Good morning, ladies and gentlemen, and welcome to the NAPCO Security Technologies Fiscal Q4 and Fiscal 2024 Earnings Conference Call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you need assistance, please press star zero for the operator. This call is being recorded on Monday, August 26th, 2024. I would now like to turn the conference over to Francis Okoniewski, VP Investor Relations. Please go ahead. Thank you, Joanna. Good morning, everyone. This is Fran Okoniewski, Vice President of Investor Relations for NAPCO Security Technologies. Thank you all for joining today's conference call to discuss financial results for our fiscal fourth quarter and fiscal year 2024. By now, all of you should have had the opportunity to review our earnings press release discussing our quarterly results. If you have not, a copy of the release is available in the Investor Relations section of our website, www.napcosecurity.com. On the call today are Dick Soloway, Chairman, CEO, of NAPCO Security Technologies, and Kevin Buchel, President, Chief Operating Officer, and Chief Financial Officer. Before we begin, let me take a moment to read the forward-looking statement, as 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, 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 our recurring monthly revenue. Forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from those contained in 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 proving 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 are as of today's date, unless otherwise stated, and we undertake no duty to update such information except as required under applicable law. I'll turn the call over to Dick in a moment, but before I do, I want to mention we're actively planning our investor relations calendar for non-deal roadshow and conference attendance in the near future. Investor outreach is very important to NAPCO, and I'd like to thank all those folks who assist us in these types of events. In the coming weeks, we will be attending the Lake Street Best Ideas Conference in New York City on September twelfth, and the D.A. Davidson 23rd Annual Diversified Industrials and Services Conference in Nashville, Tennessee, on September eighteenth and nineteenth. We will also be participating in a number of non-deal roadshows with firms such as Mizuho, Stephens, J.P. Morgan, Wells Fargo, TD Cowen, Morgan Stanley, KeyBanc, and Bank of America. With that out of the way, let me turn the call over to Dick Soloway, Chairman and CEO of NAPCO Security Technologies. Dick, the floor is yours. Thank you, Fran. Good morning, everyone, and welcome to our conference call. We appreciate your participation today, and we review our fiscal Q4 and fiscal 2024 performance. We are thrilled to announce record sales of $50.3 million for this quarter, making our 15th consecutive quarter of achieving record quarterly sales. Our recurring revenue subscription service continues to exhibit robust growth, increasing 27% in Q4, and now has an annual prospective run rate of $84 million based on July 2024 recurring revenues. Our balance sheet remains strong, with cash balances reaching $97.7 million, a 46% increase over the level recorded on June 30, 2023. We have no debt. Our strategic focus continues to capitalize on key industry trends, including wireless fire and intrusion alarms, driving recurring service revenues, school security solutions, enterprise access control systems, and architectural locking products. At NAPCO, our management team remains committed to prioritizing growth, profitability, and returns on equity while effectively managing costs. These metrics are critical to us and our shareholders, reflecting our dedication to executing our business strategy and aligning our interests with those of our shareholders. Now I'd like to hand the call over to our President, Chief Operating Officer, and Chief Financial Officer, Kevin Buchel, who will provide an overview of our fiscal fourth quarter and fiscal 2024 results. Following Kevin's remarks, I will return to delve deeper into our strategies and market outlook. Kevin? Thank you, Dick. Good morning, everybody. Net sales for the three months ended June 30th, 2024, increased 13% to a quarterly record $50.3 million, and that compares to $44.6 million for the same period a year ago. And net sales for the twelve months ended June 30th, 2024, increased 11% to a record $188.8 million, as compared to $170 million for the same period a year ago. Recurring monthly service revenue continued its strong growth, increasing 27% in Q4- $20.3 million, as compared to $16.1 million for the same period last year. Recurring monthly service revenues for the twelve months ended June 30th, 2024, increased 26% to $75.7 million, as compared to $59.9 million last year. These increases are due to the continued strength of our line of StarLink radios. Equipment sales for the quarter increased 5% to $29.9 million, as compared to $28.6 million last year. Equipment sales for the year ended June 30th, 