Napco Security (NSSC) 8 Feb 212021 Q2 Earnings call transcript

Greetings, and welcome to the Napco Security Technologies Fiscal Second Quarter 2021 Earnings Release Conference Call [Operator Instructions]. Please note this conference is being recorded. I would now like to turn the conference over to Patrick McKillop, Director of Investor Relations. Thank you.

You may begin.

you. Thank morning. Good Director McKillop, Relations at here I'm of Napco. Patrick Investor XXXX. joining Thank for today's quarter us conference for our call second results for financial today you our to fiscal discuss had By the release now the results. you all should discussing opportunity review the of to press have

Relations have Investor of you in copy not, the site, a release If our available Web is of the section www.napcosecurity.com.

Kevin CFO. is CEO of Technologies and On and Napco and President President the Buchel, Richard call Vice Soloway, today Senior Security

growth moment a based to and the we business, estimates, without of statements to begin, judgment, our take Before trends, products revenue. anticipated market forward-looking future are drivers me school security services, company's This recurring SaaS beliefs, customers statement. recurring benefits that forecasts control opportunities, run of and and the include, contains and of monthly to limitation, as dealers, management's the and products product on read presentation expected based projections let such forward-looking revenue expectations, on annual potential performance. performance costs current rate statements ability and for These statements expenses its current revenue forward-looking relating recurring to

uncertainties subsequently be materially cause but the on statements. that annual to materially report factors risks Other results assumptions to forward-looking those differ limited actual to, differ unknown not underlying XX-K. results are Forward-looking in our Form including filings, SEC could proving from involve statements. These statements cause described to factors unpredictable or incorrect, actual from our or in and in contained include, those may forward-looking factors such risk

guarantee reflected reasonable, achievements. or level expectations future results, the in the of that performance cannot are believe activity, forward-looking we we statements Although

front. forward-looking no as reliance today's in date before stated, to applicable otherwise You on moment. Dick information, information such over things is wanted to We’ll call and undertake release the unless duty IR statements. should provided But except I in just update not and of law. this do, conference mention to few turn call place a as All I the undue press we today's a required these under on

would more roadshows the year forward new recently B. meet person the Napco crucial, excited of We you inclusive again. and research throughout analysts, folks virtual the of especially such we Also Riley in Investor planning companies, we those when all and coverage marketing and thank gained them in of are have is for Needham With conference assist of to and cap that awareness help that I excited we're from look out to the for these outreach like story. as trips. Napco, way. small to and us remainder

and the Let me Richard of floor Napco is Security the Soloway, CEO Dick, call Technologies. yours. over to turn President

joining our Welcome conference our today to morning, to Thank you, Thank Good you Patrick. results. discuss us everyone. for call.

We pleased million. of result QX are very to $XX.X sales report record our

Our million recurring at an annual December. higher of as an revenues and XX% we of quarters, rate run have recent QX even in rate than continue $XX.X now grow to

is driving markets continuous the on alarm installations this fire end sector. and targeting mostly especially professional Our growth, focus commercial the in

security return remains sheet locking and continuing architectural remain balances and key control which include trends, our systems with shareholders. on as focus metrics strong balance Our management alarms, us on are wireless, our and focused our to Napco times. capitalizing profits team of equity these difficult grow. at controlling well intrusion costs, The We key products. industry important on school as access especially and plus cash fire metrics here growth, enterprise These solutions to during continues to

shareholders interests of are the approximately as strategy equity. aligned with at our execute management business XX% Napco to We senior our our continue and owns

who will overview and call outlook. the into quarter strategies with will Kevin of Buchel, our fiscal I results on and Kevin? detail, our over I'll back our Before provide more then greater turn be an now I CFO, go second to

