NEW YORK, May 05, 2025 (GLOBE NEWSWIRE) -- WHY: Rosen Law Firm, a global investor rights law firm, announces the filing of a class action lawsuit on behalf of purchasers of securities of NAPCO Security Technologies, Inc. (NASDAQ: NSSC) between February 5, 2024 and February 3, 2025, both dates inclusive (the “Class Period”). If you wish to serve as lead plaintiff, you must move the Court no later than June 24, 2025. SO WHAT: If you purchased NAPCO securities during the Class Period you may be entitled to co ...

NEW YORK, May 05, 2025 (GLOBE NEWSWIRE) -- Levi & Korsinsky, LLP notifies investors in Napco Security Technologies, Inc. ("Napco" or the "Company") (NASDAQ: NSSC) of a class action securities lawsuit. CLASS DEFINITION: The lawsuit seeks to recover losses on behalf of Napco investors who were adversely affected by alleged securities fraud between February 5, 2024 and February 3, 2025. Follow the link below to get more information and be contacted by a member of our team: https://zlk.com/pslra-1/napco-securit ...

Financial Performance - Net sales decreased by 10.8% to $44.0 million for the three months ended March 31, 2025, and by 5.5% to $130.9 million for the nine months[134]. - Recurring service revenue increased by 10.6% to $21.6 million for the three months and by 15.4% to $63.9 million for the nine months[134]. - Total gross profit margin improved from 53.8% to 57.2% for the three months and from 53.4% to 56.7% for the nine months[134]. - The overall gross profit for the nine months increased by $323,000 to $74.2 million, representing 56.7% of net sales[153]. - Gross profit from service revenues was 90.8% for the three months, slightly down from 91.8% in the prior year, while it increased to 91.1% for the nine months compared to 90.5%[134]. Cash Flow and Investments - Cash flows from operations generated were $38.9 million for the nine months ended March 31, 2025, compared to $31.0 million in fiscal 2024[134]. - Cash and cash equivalents increased by $8,072,000 during the nine months ended March 31, 2025, totaling $89,297,000 as of that date[164]. - Net cash provided by operating activities was $38.9 million for the nine months ended March 31, 2025, attributed to net income of $31.8 million and changes in operating assets and liabilities[166]. - The net cash provided by investing activities was $15.1 million during the nine months ended March 31, 2025, primarily from the redemption of other investments[168]. - Cash used in financing activities was $45.9 million for the nine months ended March 31, 2025, mainly related to the purchase of treasury shares and payment of dividends[169]. - The Company had no outstanding debt as of March 31, 2025, with an available revolving credit line of $20,000,000[165]. Expenses - The company experienced a significant increase in research and development expenses, rising by 15.5% to $3.2 million for the three months and by 20.9% to $9.3 million for the nine months[156]. - Research and development expenses for the nine months ended March 31, 2025 increased by $1,613,000 to $9,349,000, representing 7.1% of net sales compared to 5.6% for the prior period[157]. - Selling, general and administrative (SG&A) expenses for the nine months ended March 31, 2025 increased by $4,391,000 to $30,710,000, primarily due to compensation increases and hiring additional staff[159]. Tax and Interest - The Company's effective tax rate for the nine months ended March 31, 2025 was 14.4%, up from 12.9% in the prior year, due to lower estimated R&D tax credits and higher non-deductible stock-based compensation[163]. - Interest and other income, net for the nine months ended March 31, 2025 increased by $1,121,000 to $2,927,000, driven by higher interest income on short-term investments[161]. - A 100 basis point increase in interest rates would result in a decrease in the fair value of the investment portfolio by approximately $318,000[171]. Market and Strategic Focus - The U.S. announced a new universal baseline tariff of 10% on imports, which may increase product costs and impact margins[137]. - The company is focused on innovation and adapting to industry trends through ongoing research and development activities[135].

