| Lower
sales send Napco shares down - Company hopes
improved focus on Europe will help Shares
of Napco Security Systems plunged 14.7
percent yesterday after the company said
revenue and profits declined in its second
fiscal quarter because of lower sales.
Amityville-based Napco said it earned
$1.1 million in the quarter that ended
Dec. 31, compared with net income of $1.5
million in the same period last year.
Sales in the quarter were $16.1 million,
a 6 percent decline from the second quarter
of last year. On a per-share basis, Napco
said it earned 6 cents, down from 7 cents
in the similar period last year.
Napco shares declined sharply in September
after the company reported fiscal 2006
net earnings of $6.12 million, or 30 cents
a share. While that was up from $5.63
million, or 28 cents a share in fiscal
2005, analysts had expected earnings of
37 cents for 2006.
The stock fell 17 percent after the September
earnings release. After yesterday's financial
results were released, Napco shares fell
88 cents to close at $5.12.
Richard Soloway, Napco's chairman and
president, said in an announcement that
"gross profit was lower [in the latest
quarter] as a result of lower sales."
Napco also said net sales and net income
for the three- and six-month periods had
declined because of lower sales in the
company's European markets. Soloway said
the company has "taken several steps
that we believe will lead to improved"
sales there. The company's European sales
force has been realigned "to get
better penetration and increased presence
in these markets."
Howard Rosencrans, who follows the residential
and commercial security industry for Capital
Growth Financial, said Napco's recent
quarters had been "uninspiring."
"The weakness in the stock reflects
a shortfall" in recent results, he
said. "The company had a weak mix
of business and gross margins fell precipitously."
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