NATIONAL PRESTO INDUSTRIES INC
For the period ended Mar 30, 2025. Filed May 9, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 30, 2025 · Filed May 9, 2025
NPK$142.55+1.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-29; filed 2024-11-08.
0001437749-24-034199
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2025-03-30; filed 2025-05-09.
0001437749-25-015772
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 40 previous paragraphs and 24 current paragraphs.
8 unchanged; 13 reworded; 3 added; 16 removed; 3 previous and 0 current paragraphs rearranged.
Tables are not compared: 0 previous and 0 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (3)
Current report
As of March 30, 2025, 191 employees of Amron, or 17% of the total workforce of the Company and its subsidiaries are members of the United Steel Workers union. The most recent contract between Amron and the union expired on February 25, 2025. Tentative agreements had been reached between Amron and the union negotiation committee to extend the union contract through February 28, 2030, but were voted down by union membership on February 13, 2025 and March 14, 2025. On May 5, 2025 a new agreement was reached. The membership ratification vote is scheduled for May 23, 2025. The Company cannot predict the outcome of that vote.
Current report
Comparison of First Quarter 2025 and 2024
Current report
Selling and general expenses for the Housewares/Small Appliance segment increased $737,000, primarily due to the increase in legal and professional costs of $253,000, the absence of the favorable adjustment to the reserve for bad debts of $285,000 from the prior year, and an increase health care cost accruals of $202,000. Selling and general expenses for the Defense segment increased $832,000, primarily attributed to the increases in personnel costs of $609,000, legal and professional costs of $163,000, and repairs and maintenance of $107,000. Selling and general expenses for the Safety segment decreased $104,000, primarily reflecting reduced personnel costs.
Removed paragraphs (16)
Previous report
Health Epidemics, Pandemics, or Similar Public Health Crises Risks:
Previous report
The Company faces a wide variety of risks related to health epidemics, pandemics and similar outbreaks, especially of infectious diseases. A global health crisis, COVID-19 pandemic contributed to business slowdowns or shutdowns, labor shortages, supply chain challenges, changes in government spending and requirements, regulatory challenges, changes in demand for products and services, inflationary pressures and market volatility. If a health epidemic, pandemic or similar outbreak were to occur or worsen, the Company will likely experience broad and varied impacts, including potentially labor shortages, supply chain disruptions, inflationary pressures and increased costs (which may or may not be fully recoverable or insured), contracting, production and/or distribution delays, market volatility and other financial impacts. If any or all of these items were to occur, the Company could experience material adverse impacts on its business, financial condition, and results of operations and/or cash flows.
Previous report
Comparison of Third Quarter 2024 and 2023
Previous report
Selling and general expenses for the Housewares/Small Appliance and the Defense segment were relatively flat. Selling and general expenses for the Safety segment decreased $339,000, primarily reflecting the decreased personnel costs of $260,000 and decreased legal and professional costs of $69,000.
Previous report
Comparison of First Nine Months 2024 and 2023
Previous report
On a consolidated basis, net sales increased by $11,040,000 (5%), gross profit decreased by $1,024,000 (2%), selling and general expenses decreased by $1,027,000 (4%), and amortization decreased by $120,000 (10%).** **Other income decreased by $792,000 (14%), earnings before provision for income taxes decreased by $669,000 (3%), and net earnings decreased by $672,000 (3%). Details concerning these changes can be found in the comments by segment below.
Previous report
Housewares/Small Appliance net sales increased by $3,217,000 from $61,533,000 to $64,750,000, or 5%, primarily attributable to the increase in units shipped, approximately one-fourth of which was offset by decreases in pricing.** **Defense net sales increased by $8,086,000 from $179,874,000 to $187,960,000 or 5%, primarily reflecting an increase in shipments from the segment's backlog.
Previous report
Housewares/Small Appliance gross profit decreased $1,248,000 from $12,814,000 to $11,566,000, primarily reflecting the sales increase mentioned above, offset by increases in the cost of ocean shipping, higher repair costs at its main facility, and changes in various accruals. Defense gross profit increased $1,158,000 from $36,992,000 to $38,150,000, primarily reflecting the increase in sales mentioned above, impacted by changes to the product mix, and improved efficiencies. Due to the startup nature of the businesses in the Safety segment and the resulting limited revenues, gross margins were negative in both years.
