Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Jun. 30, 2023 | Sep. 07, 2023 | Dec. 31, 2022 | |
Document And Entity Information | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Jun. 30, 2023 | ||
Entity File Number | 0-10004 | ||
Entity Registrant Name | NAPCO SECURITY TECHNOLOGIES, INC | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 11-2277818 | ||
Entity Address, Address Line One | 333 Bayview Avenue | ||
Entity Address, City or Town | Amityville | ||
Entity Address, State or Province | NY | ||
Entity Address, Postal Zip Code | 11701 | ||
City Area Code | 631 | ||
Local Phone Number | 842-9400 | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Title of 12(b) Security | Common Stock, par value $0.01 per share | ||
Trading Symbol | NSSC | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Interactive Data Current | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Central Index Key | 0000069633 | ||
Current Fiscal Year End Date | --06-30 | ||
ICFR Auditor Attestation Flag | false | ||
Entity Public Float | $ 837,189,247 | ||
Entity Common Stock, Shares Outstanding | 36,770,097 | ||
Auditor Name | BAKER TILLY US, LLP | ||
Auditor Firm ID | 23 | ||
Auditor Location | Uniondale, New York |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2023 | Jun. 30, 2022 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 35,955 | $ 41,730 |
Investments - other | 25,660 | |
Marketable securities | 5,136 | 5,068 |
Accounts receivable, net of allowance for credit losses of $131 and $243 as of June 30, 2023 and June 30, 2022, respectively | 26,069 | 29,218 |
Inventories, net | 35,062 | 40,781 |
Income tax receivable | 75 | |
Prepaid expenses and other current assets | 3,402 | 2,838 |
Total Current Assets | 131,359 | 119,635 |
Inventories - non-current, net | 13,287 | 9,005 |
Property, plant and equipment, net | 9,308 | 7,939 |
Intangible assets, net | 3,939 | 4,300 |
Deferred income taxes | 2,652 | |
Operating lease asset | 5,797 | 7,350 |
Other assets | 312 | 347 |
TOTAL ASSETS | 166,654 | 148,576 |
CURRENT LIABILITIES | ||
Accounts payable | 8,061 | 11,072 |
Accrued expenses | 8,079 | 9,489 |
Accrued salaries and wages | 3,546 | 4,064 |
Accrued income taxes | 1,868 | |
Total Current Liabilities | 19,686 | 26,493 |
Deferred income taxes | 166 | |
Accrued income taxes | 1,110 | 1,058 |
Long term operating lease liabilities | 5,689 | 7,068 |
TOTAL LIABILITIES | 26,485 | 34,785 |
COMMITMENTS AND CONTINGENCIES (Note 13) | ||
STOCKHOLDERS' EQUITY | ||
Common Stock, par value $0.01 per share; 100,000,000 shares authorized as of June 30, 2023 and June 30, 2022; 39,663,812 and 39,628,197 shares issued; and 36,770,097 and 36,734,482 shares outstanding, respectively | 397 | 396 |
Additional paid-in capital | 21,553 | 20,005 |
Retained earnings | 137,740 | 112,911 |
Less: Treasury Stock, at cost (2,893,715 shares) | (19,521) | (19,521) |
TOTAL STOCKHOLDERS' EQUITY | 140,169 | 113,791 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 166,654 | $ 148,576 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Jun. 30, 2023 | Jun. 30, 2022 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Allowance for credit losses | $ 131,000 | $ 243,000 |
Common stock, par (per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, issued (in shares) | 39,663,812 | 39,628,197 |
Common stock, outstanding (in shares) | 36,770,097 | 36,734,482 |
Treasury stock, shares | 2,893,715 | 2,893,715 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | |
Net sales: | |||
Net sales | $ 169,997 | $ 143,593 | $ 114,035 |
Cost of sales: | |||
Cost of sales | 96,764 | 84,437 | 63,287 |
Gross Profit | 73,233 | 59,156 | 50,748 |
Operating expenses: | |||
Research and development | 9,328 | 8,024 | 7,620 |
Selling, general, and administrative expenses | 33,580 | 32,907 | 25,196 |
Total Operating Expenses | 42,908 | 40,931 | 32,816 |
Operating Income | 30,325 | 18,225 | 17,932 |
Other income (expense): | |||
Interest and other income (expense), net | 903 | (283) | (5) |
Gain on extinguishment of debt | 3,904 | ||
Income before Provision for Income Taxes | 31,228 | 21,846 | 17,927 |
Provision for Income Taxes | 4,101 | 2,247 | 2,514 |
Net Income | $ 27,127 | $ 19,599 | $ 15,413 |
Income per share: | |||
Basic (in dollars per share) | $ 0.74 | $ 0.53 | $ 0.42 |
Diluted (in dollars per share) | $ 0.73 | $ 0.53 | $ 0.42 |
Weighted average number of shares outstanding: | |||
Basic (in shares) | 36,741,000 | 36,725,000 | 36,696,000 |
Diluted (in shares) | 37,005,000 | 36,867,000 | 36,808,000 |
Equipment | |||
Net sales: | |||
Net sales | $ 110,062 | $ 97,612 | $ 80,131 |
Cost of sales: | |||
Cost of sales | 90,197 | 78,471 | 58,401 |
Services | |||
Net sales: | |||
Net sales | 59,935 | 45,981 | 33,904 |
Cost of sales: | |||
Cost of sales | $ 6,567 | $ 5,966 | $ 4,886 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Treasury Stock | Retained Earnings | Total |
Balance at Jun. 30, 2020 | $ 396 | $ 17,766 | $ (19,521) | $ 77,899 | $ 76,540 |
Balance (in shares) at Jun. 30, 2020 | 39,588,417 | (2,893,715) | |||
Stock options exercised (in shares) | 7,466 | ||||
Stock-based compensation expense | 435 | 435 | |||
Net income | 15,413 | 15,413 | |||
Balance at Jun. 30, 2021 | $ 396 | 18,201 | $ (19,521) | 93,312 | 92,388 |
Balance (in shares) at Jun. 30, 2021 | 39,595,883 | (2,893,715) | |||
Stock options exercised | 155 | 155 | |||
Stock options exercised (in shares) | 32,314 | ||||
Stock-based compensation expense | 1,649 | 1,649 | |||
Net income | 19,599 | 19,599 | |||
Balance at Jun. 30, 2022 | $ 396 | 20,005 | $ (19,521) | 112,911 | 113,791 |
Balance (in shares) at Jun. 30, 2022 | 39,628,197 | (2,893,715) | |||
Stock options exercised | $ 1 | 84 | 85 | ||
Stock options exercised (in shares) | 35,615 | ||||
Stock-based compensation expense | 1,464 | 1,464 | |||
Cash Dividend | (2,298) | (2,298) | |||
Net income | 27,127 | 27,127 | |||
Balance at Jun. 30, 2023 | $ 397 | $ 21,553 | $ (19,521) | $ 137,740 | $ 140,169 |
Balance (in shares) at Jun. 30, 2023 | 39,663,812 | (2,893,715) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Net income | $ 27,127,000 | $ 19,599,000 | $ 15,413,000 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 1,930,000 | 1,771,000 | 1,697,000 |
Gain on disposal of fixed asset | (15,000) | ||
Interest income on other investments | (470,000) | ||
Unrealized loss (gain) on marketable securities | 80,000 | 426,000 | 9,000 |
(Recovery) reserve of credit losses | (112,000) | 17,000 | (100,000) |
Change to inventory reserve | (445,000) | 1,187,000 | (79,000) |
Deferred income taxes | (2,818,000) | (214,000) | 337,000 |
Stock based compensation expense | 1,464,000 | 1,649,000 | 435,000 |
Gain on extinguishment of debt | (3,904,000) | ||
Changes in operating assets and liabilities: | |||
Accounts receivable | 3,261,000 | (1,154,000) | (5,049,000) |
Inventories | 1,883,000 | (19,274,000) | 8,794,000 |
Prepaid expenses and other current assets | (564,000) | (430,000) | (359,000) |
Income tax receivable | (75,000) | ||
Other assets | 35,000 | (103,000) | |
Accounts payable, accrued expenses, accrued salaries and wages, accrued income taxes | (6,581,000) | 8,762,000 | 1,889,000 |
Net Cash Provided by Operating Activities | 24,700,000 | 8,332,000 | 22,987,000 |
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Purchases of property, plant, and equipment | (2,962,000) | (1,482,000) | (1,007,000) |
Proceeds from disposal of fixed asset | 38,000 | ||
Purchases of marketable securities | (148,000) | (81,000) | (5,422,000) |
Purchases of other investments | (35,281,000) | ||
Redemption of other investments | 10,091,000 | ||
Net Cash Used in Investing Activities | (28,262,000) | (1,563,000) | (6,429,000) |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Proceeds from stock option exercises | 85,000 | 155,000 | |
Cash paid for dividend | (2,298,000) | ||
Net Cash (Used in) Provided by Financing Activities | (2,213,000) | 155,000 | |
Net (decrease) increase in Cash and Cash Equivalents | (5,775,000) | 6,924,000 | 16,558,000 |
CASH AND CASH EQUIVALENTS - Beginning | 41,730,000 | 34,806,000 | 18,248,000 |
CASH AND CASH EQUIVALENTS - Ending | 35,955,000 | 41,730,000 | 34,806,000 |
SUPPLEMENTAL CASH FLOW INFORMATION | |||
Interest paid | 16,000 | 16,000 | 18,000 |
Income taxes paid | $ 8,811,000 | $ 2,168,000 | $ 1,970,000 |
Nature of Business and Summary
Nature of Business and Summary of Significant Accounting Policies | 12 Months Ended |
Jun. 30, 2023 | |
Nature of Business and Summary of Significant Accounting Policies | |
Nature of Business and Summary of Significant Accounting Policies | NOTE 1 - Nature of Business and Summary of Significant Accounting Policies Nature of Business : Napco Security Technologies, Inc (“NAPCO”, “the Company”, “we”) is one of the leading manufacturers and designers of high-tech electronic security devices, cellular communication services for intrusion and fire alarm systems as well as a leading provider of school safety solutions. We offer a diversified array of security products, encompassing access control systems, door-locking products, intrusion and fire alarm systems and video surveillance products. These products are used for commercial, residential, institutional, industrial and governmental applications, and are sold worldwide principally to independent distributors, dealers and installers of security equipment. We have experienced significant growth in recent years, primarily driven by fast growing recurring service revenues generated from wireless communication services for intrusion and fire alarm systems, as well as our school security products that are designed to meet the increasing needs to enhance school security as a result of on-campus shooting and violence in the U.S. The Company's fiscal year begins on July 1 and ends on June 30. Historically, the end users of the Company’s hardware products want to install these products prior to the summer; therefore, sales of these products historically peak in the period April 1 through June 30, the Company's fiscal fourth quarter, and are reduced in the period July 1 through September 30, the Company's fiscal first quarter. In addition, demand for all of our products may be affected by the housing and construction markets. Significant future deterioration of the current economic conditions may also affect this trend. The monthly recurring revenue, which is less susceptible to these fluctuations, allows us to generate a more consistent and predictable stream of income and mitigates the risk of fluctuation in market demand for our equipment products. Significant Accounting Policies : Principles of Consolidation The consolidated financial statements include the accounts of Napco Security Technologies, Inc. and its wholly-owned subsidiaries. All inter-company balances and transactions have been eliminated in consolidation. Accounting Estimates The preparation of financial statements in conformity with Generally Accepted Accounting Principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent gains and losses at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Critical estimates include management’s judgments associated with reserves for sales returns and allowances, allowance for credit losses, overhead expenses applied to inventory, inventory