Attached files
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| 8-K - NAPCO SECURITY TECHNOLOGIES, INC. 8-K - NAPCO SECURITY TECHNOLOGIES, INC | a50168904.htm |
Exhibit 99.1
NAPCO Reports Results for Three and Six Months Ended December 31, 2011
- Management to Host Conference Call Today at 11AM –
AMITYVILLE, N.Y.--(BUSINESS WIRE)--February 13, 2012--NAPCO Security Technologies, Inc., (NASDAQ:NSSC), one of the world’s leading suppliers of high performance electronic security equipment for over 40 years, today announced financial results for the second quarter and first six months ended December 31, 2011.
Highlights:
Net sales for the second quarter remained constant at $17,617,000 as compared to $17,608,000 a year ago.
Adjusted EBITDA* for the second quarter increased $290,000, or 25%, to $1,437,000 as compared to $1,147,000 for the same period a year ago (see table attached). For the six months ended December 31, 2011 Adjusted EBITDA* increased $576,000, or 46%, to $1,841,000 from $1,265,000 for the same period a year ago.
Net income for the second quarter increased $152,000 or 97% to $309,000, or $0.02 per share, as compared to $157,000, or $0.01, per share for the same period a year ago. Net income for the six months ended December 31, 2011 increased $1,119,000 to $142,000, or $0.01 per share, as compared to $(977,000), or $(0.05), per share for the same period a year ago. Per share results are based on 19,256,000 and 19,176,000 fully diluted weighted average shares for the three and six months ended December 31, 2011, respectively, and 19,096,000 fully diluted weighted average shares for both the three and six months ended December 31, 2010.
Cash generated by operating activities was approximately $0.4 million for the three months ended December 31, 2011 as compared to $1.0 million for the same period a year ago.
Debt, net of cash, has been reduced by $16.2 million from $35.9 million to $19.7 million since acquiring Marks USA in August of 2008.
Gross Profit for the three months ended December 31, 2011 was $4,895,000, an increase of 4% compared to $4,690,000 for same period a year ago. Gross Profit for the six months ended December 31, 2011 was $9,051,000, an increase of 12% compared to $8,113,000 for same period a year ago.
Selling, general and administrative expenses for the three months ended December 31, 2011 decreased by 4% to $4,000,000 as compared to $4,159,000 for the same quarter a year ago. Selling, general and administrative expenses remained constant at $8,298,000 and $8,299,000 for the six months ended December 31, 2011 and 2010, respectively.
Operating income for the three months ended December 31, 2011 increased by $364,000, or 69%, to $895,000 as compared to $531,000 for the same quarter a year ago. Operating income for the six months ended December 31, 2011 increased by $939,000 to $753,000 as compared to $(186,000) for the same period a year ago.
Richard Soloway, Chairman and President, stated, “Our second quarter concluded with sales holding steady from last year while we reduced overhead expenses, increasing our profitability even as we sustained ongoing investment in Research and Development. Historically, our quarters get seasonally stronger as the fiscal year progresses. We continue to reduce our outstanding debt, paying down $1.8 million in the first six months of this fiscal year, resulting in reduced interest expense.”
Mr. Soloway added, “The rollout and education process of launching our new products is progressing nicely and is being well received by the many thousands of dealers and distributors in our sales channel. This endeavor of generating awareness, trial and subsequent adoption is underway with our Gemini Commercial™ integrated fire and intrusion product platform, our Networx™ wireless locking system and our recurring revenue products, featuring the iSeeVideo™ remote viewing system as well as the Starlink 2™ wireless GSM communicator. We are optimistic that these products will add sales volume to the legacy products for which the Company is so well known.”
Mr. Soloway concluded, “The past few years have been challenging for all companies. NAPCO has risen to this challenge and we are a stronger, more stream-lined and better company as a reward for our efforts. We have reduced expenses while still bringing new and exciting products to the security market. With continued vigilance, we see a strong upside to the Company’s future as economic conditions improve and revenue from the aforementioned new products increases.”
NAPCO will host a conference call for the investment community today, February 13, 2012, at 11:00 AM ET. Interested parties may participate in the call by dialing (877) 407-8291; international callers dial (201) 689-8345 about 5-10 minutes prior to 11:00 AM ET. The conference call will also be available on replay starting at 1:00 PM ET on February 13, 2012 and ending on February 27, 2012. For the replay, please dial (877) 660-6853 (replay account # 332, replay conference #388361). The access number for the replay for international callers is (201) 612-7415 (replay account # 332, replay conference #388361).
About NAPCO Security Technologies, Inc.
NAPCO Security Technologies, Inc. is one of the world's leading manufacturers of technologically advanced electronic security equipment including intrusion and fire alarm systems, access control and door locking systems. The Company consists of NAPCO plus three wholly-owned subsidiaries: Alarm Lock, Continental Instruments, and Marks USA. The products are installed by security professionals worldwide in commercial, industrial, institutional, residential and government applications. NAPCO products have earned a reputation for technical excellence, reliability and innovation, poising the Company for growth in the rapidly expanding electronic security market, a multi-billion dollar market.