Financial Performance - Net sales for Q3 2025 were $43.96 million, a decrease of 10.8% year-over-year[3] - Net income for Q3 2025 was $10.12 million, down 23.3% from $13.20 million in Q3 2024[3] - Diluted EPS decreased to $0.28 from $0.36 in the prior fiscal year quarter, representing a decline of 22.2%[3] - Adjusted EBITDA for the quarter was $13.16 million, a decrease of 15.5% year-over-year[3] - Operating income for the three months ended March 31, 2025, was $11,146,000, down from $14,494,000 in 2024, a decrease of approximately 23.4%[16] - Net income for the three months ended March 31, 2025, was $10,122,000, compared to $13,196,000 in 2024, representing a decline of about 23.4%[16] - Adjusted EBITDA for the nine months ended March 31, 2025, was $37,877,000, down from $43,519,000 in 2024, a decrease of approximately 13.0%[20] Revenue Breakdown - Recurring service revenue (RSR) increased by 10.6% to $21.6 million, while equipment sales decreased by 24.8% to $22.4 million[7] - RSR represented 49% of total revenue in Q3, with a prospective annual run rate of approximately $89 million based on April 2025 figures[5] - For the three months ended March 31, 2025, net sales decreased to $43,961,000 from $49,267,000 in the same period of 2024, representing a decline of approximately 10.4%[16] - Equipment revenues for the nine months ended March 31, 2025, were $66,993,000, down from $83,133,000 in 2024, a decrease of about 19.4%[17] - Service revenues increased to $63,904,000 for the nine months ended March 31, 2025, compared to $55,357,000 in 2024, reflecting an increase of approximately 15.5%[17] Profitability Metrics - Gross profit margin improved to 57.2%, compared to 53.8% in the same quarter of the previous fiscal year[3] - Gross profit for the nine months ended March 31, 2025, was $74,232,000, slightly up from $73,909,000 in 2024, indicating a growth of about 0.4%[17] Cash Flow and Liquidity - Cash provided by operating activities for the nine months ended March 31, 2025, increased to $38,903,000 from $31,032,000 in 2024, an increase of approximately 25.5%[18] - The ending cash and cash equivalents balance as of March 31, 2025, was $73,413,000, up from $55,518,000 in 2024, reflecting an increase of about 32.2%[18] Dividends and Shareholder Returns - The company declared a quarterly dividend of $0.14 per share, an increase from the previous dividend of $0.125 per share[7] Strategic Initiatives - The company introduced a new cloud-based MVP Access platform aimed at enhancing security management capabilities[6] - The company plans to implement a price increase on all equipment products in response to tariff uncertainties[6]

Financial Data and Key Metrics Changes - Net sales for Q3 2025 decreased by 10.8% to $44 million compared to $49.3 million in the same period last year [12] - Recurring monthly service revenue grew by 10.6% to $21.6 million, up from $19.5 million year-over-year [12] - Net income for the quarter decreased by 23.3% to $10.1 million, or $0.28 per share, compared to $13.2 million, or $0.36 per diluted share last year [22] - Adjusted EBITDA for the quarter decreased by 15.4% to $13.2 million, representing a 30% adjusted EBITDA margin [24] Business Line Data and Key Metrics Changes - Recurring service revenue accounted for 49% of total revenue this quarter, with an annualized run rate of approximately $89 million, an increase of $3 million from the previous quarter [9][10] - Equipment sales for Q3 decreased by 24.8% to $22.4 million compared to $29.7 million last year [13] - Gross profit for recurring service revenue increased by 9.5% to $19.6 million, with a gross margin of 91% [17] Market Data and Key Metrics Changes - The company noted variability in demand signals in the broader market but remains focused on innovation and product development [10] - The company is experiencing strong engagement in the market, particularly following the ISC West Expo, which drew over 30,000 attendees [32] Company Strategy and Development Direction - The company is focused on expanding its portfolio of high-margin recurring service revenue offerings and enhancing its product development pipeline [10] - New product lines, including cloud-based solutions, are being introduced to generate additional recurring revenue [30] - The company aims to penetrate markets such as school security, healthcare, and retail loss prevention [31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term strategy and business fundamentals despite external challenges [29] - The company believes its business is recession-resistant, as demand for security remains strong regardless of economic conditions [84] - Management anticipates continued growth in recurring revenue, particularly from the Starlink product line [30] Other Important Information - The company remains debt-free and has substantial cash reserves, ending the quarter with $89.3 million in cash and cash equivalents [26] - A quarterly dividend of $0.14 per share will be issued, representing an increase from the previous dividend [36] Q&A Session Summary Question: Can you discuss the mix of hardware capable of generating recurring services revenue? - Management highlighted that recurring revenue primarily comes from Starlink radios, with new advanced products introduced at ISC West [38] Question: What are you seeing in terms of quoting activities for projects? - Management noted that sell-through stats are encouraging, with increases in various segments, indicating improving demand [46] Question: Can you provide more detail on the weakness in the locking products area? - Management acknowledged that distributor nervousness and inventory management are impacting sales, but sell-through stats remain strong [56] Question: How sensitive is demand for security systems to economic downturns? - Management believes the demand for security is resilient, as people prioritize safety and protection regardless of economic conditions [84] Question: What is the magnitude of the price increases announced? - A surcharge of 8.5% was implemented to cover tariff costs, with a typical annual price increase expected in July [92]

