This call is being recorded on Monday, May 4, 2026. I would now like to turn the conference over to Francis Okoniewski, Vice President of Investor Relations. Please go ahead. Thank you, Matthew, and 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 3rd quarter 2026. 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, our Chairman and CEO of NAPCO Security Technologies, Kevin Buchel, President and Chief Operating Officer, and Chief Financial Officer, Andrew Vuono. 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 Software as a Service 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 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, the 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. Throughout the presentation, management will address certain non-GAAP financial results. We encourage you to refer to our reconciliation between GAAP and non-GAAP results, which you can find in our press release. I'll turn the call over to Dick in a moment. I'd first like to highlight our upcoming investor relations engagement plans. We're actively building out our investor relations calendar with a series of non-deal roadshows and conference appearances. Investor outreach remains a top priority for NAPCO, and I wanna thank everyone who helps support these efforts. We're looking ahead to a full and dynamic schedule this quarter. Later this week, we'll participate in Oppenheimer's 21st Annual Industrial Growth Conference, followed by a virtual non-deal roadshow with KeyBank on Thursday, May 7th. On May 13th, we'll be in New York City for Needham's 21st Annual Technology, Media, and Consumer Conference. Later in May, we'll attend Cowen's 54th Annual Global TMT Conference, also in New York. In June, we'll participate in Robert W. Baird's 2026 Consumer Technology and Services Conference in New York City. We'll wrap up this stretch at the Wells Fargo Industrials and Materials Conference in Chicago on June 11th. These events provide valuable opportunities to share our story, strengthen our relationships with the investment community, and continue building momentum around our strategy and performance. With that out of the way, let me turn the call over to Dick Soloway, Chairman and CEO of NAPCO Security Technologies, who will make a brief introductory comment. After which, our President and COO, Kevin Buchel, will make a comment on some operational and financial performance highlights. Following Kevin's remarks, our CFO, Andrew Vuono, will go through the financials in more detail, and then Kevin will return to delve deeper into NAPCO's strategies and market outlook. Dick, the floor is yours. Good morning, everyone. Thank you for joining. Kevin Buchel will take you through the highlights of fiscal Q3. Kevin, the floor is yours. Thank you, Dick. Good morning, everyone. I'd like to focus my remarks on the operational drivers behind our performance this quarter, with particular emphasis on the continued growth of our recurring service revenue, improvements in product margins, and the strong expansion in profitability metrics that demonstrate the effectiveness of our business model. During the quarter, total company sales grew nearly 12% year-over-year, reflecting steady demand across both our recurring services and hardware product lines. This level of growth, combined with disciplined cost management, allowed us to deliver meaningful expansion in profitability and operating leverage. Our recurring service revenue once again delivered outstanding performance, increasing more than 15% year-over-year and representing approximately 51% of total company sales. The scale of this business is particularly important as it now reflects an annualized run rate of over $100 million. Just as important, the quality of this revenue remains exceptional, with gross margins once again exceeding 90%, providing strong visibility and predictability to our financial results. The continued expansion of recurring services as a percentage of total revenue is one of the most significant achievements for the company. This shift towards a higher proportion of recurring revenue strengthens the overall margin profile of the business and enhances long-term earnings stability. It also reflects the growing installed base of connected devices and the increasing adoption of our subscription-based solutions by security dealers and integrators. In our hardware business, we also achieved solid performance and meaningful margin improvement. Equipment revenue grew over 8% year-over-year, predominantly driven by continued demand for our locking products. At the same time, equipment gross margins improved to approximately 29%, reflecting disciplined pricing, favorable product mix, and continued operational efficiencies within our manufacturing operations. Our teams executed exceptionally well in managing materials, labor, and overhead expenses while maintaining consistent product quality and delivery performance. These efforts allowed us to expand overall gross margins to