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.
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NAPCO SECURITY TECHNOLOGIES, INC. AND SUBSIDIARIES |
|||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||
| ASSETS | December 31, 2011 | June 30, 2011 | |||||||
| (unaudited) | (audited) | ||||||||
| (In thousands except share data) | |||||||||
| CURRENT ASSETS | |||||||||
| Cash and cash equivalents | $ | 2,254 | $ | 3,077 | |||||
| Accounts receivable, net of reserves | 14,410 | 17,640 | |||||||
| Inventories | 21,085 | 19,986 | |||||||
| Prepaid expenses and other current assets | 761 | 950 | |||||||
| Income tax receivable | 78 | -- | |||||||
| Deferred income taxes | 543 | 528 | |||||||
| Total Current Assets | 39,131 | 42,181 | |||||||
| Inventories - non-current, net | 4,528 | 4,201 | |||||||
| Deferred income taxes | 1,992 | 2,083 | |||||||
| Property, plant and equipment, net | 7,432 | 7,741 | |||||||
| Intangible assets, net | 11,783 | 12,316 | |||||||
| Other assets | 292 | 273 | |||||||
| TOTAL ASSETS | $ | 65,158 | $ | 68,795 | |||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||
| CURRENT LIABILITIES | |||||||||
| Current maturities of long-term debt | $ | 12,172 |
* |
|
$ | 3,572 | |||
| Accounts payable | 4,400 | 4,649 | |||||||
| Accrued expenses | 1,731 | 2,553 | |||||||
| Income tax payable | -- | 437 | |||||||
| Accrued salaries and wages | 1,337 | 1,785 | |||||||
| Total Current Liabilities | 19,640 | 12,996 | |||||||
| Long-term debt, net of current maturities | 9,819 | 20,205 | |||||||
| Accrued income taxes | 120 | 165 | |||||||
| Total Liabilities | 29,579 | 33,366 | |||||||
| COMMITMENTS AND CONTINGENCIES | |||||||||
| STOCKHOLDERS' EQUITY | |||||||||
| Common Stock, par value $0.01 per share; 40,000,000 shares authorized; 20,095,713 shares issued; 19,095,713 shares outstanding | 201 | 201 | |||||||
| Additional paid-in capital | 14,080 | 14,072 | |||||||
| Retained earnings | 26,913 | 26,771 | |||||||
| 41,194 | 41,044 | ||||||||
| Less: Treasury Stock, at cost (1,000,000 shares) | (5,615 | ) | (5,615 | ) | |||||
| TOTAL STOCKHOLDERS' EQUITY | 35,579 | 35,429 | |||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 65,158 | $ | 68,795 | |||||
* Our existing revolving line of credit expires in August 2012. Accordingly, we have classified its balance as a current liability as of December 31, 2011. We plan to refinance or extend this line prior to its expiration date.
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NAPCO SECURITY TECHNOLOGIES, INC. AND SUBSIDIARIES |
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| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) | |||||||||||||||
| Three months ended December 31, | Six months ended December 31, | ||||||||||||||
| 2011 | 2010 | 2011 | 2010 | ||||||||||||
| (In thousands, except share and per share data) | |||||||||||||||
| Net sales | $ | 17,617 | $ | 17,608 | $ | 33,820 | $ | 32,935 | |||||||
| Cost of sales | 12,722 | 12,918 | 24,769 | 24,822 | |||||||||||
| Gross Profit | 4,895 | 4,690 | 9,051 | 8,113 | |||||||||||
| Selling, general, and administrative expenses | 4,000 | 4,159 | 8,298 | 8,299 | |||||||||||
| Operating Income (Loss) | 895 | 531 | 753 | (186 | ) | ||||||||||
| Other expense: | |||||||||||||||
| Interest expense, net | 298 | 411 | 602 | 1,005 | |||||||||||
| Other, net | 13 | 14 | 27 | 28 | |||||||||||
| 311 | 425 | 629 | 1,033 | ||||||||||||
| Income (Loss) before Provision (Benefit) for Income Taxes | 584 | 106 | 124 | (1,219 | ) | ||||||||||
| Provision (Benefit) for income taxes | 275 | (51 | ) | (18 | ) | (242 | ) | ||||||||
| Net Income (Loss) | $ | 309 | $ | 157 | $ | 142 | $ | (977 | ) | ||||||
| Income (Loss) per share: | |||||||||||||||
| Basic | $ | 0.02 | $ | 0.01 | $ | 0.01 | $ | (0.05 | ) | ||||||
| Diluted | $ | 0.02 | $ | 0.01 | $ | 0.01 | $ | (0.05 | ) | ||||||
| Weighted average number of shares outstanding: | |||||||||||||||
| Basic | 19,096,000 | 19,096,000 | 19,096,000 | 19,096,000 | |||||||||||
| Diluted | 19,256,000 | 19,096,000 | 19,176,000 | 19,096,000 | |||||||||||
| NAPCO SECURITY TECHNOLOGIES, INC. AND SUBSIDIARIES | |||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) | |||||||
| Six months ended December 31, | |||||||
| 2011 | 2010 | ||||||
| (in thousands) | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | |||||||
