Napco Security (NSSC) 26 Aug 242024 Q4 Earnings call transcript

Good morning, ladies and gentlemen, and welcome to the NAPCO Security Technologies Fiscal Q4 and Fiscal 2024 Earnings Conference Call. [Operator Instructions] This call is being recorded on Monday, August 26, 2024.

I would now like to turn the conference over to Francis Okoniewski, VP, Investor Relations. Please go ahead.

Thank you, Joan, and good morning, everyone. Vice Investor Okoniewski, Security for Francis Technologies. is President Relations of NAPCO This for call year today's results you joining Thank all conference fiscal quarter for fourth to and fiscal XXXX. our financial discuss you should press earnings our By now, discussing all have the review release opportunity results. had quarterly our to of

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

and NAPCO Chief today are Officer. Chief Dick Security of Technologies; call CEO President, and the On Operating Chairman, Officer Financial Buchel, Kevin Soloway,

Before we take me a moment statements. to forward-looking begin, let read the

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

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

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

place forward-looking on these statements. not should reliance undue You

to conference as press law. such unless provided update applicable release today's duty information and we and All date today's undertake as in under except call no are required this otherwise stated, of information

Relations calendar to very Dick in thank future. mention, call conference and actively for the I'd Investor attendance over events. to outreach who and want like to non-deal but of the folks in important these us types we're is do, planning NAPCO, I moment, assist to I roadshow in our turn those a near I'll before all Investor

In the XX and New York D.A. Annual Street and Diversified in Davidson on September Ideas Best be Conference attending Lake the will we XX. coming City Tennessee Conference Nashville, Industrials Services the September on weeks, XX, XXrd in &

also Stanley, Cowen, Stephens, will in Mizuho, TD participating number road with Fargo, Bank JPMorgan, be non-deal shows KeyBanc We Morgan a firms such Wells America. and of of as

the of over way, Chairman turn to Technologies. and call floor Dick, is Soloway, With me that let the yours. of Dick CEO out NAPCO Security the

Francis. and our you, Good morning, appreciate and performance. conference your review our XXXX call. participation to fiscal welcome QX Thank today, fiscal and everyone, We we

this consecutive million of are for record to $XX.X quarter We announce sales achieving making thrilled XXth record of quarterly sales. our quarter,

recurring million Our in increasing recurring perspective, July growth, robust revenue $XX on run exhibit based revenues. of XX% annual XXXX subscription has now QX rate to an service continues and

XX, June increase balances balance Our the reaching XXXX. strong million, recorded $XX.X a on remains level XX% sheet cash with over

no have We debt.

and Our architectural and key control to products. recurring trends, intrusion school continues wireless locking revenues, strategic including driving access systems solutions, focus fire service enterprise industry security capitalize on alarms,

shareholders, growth, our strategy our critical are profitability on effectively remains executing to us business our metrics At to our to aligning those interest our with management shareholders. committed NAPCO, while reflecting managing These prioritizing and team our costs. and equity dedication of returns and

fiscal Chief and President, Now over call to XXXX fourth to Officer Financial I'd overview an Kevin our Operating Buchel, Chief Officer, fiscal provide the and like will our of hand results. quarter

into market our to I will outlook. Kevin? return dug remarks, Following deeper and strategies Kevin's

XXXX, million, ended XX% and XX for XX, ago, and everybody. and period ended that continued months record $XX.X the last June strong record in increased $XX.X compared year XX% to Thank sales to million year compares monthly as XX, the X the sales a a same a million same million for for the morning, increased Good $XXX.X XX% revenue its to net $XX.X June service Recurring a growth, months Net ago. XXXX, increasing million million same you, quarterly for QX for $XX.X to as $XXX to Dick. year. period to compared period the

increased million of increased the $XX.X are the due compared a service compared StarLink last to along XX Alarm year. $XX.X products. Lock and XX, decrease million million revenues $XX.X last Equipment and quarter intrusion These the XX% for XX, XXXX, as increased months revenue sales Equipment primarily by $XX.X in for period million to partially for to last $XXX These to to radios. continued of X% ended increases X% access the for the increases our monthly year ended brands Recurring the were June million as as June year. line to to as XXXX, locking to in due products, increases compared offset year. same door $XXX sales strength million Marks

increased and at lead some intrusion at inventory levels which of time radios distribution, quarters to as decreased of Locking last of months access past have down the over sales, radio XG June of significantly XX as QX product in to and quarter XX% XXXX. continued of ended setting due the and our XX%, levels sales few compared effect reduce, sales. and well that the sales XX, grew as to Radio year distributors. XX% we inventory Radio sales sun the of XX% were respectively, QX to continue as compared expect technology the will for alarm that to the represent and to

expect a such, key lead growth recurring we and profitable sales contributor service continue be the highly radio to our sales our of to hardware to As continued to revenues.