approximately 60% for the quarter, that represented a significant improvement from the prior year period and demonstrates the effectiveness of our operational discipline. From a bottom-line perspective, we delivered particularly strong growth in profitability. Non-GAAP net income increased nearly 37% year-over-year, reflecting the combined impact of revenue growth, margin expansion, and disciplined expense management. This level of earnings growth demonstrates the scalability of our business model and the benefits of our increasing mix of high-margin recurring revenue. We also generated impressive growth in adjusted EBITDA, which increased more than 20% compared to the prior year. Our adjusted EBITDA margin expanded to over 32%, highlighting improved operating leverage and the strength of our core operations. These results demonstrate our ability to convert revenue growth into meaningful earnings and cash flow. Cash flow generation remained another key strength of the business. Free cash flow increased more than 20% during the quarter, providing the financial flexibility to invest in innovation, support growth initiatives, and returning capital to shareholders through our dividend program, which continues with this morning's announcement of another dividend of $0.15 per share, payable on July 3rd, 2026 to shareholders of record on June 12, 2026. As was noted in our press release, we recorded a charge of $16 million in connection with the settlement of outstanding litigation. We are pleased to have that uncertainty behind us and the distractions it presents. Operationally, we continue to focus on execution across the organization. Our manufacturing and supply chain teams maintained reliable production levels and ensured product availability for our customers. Our sales and technical support organization remained highly engaged with dealers and distributors, helping them deploy our solutions efficiently and expand their use of our recurring service offerings. Looking ahead, our priorities remain clear. We will continue to drive growth in recurring service revenue, further improve product margins through operational discipline and efficiency initiatives, and maintain a strong focus on profitability and cash generation. We believe these priorities position us well to deliver consistent financial performance and long-term value for our shareholders. This quarter demonstrated the strength of our operating model and the dedication of our employees across the organization. Their commitment to execution, innovation, and customer service is what enables us to achieve strong financial results and continue building momentum. I will now turn the call over to our Chief Financial Officer, Andy Vuono, to review the financial details. Andy? Thank you, Kevin. Good morning, everyone. Net revenue for the quarter ended March 31st, 2026 increased 11.8% to $49.2 million, as compared to $44 million for the same period a year ago. Net revenue for the nine months ended March 31st, 2026 increased 11.9% to $146.5 million, as compared to $130.9 million for the same period one year ago. Recurring monthly service revenue in Q3 grew 15.4% to $24.9 million, as compared to $21.6 million the same period last year. Recurring monthly service revenue for the nine months ended March 2026 increased 13% to $72.2 million, as compared to $63.9 million last year. Our recurring service revenue now has a prospective annual run rate of approximately $101 million based on April 2026 recurring revenue, which compares to $99 million based on January 2026 recurring service revenue, which we reported back in February. The increase in service revenues for the three and nine months was due to the increase in number of our cellular radio communication devices put into service and activated. The equipment revenue for the quarter increased 8.4% to $24.2 million, as compared to $22.4 million last year. The equipment revenue for the nine months increased 10.9% to $74.3 million, as compared to $67 million for the same period last year. The increase in net equipment revenue for the quarter and for the nine months was primarily due to increased volume of our door locking products and the impact of price increases in both locking and our intrusion and access products. Gross profit for the three months ended March 2026 increased 17.4% to $29.5 million with a gross margin of 60%, as compared to $25.1 million with a gross margin of 57.2% for the same period last year. Gross profit for the nine months increased 15.3% to $85.6 million with a gross margin of 58.4%, as compared to $74.2 million with a gross margin of 56.7% a year ago. Gross profit as percentage of service revenue was consistent in both the quarter and the nine months ended March 2026 as compared to the prior year. Gross profit for recurring service revenue for the quarter increased 14.8% to $22.5 million with a gross margin of 90.4% as compared to $19.6 million with a gross margin of 90.8% last year. Gross profit for recurring service revenue