2024, increased 3% to $113 million, as compared to $110 million for the same period last year. These increases were primarily due to revenue increases in the Alarm Lock and Marks brands door locking products, as partially offset by a decrease in intrusion and access alarm products. Locking sales grew 21% and 18% respectively, as compared to Q4 and the twelve months ended June 30, 2023. Radio sales for the quarter were down 10% as compared to Q4 last year, due to the continued effect of the sunsetting of 3G, 3G technology, as well as the inventory levels of radios at that time at some of our distributors. Radio sales represent 59% of intrusion and access alarm product sales, and we expect inventory levels in distribution, which have decreased significantly over the past few quarters, to continue to reduce, and that'll lead to increased radio sales. As such, we expect radio sales to continue to be a key contributor to our hardware sales and lead to the continued growth of our highly profitable recurring service revenues. Gross profit for the 3 months ended June 30th, 2024, increased 21% to $27.8 million, with a gross margin of 55%, as compared to $23 million, with a gross margin of 52% for the same period last year. Gross profit for the 12 months ended June 30th, 2024, increased by 39% to $101.8 million, with a gross margin of 54%, and that compared to $73.2 million, with a gross margin of 43% a year ago. Gross profit for recurring service revenue for the quarter increased 29% to $18.4 million, with a gross margin of 90%, as compared to $14.3 million, with a gross margin of 89% last year. Gross profit for recurring service revenues for the twelve months ended June 30, 2024, increased 28% to $68.5 million, with a gross margin of 90%, as compared to $53.4 million, with a gross margin of 89% last year. Gross profit for equipment revenues in Q4 increased by 8% to $9.4 million, with a gross margin of 31%, as compared to $8.7 million, with a gross margin of 30% last year. Gross profit for equipment revenues for the twelve months ended June 30th, 2024, increased by 67% to $33.2 million, with a gross margin of 29%, as compared to $19.9 million, with a gross margin of 18% for the same period last year. The increase in both gross profit dollars and gross margin for recurring revenue for the three and the twelve months ended June 30, 2024, was primarily the result of the previously mentioned increase in recurring revenues, as well as a greater proportion of those revenues being generated by our StarLink Fire radios, which generate higher monthly service charges than the other StarLink radios. The increase in both gross profit dollars and gross margin for equipment revenues for both the three and twelve months ended June 30, 2024, primarily resulted from the aforementioned increase in equipment revenues, as well as a favorable shift in product mix for locking products, which typically have a higher gross margin than intrusion products. Another factor in the increased profit and gross margin for equipment revenue is increased overhead absorption from our Dominican Republic manufacturing facility. as well as the stabilization of component costs from the effects of the global supply chain crisis. Research and development costs for the quarter increased 28% to $3 million, or 6% of sales, and that compares to $2.4 million, or 5% of sales, for the same period a year ago. Research and development costs for the twelve months ended June 30, 2024, increased 15% to $10.8 million, or 6% of sales, as compared to $9.3 million, or 5% of sales, for the same period a year ago. The increase for the three and the twelve months primarily resulted from salary increases and additional staff. Selling, general, and administrative expenses for the quarter increased 22% to $10.9 million, or 22% of net sales, and that compares to $8.9 million, or 20% of net sales, for the same period last year. Selling, general, and administrative expenses for the twelve months ended June 30th, 2024, increased 11% to $37.1 million, or 20% of net sales, and that compares to $33.6 million, or 20% of net sales, for the same period last year. The increases in SG&A for the three months was primarily due to increases in trade show expenses, as the ISC West Show occurred in Q4 this year versus Q3 last year. In addition, increased stock-based compensation expenses and increased legal and accounting expenses relating to the enhancing of our internal control systems also contributed to the increase. The increase for the twelve months was primarily due to the aforementioned items, with the exception of trade show expenses, which were fairly constant during fiscal 2024 versus fiscal 2023. Operating income for the quarter increased 18% to $14 million, as compared to $11.8 million for the same period last year, and operating income for the twelve months ended June 30, 2024, increased 77% to $53.8 million, as compared to $30.3 million for the same period last year. Interest and other income for the three months