Previous report
Selling and general expenses for the Housewares/Small Appliance decreased $657,000, primarily reflecting decreased accruals relating to legal and professional costs of $518,000 and bad debts of $285,000, offset by an increase in software expense of $88,000. Selling and general expenses for the Defense segment increased $638,000, primarily reflecting increased personnel and recruiting costs of $613,000, and the absence of a prior year adjustment of $313,000 related to the purchase of Woodlawn Manufacturing LTD., which was acquired on October 26, 2022. These were partially offset by the absences of prior year legal settlement costs of $288,000, and one-time insurance related costs of $250,000. Selling and general expenses for the Safety segment decreased $1,008,000, primarily reflecting the decreased personnel costs of $655,000 and decreased legal and professional costs of $312,000.
Previous report
Earnings before provision for income taxes decreased $669,000 from $27,240,000 to $26,571,000. The provision for income taxes increased slightly from $5,840,000 to $5,843,000. The effective income tax rate was 22% and 21% for the first nine months ended September 29, 2024 and October 1, 2023, respectively. Net earnings decreased $672,000 from $21,400,000 to $20,728,000, or 3%.
Previous report
Inventories
Previous report
New Housewares/Small Appliance and Safety product introductions are an important part of the Company’s sales. In the case of the Housewares/Small Appliance segment, the introductions are important to offset the morbidity rate of other products and/or the effect of lowered acceptance of seasonal products due to weather conditions. New products entail unusual risks and have occasionally, in the past, resulted in losses related to obsolete or excess inventory as a result of low or diminishing demand for a product. The Housewares/Small Appliance segment recorded impairments related to such losses of $1,216,000 during the year ended 2023. There were no other obsolescence issues that had a material effect during the nine months ended September 29, 2024. In the future should product demand issues arise, the Company may incur losses related to the obsolescence of the related inventory. Inventory risk for the Company’s Defense segment is not deemed to be significant, as products are largely built pursuant to customers’ specific orders.
Previous report
Self-Insured Product Liability and Health Insurance
Previous report
The Company is subject to product liability claims in the normal course of business and is self-insured for health care costs, although it does carry stop loss and other insurance to cover claims once a health care claim reaches a specified threshold. The Company’s insurance coverage varies from policy year to policy year, and there are typically limits on all types of insurance coverage, which also vary from policy year to policy year. Accordingly, the Company records an accrual for known claims and incurred but not reported claims, including an estimate for related legal fees in the Company’s Consolidated Financial Statements. The Company utilizes historical trends and other analysis to assist in determining the appropriate accrual. There are no known claims that would have a material adverse impact on the Company beyond the reserve levels that have been accrued and recorded on the Company’s books and records. An increase in the number or magnitude of claims could have a material impact on the Company’s financial condition and results of operations.
Previous report
Revenues
Previous report
Sales are recorded net of discounts and returns for the Housewares/Small Appliance segment. Sales discounts and returns are key aspects of variable consideration, which is a significant estimate utilized in revenue recognition. Sales returns pertain primarily to warranty returns, returns of seasonal items, and returns of those newly introduced products sold with a return privilege. The calculation of warranty returns is based in large part on historical data, while seasonal and new product returns are primarily developed using customer provided information.
Reworded paragraphs (13)
Previous wording
Forward-looking statements in this Management’s Discussion and Analysis of Financial Condition and Results of Operations, elsewhere in this Form 10-Q, in the Company’s 2023 Annual Report to Stockholders, in the Proxy Statement for the annual meeting held on May 21, 2024, and in the Company’s press releases and oral statements made with the approval of an authorized executive officer are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. There are certain important factors that could cause results to differ materially from those anticipated by some of the statements made herein. Investors are cautioned that all forward-looking statements involve risks and uncertainty. In addition to the factors discussed herein and in the Notes to Consolidated Financial Statements, among the other factors that could cause actual results to differ materially are the following: consumer spending and debt levels; interest rates; continuity of relationships with and purchases by major customers; product mix; the benefit and risk of business acquisitions; competitive pressure on sales and pricing; development and market acceptance of new products; increases in material, freight/shipping, tariffs, or production cost which cannot be recouped in product pricing; delays or interruptions in shipping or production; shipment of defective product which could result in product liability claims or recalls; work or labor disruptions stemming from a unionized work force; changes in government requirements, military spending, and funding of government contracts, which could result in, among other things, the modification or termination of existing contracts; dependence on subcontractors or vendors to perform as required by contract; the ability of startup businesses to ultimately have the potential to be successful; the efficient start-up and utilization of capital equipment investments; political actions of federal and state governments which could have an impact on everything from the value of the U.S dollar vis-à-vis other currencies to the availability of affordable labor and energy; and security breaches and disruptions to the Company’s information technology systems. Additional information concerning these and other factors is contained in the Company's Securities and Exchange Commission filings.
