-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, P1W8ych6a66MUbVROyrKNPMpyg7OYt3NepCLYZ0lxpRm41Ia/3cpL+1oKFugh9ZG WEqxRVXg0n9x9R6QjEMNLQ== 0001157523-07-001122.txt : 20070206 0001157523-07-001122.hdr.sgml : 20070206 20070206132243 ACCESSION NUMBER: 0001157523-07-001122 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20070206 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20070206 DATE AS OF CHANGE: 20070206 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NAPCO SECURITY SYSTEMS INC CENTRAL INDEX KEY: 0000069633 STANDARD INDUSTRIAL CLASSIFICATION: COMMUNICATIONS EQUIPMENT, NEC [3669] IRS NUMBER: 112277818 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-10004 FILM NUMBER: 07583618 BUSINESS ADDRESS: STREET 1: 333 BAYVIEW AVE CITY: AMITYVILLE STATE: NY ZIP: 11701 BUSINESS PHONE: 5168429400 MAIL ADDRESS: STREET 1: 333 BAYVIEW AVE STREET 2: XXXXXXXXXXXXXXXXXXX CITY: AMITYVILLE STATE: NY ZIP: 11701 8-K 1 a5327770.txt NAPCO SECURITY SYSTEMS, INC. 8-K 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) February 6, 2007 NAPCO SECURITY SYSTEMS, INC. (Exact name of registrant as specified in charter) Delaware 0-10004 11-2277818 - --------------- ------------ ------------------- (State or other (Commission (IRS Employer jurisdiction of File Number) Identification No.) incorporation) 333 Bayview Avenue, Amityville, New York 11701 (Address of principal executive offices) Registrant's telephone number, including area code (631) 842-9400 Check the appropriate box below if the Form 8-K filing is intended to 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)) INFORMATION TO BE INCLUDED IN THE REPORT ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION On February 6, 2007, the registrant issued a press release to report results for the six months ended December 31, 2006. This press release is furnished as Exhibit 99.1. The information in this Current Report on Form 8-K, including the exhibits 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 Systems, Inc. dated February 6, 2007. SIGNATURES 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 SYSTEMS, INC. ------------------------------- (Registrant) Date: February 6, 2007 By: /s/ Kevin S. Buchel ------------------------------- Kevin S. Buchel Senior Vice President and Chief Financial Officer EX-99.1 2 a5327770ex991.txt NAPCO SECURITY SYSTEMS, INC. EXHIBIT 99.1 Exhibit 99.1 NAPCO Security Systems, Inc. Announces Second Quarter Financial Results -Second Quarter EPS $0.06 vs. $0.07 Last Year- AMITYVILLE, N.Y.--(BUSINESS WIRE)--Feb. 6, 2007--NAPCO Security Systems, Inc., (Nasdaq: NSSC), one of the world's leading suppliers of high performance electronic security equipment for over 30 years, today announced financial results for its second quarter ended December 31, 2006. Net sales for the three months ended December 31, 2006 was $16.1 million as compared to $17.2 million for the same quarter a year earlier, a decrease of 6%. Net income for the quarter was $1.1 million, or $0.06 per diluted share, compared to net income of $1.5 million, or $0.07 per diluted share, for the same year ago period, a decrease of $400,000. Net sales for the six months ended December 31, 2006 was $30.1 million as compared to $31.4 million for the prior year period, a decrease of 4%. Net income for the six months ended December 31, 2006 was $2.1 million or $0.10 per diluted share, as compared to $2.3 million or $0.11 per diluted share in the prior year period, a decrease of $200,000. Net sales and net income for the three and six months declined due to lower sales in the Company's European markets. Richard Soloway, Chairman and President, noted, "We have taken several steps that we believe will lead to improved European sales in the near term, including the realignment of the European sales force in order to get better penetration and increased presence in these markets. "While Gross Profit was lower as a result of lower sales, the Company's Gross Margin percentage increased during this past quarter to 36.2% from 35.1% a year ago. The increase in Gross Margin percentage occurred primarily as a result of increased overhead absorption resulting from increased production, a more favorable product mix resulting from the increased sales of the Company's door locking and access control products as well as the positive effect of the Company's raw materials cost reduction program. "The Company's inventory levels increased significantly during the first two quarters of fiscal 2007. The Company's policy is to level-load its production schedule during the year, even though its historical sales cycle is with a larger portion of sales occurring in the latter fiscal quarters. This stabilizes the Company's work force and increases manufacturing efficiencies. This type of production planning also typically leads to significant increases in inventory during the earlier quarters. In addition, the Company produced additional inventory to support the introduction of the Company's new Freedom 64 code-less intrusion alarm system and several other key new products as well as to support a projection of higher sales in the first two quarters of fiscal 2007. The inventory increase has centered on core components and new products. The Company has recently taken several steps in order to reduce inventory levels." Mr. Soloway concluded, "Our fundamental strengths include the broadest line of high quality, innovative products in the industry designed to serve the needs of the residential, business, military and government markets and encompassing products for access control, intrusion and fire alarm systems, and electronic locking devices. We are one of the few independent but meaningful security product and systems providers. This array of products and markets