NSSC — what changed in the latest 10-K

Text added vs the prior filing · source: 10-K · 2026-08-24

• 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. 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…

• 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. Net income for the fiscal year ended June 30, 2026 is inclusive of a one-time litigation settlement charge of ($16 million).

• 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…

• ●Combination Control Panels/Digital Communicators and Digital Keypad Systems. 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 efficien…

• 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. Suppliers may allocate li…

Text removed vs the prior filing · source: 10-K · 2025-08-25

• 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. 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 …

• 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 Acce…

• ●Combination Control Panels/Digital Communicators and Digital Keypad Systems. A combination control panel, digital communicator and a digital keypad has 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.

Text added vs the prior filing · source: 10-K · 2026-08-24

• Increased demand for semiconductors and electronic components driven by artificial intelligence ("AI") infrastructure and data center expansion could adversely affect our supply chain and operating results.

• The rapid growth of AI applications and the expansion of large-scale data centers have significantly increased global demand for semiconductors, processors, memory devices, power management components and other electronic parts. As a result, component manufacturers may prioritize production capacity…

• We rely on a variety of third-party suppliers for critical electronic components used in our products. Increased competition for available semiconductor capacity could result in extended lead times, reduced allocations, higher prices, supply shortages and less favorable purchasing terms. In addition…

• While we maintain inventory strategies, supplier relationships and alternative sourcing initiatives designed to mitigate supply disruptions, there can be no assurance that these efforts will be sufficient. Any significant interruption in the supply of critical components, inability to obtain require…

• The impact of these risks may be amplified by geopolitical tensions, trade restrictions, manufacturing concentration in certain regions, transportation disruptions or continued growth in AI-related demand for advanced and legacy semiconductor products.

Text removed vs the prior filing · source: 10-K · 2025-08-25

• developing new ones. Further, there can be no assurance that the Company will not experience additional price competition, and that such competition may not adversely affect the Company’s revenues and results of operations

• The financial health of our distributors and wholesalers and our continuing relationships with them are important to our success. Some of these distributors and wholesalers, particularly smaller firms with limited working capital and resources, may not be able to withstand adverse changes in busines…

• our control, including but are not limited to, acquisition of distributors by third parties may not be willing to continue the relationship with us; internal restructuring or refocus of business strategies; and changes in management, all of which may negatively impact our ability to continue to sell…

• We rely on introduction of new products and services to penetrate new markets and identify additional sources of revenues order to grow our business. However, many of our distributors and customers may not be willing to change or switch to new products and equipment, or may require an extended perio…

• costs are spread over reduced levels, which may contribute to decreasing margins and reduced profitability. Operation of a manufacturing facility also subjects us to certain additional risks, including but not limited to the following:

Text added vs the prior filing · source: 10-K · 2026-08-24

• ●Recurring service revenue (“RSR”) for the year increased 13% to $97.5 million.

• ●Gross margin for recurring service revenue was 90.3% for fiscal 2026.

• ●Overall gross margin increased to 59.2%, which included a benefit of approximately 50 basis points from tariffs for fiscal 2026

• ●Net income decreased 1% to $43.0 million after giving effect to a one-time litigation settlement charge of $16 million.

• ●Non-GAAP Adjusted EBITDA, a measurement of operating performance increased 27.9% to $66.7 million.

Text removed vs the prior filing · source: 10-K · 2025-08-25

• ●Gross margin for recurring service revenue was 91.0% for fiscal 2025.

• ●Gross margin for equipment revenue was 23.6% as compared to 29.4%.

• On April 2, 2025, the U.S. announced a new universal baseline tariff of 10%, (which includes imports from the Dominican Republic where we manufacture most of our products) plus significant additional country-specific tariffs for select trading partners, on all U.S. imports. The reciprocal country-sp…

• attempting to mitigate these impacts, including using pricing adjustments, sourcing strategies and other cost-mitigation measures. However, there can be no assurance that we will be able to fully mitigate the impacts of such tariffs or that the imposition of tariffs, and the resulting economic impac…

• We primarily source our manufacturing materials from Asia, including Taiwan, India and China, with additional sourcing from other producers throughout the world. There have been significant enacted and proposed reciprocal tariffs on certain of these countries. At this time, the overall impact on our…