Participants

Francis Okoniewski; Vice President of Industrial Relations; NAPCO Security Technologies Inc

Richard Soloway; Chairman of the Board, President, Chief Executive Officer, Secretary; NAPCO Security Technologies Inc

Kevin Buchel; Chief Financial Officer, Executive Vice President - Operations, Treasurer, Director; NAPCO Security Technologies Inc

Matt Summerville; Analyst; D A Davidson

Jim Rishidhi; Analyst; Nedham

Lance Vitanza; Analyst; TD Cowen

Jeremy Hublin; Analyst; Craig Holland Capital Group

Raj Sharma; Analyst; B Riley Securities

Presentation

Operator

Good morning, ladies and gentlemen and welcome to the Napco Security Technologies Q1 2025 earnings conference call at this time. All lines are in listen-only mode following the presentation, we will conduct a question and answer session. If at any time during this call, you require immediate assistance. Please press star zero for the operator. This call is being recorded on Monday, November 4th 2024. I would now like to turn the conference over to Mr Francis Okoniewski.
Please go ahead.

Francis Okoniewski

Thank you and good morning everyone. My name is Francis Okoniewski, Vice President of Industrial Relations for Napco Security Technologies.
And we want to thank you all for joining today's conference call to discuss financial results for our fiscal first 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 dotcom 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 it 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 recurring revenue products to customers and dealers, our ability to control expenses and costs and expected annual run rate for software as a service or as a reoccurring monthly revenue.
Forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from those contained in 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, we will be attending the International Security Conference Industry trade Show, November 20th and 21st in New York City's Javits Center.
We'll be showcasing an array of exciting new products and if anyone is interested in attending, please contact me and I will arrange to get you a pass.
In addition, we're actively planning our investor relations calendar for non deal roadshow and conference attendance in the near future.
Investor outreach is important ACO and I'd like to thank all those who assist us in these types of events.
In the coming weeks. We'll be attending the Robert Baird Global Industrial Conference in Chicago, the Stevens Annual Investment Conference in Nashville, the U BS Global Industrials and Transportation Conference in Palm Beach, Florida Imperial Capital's 21st annual Security Investor Conference in New York City and Needham's 27th annual growth conference also in New York City.
In addition, we'll be doing a virtual Non deal road show with Craig Hem on November 11th.
With that out of the way. Let me turn the call over to Richard Soloway, Chairman and CEO of Napco Security Technologies.
Six, the floor is yours.

Richard Soloway

Thank you Fran, good morning, everyone and welcome to our conference call.
We appreciate you joining us as we review our fiscal first quarter, 2025 performance.
I'm pleased to announce that we achieved another record sales result of 44 million this quarter marking our 16th consecutive quarter of record sales for a quarterly reporting period.
Our recurring monthly service revenue continues to show impressive growth increasing by 22% in Q1 and representing 48% of total revenue, our net income of 11.2 million was also a Q1 record.
Our financial position remains robust with cash balances reaching 102 million. Importantly, we remain debt free along with a continued strong cash flow position.
Strategically, we're focused on leveraging our key industry trends including wireless fire and intrusion alarms, enhancing recurring service revenues, school security solutions, enterprise access control systems and architectural locking products.
Here at Napco, our management team is committed to driving growth, profitability and return on equity while maintaining effective cost management.
These metrics are core to our business strategy and align closely with shareholder interests.
Now I'll turn the call over to our President, Chief Operating Officer and Chief Financial Officer Kevin Buchel, who'll provide an overview of our fiscal first quarter, 2025 results after Kevin's remarks, I'll return to discuss our strategies and outlook in more detail. Kevin the floor is yours.

