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)

April 7, 2020

 

NAPCO SECURITY TECHNOLOGIES, INC.

(Exact name of registrant as specified in charter)

 

Delaware   0-10004   11-2277818

(State or other jurisdiction of incorporation)

  (Commission File Number)   (IRS Employer Identification No.)

 

333 Bayview Avenue, Amityville, New York 11701

(Address of principal executive offices)

Registrant's telephone number, including area code (631) 842-9400

 

 

 

(Former name and former address if changed from last report)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
Common Stock, par value $0.01 per share   NSSC   Nasdaq Stock Market

 

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))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (section 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (section 240.12b-2 of this chapter).

 

Emerging growth company  ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act  ¨

 

 

 

 

 

 

 

Item 2.02.     RESULTS OF OPERATIONS AND FINANCIAL CONDITION

 

On April 7, 2020, the registrant issued a press release to report preliminary results for the fiscal quarter ended March 31, 2020. This press release is furnished as Exhibit 99.1.

 

The information in this Current Report on Form 8-K, including the exhibit 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

 

(d) Exhibits:

 

 99.1    Press Release issued by Napco Security Technologies, Inc. dated April 7, 2020.

 

SIGNATURE

 

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 TECHNOLOGIES, INC.
    (Registrant)
         
Date: April 8, 2020   By: /s/ Kevin S. Buchel
      Kevin S. Buchel
      Senior Vice President and Chief Financial Officer

  

 

 

 

 

Exhibit 99.1

 

NAPCO Announces Preliminary Third Fiscal Quarter 2020 Results

-Sales Increase 4% to a Third Fiscal Quarter Record $26.2 Million-

-23rd Consecutive Quarter of Year-Over-Year Record Sales-

-Recurring Service Revenues Grew 38% to $6.2 Million-

 

AMITYVILLE, N.Y., April 7, 2020 /PRNewswire/ -- NAPCO Security Technologies, Inc. (NASDAQ: NSSC), one of the world's leading manufacturers of high-tech electronic security devices that are fueling the Company's fast growing recurring service revenues, as well as a leading provider of school safety solutions, today announced preliminary sales results for its third fiscal quarter ended March 31, 2020.

 

Highlights:

 

·Net sales for the quarter increased 4% to a third quarter record $26.2 million as compared to $25.1 million for the same quarter last year. Net sales for the nine months increased 7% to $78.4 million as compared to $73.3 million for the same period last year.

 

·Recurring service revenue for the quarter increased 38% to $6.2 million as compared to $4.5 million for the same quarter last year. Recurring service revenue for the nine months increased 38% to $17.3 million as compared to $12.5 million for the same period last year. Recurring service revenue now has a prospective annual run rate of $25.4 million based on March 2020 recurring revenues.

 

·As of March 31, 2020, the Company had approximately $10 million cash on hand and $11 million available under its revolving line of credit.

 

Richard Soloway, Chairman and President, commented, "While we do not typically provide a business update outside of our normal quarterly cadence, we recognize these are not normal times. Given the unprecedented impact of COVID-19 on the entire world, we believe this information is warranted. As we continue to navigate this public health crisis, we have decided to provide our preliminary third quarter sales results, including recurring service revenues.

 

We have also decided to provide some insight into operations at this time. Our Company remains open for business and we continue to provide security equipment to our distributors, dealers and integrators nationwide. Despite what has been going on globally our Company was still able to generate a 4% increase in sales for Q3. We are extremely proud of the Company's increased sales levels despite the uncertain business environment during the quarter. Our preliminary sales, particularly with respect to hardware shipments, would likely have been significantly higher if not for encountered supply chain disruptions (since rectified) caused by the initial shock of this unprecedented crisis. As we head into our fiscal fourth quarter and shelter in place directives continue to change, we will carefully monitor and fine-tune the best ways to service our customers during a time that our business, like countless others, will likely encounter market challenges that can neither be fully anticipated nor quantified.

 

We remain laser focused on increasing our sales and profitability while continuing to navigate through the headwinds created by COVID-19. We are carefully managing our balance sheet, cash flow and all areas of the business to ensure we are doing what we believe will help us manage through the near-term and, as always, position ourselves for long-term success. Our solid business model, including recurring service revenue, which now has an annual run rate in excess of $25 million, as well as our strong balance sheet, which has zero debt, will continue to serve us well in these challenging times. Recurring service revenue from our StarLink family of communicators remains strong and we expect this strength to continue in upcoming quarters."

 

Mr. Soloway concluded, "Thank you to our customers, suppliers, shareholders and most importantly our employees for their continued fight and passion to support our Company during this difficult period." 

 

About NAPCO Security Technologies, Inc.

 

NAPCO Security Technologies, Inc. is one of the world's leading manufacturers of high tech electronic security devices that are fueling the Company's fast growing recurring service revenues, as well as a leading provider of school safety solutions, The Company consists of four Divisions: NAPCO, plus three wholly-owned subsidiaries: Alarm Lock, Continental Instruments, and Marks USA. Headquartered in Amityville, New York, its products are installed by tens of thousands of security professionals worldwide in commercial, industrial, institutional, residential and government applications. NAPCO products have earned a reputation for innovation, technical excellence and reliability, positioning the Company for growth in the multi-billion dollar and rapidly expanding electronic security market. For additional information on NAPCO, please visit the Company's web site at http://www.napcosecurity.com.

 

Safe Harbor Statement

 

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.

 

Contacts:
Patrick McKillop
Director of Investor Relations
NAPCO Security Technologies, Inc.
OP: 800-645-9445 x 374
CP: 516-404-3597
pmckillop@napcosecurity.com