increased 99% to $762,000, and that compared to $382,000 last year. For the twelve months ended June thirty, 2024, interest and other income increased by 184% to $2.6 million, compared to $903,000 last year. The increases for both the three and the twelve months ended June thirty, 2024, was primarily due to increased interest in dividend income from the company's cash and short-term investments. The provision for income taxes for the three months decreased by 27%, or $434,000, to $1.2 million, with an effective tax rate of 8%, as compared to $1.6 million, with an effective tax rate of 13% last year. For the twelve months ended June thirty, 2024, the provision for income taxes increased by 60%, or $2.5 million, to $6.6 million, with an effective tax rate of 12%, and that compared to $4.1 million, with an effective tax rate of 13% last year. The decrease in the provision for the three months is due to NAPCO accruing at a higher rate through Q3, and the increase for the 12 months ended June thirty, 2024, was due to increases in taxable income. The decrease in the company's effective tax rate for fiscal 2024 was the result of a larger portion of our taxable income being attributable to foreign operations. Net income for the quarter increased 28% to a quarterly record $13.5 million, or $0.36 per diluted share, as compared to $10.6 million, or $0.28 per diluted share, for the same period last year. That represents 27% of net sales. Net income for the 12 months ended June 30th, 2024, increased 84% to a 12-month record of $49.8 million, or $1.34 per diluted share, and that compares to $27.1 million, or $0.73 per diluted share, for the same period last year, and represents 26% of net sales. Adjusted EBITDA for the quarter increased 18% to $15.4 million, or $0.41 per diluted share, as compared to $13 million or $0.35 per diluted share for the same period a year ago. That equates to an adjusted EBITDA margin of 31%. Adjusted EBITDA for the 12 months ended June 30, 2024, increased 72% to a 12-month record, $58.9 million or $1.59 per diluted share. That compares to $34.3 million or $0.93 per diluted share for the same period last year, and equates to an adjusted EBITDA margin of 31%. Moving on to the balance sheet. As of June 30, 2024, the company had $97.7 million in cash and cash equivalents, other investments, and marketable securities, and that compared to $66.7 million as of June 30, 2023, and that's a 46% increase. The company has no debt. Cash provided by operating activities for the 12 months ended June 30, 2024, was $45.4 million, and that compared to $24.7 million for the same period last year, and that's an 84% increase. Working capital, as defined as current assets plus current liabilities, was $146.5 million on June 30, 2024, and that compared with working capital of $111.7 million at June 30, 2023. Current ratio, defined as current assets divided by current liabilities, was 7.6 to 1 at June 30, 2024, and 6.7 to 1 at June 30, 2023. CapEx for the quarter was $551,000, and that compared to $415,000 in the prior year period. For the full fiscal year, CapEx was $1.6 million, and that compared to $3 million last year. That concludes my formal remarks, and I would now like to return the call back to Dick. Thank you, Kevin. Fiscal 2024 concluded with record revenue and net income for both the fourth quarter and the full fiscal 2024 year ending June 30, 2024. The fourth quarter sales of $50.3 million was the 15th consecutive quarter of record sales for a quarterly reporting period. Our record quarterly net income of $13.5 million represents 27% of sales. Adjusted EBITDA was $15.4 million for Q4 and $58.9 million for the full fiscal year, and equates to a 31% EBITDA margin. Equipment revenue grew at 5% for the quarter, with gross margins on such sales sequentially increasing to 31% as compared to 29% in each of the last two quarters. Recurring service revenues, which increased 27% in Q4, is a major contributor to the year-over-year overall sales and earnings growth and represents 40% of total revenue. Gross margin for recurring service revenues remained strong at 90%. Our balance sheet continues to get stronger, with cash and cash equivalents in other investments and marketable securities increasing 46% to $97.7 million. We have no debt, and the net cash provided by operating activities was also very strong, growing 84% over last year. Our Alarm Lock and Marks locking hardware lines continue to see growth in school and classroom security, healthcare, and retail loss prevention, as well as in multifamily, commercial, and residential applications. We continue to remain focused on further penetrating each of these markets. Our StarLink line of radios have the widest coverage range of both Verizon and AT&T, which with rich feature sets, which our dealers love. We continue to enhance these rich feature sets, which make the product easy to install, work on all fire and burglar panels, ours as well as our competitors. No other company can say that, and unlike a lot