Thank you, everybody. Dick. morning, Good

by for quarter, the the quarter, strong part $XX.X to is for revenue, $XX.X larger revenue for December the primarily XX, six $XX.X as related quarter months the last continued a months to XX% X% locking its recurring second last should compared well recurring margin the months. versus the by out The XXXX second increase point with was primarily now while XX% increased period did recurring pointed XXX are due $XX.X XX% XX%, Gross were door of X% one represents QX. annual X% quarter million for ago. for of net year run million at as were year margin a of in has versus partially $XX.X on gross For ended Recurring products, which a to to same sales six basis by the radios, December mix. increases XX, with impacted million for were as Equipment of sales street an XX% a increasing the QX profit attributable however same by to period for coming $XX.X the [to] of which recurring million XXXX XXXX of to XXX and Net XX% continues gross and $XX.X a margin XXXX as ago. year strong points. monthly The to million sales a decreased that revenue. of becoming period pandemic, XX% the ended the December to based of XX, in a months XX% [inched] December of million as to with the consensus quarter three products basis decreased second same revenue increase $XX.X decreased the same associated sales intrusion gross improve ago. also of services compared and for to million to compared sales the revenue. the decreased COVID-XX sales continued fire in revenue the profit X% is million ago a the recurring This for margin Gross year, the estimate Gross and million be strength period ended margins growth, with $XX.X $XX.X six and revenue offset intrusion a quarter which in XX% XX% which six Recurring increase. compared of improvement access as products. in for growth rate a million months period for beating gross sales primarily increases year

in recurring revenue due improvement. XX% gross in revenue StarLink For locking on Fire mix increased intrusion Commercial to the six sales was margins also than product that $X.X months, resulted line [as] are of last an our million the XXX led Radios, Radios, lower the The decline year, margins gross locking is the from from associated versus to recurring door especially which primarily of gross equipment and an last which increase gross generating of from recurring a margin XX% generate from basis to the from our and which and larger gross was gross become purchasing to mix. Cellular levels part unfavorable and as of six the equipment overhead The recurring to costs door ago, in due margins profit products, equipment to inventory additional production affecting QX gross for products, the revenue from margins, mentioned overall lower a products I margins phenomenal absorption, the still An months due factor higher margin and continue three was and decrease primarily revenues, lower [feeds] margins a StarLink previously quarter. from point lower in from which strong shift while gross revenue. year very

$X.X ended the year for quarter for XX, of XXXX. to of months compared months sales year The quarter same December XXXX. compared $X.XX XX% XX, sales months income same compared million the XX% and $X.XX were $X.XX XXXX the $X.X each of December to $X.X December the period million [XX%] year for same administrative decreased or compared remain was for $X.XX the a So and income compared period million or the and decreased for XX% development general for ended for million decreased period $X.X million the administrative tradeshow quarter ago. happy same effective sales six both a XX% relatively million for XXXX for year months December as of quarter December period as months $X.X rate year the Adjusted per ago, share to the the for million same to income as $X.XX compared last for taxes compared million million as $X.X [Technical Selling, ago, ago EBITDA for XXXX of was were the the at months as and sales XX% decrease. for Difficulty]. $X.X due a was general $XXX,XXX the to provision XX, ago. per to a for $X.X share share and a Operating as ago XX% $X.X X% last the period period $XX.X adjusted diluted three to Difficulty]. $X.X development million to net ended constant and XX% to income was $X.X same XX, was and and $X.XX by XXXX. X% period about quarter, [Technical as and the December increased XX, diluted $XXX,XXX million ago. year. the we're December the Operating increased million as that. last The was XXXX for for $X last quarter, X% last same for Earnings to to of and XX, period as as and months months period of travel XX% the $X.X income X% costs six a increase XXXX year ended per net same expenses for $X.XX share income per XXXX same $X.X company's million also and compared quarter increase EBITDA to $X.X provision quarter very December million, income XX% earnings compared that's XX, an same ago, same income year. months ended for as for quarters $X.X the six million to of share period million compared to XX% as compared increased the or XX% six Selling, and XXXX December ended a the for X% ending same December that's sales six million the ended diluted or compared three million decreased XXXX to X% SG&A to was was a taxes year. quarter, Net and company's XXXX for XX% a $X.X income Research same the year six the the to million period decreases for the EBITDA expenses sales three company's quarter a $XXX,XXX to months Research compared for the quarter last an the as decreased $X.X taxes XX, of diluted $XX,XXX last share and quarter, the to a a million year months costs million for $XXX,XXX share XX, ended $X.X of six ended in ago, for a $X.XX per compared for for for the year. and for million of Adjusted increase million The for last or decrease. or or last $X.X last to XX, XX% And to year. per six for quarter, The expenses. X% $X.XX period $XX earnings year primarily per $X.XX the to XXXX and a $X.X of share per Net