Group 1 - A class action lawsuit has been filed against Napco Security Technologies, Inc. for alleged securities fraud and unlawful business practices [2][4]. - Investors have until June 24, 2025, to request appointment as Lead Plaintiff if they purchased Napco securities during the Class Period [2]. - Napco reported a significant decline in hardware sales attributed to reduced sales from two major distributors, leading to the withdrawal of its long-term 45% EBITDA margin target [4]. Group 2 - Following the announcement of the financial results, Napco's stock price dropped by $9.77 per share, or 26.62%, closing at $26.93 per share on February 3, 2025 [4].

Financial Data and Key Metrics Changes - Net sales for Q3 2025 decreased by 10.8% to $44 million compared to $49.3 million in Q3 2024 [11] - Net income for Q3 2025 decreased by 23.3% to $10.1 million, or $0.28 per share, compared to $13.2 million, or $0.36 per share, in the same period last year [20] - Adjusted EBITDA for Q3 2025 decreased by 15.4% to $13.2 million, equating to a margin of 30% [22] - The company remains debt-free with cash and cash equivalents totaling $89.3 million as of March 31, 2025 [23] Business Line Data and Key Metrics Changes - Recurring monthly service revenue grew by 10.6% in Q3 to $21.6 million, up from $19.5 million in Q3 2024 [12] - Equipment sales for Q3 decreased by 24.8% to $22.4 million compared to $29.7 million in the same period last year [12] - Gross profit for recurring service revenue increased by 9.5% to $19.6 million, maintaining a gross margin of 91% [15] Market Data and Key Metrics Changes - The company reported that recurring service revenue accounted for 49% of total revenue in Q3 2025 [26] - The annualized run rate for recurring service revenue increased to approximately $89 million based on April 2025 results, up from $86 million in January 2025 [27] Company Strategy and Development Direction - The company is focused on accelerating innovation and expanding its product development pipeline, which is described as the strongest ever [9] - New product lines, including cloud-based solutions, are being introduced to enhance recurring revenue opportunities [27] - The company aims to penetrate markets such as school security, healthcare, and retail loss prevention [28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term strategy despite external challenges, emphasizing the resilience of the operating model [26] - The company anticipates continued growth in recurring revenue, particularly from the Starlink line of products [27] - Management noted that the security industry remains robust despite economic uncertainties, with ongoing demand for security solutions [78][80] Other Important Information - The company plans to issue a quarterly dividend of $0.14 per share, reflecting a sequential increase [33] - The company has engaged in significant stock buybacks, spending $18.8 million in Q3 and $36.7 million for the nine months [25] Q&A Session Summary Question: Can you discuss the mix of hardware capable of generating recurring services revenue? - The recurring revenue primarily comes from Starlink radios, with new advanced products introduced at ISC West [35] Question: What are you seeing in terms of quoting activities for projects? - Sell-through stats are encouraging, with increases in various segments, indicating improved demand [44] Question: Can you provide more detail on the weakness in the locking products area? - The weakness is attributed to tariff-driven issues and inventory management by distributors [54] Question: How sensitive is the demand for security systems to economic downturns? - The company believes its business is recession-resistant, as security needs persist regardless of economic conditions [80] Question: What is the magnitude of the price increases announced? - An 8.5% surcharge was implemented to cover tariff costs, with a typical annual price increase expected in July [89]