reserves, valuation of Fair Value of Financial Instruments The methods and assumptions used to estimate the fair value of the following classes of financial instruments were: Current Assets and Current Liabilities - The carrying amount of cash and cash equivalents, certificates of deposits, current receivables and payables and certain other short-term financial instruments approximate their fair value as of June 30, 2022 and 2021 due to their short-term maturities. Cash and Cash Equivalents Cash and cash equivalents include approximately $15,242,000 of short-term time deposits, consisting of several certificates of deposit totaling $15,179,000 and $63,000 in a money market fund as of June 30, 2023. Cash and cash equivalents include approximately $63,000 of short-term time deposits, consisting of $63,000 in a money market fund as of June 30, 2022. The Company classifies these highly liquid investments with original maturities of three months or less as cash equivalents. Certificates of deposit with an original maturity greater than three months are classified as Investments – other. Cash and cash equivalents consists of the following as of (in thousands): June 30, 2023 June 30, 2022 Cash $ 20,713 $ 41,667 Money Market Fund 63 63 Certificates of Deposit 15,179 — $ 35,955 $ 41,730 Investments-other consists of the following as of (in thousands): June 30, 2023 June 30, 2022 Certificates of Deposit $ 25,660 $ — $ 25,660 $ — Certificates of deposit are recorded at the original cost plus accrued interest. The Company’s Certificates of Deposit consist of the following as of (in thousands): June 30, 2023 Balance Sheet Classification Interest Rate Maturity Date Cost Carrying Value Cash and Cash Equivalents 4.59% - 5.00% 7/30/2023 - 8/29/2023 $ 15,112 $ 15,179 Investments - other 4.80% - 5.15% 7/24/2023 - 10/24/2023 25,359 25,660 The Company has cash balances in banks in excess of the maximum amount insured by the FDIC and other international agencies as of June 30, 2023 and 2022. The Company has not historically experienced any credit losses with balances in excess of FDIC limits. Marketable Securities The Company’s marketable securities include investments in mutual funds, which invest primarily in various government and corporate obligations, stocks and money market funds Accounts Receivable Accounts receivable is stated net of the reserves for credit losses of $131,000 and $243,000 as of June 30, 2023 and 2022, respectively. Our reserves for credit losses are subjective critical estimates that have a direct impact on reported net earnings. These reserves are based upon the evaluation of our accounts receivable aging, specific exposures, sales levels and historical trends. Inventories Inventories are valued at the lower of cost or net realizable value, with cost being determined on the first-in, first-out (FIFO) method. The reported net value of inventory includes finished saleable products, work-in-process and raw materials that will be sold or used in future periods. Inventory costs include raw materials, direct labor and overhead. The Company’s overhead expenses are applied based, in part, upon estimates of the proportion of those expenses that are related to procuring and storing raw materials as compared to the manufacture and assembly of finished products. These proportions, the method of their application, and the resulting overhead included in ending inventory, are based in part on subjective estimates and actual results could differ from those estimates. The Company records an inventory obsolescence reserve, which represents any excess of the cost of the inventory over its estimated realizable value. This reserve is calculated using an estimated obsolescence percentage applied to the inventory based on age, historical trends, product life cycle, requirements to support forecasted sales, and the ability to find alternate applications of its raw materials and to convert finished product into alternate versions of the same product to better match customer demand. In addition, and as necessary, the Company may establish specific reserves for future known or anticipated events. There is inherent professional judgment and subjectivity made by both production and engineering members of management in determining the estimated obsolescence percentage. The Company also regularly reviews the period over which its inventories will be converted to sales. Any inventories expected to convert to sales beyond 12 months from the balance sheet date are classified as non-current. Property, Plant, and Equipment Property, plant, and equipment are carried at cost less accumulated depreciation. Expenditures for maintenance and repairs are charged to expense as incurred; costs of major renewals and improvements are capitalized. At the time property and equipment are retired or otherwise disposed of, the cost and accumulated depreciation are eliminated from the asset and accumulated depreciation accounts and the profit or loss on such disposition is reflected in income. Depreciation is recorded over the estimated service lives of the related assets using primarily the straight-line method. Amortization of leasehold improvements is calculated by using the straight-line method over the estimated useful life of the asset or lease term, whichever is shorter. Long-Lived and Intangible Assets Long-lived assets are amortized over their useful lives and are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets in question may not be recoverable. Impairment would be recorded in circumstances where undiscounted cash flows expected to be generated by an asset are less than the carrying value of that asset. Intangible assets determined to have indefinite lives were not amortized but were tested for impairment at least annually. Changes in intangible assets are as follows (in thousands): June 30, 2023 June 30, 2022 June 30, 2021 Carrying Accumulated Net book Carrying Accumulated Net book Carrying Accumulated Net book value amortization value value amortization value value amortization value Customer relationships $ 9,800 (9,302) $ 498 $ 9,800 (9,143) $ 657 $ 9,800 $ (8,955) $ 845 Trade name 4,048 (607) 3,441 4,048 (405) 3,643 4,048 (202) 3,846 $ 13,848 $ (9,909) $ 3,939 $ 13,848 $ (9,548) $ 4,300 $ 13,848 $ (9,157) $ 4,691 Amortization expense for intangible assets subject to amortization was approximately $361,000, $391,000 and $425,000 for the fiscal years ended June 30, 2023, 2022 and 2021, respectively. Amortization expense for each of the next five fiscal years is estimated to be as follows: 2024 - $336,000; 2025 - $315,000; 2026 - $297,000; 2027 - $283,000; and 2028 - $269,000. The weighted average remaining amortization period for intangible assets was 15.5 years and 16.2 years at June 30, 2023 and 2022, respectively. Revenue Recognition Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. For product sales, the Company typically transfers control at a point in time upon shipment or delivery of the product. For monthly communication services the Company satisfies its performance obligation as the services are rendered over the course of the month and therefore recognizes revenue over the monthly period. Typically timing of revenue recognition coincides with the timing of invoicing to the customers, at which time the Company has an unconditional right to consideration. As such, the Company typically records a receivable when revenue is recognized. The contract with the customer states the final terms of the sale, including the description, quantity, and price of each product purchased. Payment for product sales is typically due within 30 and 180 days of the delivery date. Payment for monthly communication services is billed on a monthly basis and is typically due at the beginning of the month of service or in 30 days for customers with an open account. The Company provides limited standard warranty for defective products, usually for a period of 24 to 36 months. The Company accepts returns for such defective products as well as for other limited circumstances. The Company also provides rebates to customers for meeting specified purchasing targets and other coupons or credits in limited circumstances. The Company establishes reserves for the estimated returns, rebates and credits and measures such variable consideration based on the expected value method using an analysis of historical data. Changes to the estimated variable consideration in subsequent periods are not material. The Company analyzes product sales returns and is able to make reasonable and reliable estimates of product returns based on the Company’s past history. Estimates for sales returns are based on several factors including actual returns and based on expected return data communicated to it by its customers. Accordingly, the Company believes that its historical returns analysis is an accurate basis for its allowance for sales returns. Actual results could differ from those estimates. Advertising and Promotional Costs Advertising and promotional costs are included in "Selling, General and Administrative" expenses in the consolidated statements of income and are expensed as incurred. Advertising expense for fiscal years ended June 30, 2023, 2022 and 2021 was $2,931,000, $2,889,000 and $1,306,000, respectively. Research and Development Costs Research and development costs incurred by the Company are charged to expense as incurred and are included in operating expenses in the consolidated statements of income. Company-sponsored research and development expense for the fiscal years ended June 30, 2023, 2022 and 2021 was $9,328,000, $8,024,000 and $7,620,000, respectively. Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred income tax expense represents the change during the period in the deferred tax assets and deferred tax liabilities. