NAPCO Security Technologies (NSSC) presents a balance sheet that is strongly asset-light and cash-heavy, producing a positive liquidation recovery to equity under the lens applied here. Total assets of $222.0M are dominated by current assets of $192.8M, of which cash and equivalents alone total $114.4M and short-term marketable securities (US Treasuries) add $10.5M — both at or near 100% recovery. Accounts receivable of $28.5M with a negligible allowance of $27K haircutted at 90-95% recovers approximately $25.7M-$27.1M. Inventory of $33.4M current plus $10.0M noncurrent (total $43.4M) at a 60% haircut recovers approximately $26.0M. PP&E net book value is $9.3M ($57.4M gross against $48.1M accumulated depreciation); at 50-70% recovery this yields approximately $4.7M-$6.5M. Intangibles of $3.1M net are zeroed. Operating lease ROU asset of $5.0M is zeroed as a liquidation asset. Total liability stack is $44.2M, including current liabilities of $39.0M dominated by a $16.0M litigation settlement reserve (LitigationReserve), accounts payable of $5.8M, accrued liabilities of $8.0M, accrued compensation of $3.8M, and dividends payable of $5.4M. Noncurrent liabilities are minimal: operating lease liability noncurrent of $5.2M stays at face value in wind-up. Gross estimated liquidation recovery on assets (mid-case) approximates $180M-$185M against $44.2M in liabilities at face, implying positive recovery to equity of approximately $136M-$141M. This is well above MFFAIS's CLV of $70.2M (cash-only lens) and aligns directionally with the OLV of $132.1M. The dominant balance sheet event this quarter is the recognition of a $16.0M litigation settlement reserve (Zornberg v. NAPCO), which flipped Q3 standalone net income to a loss of ($0.4M) from $10.1M in the prior year quarter. The settlement is confirmed in Note 15 as a subsequent event at $16.0M net of any insurance reimbursements, now accrued on balance sheet. Cash and combined liquid balances increased to $125.0M by March 31, 2026, up from $104.9M at the prior filing date (December 31, 2025), reflecting strong operating cash generation of $43.5M YTD. No debt outstanding on the $20.0M revolving credit facility. The 99-year Dominican Republic land lease at approximately $340K annually is a minor operating commitment. Filing discusses tariff exposure and IEEPA refund potential in MD&A but does not separately tag either in XBRL.
▼ Community Notes