Napco Security (NSSC) 6 Nov 232024 Q1 Earnings call transcript

Welcome to the NAPCO Security Technologies Fiscal Q1 2024 Earnings Call.

Our host for today's call is Fran Okoniewski, Vice President of Investor Relations. [Operator Instructions] I would now like to turn the call over to your host, Fran, you may begin.

Thank you, Ross, and good morning, everyone. My name is Fran Okoniewski, Vice President of Investor Relations for NAPCO Security Technologies. joining results today's quarter for for discuss call XXXX. all financial our our you us conference for to Thank fiscal first

to quarter. By had release you of the review opportunity discussing our now, press our of should results earnings all the have

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

President Officer. and On Officer of Executive the and Kevin our President Buchel, Chief call Financial today our are and Executive Vice Security Richard Technologies; Chief Soloway, NAPCO

Before me this read contains forecasts based let current future we forward-looking forward-looking the and beliefs, expectations judgment, of current trends are to begin, performance anticipated moment a take management's performance. based that statement estimates, presentation as projections on on and statements product

include, of customers limitation, our growth market school revenue. and monthly rate for without control such as Software opportunities, to relating recurring annual expenses the run to and and our products, of business, a revenue statements recurring reoccurring services, Service, drivers security as statements products the dealers, These revenue potential to expected company's forward-looking ability costs benefits

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

the from in proving incorrect could be those assumptions statements. cause to Other to or subsequently or results differ factors unknown materially underlying unpredictable actual forward-looking

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

conference unless stated information, no to today's provided forward-looking these of and we law. statements. required today's press such date, You information otherwise should not on as reliance update as release applicable this and is place under in undertake except duty call undue All

November will New with pass. XX Dick and East Javits on to us, please York a arrange over trade industry will Center. If call me, mention XX we show you get that interested and I in in want but the before contact a meeting in attending turn and to will the anyone is be do, I moment, to I ISC I City's attending

In XXth the out also future. Annual Chief of in non-deal the me for We're roadshow Conference Soloway, near way, January. planning Richard Technologies. the be Dick, is in over let and of call some Officer With President addition, we Needham yours. activity turn the will attending Growth NAPCO Security Executive to floor that the

conference welcome discuss everyone, Thank Thank to you, our you to Good our results. Fran. morning, call. today and joining us for

report This our sales fiscal for XXth XXXX QX $XX.X a quarter We to reporting achieved of are million. sales consecutive record period. pleased we quarterly is record the

revenues. annual Recurring service $XX.X a revenue recurring run to rate and on now rate October prospective based XXXX at very strong continues grow the million is

up remains cash sheet strong sequentially. Our million, balance $XX.X balances over with fiscal at and XX% QX XXXX our XX% up

debt. no have We

here metrics costs. We capitalizing control on locking team controlling at trends, to to profits security the enterprise school NAPCO the on related and and revenue wireless plus of systems solutions, service and focus fire which The equity products. and on continue alarms include access focus growth, architectural returns intrusion and recurring continues our on key key management industry

important as shareholders. as to our are metrics us These well

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

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

last $XX.X XX, XXXX, X% first million of X same million ended everybody. quarter September sales Net compared to a period the months to as record morning, Thank you, Dick, and by year. $XX.X for fiscal increased the good for

Recurring continued for million year. XX% the strong its period same increasing monthly QX last revenue $XX.X compared to service $XX.X to in growth, million

have annual revenues of in to Our service we on revenues, July which a $XX.X $XX approximately prospective service August. now that run million recurring XXXX October million rate based and recurring compares service XXXX reported revenues based recurring back on

sales X% $XX.X as radio off and $XX.X year. for expected million to due decrease million as Equipment distributors compared the last softness decreased quarter work in This the primarily was sales to to some radios they inventory, the excess of result sunset was with was in Verizon ensure XG loading up they inventory. their XG had radios that when updated wanted which distributors the to impending approaching

expect Marks QX. And We versus in our store both Lock the excess a highly contributor our believe we locking this to a by and radio temporary increased key is continued Alarm partially lead to be in in to growth sales situation, which to radio and our sales profitable revenue. our continue the increases the products, and hardware recurring XX% QX was offset of year's last inventory channel

last ago. with the for to months XX% million and of with margin with a gross with $X.X gross for X of the XX% a to gross million year. profit sales million Gross for $XX.X of a compares equipment same year XXXX, $XX.X increased that XX, September million and $X.X period XXX% margin Gross of XX%, QX compares ended increased gross margin to XX% X% a to margin that profit a for