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company measures and recognizes the tax implications of positions taken or expected to be taken in its tax returns on an ongoing basis. The Company records uncertain tax positions in accordance with ASC 740 on the basis of a two-step process in which (1) we determine whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. Net Income per Share Basic net income per common share (Basic EPS) is computed by dividing net income by the weighted average number of common shares outstanding. Diluted net income per common share (Diluted EPS) is computed by dividing net income by the weighted average number of common shares and dilutive common share equivalents and convertible securities then outstanding. The following provides a reconciliation of information used in calculating the per share amounts for the fiscal years ended June 30 (in thousands, except per share data): Weighted Average Net Income per Net Income Shares Share 2023 2022 2021 2023 2022 2021 2023 2022 2021 Basic EPS $ 27,127 $ 19,599 $ 15,413 36,741 36,725 36,696 $ 0.74 $ 0.53 $ 0.42 Effect of Dilutive Securities: Stock Options — — — 264 142 112 (0.01) — — Diluted EPS $ 27,127 $ 19,599 $ 15,413 37,005 36,867 36,808 $ 0.73 $ 0.53 $ 0.42 Options to purchase 7,534, 214,109 and 40,000 shares of common stock for the fiscal years ended June 30, 2023, 2022 and 2021, respectively, were not included in the computation of Diluted EPS because their inclusion would be anti-dilutive. These options were still outstanding at the end of the respective periods. Stock-Based Compensation The Company has established five share incentive programs as discussed in Note 9. Stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense on a straight-line basis over the vesting period. Determining the fair value of share-based awards at the grant date requires assumptions and judgments about expected volatility and forfeiture rates, among other factors. Stock-based compensation costs of $1,464,000, $1,649,000 and $435,000 were recognized for the fiscal years ended June 30, 2023, 2022 and 2021, respectively. Foreign Currency The Company has determined the functional currency of all foreign subsidiaries is the U.S. Dollar. All foreign operations are considered a direct and integral part or extension of the Company’s operations. The day-to-day operations of all foreign subsidiaries are dependent on the economic environment of the U.S. Dollar. Therefore, no realized and unrealized gains and losses associated with foreign currency translation are recorded for the fiscal years ended June 30, 2023, 2022 or 2021. Comprehensive Income For the fiscal years ended June 30, 2023, 2022 and 2021, the Company’s operations did not give rise to material items includable in comprehensive income, which were not already included in net income. Accordingly, the Company’s comprehensive income approximates its net income for all periods presented. Segment Reporting The Company’s reportable operating segments are determined based on the Company’s management approach. The management approach is based on the way that the chief operating decision maker organizes the segments within an enterprise for making operating decisions and assessing performance. The Company’s results of operations are reviewed by the chief operating decision maker on a consolidated basis and the Company operates in only one segment. The Company has presented required geographical data in Note 14. Shipping and Handling Sales and Costs The Company records the amount billed to customers for shipping and handling in net sales ($450,000, $428,000 and $395,000 in the fiscal years ended June 30, 2023, 2022 and 2021, respectively) and classifies the costs associated with these sales in cost of sales ($1,697,000, $1,425,000 and $1,058,000 in the fiscal years ended June 30, 2023, 2022 and 2021, respectively). Leases The Company records lease assets and corresponding lease liabilities for the operating lease on our Consolidated Balance Sheets, excluding short-term leases (leases with terms of 12 months or less) as described under ASU No. 2016-02, Leases (Topic 842) Recently Issued Accounting Standards Reference Rate Reform (ASC Topic 848) In March 2020, the FASB issued authoritative guidance to provide optional relief for companies preparing for the discontinuation of interest rates such as the London Interbank Offered Rate (“LIBOR”), which was expected to be phased out at the end of calendar 2021, and applies to lease contracts, hedging instruments, held-to-maturity debt securities and debt arrangements that have LIBOR as the benchmark rate. The Company’s bank has notified the Company that its LIBOR option will continue to be available to it through June 30, 2023, at which time the option will shift to the Benchmark Replacement as defined in the agreement with the bank (see Note 8). The Company does not believe that this transition will have a material impact on its financial condition. |
Revenue Recognition and Contrac
Revenue Recognition and Contracts with Customers | 12 Months Ended |
Jun. 30, 2023 | |
Revenue Recognition and Contracts with Customers | |
Revenue Recognition and Contracts with Customers | NOTE 2 – Revenue Recognition and Contracts with Customers The Company is engaged in one major line of business: the development, manufacture, and distribution of security products, encompassing access control systems, door security products, intrusion and fire alarm systems, alarm communication services, and video surveillance products for commercial and residential use. The Company also provides wireless communication service for intrusion and fire alarm systems on a monthly basis. These products are used for commercial, residential, institutional, industrial and governmental applications, and are sold worldwide principally to independent distributors, dealers and installers of security equipment. Sales to unaffiliated customers are primarily shipped from the United States. As of June 30, 2023 and 2022, the Company included refund liabilities of approximately $5,521,000 and $5,863,000, respectively, in current liabilities. As of June 30, 2023 and 2022, the Company included return-related assets of approximately $1,338,000 and $974,000, respectively, in other current assets. As a percentage of gross sales, sales returns, rebates and allowances were 7%, 10% and 10% for the fiscal years ended June 30, 2023, 2022 and 2021, respectively. The Company disaggregates revenue from contracts with customers into major product lines. The Company determines that disaggregating revenue into these categories achieves the disclosure objective to depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. As noted in the accounting policy footnote, the Company’s business consists of one operating segment. Following is the disaggregation of revenues based on major product lines (in thousands): Fiscal year ended June 30, 2023 2022 2021 Major Product Lines: Intrusion and access alarm products $ 47,344 $ 49,606 $ 36,794 Door locking devices 62,718 48,006 43,337 Services 59,935 45,981 33,904 Total Revenues $ 169,997 $ 143,593 $ 114,035 The following table represents the allowance for credit losses accounts as of the respective years ending June 30 (in thousands): Balance at beginning of period Charged to costs and expenses Deductions/ (recoveries) Balance at end of period For the Year Ended June 30, 2021: Allowance for credit losses $ 326 $ 30 $ (130) $ 226 For the Year Ended June 30, 2022: Allowance for credit losses $ 226 $ 17 $ — $ 243 For the Year Ended June 30, 2023: Allowance for credit losses $ 243 $ 6 $ (118) $ 131 |
Business and Credit Concentrati
Business and Credit Concentrations | 12 Months Ended |
Jun. 30, 2023 | |
Business and Credit Concentrations | |
Business and Credit Concentrations | NOTE 3 – Business and Credit Concentrations An entity is more vulnerable to concentrations of credit risk if it is exposed to risk of loss greater than it would have had if it mitigated its risk through diversification of customers. The Company had one customer with an accounts receivable balance that comprised 19% , 22% and 19% of the Company’s overall accounts receivable at June 30, 2023, 2022 and 2021, respectively. Sales to this customer did not exceed 10% of the Company’s net sales during fiscal years ended June 30, 2023, 2022 and 2021. The Company had another customer with an accounts receivable balance that comprised 14% and 11% of the Company’s overall accounts receivable at June 30, 2023 and 2021, respectively. This customers’ accounts receivable balance did not exceed 10% of the Company’s overall accounts receivable at June 30, 2022. Sales to this customer did not exceed 10% of the Company’s net sales in any of the fiscal years ended June 30, 2023, 2022 and 2021. The Company had a third customer with an accounts receivable balance that comprised 16% and 12% of the Company’s overall accounts receivable at June 30, 2022 and 2021, respectively. This customers’ accounts receivable balance did not exceed 10% of the Company’s overall accounts receivable at June 30, 2023. Sales to this customer did not exceed 10% of the Company’s net sales in any of the fiscal years ended June 30, 2023, 2022 and 2021. |
Marketable Securities
Marketable Securities | 12 Months Ended |
Jun. 30, 2023 | |
Marketable Securities | |
Marketable Securities | NOTE 4 – Marketable Securities Marketable securities include investments in fixed income mutual funds, which are reported at their fair values. The disaggregated net gains and losses on the marketable securities recognize in the income statement for the years ended June 30, 2023, 2022 and 2021 are as follows (in thousands): Year ended June 30, 2023 2022 2021 Net gains recognized during the period on marketable securities $ 147 $ 81 $ — Less: Net gains recognized during the period on marketable securities sold during the period — — — Unrealized gains (losses) recognized during the reporting period on marketable securities still held at the reporting date (79) (426) (9) $ 68 $ (345) $ (9) The fair values of the Company’s marketable securities are determined as being the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the Company utilizes the three-tier value hierarchy, as prescribed by US GAAP, which prioritizes the inputs used in measuring fair value as follows: • Level 1 - inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. • Level 2 - inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. • Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement. The Company’s marketable securities, which are considered available-for-sale securities, are re-measured to fair value on a recurring basis and are valued using Level 1 inputs using quoted prices (unadjusted) for identical assets in active markets. The following tables summarize the Company’s investments (in thousands): June 30, 2023 June 30, 2022 Unrealized Unrealized Cost Fair Value Gain (Loss) Cost Fair Value Gain (Loss) Mutual Funds - Level 1 $ 5,651 5,136 $ (515) $ 5,504 $ 5,068 $ (436) Investment income is recognized when earned and consists principally of interest income from fixed income mutual funds. Realized gains and losses on sales of investments are determined on a specific identification basis. For the years ended June 30, 2023 and 2022, there were no transfers between Levels 1 and 2 investments and no transfers in or out of Level 3. |
Inventories
Inventories | 12 Months Ended |
Jun. 30, 2023 | |
Inventories | |
Inventories | NOTE 5 - Inventories Inventories, net of reserves are valued at lower of cost (first-in, first-out method) or net realizable value. Inventories, net of reserves consist of the following (in thousands): June 30, June 30, 2023 2022 Component parts $ 29,939 $ 32,656 Work-in-process 7,726 10,085 Finished product 10,684 7,045 $ 48,349 $ 49,786 Classification of inventories, net of reserves: Current $ 35,062 $ 40,781 Non-current 13,287 9,005 $ 48,349 $ 49,786 The following table represents the inventory obsolescence and net realizable value inventory reserves as of the respective years ending June 30 (in thousands): Balance at beginning of period Charged to costs and expenses Deductions/ (recoveries) Balance at end of period For the Year Ended June 30, 2021: Inventory obsolescence and net realizable value reserve $ 2,913 $ — $ (79) $ 2,834 For the Year Ended June 30, 2022: Inventory obsolescence and net realizable value reserve $ 2,834 $ 1,187 $ — $ 4,021 For the Year Ended June 30, 2023: Inventory obsolescence and net realizable value reserve $ 4,021 $ 460 $ (905) $ 3,576 |
Property, Plant, and Equipment
Property, Plant, and Equipment | 12 Months Ended |
Jun. 30, 2023 | |
Property, Plant, and Equipment | |
