Napco Security Technologies, Inc. has presented record sales in its financial results for its third fiscal quarter ended March 31, 2020. The company announced that net sales for the quarter increased 4% to a third quarter record $26.2 million as compared to $25.1 million for the same quarter last year. Net sales for the nine months increased 7% to $78.4 million as compared to $73.3 million for the same period last year.
Recurring service revenue for the quarter increased 37% to $6.2 million as compared to $4.5 million for the same quarter last year. Recurring service revenue for the nine months increased 39% to $17.4 million as compared to $12.5 million for the same period last year. Recurring service revenue now has a prospective annual run rate of $25.4 million based on March 2020 recurring revenues. Net income for the quarter increased 16% to a third quarter record of $3.6 million from $3.1 million a year ago.
Richard Soloway, Chairman and President, commented, “We are encouraged by our Q3 record sales and profit performance, despite our having to navigate through the headwinds created by COVID-19. Importantly, since over 80% of our sales are conducted in the commercial security sector and thousands of our dealers are deemed an “essential service” during the pandemic, this provided our company with some level of insulation to the fallout the economy is experiencing. Also, a large majority of our recurring service, subscription-based income stream, is comprised of non-discretionary, commercial fire and intrusion alarm communication, largely mandated by local code and laws. Going forward, Napco should be well positioned for growth, as we manage the challenges wrought by COVID-19.
In addition to its successes in the security and fire markets, NAPCO plays a role in the vital healthcare vertical market through its Alarm Lock, Marks and Continental Access Control Divisions. Alarm Lock access control locks and Marks exit devices, push/pull locks, with antimicrobial finishes are installed in thousands of hospitals across the U.S. Alarm Lock markets the DL-2700, which is a technologically advanced lock, with all of the advanced features of the most sophisticated access control systems, all encased in a portable, easily-installed lock. At the end of March, the U.S. Army Corp of Engineers was outfitting a temporary field hospital in the McCormick Place Convention Center in Chicago and we are honoured that they selected our DL-2700 locks to provide access control at that location.”