Greetings, and welcome to the NAPCO Security Technologies Fiscal First Quarter 2023 Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during this conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to our host, Patrick McKillop, Vice President of Investor Relations. Thank you. You may begin. Thank you. Good morning. My name is Patrick McKillop, Vice President of Investor Relations for NAPCO Security. Thank you all for joining us for today's conference call to discuss our financial results for our fiscal first quarter 2023. By now, all of you should have had the opportunity to review the press release discussing the results. If you have not, a copy of the release is available on the investor relations section of our website, www.napcosecurity.com. On the call today is Richard Soloway, President and CEO of NAPCO Security Technologies, and Kevin Buchel, Executive Vice President and CFO. Before we begin, let me take a moment to read the forward-looking statement. This presentation contains forward-looking statements that are based on current expectations, estimates, forecasts, and projections of future performance based on management's judgment, beliefs, current trends, and anticipated product performance. These forward-looking statements include, without limitation, statements relating to growth drivers of the company's business, such as school security products and recurring revenue services, potential market opportunities, the benefits of our recurring revenue products to customers and dealers, our ability to control expenses and costs, and expected annual run rate for SaaS recurring monthly revenue. Forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements. These factors include, but are not limited to, such risk factors described in our SEC filings, including our annual report on Form 10-K. Other unknown or unpredictable factors or underlying assumptions subsequently proven to be incorrect could cause actual results to differ materially from those in the forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance, or achievements. You should not place undue reliance on these forward-looking statements. All information provided in today's press release and this conference call is as of today's date, unless otherwise stated, and we undertake no duty to update such information except as required under applicable law. I will turn the call over to Ric in a moment, but before I do, I just wanted to mention a few things on the IR calendar. We are attending and hosting one-on-one meetings at the sixth annual Wells Fargo TMT Summit Conference taking place in Las Vegas November twenty-ninth through December first. Also, we will be attending the Imperial Capital Annual Security Investor Conference on December 14th through the 15th in New York City. Finally, we'll be at the annual Needham Growth Conference in New York City on January 10th through the 12th, 2023. We would also like to invite investors and our sell-side analysts to come to the ISC East Trade Show taking place at the Javits Center in New York on November 15 through 17. ISC East is one of the largest trade shows in the industry, and NAPCO will have a premier location for its booth, displaying all of our great products. Investor outreach is crucial, especially for a small-cap company such as NAPCO, and I would like to thank all those folks that assist us in these conferences and marketing trips. With that out of the way, let me turn the call over to Richard Soloway, President and CEO of NAPCO Security Technologies. Ric, the floor is yours. Thank you, Patrick. Good morning, everyone, and welcome to our conference call. Thank you for joining us today to discuss our results. We are very pleased to report our fiscal Q1 2023 record sales of $39.5 million. Recurring revenue continued to grow at a very strong rate, and the annual run rate is now approximately $58 million, based on October 2022 recurring revenues. Our balance sheet remains strong with our cash balances at $44.4 million, and we have no debt. We continue to focus on capitalizing on key industry trends, which include wireless fire and intrusion alarms, school security solutions, plus enterprise access control systems and architectural locking products. The management team here at NAPCO continues to focus on the key metrics of growth, profits, returns on equity, and controlling costs. These metrics are important for us as well as our shareholders. We continue to execute our business strategy, and our interests are aligned with our shareholders as senior management of NAPCO owns approximately 21% of the equity. Before I go into greater detail, I will now turn the call over to our CFO, Kevin Buchel. He will provide an overview of our fiscal first quarter results, and then I'll be back with more on our strategies and outlook. Kevin? Thank you, Ric, and good morning, everybody. Net sales for the quarter increased 27% to a quarterly record of $39.5 million, as compared to $31.1 million for the same period one year ago. Our equipment sales in Q1 