is supported by a large R&D effort with the mandate of using the latest technologies to develop new products and systems for the sole purpose of bringing greater security into our customers' lives. I am looking forward to the benefits from our many new product introductions, our new European sales structure as well as our continuing search for accretive acquisitions." About NAPCO Security Systems, Inc. NAPCO Security Systems, Inc. is one of the world's leading manufacturers of technologically advanced -electronic security equipment including intrusion and fire alarm systems, access control systems and electronic locking devices. The Company's products, including those of Alarm Lock and Continental Instruments, feature some of the most popular and best-selling control panels, sensors, locking devices and access control products. They are used in residential, commercial, institutional, industrial and governmental applications. NAPCO security products have earned a reputation for technical excellence, reliability and innovation, poising the Company for revenue growth in the rapidly expanding electronic security market, a market whose current size exceeds $30 billion. 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. Napco Security Systems, Inc and Subsidiaries Condensed Consolidated Statements of Income (Unaudited) Three Months Ended December 31, ------------------------- 2006 2005 ----------- ----------- (in thousands, except share and per share data) Net sales $ 16,077 $ 17,223 Cost of sales 10,252 11,174 ----------- ----------- Gross Profit 5,825 6,049 Selling, general and administrative expenses 3,981 3,785 ----------- ----------- Operating Income 1,844 2,264 ----------- ----------- Interest expense, net 119 60 Other expenses, net 5 2 ----------- ----------- Other expenses 124 62 ----------- ----------- Income Before Minority Interest and Provision for Income Taxes 1,720 2,202 Minority interest in net loss of subsidiary, net 41 54 ----------- ----------- Income Before Provision for Income Taxes 1,761 2,256 Provision for income taxes 617 773 ----------- ----------- Net Income $ 1,144 $ 1,483 =========== =========== Earnings per share* : Basic $ 0.06 $ 0.07 =========== =========== Diluted $ 0.06 $ 0.07 =========== =========== Weighted average number of shares outstanding* : Basic 20,034,552 19,775,998 =========== =========== Diluted 20,628,793 20,593,902 =========== =========== * The 3:2 stock split declared in May 2006 has been retroactively reflected in all 2005 share and per share data. Napco Security Systems, Inc and Subsidiaries Condensed Consolidated Statements of Income (Unaudited) Six Months Ended December 31, ------------------------- 2006 2005 ------------ ------------ (in thousands,except share and per share data) Net sales $ 30,106 $ 31,403 Cost of sales 18,722 20,229 ------------ ------------ Gross Profit 11,384 11,174 Selling, general and administrative expenses 7,979 7,658 ------------ ------------ Operating Income 3,405 3,516 ------------ ------------ Interest expense, net 209 98 Other expenses, net 9 6 ------------ ------------ Other expenses 218 104 ------------ ------------ Income Before Minority Interest and Provision for Income Taxes 3,187 3,412 Minority interest in net loss of subsidiary, net 54 115 ------------ ------------ Income Before Provision for Income Taxes 3,241 3,527 Provision for income taxes 1,145 1,229 ------------ ------------ Net Income $ 2,096 $ 2,298 ============ ============ Earnings per share*: Basic $ 0.10 $ 0.12 ============ ============ Diluted $ 0.10 $ 0.11 ============ ============ Weighted average number of shares outstanding*: Basic 19,992,925 19,662,681 ============ ============ Diluted 20,715,830 20,580,189 ============ ============ * The 3:2 stock split declared in May 2006 has been retroactively reflected in all 2005 share and per share data. Napco Security Systems, Inc and Subsidiaries Condensed Consolidated Balance Sheets December 31, ASSETS 2006 June 30, (unaudited) 2006 - -------------------------------------------- ------------ ------------ (in thousands,except share data) Current Assets: Cash and cash equivalents $ 731 $ 2,738 Accounts receivable, less allowance for doubtful accounts 22,774 25,153 Inventories, net 30,766 22,666 Prepaid expenses and other current assets 1,168 755 Deferred income taxes 1,701 1,531 ------------ ------------ Total current assets 57,140 52,843 Property, plant and equipment, net 9,065 9,038 Goodwill 9,686 9,686 Other assets 267 155 ------------ ------------ Total Assets $ 76,158 $ 71,722 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY - -------------------------------------------- Current Liabilities: Accounts payable $ 6,374 $ 6,060 Accrued expenses 1,325 1,372 Accrued salaries and wages 2,437 2,586 Accrued income taxes 558 1,877 ------------ ------------ Total current liabilities 10,694 11,895 Long-term debt 7,700 4,700 Accrued income taxes 2,243 2,243 Deferred income taxes 2,032 1,887 Minority interest in subsidiary 147 147 ------------ ------------ Total liabilities 22,816 20,872 ------------ ------------ Stockholders' Equity : Common stock, par value $.01 per share; 40,000,000 shares authorized, 20,090,313 and 19,950,453 shares issued and outstanding, respectively 201 200 Additional paid-in capital 12,963 12,568 Retained earnings 40,178 38,082 ------------ ------------ Total stockholders' equity 53,342 50,850 ------------ ------------ Total Liabilities and Stockholders' Equity $ 76,158 $ 71,722 ========================= CONTACT: NAPCO Security Systems, Inc. Richard Soloway, President Kevin S. Buchel, Senior VP 631-842-9400 ext. 120 or Wolfe Axelrod Weinberger Assoc. LLC Donald Weinberger, 212-370-4500 Fax: 212-370-4505 don@wolfeaxelrod.com -----END PRIVACY-ENHANCED MESSAGE-----