Current wording
Forward-looking statements in this Management’s Discussion and Analysis of Financial Condition and Results of Operations, elsewhere in this Form 10-Q, in the Company’s 2024 Annual Report to Stockholders, in the Proxy Statement for the annual meeting to be held on May 20, 2025, and in the Company’s press releases and oral statements made with the approval of an authorized executive officer are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. There are certain important factors that could cause results to differ materially from those anticipated by some of the statements made herein. Investors are cautioned that all forward-looking statements involve risks and uncertainty. In addition to the factors discussed herein and in the Notes to Consolidated Financial Statements, among the other factors that could cause actual results to differ materially are the following: consumer spending and debt levels; interest rates; continuity of relationships with and purchases by major customers; product mix; the benefit and risk of business acquisitions; competitive pressure on sales and pricing; development and market acceptance of new products; increases in material, freight/shipping, tariffs, or production cost which cannot be recouped in product pricing; delays or interruptions in shipping or production; shipment of defective product which could result in product liability claims or recalls; work or labor disruptions stemming from a unionized work force; changes in government requirements, military spending, and funding of government contracts, which could result in, among other things, the modification or termination of existing contracts; dependence on subcontractors or vendors to perform as required by contract; the ability of startup businesses to ultimately have the potential to be successful; the efficient start-up and utilization of capital equipment investments; political actions of federal and state governments which could have an impact on everything from the value of the U.S dollar vis-à-vis other currencies to the availability of affordable labor and energy; and security breaches and disruptions to the Company’s information technology systems. Additional information concerning these and other factors is contained in the Company's Securities and Exchange Commission filings.
Previous wording
On a consolidated basis, net sales increased by $8,682,000 (10%), gross profit increased by $1,824,000 (12%), selling and general expenses decreased by $283,000 (4%), and amortization decreased by $48,000 (11%). Other income decreased by $625,000 (35%), earnings before provision for income taxes increased by $1,530,000 (17%), and net earnings increased by $1,064,000 (15%). Details concerning these changes can be found in the comments by segment below.
Current wording
On a consolidated basis, net sales increased by $26,986,000 (35%), gross profit increased by $4,258,000 (31%), selling and general expenses increased by $1,465,000 (20%), and amortization was consistent. Other income decreased by $1,337,000 (64%), earnings before provision for income taxes increased by $1,456,000 (17%), and net earnings increased by $1,042,000 (16%). Details concerning these changes can be found in the comments by segment below.
Previous wording
Housewares/Small Appliance net sales increased by $3,271,000 from $21,545,000 to $24,816,000, or 15%, which was primarily attributable to an increase in units shipped. Defense net sales increased by $5,483,000 from $61,311,000 to $66,794,000 or 9%, primarily reflecting an increase in shipments from the segment's backlog.
Current wording
Housewares/Small Appliance net sales increased by $659,000 from $21,267,000 to $21,926,000, or 3%, which was primarily attributable to an increase in units shipped. Defense net sales increased by $25,898,000 from $55,040,000 to $80,938,000 or 47%, primarily reflecting an increase in shipments from the segment's backlog.
Previous wording
Housewares/Small Appliance gross profit increased $1,077,000 from $3,920,000 to $4,997,000, primarily reflecting the increase in sales mentioned above, partially offset by increases in the cost of ocean shipping, as well as higher repair costs at its main facility. Defense gross profit increased $707,000 from $12,740,000 to $13,447,000, primarily reflecting the increase in sales mentioned above, impacted by changes to the product mix, and improved efficiencies. Due to the startup nature of the businesses in the Safety segment and the resulting limited revenues, gross margins were negative in both years.
Current wording
Housewares/Small Appliance gross profit decreased $1,648,000 from $3,108,000 to $1,460,000, primarily reflecting the increase in sales mentioned above, offset by a less favorable mix of products and higher material costs. The Trump administration's tariffs that went into effect on goods deemed to have been shipped from the Orient after January 31, 2025 also unfavorably affected earnings. Those tariffs are treated as period costs at the time they are incurred. Defense gross profit increased $5,706,000 from $11,924,000 to $17,630,000, primarily reflecting the increase in sales mentioned above. Due to the startup nature of the businesses in the Safety segment and the resulting limited revenues, gross margins were negative in both years.