for the nine months increased 12% to $65.2 million with a gross margin of 90.3% as compared to $58.2 million with a gross margin of 91.1% last year. Gross profit from equipment revenue in Q3 increased 26.4% to $6.9 million with a gross margin of 28.7% as compared to $5.5 million with a gross margin of 24.6% last year. Gross profit from equipment revenue for the nine months increased 27% to $20.4 million with a gross margin of 27.4% as compared to $16 million with a gross margin of 23.9% for the same period last year. The 280 and 170 basis point increases in overall gross margin for the quarter and the nine months ended March 2026 is due to the substantial profitability of our recurring revenue, plus the overall improved margins on our equipment revenue. The increase in gross profit percentage from equipment revenue for the quarter and the nine months was primarily a result of product sales mix, increased volume in our locking products, which improved the absorption rate of our fixed overhead costs, certain price increases that went into effect during fiscal 2026, and reduction in sales discounting during the periods. Research and development expense for the quarter increased 7.3% to $3.4 million, or 7% of net revenues, as compared to $3.2 million or 7.2% of net revenues for the same period a year ago. Research and development costs for the nine months ended March 2026 increased 8.4% to $10.1 million or 6.9% of net revenues, as compared to $9.3 million or 7.1% of net revenue for the same period a year ago. Increase for the three and nine months primarily resulted from annual compensation and benefit increases and hiring of additional resources. Selling, general, and administrative expenses for the quarter increased 4.3% to $11.3 million, or 22.9% of net revenues, as compared to $10.8 million or 24.6% of net revenues for the same period last year. SG&A expenses for the nine months ended March 2026 increased 5% to $32.2 million, or 22% of net revenue, as compared to $30.7 million or 23.5% of revenue for the same period last year. The increase for the three and nine months was primarily attributable to increases in trade show related expenses. The ISC West Show occurred in Q3 this year as compared to Q4 of last year. Wages, bonuses, compensation and benefits, sales commissions and related expenses and insurance expense, which was offset by decreases in professional fees and legal fees. As Kevin previously mentioned, for the three and nine months ended March 2026, we recorded a litigation settlement expense of $16 million as a result of settling existing litigation subsequent to the end of Q3. Non-GAAP operating income for the quarter increased 32.9% to $14.8 million, as compared to $11.1 million for the same period last year. Non-GAAP operating income for the nine months ended March 2026 increased 26.4% to $43.2 million, as compared to $34.2 million for the same period last year. Other income for the quarter increased 14.4% to $986,000, as compared to $862,000 last year. For the nine months, other income increased 1.3% to $3 million, as compared to $2.9 million last year. The increases for both the three and nine months ended March 2026 was due to increased interest income from larger depository balances. As a result of the aforementioned litigation settlement, the provision for income taxes for the quarter was $200,000, as compared to $1.9 million last year. For the nine months, the provision for income taxes was $4.9 million, which represents an effective tax rate of 16.3%, as compared to $5.3 million for the same period last year, with an effective tax rate of 14.4%. The company's effective tax rate for the nine months ended March 2026 increased as a result of an increase in the portion of taxable income allocated to the United States as a result of the litigation settlement, offset by windfall benefits from the exercise of employee stock options during the period. Non-GAAP net income for the quarter increased 36.9% to $13.9 million, or $0.39 per diluted share, as compared to $10.1 million, or $0.28 per diluted share for the same period last year, and represents 28.2% of net revenue, as compared to 23% for the same period last year. Non-GAAP net income for the nine months ended March increased 24.4% to $39.5 million, or $1.10 per diluted share, as compared to $31.8 million or $0.86 per diluted share for the same period last year, and represents 27% of net revenue, as compared to 24.3% for the same period last year. Adjusted EBITDA for the quarter increased 20.2% to $15.8 million or $0.44 per diluted share, as compared to $13.2 million or $0.36 per diluted share for the same period a year ago, and equates to an adjusted EBITDA margin of 32.2% as compared to 29.9% for the same period last year. Adjusted EBITDA for the nine months ended March 2026 increased 21.7% to $46.1 million or $1.28 per diluted share, as compared to $37.9 million or $1.03 per diluted share for the same period last year, and equates to an adjusted EBITDA margin