Property, Plant, and Equipment | NOTE 6 - Property, Plant, and Equipment Property, plant and equipment consist of the following (in thousands): June 30, 2023 June 30, 2022 Useful Life in Years Land $ 904 $ 904 N/A Buildings 8,911 8,911 30 to 40 Molds and dies 7,517 7,480 3 to 5 Furniture and fixtures 3,387 3,030 5 to 10 Machinery and equipment 28,574 26,696 3 to 10 Building improvements 3,078 2,464 Shorter of the lease term or life of asset 52,371 49,485 Less: accumulated depreciation and amortization (43,063) (41,546) $ 9,308 $ 7,939 Depreciation and amortization expense on property, plant, and equipment was approximately $1,569,000, $1,380,000 and $1,260,000 in fiscal 2023, 2022 and 2021, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Jun. 30, 2023 | |
Income Taxes | |
Income Taxes | NOTE 7 - Income Taxes The provision for income taxes is comprised of the following (in thousands): For the Year ended June 30, 2023 2022 2021 Current income taxes: Federal $ 5,899 $ 2,161 $ 1,912 State 1,020 300 265 6,919 2,461 2,177 Deferred income taxes: Federal (2,334) (214) 337 State (484) — — (2,818) (214) 337 Provision for income taxes $ 4,101 $ 2,247 $ 2,514 A reconciliation of the U.S. Federal statutory income tax rate to our actual effective tax rate on earnings before income taxes is as follows for the years ended June 30, (dollars in thousands): 2023 2022 2021 % of % of % of Pre-tax Pre-tax Pre-tax Amount Income Amount Income Amount Income Tax at Federal statutory rate $ 6,558 21.0 % $ 4,588 21.0 % $ 3,765 21.0 % Increases (decreases) in taxes resulting from: Meals and entertainment 48 0.2 % 29 0.1 % 29 0.2 % State income taxes, net of Federal income tax benefit 436 1.4 % 238 1.1 % 135 0.8 % Global intangible low-taxed income 2,739 8.8 % 1,697 7.8 % 1,706 9.5 % R&D Credit (661) (2.1) % (554) (2.5) % (523) (2.9) % Foreign withholding tax — — % — — % 205 1 % Foreign Source income not subject to Tax (5,524) (17.7) % (3,231) (14.8) % (3,353) (19) % Non-taxable debt extinguishment — — % (820) (3.8) % — — % Uncertain Tax Positions 63 0.2 % 20 0.1 % 312 1.7 % IRS examination settlements — — % — — % — — % Other, net 442 1.4 % 280 1.3 % 238 1.3 % Effective tax rate $ 4,101 13.1 % $ 2,247 10.3 % $ 2,514 14.0 % Deferred tax assets and deferred tax liabilities at June 30, 2023 and 2022 are as follows (in thousands): Deferred Tax Assets (Liabilities) 2023 2022 Accounts receivable $ 22 $ 42 Inventories 397 413 Accrued liabilities 857 454 Stock based compensation expense 250 179 Revenue reserves 333 466 Unrealized loss (gain) on marketable securities 124 90 Capitalized research and development cost 2,923 — Other 4 — Total Deferred Tax Assets $ 4,910 $ 1,644 Valuation allowance — — Deferred income tax assets, net of valuation allowance $ 4,910 $ 1,644 Intangibles (916) (615) Property, plant and equipment (729) (582) Other deferred tax liabilities (613) (613) Total Deferred Tax Liability $ (2,258) $ (1,810) Net Deferred Tax Asset/(Liability) $ 2,652 $ (166) The Company has identified the United States and New York State as its major tax jurisdictions. Fiscal year 2018 and forward years are still open for examination. In addition, the Company has a wholly-owned subsidiary which operates in a Free Zone in the Dominican Republic (“DR”) and is exempt from DR income tax. The Company was audited by the IRS for the fiscal year 2017. The Company received Form 4549-A, Income Tax Examination Changes from the IRS proposing an adjustment to income for the fiscal 2017 tax year regarding deemed dividends based on its interpretation under IRC Section 956 arising from the intercompany balances on the books of the Company. During the third quarter of fiscal 2021, the Company settled the issue and paid the IRS $399,000. The Company reported the results of the IRS exam to all the jurisdictions in which it files and paid taxes and interest totaling $97,000. Subsequent to the quarter end, the Company paid the IRS $68,000 for interest. None of the payments were recorded to expense in 2021, since liabilities had previously been established. In December 2022, the Company received a letter from the IRS (“IRS”) notifying it that the IRS has closed its examination of the Company’s income tax return for fiscal year ended June 30, 2020. There have been no changes proposed in relation to this examination. The provision for income taxes represents Federal, foreign, and state and local income taxes. The effective rate differs from statutory rates due to the effect of tax rates in foreign jurisdictions, state and local income taxes, tax benefit of R&D credits, certain nondeductible expenses, uncertain tax positions and global intangible low-taxed income ("GILTI"). During the year ending June 30, 2023, the Company increased its reserve for uncertain income tax positions by $22,000. The Company’s practice is to recognize interest and penalties related to income tax matters in income tax expense and accrued income taxes. As of June 30, 2023, the Company had accrued interest totaling $139,000, penalties totaling $5,000, and $700,000 of unrecognized net tax benefits that, if recognized, would favorably affect the Company’s effective income tax rate in any future period. The Company does not expect that its unrecognized tax benefits will significantly change within the next twelve months. The Company claims R&D tax credits on eligible research and development expenditures. The R&D tax credits are recognized as a reduction to income tax expense. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands): 2023 2022 2021 Balance of gross unrecognized tax benefits as of Beginning of Year $ 678 $ 678 $ 866 Increase (Decrease) to unrecognized tax benefits from deemed dividends for investments in US property — — (3) Increase (Decrease) to unrecognized tax benefits resulting from the release of R&D credits due to the settled IRS audit — — (185) Increase (Decrease) to unrecognized tax benefits resulting from a state filing tax position 22 — — Balance of gross unrecognized tax benefits as of End of Year $ 700 $ 678 $ 678 |
Debt
Debt | 12 Months Ended |
Jun. 30, 2023 | |
Debt | |
Debt | NOTE 8 - Debt As of June 30, 2023 and 2022, debt consisted of a revolving line of credit of $11,000,000 (“Revolver Agreement”), with no amounts outstanding, which expires in June 2024. The Revolver Agreement also provides for a LIBOR-based interest rate option of LIBOR plus 1.15% to 2.00%, depending on the ratio of outstanding debt to EBITDA, which is to be measured and adjusted quarterly, a prime rate-based option of the prime rate plus 0.25% and other terms and conditions as more fully described in the Revolver Agreement. The Company’s obligations under the Revolver Agreement continue to be secured by substantially all of its domestic assets, including but not limited to deposit accounts, accounts receivable, inventory, equipment and fixtures and intangible assets. In addition, the Company’s wholly owned subsidiaries, with the exception of the Company’s foreign subsidiaries, have issued guarantees and pledges of all of their assets to secure the Company’s obligations under the Revolver Agreement. All of the outstanding common stock of the Company’s domestic subsidiaries and 65% of the common stock of the Company’s foreign subsidiaries has been pledged to secure the Company’s obligations under the Revolver Agreement. The Revolver Agreement contains various restrictions and covenants including, among others, restrictions on payment of dividends, restrictions on borrowings and compliance with certain financial ratios, as defined in the Revolver Agreement. In September 2020, the Company and its lender amended the Revolver Agreement, which had an expiration date of June 2021, to expire in June 2024. The amended Revolver Agreement also removed certain requirements and restrictions on the Company as well as removing the mortgage on the Company’s Amityville facility. During the fourth quarter of fiscal 2020, the Company received the proceeds of promissory notes dated between April 17, 2020 and May 7, 2020 (the "PPP Loan Agreement"), entered into between the Company and HSBC Bank USA N.A., as lender (the "Lender”). The Lender made the loans pursuant to the Paycheck Protection Program (the "PPP"), created by Section 1102 of the CARES Act and governed by the CARES Act, Section 7(a)(36) of the Small Business Act, any rules or guidance that has been issued by the Small Business Association (“SBA”) implementing the PPP and acting as guarantor, or any other applicable loan program requirements, as defined in 13 CFR § 120.10, as amended from time to time. Pursuant to the PPP Loan Agreement, the Lender made loans to the Company with an aggregate principal amount of $3,904,000 (the "PPP Loan"). The PPP Loan and related extinguishment was accounted for in accordance with ASC 470 “Debt”. Pursuant to the CARES Act, the loans may be forgiven by the SBA. During the year ended June 30, 2022, the PPP Loans were forgiven, in their entirety, in accordance with guidelines set forth in the PPP loan documents. The Company recognized a gain on the extinguishment of debt during the fiscal year ended June 30, 2022 in the amount of $3,904,000 within the other (expense) income section in the accompanying condensed consolidated statements of income. The SBA reserves the right to audit PPP forgiveness applications for a period of six years from the date of forgiveness. It has indicated that it will audit all of those that are in excess of $2 million. |
Stock Option
Stock Option | 12 Months Ended |
Jun. 30, 2023 | |
Stock Option | |
Stock Option | NOTE 9 - Stock Options The Company follows ASC 718 (“Share-Based Payment”), which requires that all share-based payments to employees, including stock options, be recognized as compensation expense in the consolidated financial statements based on their fair values and over the requisite service period. For the fiscal years ended June 30, 2023, 2022 and 2021, the Company recorded non-cash compensation expense of $1,464,000 ($.04 per basic and diluted diluted diluted 2012 Employee Stock Option Plan In December 2012, the stockholders approved the 2012 Employee Stock Option Plan (the “2012 Employee Plan”). The 2012 Employee Plan authorizes the granting of awards, the exercise of which would allow up to an aggregate of 1,900,000 shares of the Company’s common stock to be acquired by the holders of such awards. Under this plan, the Company may grant stock options, which are intended to qualify as incentive stock options (ISOs), to valued employees. Any plan participant who is granted ISOs and possesses more than 10% of the voting rights of the Company’s outstanding common stock must be granted an option with a price of at least 110% of the fair market value on the date of grant. Under the 2012 Employee Plan, stock options may be granted to valued employees with a term of up to 10 years at an exercise price equal to or greater than the fair market value on the date of grant and are exercisable, in whole or in part, at 20% per year beginning on the date of grant. An option granted under this plan shall vest in full upon a “change in control” as defined in the plan. At June 30, 2023, 521,580 stock options were outstanding, 247,628 stock options were exercisable and no further stock options were available for grant under