a the gross for last the $XX And months margin the X compared XX, year recurring million, period compared compared by margin ended of that ago. with XX, gross gross margin for $XX.X XXXX, XX% revenue of $XXX.X of XX% increased XX% $XX.X increased as margin XXXX, to ended gross margin $XX.X as to profit million $XX.X XX% million for gross XX with profit gross year. million service June XX% year. for a XX% a to quarter with Gross months to million June last and a a a with margin for profit Gross increased of of to to XX% the same million XX% a XX% gross of with with

recurring Gross compared $XX.X of gross last margin million revenues of $X.X year. increased compared by June $X.X months period Gross a as to a X% XX% margin margin months with with for ended by to XX% Gross XX to increased XX, gross for million same of million the gross of revenues a $XX.X QX last margin million margin XX% a XX% year. ended for XX, XX% of profit profit revenues a for XX% to XXXX, as in million with with XX% with a the XXXX, gross XX the gross gross profit for margin of equipment last June with $XX.X $XX.X compared XX% as to equipment for million, service increased to year.

margin XX, greater in proportion generated recurring gross mentioned as radios. StarLink being and higher generate than months The dollars of the in was StarLink those a as and June for by the radios, primarily monthly increase revenues well XX XXXX, gross increase service other recurring of result the for ended profit both which revenues, revenue our the X previously charges Fire the

ended as XX margin for equipment The months a intrusion the which equipment revenues increase favorable for June mix XX, the in locking from as in gross resulted products. than well typically revenues, both gross X shift both aforementioned profit product and higher for and gross in XXXX, primarily a margin products, have increase

component the of Research that as development gross overhead for million $X.X profit global crisis. supply costs facility, X% to or quarter our million to ago. as million revenue salary year and is year the The period of a to the margin increases and increased X% well the in or and costs a Dominican increased ended for stabilization staff. Republic factor and from from costs increase same the effects Another and same $X development for resulted the chain sales equipment additional XX% as compares to the of or sales sales, million X% the absorption the XX% X% increased XXXX, compared X for for Research $XX.X sales primarily period from manufacturing for $X.X increased XX, months XX ago. of or the of months June and of XX

net XX% $XX.X year. expenses to that the period million net general and sales to general sales XX% XX compares million XX% of last XX% for to for compares million or ended months and the million quarter Selling, same the of sales administrative $XX.X or $XX.X to the administrative XXXX, for expenses and XX% $X.X XX, net increased that of same last year. June period of XX% increased or sales net and or for Selling,

for The last increases QX in in as year year. primarily to due this show ISC West was in show months occurred X the trade the increases expenses versus SG&A QX

In constant fiscal increased The also internal the the control enhancing the our and XXXX contributed trade due and fairly addition, expenses systems to to XXXX. was aforementioned which of of primarily show increased legal the versus fiscal increase stock-based with months the increase. were compensation XX expenses, exception for expenses items accounting to relating during

interest $XXX,XXX months from million and for million period and $XX.X June $XX compared was the June same compared the Interest compared XX, $XX.X both for to XX the to XXXX, months $XXX,XXX XX% income The interest to income to as increased Operating the to increased $X.X company's last June primarily year. last million and $XXX,XXX compared the income due months last and ended ended $XX.X year. And increased X for increased period the other and XX XX% XX income X that million operating year. months last same and XX, year. to the to quarter the And other increases XX% short-term investments. the cash income to for for for dividend by as XXX% XX, for million increased to XXXX, ended XXXX,

$X.X taxes the last tax The an for X rate to XX% effective of compared provision $X.X an XX% for to $XXX,XXX rate million, with decreased with months million by or X%, tax year. of as income effective