Kevin Buchel

Thank you, Dick. Good morning, everybody.
Net sales for the three months ended, September 30 2024 increased 6% to a quarterly record $44 million as compared to $41.7 million for the same period a year ago, recurring monthly service revenue continued its strong growth increasing 22% in Q1 to $21.1 million as compared to $17.3 million for the same period. Last year. Our recurring service revenues now have a prospective annual run rate of approximately $85.2 million based on October 2024 recurring service revenues. And that compares to $83.5 million based on July 2024 recurring service revenues which were reported back in August.
The increase is due to the continued strength of our line of Starlink radios, particularly our Starlink fire radios. Our Starlink radio sales increased 93% compared to Q1 last year. It increased 23% sequentially and it represented the highest level of radio sales since Q3 of fiscal 2023 which was the last quarter positively affected by the Verizon three G sunset as we've previously discussed as distributors reduced their radio inventory levels and sell through is strong. We expect to see increased radio sales. That's what we saw in Q1 and we expect radio sales to continue to be a key contributor to our equipment sales and lead to the continued strong growth of our highly profitable recurring service revenues.
Equipment sales for the quarter decreased 6% to $22.9 million. As compared to $24.4 million last year.
This decrease was primarily due to locking sales decreasing 8% as compared to Fiscial Q1 2024 as partially offset by the aforementioned strong staring radio sales.
The decrease in locking sales was primarily attributable to several locking distributors efforts to temporarily lower their inventory levels.
And this we believe is temporary. Unlike the radios that were in the channel which lasted several quarters. This is different gross profit for the three months ended. September 30 2024 increased 10% to $24.6 million with a gross margin of 56% as compared to $22.4 million with a gross margin of 54% for the same period. Last year. Gross profit for recurring service revenues for the quarter increased 24% to $19.2 million with a gross margin of 91% as compared to $15.5 million with a gross margin of 90% last year.
Gross profit for equipment revenues in Q1 decreased by 22% to $5.4 million with a gross margin of 24% as compared to $6.9 million with a gross margin of 28% last year.
The decrease in equipment gross profit is primarily the result of product mix. As the Strong Starlink radio sales have a s a significantly lower gross margin than door locking products. But of course, ultimately lead to increases in our recurring revenue. Business research and development costs for the quarter increased 25% to $3.1 million or 7% of sales as compared to $2.4 million or 6% of sales. For the same period. A year ago, the increase for the three months primarily resulted from annual compensation increases and the hiring of additional engineers selling general and administrative expenses for the quarter increased 15% to $9.7 million or 22% of net sales as compared to $8.4 million or 20% of net sales for the same period. Last year. The increases in SG&A for the three months were primarily due to compensation increases. The hiring of additional staff increases in advertising and insurance costs as partially offset by decreases in professional fees.
Operating income for the quarter increased 3% to $11.9 million compared to $11.6 million for the same period last year, interest and other income for the three months increased 160% to $1.1 million as compared to $440,000. Last year.
The increase for the three months ended, September 30 2024 was primarily due to increased interest and dividend income from the company's cash and short term investments.
The provision for income taxes for the three months increased by 20%. $298,000 or $298,000 to $1.8 million with an effective tax rate of 14% as compared to $1.5 million with an effective tax rate of 12.6% last year. The increase in the provision for the three months was due to higher taxable income as well as higher non deductible stock based compensation expense net income for the quarter increased 7% to a quarterly record $11.2 million or 30¢ per diluted share as compared to $10.5 million or 28¢ per diluted share for the same period last year. And that represents 25% of net sales adjusted ebita for the quarter decreased 4% to $12.3 million or 33¢ per diluted share as compared to $12.9 million or 35¢ per diluted share for the same period a year ago. And that equates to an adjusted Ibazar margin of 28%.
Moving on to the balance sheet. As of September 30 2024 the company had $102 million in cash, cash equivalents, cash equivalents, other investments and marketable securities. And that compares to $97.7 million as of June 30 2024 and that's a 5% sequential increase.
The company had no debt as of September 30 2024 cash provided by operating activities for the three month sentence. September 30 2024 was $12 million. And that compared to $11.2 million for the same period last year. And that's a 7% increase.
Working capital is defined as current assets. Less current liabilities was $146.7 million on September 30 2024. And that compared with working capital of 146.5 million on June 30 2024 current ratio is defined as current assets divided by current liabilities 6.9 to 1 at September 30 2024 and 7.6 to 1 at June 30 2024.
And CapEx for the quarter was $680,000. And that compared to $256,000 in the prior year period, that concludes my formal remarks and I would now like to return the call back to Richard.

