NAPCO Security Technologies(NSSC) - 2025 Q2 - Quarterly Results

Financial Performance - Net sales for Q2 Fiscal 2025 were $42.9 million, a decrease of 9.7% year-over-year from $47.5 million[3] - Net income decreased to $10.5 million, down 17.0% from $12.6 million in the prior year[3] - Diluted EPS was $0.28, compared to $0.34 in the same quarter last year, reflecting a decline of 17.6%[6] - Adjusted EBITDA for Q2 was $12.2 million, a decrease of 19.3% from $15.1 million in the prior year[3] - Operating income for the three months ended December 31, 2024, was $11,171, a decline of 19.0% from $13,805 in the same period of 2023[15] - Net income for the six months ended December 31, 2024, was $21,652, down 6.2% from $23,088 in 2023[16] - Adjusted EBITDA for the three months ended December 31, 2024, was $12,178, a decrease of 19.1% from $15,098 in the same period of 2023[19] - Basic income per share for the three months ended December 31, 2024, was $0.29, down from $0.34 in the prior year[15] Revenue Breakdown - Recurring service revenue (RSR) increased by 14.4% to $21.2 million, representing 49% of total revenue in Q2[5] - Equipment revenues decreased to $21,725, down 25.1% from $29,007 in the prior year, while service revenues increased to $21,208, up 14.4% from $18,540[15] Profitability Metrics - Gross profit margin improved to 57.0%, up from 52.6% in the same quarter last year[6] - Gross profit for the six months ended December 31, 2024, was $49,105, an increase of 3.5% from $47,425 in 2023[16] Cash Flow and Liquidity - Cash flows from operating activities increased by 36.5% to $25.5 million compared to $18.7 million in the prior year[3] - Cash provided by operating activities for the six months ended December 31, 2024, was $25,524, an increase of 36.5% compared to $18,693 in 2023[17] - The company reported an ending cash and cash equivalents balance of $86,019 for the six months ended December 31, 2024, compared to $47,311 in 2023[17] Dividends and Shareholder Returns - The company declared a quarterly dividend of $0.125 per share, payable on April 3, 2025[6] Product Development and Market Position - The Prima by NAPCO, an all-in-one security panel, is gaining traction in the market[7] - The new cloud-based MVP Access platform was introduced, aimed at generating monthly recurring revenue for the locking industry[8] Research and Development - Research and development expenses increased to $3,107 for the three months ended December 31, 2024, up 22.2% from $2,542 in 2023[15]