of 31.5% as compared to 28.9% for the same period last year. Free cash flows for the quarter increased 20.3% to $16 million, as compared to $13.3 million for the same period a year ago, and equates to a free cash flow margin of 32.6% this year compared to 30.3% last year. Free cash flows for the nine months increased 13.4% to $42 million, as compared to $37 million for the same period a year ago, and equates to a free cash flow margin of 28.7% this year compared to 28.3% last year. Moving on to our balance sheet. As of March 2026, the company had $125 million in cash and cash equivalents and marketable securities, as compared to $99.1 million as of June 2025. The company had no debt as of March. Working capital as of March 2026 was $153.8 million, as compared to working capital of $138.4 million as of June 2025. Our current ratio was 4.9 to 1 as of March 2026, as compared to 6.8 to 1 as of June 2025. CapEx for the quarter was $734,000, as compared to $65,000 in the prior year, and $1.5 million for the nine months as compared to $1.9 million last year. That concludes my formal remarks. I would like to return the call back to Kevin. Thank you, Andy. As you've heard today, our fiscal 3rd quarter 2026 results reflect another strong period of execution and meaningful progress against our long-term strategy. These results reinforce that our business model is working exactly as intended. Our inclusion in the S&P SmallCap 600 is an important milestone for NAPCO Security Technologies, and it reflects the progress we've made in scaling the business and delivering consistent results. While this enhances our visibility and broadens our shareholder base, our focus remains firmly on execution and long-term value creation. At the core of our strategy is our recurring service revenue platform, which continues to deliver consistent high-margin growth. Recurring service revenue exceeded 50% of our total Q3 sales, supported by sustained gross margin above 90%, with an annualized run rate exceeding $100 million. This provides a predictable, high-quality revenue stream that drives strong cash generation and long-term value creation. A key contributor to this performance is our StarLink Fire Commercial Fire Radio Platform, which has firmly established itself as the industry standard for commercial fire alarm communicators. Demand remains healthy across both new installations and our growing installed base, and we continue to see meaningful runway ahead, particularly as the transition away from legacy copper phone lines to cellular connectivity accelerates. With connectivity across AT&T, Verizon, and now T-Mobile networks, StarLink is well-positioned to capture additional market share across millions of commercial buildings that have not yet converted to a cellular solution. We also saw strong validation of that demand at ISC West 2026 at the end of March, which was a tremendous success for us and generated a record number of leads across all NAPCO platforms. Our sales and marketing teams are now actively qualifying and pursuing these opportunities, building a robust pipeline that supports continued growth. On the equipment side, we are equally encouraged by the continued momentum driven by door locking installations and in our intrusion and alarm product segments. Pricing actions, more disciplined discounting and rebate practices, and favorable mix have led to significantly improved equipment gross margins, and we believe more improvements can be made. Profitability remains a major strength of the company. Non-GAAP operating income, net income, and adjusted EBITDA all grew significantly faster than revenue, demonstrating continued strong operating leverage. With EBITDA margins exceeding 30%, we're generating substantial cash flow while continuing to invest in innovation, infrastructure, and growth initiatives. Our balance sheet further differentiates us with $125 million in cash and marketable securities and no debt, which gives us exceptional financial flexibility and enables us to invest organically, pursue strategic opportunities, and continue returning capital to shareholders. Operationally, our team continues to execute at a very high level. We're managing inventory tightly while investing in product development, compliance automation, and infrastructure, all while maintaining a debt-free balance sheet. Our manufacturing facility in the Dominican Republic remains a key competitive advantage, providing cost efficiency, stable logistics, and lower tariff exposure as compared to many competitors operating in higher tariff regions. We're also driving a new phase of commercial expansion by entering the architectural and engineering specification market, positioning ourselves for specification-driven opportunities across the entire NAPCO portfolio. In parallel, we continue to broaden our distribution footprint through new and expanding channel partnerships. These initiatives are expanding our reach across a broader branch network and enhancing product