XX% year. with XXXX, or For $X.X million effective of million XX% the taxes last an by $X.X rate effective to increased income million provision with compares June of an tax to ended that XX%, XX, and XX tax rate $X.X months for the

operations. was The QX decrease the NAPCO taxable rate of is our higher XXXX ended XX in was portion and The fiscal months through in to provision for a rate June taxable the result tax company's XX, foreign of decrease attributable the XXXX, the increase income accruing X being effective larger income. months increases in at for to due due the a the for to

Net or quarter income to per or $X.XX last compared for and XX% to the million the year, net period of as for XX% $X.XX per increased million that diluted share same share $XX.X quarterly record represents a sales. $XX.X diluted

XX-month June year a the $X.XX million for compares XX, income sales. increased and record XX share $XX.X Net diluted the of to $X.XX of last XX% XX% share, diluted that $XX.X XXXX, per to period million and months represents ended net per for or same or

XX% per for margin XX% the adjusted share compares equates the million XX an to or Adjusted a last months to period and of same diluted $X.XX EBITDA or $XX.X margin XX, as and or share $X.XX to XX-month to quarter to share for per ago. XXXX, same for EBITDA $X.XX adjusted or XX%. increased of diluted EBITDA And million diluted million equates period that year EBITDA XX%. diluted a the the year ended $XX.X that $XX Adjusted share an per June per $XX.X $X.XX for to increased million compared record

the Moving on sheet. balance to

for cash million and XXXX, As the that other securities, and marketable and million last months operating equivalents, XX, ended and investments provided XX XX% had that that's XXXX, same of as to year, June compares was XX% to XX, and Cash by June $XX.X of debt. no for increase. increase. activities $XX.X the the has June XXXX, compared company million an million, and that's period in The XX, $XX.X $XX.X a cash company

year. June assets liabilities, current and XXXX. capital, on current compared liabilities, And less and June of XX, XXXX. million X.X:X compared that XX, ratio, June at $X.X capital compared June XX, the last XX, XXXX, working $XXX.X $XXX.X million for current to that X.X:X was and with XXXX, as CapEx by defined Working in quarter at as and And Current $X current to million defined $XXX,XXX for full prior the million, fiscal year at CapEx the year, was $XXX,XXX, divided as was period. assets that was

back formal return my remarks, the would to to now like That call Dick. and I concludes

Kevin. XXXX fourth you, a XXXX. XXXX Thank XXth June the consecutive fourth the income and Fiscal year of period. the both and revenue quarter quarter for $XX.X ending XX, of record quarter with sales concluded net for reporting The million quarterly full fiscal record sales was

Our record $XX.X for EBITDA net fiscal equates $XX.X income XX% and margin. EBITDA million of represents XX% was and quarterly of million QX a the to for Adjusted sales. year $XX.X million full

to revenue recurring margin XX%. quarter XX% which overall of at increased quarters. as sales growth is Recurring service the XX% and revenues contributor grew the and compared remained to with strong on at for sequentially Equipment in Gross such to represents X revenues, earnings QX a XX% in X% increasing for of year-over-year XX% margins the revenue. gross service total each sales last major

continues stronger cash XX% equivalents $XX.X increasing get other cash with and balance and investments marketable Our to million. sheet securities, to and

We cash provided operating have the strong, growing last debt and no by activities also net year. XX% over was very

Our security, well health commercial prevention in and classroom market and care in applications. loss marks as continue school hardware to residential multifamily locking lines see and Alarm growth as retail

of We penetrating to focused remain each continue on further markets. these

line have of range with widest love. sets, rich StarLink our AT&T feature both of the Verizon Our coverage and which dealers radios

unlike gold competitors. easy makes burglar lot We our all approved say the continue as can the these industry. to on Laboratory, feature enhance install, competition of No Underwriters security the and other that. ours of sets, standard by And work a as rich well which company is product our panels, fire to

as that still millions lines. as upgrades of are There all of hospitals, well as types commercial restaurants, legacy offices, coffee copper buildings require such residences shops, from schools, phone

radios. continued with of to We are line our growth well strong StarLink positioned see

a a Video All-in-One focus the recent Our Home for Panel Connected by remains NAPCO, and Fire, Prima introduction new installation, company. Security, of important for very X-minute with a

to segment cellular/radio its Prima indications, service and as installed to With residential is alert security goal generating and dealer and the important including market, Our NAPCO for options video system, smart can well subscription recurring of WiFi each business. revenue the home mass security accounts. address add and small as customer an built-in notifications more

of Fiscal I've said is amazing EBITDA $XX.X record-breaking a But XXXX net to and of we an adjusted was adjusted year work million of income generated margin where there an more million, done. XX%. as $XX.X EBITDA be before,

in be encouraged for the to margin XXXX of with believe continue and this hardware sales we we While gross XX.X%, should fiscal improve beyond. further