| Net Income (Loss) | $ | 142 | $ | (977 | ) | ||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||
| Depreciation and amortization | 1,080 | 1,128 | |||||
| Provision for doubtful accounts | (5 | ) | (65 | ) | |||
| Deferred income taxes | 76 | 170 | |||||
| Stock based compensation expense | 8 | 38 | |||||
| Changes in operating assets and liabilities: | |||||||
| Accounts receivable | 3,235 | 4,069 | |||||
| Inventories | (1,425 | ) | (431 | ) | |||
| Prepaid expenses and other current assets | 189 | 172 | |||||
| Income tax receivable | (78 | ) | (423 | ) | |||
| Other assets | (46 | ) | 5 | ||||
| Accounts payable and accrued expenses | (2,002 | ) | (2,470 | ) | |||
| Net Cash Provided by Operating Activities | 1,174 | 1,216 | |||||
| CASH FLOWS FROM INVESTING ACTIVITIES | |||||||
| Purchases of property, plant, and equipment | (211 | ) | (282 | ) | |||
| Net Cash Used in Investing Activities | (211 | ) | (282 | ) | |||
| CASH FLOWS FROM FINANCING ACTIVITIES | |||||||
| Principal payments on long-term debt | (1,786 | ) | (3,679 | ) | |||
| Net Cash Used in Financing Activities | (1,786 | ) | (3,679 | ) | |||
| Net Decrease in Cash and Cash Equivalents | (823 | ) | (2,745 | ) | |||
| CASH AND CASH EQUIVALENTS - Beginning | 3,077 | 5,522 | |||||
| CASH AND CASH EQUIVALENTS - Ending | $ | 2,254 | $ | 2,777 | |||
| SUPPLEMENTAL CASH FLOW INFORMATION | |||||||
| Interest paid, net | $ | 750 | $ | 942 | |||
| Income taxes paid | $ | 467 | $ | 5 | |||
| NAPCO SECURITY TECHNOLOGIES, INC. | ||||||||||||||
| NON-GAAP MEASURES OF PERFORMANCE* (Unaudited) | ||||||||||||||
| (in thousands) | ||||||||||||||
| 3 months ended December 31, | 6 months ended December 31, | |||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||
| Net income (loss) (GAAP) | $ | 309 | $ | 157 | $ | 142 | $ | (977 | ) | |||||
| Add back provision (benefit) for income taxes | 275 | (51 | ) | (18 | ) | (242 | ) | |||||||
| Add back interest and other expense | 311 | 425 | 629 | 1,033 | ||||||||||
| Operating income (loss) (GAAP) | 895 | 531 | 753 | (186 | ) | |||||||||
| Adjustments for non-GAAP measures of performance: | ||||||||||||||
| Add back amortization of acquisition-related intangibles | 267 | 288 | 533 | 576 | ||||||||||
| Add back stock-based compensation expense | 1 | 15 | 8 | 38 | ||||||||||
| Add back costs relating to Marks acquisition and consolidation | -- | -- | -- | 216 | ||||||||||
| Add back costs associated with waivers and amendments to credit facilities | -- | 34 | -- | 69 | ||||||||||
| Adjusted non-GAAP operating income | 1,163 | 868 | 1,294 | 713 | ||||||||||
| Add back depreciation | 274 | 279 | 547 | 552 | ||||||||||
| Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) | $ | 1,437 | $ | 1,147 | $ | 1,841 | $ | 1,265 | ||||||
* Non-GAAP Information. Certain non-GAAP measures are included in this press release, including EBITDA, non-GAAP operating income and Adjusted EBITDA. We define EBITDA as GAAP net income (loss) plus income tax expense (benefit), net interest expense and depreciation and amortization expense. Non-GAAP operating income does not include impairment of goodwill, amortization of intangibles, restructuring charges, stock-based compensation expense and other infrequent or unusual charges. These non-GAAP measures are provided to enhance the user’s overall understanding of our financial performance. By excluding these charges our non-GAAP results provide information to management and investors that is useful in assessing NAPCO’s core operating performance and in comparing our results of operations on a consistent basis from period to period. The presentation of this information is not meant to be a substitute for the corresponding financial measures prepared in accordance with generally accepted accounting principles. Investors are encouraged to review the reconciliation of GAAP to non-GAAP financial measures included in the above.
CONTACT:
INVESTOR INQUIRIES:
Wolfe Axelrod Associates
Donald
Weinberger, 212-370-4500
don@wolfeaxelrod.com
or
Hayden
IR
Brett Maas, 646-536-7331
brett@haydenir.com
or
James
Carbonara, Regional Vice President
646-755-7412
917-340-1339 (cell)
james@haydenir.com
or
NAPCO:
Richard
Soloway, CEO
631-842-9400, ext. 120
rsoloway@napcosecurity.com
or
Kevin
Buchel, CFO
631-842-9400, ext. 120
kbuchel@napcosecurity.com