increased 23% to $25.7 million, as compared to $20.8 million for the same period one year ago. Recurring monthly revenue continued its strong growth, increasing 35% in Q1 to $13.8 million compared to $10.2 million for the same period last year. Our recurring service revenues now have a prospective annual run rate of approximately $58 million based on October 2022 recurring service revenues. The increase in equipment sales for the quarter were related to increases in all segments of our business, intrusion products, locking products, and access control products. They all increased. The strong growth of our recurring revenue is primarily attributable to the continued strength of our StarLink cellular radio products, driven by increases in the commercial intrusion and fire alarm business. Gross profit for the three months ended September 30, 2022 increased 35% to $18.2 million with a gross margin of 46% as compared to $13.5 million with a gross margin of 43% for the same period a year ago. Gross profit for equipment sales for Q1 increased 29% to $6 million with a gross margin of 23% as compared to $4.7 million with a gross margin of 22% last year. Gross profit for recurring revenue for the first quarter increased 38% to $12.1 million with an 88% gross margin as compared to $8.8 million with a gross margin of 86% for the same period last year. The increase in gross profit dollars, as well as the 300 basis point increase in gross margin, was primarily the result of the aforementioned increase in revenues, which leads to greater overhead cost absorption in our Dominican Republic manufacturing facility. As well as improved product mix, more higher margin equipment sales, and strategic price increases, which we have implemented on select products. Another key factor in the increases in gross profit and gross margins is the 200 basis point increase in gross margin on service revenues, now 88%, which was primarily due to the continued increase in service revenues relating to the company's fire radios, which have higher monthly selling prices than the company's intrusion radios. Research and development costs for the quarter increased 26% to $2.4 million, or 6% of sales, as compared to $1.9 million, or 6% of sales for the same quarter a year ago. The increase in dollars was due primarily to salary increases and some additional staff. Selling general and administrative expenses for the quarter increased 16% to $8.5 million, or 22% of net sales, as compared to $7.3 million, or 24% of sales for the same period last year. The increase in selling, general, and administrative expenses for the first quarter was due primarily to increased sales incentive compensation relating to the increase in net sales, as well as increases in stock-based compensation and legal expenses. The decrease as a percentage of net sales was due primarily to the increase in net sales as partially offset by the aforementioned increase in expense dollars. Operating income for the quarter increased 71% to $7.2 million as compared to $4.2 million for the same period last year. The company's provision for income taxes for the three months ended September 30, 2022 increased by $396,000- $744,000 as compared to $348,000 for the same period a year ago. The increase in the provision for income taxes for the three months was primarily due to higher U.S. taxable income. The company's effective rate for income tax was 10.4% and 4.3% for the three months ended September 30, 2022 and 2021, respectively. The effective tax rate of 4.3% for Q1 last year was the result of other income of $3.9 million being non-taxable. Net income for the quarter was $6.4 million, or $0.17 per diluted share, as compared to $7.8 million or $0.21 per diluted share for the same period last year, an 18% decrease. Net income and earnings per share from last year's Q1 benefited from $3.9 million of other income as the result of extinguishment of debt. Without such benefit, net income and earnings per share for Q1 last year would have been $3.8 million and $0.10 per share, respectively. Adjusted EBITDA for the quarter increased 77% to $8.3 million, or $0.22 per diluted share, as compared to $4.7 million, or $0.13 per diluted share for the same period last year. The EBITDA margin for Q1 was 21% as compared to 15% in the year ago period. Moving on to the balance sheet. At September 30, 2022, the company had $44.4 million in cash equivalents, and marketable securities, as compared to $46.8 million at June 30, 2022. Working capital, defined as current assets with current liabilities, was $97 million at September 30, 2022, as compared with working capital of $93 million at June 30, 2022. Current ratio, defined as current assets divided by current liabilities, was 5.0-to-1 at September 30, 2022, and was 4.5-to-1 at June 30, 2022. Cash used in operating activities for the three months was $2 million, as compared to cash provided by operating activities of $3.5 million for the same period last year. The decrease was primarily due to inventories