of our competition, is approved by Underwriters Laboratories, the gold standard of the security industry. There are millions of commercial buildings of all types, such as offices, hospitals, schools, coffee shops, restaurants, as well as residences, that still require upgrades from legacy copper phone lines. We are well positioned to see continued strong growth with our StarLink line of radios. Our recent introduction of Prima by NAPCO, a new all-in-one panel for security, fire, video, and connected home with a five-minute installation, remains a very important focus for the company. Our goal is for Prima to address an important mass segment of the security market, including residential and small business. With its built-in Wi-Fi and cellular radio communications, customer alert notifications, and video and smart home subscription options for each installed system, The security dealer, as well as NAPCO, can add more recurring service revenue generating accounts. Fiscal 2024 was an amazing record-breaking year, where we generated net income of $49.8 million, adjusted EBITDA of $58.9 million, and an adjusted EBITDA margin of 31%. But as I've said before, there's more work to be done. While we continue to be encouraged with the gross margin for hardware sales of 31.4%, we believe this should improve further in fiscal 2025 and beyond. Our strong net income, adjusted EBITDA and growing cash indicate the financial strength of our business. As such, we are pleased to continue our dividend program, and we'll be increasing the dividend, quarterly dividend to $0.125 per share, a 25% increase over the $0.10 we paid last quarter. This will be payable on October third, 2024, to shareholders of record on September twelfth, 2024. As always, we will strive to accomplish our goal of a continued financial strength, product innovation, technical superiority, and strong profitability to fiscal 2025 and beyond, and we believe we can continue this growth well into the future as we work towards our fiscal 2026 goals. I'd like to thank everyone for their support and for joining us in this exciting future we have. Our formal remarks are now concluded, and we'd like to open the call for a Q&A session. Operator, please proceed. Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Should you have a question, please press the star followed by the one on your touchtone phone. You will hear a prompt that your hand has been raised. If you are using a speakerphone, please lift the handset before pressing any keys. First question comes from Matt Summerville at D.A. Davidson. Please go ahead. Thanks. Couple questions. First, just on the locking side of the business, obviously growing north of 20% in the quarter, how fast do you think the market is actually growing? And what are you guys doing to drive the share capture you're seeing in that market? And then I have a follow-up. The locking sales have been strong for several quarters in a row now. We have two locking companies. They're both doing well. We've picked up market share, we believe, during the times of supply chain, as our competitors couldn't deliver. Our Dominican factory kept delivering, and we picked up share, we believe. We're very diverse. We're into schools, which is a big need still. All the shootings that still go on, many schools still haven't done anything. There's a tremendous need in airport renovations, which are going on throughout the country. There's a tremendous need in hospitals. These needs continue. Our products are also different. We make electrified locks, not just, you know, plain old hardware locks. Puts us in a different category. Having these two companies, both performing well at the same time, has created this rise, which was up 18% for the year versus a year ago, and it's 65% of our total hardware sales, equipment sales. Can we keep this pace up? I don't know, but I think double digits is certainly a possibility to continue. We don't see any slowing down. We travel along the country. We see a lot of construction still going on, despite what you might read in the papers. Activity for the locking is very good. Thanks for that color. And then just on the radio side of the business, you know, you had this recent product launch that you sort of referenced in the prepared remarks. Any sort of early read on the success you're having there? You know, you mentioned the radio business was down this quarter. It sounds like it's probably going to be down in the fiscal first quarter. Do you see that business re-accelerating to a high single- to double-digit growth rate as you move through the year? You know, the radio business, despite the stats that tell you it was down, and it was down as we've said, 5% sequentially, 10% compared to last year's Q4. It's down in the radios that produce the lowest recurring, and we are fighting like crazy to get it back, coming out with new features on our radios, which has been well-received. But the interesting thing, which I don't know if everybody picks up on, is