Richard Soloway

Kevin. Thank you. Fiscal Q1 2025 sales of 44 million and net income of 11.2 million were both Q1 record breakers.
Recurring service revenues remained strong and was 48% of our revenue. And it generated a very profitable gross margin of 91%.
A balance sheet continues to get stronger with cash and cash equivalents and other investments growing even after our continuing dividend program and opportunistic stock buybacks. Despite the decline in locking hardware. This quarter, we haven't lost sight into the significant opportunity for continued growth from spending driven by funded governmental infrastructure projects as well as millions of dollars going forward to state and federal level program like Florida's School Hardening Act, Indiana's secured school safety grant program and many states like Texas that have approved over $100 million in increased security funds, security and health care and retail loss prevention as well as in multi dwelling, commercial and residential applications are also providing opportunities for growth.
We continue to remain focused on further penetrating each of these markets.
A new growth opportunity in commercial locking and access control is a long awaited MVP hosted access system which could generate substantial hardware sales and reoccurring revenue for both the installing dealer and for Napco, this new innovative IP technology systems enables wireless cloud access for end users of the system.
We will also be showing a new MVP system at this month's International Security Expo at the Javits Center in New York City with thousands of installing dealers. We'll see it in a, we'll see it in action. We welcome any of investor who would like to come and see the show to please contact Fran and it'll be very exciting. You'll see dealers, distributors and our competitors there and you'll get a picture of how powerful Napco is in the industry.
We're excited about the potential of this technology for new installations as well as retrofit or upgrade of existing locks with ease which would ultimately drive increased equipment sales and reoccurring revenue.
Our Starlink radio sales were strong in Q1 as alarm dealers recognize that our radios offer the broadest coverage of both Verizon and AT&T networks combined with feature rich capabilities that our dealers generally appreciate.
Our R&D team is continually enhancing these high performance radios designed for straightforward installations and compatibility with all fire and burglar alarm panels. Ours and our competitors alike, no other company can offer this level of versatility.
Unlike many competitors, our radios are also underwriters laboratory certified, which is the industry gold standard.
There are still millions of commercial buildings and residences from offices and hospitals to schools and coffee shops and restaurants that need to transition from legacy copper phone lines to cellular connectivity with Starlink. We're ideally positioned to continue strong growth in this market.
Our latest Starlink fire max two communicator for commercial fire and alarm systems includes dual sim technology dynamically using either the Verizon or the AT&T networks for optimum signal strength.
This streamlined solution which dealers love will simplify their inventory while providing our feature rich experience for them.
Our recently introduced Prima by Napco, a new all in one panel for security installation and connected home with a 15 minute installation remains a very important focus for the company.
Our goal is for prima to address an important mass segment of the security market including residential and small business systems with built in wifi and cellular radio communications, customer alert notifications and video and smart home subscription options for each installed system. The security dealer as well as the company could add more recurring revenue service generating accounts.
Prema now offers a full set of necessary peripherals to go along with the Prima kit. We believe this will help enhance prema sales in the future.
Our strong net income and growing cash balance indicate the financial strength of our business as such. We are pleased to continue our dividend program with a payout of 12.5¢ per share. This will be payable on 13 2025 to shareholders of record on 12-12-24.
In addition, as announced in this morning's earnings release, our board has authorized the company to opportunistically repurchase up to an additional 1 million shares of our common stock. As always, we will strive to accomplish our goal of continued financial strength, product innovation, technical superiority, and strong profitability for fiscal 2025 and beyond.
I'd like to thank everyone for their support and for joining us in this, in this exciting future. We have our formal remarks are now concluded and we would like to open the call for a Q&A session operator. Please proceed.

Question and Answer Session

Operator

Thank you, ladies and gentlemen. We will now begin the question and answer session. Should you have a question? Please press star followed by the number one on your touchtone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the following process? Please press the start followed by the number two. If you are using speaker phone. Please lift 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.

Richard Soloway

Now, are you on mute?

Matt Summerville

Can you hear? Can you hear me?

Kevin Buchel

Okay.

Matt Summerville

Alright. Yes, sorry. Maybe I was on mute. I apologize. So anyways, Kevin, in your prepared remarks, you mentioned several distributors temporarily lowering locking hardware inventory and that this situation is different than the multi quarter trend you saw on the radio side help us understand why this is different and whether or not you think you can grow equipment revenues for the full year. And then I have a follow up.