increasing by $14 million as a result of the company's decision to purchase an abundance of hard-to-get parts that are used in our StarLink radio products, which generate the highly profitable and continuous recurring revenue. CapEx for the quarter was $372,000 versus $522,000 in the year-ago period, and we have no debt. That concludes my formal remarks, and I would now like to return the call back to Ric. Kevin, thank you. Our first quarter was a sales record breaker, continuing our sales growth streak, which is now our eighth consecutive quarter of year-over-year sales growth. Prior to the COVID pandemic, we had 23 consecutive quarters of growth, and we look forward to surpassing that streak in the future. We are pleased that we were able to beat published street consensus estimates for revenue, EPS, net income, adjusted EBITDA metrics. One key area of our success continues to come from our commercial fire and intrusion alarm business. Today's news headlines are all about the continued interest rate hikes and when the U.S. might fall into a recession. I would like to remind you that our company is highly recession resistant as 80% of our business is commercial, and one of our primary growth drivers, the commercial fire alarm business, is a mandatory non-discretionary item. Commercial buildings must have and maintain a fire alarm system in order to receive a certificate of occupancy. Given the high profitability and essential nature of this business, we focus on this as a key area of our resources. Our equipment and recurring revenue both generated exceptional growth this quarter, increasing 23% and 35%, respectively. The annual run rate for recurring revenue is now approximately $58 million as of October 2022. Our StarLink radios continue to have strong sales, and we are optimistic that we can reach our previous mentioned goals of $150 million in recurring revenue and $150 million of equipment revenue by the end of fiscal 2026, or possibly sooner. Achievement of those goals, as well as our gross margin goals of 80% for recurring revenue and 50% for equipment revenue, could generate EBITDA margins in excess of 45%. As the 3G sunset at the end of calendar 2022 is fast approaching and dealers are racing to complete commercial fire alarm upgrades, we believe that we are in a strong position to benefit. Additionally, the continued need to upgrade legacy systems from old-fashioned copper phone lines still exists. We estimate that there are millions of commercial buildings of all types, such as offices, hospitals, schools, coffee shops, fast food restaurants, plus others, that need to either upgrade from copper or replace an older 3G cellular radio. Our StarLink radios have the widest coverage with both AT&T and Verizon service and rich feature sets which our dealers love. The constraints of the supply chain continue to be challenging, but clearly our strategy to temporarily sacrifice hardware gross margin by purchasing components at higher prices so we can continue to manufacture radios which lead to continued high margin recurring revenue for each radio installed and operating is working. We are pleased that the equipment margins improved by 100 basis points to 23% in this quarter versus 22% in the same period a year ago. Margins for recurring revenue also improved by 200 basis points to 88% for this quarter versus 86% in the same period a year ago. We continue to aggressively manage supply chain issues by developing alternative supply sources and delivery methods, while also re-engineering products where necessary. We believe that in the next six months, the new supplier resources we are developing will reinvigorate our equipment margins and bring them to even higher levels than what we generated prior to the supply chain crisis. The backlog for the company remains at historical high levels, and we remain confident in sustainability demand for our products going forward. We remain encouraged by the continued strength of our sell-through statistics, which we are seeing from several of our largest distributors. We believe we are taking market share from our competitors based on customers continuing to tell us they can't get products from the competition. School administrators have started to turn their attention back to the need for security solutions as more incidents happen. Our fully integrated solutions for the school security generate healthy margins for our business. Now more than ever, we are laser-focused on further penetration of the school security market, which is composed of approximately 130,000 K-12s and 5,000 colleges and universities across the country. Our fully integrated technologies for the school security market continues to remain a top priority for NAPCO. The availability of grants for schools to fund these security projects has never been better. As an example, we recently saw that the Department of Justice awarded $190 million in grants to support school security in October 2022. Many other states continue to pass funding initiatives as