to Working on XXXX, period compared moving XX, of the compares up XXXX. December of the $XX.X liabilities had due at result and company December million $X.X XX, by the my as XXXX, million XX, compared compared million from assets the the primarily Now cash six capital during was sheet. COVID-XX current last would XX, cash equivalents. $XX.X XX, That year. in current capital Dick. pandemic with December inventory. XX, sales were These to defined as to to million $X.X call and months that $XX.X working December and of balance increased June XX, at less equipment the ratio decreased return as increase the That aforementioned liabilities At June drop million in that to provided defined XXXX. XXXX. to compared June million as the XX, activities at was current XXXX inventories $X.X XX% $X.X current the million as the assets year, for XX% XXXX. additional utilizing at by to by XXXX divided decreased company for from as and last million And Cash it $XX operating at concludes X.X:X by quarter X.XX XX, increased Current to million in built like $X.X XXXX June last XXX% formal now for same led I to inventory a to that remarks. $X.X some and the quarter And back versus and to decreases million of September

you, Thank Kevin.

sales exiting that healthy track our equipment gain on rate previously ability largest to XXXX. to sell job double during and second we record, Also, now are driven of continue several commercial discussed $XX.X increased rate distributors our run revenue is as the of to rates And of fiscal million. digit the sites million recurring residential achieve positive XXXX through that with a professionals a from goal believe $XX by of quarter by were to annual Our of run see we we December percentages. quarter. access increase The security signs to continue

school ago revenue projects the certificate are they to plentiful. as has rebound expansion particular must alarm The fire options strong a being federal improvement the the positioned be and The we continues remains fire governments is state months. the that margin in basis availability in of well have quarter business evidenced the opportunity. all for types comply the a for believe significant safe a to to by fire point recurring for the security mandated with of versus recovery. government radio buildings is continue economic We for business for helping security and six occupancy, codes. order to being schools XXX basis from The been gross and for improvement XXX government year funding period with never point grants US better of market The

look the cancellations. on upgrades a their focused seen these we not we've receive must issued protect been they at some recently faculty. and they to products project need products Montana for delays sharing security release. security solutions and to allowed Montana, opportunity is Press approval at While students and to news have when in the Opera remain us more press releases regarding institutions university a planned school We State and and prior wins forward significant project from about We providing schools Northern issued future. release about are we as these the

role which the have upgrade in Our Verizon older a vital StarLink XG AT&T AT&T and dealers communicators the networks, their calendar IoT ticking clock XXXX intrusion need announced the their of fire sunset the complete of for of the happen for playing will LTE both are AT&T to universal The upgrades integrators customers. communicators. during version now and is year. line for and XG

communicators Verizon offer StarLink the with both US to service. widest in and Our LTE coverage AT&T dealers the

revenue most rich hour recurring continuing industry. and times positive cost product is receive are offers in launch iSecure residential installation the new iSecure and the midsize commercial installers of the has Napco's we residential plus from the functions its continue and to small effective for businesses designed professional iSecure innovation, and zone it consumers. system, for breed latest XX dealers. alarm many feature Our is of and the and today, sets of looking functionality that offers savvy feedback one

areas into strategy. communicator in industry expanding our other point security cellular is future, for Looking our a the technology focal the to

StarLink Access, technology. benefit We no Napco have will corporate updates. need backups enjoy a will our problem and revenue. which to to and We’ll in session a locking product portion started Q&A introduce call dealers and expensive interfere no generate uses can a installers recurring to investment for called control Air line, include product hardware, end that based users onsite highlight cellular This moment. allow networks, in The new this begin no need of which major to upfront database for be software with IT access or

Our second quarter fiscal XXXX was very successful.

equity, pandemic we of of would year-over-year the level quarters a the COVID-XX sales and ownership their now joining impact streak. XXXX began Napco maintains sales beyond. for exciting back our us We approximately thank support year excited Before new have. fiscal of to of consecutive country remain our senior we I everyone significantly to had Napco achieved started and for March XX% about high management future have XX growth in growth in a and and like the in XXXX,

now Our formal session. proceed. please call the open and have concluded. remarks the We Operator, now question-and-answer would

Instructions] [Operator & question with Rich Company. Valera is first Our from Needham

with large you sell-through you the encouraging are growth in the talking your percent distributors Can to was commentary clarify just comments? year-over-year that respect for sell-through the are about, to you. that were trends that if referring were you double digit First, providing just

yes. So,

some it, flavor. Looking give right at now to just you

looking So guy, I'm up at This one I'm looking guy, looking was XX% our was another at at second he year-over-year, up is he up . XX%. top XX%. year-over-year. our I'm

