NAPCO Security Technologies, a leading manufacturer and designer of electronic security equipment and wireless communication devices, has recently discovered errors in its financial statements. The errors primarily affected the figures reported for the first three quarters of fiscal 2023.
In a statement released on Friday, NAPCO, based in Amityville, N.Y., explained that these errors were related to the calculation of cost of goods sold and inventory for each quarter. The costing procedures used failed to adequately account for fluctuations in the costs of various components.
As a result, NAPCO found that its inventories were overstated while the cost of goods sold was understated. Consequently, the company's gross profit, operating income, and net income for the first three quarters of fiscal 2023 were all overstated.
Upon restatement, NAPCO estimates that the net income for the first quarter will be $2.9 million, a significant decrease from the previously reported $6.4 million. Similarly, the second quarter is expected to have a restated net income of $3.7 million instead of $8.4 million, while the restated net income for the third quarter is projected to be $9.5 million compared to the previously reported $10.8 million.
Additionally, NAPCO provided preliminary estimates for the fourth quarter, which concluded on August 28th. The company anticipates sales of approximately $44.7 million during this period and estimates a net income ranging between $10 million and $11 million.