NAPCO Security Technologies, Inc. Net Income dropped on 30.3% and Revenue decreased slightly on 1.5%
09/08/2020 • About NAPCO Security Technologies, Inc. (
$NSSC) • By InTwits
NAPCO Security Technologies, Inc. reported FY2020 financial results today. Here are the key drivers of the company's long term financial model:
- NAPCO Security Technologies, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.5%. At the same time it's a lot of higher than industry average of 3.2%.
- CAPEX is quite volatile: $2m in FY2020, $2m in FY2019, $1m in FY2018, $1m in FY2017, $1m in FY2016
- The company has highly profitable business model: ROIC is 13.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
NAPCO Security Technologies, Inc.'s Revenue decreased slightly on 1.5%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 8.7 pp from -21.1% to -12.4% in FY2020.
Gross Margin showed almost no change in FY2020. SG&A as a % of Revenue increased slightly on 0.80 pp from 22.6% to 23.4% in FY2020.
Net Income margin decreased on 3.5 pp from 11.9% to 8.4% in FY2020.
Investments (CAPEX, working capital and M&A)
In FY2020 the company had CAPEX/Revenue of 1.6%. CAPEX/Revenue showed almost no change from FY2017 to FY2020. For the last three years the average CAPEX/Revenue was 1.6%.
Return on investment
The company operates at good ROIC (13.6%) while ROE is low (11.4%). ROIC decreased on 6.2 pp from 19.8% to 13.6% in FY2020. ROE decreased on 6.7 pp from 18.2% to 11.4% in FY2020.
Leverage (Debt)
Debt level is -0.6x Net Debt / EBITDA and 0.9x Debt / EBITDA. Debt surged while cash jumped on 127%.
NAPCO Security Technologies, Inc. has no short term refinancing risk: cash is higher than short term debt (879.0%).
Valuation and dividends
The company's trades at EV/EBITDA 31.9x and P/E 47.7x.
Management team
Richard L Soloway is a the company's CEO. Richard L Soloway has spent 23 years with the company. Kevin S Buchel is a the company's CFO. Kevin S Buchel has spent 12 years at the company.
Financial and operational results
FY ended 06/30/2020
NAPCO Security Technologies, Inc. ($NSSC) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 82.5 | 87.4 | 91.7 | 102.9 | 101.4 | -1.5% |
| Gross Profit | 27.6 | 36.3 | 38.0 | 43.9 | 43.6 | -0.7% |
| SG&A | 21.3 | 23.2 | 23.0 | 23.2 | 23.7 | 2.0% |
| EBITDA | 7.7 | 7.8 | 9.8 | 14.9 | 12.5 | -15.6% |
| Net Income | 5.8 | 5.6 | 7.6 | 12.2 | 8.5 | -30.3% |
Balance Sheet
|
|---|
| Cash | 3.8 | 3.5 | 5.3 | 8.0 | 18.2 | 127.3% |
| Short Term Debt | 0.3 | 0.0 | 0.0 | 0.0 | 2.1 | |
| Long Term Debt | 4.5 | 3.5 | 0.0 | 0.0 | 9.2 | |
Cash flow
|
|---|
| Capex | 0.7 | 1.4 | 1.3 | 2.0 | 1.6 | -18.8% |
Ratios
|
|---|
| Revenue growth | 6.1% | 5.9% | 5.0% | 12.2% | -1.5% | |
| EBITDA growth | 13.0% | 0.1% | 26.7% | 51.4% | -15.6% | |
|
|---|
| Gross Margin | 33.4% | 41.5% | 41.4% | 42.6% | 43.0% | 0.4% |
| EBITDA Margin | 9.4% | 8.9% | 10.7% | 14.5% | 12.4% | -2.1% |
| SG&A, % of revenue | 25.8% | 26.6% | 25.0% | 22.6% | 23.4% | 0.8% |
| Net Income Margin | 7.0% | 6.4% | 8.3% | 11.9% | 8.4% | -3.5% |
| CAPEX, % of revenue | 0.8% | 1.6% | 1.4% | 1.9% | 1.6% | -0.3% |
|
|---|
| ROIC | | | | 19.8% | 13.6% | -6.2% |
| ROE | 11.8% | 10.4% | 12.7% | 18.2% | 11.4% | -6.7% |
| Net Debt/EBITDA | 0.1x | 0.0x | -0.5x | -0.5x | -0.6x | -0.0x |
NAPCO Security Technologies, Inc. ($NSSC) key quoterly financial indicators
| mln. $ | FY20Q1 | FY20Q2 | FY20Q3 | FY20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 26 | 26 | 26 | 23 | | - | - | - | - |
| EBITDA | 4 | 4 | 4 | -0 | | - | - | - | - |
| Net Income | 3 | 4 | 4 | -2 | | - | - | - | - |
Balance Sheet
|
|---|
| Cash | 11 | 12 | 11 | 18 | | - | - | - | - |
| Short Term Debt | 0 | 0 | 0 | 2 | | - | - | - | - |
| Long Term Debt | 7 | 7 | 7 | 9 | | - | - | - | - |
Ratios
|
|---|