Kevin Buchel

So with radios, we were coming off of the three G sunset where all the distributors were loading up because they couldn't get radio deliveries from anybody except us and they had to be prepared for the sunset.
So we saw all of our distributors having a lot of inventory and then when the sunset came and went, they had too much and we knew it was going to take several quarters for it to work its way through.
And that's what happened. It took several quarters and now we could say we're finished with that based on the very strong radio sales we saw in this quarter with locking, it's much different. We can see from their inventory levels, we can see from the sell through. This is a much different situation.
They wanted to slow up in this quarter. Why it's hard to say, is it the election? I heard that from a few of the distributors. You want to wait till the election, then we'll start buying again. I heard that from some it was budget related.
They want to wait till the new budget period because a lot of the projects start with October 1 budget period. I talked to several of them personally and they assured me that it was a one quarter type event.
That's what I'm going by locking is strong. It comes from a lot of different avenues, schools. There's a lot of school activity. We're hopeful to announce a school when later this week, stay tuned. This bunch of hospital upgrade projects we're working on so we feel good about it. Don't take what happened in one quarter as being the new norm. That's how we feel. So we think we'll grow as the year progresses. This is just one quarter. Even with this, even with the disappointment of the locking, we still earned over $11 million still 25% net income as a percentage of sales, it'll come back over the next coming quarters. That's what we believe.

Matt Summerville

And then it is a follow up, Kevin, can you maybe talk about you guys talk about the magnitude of promotional activity that occurred in the quarter to drive that kind of growth in radios and whether or not you expect maybe not ultimately in percentage terms. But do you expect further growth in radios as the year goes on compared to the prior year period?

Kevin Buchel

Thank you.
So, radios, the radio sales declining was something that bothered us. You, we talked about it for several quarters. Yeah, it was because of heavy inventory levels, but we felt we could do more to enhance our radio sales.
And we actively promoted the radios in words, we put out what they call beat sheets, showing our radio compared to the competition, showing the differences where we come up way ahead of our competitors.
That would made a big difference. We made some management changes within the division that sells the radios very happy with that change.
So we did a lot of things behind the scenes to get the radio sales to come back to where they should be.
And so the, the what we saw this quarter far exceeded what I even thought. I knew it was coming back. I knew we had worked through the distribution levels of inventory. This was even beyond, we have to keep it going. We know how important this is. We're not going to see an immediate hit increase to recurring revenue as a result of these higher sales takes a little time. You sell to a distributor, it sits with the distributor for a month or so. Then he sells it to the dealer, then the dealer activates it and then there's usually a promotion where they get X dollars of free recurring, might be a few months, 34 months of free recurring, then it kicks in. But the main thing is to see the level that we saw this quarter. That means in the future, this is going to only get better and we're going to keep it going. We're focused and coming out with new features within the radios, which if you come to Isc East, you'll see that too.
Please go on.

Matt Summerville

Thank you, man.

Operator

Your next question comes from Jim Rishidi of Nedham. Please go ahead.

Jim Rishidhi

Thanks. So Kevin, I do want to go back to the, the locking business. You know, where are we though? You know, what gives you the assurance that the distributors, It's going to be a one quarter phenomenon just basically what, what they're telling you. I know it's different. But, you know, it, it obviously we've heard of inventory corrections before and it takes a little bit more than a quarter. I mean, how confident are you? Have you spoken to it? Not just the distributors? And by the way, are these the same distributors that are carrying your radios or are these different players.

Kevin Buchel

In some cases? It's the same in some cases it's not.
And I spoke to our largest distributor of locking products, the largest one that's not the same. They don't distribute radios, they're locking guys, spoke to the President.
We spoke at length.
He assured me this is just a temporary one quarter event.
I said to him, what is this? The election? What does the election have to do with it? He said, look, I just want to say it's one quarter and we'll be back next quarter. So I'm banking on it based on conversations from him.
Other things I'm banking on is I see the stats, I see the sell through stats. I see their inventory level.
There's no reason why it shouldn't come back.
The only differential you have is there are special projects within locking.
We had a big project that went on last year.
The Waldorf Astoria project that happened throughout fiscal 2024. It's somewhat still in 2025.
So that makes for a difficult comp but there are other projects that are going on this year.
There'll be a school security announcement and there's some other things. So as we get those special projects this year and the distributors go back to what they were doing. That's how you get the confidence that locking will be very good this year.

Jim Rishidhi

Okay. How much of a catalyst to the radio sales was the new distributor that you added over the past year? You know, and how would you, how would the position of the other two distributors?

