Amityville, New York, November 2, 2026 / PRNewswire / -- One of the leading manufacturers and designers of high-tech electronic security equipment, wireless communication devices for intrusion and fire alarm systems, and related recurring service revenues, as well as a provider of campus security solutions, NAPCO Security Technologies, Inc. ( NASDAQ : NSSC ) today announced its financial results for the first quarter of the 2027 fiscal year. The results are reported in accordance with U.S. Generally Accepted Accounting Principles ( GAAP ), and have also been adjusted for certain items to be reported on a non- GAAP basis. Adjustments to GAAP and non- GAAP operating results can be found at the end of this press release.

First quarter of fiscal year 2027 compared to the first quarter of fiscal year 2026

• Net revenue increased by 1.7% to a record $50 million in the first fiscal quarter.
• Recurring service revenue ( RSR ) increased by 11.5% to a quarterly record of $26.1 million, with a gross margin exceeding 90%.
• Based on the recurring service revenue in October 2026, the expected annual operating rate corresponding to RSR is approximately 106 million US dollars.
• Device revenue decreased by 7.3% to $23.9 million.
• Gross profit margin rose to 58.7%, compared to 56.6% in the same period last year.
• Net profit increased by 6.9% year-on-year, reaching a record of $13 million in the first fiscal quarter.
• After dilution, net profit per share increased by 5.9% to $0.36.
• After adjustment, EBITDA increased by 3.8% to reach a record $15.5 million in the first fiscal quarter; after adjustment, the profit margin of EBITDA was 31.0%, compared to $14.9 million and a profit margin of 30.4% in the same period last year.
• The board of directors announced the distribution of a quarterly dividend of $0.17 per share, which will be paid to shareholders registered as of December 14, 2026, on January 4, 2027.

CEO and President Kevin Buchel stated: "Our performance in the first quarter of fiscal year 2027 reflects continued positive financial results. We achieved a record first-quarter revenue of $50 million, as well as a record adjusted EBITDA of $15.5 million, which was supported by recurring service income. Our RSR continues to generate a gross margin of over 90%, with an expected operating rate of approximately $106 million, an increase of $3 million from the operating rate we reported in July 2026."

"Although device revenue decreased year-over-year, the reason for the decline is that two lock distributors reduced their purchases this quarter. Importantly, the terminal sales of these two distributors increased year-over-year and also showed a significant improvement month-over-month. We believe that terminal sales are the most accurate indicator of terminal market demand, and these trends strengthen our confidence in the health of the business fundamentals."

"We are delighted to continue advancing our dividend plan. This quarter's dividend is $0.17 per share and will be paid to shareholders registered as of December 14, 2026, on January 4, 2027."

Telephone Conference Arrangement

Management will hold a teleconference at 11 a.m. Eastern Time on November 2, 2026. To participate in the meeting, please visit the Investor Relations section of the company's website: https :// investor.napcosecurity.com / events-presentations, or visit https :// app.webinar.net / ndlaQ1yQy3W. In addition, interested parties may also call (in the U.S.) 1-800-836-8184 or (internationally) 1-646-357-8785 to join the meeting. A replay of the webcast will be available in the Investor Relations section of the company's website.

Regarding NAPCO Security Technologies, Inc.

NAPCO Security Technologies, Inc is one of the leading manufacturers and designers in the fields of high-tech electronic security equipment, wireless communication services for intrusion and fire alarm systems, as well as campus security solutions. The company consists of four departments, including NAPCO and three wholly-owned subsidiaries: Alarm Lock, Continental Instruments, and Marks USA. Headquartered in Amityville, New York, its products are installed by tens of thousands of security professionals around the world and are used in commercial, industrial, institutional, residential, and government settings. NAPCO products are known for their innovation, technical excellence, and reliability, which gives the company growth potential in the billion-dollar and rapidly expanding electronic security market. For more information, please visit the company's website: http:// www.napcosecurity.com.

Safe Harbor Statement

This press release contains forward-looking statements that are based on management's judgment, beliefs, current trends, and expectations regarding product performance. These statements reflect current expectations, estimates, projections, and outlooks for future results. Such forward-looking statements include, but are not limited to: statements regarding supply chain challenges and their development; growth in recurring service revenue and annual operating rates; the strength of the balance sheet; expectations for future performance; the introduction of new access control and locking products; opportunities in campus security products; opportunities in fire alarm products; and the ability to execute the company's business strategy.

Due to certain factors, actual results, performance, or achievements may differ significantly from those anticipated in these forward-looking statements. These factors include the risk factors listed in the documents submitted by the company to the U.S. Securities and Exchange Commission, such as the 10-K annual reports and 10-Q quarterly reports. Other unknown or unpredictable factors, or fundamental assumptions that later prove to be incorrect, may also lead to significant differences between actual results and forward-looking statements. Although the company believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results, levels of activity, performance, or achievements. Investors should not rely excessively on these forward-looking statements. Unless otherwise stated, all information in this press release is as of today, and the company has no obligation to update such information except as required by applicable laws.

Non-GAAP financial indicators

This press release contains several indicators that are not marked with GAAP, including non-GAAP operating profit, non-GAAP net profit, non-GAAP earnings per share (diluted), non-GAAP net profit margin, adjusted EBITDA, adjusted earnings per share EBITDA (diluted), adjusted earnings per share EBITDA profit margin, free cash flow, and free cash flow profit margin. The company defines non-GAAP net profit as GAAP net profit plus litigation settlement costs. The company defines adjusted EBITDA as GAAP net profit, plus income tax expense, less net interest income (expense), stock-based compensation, non-recurring legal expenses, litigation settlement costs, and depreciation and amortization expenses. The non-GAAP net profit margin is calculated by dividing non-GAAP net profit by revenue. The adjusted EBITDA profit margin is calculated by dividing adjusted EBITDA by revenue. The company defines free cash flow ( FCF ) as the net cash provided by operating activities minus capital expenditures, and the FCF profit margin is calculated by dividing FCF by revenue.

The company stated that providing these non-GAAP indicators is aimed at enhancing users' overall understanding of the company's financial performance. By excluding these items, the non-GAAP results can provide management and investors with information that helps to assess the core operational performance of NAPCO, and facilitate a consistent comparison of operating results across periods. However, the use of these non-GAAP financial indicators by the company also has certain limitations, as these indicators may not be directly comparable to similar indicators disclosed by other companies. For example, terms such as "adjusted EBITDA" used in this press release do not have a standardized definition. Other companies may use indicators with the same or similar names, but the items excluded may differ, thus not necessarily providing investors with a comparable perspective on performance. The above information is not intended to replace the corresponding financial indicators prepared in accordance with generally accepted accounting principles. The company encourages investors to refer to the adjustments made to the GAAP and non-GAAP financial indicators listed above.

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