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These dealers are dependent on our platform for communication services to our radio communicators and smart security devices, and they pay us a monthly fee for these services to operate and manage their businesses efficiently.
−Removed: Our net sales were $181.6 million, $188.8 million and $170.0 million for the fiscal years ended June 30, 2025, 2024 and 2023, respectively.
−Removed: The decrease in our net sales from fiscal 2024 to 2025 was driven by the decrease in sales of equipment products ($17.8 million) offset by the continued growth of our recurring communication services ($10.6 million).
−Removed: The decrease in equipment sales was due primarily to reduced sales of door-locking products ($11.5 million) as a result of the timing of project work as well as softness in demand for locking products during the period related to distributor destocking of inventory and to a lesser extent general uncertainty over U.S.
−Removed: tariff policies.
+Added: Our net revenues were $202.3 million, $181.6 million and $188.8 million for the fiscal years ended June 30, 2026, 2025 and 2024, respectively.
+Added: The increase in our net revenues from fiscal 2025 to 2026 was driven by the increase in revenues of equipment products ($9.5 million or 10.0%) as well as the continued growth of our recurring communication services ($11.2 million or 13.0%).
+Added: The increase in net equipment revenues was due primarily to increased revenues of door-locking products ($6.9 million or 11.1%) and increased revenues of intrusion and access products ($2.6 million or 7.8%).
+Added: The increase in net service revenues was due to net new activations of our fire and burglar cellular (radio) communication devices put into service and activated.
Our net income was $43.0 million, $43.4 million and $49.8 million for the fiscal years ended June 30, 2026, 2025 and 2024, respectively.
−Removed: Net income for the fiscal year ended June 30, 2025 was down ($6.4 million) as a result of decreases in the sales of our equipment products and increased operating expenses.
+Added: Net income for the fiscal year ended June 30, 2026 is inclusive of a one-time litigation settlement charge of ($16 million).
Our Products and Services
−Removed: Since 1969, NAPCO has established a heritage and proven record in the professional security community for reliably delivering both advanced technology and high-quality security solutions, building many of the industry’s widely recognized brands, such as NAPCO Security Systems, Alarm Lock, NAPCO Access Pro, Marks USA, and other popular product lines.
+Added: Since 1969, NAPCO has established a heritage and proven record in the professional security community for reliably delivering both advanced technology and high-quality security solutions, building many of the industry’s widely recognized brands, such as NAPCO Security Technologies, Alarm Lock, NAPCO Access Pro, Marks USA, and other popular product lines.
The Company’s products and services are comprised primarily of the following:
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Communication Services (Recurring Service Revenues)
−Removed: The Company provides.
In 2012, we began to generate monthly recurring service revenue by providing secure cellular and cloud access for intrusion and fire alarm communicators and other smart security devices.
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Communication equipment such as a cellular or digital communicator may be used to transmit the alarm signal to a central station or another person selected by a customer.
−Removed: Cellular communicators have become more popular and panels and communicators are trending towards integration so that many alarm panels will contain an integrated cellular communication device.
+Added: Cellular communicators have become the standard, and panels and communicators are trending towards integration so that many alarm panels will contain an integrated cellular communication device.
The Company manufactures and markets the following products for these alarm systems:
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● Combination Control Panels/Digital Communicators and Digital Keypad Systems.
−Removed: A combination control panel, digital communicator and a digital keypad has continued to be the leading configuration in terms of dealer and consumer preference.
+Added: A combination control panel, digital communicator and a digital keypad have continued to be the leading configuration in terms of dealer and consumer preference.
Benefits of the combination format include the cost efficiency resulting from a single microcomputer function, as well as the reliability and ease of installation gained from the simplicity and sophistication of micro-computer technology.
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card readers, hand scanners), a control panel, a PC-based computer and electronically activated door-locking devices.
−Removed: When an identification card or other identifying information is entered into the reader, the information is transmitted to the control panel/PC, which then validates the data and determines whether or not to grant access by electronically deactivating the door locking device.
+Added: When an identification card or other identifying information is entered into the reader, the information is transmitted to the control panel/PC, which then validates the data and determines whether to grant access by electronically deactivating the door locking device.
An electronic log is kept which records various types of data regarding access activity.
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School Security and Public Safety
−Removed: School security and public safety continues to be an important market, and we have developed products to help address security concerns arising from the significant need for increased security in schools and other public spaces.
+Added: School security and public safety continue to be an important market, and we have developed products to help address security concerns arising from the significant need for increased security in schools and other public spaces.
In the U.S., there are over 100,000 K-12 schools, over 5,000 colleges and universities and over 350,000 houses of worship.