Kevin Buchel

I'd say our top two, the new one that we added, plus our other one. Who's, who's our biggest one? Those two I would say were the biggest catalyst but we saw it across the board.
Once you work through the inventory, we, there was one distributor left heading into Q1.
We even saw growth from him. So I'd say we saw it pretty much across the board and we saw a lot of fire.
You know, we've talked about this a lot. We love the fire radio. It's the most profitable one.
It's probably two thirds of our active radios and we saw that pattern within the radios. We sold this quarter.
So it wasn't just one distributor. It was more than one. It was right down the line. The hope is it continues again this quarter.

Jim Rishidhi

Thanks. I'll jump back in the queue.

Kevin Buchel

Thank you, Jim.

Operator

Your next question comes from Lance Vitanza of TD Cowen. Please go ahead.

Lance Vitanza

Thanks for taking the questions. I have two the first just to sort of stay on the theme of the uptick in radio sales. I'm interested in how this the composition of sales that you're seeing in terms of the rebound.
And I, I heard what you just said, you know, fire versus BRG, but how do you expect that's going to impact service revenues and services gross margin going forward. And here, I'm, I'm thinking, you know, back half of this fiscal year and, and fiscal '26 just based on the trends that you're seeing to date.

Kevin Buchel

Right? So as we said, you get strong radio hardware sales, you don't feel the impact immediately in the recurring, but you will feel it again. It takes a little time, I always say, should sit on a distributor's shelf for about a month, maybe a little more a month and a half after that goes to the dealer, dealer activates it right away. He's not interested in keeping inventory on his shelf. They usually, they get it so they could do installations.
So the process is pretty quick and then there's usually some sort of rebate, maybe $50 some amount which it adds up to several months of free recurring. After that, you feel it, that means back end of this fiscal year, we start to feel it.
And of course, we want to, we want to have another quarter like that in Q2 and the same thing, we'll feel that in Q4. So we just have to keep it rolling. We're being very aggressive getting the word out of why our radios are better than the competition.
And I think again, if you go to ISC show, you will see the difference between hours and the competition and it'll make sense why we believe the power of these radios is going to continue and get even better.

Richard Soloway

We keep adding more and more new radios and new products with you which use these radios within. And you're going to see that at the International Security Conference. So it's not like we're standing still with the line of radios that we have the radio line is developing and it's very exciting for the dealers because it's the way they're getting communications from the, account that they put the alarm in to their sent to the dealer central station. And it's the best radio out there. It's acknowledged as the best. And it's multiple radios for different applications. So it'll keep contributing lots of recurring revenue as far as the future as we can see. And the introduction of a new product, which is a locking product and access product which we call MVP will also generate a lot of recurring revenue for us over the years as it becomes a standard in the industry. It's unique and very special and we're excited about it.

Lance Vitanza

That's great. Thanks. I guess what I was trying to get at was the, the radio sales in the quarter and that you're expecting going forward are those attaching at a higher or lower monthly recurring revenue per unit or, or about the same as, as the existing net, you know, the existing fleet of devices that you have out in the field.

Kevin Buchel

You know, fire gets more than the, than the bird and this was a very fire heavy radio quarter.
So while the amounts per radio might be the same, the mix is actually even a little better and the mix has been getting better and better, better and better meeting more fire. It was actually even better this quarter that could Bode, well, for higher margins, you know, we'll see we're at 91. Maybe we go beyond that. I don't know yet, but we love fire. That's the best. And we saw a lot of it in Q1.

Lance Vitanza

Okay, great. Thanks guys.
Excellent.

Operator

As a reminder. If you wish to ask a question, please press star one.
Your next question comes from Jeremy Hublin of Craig Holland Capital Group. Please go ahead.

Jeremy Hublin

Thanks for taking the questions. And I just wanted to follow up on the, the, the last point. So, and it, it sounds like you're getting a little bit higher monthly, you know, subscription fee, on, on the fire. I wanted to just understand in terms of the support service, costs, you know, of, of fire vses the BRG. It are the margins just, you know, flat out. They're, they're better because the support cost is a little lower or similar support costs. And, and again, you're starting to see that ASP the monthly fee, driving higher.