this plan. 37,500 options were granted under this plan during the year ended June 30, 2023. The fair value of each option granted was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions: 2023 2022 2021 Risk-free interest rates 3.03 % 1.64 % n/a Expected lives 7.27 Years 6.18 Years n/a Expected volatility 43 % 43 % n/a Expected dividend yields 0 % 0 % n/a The Company uses a weighted-average expected stock-price volatility assumption that is a combination of both current and historical implied volatilities of the underlying stock. The implied volatilities were obtained from publicly available data sources. For the weighted-average expected option life assumption, the Company considers the exercise behavior of past grants. The average risk-free interest rate is based on the U.S. Treasury Bond rate for the expected term of the options and the average dividend yield is based on historical experience. The following table reflects activity under the 2012 Plan for the fiscal years ended June 30,: 2023 2022 2021 Weighted average Weighted average Weighted average Options exercise price Options exercise price Options exercise price Outstanding, beginning of year 523,080 $ 18.59 214,080 $ 9.59 235,680 $ 9.42 Granted 37,500 $ 26.94 338,000 $ 23.17 — — Forfeited/Lapsed — — — — (13,000) 6.91 Exercised (39,000) $ 10.44 (29,000) $ 5.45 (8,600) 9.04 Outstanding, end of period 521,580 $ 19.37 523,080 $ 18.59 214,080 $ 9.59 Exercisable, end of period 247,628 $ 17.16 176,752 $ 14.68 98,176 $ 8.07 Weighted average fair value at grant date of options granted $ 13.36 $ 12.16 $ n/a Total intrinsic value of options exercised $ 822,000 $ 502,000 $ 65,000 Total intrinsic value of options outstanding $ 7,968,000 $ 1,916,000 $ 1,840,000 Total intrinsic value of options exercisable $ 4,330,000 $ 1,218,000 $ 993,000 37,500, 338,000 and 0 options were granted during the fiscal years ended June 30, 2023, 2022 and 2021, respectively. 39,000, 29,000 and 8,600 options were exercised during the fiscal years ended June 30, 2023, 2022 and 2021, respectively. 29,600 of the 39,000 stock options exercised during the fiscal year ended June 30, 2023, were settled by exchanging 10,150 shares of the Company’s common stock which were retired and returned to unissued status upon receipt. 1,000 of the 29,000 stock options exercised during the fiscal year ended June 30, 2022, were settled by exchanging 153 shares of the Company’s common stock which were retired and returned to unissued status upon receipt. 8,600 stock options exercised during the fiscal year ended June 30, 2021 were settled by exchanging 4,604 shares of the Company's common stock which were retired and returned to unissued status upon receipt. $84,000, $155,000 and $0 was received from the remaining option exercises for the fiscal years ended June 30, 2023, 2022 and 2021, respectively, and the actual tax benefit realized for the tax deductions from option exercises was $0 for each of these periods. The following table summarizes information about stock options outstanding under the 2012 Employee Plan at June 30, 2023: Options outstanding Options exercisable Weighted average Number remaining Weighted average Number Weighted average Range of exercise prices outstanding contractual life exercise price exercisable exercise price $3.15 ‑ $26.94 521,580 7.67 $ 19.37 247,628 $ 17.16 521,580 7.67 $ 19.37 247,628 $ 17.16 As of June 30, 2023 and 2022, there was $1,971,000 and $2,489,000 of unearned stock-based compensation cost related to share-based compensation arrangements granted under the 2012 Employee Plan, respectively. 109,876, 107,576 and 44,776 options vested during the years June 30, 2023, 2022 and 2021, respectively. 2012 Non-Employee Stock Option Plan In December 2012, the stockholders approved the 2012 Non-Employee Stock Option Plan (the “2012 Non-Employee Plan”). This plan authorizes the granting of awards, the exercise of which would allow up to an aggregate of 100,000 shares of the Company’s common stock to be acquired by the holders of such awards. Under this plan, the Company may grant stock options to non-employee directors and consultants to the Company and its subsidiaries. Under the 2012 Non-Employee Plan, stock options may be granted with a term of up to 10 years at an exercise price equal to or greater than the fair market value on the date of grant and are exercisable in whole or in part at 20% per year beginning on the date of grant. An option granted under this plan shall vest in full upon a “change in control” as defined in the plan. At June 30, 2023, 20,400 stock options were outstanding, 13,920 stock options were exercisable and 0 stock options were available for grant under this plan. No stock options were granted under this plan during the year ended June 30, 2023. The fair value of each option granted was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions: 2023 2022 2021 Risk-free interest rates n/a 1.68 % n/a Expected lives n/a 6.18 Years n/a Expected volatility n/a 43 % n/a Expected dividend yields n/a 0 % n/a The following table reflects activity under the 2012 Non-Employee Plan for the fiscal years ended June 30,: 2023 2022 2021 Weighted average Weighted average Weighted average Options exercise price Options exercise price Options exercise price Outstanding, beginning of year 20,400 $ 14.39 12,000 $ 6.55 24,000 $ 5.15 Granted — — 9,600 $ 22.93 — — Forfeited/Lapsed — — — — (9,600) $ 3.59 Exercised — — (1,200) $ 4.35 (2,400) $ 4.35 Outstanding, end of period 20,400 $ 14.39 20,400 $ 14.39 12,000 $ 6.55 Exercisable, end of period 13,920 $ 10.99 11,280 $ 8.92 6,240 $ 6.04 Weighted average fair value at grant date of options granted n/a $ 12.58 n/a Total intrinsic value of options exercised n/a $ 19,000 $ 31,000 Total intrinsic value of options outstanding $ 413,000 $ 149,000 $ 140,000 Total intrinsic value of options exercisable $ 329,000 $ 136,000 $ 76,000 0, 9,600 and 0 options were granted during the fiscal years ended June 30, 2023, 2022 and 2021, respectively. 0, 1,200 and 2,400 options were exercised during the fiscal years ended June 30, 2023, 2022 and 2021, respectively. 1,200 stock options exercised during the fiscal year ended June 30, 2022 were settled by exchanging 258 shares of the Company’s common stock which were retired and returned to unissued status upon receipt. 2,400 options exercised during the fiscal year ended June 30, 2021 were settled by exchanging 612 shares of the Company common stock which were retired and returned to unissued status upon receipt. $0 was received from the remaining option exercises for each of the fiscal years ended June 30, 2023, 2022 and 2021, and the actual tax benefit realized for the tax deductions from option exercises was $0, $4,000 and $6,000 in fiscal 2023, 2022 and 2021 respectively. The following table summarizes information about stock options outstanding under the 2012 Non-Employee Plan at June 30, 2023: Options outstanding Options exercisable Weighted average Weighted Weighted Number remaining average exercise Number average exercise Range of exercise prices outstanding contractual life price exercisable price $4.35 - $22.93 20,400 6.65 $ 14.39 13,920 $ 10.99 20,400 6.65 $ 14.39 13,920 $ 10.99 As of June 30, 2023 and 2022, there was $46,000 and $70,000 of unearned stock-based compensation cost related to share-based compensation arrangements granted under the 2012 Non-Employee Plan, respectively. 2,640, 6,240 and 5,520 options vested during the years June 30, 2023, 2022 and 2021, respectively. 2018 Non-Employee Stock Option Plan In December 2018, the stockholders approved the 2018 Non-Employee Stock Option Plan (the “2018 Non-Employee Plan”). This plan authorizes the granting of awards, the exercise of which would allow up to an aggregate of 100,000 shares of the Company's common stock to be acquired by the holders of such awards. Under this plan, the Company may grant stock options to non-employee directors and consultants to the Company and its subsidiaries. Under the 2018 Non-Employee Plan, stock options may be granted with a term of up to 10 years at an exercise price equal to or greater than the fair market value on the date of grant and are exercisable in whole or in part at 20% per year beginning on the date of grant. An option granted under this plan shall vest in full upon a “change in control” as defined in the plan. At June 30, 2023, 75,000 stock options were outstanding, 50,720 stock options were exercisable and 0 stock options were available for grant under this plan. No stock options were granted under this plan during the year ended June 30, 2023. The fair value of each option granted was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions: 2023 2022 2021 Risk-free interest rates n/a 1.68 % n/a Expected lives n/a 6.18 Years n/a Expected volatility n/a 43 % n/a Expected dividend yields n/a 0 % n/a The following table reflects activity under the 2018 Non-Employee plan for the fiscal year ended June 30,: 2023 2022 2021 Weighted average Weighted average Weighted average Options exercise price Options exercise price Options exercise price Outstanding, beginning of year 89,000 $ 14.91 70,100 $ 11.93 96,800 $ 11.74 Granted — — 23,500 $ 22.93 — — Forfeited/Lapsed — — — — (23,500) 11.68 Exercised (14,000) $ 15.32 (4,600) $ 10.43 (3,200) 8.10 Outstanding, end of period 75,000 $ 14.83 89,000 $ 14.91 70,100 $ 11.93 Exercisable, end of period 50,720 $ 12.87 45,040 $ 12.98 29,960 $ 11.68 Weighted average fair value at grant date of options granted n/a $ 12.58 n/a Total intrinsic value of options exercised $ 209,000 $ 58,000 $ 29,000 Total intrinsic value of options outstanding $ 1,486,000 $ 561,000 $ 439,000 Total intrinsic value of options exercisable $ 1,104,000 $ 354,000 $ 195,000 0, 23,500 and 0 options were granted during the fiscal years ended June 30, 2023, 2022 and 2021, respectively. 14,000, 4,600 and 3,200 options were exercised during the fiscal years ended June 30, 2023, 2022 and 2021, respectively. 14,000 stock options exercised during the fiscal year ended June 30, 2023 were settled by exchanging 7,235 shares of the Company’s common stock which were retired and returned to unissued status upon receipt. 4,600 stock options exercised during the fiscal year ended June 30, 2022 were settled by exchanging 2,075 shares of the Company’s common stock which were retired and returned to unissued status upon receipt. 3,200 stock options exercised during the fiscal year ended June 30, 2021 were settled by exchanging 1,518 shares of the Company’s common stock which were retired and returned to unissued status upon receipt. $0 was received from the remaining option exercises for each of the fiscal years ended June 30, 2023, 2022 and 2021, and the actual tax benefit realized for the tax deductions from option exercises was $44,000, $12,000 and $6,000 in fiscal 2023, 2022 and 2021, respectively. The following table summarizes information about stock options outstanding under the 2018 Non- Employee Plan at June 30, 2023: Options outstanding Options exercisable Weighted average Weighted Weighted Number remaining average exercise Number average exercise Range of exercise prices outstanding contractual life price exercisable price $8.10 - $22.93 75,000 6.76 $ 14.83 50,720 $ 12.87 75,000 6.76 $ 14.83 50,720 $ 12.87 As of June 30, 2023 and 2022, there was $135,000 and $265,000 of unearned stock-based compensation cost related to share-based compensation arrangements granted under the 2018 Non-Employee Plan, respectively. 