EBITDA financial and net adjusted strong of business. the Our growing cash our strength income, indicate

XX% are our over paid September we $X.XXX the will be XXXX XXXX. program we share, -- dividend a be on such, to dividend payable As dividend shareholders increasing and X, to quarter. we'll pleased to increase $X.XX, last per on quarterly record October This the of continue XX,

XXXX our our to as accomplish for strive for work continue financial future and and fiscal we we have. goals. this I'd always, beyond. And fiscal growth the future superiority and goal continued technical everyone will profitability of innovation, strong we believe product their us exciting into joining we towards can XXXX well support in thank like strength, this for to As the we

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

at question Matt Summerville First comes Instructions] [Operator D.A. Davidson. from

A couple of questions.

that of north quarter. is XX% you market fast in then are have Locking And follow-up. drive on you're share obviously you growing? I to How And think do the guys capture just a in the of business, market? doing the growing side what the First, the seeing actually

now. for several The in Locking a strong sales row quarters have been

of the companies. We've share, market both couldn't we They're competitors our We up during picked chain as times doing believe, deliver. have Locking supply well. X

diverse. delivering, on in Our there's that which airport on, believe. a anything. up Dominican a need hospitals. not country, shootings -- factory continue. we is picked kept having We're we the still, renovations, big share, need into tremendous and going very need tremendous We're still a the schools still done in many are which schools, needs have There's throughout These go all

old puts Our not in category. different. locks, make also We a plain us products locks, just hardware electrified are different

has so we up? rise, see construction of don't these this same a of both I hardware know, what on continue. the I despite papers. double this our is X year but And up it's digits possibility We time, versus at We was going equipment We still think any performing the country. certainly don't to XX% in well created see which a for along keep the down. you travel might read a ago, lot sales, slowing year pace sales. total having companies, XX% and the Can

So activities for the good. very Locking is

just side business. the then of And the on Radio

be recent Radio in this that on launch sort Do reaccelerating the quarter. like prepared the rate read had It having down sounds it's You probably to success double-digit move year? first the referenced down there? growth product that of mentioned of you to as this you through single high going fiscal was you're to Any a you business in see quarter. business early the You sort the remarks.

radios. The been back, on do -- because fighting it compared And and recurring received. that that radios we've we bring grow which our talked stats down radios, was money down, over radios, in in the we've continues fire XX% if was well thing, don't and coming over other tell down, to I new to to year's is about, But picks on, the as everybody the despite to the on than fire well. said, And lowest radios know which the interesting like has out It's up you Radio are X% the revenue continues more sequentially, the crazy recurring. QX. produce features that with business last the it it get as

that through well. that about, is added big impressed was talked Fire new names. despite we've you'll just That, big issues. those the keep well also and well. before. of with end we'll better, all get sides very doing believe, radios. our up growth that as the XX% some get that of working that really the well getting stats growth going to do have and It's for distribution and overall the lower better the distributor. on doing we'll XX% And So then side then Doing of contributing I with both about, we the the year. hardware our we and hard to up we've recurring the radios happy talked is we're talked that about accounts was We've to And see

our distributors had of Some much. too

have as distributor help to left one that, too We a that hard well. much reduce has little will that working

Next Ricchiuti from question at Needham. comes Jim

a question. the as Maybe follow-up previous to

distributor As we still radio the distributor where other it, -- which normalization in think lower-end to some some I of over the coming on business, about demand you're with is way from stream the benefit this inventoried possible fiscal radio. one it's new is maybe and scaling Kevin, it having fire 'XX, and think about assume getting they're

to it is one the quarters? the about way think as several that over So next business

We're than sales. they time would start more spending into good, And which these we higher do names we lot talked a we those see the more. lot We've translate to want but some a Well, potential will. big have be with of they much to normalization and we've normalization radio think got call relationships want want big We enhancement, names, I'll to about. it. with

So between the big names...

sorry. ahead, you I'm were -- yes, go suggesting if So

say going see segment, not growth in of been the the big what Fire. should nice just overall to between Radio I was and in past, the occurring we names so just the has normalization

it. Got

business. anticipate sounds the in like continued strength fire you it of side But the also... So radio

