Our balance sheet continues to be very strong, with cash and cash equivalents, other investments and marketable securities of $44.4 million and no debt at September 30, 2022. We continue to leverage our strong balance sheet by purchasing difficult to get electronic components which, while resulting in a significant inventory increase, has also led to continued strong sales growth. This reflects management's strategic decision to continue to invest resources in maximizing the production and sales of its cellular radios, which result in the highly profitable and continuous recurring revenue and which generated a gross margin of 88% in Q1.
With school security a paramount concern to many municipalities, our fully integrated technologies for the school security market continues to remain a top priority for NAPCO, given the healthy margins those products typically generate. With a market comprised of approximately 130,000 K-12’s and 5,000 colleges and universities across the country, most of who still need school security solutions, we remain laser-focused on further penetrating this market.
Mr. Soloway concluded, "NAPCO continues to deliver outstanding results as we successfully maneuver through a challenging operating environment. We remain confident in our ability to navigate through these difficult economic times and to continue to deliver strong growth in both equipment and recurring revenue. The demand for our products and services continues to be very strong. We are confident that our seasoned management team has the experience and methods from previous supply chain shortages, to deal with the volatility associated with the current global supply chain constraints. Our fundamental strategy continues to be to provide seamless security solutions for our customers and to continue to grow recurring revenue, now at a $58 million annual run rate, with both existing products as well as new ones, such as the unique to the industry Air Access products, which should generate a new stream of recurring revenue from the locking and access control segments of our business. Now, all portions of our business will be in position to generate recurring revenue. We continue to remain focused on delivering significant value to our shareholders by generating strong revenue growth as well as increased profitability for fiscal 2023 and beyond. The first quarter of fiscal 2023 was a strong performance for our Company and I remain confident that our best quarters are yet to come."
Financial Results
Net sales for the quarter increased 27% to a quarterly record of $39.5 million, as compared to $31.1 million for the same period one year ago. Research and development costs for the quarter increased 26% to $2.4 million or 6% of sales as compared to $1.9 million or 6% of sales for the same quarter a year ago. Selling, general and administrative expenses for the quarter increased 16% to $8.5 million or 22% of net sales, as compared to $7.3 million, or 24% of sales for the same period last year.
Operating income for the quarter increased 71% to $7.2 million as compared to $4.2 million for the same period last year. Net income for the quarter was $6.4 million or $0.17 per diluted share as compared to $7.8 million or $0.21 per diluted share for the same period last year, an 18% decrease.
Adjusted EBITDA* for the quarter was $8.3, million, or $0.22 per diluted share, as compared to $4.7 million, or $0.13 per diluted share for the same period last year, a 77% increase.
Net income and earnings per share for last year’s Q1 reflected Other income of $3.9 million which resulted from extinguishment of debt during the quarter ended September 30, 2021. Without such benefit, net income and earnings per share would have been $3.8 million and $0.10, respectively.
Balance Sheet Summary
At September 30, 2022, the Company had $44.4 million in cash and cash equivalents, other investments and marketable securities as compared to $46.8 million as of June 30, 2022. Working capital (defined as current assets less current liabilities) was $97.0 million at September 30, 2022 as compared with working capital of $93.1 million at June 30, 2022. Current ratio (defined as current assets divided by current liabilities) was 5.0:1 at September 30, 2022, and 4.5:1 at June 30, 2022.
Conference Call Information
Management will conduct a conference call at 11 a.m. ET today, November 7, 2022. Interested parties may participate in the call by dialing 1-877-407-4018 or for international callers, 1-201-689-8471, about 5-10 minutes prior to the start time of 11 a.m. ET. The conference call will also be available on replay starting at 2 p.m. ET on November 7, 2022 and ending on November 14, 2022 at 11:59 p.m. ET. For the replay, please dial 1-844-512-2921 domestically, or 1-412-317-6671 for international callers, and use the replay access code 13734148. In addition, the call will be webcast and will be available on the Company's website at www.napcosecurity.com.
About NAPCO Security Technologies, Inc.
NAPCO Security Technologies, Inc., is one of the leading manufacturers and designers of high-tech electronic security devices, wireless recurring communication services for intrusion and fire alarm systems as well as a leading provider of school safety solutions, The Company consists of four Divisions: NAPCO, plus three wholly owned subsidiaries: Alarm Lock, Continental Instruments, and Marks USA. Headquartered in Amityville, New York, its products are installed by tens of thousands of security professionals worldwide in