a freight the first as to mix product XX% problems period gross and of gross revenues same of chain quarter the profit The the of material after sales margin $XX.X supply and global as products. for gross increased with result XX% increase shift gross to that million the recurring $XX.X locking million with higher-margin margin for in well profit last year. for and the XX% the dollars was to equipment cessation margin, and normalized primarily in a Gross more compares costs for

selling in the company's to sales for monthly was higher year radios. margin XX% service increase to of X% this million radios, on for due QX gross fire last year. well quarter at QX as which the both Research costs the $X.X development relatively The XXX as and the or point in than revenues revenues constant intrusion service basis have increase primarily continued now relating company's prices remained

administrative a to and effective expenses rate September The income of effective quarter net with XXXX, months year. the for as last million XX, tax million million XX% $X.X Operating $X.X $X.X period the an $XXX,XXX an or period ago. rate were to constant XX% for the $XX.X at $X.X X also same general compared or taxes of compared company's sales $X.X relatively compared of sales XX% million tax for by the increased last provision income XXX% Selling, to increased million year. as with quarter approximately XX% ended of for as the net year for million to to same for

for $XX.X months $X.XX as the diluted income. was net The the primarily year, million the QX $X.X Net it higher per of for period XX% per quarter the a for taxable and in income to share provision same compared due represents or $X.XX increase to taxes record increased income or share million X sales. for last to XXX% diluted

XX%. equates per Adjusted to EBITDA and QX to for that a same $X.XX of period year EBITDA and the diluted or quarter last million or the increased XXX% compares per share adjusted an for margin diluted $X.XX million record $X.X to share, $XX.X

is increase. at Working marketable September company defined At and compares September XXXX. represents liabilities, XX, working a $XXX.X to current XX, assets $XXX.X XX% XXXX, June was that as capital million current of at capital less and at with in balance million securities, $XX.X Moving that million XX, million on that $XX.X June compared the XX, equivalents the and cash, XXXX, to XXXX, sheet. and had cash

XXXX, the was compared and And for assets XX, as activities by current with operating months in $X ratio, that XXXX. X.X:X period September last was same at June XXXX, million the liabilities X defined million, by Cash and the activities cash current provided at of year. $XX.X XX, current to September XX, operating divided ended X.X:X used for

and back $XXX,XXX last CapEx prior call and for the Dick. in my I to This like to now $XXX,XXX the year. to the period that return remarks, compared quarter formal concludes would was

thank Kevin, you.

start XXXX enabled growth recurring of representing a our achieving revenues. by mentioned, XX%, off revenue record I driven of hardware total As fiscal to QX is results, profits fiscal great company with XX%

achieved $XX.X Total company year-over-year gross revenues growth up XX% and million. we to profit were X% of

gross annual to and $XX.X XX% recurring declined on XX%, with our revenue by revenue equipment X%, run to rate increased October margins an XXXX. $XX.X as of our While such million sales grew of by million

our sales from in QX locking divisions, which of our QX. Lock our and XX% represents increased sales Alarm year's And Marks versus XX% hardware last

XG inventory, radios As newer conditions. revenues we radios need to as work expect be to because these we replaced have with recurring NAPCO's new alarm of will functioning thousands be anticipate must to dealers and alarm generation and channel through radios replaced reaccelerate revenue-producing monitor we equipment

company. would revenue hardware revenue This in recurring the additional and for increasing both result

our as a XXXX. of our the for gross in on XX%. goals revenue run QX goal here goals in XX% these recurring was or revenue would equipment focus about and XX% on to $XXX and continue XX% well as excess generate We stated of of revenue, million equipment recurring margins and for goals Achieving $XXX of million of margin fiscal in EBITDA rate previously it end

was We are are phone commercial as and well schools, from in lines. shops, offices, as require thousands XX%. goal upgrades buildings all restaurants, this of legacy others on our our still of hospitals, that There such way EBITDA coffee types margin to QX achieving copper

which both our quarter AT&T coverage and of love. the Margins points dealers line revenue this widest by period a ago. for StarLink sets, versus in year Verizon with improved Our radios XX% XXX have feature XX% to of recurring same basis rich the range

the in any developed, levels equipment that months As coming new to believe the our we supply we time and the than reinvigorate have services abating, begin constraints higher stated, combined even we'll before. of chain to previously sales we with are have distribution