Yes.

ever. seen down haven't slow that all, We at

of out mixed any provide the know in any color seeing there a some you can respect there terms on I you're metrics is sell-through bit provide? picture distributors. of could color you the it's with But a to Is of what there?

doing They And the the in hardware added become we There's They're customer great. Wesco, had issues them. the other you their inventory. no We've X a our issue. big really They're They with may a ones. no biggest for through we other year. X one, distributor. XX% near who's one, worked Anixter, new Well, hope. them future, well. Then doing only have or

it's that more they're then are need that more another have We inventory, to once have even all new then orders. do sell-through much one. And stats they got too good, we with we one, think I work though one. get good. orders, but selling, through We The when

That's So they sell-through their is. great, kind but round. can get inventory in it what shape let's so place of another

question, revenue way view the one it's the Got the you part just business How satisfied small are right of How know to you it. on with is develop? of product? starting do the Prima. now. And launch final the I a

us. it's from install And right? salesman Well, don't market, in could do a time. have an The area in lot actually important out a for resi lot that get market, The no big Prima is people copper. It's a of market in, residential huge still it, why a love could be install. away to a we and XX-minute they and market, wouldn't

So $X the $X, recurring everyone opportunity would in. put markets we is that the for get there, gets of there,

on So turn our It's area. can't this market. big a we back

translate to optimistic of were enhancements, going is the now done life when success. we accessories, ago, we we're all added a salespeople mission recurring don't introduced it, more of whose get main it We're area. going whose things, added So That's to think than lot into focus, it. this. hard. We hope. all lot takes year time We've work just I'm to to any this. we of hold. incremental a first roughly. Like say Big out take a it's know, some working product, It's in We on introduced I whatever

the on Congrats quarter.

Lake Schmidt Street. Jaeson from comes Next question at

I noted going is ADI that well. Kevin, you know

some ramp expectations we and you your should color in tracking relationship, on if 'XX? provide curious, that it's fiscal that could expect how if additional Just to

good. It's happy, far, so only very been so a year,

They're distributes largest distributes the got because in larger You ADI working. only. other look to than things. keep security security Wesco They Stats distributor products there. industry. Wesco, of the opportunities are good,

got in, it. year It's doing to work we one well. for really and So

they've that dealers have meet. have introductions to done, of the they've don't didn't things One We opportunity for us to large there. all. we an out made dealers them There's XX,XXX

have big us them. those with fire do has couple for there. names an introduction a relationships ADI big to of names. those of we names. is selling XX,XXX out XX,XXX with. to love We And business relationship some And have some radios made another in we'd of There to Well, the now a of big they

growing them. just So there's and more that with of want the business to we keep

So earlier, is. good. so hardware far, It Like our at of if could keeps be I much it XX% customer, better than it be could said they up.

And a issue inventory as you've the distributor patterns this helpful. to after going of that to down be September so just on That's be that follow-up, Okay. to just inventory then has sort the do order seen still based far, expect excess worked quarter back you that over through and one quarter?

the It's Jaeson, business, at end. distributors, with comes big of the hard in to because especially say, the a lot

see going XX, we're even a August here happen sitting quarter. in what's left on to though lot So to there's time of this

is, So don't but hope the know we yet. yes,

The Capital. of next Jeremy Hamblin Craig-Hallum comes question from

strong back want gross to I make come your to Congrats which progress. on really margins, a equipment continue strong year. to

for or maybe you're thinking then of to time expect of you XXXX the FY over do a because progression distributor make a how and couple next I likely bit move as in think years, here that terms to you least get in about from that you forward have with then out 'XX, sense play excess inventory, to to noting expect get little over But with you plus. the of that just that -- beyond? there at to In and progression XX% one wanted

things: And the by margins past will the volume. the the helped margins volume. the by get and helped and Well, a things, this X the were quarter, lot quarter, this mix both mix

So your XX% best a the have of I great has don't margins. having being sales of love They the That margins. helps hardware XX% sales locking hardware being lot. locking sales, that the radios. of mix, --

we recurring margins locking hardware best the the but love have they course, on in the side. Of

the the strong from both, saw quarter which So a more factory Because what because strong factory, leverage margin. labor-intensive was we factory. volume, but volume helps. in need brings we our Republic, up we our get And locking, through pushing volume it's going the in this Dominican

labor, labor. a lot low-cost It's You labor. need of

don't You much of need anything else.