Previous wording
The $625,000 decrease in other income was primarily attributable to a decrease in interest income on marketable securities largely stemming from a lower average daily investment.
Current wording
The $1,337,000 decrease in other income was primarily attributable to a decrease in interest income on marketable securities largely stemming from a lower average daily investment as a result of larger investments in inventory required to support augmented defense segment awards.
Previous wording
Earnings before provision for income taxes increased $1,530,000 from $8,843,000 to $10,373,000. The provision for income taxes increased from $1,824,000 to $2,290,000. The effective income tax rate was 22% and 21% for the quarters ended September 29, 2024 and October 1, 2023, respectively. Net earnings increased $1,064,000 from $7,019,000 to $8,083,000, or 15%.
Current wording
Earnings before provision for income taxes increased $1,456,000 from $8,352,000 to $9,808,000. The provision for income taxes increased from $1,784,000 to $2,198,000, which resulted in an effective income tax rate of 22% and 21% for the quarters ended March 30, 2025 and March 31, 2024, respectively. Net earnings increased $1,042,000 from $6,568,000 to $7,610,000, or 16%.
Previous wording
Net cash used in operating activities was $45,793,000 during the first nine months of 2024 compared to $28,790,000 provided by operating activities during the first nine months of 2023. The principal factors contributing to the change can be found in the changes in the components of working capital within the Consolidated Statements of Cash Flows. Of particular note during the first nine months of 2024 were net earnings of $20,728,000, which included non-cash depreciation and amortization expenses of $3,877,000. Contributing to the cash used were increases in inventory levels, as well as a decrease in payable and accrual levels. These were partially offset by decreases in accounts receivable levels stemming from cash collections on customer sales and deposits made to vendors included in other current assets. Of particular note during the first nine months of 2023 were net earnings of $21,400,000, which included non-cash depreciation and amortization expenses of $4,144,000. Contributing to the cash provided were decreases in accounts receivable levels stemming from cash collections on customer sales and deposits made to vendors included in other assets and current assets, and increases in payable and accrual levels, partially offset by increases in inventory levels.
Current wording
Net cash provided by operating activities was $12,460,000 during the first three months of 2025 compared to $5,555,000 during the first three months of 2024. The principal factors contributing to the change can be found in the changes in the components of working capital within the Consolidated Statements of Cash Flows. Of particular note during the first three months of 2025 were net earnings of $7,610,000, which included non-cash depreciation and amortization expenses of $1,220,000. Contributing to the cash provided were a decrease in accounts receivable levels stemming from cash collections on customer sales and increases in payable and accrual levels. These were partially offset by increases in inventory levels and deposits made to vendors included in other current assets. Of particular note during the first three months of 2024 were net earnings of $6,568,000, which included non-cash depreciation and amortization expenses of $1,474,000. Contributing to the cash provided were decreases in accounts receivable levels stemming from cash collections on customer sales, offset by increases in inventory levels, as well as prepayments included in other current assets.
Previous wording
Net cash provided by investing activities was $5,981,000 for the first nine months of 2024, and net cash used in investing activities was $1,134,000 for the first nine months of 2023. Significant factors contributing to the change were net maturities and sales of marketable securities of $9,624,000 in 2024, in contrast with net marketable securities purchased of $68,000 in 2023; and purchases of property, plant and equipment of $3,873,000 in 2024, as opposed to $1,693,000 in 2023.
Current wording
Net cash used in investing activities was $22,083,000 for the first three months of 2025, and net cash provided by investing activities was $1,868,000 for the first three months of 2024. Significant factors contributing to the change were net maturities and sales of marketable securities of $497,000 in 2025, and $2,083,000 in 2024; and purchases of property, plant and equipment of $22,983,000 in 2025, as opposed to $389,000 in 2024.
Previous wording
Net cash used in financing activities was $31,516,000 and $27,956,000, for the first nine months of 2024 and 2023, respectively, and primarily relates to the annual dividend payments. The extra dividend increased from $3.00 per share in 2023 to $3.50 per share in 2024. Cash flows for both nine month periods also reflected the proceeds from the sale of treasury stock to a Company sponsored retirement plan. In addition, the Company drew on and repaid its line of credit during 2024, incurring interest expense of $2,000.