Another one up XX%, low year-over-year.

is could happy. inventory I I this. well. have and in the going say was to they When be strong, was bodes I through don't sell to of that they levels. March choice. because know the it What have no is everything distributors, great predict So quarter The buy.

going you they But have to to they're kind of year-over-year want don't have when know of to those kind we growth, levels buy. have to inventory type So what keep.

an of lot buying in increase a lot XX% quarter a more with lot last a optimistic. throughout them equipment buy We'll quarter. track. to are But So know very end. quarter, them we comes the More on versus we're and end, at back the as think we're of a obviously, the sales

we into get the a more sales, don't jobs, about of the and Yes, doing inventory. through, carry going Rich, sell buildings most Most of installation. dealers they're opportunities talk the to that's equipment and into when lot more for dealers

inventory the through installed. being pulled So and is

very good So that's a sign.

it it side, there service terms the Yes, say sounds -- of making progress can just future on with from iSecure, good the you're Is like make growth. great contribution you more leading iSecure. And that revenue of indicator or Dick, like momentum then anything seems you about just have a revenue continue to there. kind of product revenue like trends sounds in

be very rich is really can putting it of Well, and an little a all time a powerful a a very And dealer, iSecure it a product in, bit powerful feature legs mainstream it in to But product. make hour. we has it to mainstream product. the it do takes

So for they continue and residential. as use it, their commercial it want system it more control more and panel, prime to with alarm dealers make

that it. and to are what going the we great such legs hopes to have see So it's what for hear, we

have get some functionality added it We we to it, the better as dealers. make even from feedback to

category towers then has they speed. a of up some the They sure going the pick have but it Then it A it have works it the a lot And just way competition which control sensitivity. in make don't sit on good to the to the with they work. the to all country. of set way make the other, of this they lot feature, do this across are does. the so very dealers that kinds don't that's talk powerful. all products installations. to efficiency So each has while, it And it's expect a for works more They even

it get designed fabulous the job its dealer in virtually want equipment into. market And its put a grow unique. and for and It's it's product, it very as they very, much so We point works of is is that price The So without business to every functionality. very effective. top spending which cost can fabulous.

for hit have be that strong hopes company. a major going we is to our So very this

Our is next Mike Canaccord from Walkley question Genuity. with

the it maybe sounds question, to hopefully school, of quick see some by full fall some that into the that recurring students business it Can at the you radio been strong, of with Can got has reopening business? to is you pipeline quite is the hardware pipeline revenue. ask guys this looking to great businesses. house in about the soon talk for of the like seems wanted coming side summer back locking like of the be how in other Just about which But together and the with at the hopefully the side vaccinations reacceleration there's that talk on demand area. all economies pent-up just

Kevin, do that? take to you want

on So phenomenal. hardware radios Mike, sales the doing are

saw jobs not a But schools are if of Montana. of hardware operational suffer. why don't are as than happier jobs the leads We school better a haven't those couldn't lot A saw motion, We that or it with got is it security the we slowed why which recurring down. as all by growth missed or from sales beat. It's XX%. lot that. That's we encouraged a job ever. to you school revenue, we you to The lot be that of state has the a are going to we relates know, stacks have

hope a the Now school get lives Montana, XX But middle the is me our going are this New who of school like we're And And country. business operating are a of them. schools of other from Montana. as in usual. other it's guy in and XX part There throughout this as of nowhere. all they job we group is got to to York, jobs in

pick to waiting the are part for will to to soon. on business And are, the see some are to Vaccines We're We last get be that it. over going better. the see up see are be Some want hardware because things along we get we schools When going know to that very better. We encouraging. where here, pick pause, opening but depends even moving are up versus was that's getting Schools be when to where not open. million then this they want of over threshold. we're and it million, close. XX% up you on yet. quarter expand you're That when $XX was $XX we start quarter. Hardware margins

to as these to think we even of improvement come the locking so see next start going the side on quarters we're tremendous couple And business. about, of

Mike, let me add just something to it.