19,680 options vested during each of the years June 30, 2023, 2022 and 2021, respectively. 2020 Non-Employee Stock Option Plan In May 2020, the stockholders approved the 2020 Non-Employee Stock Option Plan (the “2020 Non-Employee Plan”). This plan authorizes the granting of awards, the exercise of which would allow up to an aggregate of 100,000 shares of the Company's common stock to be acquired by the holders of such awards. Under this plan, the Company may grant stock options to non-employee directors and consultants to the Company and its subsidiaries. Under the 2020 Non-Employee Plan, stock options may be granted with a term of up to 10 years at an exercise price equal to or greater than the fair market value on the date of grant and are exercisable in whole or in part at 20% per year beginning on the date of grant. An option granted under this plan shall vest in full upon a “change in control” as defined in the plan. At June 30, 2023, 56,900 stock options were outstanding, 18,760 stock options were exercisable and 43,100 stock options were available for grant under this plan. 30,000 options were granted under this plan during the year ended June 30, 2023. The fair value of each option granted was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions: 2023 2022 2021 Risk-free interest rates 3.03 - 3.40 % 1.68 % 0.62 % Expected lives 7.23 - 7.27 Years 6.18 Years 10 Years Expected volatility 43 % 43 % 45 % Expected dividend yields 0 % 0 % 0 % The following table reflects activity under the 2020 Non-Employee plan for the fiscal year ended June 30,: 2023 2022 2021 Weighted average Weighted average Weighted average Options exercise price Options exercise price Options exercise price Outstanding, beginning of year 26,900 $ 18.64 10,000 $ 11.40 — — Granted 30,000 $ 27.57 16,900 $ 22.93 10,000 $ 11.40 Forfeited/Lapsed — — — — — — Exercised — — — — — — Outstanding, end of period 56,900 $ 23.35 26,900 $ 18.64 10,000 $ 11.40 Exercisable, end of period 18,760 $ 20.73 7,380 $ 16.68 2,000 $ 11.40 Weighted average fair value at grant date of options granted $ 13.74 $ 12.58 $ 6.10 Total intrinsic value of options exercised n/a n/a n/a Total intrinsic value of options outstanding $ 643,000 $ 92,000 $ 68,000 Total intrinsic value of options exercisable $ 261,000 $ 37,000 $ 14,000 30,000, 16,900 and 10,000 options were granted during the fiscal years ended June 30, 2023, 2022 and 2021, respectively. No options were exercised during the fiscal years ended June 30, 2023, 2022 and 2021. The following table summarizes information about stock options outstanding under the 2020 Non- Employee Plan at June 30, 2023: Options outstanding Options exercisable Weighted average Number remaining Weighted average Number Weighted average Range of exercise prices outstanding contractual life exercise price exercisable exercise price $11.40 - $30.71 56,900 8.59 $ 23.35 18,760 $ 20.73 56,900 8.59 $ 23.35 18,760 $ 20.73 As of June 30, 2023 and 2022, there was $344,000 and $135,000 of unearned stock-based compensation cost related to share-based compensation arrangements granted under the 2020 Non-Employee Plan, respectively. 11,380, 5,380 and 2,000 options vested during the years June 30, 2023, 2022 and 2021, respectively. 2022 Employee Stock Option Plan In December 2022, the stockholders approved the 2022 Employee Stock Option Plan (the “2022 Employee Plan”). The plan authorizes the granting of awards, the exercise of which would allow up to an aggregate of 950,000 shares of the Company’s common stock to be acquired by the holders of such awards. Under this plan, the Company may grant stock options, which are intended to qualify as incentive stock options (“ISOs”) or non-incentive stock options, to valued employees. Any plan participant who is granted ISOs and possesses more than 10% of the voting rights of the Company’s outstanding common stock must be granted an option with a price of at least 110% of the fair market value on the date of grant. Under the 2022 Employee Plan, stock options may be granted to valued employees with a term of up to 10 years at an exercise price equal to or greater than the fair market value on the date of grant and are exercisable, in whole or in part, at 20% per year beginning on the date of grant. An option granted under this plan shall vest in full upon a “change in control” as defined in the plan. At June 30, 2023, 5,000 stock options were outstanding, 1,000 stock options were exercisable and 945,000 stock options were available for grant under this plan. 5,000 options were granted under this plan during the year ended June 30, 2023. The fair value of each option granted was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions: 2023 Risk-free interest rates 3.84 % Expected lives 7.28 Years Expected volatility 45 % Expected dividend yields 0.62 % The following table reflects activity under the 2022 Employee plan for the fiscal year ended June 30,: 2023 Weighted average Options exercise price Outstanding, beginning of year — — Granted 5,000 $ 40.01 Forfeited/Lapsed — — Exercised — — Outstanding, end of period 5,000 $ 40.01 Exercisable, end of period 1,000 $ 40.01 Weighted average fair value at grant date of options granted $ 19.77 Total intrinsic value of options exercised n/a Total intrinsic value of options outstanding $ — Total intrinsic value of options exercisable $ — 5,000 options were granted during the fiscal year ended June 30, 2023. No options were exercised during the fiscal year ended June 30, 2023. The following table summarizes information about stock options outstanding under the 2022 Employee Plan at June 30, 2023: Options outstanding Options exercisable Weighted average Number remaining Weighted average Number Weighted average Range of exercise prices outstanding contractual life exercise price exercisable exercise price $40.01 5,000 9.95 $ 40.01 1,000 $ 40.01 5,000 9.95 $ 40.01 1,000 $ 40.01 As of June 30, 2023, there was $74,000 of unearned stock-based compensation cost related to share-based compensation arrangements granted under the 2020 Non-Employee Plan. 1,000 options vested during the year ended June 30, 2023. |
Stockholders' Equity Transactio
Stockholders' Equity Transactions | 12 Months Ended |
Jun. 30, 2023 | |
Stockholders' Equity Transactions | |
Stockholders' Equity Transactions | NOTE 10 – Stockholders’ Equity Transactions On September 16, 2014 the Company’s board of directors authorized the repurchase of up to 2 million of the approximately 38.8 million shares of the Company’s common stock then outstanding. Such repurchases may be made from time to time in the open market or in privately negotiated transactions subject to market conditions and the market price of the common stock. Relative to the Revolver Agreement described in Note 8, the Company’s lender gave its consent to this stock repurchase plan. During the fiscal year ended June 30, 2023, 2022 and 2021, the Company did not repurchase any shares of its outstanding common stock. Shares repurchased through June 30, 2023 are included in the Company’s Treasury Stock as of June 30, 2023, 2022 and 2021. On December 6, 2021, the stockholders of the Company approved an amendment of the Company’s Certificate of Incorporation increasing the number of authorized shares the Company may issue to 100,000,000 shares of common stock at a $.01 par value per share. In December 2021, the Company’s Board of Directors approved a two-for-one stock split in the form of a 100% dividend of the Company’s common stock, payable to stockholder of record on December 20, 2021. The additional shares were distributed on January 4, 2022. All share and per share amounts (except par value) have been retroactively adjusted to reflect the stock split. There was no net effect on total stockholders’ equity as a result of the stock split. On May 5, 2023, the Company’s Board of Directors declared a cash dividend of $.0625 per share payable on June 12, 2023 to stockholders of record on May 22, 2023. The cash dividend resulted in approximately $2,298,000 of cash paid to stockholders. During fiscal 2023, certain employees and directors exercised stock options under the Company's 2012 Employee and 2018 Non-Employee Stock Option Plans totaling 53,000 shares. 43,600 of these exercises were completed as cashless exercises as allowed for under the plans, where the exercise shares are issued by the Company in exchange for shares of the Company's common stock that are owned by the optionees. The number of shares surrendered by the optionees was 17,385 and was based upon the per share price on the effective date of the option exercise. During fiscal 2022, certain employees and directors exercised stock options under the Company's 2012 Employee and Non-Employee and 2018 Non-Employee Stock Option Plans totaling 34,800 shares. 6,800 of these exercises were completed as cashless exercises as allowed for under the plans, where the exercise shares are issued by the Company in exchange for shares of the Company's common stock that are owned by the optionees. The number of shares surrendered by the optionees was 2,486 and was based upon the per share price on the effective date of the option exercise. During fiscal 2021, certain employees and directors exercised stock options under the Company's 2012 Employee and Non-Employee and 2018 Non-Employee Stock Option Plans totaling 14,200 shares. All of these exercises were completed as cashless exercises as allowed for under the plans, where the exercise shares are issued by the Company in exchange for shares of the Company's common stock that are owned by the optionees. The number of shares surrendered by the optionees was 6,734 and was based upon the per share price on the effective date of the option exercise. |
Related Party Transaction
Related Party Transaction | 12 Months Ended |
Jun. 30, 2023 | |
Related Party Transaction | |
Related Party Transaction | NOTE 11 – Related Party Transaction On February 13, 2023, the Company's President and Chairman and the Company’s Executive Vice President and Chief Financial Officer sold 2,012,500 and 87,500 shares of our common stock, respectively, as selling stockholders in an underwritten secondary public offering at a public offering price of $31.50 per share. In connection with such offering, the selling stockholders granted the underwriters an option to purchase additional shares (the “Greenshoe Option”). On February 15, 2023, the underwriters exercised in full the Greenshoe Option, pursuant to which the selling stockholders sold a total of 300,000 additional shares of common stock at the same public offering price. The Company did not sell any shares in the offering and received no proceeds from the offerings, but the Company incurred $509,000 in offering expenses, which are recorded in selling, general, and administrative expenses in the accompanying condensed consolidated statements of income. |
401(k) Plan
401(k) Plan | 12 Months Ended |
Jun. 30, 2023 | |
401(k) Plan | |