Republic we sales, this to higher as margins more happens, of margins. the that absorption our the increased occurs generate in and When our level factory the hardware Dominican gross expect hardware expands also overhead gross

is of advisory & announced the hiring and to and range having a accounting also in has as their reputation of renowned Deloitte Deloitte of X high-quality wide expertise audit a for firm. new the and the our Touche services strong providing professional clients. largest of world service record networks known track We

and the to distribution the challenges of At NAPCO, our product in and relevant professionals alarm a with to it's essential integrators relationship, over the our unique distributors big locking our dealers, XXX this to country in partnering the across aligns industry-specific additional was largest this to X with branches locations. new choose with with quarter understands over An regulations and stage, expands the who for this and X with sector. network service experience organization highlight system U.S.A. that alarm firm XXX

fire burglar developing In our recurring a products hardware called we grow which service will to us substantial remains sales high-volume more recurring add team small business business. and at Our residential for introduced R&D revenue help XXXX, and importantly, in hard alarm NAPCO. work, which growth substantial future, the October PRIMA, generate most revenue profits could new

we continue to Also engineering new and new excited. have strategic help quarter, made alarm to ways existing exciting and talent locking in some in in as of the These them get our and more to personnel and additions adding integrators our to products investments will market sales team. specialized develop the us take so faster and

indicated tremendous and to earnings we created the profitable shareholder per team be dividend program for years, way as such in Lastly, of $X.XX will growth share distribute as to proud the is are over the investors. and us issuing release, NAPCO another this value we this another has

a fiscal for generate pristine off continue are start and We great XXXX, balance healthy have profits. sheet, sales and and to no a strong we debt to

support continue like believe joining I'd beyond. we for us future into well we in and to exciting fiscal thank toward we this as goals XXXX We future everyone can our their the for and have. growth this work

like the remarks please formal Our we the would concluded, are Q&A proceed. to and call for now session. open

Pfau Blair. [Operator our from question Instructions] Matt first And comes from William

your just to the help address should that past And expenses? had. the first looked those think that. doing those restatements to some about how like accounting wanted on address to It I auditor changed Anything you've ask results. you're we impacting issues? of help internally Nice you else

Thanks, Matt.

in things. quarter our the the is in testing than different One, on we've it are We do compare large past. in there's we changes changes, that to a done to continue procedures have materials. any any price on had. We we what investigate and October same we it. We test it a raw So the items the performed end was of thing If few occurred. that might basis adjust the any at

a what it any brought hardly changes that's pricing we caused we with module any to crisis, the a year. will to see investing by didn't these that We is changes in do be past didn't check it that a this QX. in expect automated we We the more of quicker the and that in and changes in chaos supply And see and of still fashion, this last live But quarter. really over. lot chain expect it, are in

We next -- weaknesses Deloitte. to and to policies X. day be hand us in don't which hired with so be to will work file procedures any we after have or that also working firm hand no be QX are and start we or a get consulting we They with perfect, will internal in the deficiencies. our right our Deloitte will controls

industrial We engineers auditor Q our new on the is the on filed, that Once an on staff. work focus costings. plan with and on accountants. labor becomes will our We hand-in-hand the consultant. material to control Deloitte internal to They plan hiring hiring

motion. is Each of these things in

felt haven't them any happening of now. of all because the yet impact is We this

the this cost XX start to million see to of is guess the year. -- months, impact next over of $X the over the up it my we'll expense So will course

So than it, we've what and if it $X with seen from we're to -- firm. the will our September, million. and following us well through to you million looking All probably $X closely forward October Deloitte worth both be working more up consulting measure

equipment That's helpful. on revenue to up the And it. Got follow wanted results.

revenue So sounds understand can strength of performance equipment you like continued was weakness in so going that. us what's help give areas segment we other to by some offset radio sales, the on there it but in better an the Can idea there business. in and

Right.

the Q but in going and it today or of it's There's that's devices when couple see gets X, access locking be the door the in a in to and products, footnote and intrusion not will I'm it shows either between You'll exactly this filed later table next soon. it revenue. days. when recurring be, alarm breakout sure