that the recurring revenue continues to grow because the fire radios continues to do well. And as we've talked over and over about, fire radios bring in more money than the other radios. So I was very impressed and happy that despite those stats that we talked about, that recurring was up 27% and up 26% for the year. Fire is doing really well. Doing well with our new distributor. It's doing well with our big accounts that we landed, that we've talked about, some of the big names. That we believe is gonna just keep getting better, and we'll get the lower-end radios to do better as well. And then we'll have both sides contributing, and then you'll see the growth of the overall growth on the hardware side of the radios. And we're working hard also to get through all the distribution issues. We've talked about that before. Some of our distributors had too much. We have one distributor left that has a little too much. Working hard to reduce that. That'll help as well. Thanks, Kevin. You're welcome, Matt. Thank you. Next question comes from Jim Ricchiuti at Needham. Please go ahead. Hi. Thanks. Maybe as a follow-up to the previous question. As we think about fiscal 25, is one way to think about it, Kevin and Dick, some normalization of demand in the fire radio business, which I assume you're getting some benefit from having the new distributor coming on stream and scaling, and maybe this other distributor, where it's possible they're still over-inventoried with the lower-end radio. So is that one way to think about the business as it... Over the next several quarters? Well, normalization would be good, but we want more than normalization. We want enhancement, I'll call it. You know, we've got relationships with some big names, which we've talked about. We want to start to see those translate into much higher radio sales, and we think they will. We're spending a lot of time with these big names, and they have the potential to do a lot more. So between the big name- Yep. Got it. I'm sorry. Yep. I was just gonna say, so between the big names and the normalization of what has been occurring in the past, we should see nice growth in the overall radio segment, not just fire. Got it. So it sounds like you anticipate continued strength in the fire radio side of the business, and also- Yeah, we haven't seen that. We haven't seen that slow down at all, ever. Is there any color you can provide? I know it's a bit of a mixed picture with respect to the distributors, but is there any color you could provide on some of the sell-through metrics in terms of what you're seeing out there? We added the new distributor. There's no issues with them. They're doing great. They may become a 10% hardware customer in the near future, we hope. They're doing really well. We've only had them for a year. Then you have two or three other big ones, and the other one, who's our biggest one, Anixter, Wesco, no issue. They've worked through their inventory. We have another one. We got to do more work with that one. And, then once we get through that, that one, then I think it's all good. The sell-through stats are good, but when they have too much inventory, even though they're selling, we need new orders, more orders. So sell-through, great, but let's get their inventory in shape so they can place another round. That's kind of what it is. Got it. And one final question, just on Prima. How do you view the launch of the product? How satisfied are you with the way the business is starting to develop? I know it's a small part of the revenue right now. Prima is an important area for us. It's a big market that we don't do a lot in, right? The resi market, residential market. It's a huge market, and a lot of people still have to get away from copper. And why wouldn't they love a fifteen-minute install? The salesman could actually install it. It could be in and out in no time. So the market's there, the opportunity is there. We would get $5-$6 of recurring for everyone that gets put in, so we can't turn our back on this market. It's a big area, so we're working hard. We introduced it, I don't know, I'm gonna say a year ago, roughly. Like any product, it takes time to take hold. We're more optimistic now than we were, you know, when we first introduced it. We've done a lot of things, a lot of enhancements, added accessories, added some salespeople whose focus, whose main mission in life is to just work on this. We think it's gonna all translate into success. That's the hope. Big area. It's all incremental, recurring, whatever we get out of this. Got it. Thanks for the color. Congrats on the quarter. You guys. Take care, Joe. Thank you. Next question comes from Jaeson Schmidt at Lake Street. Please go ahead. Hey, guys. Thanks for taking my questions. Kevin, I know you noted that ADI is going well. Just curious if you could provide some additional color on that relationship, if it's tracking to your expectations and how we should expect that ramp in fiscal 25. It's only been a year. Very happy. So