401(k) Plan | NOTE 12 - 401(k) Plan The Company maintains a 401(k) plan (“the Plan”) that is available to all U.S. non-union employees and is qualified under Sections 401(a) and 401(k) of the Internal Revenue Code. Company contributions to this plan are discretionary and totaled $251,000, $191,000 and $138,000 for the years ended June 30, 2023, 2022 and 2021, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies | |
Commitments and Contingencies | NOTE 13 - Commitments and Contingencies Leases Our lease obligation consists of a 99-year Operating leases are included in operating lease right-of-use assets, accrued expenses and operating lease liabilities, non-current on our condensed consolidated balance sheets. For the fiscal year ended June 30, 2023 and 2022, cash payments against operating lease liabilities totaled $335,000 and $288,000, respectively. Supplemental balance sheet information related to operating leases was as follows: Weighted-average remaining lease term 69 Years Weighted-average discount rate 6.25 % The following is a schedule, by years, of maturities of lease liabilities as of June 30, 2023 (in thousands): Year Ending June 30, Amount 2024 $ 316 2025 299 2026 282 2027 267 2028 253 Thereafter 4,380 Total $ 5,797 Operating lease expense totaled approximately $458,000, $319,000 and $316,000, for the fiscal years ended June 30, 2023, 2022 and 2021, respectively. Litigation In the normal course of business, the Company is a party to claims and/or litigation. Management believes that the settlement of such claims and/or litigation, considered in the aggregate, will not have a material adverse effect on the Company’s financial position and results of operations. Employment Agreements As of September 30, 2022, the Company was obligated under two employment agreements and one severance agreement. The employment agreements are with the Company’s CEO and the Senior Vice President of Engineering (“the SVP of Engineering”). The severance agreement is with the Company’s CFO. The employment agreement with the CEO provides for an annual salary of $872,000, as adjusted for inflation; incentive compensation as may be approved by the Board of Directors from time to time; and a termination payment in an amount up to 299% of the average of the prior five calendar years’ compensation, subject to certain limitations, as defined in the agreement. The employment agreement renews annually in August unless either party gives the other notice of non-renewal at least six months prior to the end of the applicable term. The employment agreement with the SVP of Engineering expires in August 2024 and provides for an annual salary of $361,000, and, if terminated by the Company without cause, severance of nine months’ salary and continued company-sponsored health insurance for six months from the date of termination. The severance agreement is with the Executive Vice President of Operations and Chief Financial Officer and provides for, if terminated by the Company without cause or within three months of a change in corporate control of the Company, severance of nine months’ salary, continued company-sponsored health insurance for six months from the date of termination and certain non-compete and other restrictive provisions. |
Geographical Data
Geographical Data | 12 Months Ended |
Jun. 30, 2023 | |
Geographical Data | |
Geographical Data | NOTE 14 - Geographical Data The Company is engaged in one major line of business: the development, manufacture, and distribution of security products, encompassing access control systems, door-locking products, intrusion and fire alarm systems and video surveillance products for commercial and residential use. The Company also provides wireless communication service for intrusion and fire alarm systems. These products are used for commercial, residential, institutional, industrial and governmental applications, and are sold worldwide principally to independent distributors, dealers and installers of security equipment. Sales to unaffiliated customers are primarily shipped from the United States. The Company has customers worldwide with major concentrations in North America. Financial Information Relating to Domestic and Foreign Operations (in thousands) Fiscal Year ended June 30, 2023 2022 2021 Sales to external customers (1): Domestic $ 168,619 $ 142,059 $ 112,618 Foreign 1,378 1,534 1,417 Total Net Sales $ 169,997 $ 143,593 $ 114,035 2023 2022 Identifiable assets: United States $ 122,995 $ 98,791 Dominican Republic (2) 43,659 49,785 Total Identifiable Assets $ 166,654 $ 148,576 (1) All of the Company’s sales originate in the United States and are shipped primarily from the Company’s facilities in the United States. There were no sales into any one foreign country in excess of 10% of total Net Sales. (2) Consists primarily of inventories (2023 = $33,477 ; 2022 = $38,755 ), operating lease assets (2023 = $5,797 ; 2022 = $7,350 ) and fixed assets (2023 = $3,958 ; 2022 = $3,253 ) located at the Company’s principal manufacturing facility in the Dominican Republic. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Jun. 30, 2023 | |
Subsequent Events | |
Subsequent Events | NOTE 15 – Subsequent Events The Company has evaluated subsequent events occurring after the date of the consolidated financial statements for events requiring recording or disclosure in the consolidated financial statements. On August 18, 2023, the Company’s Board of Directors declared a cash dividend of $.08 per share payable on September 22, 2023 to stockholders of record on September 1, 2023. On August 29, 2023, a purported class action was filed in the United States District Court for the Eastern District of New York against the Company, its Chairman and Chief Executive Officer, and its Chief Financial Officer, alleging violations of the Securities Exchange Act of 1934 in connection with statements made in the Company’s quarterly reports on Form 10-Q for the quarters ended September 30, 2022, December 31, 2022 and March 31, 2023 (the “10-Q’s”). The Company previously announced that it was going to restate the financial statements contained in the 10-Qs. The Company intends to vigorously defend against the action. |
Nature of Business and Summar_2
Nature of Business and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Jun. 30, 2023 | |
Nature of Business and Summary of Significant Accounting Policies | |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of Napco Security Technologies, Inc. and its wholly-owned subsidiaries. All inter-company balances and transactions have been eliminated in consolidation. |
Accounting Estimates | Accounting Estimates The preparation of financial statements in conformity with Generally Accepted Accounting Principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent gains and losses at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Critical estimates include management’s judgments associated with reserves for sales returns and allowances, allowance for credit losses, overhead expenses applied to inventory, inventory reserves, valuation of |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The methods and assumptions used to estimate the fair value of the following classes of financial instruments were: Current Assets and Current Liabilities - The carrying amount of cash and cash equivalents, certificates of deposits, current receivables and payables and certain other short-term financial instruments approximate their fair value as of June 30, 2022 and 2021 due to their short-term maturities. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include approximately $15,242,000 of short-term time deposits, consisting of several certificates of deposit totaling $15,179,000 and $63,000 in a money market fund as of June 30, 2023. Cash and cash equivalents include approximately $63,000 of short-term time deposits, consisting of $63,000 in a money market fund as of June 30, 2022. The Company classifies these highly liquid investments with original maturities of three months or less as cash equivalents. Certificates of deposit with an original maturity greater than three months are classified as Investments – other. Cash and cash equivalents consists of the following as of (in thousands): June 30, 2023 June 30, 2022 Cash $ 20,713 $ 41,667 Money Market Fund 63 63 Certificates of Deposit 15,179 — $ 35,955 $ 41,730 Investments-other consists of the following as of (in thousands): June 30, 2023 June 30, 2022 Certificates of Deposit $ 25,660 $ — $ 25,660 $ — Certificates of deposit are recorded at the original cost plus accrued interest. The Company’s Certificates of Deposit consist of the following as of (in thousands): June 30, 2023 Balance Sheet Classification Interest Rate Maturity Date Cost Carrying Value Cash and Cash Equivalents 4.59% - 5.00% 7/30/2023 - 8/29/2023 $ 15,112 $ 15,179 Investments - other 4.80% - 5.15% 7/24/2023 - 10/24/2023 25,359 25,660 The Company has cash balances in banks in excess of the maximum amount insured by the FDIC and other international agencies as of June 30, 2023 and 2022. The Company has not historically experienced any credit losses with balances in excess of FDIC limits. |
Marketable Securities. | Marketable Securities The Company’s marketable securities include investments in mutual funds, which invest primarily in various government and corporate obligations, stocks and money market funds |
Accounts Receivable | Accounts Receivable Accounts receivable is stated net of the reserves for credit losses of $131,000 and $243,000 as of June 30, 2023 and 2022, respectively. Our reserves for credit losses are subjective critical estimates that have a direct impact on reported net earnings. These reserves are based upon the evaluation of our accounts receivable aging, specific exposures, sales levels and historical trends. |
Inventories | Inventories Inventories are valued at the lower of cost or net realizable value, with cost being determined on the first-in, first-out (FIFO) method. The reported net value of inventory includes finished saleable products, work-in-process and raw materials that will be sold or used in future periods. Inventory costs include raw materials, direct labor and overhead. The Company’s overhead expenses are applied based, in part, upon estimates of the proportion of those expenses that are related to procuring and storing raw materials as compared to the manufacture and assembly of finished products. These proportions, the method of their application, and the resulting overhead included in ending inventory, are based in part on subjective estimates and actual results could differ from those estimates. The Company records an inventory obsolescence reserve, which represents any excess of the cost of the inventory over its estimated realizable value. This reserve is calculated using an estimated obsolescence percentage applied to the inventory based on age, historical trends, product life cycle, requirements to support forecasted sales, and the ability to find alternate applications of its raw materials and to convert finished product into alternate versions of the same product to better match customer demand. In addition, and as necessary, the Company may establish specific reserves for future known or anticipated events. There is inherent professional judgment and subjectivity made by both production and engineering members of management in determining the estimated obsolescence percentage. The Company also regularly reviews the period over which its inventories will be converted to sales. Any inventories expected to convert to sales beyond 12 months from the balance sheet date are classified as non-current. |