availability in the field. Innovation remains central to our strategy. We continue to enhance our MVP Cloud-Based Access Control Platform, incorporating customer-driven features based on continual customer feedback. MVP represents a meaningful step forward, introducing a subscriptions-based revenue model for both NAPCO and our locking and access control dealers. We believe MVP has the potential to be a game changer, extending our leadership into the hosted access control market while reinforcing our strategy of pairing innovative hardware with cloud-based services to drive high-margin recurring revenue. In addition, our new smart and interconnected deadbolt platform positions both the company and our dealers to capitalize on the fast-growing U.S. multifamily market, expanding beyond traditional security hardware into unit-level access control at scale. Beyond access control, our Alarm Lock and Marks hardware lines continue to grow across key verticals, including healthcare, retail, multi-dwelling housing, airport infrastructure, and especially school security, where our integrated solutions are viewed favorably alongside enterprise-scale access control systems. NAPCO platforms are secure, scalable, and aligned with the Partner Alliance for Safer Schools guidelines. Amid ongoing market and geopolitical uncertainty, we remain grounded in what we can control: our strategy, our execution, and our commitment to creating sustainable shareholder value. Looking ahead, we remain optimistic about the remainder of fiscal 2026 and beyond. Demand across our product portfolio remains strong, our recurring revenue base continues to expand, and our operating discipline remains firmly in place. Dick and I would like to thank you all for your continued support and confidence in NAPCO. Our formal remarks are now concluded, and we would now like to open the call up for the 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 star followed by one on your touch-tone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by two. If you are using a speakerphone, please leave the handset before pressing any keys. One moment, please, for your first question. Your first question comes from Matt Summerville of D.A. Davidson. Please go ahead. Your line is open. Thanks. I apologize for background noise at the airport, but I was curious how we should be thinking about pricing actions for fiscal 2027 and ultimately how you're balancing your discounting programs in that, If discounting is coming down, that would theoretically have an impact on equipment volume, which would then theoretically have a downstream impact on the growth rate in RSR. How should I be thinking about that dynamic? Then I have a follow-up. Last year at this time, we had two price increases we announced. We announced a tariff one and a general one. That drove a lot of business into Q4 as the distributors tried to avoid these increases. This year, we have a general price increase, we don't have as much of pricing increases this year as we did last year, but we still have the general one. It's not gonna be the same from that point of view. Also, we are much more disciplined in our discounting now than we've ever been. The good part of that is our margins go up, and they did go up this quarter to close to 29%, and we're gonna continue to be disciplined like that. What we wanna do is generate more hardware sales, but also not give away margin along the way. We're working hard to have both. As we're into this fourth quarter that we're in now, it might be a little different than it was a year ago, but from a profitability point of view, it should be better than it was a year ago. Got it. Then can you talk about whether or not you're starting to see any traction, discernible traction in revenue and recurring from MVP and how we should be thinking about kinda uses of cash M&A-wise over the next six months? MVP, we have said it's 18 months. I started the clock from ISC West last year. 18 months puts us about October of this year. That's when we expect meaningful recurring revenue to begin. That's when I expect we could talk to you about it and give you, say, "Hey, it's X% of our total recurring," or, "It's $X." We're not there yet. We're encouraged. To those of you who were at the show, you saw a mob scene in our booth wanting to see MVP. It's getting a lot of great interest. We're doing a lot of training. We don't wanna screw this thing up. We wanna do it right, get everybody's feedback, and then we think it'll be super successful. Give it a few more months, Matt, and then I think we'll start to feel it. With regard to M&A activity, we have a lot that's being served up to us. We have a lot of bankers who are interested in working with us. We have a couple that, you know, particularly we're interested in. Nothing imminent, as you guys know, we have the cash to do it. It's a good time. The last one we did was many years ago, at that time, we had lots of debt, minimal cash. It's a much different story now, we're