Kevin Buchel

Similar support costs, minimal support costs are minutes.
We buy minutes from the carriers.
That's the cost.
So the minutes are inconsequential. They're not, it's not a lot. It's more for fire than it might be for BRG. A fire radio has to check in electronically, do an electronic handshake. It uses minutes to do that to show that it's working. So it'll be more than a burglary radio. But in the big picture not a lot. The amount we get for a fire radio exceeds the amount we get for a bird radio by more than whatever the differential is in the cost. So that's why we love the fire. It's just super profitable. And I believe we just have such a better offering than the competition. It's not even close. So, and again, if you go to ISC, you'll see that, but that's why we get more, we get better margins.

Richard Soloway

And realize that, once the radio is put into a commercial building for reporting the commercial fire alarm, situation to the central station, the dealer. So, if the dealer can dispatch a fire department, it's something that is basically in, for the lifetime of the building because of the fact that you have to keep the fire alarm system working and communicating because it's inspected by the fire marshal on a regular basis to make sure it's com, it's communicating. So, we have a big push into the fire to keep the fire jobs going. There's millions and millions of buildings that still have to be retooled as the copper is going bad. It's breaking, it's cracking. And the phone companies are not repairing it. We become the replacement for the phone companies with that though. That's, it's a sale that keeps on giving for both the dealer and for us.

Jeremy Hublin

Just as a follow up question on the, the, the minutes that you're buying from carriers. Are, are you seeing inflate, I mean, there's inflation across a number of line items. You noted. Insurance is one of them. But you know, in terms of, of the, the minutes that you're buying from carriers. Are you seeing any inflationary pressure there?

Richard Soloway

No, we, what do we do competitive bidding with the different carriers? So the prices are not going up for us. We're buying more and more minutes as more and more radios are added to the system, more and more and more control panels with radios and we all so make a line of two or three other styles of radios. One is basic intrusion, one is home automation, we make these different radios, so we're buying more and more minutes and all the carriers want us to buy minutes. That's what they sell to us. So we don't see the prices going up.

Jeremy Hublin

Got it. Last one for me just as, as we look a little bit further ahead and, you know, the kind of what you're driving towards for FY26. And previously you talked about your mix of business, you know, hoping to achieve 50-50 you know, equipment revs to, you know, service revs in that fiscal year. You're, you're getting close to that 50% already. You know, and it sounds like quite a bit of momentum in the radio portion of your business. Is there, is there a potential for the service revenues to exceed equipment, you know, revs on a go forward basis and, and take an even higher portion, particularly if, you know, if the locking part of your business. You know, I, I know that that sounds like it's a one quarter issue but, you know, just in terms of visibility that you have and what that revenue mix might look like, next fiscal year.

Richard Soloway

Well, I would say we're pushing the pedal to the metal, both on the recurring revenue radio business and also on the hardware, the locking hardware business, the locking hardware business has been doing fabulously each quarter in the past. So one quarter, speed bump by a couple of distributors not be looked at as indicative of the future, but we expect both the recurring revenue business with new products and locking business with new products and getting more market share in both of those categories will drive us to higher heights than we've been talking about. We're here for the long haul and we got to keep investing in our engineering and our sales and marketing and that's what we're doing. So it's a very exciting future. We love leading the way in the security industry.

Jeremy Hublin

Got it. Thanks for all the color, our best wishes.

Operator

Thanks.
Your next question comes from Raj Sharma of B Riley. Please go ahead.

Raj Sharma

Yeah, hi. Thanks. For taking the questions. I have a question about the radios. You said radios are up strongly up 93% year on year. What else is in the intrusion and the access alarm segment? I I believe it's access controls and Prima. And that's, that is down 42% a year on year. The other part of the the category, how confident are you about the non radio part of intrusion and access alarm's picking up for the rest of the year so that it helps in overall growth in that segment.

Kevin Buchel

Yeah, pretty confident Raj because Prima was introduced in Q1 of 2024. That was the, that was its coming out party, so to speak.
And we had a lot of sales that quarter.
But what we did have, we didn't have the peripherals, the accessories and so that kind of stalled the growth as the year progressed.
And so when we came to Q1 of 2025 we're just starting to have a full line of accessories.
And so when you compared last year, the coming out party of Prima to this year's Q1, it was different, it was down, but because the accessories now are available, we're starting to see an uptick of those sales. And so going forward in the rest of this fiscal year, I think on a comparative basis, I think it'll be up every quarter but it wasn't in Q1 and that's what drove that segment to be down versus a year ago versus where the radios were so amazingly higher than they were a year ago. So it kind of kind of masked it a little bit. That's why we disclosed what the radio part of it was.

