Napco Security Technologies, Inc. reported its financial results for the quarter ending September 30, 2024, showcasing a solid performance with total net sales reaching $44.0 million, a 5.6% increase from $41.7 million in the same period of the previous year. This growth was primarily driven by a 22% rise in recurring service revenue, which amounted to $21.1 million, attributed to increased activations of cellular communication devices. However, equipment revenues decreased by 6.1% to $22.9 million, down from $24.4 million, largely due to declines in sales of intrusion and access alarm products.
The company's gross profit for the quarter was $24.6 million, reflecting a 9.8% increase from $22.4 million in the prior year, with gross margins improving to 55.9% of net sales. Notably, gross profit from service revenues rose to $19.2 million, achieving a margin of 91.1%, while equipment sales saw a decline in gross margin to 23.6%.
Operating income also showed a modest increase of 2.6%, reaching $11.9 million compared to $11.6 million in the previous year. Net income for the quarter was reported at $11.2 million, a 6.7% increase from $10.5 million, resulting in earnings per share of $0.30, up from $0.27.
On the balance sheet, cash and cash equivalents increased significantly to $85.6 million as of September 30, 2024, compared to $65.3 million at the end of June 2024. This increase was bolstered by net cash provided by operating activities of $12.0 million and a net increase in cash of $20.3 million during the quarter. The company also reported total current assets of $171.4 million, up from $168.8 million, while total assets rose to $209.9 million.
In terms of expenses, research and development costs increased to $3.1 million, reflecting a commitment to innovation, while selling, general, and administrative expenses rose to $9.7 million. The company’s interest and other income also improved, totaling $1.1 million, up from $440,000, due to higher interest income on short-term investments.
Strategically, Napco has maintained a focus on enhancing its service offerings, particularly in the school security sector, which has seen increased demand due to heightened safety concerns. The company continues to operate without any outstanding debt and has a revolving credit line of $20 million available until February 2029.
About NAPCO SECURITY TECHNOLOGIES, INC
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