in a good position to do something. As we've said, gotta be right. We're not gonna just do one for the sake of doing it. It's gotta check all the boxes of things like being accretive from day one, paying a fair multiple, utilizing our Dominican factory we can get the leverage from the factory. Pay a fair multiple. Wanna stick in our lane. If it has those things, we're interested. There's a couple that we've got our eye on. We'll keep you posted as things develop. Thanks, Kevin. Thank you. Your next question comes from the line of Jim Ricchiuti of Needham. Please go ahead. Your line is open. Thank you. Good morning. Curious on the door locking side of the business, what kind of activity are you seeing both from the standpoint of school security and then, you know, the efforts you've been talking about each quarter now about potentially larger project, architectural engineering-related parts of the business? How are we thinking about that area of the business? The school segment remains strong. We always are asked, and I'm sure, you know, you asked us as well, "Well, how much is it of your Locking?" I wish we could tell you. We sell, as you know, to distributors for the most part, and the distributors are the ones that sell to the schools. In some cases, we'll sell directly to the integrator who will do the installation at a large school, and we know about those. It's hard for us to tell you exactly how much is school security. We know it's been very strong. It's very good. Our Locking sales, which you guys will see when you look at the Q and you see the breakout between our segments, Locking was very strong once again this quarter. It's a reflection of all these areas, whether it's airports, hospitals, schools, all of that. It's clicking on all cylinders. There are some big projects. When we can tell you about it, we will. Sometimes there's a hesitation. They don't want it publicized, but there are some that are out there that we expect to be contributors in the future, and we'll keep you posted on that. Generally speaking, we're very happy with the way the locking area is going, and there's more work to be done. We wanna get locking to be even stronger. We want the radio business to get stronger. The radio business contributes to the recurring revenue. We want MVP to start to contribute 'cause MVP gives us more recurring revenue. Each of these areas we're focused heavily on generally. Got it. Hey, you know, the recurring service revenue margins have remained elevated, which I'm assuming, I think you guys have said so, is being helped by mix. How much of that is associated with fire radios versus, say, a year ago? Are you able to give us that? Yeah, we can. We started the recurring revenue journey 10 years ago, roughly. At that time when we first started, we didn't even have a fire radio, and the first few years was just burglary radio. Maybe three years in, fire radio came out, and it has become the dominant piece of the pie. We have roughly 1 million radios active out there, and I'd say 75% of them are fire radios. That's why you see the margins, the strong margins, 'cause we get more money for the fire radios, and it's keeping up. I was very happy to see 15.4%. That was a higher increase than we've seen in a while. Very happy to see the 90%+ margin. It actually went up a bit to 90.4%. That's all very good. We expect it to continue. There's lots more buildings that have not yet converted to copper, away from copper to cellular. As you remember, with the 3G sunset, a lot of dealers wait for the end. They wait to the bitter end. By 2029, 2030, they're gonna have to convert 'cause the carriers are not gonna fix it anymore. We're seeing steady growth. There'll probably be a big push few years from now, but in the meantime, steady growth, lots of radios. Also, just to remind everybody, we sell fire panels with the radio built in, so that's for new work. It's for existing, who wants to convert away from copper, and it's also for new. This has been going on now for a while. It remains strong. It remains a key part of our future. Thank you. Thanks, Jim. Thank you. Your next question comes from Jaeson Schmidt of Lake Street. Please go ahead. Hey, guys. Thanks for taking my questions. Kevin, just curious if you could comment on what you're seeing from the distributor channel and kinda what sell-through stats you saw in this past quarter? Distributor channel seems stable. You know, as you know, it has its ups and downs. Sometimes they're too light, sometimes they're too heavy. They're in a good spot now. We'd like to keep it that way. Sometimes when we do these big deals with these distributors, give big discounts, they carry too much inventory from their point of view. They forget that we gave them an incentive to do that, the discount. Without giving huge discounts, it's just kind of nice. The channel seems smooth, nice. I hope it stays that way. You can never tell. Right now it's in a good spot, Jaeson. Okay. That makes sense. Then just following up on that, as you noted, kind of you doing less discounting and seeing some nice margin on that equipment revenue line. When you think about the path back to sort of 30% + gross margins on equipment, what are gonna be the primary drivers there? Well, you need volume. Besides doing less discounting, you need volume. The reason you need volume is you get overhead absorption from the Dominican Republic factory. The more goods that flows through the Dominican Republic factory, the higher the margins go. 