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Intrusion Alarms and Access Control, Connectivity, and Locking devices.
−Removed: As more security installations include multiple security-related systems, which can include, intrusion, fire, access control, door-locking and connectivity, there is more demand for the various systems to communicate with each other.
−Removed: By having everything
−Removed: manufactured under one roof, we can offer customers one integrated platform solution without the risk of incompatible equipment from multiple vendors to “talk” to each other.
+Added: As more security installations include multiple security-related systems, which can include, intrusion, fire, access control,
+Added: door-locking and connectivity, there is more demand for the various systems to communicate with each other.
+Added: By having everything manufactured under one roof, we can offer customers one integrated platform solution without the risk of incompatible equipment from multiple vendors to “talk” to each other.
Our manufacturing facility located in the Dominican Republic (“D.R.”) manufactures over 90% of our products.
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We have built a strong competitive position by developing a wide range of software capabilities from embedded micro-coding to enterprise system software, database design, mobile applications development, user portal design, mechanical and electronic mechanisms and telecommunications, featuring our significant radio and cellular communications expertise.
−Removed: This has enabled us to create recurring revenue opportunities across product lines, and to sustain profitability from recurring revenue margins that recently have approximated 91%.
+Added: This has enabled us to create recurring revenue opportunities across product lines, and sustained profitability from recurring revenue with margins that approach or exceed 90%.
We are also focusing on security solutions for the healthcare industry, including anti-ligature lockets designed for life safety and liability reduction in hospitals, behavior health institutions and correctional facilities, and such products are highly profitable while complying with applicable regulatory and health standards.
−Removed: We believe that our ability to design and produce these products and services are possible due to our advanced set of in-house engineering technology capability from mechanical to electronic and electro-mechanical products, digital, microprocessor and analog circuit design, networking products, and wireless and cellular communications electronics.
+Added: We believe that our ability to design and produce these products and services is possible due to our advanced set of in-house engineering technology capability from mechanical to electronic and electro-mechanical products, digital, microprocessor and analog circuit design, networking products, and wireless and cellular communications electronics.
Research and Development
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The Company intends to continue to conduct a significant portion of its future research and development activities internally.
−Removed: We spend approximately 7% of our revenues on research and development.
+Added: We spend approximately 6% to 7% of our revenues on research and development.
Our Human Capital Resources
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Maintaining a talented workforce at all levels is critical to our ability to deliver high-quality products and services to our customers as well as maintain shareholder value.
−Removed: In order to maintain a high level of talent in our workforce, Napco offers comprehensive benefits programs, competitive wages, incentive programs, performance reviews and various employee activities and awards.
+Added: To maintain a high level of talent in our workforce, Napco offers comprehensive benefits programs, competitive wages, incentive programs, performance reviews and various employee activities and awards.
We also provide training and management support for employees to enhance their success and to identify outstanding talent and development opportunities.
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Compliance with these laws and regulations has not had and is not expected to have a material adverse effect on the Company, including capital expenditures for environmental compliance, or on its earnings or competitive position.
−Removed: The Company's staff of approximately 63 sales and marketing support employees sells and markets our products primarily to independent distributors, wholesalers and dealers of security alarm and security hardware equipment.
+Added: The Company's staff of 61 sales and marketing employees sell and market our products primarily to independent distributors, wholesalers and dealers of security alarm and security hardware equipment.
The Company currently has approximately 2,200 active customers made up of distributors, installing dealers and wholesalers who purchase our products directly from the Company as well as many more who purchase our products from these distributors.
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The Company believes that any vendor that is currently the sole source of a component can be replaced without a material impact on the Company.
+Added: The Artificial Intelligence (“AI”) data center buildout has increased demand across a broad range of electronic components, including microcontrollers, memory devices, power management integrated circuits, networking components and other semiconductors used in our products.
+Added: Suppliers may allocate limited manufacturing capacity to customers serving AI and cloud infrastructure markets, reducing availability for security and access control manufacturers such as us.
+Added: Discussions within the Company have noted that the AI data center boom has materially altered the competitive landscape for electronic component supply.
+Added: Consequently, we may experience longer lead times, cost increases, allocation restrictions or reduced product availability from suppliers.
+Added: If we are unable to obtain sufficient quantities of critical components, identify alternative sources, or pass increased costs to customers, our ability to manufacture and deliver products could be adversely affected.
Company Information
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Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to reports filed pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) are available free of charge on our website as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities Exchange Commission (the “SEC”).
−Removed: The contents of or accessible through our website are not incorporated into this Annual Report.
+Added: The contents of or accessible through our website are
+Added: not incorporated into this Annual Report.
Further, our references to the URLs for these websites are intended to be inactive textual reference only.
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.