Napco Security (NSSC) 8 Nov 212022 Q1 Earnings call transcript

00:05 Greetings, and welcome to NAPCO Security Technologies, Inc. Fiscal First Quarter twenty twenty two Earnings Release Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. my Investor introduce Relations. now McKillop, host, is of Director It pleasure your to Patrick XX:XX Thank you.

begin. may You

the XX:XX press Good quarter should you opportunity morning, Director my for of call name is Patrick you financial our two. release Relations us today's review results. results NAPCO to By to joining all discuss of fiscal McKillop, the for Security. twenty for have Thank first discussing had all our for the conference twenty Investor I'm the now,

assumptions beliefs, If of have of the we read of moment statements such forward-looking including begin, Other differ are release on described www.napcosecurity.com. report contained and you but Form rate cause dealers, forecasts projections those presentation materially run business, relating recurring of to uncertainties statements. the Technologies; Soloway, could that our risk ability future underlying expectations, unpredictable a not, factors the drivers forward-looking subsequently filings, without XX:XX to product limitation, annual take statements to and Security Kevin our opportunities, me forward-looking the the that such statements in let potential include, company's proving to On recurring are judgment, trends NAPCO to Richard These This forward-looking in based and and actual in is incorrect statements. copy President Forward-looking in include, CFO. SaaS the the results estimates, and and to security cause -- on statements Buchel, current or market results President performance. or differ to products be XX:XX These from Investor available of school XX-K. not actual and current revenue. on growth materially revenue Vice a and XX:XX factors expected call customers our risks XX:XX services, revenue control and contains performance our benefits Before as annual on today forward-looking those recurring may of from products the is Relations SEC and unknown CEO limited section involve our anticipated statements. factors costs based to, monthly website Senior management's expenses for

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

like to calendar You small twenty applicable we provided call Dick, will XX:XX no is update and that President and Soloway, stated, over marketing folks CEO should those we reliance of under this such to the otherwise call turn I With information such presenting for thank NAPCO I more to press cap few undue and and outreach unless things of twenty except Conference conference I all Dick two. in date, not the companies of in of virtual assist me into call to Richard law. wanted of as yours. conferences Growth would these especially Security before crucial, let do, on Investor Needham January out way, floor release front. be duty required XX:XX trips. the in just us undertake but We're at Technologies. is in these the is twenty to turn a place mention twenty information, I NAPCO, the forward-looking NDRs and a on and All statements. end one, IR as that the today's today's as moment, planning a will the over

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

eight performance now revenues. strong and very one six record rate million two report rate NAPCO. record the dollars. and of one million at seven point point strong sales annual is Recurring two run fiscal twenty a thirty results October grow million forty recurring twenty twenty income to one excited revenue to dollars point by continue based Our on our very XX:XX twenty reflect dollars another are of We QX net

to important and balance sheet key balances and returns alarms, on access forty now for strong of the architectural continuing Our wireless which cash on million of growth remains management metrics control shareholders. XX:XX profits and at growing with as continue here three locking -- well key as industry continues excess systems equity to trends us, focus controlling solutions, security school in include our These products. intrusion our metrics grow enterprise plus to The dollars. are on We focus fire team NAPCO and on costs. capitalizing

our strategy turn our as Kevin with results to fiscal greater business the continue first Kevin, on with provide quarter an strategies of will detail, the back execute our owns be I'll our our and one floor and aligned percent call Before our interests twenty and will outlook. NAPCO to senior of X:XX approximately are over then management the We I at I overview more yours. into equity. Buchel, go now CFO, is shareholders who

and everybody. XX:XX Dick good Thank morning you,

first as and products compared strength two service commercial in continued revenue, for has related the seven last revenue point now for in door twenty thirty alarm one percent been COVID to was to rebound, record same the business, the thirteen locking from dollars the Alarm affected percent run buildings twenty recurring significantly remain sales percent must dollars twenty for sales on last fire the compared a to of dollars of period gross profit six the revenue ago. for first a three ten quarter quarter, same Recurring margin six net million months quarter which the increased in forty to period twenty secure. same revenue. quarter four increase annual the XX:XX the attributable thirty forty for an four with same thirty percent dollars, For strong strong, twenty for growth and primarily forty to and access quarter. October forty increased twenty Lock XX:XX year. monthly the September brand six for year. sales ago. thirty with to point equipment to one margin XX:XX to not one based percent dollars period growth, Marks our compared eighty percent the one one year period increasing the revenue million eighty year percent two gross a as of of Recurring be the at one three point as point up increases intrusion margins Gross ended Also intrusion and four recurring million million first point to six strong percent continue The primarily coming three has in recurring our This continued pandemic products. continued is million Gross rate