well. Offering seamless security solution which allow for our dealers and us to generate recurring revenues is central to our strategy. Historically, recurring revenues have been from our NAPCO intrusion alarm division and fire division. With recently launched AirAccess products, we are now able to generate recurring revenue from all divisions of our company. AirAccess will generate recurring revenues from locking and access control, which has never been done before. AirAccess is the industry's first cellular-based access control system, which we believe is a billion-dollar opportunity. The benefits of AirAccess include no need for upfront investment in expensive hardware, no need to interfere with the corporate IT networks, which can be a major problem for installers, and no on-site database backups or software updates. Our R&D team remains hard at work, developing even more products for the future, which will grow our recurring revenue business. We experienced tremendous success over the last five years, growing our recurring revenue and believe the best is yet to come. We will begin our Q&A session portion of this call in a moment. Our fiscal first quarter 2023, despite the continued supply chain challenges, was a record-breaking successful one. We have a strong balance sheet, no debt, and have made the business decision to use the cash we have to spend more on raw materials and logistics as necessary to ensure that we maintain our sales and profitability growth trends. Our seasoned management team has the experience from previous supply chain disruptions, which is helping us navigate the current environment. NAPCO senior management maintains a high level of ownership in our equity, approximately 21%, and I would like to thank everyone for their support and for joining us in the exciting future we have. Our formal remarks are now concluded. We would now like to open the call for the Q&A session. Operator, please proceed. Thank you. At this time, we will conduct a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question comes from Mike Walkley with Canaccord Genuity. Please state your question. Great. Thanks for taking my questions and congratulations on the strong results. Thank you, Mike. Yeah. I guess for both Kevin and Ric, you know, it appears your focus on the commercial market is paying dividends as some of your more consumer-focused security competitors are struggling with poor results, especially compared to your strong results. Could you guys update us on the competitive environment? With your near record backlog levels, you know, how is the commercial market holding up for your products? We focus on the commercial and 80% of our business is commercial, and we have a lot of new products coming out for the commercial market, and we're doing a lot of marketing. In fact, the show that's coming up in the Javits Center, we are gonna be holding a seminar on the trade show floor. We're gonna do a party for the dealers. A lot of dealers wanna know about commercial. They're tired of the residential dog-eat-dog. They wanna go into the commercial business, which is much more stable. We're gonna be showing our AirAccess, which is our product, which will get us recurring revenue from the access division of our company, as well as the locking division. We expect to have, the show is gonna have thousands of dealers coming from all over the Northeast, to the show. We've gotten the most requests to come to the seminar ever in our history of our company. Obviously, commercial is a great success, and it's very stable, as we know, because to have a certificate of occupancy for a building, even if half the employees come to work, they still have to keep the alarm systems working. They gotta do it either through upgrading the copper, which is being taken out of service or putting in new systems, and we make both. We make the rip-and-replace type of equipment, as well as brand-new equipment for new jobs. Our dealers are very busy doing that work. It's a very strong growth area for the company. Great. Thanks. That's great to hear the excitement for AirAccess at ISC next week. I just wanna clarify, AirAccess, that recurring revenue piece, and it takes a while to train the channel, that is excluded from your fiscal 2026 forecast. If it starts to pick up, would that be upside, or is it included in those longer-term forecasts? Right. You're right. AirAccess is not included in our 2026 goals. That's gonna be gravy on top of what's a very exciting 2026 goal. AirAccess new product takes about 18 months to really start seeing results. We came out with it at the beginning of this calendar year. We think by next year, we're gonna start to see some good action from AirAccess, but it's not part of the 150/150. Great. That's helpful. Last question from me, and I'll pass the line. You know, Kevin, you're using the strong balance sheet as a competitive advantage, and inventory, you know, levels are elevated. You know, what would net cash be if you're at more normal inventory levels? There's