which this Air dealer recurring access this this businesses the see for traditional they in all be more more But Access the about. the these had sell schools into more these traditional is vision and of installers for long the for And will be is and and of and So and hardware revenue up. way. more is hardware what done and as And places, of the revenue get installed. hardware, of new both picking can revenue recurring locking, generates a which is control leader that And through for Napco. versions recurring of products all in that's term means we

farm cellular, the own this we're everything the into generate able access sale unit new cellular of concept networks, for a do vision. will the the out. control experts the technology radios. the business. We We stream we Since don't in-house in that's to alarm And and build area. into locking bring monthly So recurring we we of a understand building, in do a school like stuff this our just revenue,

don't able the and right and alarm how same recurring generates and do dealers going It's the business, stream and we alarm in streams that to want So do imagine where our with a dealers. fire of we revenue were years create be business concept recurring people Access. business, going Alarm the locking to We and business Only IoT now. that Air for revenue the that, recurring be of a to stream, that's how alarm get and we're this now. but business done going revenue, get with from integrators it of revenue to the portion Burglar knowledge recurring couple

recurring companies of all all our the generating that the So of we that's sister have, revenue. vision businesses future,

I understand of you product. and Air both follow-up Kevin. on to congrats Access leads the That vision, the kind just question my for and

to terms to side, seasonally margin? a off I hardware that gets are get above predict to on hardware June recurring hardware know $XX recurring back in revenue, or the quarterly above projects, growth assuming we willing tough see you. start margin a recurring results. should drive of strong? are revenue trade that's gross any Just or the been to you lower up usually business to give it's revenue more should XX% you that we revenue quarter expect scales, strong million, with willing COVID gross accelerate such little margins to Thank equipment that gross at But margins

on leads the gross Mike, the to have think I XX% we be radio aggressive radio XX% let's good We're with in as any it back business. being margin, give And don't don't the aggressive, need we say, get we end up aggressive. margin obviously, a to to recurring is. in it being on revenue. that's business, because, enough more

go think margins go higher margins by business hardware coming into sales is come the The because going we getting to will going are over to come. those $XX up We'll the higher $XX XXs, hump, up. the over that go the just get million I will They're to. And back. million.

fast happens. our saw game I go last, But Just versus we a don't encouraged matter to adjust plan the happen of how of all later. will quarter we net that than as this we think sooner rather forward. it at it need We're because growth

Lake Schmidt Street. Our with Jaeson next is question from

on When P&L? to we potentially impacting of start follow-up Just Air comments Access. your want the product that think should on to

trick doing new job, then now. for and just to You have It's Along they're used learned to XX for a the a it of in give a finish them locking It's have that their concept dealers now the they integrators business. coming build product that's nine business to new because equity is making magic for strong revenue stream, people But out to and them. the that's recurring idea very getting job them. and months.

couple vision, a thinking we years nine we be do, would would our of say, And that's So now. I should XX, where our plan. out be think that's right what to from we

the their security know security. be the keeps to lot So doing this They don't strongly the businesses then legs they sister new a a company that for unique that very and more with building dealers going more because their they're have industry that's and start Once exciting us. equity fact and is has can doing revenue, the we're coming of to three going banging stream. another they for then key profitability. down keep only jobs very recurring that off in in We're in because it's throw we it to revenue all grow And companies future and job.

have control with have by IoT. alarm we manufacturing and two company, locking We access an Alarm companies, have we Burglar

So and now the be line product will business our the technology the that in which and months. same through to access installed we're was figure and at change to bring nine then another whole once locking XX able to able job, get

Kevin, of traveling, COVID. at this it's here, OpEx little shows, calendar how et the ramping year? OpEx the related then looking just of cetera, that And we for line, given muted the understanding about should lack But probably a think trade remainder

lower going prevalent expenses somewhat to. were Well, virtual, being still think to and used conferences, COVID than these being that's they trade I shows and with keep

by talking the if year, to start maybe the Now you're things calendar about summer, change.

we And conference to We'll show, we'll an person, it. which you'll we're soon better, investor like as we then in conferences these whether trade times. able down, type return go. see like do everybody to it's As those or go to If normal not, in and back to calls else the which costs operate more we'll kept Zoom get are is normal more Eventually, fine. expenses levels.

