NAPCO Security Technologies, Inc. Reports Fiscal Q4 and Full Year 2025 Results

Fiscal 2025 Highlights

AMITYVILLE, N.Y., Aug. 25, 2025 /PRNewswire/ -- NAPCO Security Technologies, Inc. (NASDAQ: NSSC), one of the leading manufacturers and designers of high-tech electronic security equipment, wireless communication devices for intrusion and fire alarm systems and the related recurring service revenues as well as a provider of school safety solutions, today announced financial results for its fourth quarter of fiscal 2025.

Three months ended June 30,

Year ended June 30,

(dollars in thousands)

% Increase/

Financial Highlights (1)

2025

2024

(decrease)

2025

2024

(decrease)

Net Sales

50,724

50,330

0.8

181,621

188,820

(3.8)

Gross Profit

26,798

27,845

(3.8)

101,030

101,754

(0.7)

Gross Profit Margin

52.8

55.3

55.6

53.9

Net Income

11,632

13,534

(14.1)

43,406

49,818

(12.9)

Net Income as a % of Sales

22.9

26.9

23.9

26.4

Diluted EPS

0.33

0.36

(8.3)

1.19

1.34

(11.2)

Adjusted EBITDA (2)

14,249

15,415

(7.6)

52,126

58,934

(11.6)

Adjusted EBITDA (2) as a % of Sales

28.1

30.6

28.7

31.2

Adjusted EBITDA (2) Per Share

0.40

0.41

(2.4)

1.43

1.59

(10.1)

Cash Flows from Operating Activities

53,527

45,368

18.0

1. In millions except percentages and per share data or as otherwise noted.

2. Represents a non-GAAP financial measure. An explanation and a reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure are presented in the schedules accompanying this press release.

Richard Soloway, Chairman and CEO, commented, "With the completion of our fourth quarter of Fiscal 2025, our RSR remains strong as we continue to see double digit growth in Q4 and annually and gross margins at 91%. RSR represents 44% and 48% of total revenue in Q4 and annually, respectively, and our RSR has a prospective run rate of approximately $94 million based on our July 2025 recurring service revenue, which reflects approximately a $5 million increase from what was reported at the end of our third quarter of Fiscal 2025. We faced challenges with our equipment revenue performance throughout Fiscal 2025 as distributor destocking lingered throughout the year as well as timing of larger project work in our door-locking segment, however we are encouraged by the 27% increase in equipment sales from Q3 to Q4, and we are optimistic that equipment sales will grow in Fiscal 2026, and believe we are well positioned with the evolving tariff environment.

In the fourth quarter, we introduced a new generational cloud-based MVP Access platform. Easy to afford with an economical "By-Door" flat monthly recurring revenue rate, MVP Access products empower security teams to experience 24/7 security management, enabling users to lock down doors, adjust threat levels and monitor real-time events from anywhere and eliminates the need for on-premises hardware or databases. This product line is anticipated to generate future monthly recurring revenue for both locking and access control dealers and the Company."

Mr. Soloway concluded, "Our return on adjusted EBITDA of 28% in fiscal 2025 remains robust, and we were successful in our goal of significantly reducing our inventory levels by $8.6 million, while also generating over $53 million in cash flows from operations with no debt. During fiscal 2025 we declared cash dividends of $18.6 million to our shareholders, and in addition we repurchased $36.8 million of our common stock. As we enter fiscal 2026 we remain confident that our net income, Adjusted EBITDA* and cash flow, will continue to be strong.

As such we are pleased to continue our dividend program and will be paying the next quarterly dividend of $0.14 per share on October 3, 2025 to shareholders of record on September 12, 2025.

We continue to strive to accomplish our goal of continued financial strength, product innovation, technical superiority and strong profitability, for fiscal 2026 and beyond".

Conference Call Information

Management will conduct a conference call at 11 a.m. ET today, August 25, 2025, and in order to participate please go to the Investor Relations section of the Company website at https://investor.napcosecurity.com/events-presentations or choose https://app.webinar.net/bDwYQBoNJrd. Alternatively, interested parties may participate in the call by dialing (US) 1-800-836-8184 or 1-646-357-8785. A replay of the webcast will be available on the Investor Relations section of the Company's website

About NAPCO Security Technologies, Inc.

NAPCO Security Technologies, Inc., is one of the leading manufacturers and designers of high-tech electronic security devices, wireless recurring communication services for intrusion and fire alarm systems as well as a 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 are based on current expectations, estimates, forecasts and projections of future performance based on management's judgment, beliefs, current trends, and anticipated product performance. These forward-looking statements include, but are not limited to, statements relating to the impact of COVID-19 pandemic; supply chain challenges and developments; the growth of recurring service revenues and annual run rate; the strength of our balance sheet; our expectations regarding future results; the introduction of new access control and locking products; the opportunities for school security products; business trends , including the replacement of 3G radios, and our ability to execute our business strategies. Actual results, performance or achievements could differ materially from those anticipated in such forward-looking statements as a result of certain factors, including those risk factors set forth in the Company's filings with the Securities and Exchange Commission, such as our annual report on Form 10-K and quarterly reports on Form 10-Q. Other unknown or unpredictable factors or underlying assumptions subsequently proving to be incorrect could cause actual results to differ materially from those in the forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance, or achievements. You should not place undue reliance on these forward-looking statements. All information provided in this press release is as of today's date, unless otherwise stated, and the Company undertakes no duty to update such information, except as required under applicable law.

