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Sep 30, 2020
Napco Q1 2021 Earnings Report
Reported record-breaking revenues and gross margin for recurring service revenues, with Adjusted EBITDA up 115% compared to the previous quarter.
Key Takeaways
NAPCO Security Technologies reported a decrease in net sales by 12% to $23.2 million compared to the same period last year. However, recurring service revenues remained strong with 36% growth, and the company is focused on expanding into new markets and technologies.
Recurring service revenues grew by 36% compared to the same quarter last year.
Gross margin for recurring service revenue increased to 84% for the quarter.
Cash from Operations increased 29% to $3.8 million compared to last year's Q1.
The company had $21.9 million in cash and cash equivalents.
Napco
Napco
Forward Guidance
NAPCO plans to introduce access control and locking products with recurring service revenue. Known as Air Access®, their new cellular, cloud-hosted access control product line will allow access control integrators and locking professionals to build a recurring revenue business for themselves.
Positive Outlook
- Driving sales growth in recurring service revenue while increasing gross margins
- Investing in exciting new technologies that will expand recurring service revenue into all segments of the Company
- Strengthening balance sheet, which now shows $22 million in Cash
- Tightly managing costs
- Increasing Cash from Operations
Challenges Ahead
- COVID-19 pandemic caused some delay in spending at certain K-12 schools, colleges, and universities.
- Experienced postponements of planned security upgrades
- Many dealers experienced limited or no access to buildings and homes to perform commercial or residential security installations due to COVID-19
- Net sales decreased 12% to $23.2 million
- Net income decreased to $2.3 million