$X.X completed, intrusion income the the statement million. access and products intrusion and in $XX.X the $XX.X was alarm So locking also can this was quarter million on you which we that was just part was Door recurring The million. down. see

to We be down. it expected

was were was year, their call as loading everybody the could, get time, given impending on at what radio as trying year mania, I many sunset, this Last ago they hands a in up radios where we up, but around to which lot having either. scrambling are XXXX, of choices last-minute a occurring competitors of January and lot happen. which wasn't there did A A lot of of were trouble dealers our guys, they to load were delivering. XG

hands were in leads back it to we all remember we of spent get we extra get supply from was going a and knew of recurring in Because hands know midst keep chips it. the it chain are these You buying could was did could we hands We how, year spent to radios. that Nobody on But on also, the were the to to that get in revenue. micros the required our there how issues. things radios we moving. We able it on dealers. important hands their money ago, -- money these whatever brokers, we a, get to the our

And we some talked because we've large before, -- as we new able picked couldn't. to up deliver about and were others accounts

some on. bought they up get can And whatever hands distributors their just

come and off that inventory gone. has that sunset the not So now -- has worked to now surprise be a

we than surprise, And were sell-through We that move year were less closely they we going a the were worked very QX. knew but they were encouraged. than to stats ago, a they QX We better for saw not radio be were large through of seen brand with in expect already. them also to is to new equipment that locations to help over our overall going that distributor with we inventory signs We've distributors happen. XXX help a up this opening move

encouraging. So that's

it. attributable Alarm And a announce upgrades airports, quarters from Lock security, of view, jobs to it's the use buildings A big it. that school upgradable a a but with They've hotels. projects about us, we're know don't we to schools where of we a hear Marks. great locking you have to point both at more for all getting locking It's over. happening locking companies several infrastructure don't key we of It's see it. school it, about setup been a X doing to We and row. in lot times want to go can't have bunch attributable that Hospitals let

XX%. We're of margins. radio very the locking radio of encouraged better be say, than, margins margins the strength locking might and are the by business course, the But

Of recurring. course, the mid-XXs it XX. Locking to to margins leads over

that So margin quarter. for gross helped the overall the

from & comes question Needham Jim next Our Company. Ricchiuti from

the if be a like for new has color, that that distribution quickly I It we scale? I guys. the about. elaborate on you're more channel this sounds how wanted another to on to you could, get bit could wonder little potential you might source if talking important

the market The it And the we came another new source ISC show is your to products. and to able said, distribution is like would industry. be Las largest to distributor, Vegas last in which us in the

U.S.A. have our be a throughout have will customer for guys We great They great branches and we you. network the train and a XXX

They have we customers a are that of lot have. new don't that there

dealers people companies. business companies alarm approximately We run integration have and XX,XXX system all that independent

So that to to new us products. distributor going sell to has our this they're bring companies additional

fire There's no the We're most segments. those all the has access that unique, unique in very, alarms, manufacturer and manufacture very alarms, locking security products X company because industry burglar we products.

solution, additional it how group a business. have our So great customers to of we an add a we our to lot have explain integrated to expect and these volume to ability sales new with we

help this have of a NAPCO that out to lot now which XXX network, great fabulous products our such additional customer branches on about to it a in we have and company over why between we've as of we anything and marketplace. and break network, advantages salespeople salesmen, lots it's these the going as there distributors And base. there's added guys to what new are So so has we our be -- to sell great make it said, independent

our for exciting future with looking we're an distributor. So new

you ramping know that What it's go year? as I'm us you you I with seeing? give can kind traction to a sense through you of the potentially are early see how days if PRIMA, as wondering

I profile terms perhaps wonder offerings. about And there bit -- your of also little your could lower the think you be of and recurring margin this in might some assume as of is if cannibalization I some revenue to of talk -- whether a we higher-priced

The new PRIMA have It's we in been called alarms. of different else a completely And making products type is The dealers line. it. anything burglar alarms, fire than our It's rock Gemini. is We've now PRIMA love it's product. different solid.

product totally installs residential. product, it's wireless but in, to quality a or for a either small lick-and-stick it. feature to business designed NAPCO very, has in reliable, we of very go enterprises, smaller like it. X it's it's can it minutes It say It's because type NAPCO a -- sets

