National Presto Industries(US:NPK)2025-03-14 20:19Financial Performance - Consolidated sales increased by $47.316 million (14%) in 2024 compared to 2023, with net earnings rising by $6.901 million (20%) to $41.460 million[120]. - Net sales for 2024 reached $388,228 thousand, a 13.9% increase from $340,912 thousand in 2023[206]. - Gross profit improved to $78,566 thousand in 2024, up 16.6% from $67,452 thousand in 2023[206]. - Operating profit increased to $45,213 thousand, representing a 29.1% rise compared to $35,033 thousand in 2023[206]. - Net earnings for 2024 were $41,460 thousand, a 20% increase from $34,559 thousand in 2023[206]. - Earnings per share (EPS) rose to $5.82 in 2024, up from $4.86 in 2023, reflecting a 20% growth[206]. - Dividends paid in 2024 amounted to $32,029 thousand, up from $28,385 thousand in 2023, indicating a 12.4% increase[208]. Segment Performance - Net sales in the Housewares/Small Appliance segment rose by $5.180 million (5%) to $102.799 million, while the Defense segment saw an increase of $42.322 million (18%) to $284.025 million[121]. - Gross profit for the Housewares/Small Appliance segment increased by $5.611 million (28.3%) to $25.478 million, while the Defense segment's gross profit rose by $6.170 million (11.9%) to $58.173 million[122]. Contracts and Backlog - The Defense segment was awarded a fourth five-year 40mm system contract valued at approximately $564.4 million for FY22 through FY24, with deliveries commencing in 2024 and scheduled to complete in 2028[29]. - The maximum ceiling value of the new five-year IDIQ contract for the 40mm M918E2 cartridge is $818.9 million, with deliveries scheduled to commence in 2025[30]. - The Defense segment's contract backlog was approximately $1,085,612,000 as of December 31, 2024, compared to $564,005,000 in 2023 and $505,069,000 in 2022, indicating significant growth in future revenue potential[54]. Research and Development - Research and development costs related to new product development were not a material element in the aggregate costs incurred by the Company for the years 2024, 2023, and 2022[16]. - Research and development costs for new product development were expensed in operations for the years 2024, 2023, and 2022, highlighting ongoing investment in innovation[38]. Workforce and Employment - The company had 1,126 employees as of December 31, 2024, an increase from 1,007 employees at the end of December 2023, reflecting workforce expansion[47]. Cash Flow and Liquidity - Cash used in operating activities was $53.426 million in 2024, compared to $45.389 million provided in 2023[138]. - Net cash provided by investing activities was $14.965 million in 2024, a significant increase from $447,000 used in 2023[139]. - Cash and cash equivalents decreased by $69.994 million to $17.663 million in 2024[142]. - The company has sufficient liquidity to meet anticipated capital requirements and fund future growth through acquisitions[146]. Inventory and Assets - The company’s inventory levels increase in advance of seasonal selling periods, necessitating large finished goods inventories to meet customer demand[50]. - Finished goods inventory rose to $38,351,000 in 2024 compared to $31,815,000 in 2023, indicating an increase of approximately 21%[202]. - Work in process inventory increased significantly to $219,154,000 in 2024 from $144,684,000 in 2023, marking a growth of around 52%[202]. - Total current assets amounted to $366,661,000 in 2024, a slight increase from $360,110,000 in 2023[202]. Regulatory and Compliance Risks - The company is subject to various federal, state, and local regulations, which could impose additional costs or liabilities in the future[44]. - The Company’s U.S. Government contracts are primarily fixed-price, exposing it to risks from cost increases that could adversely affect profits[75]. - Compliance with extensive defense industry regulations increases performance and compliance costs, potentially reducing profitability[78]. Supply Chain Risks - The company relies heavily on U.S. Government contracts, with potential risks associated with changes in the defense budget affecting sales and earnings[72]. - The company’s reliance on third-party suppliers in Asia poses risks related to supply interruptions and pricing changes, which could adversely affect operations[60]. - The Company relies on third-party subcontractors for key components, and their failure to perform could materially impact contract performance[77]. Cybersecurity and Acquisitions - The Company experienced a cybersecurity incident on March 1, 2025, which could materially impact its financial condition and results of operations[92]. - The Company is pursuing acquisitions but faces risks such as integration challenges and potential failure to achieve anticipated benefits[90].