Current wording
Net cash used in financing activities was $7,022,000 and $31,534,000, for the first three months of 2025 and 2024, respectively, and primarily relates to the annual dividend payments. There was no extra dividend payment during 2025. In 2024, the extra dividend was $3.50 per share. Cash flows for both three month periods also reflected the proceeds from the sale of treasury stock to a Company sponsored retirement plan. In addition, the Company drew on and repaid its line of credit during 2025, incurring interest expense of $4,000.
Previous wording
Working capital decreased by $9,608,000 during the first nine months of 2024 to $278,483,000 at September 29, 2024 for the reasons stated above. The Company's current ratio was 5.0 to 1.0 at both September 29, 2024 and December 31, 2023.
Current wording
Working capital decreased by $20,770,000 during the first three months of 2025 to $271,455,000 at March 30, 2025 for the reasons stated above. The Company's current ratio was 4.6 to 1.0 and 4.9 to 1.0 at March 30, 2025 and December 31, 2024, respectively.
Previous wording
The Company has substantial liquidity in the form of cash and cash equivalents and marketable securities to meet all of its anticipated capital requirements, to make dividend payments, and to fund future growth through acquisitions and other means. The bulk of its marketable securities are invested in certificates of deposit and the variable rate demand notes described in Item 3 of Part I of this quarterly report on Form 10-Q. The Company intends to continue its investment strategy of safety and short-term liquidity throughout its investment holdings.
Current wording
The Company has sufficient liquidity in the form of operating activities cash flows and a credit facility to meet all of its anticipated capital requirements, to make dividend payments, and to fund future growth through acquisitions and other means.
Previous wording
The Company's critical accounting policies are those that materially affect its Consolidated Financial Statements and involve difficult, subjective, or complex judgments by management. The Company reviewed the development and selection of the critical accounting policies and believes the following are the most critical accounting policies that could have an effect on the Company's reported results as they involve the use of significant estimates and assumptions as described above. These critical accounting policies and estimates have been reviewed with the Audit Committee of the Board of Directors. See Note A - Summary of Significant Accounting Policies to the Consolidated Financial Statements included in Part II, Item 8 of the Annual Report on Form 10-K for the year-ended December 31, 2023 filed on March 15, 2024 for more detailed information regarding the Company's critical accounting policies.
Current wording
The Company's critical accounting policies are those that materially affect its Consolidated Financial Statements and involve difficult, subjective, or complex judgments by management. The Company reviewed the development and selection of the critical accounting policies and believes the following is the most critical accounting policy that could have an effect on the Company's reported results as it involves the use of significant estimates and assumptions as described above. This critical accounting policy and estimate has been reviewed with the Audit Committee of the Board of Directors. See Note A - Summary of Significant Accounting Policies to the Consolidated Financial Statements included in Part II, Item 8 of the Annual Report on Form 10-K for the year-ended December 31, 2024 filed on March 14, 2025 for more detailed information regarding the Company's critical accounting policies.
Previous wording
The Company recognizes the excess cost of acquired entities over the net amount assigned to the fair value of assets acquired and liabilities assumed as goodwill. Goodwill is tested for impairment on an annual basis at the start of the fourth quarter and between annual tests whenever an impairment is indicated. The impairment test for goodwill requires the determination of fair value of the reporting unit. The Company uses multiples of earnings before interest, taxes, depreciation, and amortization ("EBITDA"), sales, and discounted cash flow models, which are described above, to determine the reporting unit's fair value, as appropriate.
Current wording
The Company recognizes the excess cost of acquired entities over the net amount assigned to the fair value of assets acquired and liabilities assumed as goodwill. Goodwill is tested for impairment on an annual basis at the start of the fourth quarter and between annual tests whenever an impairment is indicated. The impairment test for goodwill requires the determination of fair value of the reporting unit. The Company uses multiples of earnings before interest, taxes, depreciation, and amortization ("EBITDA"), sales, and discounted cash flow models, which are described above, to determine the reporting unit's fair value, as appropriate. The Company also uses qualitative analysis to assess goodwill impairment.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
Readers are directed to Note D to the Consolidated Financial Statements, “Business Segments,” for data on the financial results of the Company’s three business segments for the first nine months ended September 29, 2024 and October 1, 2023.
Previous report — wording carried elsewhere
The above items were responsible for the change in operating profit.
Previous report — wording carried elsewhere
The $792,000 decrease in other income was primarily attributable to a decrease in interest income on marketable securities largely stemming from a lower average daily investment, partially offset by higher yields.