far, so good. You got to keep working. Stats look good. Opportunity is there. They are the largest distributor of security products in the industry. They're larger than WESCO, because WESCO distributes other things. ADI distributes security only. So for one year in, and we got to, we got to work it, it's doing really well. One of the things they've done, they've made introductions for us, for large dealers that we didn't have an opportunity to meet. You know, there's 30,000 dealers out there. We don't have them all. We have 12,000 of them. There's another 18,000 we'd love to do business with. ADI has relationships with some of the big names out there, and they made an introduction for us to a couple of those big names, and now we have a relationship and selling fire radios to some of those big names. There's more of that, and we just want to keep growing the business with them. Far, so good. It could be much better than it is. Like I said earlier, they could be 10% of our hardware customer. It keeps up. Okay, that's helpful. And then just as a follow-up, going back to that one distributor that still has excess inventory, just based on sort of order patterns you've seen, through the September quarter so far, do you expect the inventory to be worked down, and that issue to be over after this quarter? It's hard to say, Jaeson, because a lot of the business, especially with the big distributors, comes in at the end. So even though we're sitting here on August 26th, there's a lot of time left to see what's going to happen in this quarter. So the hope is yes, but we don't know yet. All right. Thanks a lot, guys. Take care, Jaeson. Thank you. The next question comes from Jeremy Hamblin at Craig-Hallum Capital. Please go ahead. Thanks and congrats on a strong year. I want to come back to your equipment gross margins, which continue to make really strong progress. In terms of thinking about the progression that you're likely to make in FY 2025 and then as you move forward from there because I think over time or maybe over the next couple of years you expect that to get to 40% plus, but just wanted to get a sense for, you know, with noting that you have, you know, at least one distributor with a little bit of excess inventory, how do you expect that progression to play out here in 2025 and then beyond? The margins will get helped a lot by two things: the mix and the volume. The margins were helped this quarter, this past quarter, by both things, the mix and the volume. The mix, having 65% of your sales being hardware sales, of locking, 65% being locking of the hardware sales, that has great margins. That helps a lot. I love radios. They don't have the best margins. Of course, they have the best margins in the recurring, but we love locking on the hardware side, so we need both. What we saw this quarter was strong locking, which brings strong margin and volume. The volume going up helps because in our factory in the Dominican Republic, we get leverage from pushing more volume through our factory. Because it's a labor-intensive factory, you need labor, a lot of labor. It's low-cost labor. You don't need much of anything else. So if you get busy, you add more labor, and if you add nothing else, you get overhead absorption. The margins expand and the money drops to the bottom line. We feel strongly that the volume is going to keep going, going to get better and better. We recently bought our second Panasonic chip shooter machine. It's a $1 million machine. What it does, inserts the components rapidly, more rapidly than anything we've ever had. The iPhones use this machine, and it gives you flexibility, so you could change from one product to another product line without disruption. It's our second one. If we didn't believe that our hardware sales were going to be growing nicely, we wouldn't have bought a second machine. But that's our belief, and higher volume will lead to higher margins. Just as a quick follow-up, in terms of making that progression here over the next couple of years, you know, so getting to 40% plus, by FY 2026, you know, would be over a thousand basis points of improved gross margins in your equipment piece of your business. Does that feel like an achievable target here over that time frame? I guess we'll see how this year goes, but we want to see the progression to close to 40 this year. And I think if we see that, then I'll feel good about our 2026 target. But we have to grow that top line hardware more than it's grown. We have to continue to see the strength from the locking, which we've seen now for several years in a row, and then the margins will go up. And historically, we've seen a tremendous amount of margin increase when the volume goes up. If you go back to our history in 2018 and 2019, you'll see when the volume kicks up, the margins fly up. Back then, this was pre-COVID, our margins were pushing high thirties, low forties. There's no reason we can't get back to that now, considering all the steps we've taken and that locking