'Cause if you think about it, we have the facility. The facility in the DR could do $300 million of revenue. The facility could handle additional volume. We have lots of machines. It could handle the volume. We have supervision. They could handle the volume. You have to add more direct labor. Luckily, in the DR, we can get all the labor we want, and they all wanna work for us compared to other companies down there. If you're only adding direct labor, and that's it, the margins expand. That helps get into the 30s. That, less discounting, and mix. Remember, you get more money for a locking product than you do for a radio. A radio we love because it gives us the recurring revenue. From a hardware point of view, it's, you know, it makes modest profit. Locking access, they do better. You need a good mix. You need less discounting. You need volume. You get all of that, we're in the 30s pushing to 40. Okay. Perfect. Thanks a lot, guys. Thanks, Jaeson. Thank you. Your next question comes from Jeremy Hamblin of Craig-Hallum Capital Group. Please go ahead. Your line is open. Thanks. Congrats on the strong results and the record gross margins. I wanted to just get into the cost side of the equation a little bit. Just in terms of a little bit of noise in the quarter obviously related to the litigation settlement. In terms of the underlying, you know, OpEx of the business, whether it's your R&D, the SG&A side of your business. I know you had, I think ISC West expenses really in the March quarter. I think next year that shifts into Q4 in fiscal 2027. In terms of the hiring that you might need to do on the R&D portion of your team and then, you know, in terms of kind of the corporate staffing and the rest of your SG&A, can you just give a sense for, you know, what you might be looking to build out here over the next, you know, four or five quarters? Well, the biggest thing we can comment on with regard to this quarter that we're in is what you mentioned, that ISC West was in Q3, March. We had it. It's already reflected in the numbers. In Q4 now of fiscal 2026, we won't have that. Last year we did, so that's a nice favorable comparison. It's in the range of, I don't know, $700,000-$800,000, something like that. That's a big plus. In next year, it will be in April. Usually it is in April. This year, because of the calendar and the holidays, it fell in March. In general, we do not anticipate any huge increases in SG&A. The things that drive SG&A higher, commissions. You have higher sales, you're gonna have more commissions. You might have higher freight costs also. There's salary increases that you give out every year. The wild card within SG&A is legal. Settling this lawsuit is good. It'll put more predictability into the legal portion of the SG&A. On the R&D side, we try to keep the R&D as a percentage of sales somewhere in the 7% - 7.5% range. Our sales obviously are growing, and so is the number of our engineers. We are expanding as fast as we can. We're adding more engineers all the time. What we want, more products, get them to market faster, get products to market faster that have recurring revenue. We wanna be the first guy out there with the new product, not the second or the third guy. Add more people. We watch it. It's not just hire wildly. We're still, even though we've added many more engineers, we're still in the 7%-7.5% of sales range, and I expect it to stay in that range. Got it. Wanted to ask a question on tariffs. In terms of, you know, we've got some change since you guys last reported with the Supreme Court ruling, the DR, you know, we run a trade surplus with the DR. I think that under the current kind of tariff guidelines being applied, it looks like those would expire at the end of July if no new tariffs are slapped on. Can you give us a sense for what, on an annual basis, kind of the range of what you're paying in terms of tariffs under the kind of the current rate, what you paid, and then whether or not you expect to recover some of what you might have paid here in the last year or so? I will- So- I will defer to my tariff expert, Andy. Go ahead, Andy. Jeremy, just from a, from a tariff perspective. I mean, we're at 10% now. We were, you know, pre-ruling, IEEPA rates were 10% for us. We were the baseline rate. We can't predict, you know, what, if anything, will happen, you know, legislatively with Congress, if they're going to make any of these existing tariffs permanent. We are going through the process of the