So we type to it of he's easy customer selling job after if right dealer a actually has of satellite a which home a could the the job very, the the it you himself electronic it door additional sold handy customer. handy to has or in it that's install keypads, the install X-inch and put has for motion store make detectors, -- features, the can and has very can it have front unique keypad customer be leave cameras that or and doorbell is

the station, line in get NOC. all added revenue dealer any enrolled is that everyone with system, the we our the market our for of for the our like we also the recurring get bear to end-user because products. Gemini to NOC, whatever do of it's will his reports we It's regular for equipment. for he's And dealer customer behind. type And the and been charges central dealer using leaves any fee of service a comfortable It

very, the stores, is we eliminates for And dealers, for dealer utilize a very to the this win-win that type high and from good for of that the it's very, by all features repairing market product be a product eliminates us. a resonances to has lots a The it's self-adjusting. need win-win else going there's because because nothing this rolls for this So of and also truck product. it's expect volume lots it's adjusting of because technical it in very system and this the in dealer volume

issue, reboot many, With on Currently, disconnects equipment. the somebody WiFi with If like to network. the realign it's many reboots somebody and back the and different the to like the automatic. play all network and all kids WiFi, a refines has a It that in to resident WiFi PRIMA, levels. go dealers itself the have site

dealer So a have the to won't roll back go and truck.

does system and call WiFi for with So are the if is only the the fancy the features adjusting boom system. interrupted also that's great it have dealer. quickly, or a all changing we but WiFi people Not that the installs self-healing

has a it to features lot So of it.

lot great it. a to months other marketplace. product out GEMINI works a of in So things we volume. last very the year month. expect is get grip This to of We and X takes it and it similar really Typically, shipping for products started a

So quicker. going curve to I is the think learning be

it. Got

look You lock business your out guys you door we that comps running device over think are as some I of about now next... wonder what's the the And tougher into sight business. line as into

locks, business lot tech. acquired mechanical have of the the locks When type traditional X -- the tech a our else basically everybody us business to things, radios started, technology is which But it a And to and technical. was be companies, to business strong Locking I a like idea for our it. and may lot in to mechanical was business has wanted very add we of products business.

to many the have locks locks things modern. that that It's made communications different over cell So locks. It's it transfers distance. phone so

it's whole never line also line recurring themselves. we're for where from dealers and before cellular get hardware recurring because by revenue installed we're that locks, we got whole getting the we make dealer, traditional but of customer make use a while So the near-field they which of electronic-oriented locks still now the mechanical revenue making locks Z-Wave, locks, a for

before done this been Never business. in

technology mechanical locking So and that's is. off paying expect in a future. of the to business, pay we where continue it the off, bring and lot it really We to to it's

Got components sense jump that in it. had inventory to Kevin, queue. back any of we in the I'll are terms price terms in where you as are in question, And and the burning off? of final higher we where that

We're now pricing. higher are at not buying anything Those the over. days

have extra we We to inventory the through radio some some radio some like have because as work well. inventory of distributors,

mixed component The bag, costs. some costs, of of it it was some higher priced at normal component at

for progresses past quarter, you going better that's was why XX% hardware, compared saw what of the X margin which been. a kind to So as great on this year it's to reasons. of for get gross It's

the One, hardware inventory better we better it. as in picks to any go stronger costs our X, as not on get high expand. to volume anymore X the of QX course, being up X, we're than have hardly of better get overhead through and as the going being radio absorption, And the the year X than X being progresses, than margins side that typically, volumes

we happy to these expand guy. So will balance My further. see margins expectation XX% I a conservative as I'm fiscal of is that even into the to XXXX. continue was move

Jaeson from Lake question our Street And next comes Schmidt from Capital.

be digestion sell-through going in you you period. When continue largely you over? of Is do think saw on if September color what that from And to could Obviously, period then over you this in go curious Just relatedly, distributor it inventory the to through is this quarter? current quarter? some provide kind

give X. couple the quarters said it work could inventory. -- distributors first so have of We to through the This work of a was the the

our excess. quarter the think it another having help new lower this to going paces have radios, have distributor levels at the working to the helps better much the we're a of through move -- it, their working help think, We're lot. lot. to with through. them I It's couple So stats guys than work They're going inventory on to I a we distributors that

on expected the the showed lower, guys the stats because than were the was encouraged was We better were intrusion which stats ago, while it did stats We it a of were they sell-through lower in we radios. see than our QX. year sell-through

sequentially, shows to to me move the starting up. was That So direction. right it in

said And X us, give that. we're QX, better by the going for We've work we whatever before. been X take, very think by would We just whatever with effort But no this -- did. we it's We'll in more the so just this we're X the X it move quarter saw we And will second be takes. to quarter, quarters. But I and than encouraged another through it normalized. is it's then different. this going to put to through. distributors This of

in market. helpful. you an you announce That's security just guys the know you're that And in follow-up, But then just you as I curious what seeing school a Okay. space. are limited can if could provide update what

hear about. to go because distributors everyone wish to as I districts. and distributors the sometimes about the school announce school Yes, schools don't the more hear to direct I could we sell the I just

announce and off begging the usually keep I'm hear always to do to some, I don't. things like a They reluctance. it. But about And able to there's They radar. be

key that why the reasons locking key locking. all let cetera, the before, But of of is business, sales airports, school I part to a don't. locking schools of the part but a infrastructure hospitals, things business some X the it. upgrades et they're is us, mentioned still in Some upgrades have It's grown in