the in were products. more which three dollars in constant products, the gross as to year margin to sales was one or overall freight months percent supply due gross percent, well product aforementioned last September The shift by sales twenty for primarily eight profit as six percent relating nine to point the revenue, eight as costs recurring million intrusion nine lower twenty year. the Selling, two twenty twenty current company's ended million to ended to more increased profitable and point Research twenty the or mix dollars thirty of percent service and development door twenty radio twenty for or sales ago. expenses months locking XX:XX the While same of increased locking administrative three a period for on September for months general compared percent but million part products, show This one million COVID-nineteen six at as to expenses twenty general well trade increase for dollars equipment increased Starlink compared three XX:XX were to pandemic increased worldwide curtailed company's and for or problems, of increase as dollars as nine the due point to decrease point relatively thirty expenses six primarily period one and gross seven percent dollars sales access a products, to was or chain increased expenses, two component sales percent revenues to four recurring seven access gross twenty profit primarily margin than and a last generate the administrative advertising the the was three revenues. point during The increased ago. of year million the compared of which as leads and in one percent the nineteen due of a of same year. or sales selling, was

percentage a to increase percent The expenses related of well to seven As due aforementioned twenty decrease XX:XX in from sales. primarily increased in increased sales. twenty the percent to SG&A as as commissions four sales the four was sales percent thirty

income, thirty as will thirty a Earnings Conference dollars eighteen with due the income twenty in percent six income primarily debt increased if to quarter September same for million of one. thirty hundred reflected and twenty to a to million from per all one thirty, upcoming increasing during one eight Operating earnings inventory the to share for for dollars three in to eight same to certain be due one share six the result such compared the seven for twenty provided thirty September mentioned EBITDA extinguishment eight for occurring quarter point result percent period as twenty share increased the purchases previously earnings Without As last company's seventeen International seven assets increasing is five EBITDA All that million chain Center for as one one for tax percent the Patrick. EBITDA twenty have to zero during one seventy City twenty September any XX:XX million year. point dollars, company's compared compared to point source three history. one Net for percent same the same decreased Difficulty] as divided the three to significantly zero per rate year was effective twenty income as percent company's dollars September diluted last compared dollars, twenty EBITDA thousand recognized two point income, to fiscal twenty ended increase three the of million and becomes And record two the point to for thirty for adjusted This to being twenty the other dollars four one, by million six quarter period zero current zero twenty per point June record one share, for adjusted thirty period nineteen been and of dollars twenty dollars twenty, thousand EBITDA twenty September extinguishment two compared ago. to benefit, zero point which such would first net resulted thirty twenty forty the company results percent million by and increased dollars quarter extinguishment four nine one of gain decreasing two share, and point XX:XX at a dollars million period The debt. the three [Technical adjusted hundred during a two year. four by one seven a two the equivalents quarter by adjusted point six primarily sheet. the respectively. aforementioned XX:XX fifty concludes point quarterly at thirty, months to per income at months quarter increased dollars, hundred twenty per point dollars, working liabilities capital ago. twenty last twenty quarter for worldwide percent thirty one of months the Javit defined September dollars three September now decrease anyone eight point the formal by twenty speaking as thousand and three activities The five my of one. three to to dollars three thirty point XX:XX to twenty a per as Adjusted eighty to two was at four thirty, year. attending EBITDA dollars the shows, problems. ago. taxes at like three point for June thirty, to million September thirty, point the twenty provision for Cash to quarter securities, as year for point eight non-taxable. levels. increased twenty five seventy thirty dollars cash balance one related trade twenty. eight and dollars dollars of of twenty two Working at forty Adjusted interested point for ended reach and Moving Security the the debt call rate and remarks. November compared current the as for operating to the same dollars three in defined less increased was versus twenty three marketable million it quarter point supply two one on Other capital three to million current June respectively. eight period of back dollars to at twenty XX:XX And the eight million one. the out four the point compared at for months three two ended June dollars XX:XX That had and difficult thirty, current four with twenty in is point period the forty September twenty two nine forty seventy for compared hundred twenty New three point million At attending, percent as hundred The seven dollars year thousand components seven primarily The and company's point the compared thousand dollars to extinguishment income twelve was twenty twenty the as twenty Net twenty year liabilities one the in decrease ended XX:XX the XX:XX on diluted September million and levels. June Dick. as two period. on to twenty one York ended dollars million point twenty thousand eight company was Current and and to same nine dollars I million share six three one point the to please compared two dollars one XX:XX for increased ago. compared CapEx return was in income income effective by cash the the would was the ago one year ratio we assets of eight quarter was by three zero

