Shares of Napco Security Technologies (NSSC 0.26%) have plunged today, down by 15% as of 12:10 p.m. EDT, after the company reported fiscal fourth-quarter earnings. The results were mostly in line with Wall Street's expectations.
Revenue in the fiscal fourth quarter increased 9% to $29.6 million, slightly ahead of the $29.5 million in sales that analysts were modeling for. That translated into net income of $4.7 million, or $0.26 per share, which was exactly what investors were expecting. Operating income was $4.8 million and adjusted EBITDA was $5.2 million.
"Fiscal 2019 saw NAPCO reaching new heights in both sales and profitability," Chairman Richard Soloway said in a statement. "I am particularly pleased with our Company continuing its uninterrupted string of 20 consecutive quarters of year-over-year record sales levels, as well as surpassing the $100M annual sales mark and generating net income of over $12 million."
Napco is working to grow its recurring services business, with recurring service revenue jumping 44% during the quarter to $5 million. That puts recurring service revenue at an annual run rate of $20.4 million, the company notes. Napco launched its StarLink line of universal fire, intrusion alarm, and Internet of Things communicators during the fiscal fourth quarter.
"This past fiscal year recurring service revenue, propelled by the StarLink line, increased a solid 45%," Soloway added. The chairman said the company has "built a strong foundation for growth" and should be able to enjoy profit growth in fiscal 2020. Consensus estimates currently call for earnings per share of $0.91 in fiscal 2020, up from $0.66 per share in fiscal 2019.