| Gross Margin | 43.8% | 47.0% | 45.6% | 34.7% | | - | - | - | - |
| EBITDA Margin | 15.4% | 17.2% | 17.1% | -2.0% | | - | - | - | - |
| Net Income Margin | 12.3% | 13.8% | 13.8% | -8.3% | | - | - | - | - |
Peers in Electronic Equipment & Instruments
Below you can find NAPCO Security Technologies, Inc. benchmarking vs. other companies in Electronic Equipment & Instruments 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 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Intellicheck, Inc. ($IDN) | - | -6.3% | 23.2% | 72.9% | 40.1% |
| nLIGHT, Inc. ($LASR) | - | 36.8% | 38.1% | -7.7% | 26.1% |
| Luna Innovations Incorporated ($LUNA) | - | -21.0% | 29.7% | 64.3% | 17.3% |
| PAR Technology Corporation ($PAR) | - | 1.3% | -13.5% | -7.0% | 14.2% |
| Cognex Corporation ($CGNX) | - | 44.7% | 5.3% | -10.0% | 11.8% |
| |
|---|
| Median (26 companies) | -3.8% | 4.1% | 11.6% | 4.4% | -3.5% |
|---|
| NAPCO Security Technologies, Inc. ($NSSC) | - | 5.9% | 5.0% | 12.2% | -1.5% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Intellicheck, Inc. ($IDN) | 80.0% | 85.5% | 91.3% | 87.0% | 86.7% |
| Cognex Corporation ($CGNX) | 75.2% | 75.6% | 74.4% | 73.8% | 74.5% |
| National Instruments Corporation ($NATI) | 74.5% | 74.5% | 75.4% | 75.1% | 71.2% |
| Coda Octopus Group, Inc. ($CODA) | - | 66.4% | - | 65.6% | 63.5% |
| Applied DNA Sciences Inc ($APDN) | 82.2% | 77.3% | 69.1% | 83.7% | 62.7% |
| |
|---|
| Median (26 companies) | 40.7% | 41.2% | 40.4% | 42.8% | 43.9% |
|---|
| NAPCO Security Technologies, Inc. ($NSSC) | 33.4% | 41.5% | 41.4% | 42.6% | 43.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Keysight Technologies Inc. ($KEYS) | 18.5% | 14.6% | -0.9% | 23.7% | 27.0% |
| Cognex Corporation ($CGNX) | 31.9% | 36.0% | 30.1% | 24.0% | 25.3% |
| National Instruments Corporation ($NATI) | 15.7% | 16.9% | 17.9% | 20.0% | 22.3% |
| FLIR Systems, Inc. ($FLIR) | 21.3% | 20.0% | 21.7% | 20.6% | 22.0% |
| Badger Meter, Inc. ($BMI) | 18.6% | 20.1% | 18.7% | 21.1% | 21.2% |
| |
|---|
| Median (26 companies) | 2.9% | 4.1% | 3.3% | 12.0% | 8.7% |
|---|
| NAPCO Security Technologies, Inc. ($NSSC) | 9.4% | 8.9% | 10.7% | 14.5% | 12.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Know Labs Inc ($KNWN) | 0.4% | 0.0% | 2.3% | 4.4% | 57.5% |
| Applied DNA Sciences Inc ($APDN) | 16.1% | 3.1% | 6.8% | 1.3% | 55.1% |
| nLIGHT, Inc. ($LASR) | 4.0% | 4.0% | 6.1% | 7.7% | 10.9% |
| Vishay Precision Group, Inc. ($VPG) | 4.6% | 2.7% | 4.8% | 3.9% | 8.5% |
| LightPath Technologies, Inc. ($LPTH) | 6.5% | 7.8% | 7.7% | 5.7% | 7.0% |
| |
|---|
| Median (25 companies) | 2.1% | 1.6% | 2.3% | 2.0% | 2.8% |
|---|
| NAPCO Security Technologies, Inc. ($NSSC) | 0.8% | 1.6% | 1.4% | 1.9% | 1.6% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Zebra Technologies Corporation ($ZBRA) | 2.2% | 10.2% | 20.8% | 23.2% | 20.0% |
| Badger Meter, Inc. ($BMI) | 16.9% | 18.2% | 17.6% | 18.7% | 18.5% |
| Keysight Technologies Inc. ($KEYS) | 16.9% | 6.8% | -8.0% | 15.6% | 15.1% |
| National Instruments Corporation ($NATI) | 10.3% | 12.5% | 14.2% | 13.9% | 14.8% |
| Cognex Corporation ($CGNX) | 17.7% | 25.6% | 20.1% | 11.9% | 13.9% |
| |
|---|
| Median (26 companies) | 2.2% | 3.3% | 1.1% | 7.8% | 3.4% |
|---|
| NAPCO Security Technologies, Inc. ($NSSC) | - | - | - | 19.8% | 13.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Identiv, Inc. ($INVE) | - | - | 2.1x | 1.9x | 9.0x |
| Itron, Inc. ($ITRI) | 1.0x | 2.0x | 12.3x | 3.2x | 7.3x |
| Track Group Inc ($TRCK) | - | - | 12.2x | 5.2x | 3.5x |
| Trimble Inc. ($TRMB) | 1.1x | 1.3x | 3.4x | 2.9x | 2.2x |
| Luna Innovations Incorporated ($LUNA) | -6.9x | -108.1x | -19.9x | -2.9x | 1.8x |
| |
|---|
| Median (16 companies) | -0.9x | -0.9x | -1.0x | 0.5x | 0.7x |
|---|
| NAPCO Security Technologies, Inc. ($NSSC) | 0.1x | 0.0x | -0.5x | -0.5x | -0.6x |