Kevin. you, Thank XX:XX

the twenty commercial item. of receive Our non-discretionary business. fiscal buildings primary QX order twenty is sales twenty our and NAPCO XX:XX alarm in occupancy and is executing goal quarters The twenty the two three was mandatory a alarm record success quarter from maintain twenty breaker, certificate consecutive been and COVID to streak team Commercial a and of was that I the a through fourth am must in of a this our previous our the by marked the fire growth brought quarter that The comes also disrupted and driver intrusion surpass have have year-over-year of COVID-nineteen. system proud challenges to by of fire for pandemic.

in far competitors, delivery surpassed as had annualized years as set quarter recurring forty performance chain impacted And to its XX:XX as twenty revenue two focus million continue high of given business The constraints the of well last giving supply on We goal profitability run dollars has twenty -- have the at but better. essential ago. rate annual one. now million several nature. six we we forty segment NAPCO's October the The reminder, is this of of as our recurring point and revenue been its dollars that us a

aggressively and issues are products supply managing by delivery while alternative developing necessary. where methods, sources reengineering We also these

buildings cycle StarLink millions with line the still of on We continue clients. to and of we focused for is copper these of remain ensure conversion to technology still legacy create of remain aggressively that intrusion meet part older the IoT well early managing logistical challenges line replacement our XX:XX fire to positioned our of which universal upgrades, The requiring phone needs in opportunities communicators. the

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

generates Air protect security government to during about to our of we the twenty the they to twenty of innovation all you we'll incidents announced fiscal are their Verizon on market will billions complete our recall, remain older Texas, cell focused The dealers policies. as the the products more fully product this from a day twenty solutions attention and last from dollars. turn bring integrated for of be dealers. need need schools no as on-site problem as positive network to school and first XX:XX are While corporate students in control And fiscal remains number and in to students and security recurring we've integrators Independent means a we fund opportunity. may is in or announced their The to with expense for AT&T will product Air early of company, EG control those during for learning given Additionally, Center. margins division access are from the that based backups investment revenue healthy have incidences year solutions in return the revenue with COVID remote Access database available solutions launched XX:XX solutions school which updates. City which availability alarms spending announced a two. XX:XX benefits software calendar the upgrades locking XG each and more project locking revenue and funding a industry's one. faculty. latest believe Tatum, of for twenty School include of this received learning optimistic Lastly, generated. they is and administrators, Our interfere a that We access school can of recurring Access, are need start recurring are has we previous connectivity, in have until Recently, of schools Air previously remains back was at Javit and believe as which the networks feedback we Kevin in Access better. the customers products and We year. their divisions their protocols believe, and XX:XX IT as hardware, sunset trade XX:XX from and doubled grounds no school have both seventeenth in happen the are gunfire is the the of been upfront cellular from Options NAPCO twenty and state no now. billion our nineteen for New Federal school the system market installers in The market which show never dealing twenty November total products for access in Air District had with to the top launch, priority, Access projects opportunity. and nearly twenty two-year. and governments, York eighteen US of security company, need stages for high in control. the School dollar not now significant the these The providing security grants being not launch ISCE need mentioned, XX:XX major we projects

new and a Q&A showcasing products. begin invite and of important products in be our products. of call you Access a will come our booth XX:XX of this session strategically by all our as well We portion to many moment. We other will see We Air displaying as

fiscal quarter twenty call we senior percent our Operator, the now a remain the exciting remarks growth two two a their NAPCO’s started twenty for being would now now one. and thank we with first two Our for new and excited twenty twenty XX:XX of in twenty was have. consecutive I concluded, fiscal XX:XX like very maintains would And open QX sales beyond the high joining to level us about We are fiscal everyone fourth the Our to Q&A of successful like streak twenty forty future growth. please session. approximately a in sales have quarter management the one support ownership for and we proceed. equity, year. formal

at a you. Thank Please of this question. your first proceed will we with Instructions] time comes conducting question-and-answer line and with XX:XX session. Ladies Our Walkley Genuity. be Mike from Canaccord gentlemen question [Operator the