*Non-GAAP Financial Measures

Certain non-GAAP measures are included in this press release, including non-GAAP operating income, Adjusted EBITDA and Adjusted EBITDA per share (diluted). We define Adjusted EBITDA as GAAP net income plus income tax expense, net interest expense, non-cash stock-based expense, non-recurring legal expense, other non-recurring income and depreciation and amortization expense. Non-GAAP operating income does not include amortization of intangibles or stock-based compensation expense. 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. Our use of non-GAAP financial measures has certain limitations in that such non-GAAP financial measures may not be directly comparable to those reported by other companies. For example, the terms used in this press release, such as Adjusted EBITDA, do not have a standardized meaning. Other companies may use the same or similarly named measures, but exclude different items, which may not provide investors with a comparable view of our performance in relation to other companies. 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 set forth above.

NAPCO SECURITY TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

June 30, 2025

June 30, 2024

(in thousands, except share data)

Assets

Current Assets

Cash and cash equivalents

83,081

65,341

Investments - other

—

26,980

Marketable securities

16,095

5,398

Accounts receivable, net of allowance for credit losses of $25 and $32 as of June 30, 2025 and June 30, 2024, respectively

30,108

31,898

Inventories

29,962

34,804

Income tax receivable

—

Prepaid expenses and other current assets

3,198

4,269

Total Current Assets

162,444

168,763

Inventories - non-current

11,313

15,109

Property, plant and equipment, net

9,233

9,077

Intangible assets, net

3,287

3,602

Deferred income taxes

6,476

5,428

Operating lease - Right-of-use asset

5,188

5,487

Other assets

200

286

Total Assets

198,141

207,752

Liabilities and Stockholders' Equity

Current Liabilities

Accounts payable

5,742

7,977

Accrued expenses

8,712

10,345

Accrued salaries and wages

4,398

3,907

Dividends payable

4,992

—

Accrued income taxes

213

—

Total Current Liabilities

24,057

22,229

Accrued income taxes

143

1,122

Operating lease liability

5,335

5,512

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

29,535

28,863

Commitments and Contingencies (Note 14)

Stockholders' Equity

Common Stock, par value $0.01 per share; 100,000,000 shares authorized as of June 30, 2025 and June 30, 2024; 39,771,035 and 39,768,186 shares issued; and 35,656,421 and 36,874,471 shares outstanding, respectively.

398

Additional paid-in capital

25,280

23,712

Retained earnings

199,083

174,300

Less: Treasury Stock, at cost (4,114,614 and 2,893,715 shares as of June 30, 2025 and June 30, 2024, respectively)

(56,315)

(19,521)

Accumulated other comprehensive income

160

—

Total Stockholders' Equity

168,606

178,889

Total Liabilities and Stockholders' Equity

198,141

207,752

NAPCO SECURITY TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (unaudited)

Three Months ended June 30,

2025

2024

2023

(in thousands, except for share and per share data)

Net Sales:

Equipment revenues

28,298

29,938

28,551

Service revenues

22,426

20,392

16,107

50,724

50,330

44,658

Cost of Sales:

Equipment-related expenses

21,827

20,530

19,856

Service-related expenses

2,099

1,955

1,768

23,926

22,485

21,624

Gross Profit

26,798

27,845

23,034

Operating Expenses:

Research and development

3,232

3,027

2,364

Selling, general, and administrative expenses

11,480

10,854

8,861

Total Operating Expenses

14,712

13,881

11,225

Operating Income

12,086

13,964

11,809

Other Income:

Interest and other income, net

883

762

382

Income before Provision for Income Taxes

12,969

14,726

12,191

Provision for Income Taxes

1,337

1,192

1,626

Net Income

11,632

13,534

10,565

Income Per Share:

Basic

0.33

0.37

0.29

Diluted

0.33

0.36

0.28

Weighted Average Number of Shares Outstanding:

Basic

35,656,000

36,939,000

36,827,000

Diluted

35,764,000

37,232,000

37,137,000

NAPCO SECURITY TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

Year Ended June 30,

2025

2024

2023

(in thousands, except for share and per share data)

Net Sales:

Equipment revenues

95,291

113,071

110,062

Service revenues

86,330

75,749

59,935

181,621

188,820

169,997

Cost of Sales:

Equipment-related expenses

72,795

79,862

90,197

Service-related expenses

7,796

7,204

6,567

80,591

87,066

96,764

Gross Profit

101,030

101,754

73,233

Operating Expenses:

