NAPCO Security Technologies, Inc.

Greetings and welcome to the NAPCO Security Technologies, Inc. Fiscal Fourth Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note that this conference is being recorded. I will now turn the conference over to your host, Patrick McCullough, Director of Investor Relations. Thank you. You may begin.

Thank you. Good morning. I'm Patrick McKillop, Director of Investor Relations here at NAPCO Security. Thank you all for joining us for today's conference call to discuss our financial results for our fiscal fourth quarter and fiscal year 2020. By now, all of you should have had the opportunity to review the press release discussing the results. If you have not, a copy of the release is available on the Investor Relations section of our website, www.napcosecurity.com On the call today is Richard Soloway, President and CEO of Napco Security Technologies, and Kevin Buchel, Senior Vice President and CFO. Before we begin, let me take a moment to read the forward-looking statement. This presentation contains forward-looking statements that are based on current expectations, estimates, forecasts, and projections of future performance based on management's judgment, beliefs, current trends, and anticipated product performance. These forward-looking statements include, without limitation, statements relating to growth drivers of the company's business, such as school security products and recurring revenue services, potential market opportunities, the benefits of our recurring revenue products to customers and dealers, our ability to control expenses and costs, and expected annual run rate for SAS 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 ICC 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 forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance, or achievements. You should not place undue reliance on these forward-looking statements. All information provided in today's press release and this conference call is as of today's date unless otherwise stated, and we undertake no duty to update such information except as required under applicable law. I will turn the call over to Dick in a moment, but before I do, I just wanted to mention a few things on the IR front. In terms of upcoming investor outreach, we will be virtually attending and hosting one-on-one meetings at the CL King Conference on September 16th and the Lake Street Big Four Conference on September 17th. We are also planning for more virtual road shows throughout the fall. Investor outreach is crucial, especially for small-cap companies such as NAPCO. and I'd like to thank all those folks that assist us in these conferences and marketing trips. With that out of the way, let me turn the call over to Richard Soloway, President and CEO of NAPCO Security Technologies. Dick, the floor is yours.

Thank you, Patrick. Good morning, everyone, and welcome to our conference call. Thank you for joining us today to discuss our results. The fourth quarter and fiscal year 2020 equipment sales were impacted by the ongoing COVID-19 pandemic. But we are now beginning to see a pickup of our business because buildings are reopening and our installing dealers are gaining more and more access to install equipment at their end-user customers, which consists of businesses of all types, as well as homeowners. We are pleased to emphasize that despite the pandemic, our recurring revenues continue to grow at a rapid rate. Our recurring revenues increased 35% in Q4, with a gross margin of 83%, and now has an annual run rate of $27.5 million as of June. Our focus on targeting The professional installation and mostly commercial end markets is driving this continuous growth. Our balance sheet remains strong with zero debt as of this report, and our cash balances continue to grow. We remain focused on capitalizing on key industry trends, which include school security solutions, wireless fire and intrusion alarms, plus Enterprise Access Control Systems and Architectural Locking Products. The management team here at NAPCO continues to focus on the key metrics of growth, profits, and returns on equity and controlling costs, especially during these difficult times. These metrics are important to us as well as to our shareholders. We continue to execute our business strategy and our interests are aligned with our shareholders as senior management at NAPCO owns 38% of the equity. Before I go into greater detail, I'll now turn the call over to our CFO, Kevin Buchel. He will provide an overview of our fiscal fourth quarter and fiscal year financial results and then I'll be back with more on our strategies and outlook. Kevin?