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Napco Security net income up 80 percent on recurring fees

"We are particularly pleased to see that our investment in the engineering and marketing of fertile new product opportunities is driving our double digit top-line growth," Napco's chairman and president Richard Soloway said in the release issued on Monday, Nov. 7, 2016. Credit: Newsday / Michael E. Ach

Napco Security Technologies Inc.’s net income rose by 80 percent in the most recent quarter, due to increases in subscription revenues and sales of school security products.

The Amityville manufacturer of electronic security, fire alarm and “connected home” devices for residences, businesses and schools had net income of $568,000 in the quarter that ended Sept. 30, compared with $315,000 a year earlier, the company reported Monday.

Earnings per diluted share were 3 cents, up 1 cent from a year ago.

Napco shares rose 5 cents to close at $7.10 Monday on the Nasdaq Stock Market. The stock is up 12.5 percent from a year earlier.

Napco’s net sales increased 11 percent year-over-year in the last quarter, to $20.2 million, due in part to a 65 percent increase in subscription-based recurring revenues for internet-connected security systems, the company said in a news release.

“People want to communicate with their alarm systems wirelessly and they also want to connect to their door locks and see live video and control them all from [their] smartphone, and our new product lines do that so that’s very exciting,” Napco’s chairman and president, Richard Soloway, said in an interview.

Napco also experienced strong growth in its sales of security systems to hundreds of K-12 schools, colleges and universities, Soloway said.

The company plans to introduce a new “internet of things” product at a security industry trade show in Manhattan on Nov. 16, Napco said in its news release. The product, StarLink Connect, will allow customers to upgrade traditional security, heating, cooling, lighting and video camera systems so that they can be controlled by devices such as smartphones, Napco said.

To keep up with Napco’s growing business, the company expects to add to its staff of about 200 people at its headquarters, Soloway said. Over the next year, Napco expects to hire about 20 more employees in departments from shipping and production to hardware and software engineering, sales and marketing, he said.

The company also is expanding its 90,000-square-foot headquarters by about 15 percent, Soloway said.


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