Core Viewpoint - The Gross Law Firm has issued a notice to shareholders of Napco Security Technologies, Inc. regarding a class action lawsuit due to alleged misleading statements about the company's growth and hardware sales performance [1]. Summary by Sections Allegations - The complaint alleges that Napco's management provided investors with optimistic projections about the company's growth and strength in its hardware division, claiming confidence in achieving fiscal 2026 growth targets based on expected demand for hardware products [1]. - On February 3, 2025, Napco reported a significant decline in hardware sales, attributing this to reduced sales from two major distributors, which led to a retraction of their long-term EBITDA margin target of 45% [1]. - Following the announcement, Napco's stock price plummeted from $36.70 per share on January 31, 2024, to $26.93 per share on February 3, 2025, marking a decline of approximately 26.62% in one day [1]. Next Steps for Shareholders - Shareholders who purchased shares during the specified class period are encouraged to register for the class action by June 24, 2025, to potentially become lead plaintiffs [2]. - Registered shareholders will receive updates through a portfolio monitoring software throughout the case lifecycle, with no cost or obligation to participate [2]. About the Law Firm - The Gross Law Firm is a nationally recognized class action law firm dedicated to protecting investors' rights against deceit, fraud, and illegal business practices [3]. - The firm aims to ensure companies adhere to responsible business practices and seeks recovery for investors who suffered losses due to misleading statements or omissions that inflated stock prices [3].

Core Viewpoint - Rosen Law Firm has filed a class action lawsuit on behalf of investors who purchased securities of NAPCO Security Technologies, Inc. during the specified Class Period, alleging misleading statements regarding the company's revenue outlook and growth potential [1][5]. Group 1: Lawsuit Details - The class action lawsuit covers purchasers of NAPCO securities from February 5, 2024, to February 3, 2025 [1]. - Investors may be entitled to compensation without any out-of-pocket fees through a contingency fee arrangement [2]. - The lawsuit claims that NAPCO made false and misleading statements about its revenue projections and growth, which led to investor damages when the truth was revealed [5]. Group 2: Next Steps for Investors - Interested investors can join the class action by visiting the provided link or contacting the law firm directly [3][6]. - A lead plaintiff must be appointed by June 24, 2025, to represent the class in the litigation [1][3]. Group 3: Rosen Law Firm's Credentials - Rosen Law Firm has a strong track record in securities class actions, having achieved significant settlements, including the largest against a Chinese company at the time [4]. - The firm has consistently ranked highly in securities class action settlements and has recovered hundreds of millions for investors [4].

Core Viewpoint - Napco Security Technologies, Inc. is facing a class action lawsuit due to alleged securities fraud that negatively impacted investors between February 5, 2024, and February 3, 2025 [1][2] Company Performance - The lawsuit claims that the defendants misled investors regarding Napco's expected growth and strength in its hardware division, asserting confidence in achieving fiscal 2026 growth projections [2] - On February 3, 2025, Napco reported a significant decline in hardware sales, attributing the drop primarily to reduced sales from two major distributors [2] - Following the disappointing financial results, Napco retracted its long-term EBITDA margin target of 45%, stating uncertainty about achieving this goal by the end of fiscal 2026 [2] Stock Market Impact - Napco's stock price experienced a dramatic decline from $36.70 per share on January 31, 2024, to $26.93 per share on February 3, 2025, marking a decrease of approximately 26.62% in just one day [2] Legal Proceedings - Investors who suffered losses during the specified timeframe have until June 24, 2025, to request appointment as lead plaintiff in the class action [3] - Participation in the lawsuit does not require any out-of-pocket costs or fees for class members [3] Firm Background - Levi & Korsinsky, LLP has a strong track record in securities litigation, having secured hundreds of millions of dollars for shareholders over the past 20 years [4] - The firm has been recognized as one of the top securities litigation firms in the United States for seven consecutive years [4]