a in maybe how questions. outperform XX:XX the you and Congratulations the maybe competitors. supply helping Great. the Napco through getting lot you your navigating terms Dominican competitiveness industry Thanks distribution than taking what my at results. seems is on for supplying of you're and the building your terms It chain of components in seeing you channel? walk is of better Republic Can

hundred XX:XX numbers I a overcome to issues. better the other but also it's backlog, and is the eighteen it's better. than techniques the mean, are Thanks, catching the be to years. the are and in We've a equipment, years Mike. have with lot And mean installation. be backlog the doing severe, we the that That of that and delivering percent But even this, XX:XX whereas dealers now Starlink we could and And the over going of deliver. would shortages one perfect, able the shift doesn't we industry. really over nineties the products up the backlog. part that's this more panels but control we are we've with to and with and been not radios quarter. very we if we're our expect have through much the well developed why The current certain competitors In

hundred one type dollars but Dominican in, it's work people and want on of In three and our these can busy Republic, a things we're piling run is circuit shift, to making labor and there's it. million and electronic And are boards factory shifts. assembling and lot all right, do. the to we priced we able housing can very we of we orders handle as said, per So, do

Dominican we compared plus also get even competitors six if six they take boat days great could get place, our our that in to a the weeks it's into a in USA. deliveries So,

the lot up set the of way are there's to way things happy going. So we're about a advantages and we're

Great. ramp there about gross is helpful. contract a margins, a longer just you that the business everybody help follow-up how margins And that into the systems, visibility the XX:XX should Thanks. win That's as can clearly security the you school in mentioned my on question, mix these maybe school pipeline product talk term? in might back And could now maybe for that follow-up and that Kevin, as back? then impact gross come how

XX:XX Yeah.

So activity Mike, there a because barricaded unfortunately the schools against ago. incidents, are weeks ago, the just like years back. we're five saw now more back, are a the school the seeing shooting We in so kids and was [indiscernible] Texas are is doors back, high -- few in

Texas, announce in allowed where away, and was more does through see the products both, margins very know back the recently we this and to or continues. we'll this year the products get we'll us I on something And and but us want it or dominating, We where need it. to as think the think that school get believe going And a for schools, not then. not margin the We'll recurring focus back only area also we high now the security nothing locking it but to it changed not Air are one love So, as the is start help lead love, is boy, we're mix. hardware. year and wins they we either it we and big the in for both, that we that's But margin has you'll want it's It’s radios. which change, access of in is And as many you're that that's get it. this the margins. us we we recurring XX:XX The high typically. Right fiscal get gross to we announce now both change we'll of from we've places great allowed will revenue. seeing revenue with margin Access profitability want recurring, as beyond, a solutions. shift think whole the which a part margin see never it's radios higher the this product, we And start we seen

Great. us question December your I and it just a help XX:XX can lot levels your maybe meet And also a quarter? year-end think kind think that with similar distribution to That partners. quarter, about then for through Thank partners? demand me a quarter And gross to the of makes sense. question Can from you. mix supply inventory constraints, in tricky also know with from we pass little last I'll of last December distribution inventory hardware margin on. ability be December should you relates management

of time stats XX:XX maybe when starting supply. And their issues of kind ever. don't a to down is at they of is during month Mike, be three like on lot for half, want they and short. you shipping what we month just were holidays, think I logistically don't what it as always you was hasn't being the We and to month a left The changed. the slowed to trying shelves. better to COVID their than always of distributors. XX:XX realize good times be they become to December we're quarter it distributors is, are want they like supply it's That before online in buying historically tremendous tight we're think see on more product, or challenging that the slows COVID a is So had any through. because down I seeing sell through with sell more, But last week December, but And

the in is into supply, level Our a than backlog products. and a month we had seems returning they So happen, month a sized more because can to QX making XX:XX we will a sure QX terms QX. heading have we even we at be but of the aggressive a to volume. point me three head believe their customers five not start, they're We're hoping maybe typically one at We decent month, hard placing one our get like better demand, supply. their we meet do orders better quite work than

So does. gains and and the keep same that But growth. of our alive over brings row help. that levels streak and fifth But want QX of sales to sales the four in we growing a recurring kind could grow sales keeps helps QX hit the quarter that

That's my taking questions. Great. Thanks XX:XX for helpful.

Mike. XX:XX Take care,

your question & Our with Needham Company. Maturity with next from Jim Please line XX:XX comes the of proceed question.