Raj Sharma

Got it. Yeah, got it. Thank you for that. And then just on the buyback authorization, how, how was the amount of the authorization and how long is it valid till or effective?

Kevin Buchel

Right. So we had, we bought back, I think it was 193,000 shares in this past quarter, we had to stop and we hit the quiet period and there was 387,000 shares left from this prior authorization.
And so we wanted to make sure we had more than that to potentially opportunistically buy back. So we with the authorization of the board added a million to that you have a million plus the 387,388 that we had before. So basically, there's 1.4 million available for buyback.
There is no time limit on it. The only thing is we will not buy back during quiet periods again. Last quarter, we bought back 193,000 shares. We spent $7.2 million. So we'll see how it goes.
We watch it close. If it makes sense, we're going to do it. That's why we added the million shares.

Raj Sharma

Got it.

Kevin Buchel

Thank.

Raj Sharma

You for answering. Questions. I'll take it offline though.

Kevin Buchel

Thanks, Raj.

Operator

Your next question comes from Jim Rishidhi of Needham. Please go ahead.

Jim Rishidhi

And I just wanted to follow up. You know, I know there's a lot of noise with respect to the distributors and inventories. But remind us again of the seasonality on both parts of the business. As we look at Q2 and the fiscal second half.

Kevin Buchel

Our, our quarters historically get stronger with Q1 being the weakest Q4 being the strongest.
That that's one aspect of seasonality.
Also the school business, it used to be very seasonal where the schools would only want to do jobs when the kids were out of school.
And what that means is they want to do jobs in the summer or they want to do jobs in December, January during the winter recess that's really changed.
There's no real seasonality to that, but it there are, it is affected by budgets.
So a lot of the fiscal budgets start October 1st and they won't, we won't, we won't see projects until the budget of October 1st starts.
So I think budgeting more than quote, seasonality has something to do with it.
But again, our quarters typically get stronger as the year progresses. So two is usually better than 13 is better than two and four is usually better than three. That's historically what we've seen.

Jim Rishidhi

In both parts of the business it sounds like. Yeah.

Kevin Buchel

Actually, actually with, with, with radios, radios, radios just should happen all year. I don't think that's affected by this when radios are strong. Just get it all year round. That's how it should be.

Jim Rishidhi

Got it. How satisfied are you with Prima? In terms of whether it's meeting your expectations or, you know, ramping a bit more slowly, just, you know, given that it's a new area for you.

Kevin Buchel

We want to be a major contributor and we still think it will be the misstep if you will was that you can't really have a product that doesn't have a full complement of accessories and expect it to be successful when a dealer is putting in a job, he needs the full, he needs the full set.
He can't put in a system, but he doesn't have doorbells. He's gotta have the doorbells, he's gotta have the right transmitter, he's gotta have the right sir, of whatever it is.
And so we introduced it quick, maybe too quick in retrospect, but now all of the accessories are there.
So it's time for it to perform.
And so our expectations is it's going to do much better in this fiscal year.
And we were starting to see the results of that towards the back end of Q1. So we'll see how it goes. We always say it takes a new product 12 to 18 months to really performing.
Do well. So we're getting to that point with Prima.
Thank you.

Operator

As a reminder. If you wish to ask a question, please press star one.
There are no further questions at this time. Please continue, Mr Kevin Buchel.

Kevin Buchel

So I'm going to turn it to Richard for closing comments.

Richard Soloway

Thank you, everyone for participating in today's conference call. As always, should you have any further questions? Feel free to call Kevin Fran or myself for further information.
We thank you for your interest and support and look forward to speaking to you all again in a few months to discuss Napco's fiscal Q2 results. As I said, we'll be at the ISC show at Javits this month and I think it would be wonderful if you would come and see us, we could show you the new products, we're going to show you the products which are going to generate more equipment sales and more reoccurring revenue sales for the company. And you'll be able to talk and see dealers there and get their feeling about the Napco product lines and why Starlinks are the best in the business. So I look forward to welcoming you anybody that wants to come take care and have a wonderful day.

Operator

Ladies and gentlemen, this concludes this conference call. Thank you for your participation. You may now disconnect.