NAPCO Security Technologies, Inc. (NSSC) has reported a 12.19 percent fall in profit for the quarter ended Dec. 31, 2016. The company has earned $0.86 million, or $0.05 a share in the quarter, compared with $0.98 million, or $0.05 a share for the same period last year.
Revenue during the quarter went up marginally by 1.06 percent to $20.72 million from $20.50 million in the previous year period. Gross margin for the quarter expanded 169 basis points over the previous year period to 31.94 percent. Total expenses were 94.86 percent of quarterly revenues, down from 95.03 percent for the same period last year. This has led to an improvement of 16 basis points in operating margin to 5.14 percent.
Operating income for the quarter was $1.06 million, compared with $1.02 million in the previous year period.
However, the adjusted operating income for the quarter stood at $1.24 million compared to $1.22 million in the prior year period. At the same time, adjusted operating margin improved 5 basis points in the quarter to 5.98 percent from 5.93 percent in the last year period.
Richard Soloway, chairman and president said, "I am pleased that quarterly revenue once again exceeded $20 million, which is the sales level where gross profit expansion and overhead absorption begins to occur. We continue to build momentum for future growth, by focusing on vibrant markets, such as school security, IoT and wireless alarm signal communicators, with an emphasis on products that deliver substantial recurring monthly revenue (RMR). New product development initiatives are squarely aimed at increasing our portfolio of RMR building product entries, with four product launches scheduled over the next six months in the (i) dual-path fire, (ii) IoT communicator, (iii) wireless video, and (iv) intrusion alarm product segments."
Working capital increases
NAPCO Security Technologies, Inc. has recorded an increase in the working capital over the last year. It stood at $35.32 million as at Dec. 31, 2016, up 5.45 percent or $1.83 million from $33.50 million on Dec. 31, 2015. Current ratio was at 4.86 as on Dec. 31, 2016, down from 5.40 on Dec. 31, 2015.
Cash conversion cycle (CCC) has decreased to 120 days for the quarter from 193 days for the last year period. Days sales outstanding were almost stable at 70 days for the quarter, when compared with the last year period.
Days inventory outstanding has decreased to 77 days for the quarter compared with 144 days for the previous year period. At the same time, days payable outstanding went up to 27 days for the quarter from 20 for the same period last year.
Debt comes down significantly
NAPCO Security Technologies, Inc. has recorded a decline in total debt over the last one year. It stood at $2.35 million as on Dec. 31, 2016, down 70.25 percent or $5.55 million from $7.90 million on Dec. 31, 2015. Total debt was 3.67 percent of total assets as on Dec. 31, 2016, compared with 12.85 percent on Dec. 31, 2015. Debt to equity ratio was at 0.04 as on Dec. 31, 2016, down from 0.17 as on Dec. 31, 2015. Interest coverage ratio improved to 59.11 for the quarter from 24.85 for the same period last year.
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