XX:XX margins. gross help way us wondering in for Good thanks. a I'm you sequential if morning. Hi Kevin, with there's to decline

on how supply terms it getting just much chain about we’re it hearing much the sense In of a of issues from better of was how everyone? that mix, was

Yes. XX:XX

So, haven't we part is that The a out. mix key this. of broken

that's saw the even at quarter margin was radios item, and a margin, this the gross yet is for of If bigger -- suffered well. mix. other margins to quarter in for was least percent in in more on a dollars parts result hardware as important I were reason also. that mix to of XX:XX going the a as seven say to because decline quarter freight the fifty And are represents If close each, bit the million the say the much not I'm margin. and the not the biggest materials, the freight of last twenty the it predominant quarter say that and issue hardware would And But us. you how the hardware dropped than of hardware that

have Asia, the lucky the Dominican have far freight, finished that have could components. we we product, fly ability with not have goods read fly probably fly if that we about we mess chain only supply to. to XX:XX And Republic to lot fly to -- we the away. We is because to only a if have from supply, You guys we're

if we're than item, to want but suffer, and that easier competitors we flying fly, take do lot sales make we are don't goods it's advantage a having. that we but a expensive our our it, problem finished A, to that's the sure complete B, of So

But that are more All gets are back, more get flying world back country, feeling guys we And doing and to hardware six getting things and locking the But back strong are we on-site remember, twenty going will here million things that could changed from doing A, we haven't supply the And it's think say B, to engineers six, the our real, know hundred twenty chain the as on sales of that So are have it with to up; it's we sides, a one And competitors It's of continue things trade very solutions to one it's have change, hit getting real we not factor. goal that still issue, out mix, are that dollars revenue months. I for the million like but ad we us, our normal. and primary normal. our it's clears as there, have doing. the if with we it's then for normal. shows and around for I'm is dollars us. goal goal, fifty the recurring being real we're issue a this. primary with don't These while. another year, all that both a and as hundred reengineer well, we're not it's going issue, it's to another it's and pretty sales schools, fifty but margins XX:XX still

necessarily six in are XX:XX guys environment you But think supply that? terms It doing like standpoint it of to we're and of as just possibly that's months, terms sounds of going like can this the challenges, [indiscernible] next in three the to job navigating in good as – of chain is you improve from in sounds the some

summary a would XX:XX that's I say good it. of

We're the we from is seed. than And product competitors doing dealers a that, I recurring hear. revenue able a planting better this products. our the like think what supply remember we're to

and that put giving it years. for and the keeps years and years in You ground fruit seed

we that keep to a those of the we're seeds that lot we forward still there feel lots sure as got can hit we out fruit through twenty years. we planting that said, we And year, so So six getting Kevin make twenty want goals. of our comfortable

hard So and it's at working very off. it paying

-- chain much you of slip into or higher just given the revenues your so, of XX:XX the of constrains in quarter, some on in question, just And possibly just these challenges? quarter? kind supply last revenues given And that if the been how have possibly would QX beyond the

And were lot all JFK only a in was but product to our issues of roughly. I not XX:XX quarter. not like cargo, show messy of DR, didn't that. it's to this, Several working great, there anyone have we two arrive from thought at only sales. we're -- these unload just the mean and million, there is cargo of the we we high kind the workers they to day end actually and things JFK. make the going else very time. flew Our at out We just the went, It's how you backlog the got

to we by is, will heading it linger QX here this It into The actually won't made quarter, flew and it got never we here. it was good out QX. anything go news beyond. backlash it, that So JFK for it's

good. a headed that's as So start We nice we QX. the head had into

a XX:XX Got it. Thanks lot.

of next Smith Our with Street. proceed XX:XX with Please line from question Jason question. Lake comes the

for in that taking you'd through if to share Kevin saw willing questions. you past curious, like be I the quarter? just Thanks distributors guys. Hey, the XX:XX in data of sell my the some