is a bigger piece of the pie. This is, this is what we're pushing for. So look for the margins to keep going up during fiscal 2025, and then we'll be able to assess whether our goal for 2026 is achievable. What I will say is our goal for recurring revenue margin, which was 80%, is more than achievable. As you can see, it's 90%. I'd like to point out also that our engineering has expanded because we're coming out with new products on the hardware side with recurring revenue, which has never been done in the industry. So our locking lines will generate recurring revenue for the locksmiths and the door specialty installers. And that's a major drive for us. So that's going to keep piling on additional hardware sales and recurring revenue. Those products, we showed at the ISC show in their basic form, and got very good feedback on that, and we're continuing to develop them. And, we expect those to carry us to recurring revenue and equipment sales for many, many years. It's something that alarm dealers have gotten. They sell a job, and they also get a recurring revenue tail to it. The locksmiths and the door guys don't get that, but with this new product line that we showed, they will get that. So we're very optimistic about the future, and it's very exciting. We also introduced some new radios with additional coverage to them, which have greater coverage and wider variations throughout the whole country. So those will be generating a lot of additional recurring revenue and hardware sales along with them. And everything that we do is Underwriters Laboratories approved, which is the gold standard. A lot of our competitors use secondary level of approvals, and that's good for the smaller companies, but the larger companies that Kevin was referring to, which are coming to us, want the high level of security with Underwriters Laboratories approval. They know that that's the best way to get their signals and the most reliable equipment out there. So we're proud of that. That's, that's one of our major goals. Great. Thanks for all the color. Best wishes. Thank you, Jeremy. Thank you. Next question comes from Lance Vitanza at TD Cowen. Please go ahead. Hi. Thanks for taking the questions. I'm going to try to get two in if I can, one on revenue and one on cost. The revenue question is, could you talk about the pricing trends that you're seeing on the services revenue side, fire radios in particular? I'm wondering to what extent, if any, you have had to rely on promotional pricing, and do you expect that to potentially be a headwind on gross margins on the service side going forward? We promote as necessary. We've tried not to mess with the formula. The formula has worked since we started this cycle, and so, we only adjust or promote as needed, and we'll continue to do that. Fire doesn't need a lot of help, but if it's needed, we'll do it. Listen, we have 90% margins to play with, so it's not a big deal, but so far the formula has been good. On the non-fire radios, I'd say we've been more aggressive in promoting that, and there might be more of that, but again, I try not to mess with the formula, but we got to keep our eye on the market, and as needed, we'll adjust, but I think we've been doing pretty well so far in the way we've been handling it. I hope you realize- Yes. That we get our recurring revenue and our radio sales two different ways. One is the retrofit to the copper jobs that are out in the field now, which are starting to go bad, dead, because the Verizon, AT&Ts do not have to install or repair copper anymore, according to government regulations. So you have about five million fire jobs that still need to be converted over, and we have a fabulous radio that the dealers love, and as I said, it's the gold standard of the business. So we have that work coming in. Then we have all the new control panels with built-in radios. So on new work, for new buildings, refurbs of buildings, those radios are built into the control panel, which gets us hardware sales of smoke detectors and carbon monoxide detectors and all the other peripherals that go along with the fire systems. So we get it two ways. We figure we have about another five to seven years of retrofit to those five million jobs that need to be upgraded. The dealer typically doesn't pull out the system. He just puts a new communication link in, like StarLink. And since our radios work on all the different panels that are out there in brands, the opportunity is tremendous for us. Thanks, Dick. That's super helpful. If I can just squeeze in the cost question. You mentioned on the call that both R&D and SG&A were, you know, up quite a bit, and you called out a few of the items that drove that on the SG&A side. I might have missed it, but I didn't hear so much about the R&D side. Could you talk about what's going on there and how we should model both of those line items going forward? I mean, on the SG&A side, is $10 million kind of a good quarterly run rate from here? Yeah, it'll be lower than what you