you you expand the The line. the more else, So better volume labor. is the to and if get bottom it better. drops if that absorption. and We you get to feel And money you add busy, keep overhead and strongly add going nothing gets margins going,

that's our than anything $X it wouldn't We we had, could this rapidly machine. margins. recently our product the does? volume so shooter without you rapidly, a gives higher And lead machine. flexibility believe have one. change will If iPhones and one second disruption. Inserts to bought higher What second you components second we nicely, It's It's to hardware that going But more Panasonic another product the ever machine. belief. line a million chip our didn't use machine, from our it we've sales were to bought growing be

progression follow-up quick in years. of a couple as the that Just here making terms next of over

basis of equipment points target here improved of piece your plus to Does X,XXX an over would business. getting your XX% gross in margins that that 'XX, So like be over FY achievable time by frame? feel

that, see we'll grown. But And grow it's this I I'll top we this line guess then how goes, that I see more year progression about the good want than we if to feel hardware XX% target. XXXX to we our think to close have to but see year.

the the then now strength a row. several to we've from seen locking, up. which We see And the in years for to continue go have margins will

the margin of seen volume tremendous a goes increase historically, And we've when up. amount

when the the then, to There's XXXX, get you was back we XXs, see and in XXs. pushing If were to low reason back our you'll margins margins go this kicks Back pre-COVID, can't fly no our XXXX history, high up. up, that. volume

and we've is taken that locking pie, the considering a piece of what Now the all is bigger steps this pushing for. we're

will look say margins whether to able more for we'll which goal and keep was be for achievable. the margin, XXXX our during going is What recurring fiscal XXXX, for up I than assess is So XX%, is to then goal revenue our achievable.

XX%. you As see, it's can

I'd which also new never side has recurring out coming revenue, our point has like they're with engineering to out been with products, that the the expanded industry. in hardware because done

So installers. us. and our driver generate the lines door for a that's revenue for major the And specialty will recurring locking locksmiths

the for going revenue additional we And that's and piling revenue to So It's line got a and to get and lot keep They showed new something in ISC equipment showed, product revenue. Those recurring products with form, those basic get on sales and good recurring gotten. don't we it. they this get very many, to tail also years. to at hardware a will dealers us develop feedback show But continuing sales locksmiths guys that. that we've that door carry that. they The them, job we're and many their recurring a we the to on expect that. have sell

So we're exciting. the future, very very and it's optimistic about

introduced We some coverage have variations new radios throughout coverage whole and to country. also with wider the greater additional them, which

most are of Laboratory companies, their companies, the coming way which lot that is reliable best everything good that's recurring of use sales approval. equipment but a to, and know was approved, with will that, secondary referring level be generating of that's get lot So the out along which with approvals. competitors, us, want and And that level high do gold the we standard. They hardware Underwriters is the there. A our signals And of laboratory for smaller the revenue to additional those Kevin to larger them. underwriters the security

we're one So that. major of goals. of our proud That's

question comes Lance Cowen. from Vitanza at Next TD

to I'm pricing? get one any, wondering revenue talk can, promotional particular? going revenue cost. services that could you in the to if on have on to to about on be side the a try seeing The if and radios is, X you're I had headwind gross to side, one what revenue that rely extent, trends margins service question the potentially expect do fire pricing you going forward? on on I'm you And on in,

has promote since formula we cycle. not mess with formula. worked We to We've The as started tried necessary. this the

to doesn't need a to needed, help. Listen, it's continue And lot with. do XX% and only do so we But Fire it. of had margins adjust if as or we needed, play we'll we'll that. promote

big So been good. the deal. has so far, it's not formula a But

and formula. we've not to On way say might pretty doing But I with it. the keep been needed, on been the think in eye got the so again, we've market But well that, it of in we been we'll to I'd aggressive we've mess promoting be handling non-fire our more far the that. But I try more adjust. as radios,

retrofit install which you hope copper regulations. to do revenue X our not and jobs And government in we is the to repair or are ways. our copper Verizon, because the different radio go are starting One have to field I the that the get that anymore recurring bad, realize AT&T now, out according sales to dead

X need million have of over. And you dealers I to that the fire a about said, standard love So still have that jobs gold as the And we it's fabulous be business. converted radio the

control new we in. Then coming have built-in panels with work that the have all we So radios.