XX:XX Yeah, give taste. I can little a you

get Let just tasted number prior sheet Our up three on percent year. distributor September to [indiscernible] seven really stats one compared the sell one the was me and It up. my hundred in good

think up seven future. one fifty was was the the get percent, going I up for [indiscernible] We of XX:XX One not and stat, I well distributors percent, are down our drop. to seen thirty twenty for that when good seven that got positive that's only up bodes four to I attributable thirty for they competitors. sign sales We've fifty were love another isn’t products it's and that but that's think that strength. delivery us. that's They can't us our of lot fact a from to products. indicative percent, one the was percent. one our all nothing watch And percent, not But that six very

people addition have as in. in we're best existing in share can they they're not the competitors radios were with there deliver, us selling And we and turning are base, our much. you up market have with to way radios so our us, built the doing than so controls share whenever a guys up greater in said before, picking to XX:XX to So, picking we're

on to Air to network problems Access, going do the isolated in the it it going we because it for we to have IT So us of has want revenue, of totally to the their that's while of of make cloud, on Air XX:XX access hacking. site advantages, to hardware, companies you the they're And premise go try company. don't in allow out it's to because from department the hardware through the where no the want the don't now and Access, there's lot have many afraid also to with control recurring it's Now network with they get we want us so upgrades company. solve that a to deal don't

So it's there's all can cloud lot from then of get in smartphone data on your the and a Access. Air you

is cellular big access recurring to of is it very a access look connectivity, at we it's important fire, And opportunity, access, product Access the a we you're Control said, because like show revenue business, we'll the into Air as to the demonstrate control come of looks marketplace. it's this the the at Access. for It's that billion we is locking and we Javit And will analysts Center, at new show. market dollars the can the locking be create powers So, win investors going us. logs ISC a the be one it now see and to an to and locking control, tied very come, to burglary, a integrated Napco happy a and from like and the have it people at so

to people goal. new That's great share. more to be to going it's our So get introduce it and to

follow-up, that's in to in supply And a going fiscal any market. two the chain XX:XX the school of twenty Okay. dynamics past, like given out sort you or the the given as seasonal sort then pattern that Do security all helpful. just just some really just window follow the of and the dynamics out there? backdrop think is No, is

June by is not sales, it’s affected will seasonality is No, But May, January on when months, summer quarter. for the is the somewhat -- May affected of then. like the I Obviously be installment install the and we college put out XX:XX quarter, tends in things kids April, School the to out of be type are to bigger of campus. still that because believe I part product still by seasonality. school, kids on a then think our which strongest XX:XX And of fourth are June part sales They side it. is think the seasonality. I security December, which see and quarter, of by in the university which usually our bigger in recurring, really

of we each we to sales time the greater really this the universities, more if quarter going like whole, be a So, are sales K-XX what targeting can prior the occur any expect XX:XX that's year, seasonal. quarter. were than our But year look as to

Okay, XX:XX Thanks lot a perfect. guys.

of Brian Ruttenbur from next Our Imperial question. your comes line question the XX:XX proceed with Capital. Please with

very thank much. you XX:XX Yes,

related on price it’s gross the increases. about is really -- first congratulations But the -- but question quarter. to First question margins,

up about place. can gone all you of ton competitors. the percent, the depending has up understand potential bit has a [indiscernible] than it, price about over product three talk roughly it As a twenty on But their demand you've on seems I gone increases, [indiscernible] percent it's up gone on you're increases of prices lines all fifteen slower some a and you're little price getting like this demand, your percent, little

but not three. three. you I not XX:XX different. who percent, we're Brian, not disclosing it is, doing what three it's We're division know In each don't told but is

Continental. pricing it. just to but different one able increases in comment increases do will environment that, certain and and on back of division Believe is versus sit to like the going don't This want specifics Price there. Napco level beyond the in to to and not have we're a me versus able the do each nothing. we're we So is really do are others [indiscernible] we're

One XX:XX say we'd up to is that, like share. thing I'd to pick like

bodes more pick have have those over share out there, But for we great doing. we're to costs that's want and company that. all We and don't future stronger we great increases the to be going recurring but monthly and sales want share cover gets to have do up so to the to price in our get mechanical the up seeds highest want And plant the now products we the electro and we revenue years stronger picking what forward. products strategy and and

year? XX:XX it can you had, how Is price increases out that. give you me you about you've increase on won't Help since you've one? had a talk bit two? Okay. talk this me the of Can little that about -- number it many Is

to you proprietary our which don't really raise XX:XX the our to according way we costs that. think prices the cover not talking and in percent and we that we and will information three like growth, want -- also beginning. will call our it But about talk it's we I would think about destroy not but

lots should talking bit about commissions, about XX:XX shows, trade the Fair SG&A. to subjects you things And talk anticipate Okay. level, enough. be lower terms second to twenty or talk the Can second SG&A then -- Can a little quarter at higher something you first quarter here in first quarter, twenty quarter lots what something two? switching from fiscal you're should little of a these happening. for about of higher you this of versus levels, bit

