NAPCO Security Technologies, Inc. Net Income surged on 36.6% and Revenue increased on 5.0%
09/04/2018 • About NAPCO Security Technologies, Inc. (
$NSSC) • By InTwits
NAPCO Security Technologies, Inc. reported FY2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- NAPCO Security Technologies, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.2%. At the same time it's a lot of higher than industry average of 8.7%.
- CAPEX is quite volatile: $1m in FY2018, $1m in FY2017, $1m in FY2016, $1m in FY2015, $1m in FY2014
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
NAPCO Security Technologies, Inc.'s Revenue increased on 5.0%. Revenue growth showed acceleration in FY18Q4 - it increased 6.1% YoY. During the last 5 years Revenue growth topped in FY2016 at 6.1% and was decelerating since that time. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 2.3 pp from 3.6% to 5.8% in 2018.
Gross Margin showed almost no change in FY2018. Gross Margin stuck to a growing trend at 2.7 pp per annum in FY2014-FY2018. SG&A as a % of Revenue decreased slightly on 1.5 pp from 26.6% to 25.0% in FY2018.
Net Income margin increased slightly on 1.9 pp from 6.4% to 8.3% in FY2018. Net Income margin followed a growing trend at 0.75 pp per annum in the last 5 years.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 1.4% in FY2018. NAPCO Security Technologies, Inc.'s CAPEX/Revenue showed almost no change from FY2015 to FY2018. It's average level of CAPEX/Revenue for the last three years was 1.3%.
Leverage (Debt)
The company paid down all the debt in FY2018. Cash jumped on 53.7%.
Valuation and dividends
The company's trades at EV/EBITDA 27.1x and P/E 35.5x.
Management team
Richard L Soloway is a NAPCO Security Technologies, Inc.'s CEO. Richard L Soloway is a founder and has spent 10 years with the company. Kevin S Buchel is a the company's CFO. Kevin S Buchel has spent 10 years at the company.
Financial and operational results
FY ended 06/30/2018
NAPCO Security Technologies, Inc. ($NSSC) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 74.382 | 77.762 | 82.513 | 87.374 | 91.746 | 5.0% |
| Gross Profit | 23.713 | 26.047 | 27.584 | 36.301 | 37.995 | 4.7% |
| SG&A | 19.397 | 15.384 | 21.261 | 23.200 | 22.951 | -1.1% |
| EBITDA | 6.056 | 6.851 | 7.743 | 7.752 | 9.823 | 26.7% |
| Net Income | 3.476 | 4.845 | 5.773 | 5.599 | 7.649 | 36.6% |
Balance Sheet
|
|---|
| Cash | 2.483 | 2.346 | 3.805 | 3.454 | 5.308 | 53.7% |
| Short Term Debt | 1.600 | 1.600 | 0.300 | 0.000 | 0.000 | |
| Long Term Debt | 10.200 | 9.100 | 4.500 | 3.500 | 0.000 | -100.0% |
Cash flow
|
|---|
| Capex | 0.753 | 0.730 | 0.693 | 1.414 | 1.280 | -9.5% |
Ratios
|
|---|
| Revenue growth | 4.2% | 4.5% | 6.1% | 5.9% | 5.0% | |
| EBITDA growth | 6.4% | 13.1% | 13.0% | 0.1% | 26.7% | |
|
|---|
| Gross Margin | 31.9% | 33.5% | 33.4% | 41.5% | 41.4% | -0.1% |
| EBITDA Margin | 8.1% | 8.8% | 9.4% | 8.9% | 10.7% | 1.8% |
| SG&A, % of revenue | 26.1% | 19.8% | 25.8% | 26.6% | 25.0% | -1.5% |
| Net Income Margin | 4.7% | 6.2% | 7.0% | 6.4% | 8.3% | 1.9% |
| CAPEX, % of revenue | 1.0% | 0.9% | 0.8% | 1.6% | 1.4% | -0.2% |
|
|---|
| ROE | 8.3% | 10.7% | 11.8% | 10.4% | 12.7% | 2.4% |
| Net Debt/EBITDA | 1.5x | 1.2x | 0.1x | 0.0x | -0.5x | -0.5x |
NAPCO Security Technologies, Inc. ($NSSC) key quoterly financial indicators
| mln. $ | FY18Q1 | FY18Q2 | FY18Q3 | FY18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 21 | 21 | 22 | 27 | | 5.0% | 1.9% | 6.7% | 6.1% |
| EBITDA | 1 | 2 | 2 | 5 | | 33.8% | 8.4% | 53.1% | 21.3% |
| Net Income | 1 | 1 | 2 | 4 | | 56.7% | 43.9% | 92.1% | 14.7% |
Balance Sheet
|
|---|
| Cash | 4 | 4 | 4 | 5 | | -5.6% | 4.4% | 79.0% | 53.7% |
| Short Term Debt | 0 | 0 | 0 | 0 | | -100.0% | -100.0% | | |
| Long Term Debt | 4 | 2 | 2 | 0 | | -3.4% | -2.4% | -42.9% | -100.0% |
