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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): May 14, 1998
NAPCO SECURITY SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 0-10004 11-2277818
(State of other jurisdiction (Commission (I.R.S.
of incorporation File Number) Employer
Identification No.)
333 BAYVIEW AVE.
AMITYVILLE, NY 11701
(Address of principal executive offices, including Zip Code)
Registrant's telephone number, including area code: (516) 842-9400
NOT APPLICABLE
(Former name or former address, if changed since last report.)
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ITEM 5. OTHER EVENTS.
In May 1998 the Company announced that it has reached an agreement in
principle with Napco's co-founder Kenneth Rosenberg to repurchase all of Mr.
Rosenberg's 889,576 shares of Napco common stock for $5.00 per share. The
Company anticipates a Closing to occur shortly, at which time $2.5 million of
the purchase price will be paid. The balance will be paid over a 4-year period.
The portion of the purchase price payable at Closing will be financed by the
Company's primary bank.
At the Closing, Mr. Rosenberg, who had taken a less active role in the
Company's business recently, will retire as president and as director of the
Company, but will be available to consult with the Company pursuant to a
consulting agreement. The agreement also contemplates that Mr. Rosenberg will
not compete with the Company for a ten year period.
The foregoing was disclosed in the Company's Form 10-Q filed May 14,
1998.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED.
Not applicable.
(b) PRO FORMA FINANCIAL INFORMATION.
Not applicable.
(c) EXHIBITS.
Exhibit 99.1 Press Release of NAPCO SECURITY SYSTEMS, INC.
dated May 15, 1998.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NAPCO SECURITY SYSTEMS, INC.
Date: May 15, 1997 By /s/ Richard Soloway
Richard Soloway
Chairman and Co-Chief
Executive Officer
By /s/ Kenneth Rosenberg
Kenneth Rosenberg
President and Co-Chief
Executive Officer
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Exhibit 99.1
FOR IMMEDIATE RELEASE
NAPCO SECURITY SYSTEMS, INC. ANNOUNCES Q3 SALES/EARNINGS AND AGREEMENT TO
REPURCHASE COMMON STOCK
Amityville, New York, May 15, 1998 - Napco Security Systems, Inc. (NSSC -
NASDAQ) announced today the Company's results for both sales and earnings for
the nine months ended March 30, 1998.
Sales for the nine months ended March 31, 1998 decreased 6% to $35,687,000 as
compared to $38,067,000 for the same period a year ago. Net income decreased to
$709,000 or $.16 per share for the nine months ended March 31, 1998 from
$1,121,000 or $.26 per share for the same period a year ago. For the three
months ended March 31, 1998 sales decreased 11% to $12,023,000 from $13,583,000
a year ago. Net income decreased to $121,000 or $.03 per share for the three
months ended March 31,1998 as compared to $215,000 or $.05 per share for the
same quarter a year ago. These decreases were primarily due to the significant
reduction in sales due to a major customer as disclosed in the Company's most
recent Form 10-K and annual report. Also, because of improved delivery response
to the Company's customers, the sales orders during the quarter are closer to a
"just in time" basis even though the "sell through" of product to the installer
has increased. The effects of these factors were partially offset by an increase
in the Company's international sales. During the second quarter, the Company
announced that it had reorganized its Sales and Marketing management team.
In addition, in May 1998, the Company reached an agreement in principle with
NAPCO's co-founder Kenneth Rosenberg to repurchase all of Mr. Rosenberg's
889,576 NAPCO shares for $5 per share. The Company anticipates a Closing to
occur shortly, at which time $2.5 million of the purchase price will be paid.
The balance will be paid over a 4-year period. The portion of the purchase price
payable at Closing will be financed by the Company's primary bank.
At the Closing, Mr. Rosenberg, who had taken a less active role in the Company's
business recently, will retire as president and as director of the Company, but
will be available to consult with the Company pursuant to a consulting
agreement. The agreement also contemplates that Mr. Rosenberg will not compete
with the Company for a ten-year period.
Commenting on the proposed transaction, Richard Soloway, the Company's Chairman,
stated that "the repurchase will reduce the
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number of shares outstanding by about 20% which should have a positive effect on
the Company's earnings per share." Mr. Soloway added that the Company does not
have any immediate plans to replace Mr. Rosenberg, and that he would fill the
role of Chairman, President and Chief Executive Officer, and that Kevin S.
Buchel, the Company's Senior Vice President of Operations and Finance, would be
added to the board to fill the vacancy that will be created by Mr. Rosenberg's
resignation.
Founded in 1969, Napco Security Systems, Inc. is one of the Nation's leading
manufacturers of electronic security equipment. The Company's products are used
in residential, commercial, institutional and industrial installations.
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