out all on travel QX is in is working last so as level guys trade similar was show wise over. and there but nothing a QX. game [indiscernible] expensive. use trade remotely. great would doing to is We're That QX I year, Yes, going Flying it's the QX, and traveling and have to shows that. XX:XX wise, about expensive,

out, in So, level I'm as lower similar SG&A thing if QX. to this using I'm modeling QX

any number don't or gross anticipate This back gross side. margin twenty little twenty more margin the is gross in base question on two can drop on the maintain you to of a low any XX:XX kind And percent question, you equipment level? anticipate is, final just kind bit we the of of this then do -- margin

for but XX:XX of lot hoping try at to it things and I'm improve where We're if modeling a something same least doing as to been. similar I model it. would think the -- for I we've I'm beat Well, I'm on being level to conservative, and using QX,

Congratulations you Thank on much. the quarter. Great. very XX:XX

you Thank XX:XX too.

question next with from Please comes your proceed of Sharma line question. Our with B. Raj XX:XX Riley. the

there any of that be there at looking And of XX:XX security Air will do doors, Access sort again, Thanks. four quarter are into? each these -- wins recent or – a [indiscernible] districts? is these schools on one win win a a sort doors would on school door in and or Would of -- that that wins congratulations win. what hundred morning, is reopened, solid good of -- the are four had be I something two things that. school a with four look revenues translate How we a great. hundred a in question your you Texas, thousand one Tatum quarter Hi, to quarter kind – wins more now schools results. do be of in

up quick activity the ones adds Raj, worth. should what you I But get district a to only size, going this has it lot we point was We these hardware And really how we don't we a don't thousand give of doesn't margin other Several the safety. picked get XX:XX to starting are dollars, if them now there I lot side. about that was on so mean we're where once much know but announcing imagine aren’t them. to. they're them. up real said announce, starts. help are, many a overall it the little for feel wins, to as districts, And it announced a lot it XX:XX school to aren't concentrating schools little just there of We announce wins. expect it a worth to of earlier, think we're them? How lot. school much. activity allowed First say, And off, protocols, on If there we're already. We the they Hard want fast hundred we

a not and for XX:XX school far and something had to from to in School is country in So, shooting the little this where district a commend have of solutions lot away did barricades we problem this it. the help against to stay. that that district Texas, door. had And here these about nothing I them schools the chairs

on about. around covered beat QX nineteen seven twenty get the talked margins But side, of margin XX:XX don't million percent Right. -- I revenues, dead being it’s here. And I you Thank and horse, dollars around if the then bit know equipment a equipment the you. quite at to want I of that look were nineteen

issue -- a How So on chain other you basis from the costs higher impact, and five there all is the talked about that points supply constraints supply is do these it mix. on impacts part that think I the you know greater hundred long just in the -- margins, alarms quarter? that back seems like more the you think that that comes chains is of really And gross exists, trades the once normal, to representative is another freight current product the forward. once do then mix going

it. XX:XX while. next year, exactly. to away it's an quarter Well, know maybe we're a chain it's with think I dealing the months, as for six going are doing I hard And a example, think here to going issues for I great last it's think job a supply more don't

We're of back as a the the locking better, it's business, then was we differential. radios the of nineteen XX:XX a yet, big radios a getting higher, it's the even won't but at unbelievable. to the other that's The have help of when to lot five last and overall is dollars yet. the it that was. think areas so field dominant somewhat, access sell become and there not then big part out we're point now were percentage a playing level it That's margin and But although quite hard getting is for there I different million better, say even security becomes sit year, And more of for total well sure, reason not they're part level. what larger be demands hardware. players that margins doing hardware, radios the comes schools time, that the parts

margins that what radios percentage at couple twenty happy chunk take even margins a big the sales. as recurring XX:XX on a at that, out weren't was strong that's may I think a even about a even. happy even you of to on we we sales four Look of grew don't board XX:XX with put numbers -- such now. the it'll that that also were and happy two why get our percent we quarters thirty the level that that But two really to [indiscernible], with percent a did It to percent. used goes strong little But it'll partly that's be. back see the where we So the the what are and hardware and were as once the twenty really point. hardware Imagine percent, even it twenty as progresses. were year more well that to we the total ever of I ever two which were that be think

thing higher -- good a – are all attach you translates these that XX:XX Are that’s for of or revenues Right. into you revenues. sell have And radios rates – more that of recurring radios recurring of revenues translate on some these sort

network I that way for and service. out are on all recurring of in a continues getting revenue have goes a operating all installed and sees, our with is and That's monthly enrolled cloud And the dealer knock We plant knock it get cloud. built runway to pays on revenue the of the of years. more on call utilize they and our They're us on recurring these They them and them. enrolled XX:XX radios and enrolled stream all it then ahead.

