prior year comparable period.

Other income (net) for the first quarter of 2005 improved $789,000 from the prior year period due principally to a $516,000 increase in equity income recorded from the Company’s partnership investments (which consist primarily of limited partner interests in three wireless partnerships). In addition, the Company benefited from a $190,000 increase in interest income earned on higher cash and temporary investment balances and a $75,000 decrease in interest expense as a result of the Company’s continued debt reduction.

Turning to operations, Mr. Brown reported that as of March 31, 2005, the Company had a total of 71,828 access lines in its ILEC territory, 59,370 CLEC access line equivalents (including 2,414 DSL subscribers) and a total of 12,544 DSL subscribers across all subsidiaries. He noted that although ILEC access lines had decreased 2.9% over the past twelve-month period ended March 31, 2005, total CLEC access line equivalents and consolidated DSL subscribers had grown 15.9% and 20.1%, respectively, over that same twelve-month period. Mr. Brown

North Pittsburgh Systems, Inc.

Reports First Quarter 2005 Earnings

concluded his remarks by stating that one of the greatest strengths the Company has shown over the past several years is its stability in the constantly changing telecommunications environment. This stability is displayed not only in the earnings of the Company, but also in its ability to pay significant dividends, maintain one of the strongest balance sheets in the industry and fortify long-term relationships with its customers.

North Pittsburgh Systems, Inc. has total assets of $156 million and operates an integrated high-technology telecommunications business in Western Pennsylvania providing competitive and local exchange services, long distance, business phone systems and Internet services through its subsidiaries, North Pittsburgh Telephone Company, Penn Telecom, Inc. and Pinnatech, Inc. (Nauticom).

In addition to historical information, this information may contain forward-looking statements regarding events, performance, financial trends and accounting policies that may affect the Company’s future operating results, financial position or cash flows. Such forward-looking statements are based on assumptions and estimates and involve risks and uncertainties. Various factors could affect future results and could cause actual results to differ materially from those expressed in or implied by the forward-looking statements. Factors that could cause such a difference include, but are not limited to: a change in economic conditions; government and regulatory policies (at both the federal and state levels); unanticipated higher capital spending for, or delays in, the deployment of new technologies; the pricing and availability of equipment, materials and inventories; changes in the competitive environment; and the Company’s ability to continue to penetrate its edge-out markets. This information should be read in conjunction with the Company’s periodic reports filed with the Securities and Exchange Commission, the most recent of which is the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2005.

North Pittsburgh Systems, Inc.

Reports First Quarter 2005 Earnings

NORTH PITTSBURGH SYSTEMS, INC.

SUMMARIZED FINANCIAL INFORMATION

(Unaudited)

(Amounts in Thousands – Except Per Share Data)

	For the Three Months Ended March 31
	2005		2004*
Total operating revenues	$	27,661	$	27,446
Total operating expenses		20,848		20,324
Net operating income		6,813		7,122
Other income, net		1,147		358
Income before income taxes		7,960		7,480
Provision for income taxes		3,271		3,083
Net income	$	4,689	$	4,397
Common shares outstanding		15,005		15,005
Basic and diluted earnings per share	$	.31	$	.29
Dividends per share	$	.18	$	.18
	March 31 2005		Dec. 31 2004
Cash and temporary investments	$	44,006	$	42,569
Total assets		156,013		155,500
Total debt		23,911		24,682
Total shareholders’ equity		88,844		86,861

* Certain prior year operating revenues and expenses have been reclassified to conform to the current year’s presentation. These reclassifications did not affect the net operating income or net income amounts.