NAPCO Security Technologies, Inc.

Good morning, ladies and gentlemen, and welcome to the NAPCO Security Technologies Fiscal Second Quarter 2025 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, February 3rd, 2025. I would now like to turn the conference over to Frances Okuniewski, Vice President of Investor Relations. Please go ahead.

Thank you, Joanna. Good morning. This is Fran Okoneski, 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 second quarter 2025. 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 and 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, reoccurring revenue services, potential market opportunities, the benefits of our reoccurring revenue products to customers and dealers, our ability to control expenses and costs, and expected annual run rate for our software-as-a-service reoccurring 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, 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 the exciting schedule of investor outreach events lined up in the coming months. On February 12th, we're set to participate in a virtual non-deal roadshow with Seaport Global. Later in February, we'll attend the Citi Global Industrial and Mobility Conference in Miami, Florida. In March, our engagements include the Raymond James 46th Annual Institutional Investors Conference in Orlando, Florida, a virtual non-deal roadshow with Wells Fargo, and other non-deal roadshow activity with Robert W. Baird. Finally, we'll cap this busy period by attending our industry's largest trade show, ISC West, at the Venetian Expo in Las Vegas from March 31st through April 4th. If anyone is interested in attending this show, please reach out to me and I'll arrange to get you a pass. Investor outreach is a vital part of NAPCO's strategy, and I'd like to extend my gratitude to everyone who contributes to the success of these events. 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. you joining us as we review our fiscal second quarter 2025 performance. This quarter yielded mixed results. Our recurring revenue increased by 15%, which generated a gross margin of 91%, and led to a 400 basis point improvement in total gross margin to 57%. The reduction of equipment revenue was a result of timing issues with some of our distributors, as well as the timing of certain large locking projects. While certain revenue contributions shifted due to external dynamics, our core growth drivers remain intact, and demand for our products and services continues to build momentum. Importantly, our innovation pipeline is stronger than ever, with new offerings set to launch in the coming months, expanding our recurring revenue opportunities, and reinforcing our long-term trajectory. As we move forward, we remain confident in our ability to drive sustainable growth and deliver lasting value to our shareholders. At NAPCO, Our strategic focus is centered on capitalizing on key industry trends, including the expansion of wireless fire and intrusion alarms, the growth of recovering revenue services, advancements in school security solutions, enhancements in enterprise access control systems, and continued innovation in architectural locking products. We remain committed to delivering sustainable growth, maximizing profitability, and driving strong results on equity, all while maintaining disciplined cost management. These priorities are fundamental to our strategy and align with the best interests of our shareholders. I'll now turn the call over to our President, Chief Operating Officer, Chief Financial Officer Kevin Buchel, who will provide an overview of our fiscal second quarter 2025 results. After Kevin's remarks, I'll return to discuss our strategies and outlook in more detail. Kevin, the floor is yours.