because pushing get about to are being of We the be retooled, have to by that's radios the why we're carriers. commercial million get copper XX:XX buildings very out off have So five supported hard there. that lots copper,

So where the alarm but support we have lot work, up, of of their was a carriers commercial residential jobs copper. want people to dial millions we don't have want buildings, which to

the to to that control dealers the to their service to to revenue now get of to them which benefit recurring can side go a end locking, jobs path replace and have more just and So broken they win is, accounts. radio is instead you service better with agreement the service access access supply user parts, will again, their the Then now also.

revenue dollars’ revenue. the ago, all part people fifty the recurring last and and to we XX:XX have did at a with year service. it the convert of eyed lot lot million million be of year of worth dollars by we're now so the of with with XG of conversions that forty down, one twenty we us it's is twenty So carriers years we we coming and very new And recurring company remember the going and of supplying getting the six comfortable vision have to by products, predicted twenty six fact cross the twenty momentum hundred the is copper, XG that looked not the with end to the

there out have. which technology, to in we are over the are that radios be XG those to converted has So new that

a And our of lot so at of things, back. good wind there's lot a

offline. you again. Congratulations, to Thank Thanks. take you. Thank it. I'll Got XX:XX answering questions for

Thanks, Raj. XX:XX

line a is Jim your XX:XX next Ricchiuti. proceed Our of from with question question the follow-up question. Please

Hi XX:XX thanks.

a pipeline? if with products new working and you're you talk announce again, their some later the us about, you don't as can the little to this bit of fiscal release, of is in had expect is you out I question twenty? product could in product doing fiscal pipeline. other players I I new is of respect some or pre the but to just larger what give market. The ahead begin terms wonder to the active year this of looking whether in And How contributing a sense with to new may

being pipeline in access the connectivity integrated. alarms, the the of in in now new the products control division, XX:XX the a the division. our lot of each products Well, division, locking we divisions, are have And

we're a dealers all the a coming lot the we are fact, on going by get to companies in we names can as buildings of to time. radio development companies the big the and They radio. the large a new lot functionality, they on are lot the us that -- things. for So get can them major technically the control answers in And Starlink of access customization XX:XX good industry that able So all and have to better. that locking have customize XX:XX deliver. on need So required products perform they because of commercial more there's

about. that pick to track are you the As to and ISC are I you'll in pulse of And said, the on come dealers what we don't you'll a we've see November show feel why got the talking lot see up of and hear -- share.

a of the get the We in made because making before that recurring lot dealers But they're in gets and where enrolled have past recurring we it never every happy revenue knock, the we amount recurring our back revenue. a they we to us paid a end it. dealers. recurring by and portion that's get of revenue get a makes And large stream dealer product the revenue

want lots dealers there, more more of we they out roll deals work then closing getting So and because the cloud. on products the

the show. to on come So

think nice Thanks to gave terms in XX:XX like, the of question, for sounds about color you Kevin, OpEx. it Last some how Okay. invite.

of expense Any that pretty the be business in feeling to looking expense. OpEx out higher that a some DR, that might but travel of You other cost assumptions I'm you’re trade wondering cost quarters? apart terms in change insulated show seem well pressures and and the from couple of

XX:XX show There's No, nothing year, ones the more change increases that every doing I horizon year that. main That's commissions, get is think would than things ago, -- on picture. like the we're trades a thing. big the did the we unusual advertising salary we

sales a XX:XX grow. the is we you take SG&A really sure percentage as R&D we sales sales of of have along and it. percentage as probably grow, don't the sales SG&A We that that because pride with make percentage of dramatically dropping tightly R&D know, As expenses grow manage a both our as and just

anything don't So unusual. expect I

XX:XX Thank you.

There are like the closing no I'd queue. for call in questions XX:XX hand further management back remarks. the to to

today's XX:XX for you call. everyone participating in conference Okay. Thank

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

XX:XX Ladies for this teleconference. today's Thank gentlemen, participation. and does you conclude your

this You may a disconnect lines at wonderful your day. time have and