two parts to that question. Just with the excess cash you guys are building on your balance sheet, you know, what are thoughts of what you might do with that cash as it continues to accumulate as you start to hit these longer-term goals? Thank you. Mike, if we didn't have to increase the inventory to keep things moving along, our cash balance probably would have been $70 million instead of $44 million. We do what we have to do 'cause we want those sales and those profits to keep going. This is gonna start to change. The inventory, we believe, gonna start to come down in the second half of fiscal 2023. That will help cash grow. Cash grows every month because of recurring revenue. The first of the month, cash comes pouring in. We've had to use it for inventory. When that changes, and it's gonna change soon, the cash number itself will start to grow. What are we gonna do with it? It's a high-class problem. Again, we've studied different things. Acquisitions, we don't need one. If somebody comes to us with a perfect company to be acquired, we'd consider it. But it's gotta be, you know, just right. It's gotta be something we can manufacture in the Dominican Republic. It's gotta be something that's accretive from day one. We gotta be able to sell it in our channel, wanna pay a fair multiple, things like that. Somebody comes to us with that, we're interested. If not, we've got plenty to do and plenty of ammunition to hit our goals. Somebody said, "Why don't you do a dividend?" We'll consider that. Somebody says, "Buy back stock." We've done that in the past. They're all good ideas, high-class problems, and we will figure out what to do. Great. Well, congrats again on the strong results, and I'll pass the line. Thanks, Mike. Thank you. Our next question comes from Jim Ricchiuti with Needham & Company. Please go ahead. Hi. Thank you. Morning. Just wanted to again go back to the hardware margins because there's some moving parts here, obviously. You know, to what extent have you had to step up even further the procurement of some of these hard-to-get parts? You know, how do we think about that relative to the benefit, the tailwind you're getting from price increases? Yeah. We've had to do whatever we have to do to get those hard-to-get parts, and that means paying much higher pricing. You try to get it from the supplier. Supplier tells you nothing available until 2024. We can't wait around. We go to brokers, the broker market, you pay more. What it does is it allows us to keep manufacturing radios. It allows us to get that 88% gross margin recurring revenue. It's well worth doing, but we don't wanna live this way forever. We have started to develop alternative sources from the traditional sources that are telling us to wait until 2024. We believe those alternatives are gonna become available to us within six months. We might start to see that in Q3, our fiscal Q3, which is the January, February, March quarter, certainly by the April, May, June quarter. That's gonna help margins get back to, and probably exceed, the levels they were before this whole supply chain mess started. We do what we have to do. The engineers also, if we ask them to, they develop alternatives, substitution of parts. Whatever has to be done, we do to keep that strong revenue going and strong recurring revenue. You see the results this quarter. Paid off. Kevin, in the near term, potentially still some choppiness in hardware margins until you start seeing - Yeah, it's not- - some of the benefit of this. Right. The supply chain is not over. You know, there has been some easing of freight costs. Freight costs have come down a bit. It's gotten a little easier on some of the difficult components, but it's still out there. It's still out there, Jim, and we're gonna keep doing what we have to do until it's over. My follow-up question just relates to the channel. I mean, you sound like you're hearing pretty good things from the channel. You suggested you're seeing some share gains. Just in terms of sell-through, any color you could provide on that? Thank you. Our key distributors' sell-through stats when compared to a year ago, very impressive. Top three or four guys, all above last year. That's very encouraging. We watch that like a hawk. We watch it every month, and we summarize it quarterly. All moving in the right direction. Very powerful stats, and we expect it to continue going forward. Jim, if you come to the show, since you are based in New York City, you come to the Javits Center, you'll see our booth. You'll see our products. They are head and shoulders better than the competition. They look different. They have different antenna systems 'cause the dealers wanna get long range out of their products. They have different functionality. They have just a different look to them compared to everything else that's out there. Plus, we deliver. We keep those assembly lines working with, as Kevin said, with the different ways of getting parts, redesigning parts to fit into the circuit boards. We keep