with from Our next is William question Blair. David Robinson

to acceleration, commentary about sales in of heard anticipation related of of or radio any the from feedback approach any you of had I curious, the one, the a we in in kind to XG, kind XG was calendar of anticipated just do I just sunsetting as anticipate the you business guess, dealers quick sunsetting? kind and the sunsetting. closer have XXXX I

back. at be the wind have extra radios is sunsetting The upgraded. to All our old

alarm as verbal radios as So upgraded. lot fire have radios there's of be well a to alarm

And is copper lights window in our all dead sectors at country communication as around a different the That's So the of sunset, to cellular. the burglar back of jobs alarm from convert have the for because our to that wind the that's and alarm and copper also link motivated country. very between that, simultaneously. at the And that they lots happening for fact systems, out are back. wind XG alarm the dealers the to, fire it's copper

the to the five it's carriers more is or be the that's going years say, So And I The two would more guess. as out the of copper next on business. the to copper, over country years don't and sunset anymore. drive and of phone phased XG I the to helping copper, support longer, is want

footprint. goes are has the wide radio on best throughout everywhere StarLink has the the StarLink marketplace. dealers any of sensitivity such the a So It and using and country it

So a a dealer knows when copper. to StarLink gets puts in, similar which he he communication, is

from Sharma is B. with question next Riley. Our Raj

the digits. the pricing mentioned you Can to follow-up sales. I wanted with address versus I locking the distributors equipment that again doors And sell sales? lower margins intrusion. double you improving Kevin, through know and mentioned power gross gross lower on margins, you equipment mentioned you Again,

So with look next impacts forward in quarters, few double we going kind should that? you of sell gross the sense that or current the year-on-year, how through at margins digits can up how

margins So margin the they radio. better sales when quarter, the in much and past than to are their on locking much, started the improved, this

a So radio It be Control in a our on lockdown Margin system, go device high with it's door the school XX%. XX%, Access as margin would will XX%. as locking could on be if products. combining

margins back, XX% throughout go and going then comes that at hardware to and as temporary experienced. happy It's seen have haven't margins halt we're very of on sort slower that But business get to than schools you're always go what being we'd start those So margin will when that The That's seeing we up. right up all that's products, obviously, on is any a more XX% the you like. decline we of and back thing like, this about some. radio great.

view they point gross side. from So [Technical the Difficulty] highest while revenue margin not hardware a of are items

all good the And in come hardware the that's this. news rest will So the of back. of

that's the sales So course revenues, course, radio of of radio, recurring the incredible. the generate and

sort sell with up going of an going you're pushing well? improvement product to digit to addition the there get change locking the through in the sales, to So as also scale get you're doors, equipment double as is mix the

we're you could in $XXX factory Republic the a margins go then the overhead $X,XXX leverage, Dominican margin So that a revenue the to of hopefully, if to the go, have then earns absorption, have again, have per in the that's Dominican only you're because this year. back million do the leverage It's expansion, we happen that as have per be Republic. is the the thing any cost quarter. as quarter we shift quarter place. strong where the we'll low-cost we machinery, is get annual worker And we supervisors equation structure manufacturing over base, place, going add $XX to And to goes over million the again. real a because the going gross facility, like add getting $XX you get don't we We into we fourth what every higher it higher approach million year, which mark, in to

then segments, burglars that particular sort on were others? and the of were fire performed spread any the the the they any And segments rise broad the in better across side, recurring than alarms,

within recurring revenue? mean You

commercial to? Yes, alarms, within the fire recurring the cater in burglar alarms revenues in different that you segments

seeing only a it of down years as in come the for it's I you're don't a and few of radio just more That's fire It's have When Radios, the as segment mentioned thing. or the very Fire main think part I broken was mix. expansion. I -- old. a was last business. at fire it strong. it, why late as look within And the kind radios. more seeing we're I've the before, growth margin becoming comer It's the larger the radios

really this point. large well as the of names that But better. at fire fire reality in don't can't will get mention are I known can talking more business within players we then I radios. the I some industry, that some to have So a even say anything and becomes more

So what as as our better. it strong it now, hope get that's that even is will is

from with OSP. Abba is Horwitz question next Our

we're remember carried sheet? balance you Remind I cash when your on much cash. me guys so don't time seeing much so the that so last much

had we $XX ago, years debt. of XX was million it Abba,

later, we're probably approaching $XX balance cash million Now the are sheet. here we of on as

plans that Any to with cash? What are do? you going

that work We're times. little the keep also it could a but of been when lot we'll have We bit talking to shown you have about so economy, a know It's my doing cash. a problem, have have like never that lot you hard to cash, high but of through of dry opportunities But cash class this. cash, utilization a there's the with and opportunities us.

essentially the question recurring Now quarters you $XX to will is, that next other just two get one million, revenue in your that said correct?