refund claim, like many companies are. The portal opened up, I believe, a week or so ago, so we're in the process of submitting our claims. You know, on average, our tariff cost was running about just under $2 million, I would say, on an annual basis at that 10% level. You know, we have The bulk of our tariff is the movement of goods from the D.R. up to the U.S. We have, to a less extent, importing directly into the U.S. since most of the manufacturing happens in the D.R. As of now, we wouldn't expect our tariff exposure to increase from where it is today. You know, absent, you know, some legislation, you know, potentially the D.R. could go back to where we were pre liberation day to zero. It's wait and see for us. Great. Thanks for taking the questions. Your next question comes from Lance Vitanza of TD Cowen. Please go ahead. Your line is open. Thank you. Let me start just to go back to the equipment revenue and the discounting. I understand that the discounting is great, not just for the margin, but for gross profit dollars. Is it going to create a drag on recurring service revenues in either Q4 or next year? I feel like we've kind of been talking around this question, but I just want to ask you real direct. No, it won't. Whatever discounting we've done or haven't done, it's never around radios. Radios is what gives us the recurring. It's almost unaffected. Got it. People want them. That's not an issue in the least. Very good. Thank you. Okay, just a couple questions on cash flow. The first is I've consistently been overestimating your working capital as a use of cash, and it's surprising just given the growth that we're seeing in the business, right? Normally, I would expect working capital to build more quickly given the growth that we're seeing here. The question is: Should we expect sort of like a catching up, like a big uptick in working capital in either the fourth quarter of this year or perhaps next year? Andy, you wanna take that one? Yeah. I'm not sure I'm following that it's not growing at a rate you, we're expecting, Lance. I'm not sure what the question is. That's correct, right? It's, I mean, the working capital has been relatively flat. It's really not been consuming much cash. My question is: Do you expect there to be a big bump up in the amount of working capital such that, you know, your cash flow is gonna be negatively impacted in the fourth quarter or next year? No, 'cause I think we have done a much better job in the last 12, 18 months of managing inventory. You know, we're trying to manage the levels of inventory. We've worked down our inventory substantially from going back to heights probably two years ago. From a use of cash perspective, you know, I would expect us to, you know, not eat into our cash and continue to grow. Okay, great. Last question for me, just, you know, again, on the cash flow side, the settlement. I'm very glad that you got it behind you. I was surprised by the size of the payout given, you know, the lack of merit in these claims. Does this sort of $16 million outflow, which I assume is coming in the current quarter, put any pressure on your the dividend or your ability to continue increasing the dividend? Or given the reduction maybe in litigation expense going forward, is it kind of a wash? You know, we have $125 million in cash. We could afford this. We don't love it. Who loves it? It's, in the end, it's good to get rid of it, but we can afford it. No, it's not gonna affect our ability to do dividends. The one thing we did is we didn't increase it this round. You know, you've been with us for a while, so you know we've increased the amount of the dividend three, four, five times already. We kept it the same. Yeah. There'll be more increases down the road, and this company generates a lot of cash, so there's no issue on continuing dividends. Last question, I'm going to squeeze one more in. Someone earlier had asked about your stance toward M&A going forward. What about your stance towards share repurchase, given, as you point out, you got $125 million in cash? We don't like to mess with the float, but as you know, we've done it before. Depending upon where the stock is, we could do it again. We have authorization, we have the money, but we don't need to do it if the stock is performing well, and I don't wanna force anything. I like where our float is at and so do a lot of our investors. Thank you. Thanks, Lance. Thank you. Thank you, and there are no further questions at this time. I'd now like to turn the call back over to Kevin Buchel, President and Chief Operating Officer, for closing comments. Thank you, Matt. Thank you everybody for participating in today's conference call. As always, should you have any further questions, feel free to call Dick, Andy, Fran, 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 Q4 and full year results. Thanks again. Ladies and gentlemen, this concludes today's conference. We thank you for participating and ask that you please disconnect your lines.