NSSCNAPCO SECURITY TECHNOLOGIES, INC

Communications Equipment, NEC

Revenue: $202M; 11% YoY
Operating margin: 22.6%; 11% YoY
EBITDA: $48M; 1.4% YoY
Market cap: $1.4B
Employees: 1,049; $193K revenue each
Net debt / EBITDA: -2.6×; −$122M net debt
AI in 10-K: 2.8; mentions per 10K words

Takeover score 5 of 13

Fixable underperformance 1 of 7

TSR below peersNo
0 of 5 years
3+ of last 5 years
High CEO pay despite TSRNo
$2M median
Median CEO pay ≥ $15M while TSR trails
Earnings not backed by cashNo
142% of net income
Cash flow under 80% of net income
Dilutive SBCNo
0% of revenue
Over 10% of revenue
Payouts exceed cash flowNo
93% of cash flow
Buybacks + dividends over cash flow
Goodwill-heavyNo
—
Over 40% of assets
Shareholder dissentYes
76% lowest support
Any vote under 80% support

Buyer economics 3 of 4

Low revenue per employeeYes
$193K · 15th pct
Bottom quartile of its SIC industry
Quiet on AINo
2.8 per 10K words · 68th pct
Bottom quartile of AI mentions in 10-Ks
Net cashYes
Net cash · 2.6× EBITDA
More cash than debt, positive EBITDA
Buyout-sizedYes
$1.4B market cap
Market cap $500M–$5B

Catalysts 1 of 2

Active 13DNo
0 filings
Active-intent 13D in 18 months
Net insider sellingYes
−$34M net
Net sales over $10M in 12 months

Financials

Metric	FY2022	FY2023	FY2024	FY2025	FY2026	YoY	Trend
Revenue	$144M	$170M	$189M	$182M	$202M	11%
Operating income	$18M	$30M	$54M	$46M	$46M	1.3%
Net income	$20M	$27M	$50M	$43M	$43M	0.9%
Operating cash flow	$8M	$25M	$45M	$54M	$61M	14%
Capex	$1M	$3M	$2M	$2M	$2M	9.4%
Stock-based comp	$2M	$1M	$2M	$2M	$989K	35%
Buybacks	—	—	—	$37M	—
Dividends	—	$2M	$13M	$14M	$20M	49%

Deal filings

None.

13D filers

Filed	Filer	Form	Stake	Intent
Mar 12, 2024	SOLOWAY RICHARD	SC 13D/A	4.8%	Passive
Feb 13, 2023	SOLOWAY RICHARD	SC 13D/A	11.0%	Passive
Nov 17, 2022	SOLOWAY RICHARD	SC 13D/A	16.5%	Passive
Dec 28, 2020	SOLOWAY RICHARD	SC 13D	20.0%	Passive

Insider trading

Open-market buys, 12 mo: $0 · 0
Open-market sells, 12 mo: $34M · 8
Net: −$34M

Pay vs performance

Year	CEO total comp	Comp actually paid	TSR (indexed)	Peer TSR
FY2026	$1M	$1M	213	181
FY2025	$2M	$2M	167	140
FY2024	$2M	$2M	289	122
FY2023	$1M	$2M	192	95
FY2022	$2M	$3M	113	76