Run rate. Yes.

Okay, run rate.

ago, here think people We predicted to this I months we're know with go, I but if and don't right nuts, thought we're we years we like are were six there.

to us projections So are revenue? for you going give XXXX recurring fiscal

probably should. We

do get But probably that. we to XXXX, five yes, is have should years know I XXX. We will they out, which further

that our striving we're million do. business, turning We're recurring $XXX be XX-XX million year $XXX what to That's where will our to goal would goal. company about revenue year be a be and the revenue. recurring plan, is That's of service into five

So plus products, market keep the That's with generators being share. revenue plan. existing our the growing new products recurring

support margin, gross approximately? And XX the million, now an what $XX on you're going to

It's When what is I model, going been know it's XX%, so don't strong. be. is We to fire it XX%.

little. The We a products. mix lot have a radio could shift of

If you come at XX% and XX%. it, I when happy would be in model we say

But in quarters, my is essentially, okay, two point. final this and

generating you approaching $X, a $X.XX and essentially, side recurring Is a let's cover. But share revenue around correct? corporate on quarters, share two just the in So going the almost say, all all to recurring own. essentially, to on there's that business is the business. revenue, $X.XX you're be recurring revenue $X its that of understand to on have costs I the that

is the this and recurring Access. getting Yes, coming It's more out more why which of… Air with business we're to be beauty

the I there. guys by I projections of years way, that was And ago, there heard those you was and your one know

say want you So know, to congrats. I congratulations just to guys, I really. want to

Thank You you. took shareholders. care the of

with Hillary Roubaix is from Christopher question Capital. next Our

can I Is business. just us, to year have company there you both dealer ask, the that network? growing a you increase in for each and wanted recurring goes your revenue remind price for as typical this

and the quite quite There’s seeing to in and keep prices any not very, We pressure really unique. right now. offering very, unique like performance as the nothing want market to of The the the we'll equipment necessary, is on competitive we're very marketplace. adjust our but is very

feeling we're So it's at that not point. pressure this a

tend up each to do they prices Do fees? the terms in of go stable or year stay monthly

Stability…

drives all. that and haven't for speaks at It's itself, do dealers anything thrilled to itself. anything… Yes, had We are don't we it get the to it change service a and just

your spending year next I At perspective it's the would spending that into budgets, It the going be school one of like districts perhaps And school next time, aware on in support. going mean, of there fall? some more you anything the you're a maybe. shape same Obviously, pretty national year. head that as is to outlook the for have into seems disruptive down been there's year. budgets a lot

fiasco. still lot the mind a year. country, we calendar We've are again, in. of few Congress just part certain because it's seeing top out states. the of going not seen of more towards of depending and activity end of know But I whole a people upon what also of school, the are of We going the lot of jobs school lot of jobs in and worrying that are more remote out a school kids happen a to there's in or advancement know security how to of bills about learning the get

as a think more that we'll become will of the back kids in, be of about. I this talking get topic is… it Beauty

the budgets. to add And school terms of of is I a to What's you that remember that's want available. grant jump in important just to in. about lot just Chris, talk -- there's

at for State. the And talked the in past. million as they so about XXX example, $XX the December year, in have schools the But of of in Virginia this of the we've an just Ed, Department end XXXX allotted in last grants

committed money. out next the the started They million application XXXX $XXX XX grant can schools of the get is terms the the budgets, and federal government It need in to available. in just the And for the year. So per fill years. has money

But need. XX to than a schools years money get go. helping So in of little funding they the there's plenty we've got terms of less these

appear don't Instructions] questions. any Do closing be [Operator we remarks? any have There more to

want thank to So conference today's I call. everyone participating for in

look and and or As results. we again for have for thank your further fiscal in day, to myself please any a interest QX Napco's always, to to Kevin Patrick, and few have information. call further great 'XX a Bye-bye, support, feel months you forward questions, to everybody. if We all you free discuss speaking you

conclude today's you. does conference. This Thank

and You may thank your time, this you for lines disconnect at your participation.