Research and development

12,581

10,763

9,328

Selling, general, and administrative expenses

42,190

37,173

33,580

Total Operating Expenses

54,771

47,936

42,908

Operating Income

46,259

53,818

30,325

Other Income:

Interest and other income, net

3,810

2,568

903

Income before Provision for Income Taxes

50,069

56,386

31,228

Provision for Income Taxes

6,663

6,568

4,101

Net Income

43,406

49,818

27,127

Income Per Share:

Basic

1.20

1.35

0.74

Diluted

1.19

1.34

0.73

Weighted Average Number of Shares Outstanding:

Basic

36,298,000

36,812,000

36,741,000

Diluted

36,499,000

37,066,000

37,005,000

NAPCO SECURITY TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

Fiscal Year ended June 30,

2025

2024

2023

(in thousands)

Cash Flows from Operating Activities

Net income

43,406

49,818

27,127

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

2,276

2,163

1,930

Gain on disposal of fixed asset

—

(15)

Change in accrued Interest on other investments

—

(470)

Unrealized (gain) loss on marketable securities

(177)

(56)

Realized (gain) loss on sales of marketable securities

(56)

—

(Recovery of) credit losses

(7)

(99)

(112)

Change to inventory reserve

643

1,691

(445)

Deferred income taxes

(1,048)

(2,776)

(2,818)

Stock-based compensation expense

1,513

1,733

1,464

Changes in operating assets and liabilities:

Accounts receivable

1,797

(5,730)

3,261

Inventories

7,995

(3,255)

1,883

Prepaid expenses and other current assets

1,071

(867)

(564)

Income tax receivable

(75)

Other assets

Accounts payable, accrued expenses, accrued salaries and wages, accrued income

taxes

(4,020)

2,688

(6,581)

Net Cash Provided by Operating Activities

53,527

45,368

24,700

Cash Flows from Investing Activities

Purchases of property, plant, and equipment

(2,116)

(1,594)

(2,962)

Proceeds from disposal of fixed asset

—

Purchases of marketable securities

(12,835)

(206)

(148)

Proceeds from sales of marketable securities

2,556

—

Purchases of other investments

—

(1,351)

(35,281)

Redemption of other investments

26,980

—

10,091

Net Cash Provided by (Used in) Investing Activities

14,585

(3,151)

(28,262)

Cash Flows from Financing Activates

Proceeds from stock option exercises

427

Dividends paid

(13,632)

(13,258)

(2,298)

Repurchase of common stock

(36,794)

—

Net Cash Used in Financing Activities

(50,372)

(12,831)

(2,213)

Net increase (decrease) in Cash and Cash Equivalents

17,740

29,386

(5,775)

Cash and Cash Equivalents - Beginning

65,341

35,955

41,730

Cash and Cash Equivalents - Ending

83,081

65,341

35,955

Supplemental Cash Flow Information

Interest paid

—

Income taxes paid

8,427

9,330

8,811

Non-Cash Investing and Financing Transactions

Dividends declared and not paid

4,992

—

NAPCO SECURITY TECHNOLOGIES, INC.

NON-GAAP MEASURES OF PERFORMANCE* (unaudited)

(in thousands, except share and per share data)

3 months ended June 30,

12 months ended June 30,

2025

2024

2025

2024

Net income (GAAP)

11,632

13,534

$43,406

$49,818

Less:

Interest Income, net

725

762

3,356

2,568

Add:

Provision for Income Taxes

1,337

1,192

6,663

6,568

Depreciation and Amortization

571

536

2,276

2,163

EBITDA (earnings before interest, taxes, depreciation and amortization)

12,815

14,500

48,989

55,981

Adjustments for non-GAAP measures of performance:

Add: Stock based Compensation

370

857

1,513

1733

Add: Nonrecurring Legal Expenses (1)

1,064

1,624

1,220

Adjusted EBITDA

$14,249

$15,415

$52,126

$58,934

Denominator:

Basic Weighted Average Shares Outstanding

35,656,000

36,939,000

36,298,000

36,812,000

Effect of Dilutive Securities

108,000

293,000

201,000

254,000

Dilutes Weighted Average Shares Outstanding (Denominator)

35,764,000

37,232,000

36,499,000

37,066,000

Net Income per Diluted Shares Outstanding

0.33

0.36

1.19

1.34

Adjusted EBITDA* per Diluted Shares Outstanding

0.40

0.41

1.43

1.59

1. Nonrecurring Legal Expenses are legal fees that are determined not to be of a normal recuring nature and expenses necessary to operate the business.

Contacts:

Francis J. Okoniewski

Vice President of Investor Relations

NAPCO Security Technologies, Inc.

Office 800-645-9445 x 374

Mobile 516-404-3597

fokoniewski@napcosecurity.com

SOURCE NAPCO Security Technologies, Inc.