picking up more and more share. We're hearing that all over the place. That's why there's a big turnout for people to come and see the AirAccess. We're gonna do a 45-minute seminar on day one, November sixteenth of the show. We expect that that's gonna be a big contributor, and it's gonna round out our product lines that every one of our segments of security is gonna have a recurring revenue return to it. You'll be able to see that, and we welcome you and any of the other investors and analysts to come to the show. Okay. Thanks for the invitation. Congrats on the quarter, by the way. Thanks, Jim. Our next question comes from Jaeson Schmidt with Lake Street. Please go ahead. Hey, guys. Thanks for taking my questions. I just wanna follow up on the equipment gross margin. It sounds like you expect some return to normalization sort of in that March and June quarter. Is that confidence really just driven by the expectation for some of these supply constraints and pricing challenges to start to ease or really more driven by the price increases you guys are starting to flow through? There's multiple factors that make us feel confident that it's gonna be better, certainly by the second half of fiscal 2023. Yes, we took price increase in April. We took another one in July. That has to help. We didn't do one October first. We're looking. We may do another one January, but we haven't made that decision yet. That's one factor. The mix is a factor. We're seeing the locking sales really pick up. Locking sales have a stronger gross margin than radios. Radios we love because of the recurring, but the actual hardware sales, the locking is much higher margins. We're seeing that pick up. By January or sometime in Q3, maybe Q4, we're gonna start buying these crazy priced parts, these difficult chips that we're paying, in some cases, 10 times more than we have to. We're gonna see that go back to more normalized pricing. That's why we're so encouraged. We hang in for a little longer. You see the kind of numbers we put on the board even with paying these prices. Picture what it's gonna look like when we can pay more normalized pricing. A $5 chip, not a $30 chip. That's why we're very optimistic. One of the other things that advantages we have as we get more normalized is we're spending a lot of time with our engineers, redesigning software and hardware such that we can get a flow of these components, utilizing other components that we've never utilized before, but will work in our products if we redesign the software and change the boards around. So we have a great engineering team here, and we have a lot of very exciting products on tap to create more volume for us and more recurring revenue. But they're taking a little bit of a back seat right now because of the fact that we're having the engineering departments keeping the lines going with the rejiggering of the circuit boards and the housings and things like that, so we can keep a steady flow of finished goods. As Kevin is talking about, as soon as we get normalized, which is gonna happen in a couple of quarters, then those engineers can go back to come up with the exciting things that the dealers are wanting. We do lots of focus groups. We have a great industry reputation, top in the business. We're like the top dog of manufacturing the radios. Our hardware is very, very special, and we have a lot of new ideas that we wanna introduce to the marketplace, and it's gonna be a very exciting future. As we get back to full new development, instead of spending time on rejiggering components and circuit boards, it'll just drive our business to the highest heights. We're very excited about that. Okay, that's helpful. Just as a follow-up, looking at the school security market, in your prepared remarks, you called out some funding. Obviously, still a big focus on school security. Curious if you've seen any change in the deal size in that market. I guess relatedly, historically pre-COVID, you did see some sort of seasonality throughout your fiscal year in that market. Do you expect that to continue here in this fiscal year? I don't think seasonality is an issue anymore. K-12, after the shooting in Uvalde, Texas, they wanna do whatever they can do right away. Really, what the main thing they have to do is they have to give the teachers the ability to lock the classrooms from the inside. That's the biggest problem in K-12. It's a simple solution. We're seeing a lot of activity. Hopefully, it's gonna lead to a lot more sales, but we're seeing a lot. They don't have to wait. They can do these jobs while the kids are still in school. In the old days, years ago, they used to wanna do it during the December break or during the summer. Those days are over. These schools can't afford to wait. They have to act now. We're seeing a lot of activity in the K-12 market. Universities also, but a big change I've seen in K-12 since Uvalde. In the marketplace. Okay. K through twelve, we make two different types of locks that the schools like. One is with