Ratios
|
|---|
| Gross Margin | 32.5% | 40.2% | 40.1% | 44.5% | | 0.5% | 8.2% | -0.1% | -0.8% |
| EBITDA Margin | 6.6% | 7.1% | 10.2% | 17.1% | | 1.4% | 0.4% | 3.1% | 2.1% |
| Net Income Margin | 4.2% | 5.8% | 8.2% | 13.6% | | 1.4% | 1.7% | 3.7% | 1.0% |
Peers in Electronic Equipment & Instrum
Below you can find NAPCO Security Technologies, Inc. benchmarking vs. other companies in Electronic Equipment & Instrum industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Hickok Inc ($HICKA) | | -7.2% | 13.5% | 258.4% | 178.7% |
| Electro Scientific Industries, Inc. ($ESIO) | | -12.2% | 15.9% | -12.7% | 128.5% |
| Microvision, Inc. ($MVIS) | | 163.6% | 60.7% | -34.7% | 82.8% |
| Ipsidy Inc ($IDTY) | | | | | 66.2% |
| Magal Security Systems Ltd. ($MAGS) | | -17.8% | 6.4% | -5.2% | 44.0% |
| |
|---|
| Median (61 companies) | -78.5% | 3.5% | 0.3% | 3.6% | 10.4% |
|---|
| NAPCO Security Technologies, Inc. ($NSSC) | | 4.5% | 6.1% | 5.9% | 5.0% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Intellicheck, Inc. ($IDN) | 58.2% | 57.1% | 80.0% | 85.5% | 91.3% |
| Image Sensing Systems, Inc. ($ISNS) | 74.7% | 77.1% | 71.0% | 79.9% | 80.9% |
| National Instruments Corporation ($NATI) | 74.4% | 74.1% | 74.5% | 74.5% | 75.4% |
| Cognex Corporation ($CGNX) | 77.9% | 77.2% | 75.2% | 75.6% | 74.4% |
| Applied DNA Sciences Inc ($APDN) | | | 82.2% | 77.3% | 69.1% |
| |
|---|
| Median (60 companies) | 42.7% | 42.3% | 41.2% | 41.8% | 41.5% |
|---|
| NAPCO Security Technologies, Inc. ($NSSC) | 31.9% | 33.5% | 33.4% | 41.5% | 41.4% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Cognex Corporation ($CGNX) | 32.9% | 30.1% | 31.9% | 36.0% | 30.1% |
| Coherent, Inc. ($COHR) | 14.2% | 16.7% | 18.9% | 24.9% | 26.6% |
| Hollysys Automation Technologies, Ltd. ($HOLI) | 21.3% | 26.9% | 23.5% | 16.1% | 23.9% |
| Electro Scientific Industries, Inc. ($ESIO) | -10.1% | -19.1% | -2.0% | -17.8% | 23.1% |
| FLIR Systems, Inc. ($FLIR) | 20.7% | 22.8% | 21.3% | 20.0% | 21.7% |
| |
|---|
| Median (60 companies) | 5.3% | 3.9% | 3.0% | 3.0% | 3.3% |
|---|
| NAPCO Security Technologies, Inc. ($NSSC) | 8.1% | 8.8% | 9.4% | 8.9% | 10.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Wrap Technologies Inc ($WRTC) | | | | | 61.4% |
| ClearSign Combustion Corporation ($CLIR) | | 80.3% | 22.1% | 17.4% | 17.7% |
| LightPath Technologies, Inc. ($LPTH) | 16.8% | 5.0% | 6.5% | 7.8% | 7.7% |
| Giga-tronics Inc ($GIGA) | 1.7% | 0.1% | 1.3% | 0.3% | 7.0% |
| Applied DNA Sciences Inc ($APDN) | 8.4% | 3.9% | 16.1% | 3.1% | 6.8% |
| |
|---|
| Median (60 companies) | 1.9% | 2.0% | 2.1% | 1.7% | 2.3% |
|---|
| NAPCO Security Technologies, Inc. ($NSSC) | 1.0% | 0.9% | 0.8% | 1.6% | 1.4% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Evans & Sutherland Computer Corp ($ESCC) | | | 83.3% | 39.6% | 55.3% |
| Electro Scientific Industries, Inc. ($ESIO) | -11.7% | -19.7% | -7.1% | -22.9% | 31.5% |
| Coherent, Inc. ($COHR) | 9.9% | 13.1% | 15.6% | 24.0% | 21.5% |
| Zebra Technologies Corporation ($ZBRA) | 3.3% | 0.9% | 2.2% | 10.2% | 20.8% |
| Cognex Corporation ($CGNX) | 18.3% | 15.6% | 17.7% | 25.6% | 20.1% |
| |
|---|
| Median (72 companies) | 3.3% | 2.2% | 2.1% | 2.6% | 1.1% |
|---|
| NAPCO Security Technologies, Inc. ($NSSC) | | | | | |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Itron, Inc. ($ITRI) | 2.1x | 1.9x | 1.0x | 2.0x | 12.3x |
| Track Group Inc ($TRCK) | | | | | 12.2x |
| Mesa Laboratories, Inc. ($MLAB) | 0.7x | 1.1x | 1.7x | 2.0x | 3.5x |
| Trimble Inc. ($TRMB) | 1.3x | 1.7x | 1.1x | 1.3x | 3.4x |
| MTS Systems Corporation ($MTSC) | -0.0x | -0.4x | 5.8x | 3.9x | 3.2x |
| |
|---|
| Median (35 companies) | -0.8x | -0.9x | -0.9x | -0.8x | -0.9x |
|---|
| NAPCO Security Technologies, Inc. ($NSSC) | 1.5x | 1.2x | 0.1x | 0.0x | -0.5x |