for buildings, detectors and and all of us fire new new work radios which the hardware built other sales smoke carbon panel, along refurbs those that detectors peripherals oxide the systems. into are gets control buildings, go our the of with So

about to for that those we just tremendous it link in and like upgraded. communication of brands, ways. figure another we pull the X We our to new system. X dealer a doesn't puts there million So all us. typically StarLink in X have jobs that out retrofit out It on are X is years be the work to the different radios since panels get need opportunity The

that's If question. the in squeeze cost super I can Dick, just helpful.

and talk a of that the on quarterly on items side. few R&D the we it, SG&A you of on out that good kind the the side. going -- might items a Could and forward? but I called is R&D should model of is run that those up line both you mentioned bit, from how rate have side, going drove You the mean SG&A much SG&A $XX there quite I here? what's I a and so both million about didn't were hear about call missed on

it. had that's Yes, which But watch this reduce fiscal auditor, QX. certain absent will just we that, make -- adding steps, to steps, in will internal that we've made it all accounting spike we done as grown than to know an guys of to we've firms, good we've But had And 'XX it. we happy reduce you about, going all ISC, saw that also and have it. like could we're changing a it things do. to lower We're coming which during be If be continue level. you what year, we will it,

or be alarm.com me to it, guys, a of the side, comes you don't says to when if don't do says, you hire could On the is, R&D bunch XYZ Well, get hey, Engineering of X And it, get us Head have XXXs sooner. do of we but lot the X We engineers? our for we these to want hire a like go tell out has we and always who everybody why engineers, ability him, I ability. have more. whole can

say. came R&D So increase X and the $X engineers gets to doing, go million the standard, worth us range well would And salary where is from all want X adding new this increases, faster. for or I to we maybe

Next from Instructions] Sharma comes Raj question Riley. B. of [Operator

solid the again. and quarter, on the Congratulations good financials

better getting inclusion hoping the with segment XX% your So the out from worked inventories stats and Alarm's get I The down, in to comments. Access think, was year-on-year. sell-through

when help up sorry? XX% So you alarms with you're significantly revenues? were of saying they Can mix, higher that were the -- fire breakdown recurring radios XX%, monthly are a the I'm down

We to fire going than much half. say, was How out, We nonfire? is much don't is say fire fire? do just was more yes, is I up. Yes. how break

right. Right,

well, help does you intrusion too revenues? not can do the of guess? I break alarm portion down that So have access portion the the that of And recurring mix didn't

radios, tremendous a with most the Yes, want. that doing gave nothing who fire and due you nobody loading up. else. being us that were large radios the company issue you of I what is deliver other nonfire chunk tell break decrease only everybody of recurring the could the the overall has when to don't might could during you I else the the and Sunset, is supply XG could part chain out, Raj, and And increase it -- we way

that. work through You've comps are The easier now. got to

for into the us So compared we will I comps to it had XXXX. think an difficult road as XXXX, in some fiscal head of we be easier

then should few -- next so the it. side Got think, growing we how Kevin? in you quarters And model this Access Alarm

at think we've reduce We've distributors. radio you're the inventory lot. work to to Well, the a going improvement in done -- helped sales. see reduced I We've to levels the

comp for few I easy put going this -- next an don't be want have quarters. forward the increases. I on call, up. to it We expect to percentage out

doing better. going to. be has I to It think it's

the then And stellar expect than on than do rates. forward? side, revenue in greater you mean, still you to it. had it's Got service XX%, recent -- and grow I growth do service the year-on-year greater revenues XX% going And past

XX% doing it, on like hard quarter. to this -- enhance it doing. range. Working things would in of a already in what that to pretty keep impressive we're I was the We're lot

we in the don't revenue that We that residential a recurring have Prima. more we don't a have lot market in, Prima will add market. do

that higher. XX%. now, great. it on like to higher. right kick it As things that to now, I other for super are I'd with potentially get with locking be going as in, happy keep things the to these But go would from even mentioned percentage was go we're working Air And at mid-XXs for recurring Access. Dick are These that revenue earlier, will

Thank turn this closing will our back and comments. concludes over the Instructions] today. you, question-and-answer for to Soloway, CEO, session Richard ladies call gentlemen, I [Operator

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

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

Ladies and participating, we ask today. you your for lines. your please We gentlemen, that this disconnect for you and conference concludes thank