Operating income rose 47% to $US8,910,000 in fiscal 2005 from $US6,065,000 in fiscal 2004. Net income for fiscal 2005 increased 69% to $US5,630,000, or $US0.62 per fully diluted share as compared to $US3,335,000, or $US0.39 per fully diluted share for fiscal 2004. Per share results rose 59% based on 9,015,000 and 8,497,000 fully diluted weighted average shares outstanding in fiscal 2005 and 2004, respectively. Richard Soloway, Chairman and President, noted, “I am very pleased that the expectations that we set forth earlier for fiscal 2005 have not only been met but exceeded by a large margin. Supported by an R&D budget of nearly $US5 million, NAPCO has continually developed new state-of-the art products to satisfy the sophisticated demands of the residential, commercial, industrial and government markets. Revenues, earnings and per share results were records for both the final quarter and the full year as well. Revenues surpassed $US20 million in the final quarter and, as we suggested, have resulted in a dramatic expansion of operating earnings as overhead is more rapidly absorbed. “Our revised marketing strategy of reallocating marketing of intrusion and fire alarm systems through our nationwide network of independent distributors is now fully in place and, as anticipated, has resulted in increased sales of these essential security devices and systems to a broadened spectrum of security dealers who service the residential, commercial, industrial and government markets.” Mr. Soloway added, “We have been working with one of the largest companies in residential security and monitoring, ADT, to develop a product that is unique, easy-to-use and, just as important, easy to install. SafeWatch EZ, now in its second generation, is such a security package. “It is wireless, thereby making installation simple, is activated by using the house key and incorporates a patented NAPCO locking mechanism that is elegant in its simplicity. We are confident that the new, improved SafeWatch EZ will result in a meaningful positive shift in its acceptance and result in significant incremental sales.” Mr. Soloway concluded, “NAPCO’s financial performance over the past several years and, particularly, in the fourth quarter of fiscal 2005, has been impressive. Our financial position is extremely strong, the market opportunity is undiminished, our product line unequaled in breadth and quality and our strong distribution network is functioning smoothly. We are cautiously optimistic that all the necessary components are in place to improve shareholder value at a meaningful rate in fiscal 2006.” NAPCO has continued its debt repayment and over the past twelve months reduced debt to $US1.95 million, a reduction of $US6.4 million. Further reductions are expected in fiscal 2006. Cash generated from operations was $US7.2 million and fiscal 2005 EBITDA* (Earnings before interest, taxes, depreciation and amortization) increased $US3.1 million to $US10.2 million.
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