a remote control clicker, so that it could be locked across the classroom by the teacher or authorized person. They don't have to get near the door because there's been a lot of shootings through the doors. We make that, and we're very good at making wireless and unique products, and we're doing very well with the remote control locks. We also make a conventional lock, which is more economical, which is what they call a grade one lock. It's the highest security type of lock. Fits on the door, replaces the existing lock, and it has a mechanical flipper on the back of it, which allows the door to be locked, because the doors in schools swing outward and there's no locks on the inside. They're all key operated on the outside, which is the way they built schools. With our replacement lock, and we're selling a lot of hardware, as Kevin was alluding to, it's going into all kinds of commercial buildings, schools, and we make it two ways, wirelessly, and we make it with the flipper. We have a very good line of products which are grade one for the schools and hospitals. We see them all over in the hospitals, all over. Everywhere you want to keep the bad guys out. Okay. Appreciate the color. Thanks, guys. Thanks, Jaeson. Our next question comes from Brian Ruttenbur with Imperial Capital. Please state your question. Yes, thank you very much. Quick question. In terms of price increase, how much was from volume versus price increases? Your revenue from equipment revenue grew 23%. How much of that growth was from pricing versus volume? I would say the majority was from volume. The pricing took effect. The second one was July 1, and it wasn't a huge price increase. Most of the 23% came from selling more radios, selling more locks. You know, if I had to break it out, I would say, you know, 18% growth, the rest price increase. Okay. Just one question on in terms of competitive environment. Can you talk about the way you're gaining market share? Is it because the competitors A, don't have the product? Or B, that your product is less expensive or is it superior? Can you talk a little bit more about that? You're talking about your product being better, but is it because the competitor just doesn't have a product out there that's available? When we design our products, we design them with features that are very, very important to the dealers, and we design our products so they're universal, so they'll work on all kinds of applications. A lot of our competitors, most of them make it for their own ecosystem, and they're not universal. So the dealers have a product which has a lot of functionality, and it works in every system. We put a lot of extra features on it. If you take a look at our radios, it has two big rabbit ears stuck up on the top of it, which kind of parrots what the cellular towers look like because it amplifies the signals. If you look at the competitors, they have a little, pencil sticking up on the top of the thing, and it doesn't have the same punch-through as our radios, as an example, as a visible example. When you take a look at our software, it works in a way which is very easy for the consumer, the end user, to utilize, and the product installs very quickly. You take a look at the hardware for schools, the complete product line where we have the mechanical ones, we have the electromechanical, and we have the wireless versions. A dealer can get every single functionality, and the functionality is very rich compared to, the competition. We prepare checklists, and we know what we have to add to it. We've been doing this a long time, so we've added a lot of functionality that the competition doesn't have that's very wide-ranging. If you come to the show, you'll be able to see it. You can walk over to another competitor's booth, look at what they got, and just look at what we've got, and you will see the excitement. You can talk to the dealers. That's why we have the seminar with AirAccess. We have a big party on the show floor, so it's gonna be a way to get the word out about all of our newest products like AirAccess. We also have new fire panels called FireLink, which are with radios built into them. They're superior in performance. Price-wise, they're popularly priced. They're not inexpensive, and they're not expensive. When you're in the commercial business, the dealers don't really ask too much about pricing. It's not a pricing issue. If you're in the residential business, everybody wants to know about pricing. Pricing is, you know, is very important. But in our business, just make top quality that the dealers can put in and continue to get their recurring revenue and have no maintenance or things have no maintenance, per se, to talk about, makes a big difference to the dealers, and that's why they are utilizing the products, and that's why we're picking up the share. You'll be able to speak to them and hear it yourself when you come to the show. What you're gonna hear is also they can't get delivery. On top of everything Ric just said, it, you know, the