just saw, and it'll spike during ISC, which this coming year, fiscal 25, will also be in Q4. But absent to that, that's a good level. And we continue to watch it. If we could reduce it, we're gonna reduce it, but as we've grown, we've had to make steps, which we all, you guys all know about. Made certain steps, changing accounting firms, adding an internal auditor, things like that we've had to do, and we're happy that we have done it. On the R&D side, where everybody always says to us, "Well, why don't you hire a whole bunch of engineers?" Well, we don't want to be like Alarm.com, who has hundreds of engineers, but we do have the ability to hire more. And when our head of engineering comes to us and says, "Hey, if you could get me these two or three guys, I could get XYZ out a lot sooner." We tell them, "Do it. Go for it." We have the ability. So the $3 million range for R&D is the new standard, I would say. And this increase came from adding maybe six or seven engineers and salary increases. All well worth doing. Gets us to where we want to go faster. Great. Thanks for taking the questions. You got it. Thank you, ladies and gentlemen. As a reminder, should you have any questions, please press star one. Next question comes from Raj Sharma at B. Riley. Please go ahead. Yeah, thank you for taking my questions. Congratulations on the solid financials and the good quarter, again. So with the sell-through stats getting better, inventories and hoping to get worked out, you know, from your comments, you know, the intrusion and access alarms segment, which was down, I think, 21% year on year. So the radios that are 59% of the mix, they were down 10%, but you're saying fire alarms were up significantly. Yes. with higher monthly recurring revenues. Can you Yes. I'm sorry? Yeah, I was just gonna say, yes, fire was up. We don't break out how much is fire, how much is non-fire. We do say fire is more than half. Right. Right. So can you help break down the portion of the intrusion access alarm that didn't do too well, I guess? And does that portion of the mix not have recurring revenues? ... Yeah, the part that has recurring are the radios, nothing else. And we don't break it out, Raj, the way you might want. I gave you what I could tell you. And, you know, most of the increase is due to fire, and the overall decrease was a large chunk of non-fire radios that were doing tremendous during the supply chain issue with 3G sunset. Us being the only company who could deliver when nobody else could, and everybody loading up, we got to work through that. The comps are easier now. So I think, you know, as we head into fiscal 2025, it'll be an easier road for us compared to some of the difficult comps we had in 2024. Got it. And then, so how should we model this, the Alarm Lock side growing in the next few quarters, you think, Kevin? I think you're gonna see improvement in the radio sales. We've done a lot. We've helped to work to reduce the inventory levels at the distributors. We have an easy comp, going forward for the next few quarters. I expect it to be up. You know, I don't want to, on this call, you know, put out percentage increases. I think it's gonna be doing better. It has to. Got it. And then on the service revenue side, do you... I mean, you know, in the recent past and, you know, it's had stellar growth rates. Do you still expect service revenues to grow, you know, greater than 25, greater than 30% year on year going forward? Working hard on it. 27 was pretty impressive this quarter. I would like to keep it in that range. We're doing a lot of things to enhance what we're already doing. And we have Prima. Prima will add more recurring revenue that we don't have in a market that we don't do a lot in, the residential market. As Dick mentioned earlier, we're working on recurring revenue from locking with AirAccess. These are things that are gonna get that percentage potentially to go even higher. But for right now, I was super happy with 27%. I'd like to keep it in the mid-20s for now. That would be great, and as these other things kick in, it'll go higher. Great. Thank you. Thank you for taking my questions. I'll take it offline. Thank you. Take care, Raj. Great. Thank you. One moment, please. And again, ladies and gentlemen, should you have any questions, please press star one on your touch tone phone. Thank you, ladies and gentlemen. This concludes our question and answer session today. I will turn the call back over to Richard Soloway, CEO, for closing comments. Thank you, everyone, for participating in today's conference call. As always, should you have any further questions, feel free to call Fran, Kevin, or myself for further information. We thank you for your interest and support, and look forward to speaking to you all again in a few months to discuss NAPCO's fiscal Q1 results. Bye-bye. Have a great day. Ladies and gentlemen, this concludes your conference for today. We thank you for participating, and we ask that you please disconnect your lines.