And announce will. again, we when could it, we

of for the to be of that's of It to this that seasonal are May, waiting break, jobs can't will that around when are out of We at no school used school seasonality or winter get to Too school. the -- the now, be see are much out somewhat There's for we was to longer to kids no out schools real wait. it the get and done would that's the seeing schools the the by all year when done thing. it. are a jobs happening in kids afford The stake. kids universities,

there, we've out many the would hard there's doors prevent for most, universities. we're And working tragedies. I though of still and There's equipment even on districts. so this have the banging don't all so about talking K-XXs schools, of would years, school many, that been And over X,XXX lots say,

-- innings have what still inning And it's they are ask I in segment, we always So security things school gone on. despite the me that segment. the we early in, say all school

And next B. comes Riley from Sharma Raj Securities. our from question

device that's next should year? for where on some can so you on to continue Congratulations the sales the coming and expect they rest And -- of -- strong, can be The continue from? locking add you to the the results. are -- that color we

see that airport years, The are product, across been invention, everywhere. high-rises, upgrades, business. electronic line, I #X locking is product locking the schools, Institutions, which original the improved which board. locking has the over the in sales our the Trilogy is it's hospitals,

As Kennedy in I Department Trilogies. I stores, in Maguary a to kinds Trilogies. very, go Airport live upgraded very all to airport, Manhattan. key security Trilogies. NYU Trilogies. product buildings. It's happen with for hospital, of

would continue. we So expect this to

We control revenue. We different also make that Trilogies make remote wireless generate recurring it versions.

for stand-alone make We We trilogies schools. trilogies. make

we add how it. growing Trilogy So very luck. we and that's a as keep wide very, this locking to models of to the getting new And we expect range see and for have stronger on applications business

or that correct alarm sales to to quarter the dealer then should market the due this due slowdown a -- that, we're understand end And to reverse demand. way that in not hearing so slowdown, that? Great. inventories, Is is

rate. up see which million the Look it. our The a would in about a $X of X by was quarter. so, of I to million used at to run as a is be stats pointed run or $X rate, we're That's out rate for how much we remarks, run prepared couple Raj. month that Very grow growing the

That's recurring revenue... a

went rate. million, $XX to That Recurring what last it $XX million up run saw $X was million per revenue And million. quarter, encouraging, from we very went than by more month. $X

This to not $XX.X $XX.X million, quarter, it quite $X a from almost million. million almost went increase. $XX month That's a there, $XX million, million

being them. that on telling activated run That are you getting activated being signs. we're radios radios paid those and a there's is And very are that those rate lot good of

believe we of activation to that, distribution the demand our opposed we slowdown issue that a that believe issue. stats, that's about inventory why So and keep why plus talking that's is an we as more

Great.

So this quarters pick shouldn't they down, see alarm down revenues a you alarm as a impact slowdown pickup sales? up recurring the should then it few in

recurring higher the goes, remember, you've up, to it's XX%. of the sales. keep that remember is is overall with number been percent, was goes, increased percentage and us simple we now to the believe. higher harder that Remember, math. it what when it's number XX% That's very And long enough small The a it

that also job managed stuff, new PRIMA. include introducing products goal. pace a gold, us recurring even go didn't up give and can XXXX we've more new to our the up, keeping But In to we're PRIMA we we to forward but do head like it we so good as the keep XXXX

to X ways extra also the ourselves quarter. PRIMA margin and of XX% get goal, giving we on we're So being XXXX XX% recurring gross there, in our were we them this and used at

XXXX that towards as in mind keep So head things these we are frame. time to

like to turn [Operator Instructions] Mr. I'd call be no further appears there questions. back At time, this over to the to

remarks. for Soloway closing

today's call. you, everyone, participating for Thank conference in

to further free you should further any have always, Feel Fran, Kevin or for call questions, myself information. As

you a speaking for all a thank and support, results. months to day. and in again fiscal you We to discuss forward NAPCO's Bye-bye, QX and few to wonderful we look your interest have

attending. Thank This concludes today's you for conference call.