competition's quoting 26 weeks, 32 weeks. Guys can't wait. These are commercial jobs. They can't wait. It allows us to get in there, deliver, and pick up market share. Yeah, as we get into these dealers and because they're getting delivery and they find the products are really superior, then they say, "Well, what else have you got?" We show them other things which are helpful to them. It allows us to really expand our market, our product placement in these dealers in a wider area. From the point of view, COVID helped us get pick up share because we know how to re-engineer. We know how to deal with a lot of the vendors 'cause over the years we've had shortages of components, and we just put our techniques into play. It is working out very well. Great. Thank you very much. Thanks, Brian. Our next question comes from Raj Sharma with B. Riley. Please state your question. Yeah, thanks for taking my questions again. You know, congratulations on the solid results. Just fantastic, amazing. Especially given where a lot of competitors, you know, focused on the residential are showing some struggles. Your pickup also in recurring revenues is showing strength, as you had indicated earlier. So what I'm hearing is that you're not seeing any, you know, indications of delays or pullbacks at all given kind of where the flavor of the economy is currently? No, not yet, and hopefully not ever. You know, again, we look at these stats every month and through September, very strong sell-through versus a year ago. That's what we look at, and it's looking really good. Hopefully, it keeps up. Perfect. Perfect. On the school security side, any sort of indications that the actual school security sales are picking up? I mean, you know, obviously locks and access, how do we tell what and sort of what percentage of the business, you know, this quarter could, would you say would be attributed to school security projects? Yeah, we can't tell you that, Raj. I wish I could. A lot of these sales go directly to distribution. We don't even know who it's for. I am seeing locking sales are picking up, and that's usually an indication that schools is a nice big part of that. Got it. Locking has become stronger like it was pre-COVID. During COVID, it got weaker. Now it's picking up again. I'm sure that has something to do with schools, but I can't tell you specifically. Got it. Any traction on AirAccess and, you know, are you doing sales on that product? Yeah. We're selling AirAccess, and as we said, there's always a delay when you introduce a product because our products are highly technical, so we have to train a lot of dealers. As I said early on in the conversation, the number of inquiries to come to our seminar and talk about our product of AirAccess is the greatest in the history of the company compared to other introductions. That bodes well for the dealers wanting this type of product. We spent a lot of time developing it. We had a lot of focus groups on it, and it hits the spot just right for access control dealers where they can get recurring revenue utilizing cell service instead of hard wires and traditional IT type of installations. This is very exciting for us, and that's why at the show we have this seminar. We're gonna be training dealers, and this is a very big show. Thousands of dealers are coming to this show. The buzz is starting now. As Kevin said before, the 2026 goal of $150 million recurring and $150 million in hardware does not even include the AirAccess recurring revenues and hardware sales that we expect. Great. On the sales backlog, you reported that number in the past, what was the amount currently and sort of, how many quarters do you think you could, you know, satisfy that backlog in? The backlog is still at historic levels. At the end of March, it was about $10 million. At the end of June- Right It was about $10 million. At the end of September, it was between $6 million and $7 million. Got it. It's not the same $6-$7 million within that $10 million. It's new. The more we ship- Right The more we, you know, get rid of the backlog, the more orders come in. It's turning. The orders are rushing in very, very quickly. So it's still a- Sure Pretty big number. We're not used to those kind of numbers, but it's good as we head into this new quarter. Great. Great. Thank you again. Great. Fantastic quarter. Thank you for taking my questions. I'll take this offline. Thank you. Thanks, Raj. Thank you. Thank you. There are no further questions at this time. I'll turn the floor back over to management for closing remarks. Thank you everyone for participating in today's conference call. As always, should you have any further questions, please feel free to call Patrick, Kevin, or myself for further information. We thank you for your interest and support, and we look forward to speaking to you all again in a few months to discuss NAPCO's fiscal Q2 2023 results. Thank you for listening, and bye-bye. Thank you. This concludes today's conference. All parties may disconnect. Have a great day.