Property, Plant, and Equipment | Property, Plant, and Equipment Property, plant, and equipment are carried at cost less accumulated depreciation. Expenditures for maintenance and repairs are charged to expense as incurred; costs of major renewals and improvements are capitalized. At the time property and equipment are retired or otherwise disposed of, the cost and accumulated depreciation are eliminated from the asset and accumulated depreciation accounts and the profit or loss on such disposition is reflected in income. Depreciation is recorded over the estimated service lives of the related assets using primarily the straight-line method. Amortization of leasehold improvements is calculated by using the straight-line method over the estimated useful life of the asset or lease term, whichever is shorter. |
Long-Lived and Intangible Assets | Long-Lived and Intangible Assets Long-lived assets are amortized over their useful lives and are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets in question may not be recoverable. Impairment would be recorded in circumstances where undiscounted cash flows expected to be generated by an asset are less than the carrying value of that asset. Intangible assets determined to have indefinite lives were not amortized but were tested for impairment at least annually. Changes in intangible assets are as follows (in thousands): June 30, 2023 June 30, 2022 June 30, 2021 Carrying Accumulated Net book Carrying Accumulated Net book Carrying Accumulated Net book value amortization value value amortization value value amortization value Customer relationships $ 9,800 (9,302) $ 498 $ 9,800 (9,143) $ 657 $ 9,800 $ (8,955) $ 845 Trade name 4,048 (607) 3,441 4,048 (405) 3,643 4,048 (202) 3,846 $ 13,848 $ (9,909) $ 3,939 $ 13,848 $ (9,548) $ 4,300 $ 13,848 $ (9,157) $ 4,691 Amortization expense for intangible assets subject to amortization was approximately $361,000, $391,000 and $425,000 for the fiscal years ended June 30, 2023, 2022 and 2021, respectively. Amortization expense for each of the next five fiscal years is estimated to be as follows: 2024 - $336,000; 2025 - $315,000; 2026 - $297,000; 2027 - $283,000; and 2028 - $269,000. The weighted average remaining amortization period for intangible assets was 15.5 years and 16.2 years at June 30, 2023 and 2022, respectively. |
Revenue Recognition | Revenue Recognition Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. For product sales, the Company typically transfers control at a point in time upon shipment or delivery of the product. For monthly communication services the Company satisfies its performance obligation as the services are rendered over the course of the month and therefore recognizes revenue over the monthly period. Typically timing of revenue recognition coincides with the timing of invoicing to the customers, at which time the Company has an unconditional right to consideration. As such, the Company typically records a receivable when revenue is recognized. The contract with the customer states the final terms of the sale, including the description, quantity, and price of each product purchased. Payment for product sales is typically due within 30 and 180 days of the delivery date. Payment for monthly communication services is billed on a monthly basis and is typically due at the beginning of the month of service or in 30 days for customers with an open account. The Company provides limited standard warranty for defective products, usually for a period of 24 to 36 months. The Company accepts returns for such defective products as well as for other limited circumstances. The Company also provides rebates to customers for meeting specified purchasing targets and other coupons or credits in limited circumstances. The Company establishes reserves for the estimated returns, rebates and credits and measures such variable consideration based on the expected value method using an analysis of historical data. Changes to the estimated variable consideration in subsequent periods are not material. The Company analyzes product sales returns and is able to make reasonable and reliable estimates of product returns based on the Company’s past history. Estimates for sales returns are based on several factors including actual returns and based on expected return data communicated to it by its customers. Accordingly, the Company believes that its historical returns analysis is an accurate basis for its allowance for sales returns. Actual results could differ from those estimates. |
Advertising and Promotional Costs | Advertising and Promotional Costs Advertising and promotional costs are included in "Selling, General and Administrative" expenses in the consolidated statements of income and are expensed as incurred. Advertising expense for fiscal years ended June 30, 2023, 2022 and 2021 was $2,931,000, $2,889,000 and $1,306,000, respectively. |
Research and Development Costs | Research and Development Costs Research and development costs incurred by the Company are charged to expense as incurred and are included in operating expenses in the consolidated statements of income. Company-sponsored research and development expense for the fiscal years ended June 30, 2023, 2022 and 2021 was $9,328,000, $8,024,000 and $7,620,000, respectively. |
Income Taxes | Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred income tax expense represents the change during the period in the deferred tax assets and deferred tax liabilities. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company measures and recognizes the tax implications of positions taken or expected to be taken in its tax returns on an ongoing basis. The Company records uncertain tax positions in accordance with ASC 740 on the basis of a two-step process in which (1) we determine whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. |
Net Income per Share | Net Income per Share Basic net income per common share (Basic EPS) is computed by dividing net income by the weighted average number of common shares outstanding. Diluted net income per common share (Diluted EPS) is computed by dividing net income by the weighted average number of common shares and dilutive common share equivalents and convertible securities then outstanding. The following provides a reconciliation of information used in calculating the per share amounts for the fiscal years ended June 30 (in thousands, except per share data): Weighted Average Net Income per Net Income Shares Share 2023 2022 2021 2023 2022 2021 2023 2022 2021 Basic EPS $ 27,127 $ 19,599 $ 15,413 36,741 36,725 36,696 $ 0.74 $ 0.53 $ 0.42 Effect of Dilutive Securities: Stock Options — — — 264 142 112 (0.01) — — Diluted EPS $ 27,127 $ 19,599 $ 15,413 37,005 36,867 36,808 $ 0.73 $ 0.53 $ 0.42 Options to purchase 7,534, 214,109 and 40,000 shares of common stock for the fiscal years ended June 30, 2023, 2022 and 2021, respectively, were not included in the computation of Diluted EPS because their inclusion would be anti-dilutive. These options were still outstanding at the end of the respective periods. |
Stock-Based Compensation | Stock-Based Compensation The Company has established five share incentive programs as discussed in Note 9. Stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense on a straight-line basis over the vesting period. Determining the fair value of share-based awards at the grant date requires assumptions and judgments about expected volatility and forfeiture rates, among other factors. Stock-based compensation costs of $1,464,000, $1,649,000 and $435,000 were recognized for the fiscal years ended June 30, 2023, 2022 and 2021, respectively. |
Foreign Currency | Foreign Currency The Company has determined the functional currency of all foreign subsidiaries is the U.S. Dollar. All foreign operations are considered a direct and integral part or extension of the Company’s operations. The day-to-day operations of all foreign subsidiaries are dependent on the economic environment of the U.S. Dollar. Therefore, no realized and unrealized gains and losses associated with foreign currency translation are recorded for the fiscal years ended June 30, 2023, 2022 or 2021. |
Comprehensive Income | Comprehensive Income For the fiscal years ended June 30, 2023, 2022 and 2021, the Company’s operations did not give rise to material items includable in comprehensive income, which were not already included in net income. Accordingly, the Company’s comprehensive income approximates its net income for all periods presented. |
Segment Reporting | Segment Reporting The Company’s reportable operating segments are determined based on the Company’s management approach. The management approach is based on the way that the chief operating decision maker organizes the segments within an enterprise for making operating decisions and assessing performance. The Company’s results of operations are reviewed by the chief operating decision maker on a consolidated basis and the Company operates in only one segment. The Company has presented required geographical data in Note 14. |
Shipping and Handling Sales and Costs | Shipping and Handling Sales and Costs The Company records the amount billed to customers for shipping and handling in net sales ($450,000, $428,000 and $395,000 in the fiscal years ended June 30, 2023, 2022 and 2021, respectively) and classifies the costs associated with these sales in cost of sales ($1,697,000, $1,425,000 and $1,058,000 in the fiscal years ended June 30, 2023, 2022 and 2021, respectively). |
Leases | Leases The Company records lease assets and corresponding lease liabilities for the operating lease on our Consolidated Balance Sheets, excluding short-term leases (leases with terms of 12 months or less) as described under ASU No. 2016-02, Leases (Topic 842) |
Recently Issued Accounting Standards | Recently Issued Accounting Standards Reference Rate Reform (ASC Topic 848) In March 2020, the FASB issued authoritative guidance to provide optional relief for companies preparing for the discontinuation of interest rates such as the London Interbank Offered Rate (“LIBOR”), which was expected to be phased out at the end of calendar 2021, and applies to lease contracts, hedging instruments, held-to-maturity debt securities and debt arrangements that have LIBOR as the benchmark rate. The Company’s bank has notified the Company that its LIBOR option will continue to be available to it through June 30, 2023, at which time the option will shift to the Benchmark Replacement as defined in the agreement with the bank (see Note 8). The Company does not believe that this transition will have a material impact on its financial condition. |
Nature of Business and Summar_3
Nature of Business and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
Nature of Business and Summary of Significant Accounting Policies | |
Schedule of cash and cash equivalents | Cash and cash equivalents consists of the following as of (in thousands): June 30, 2023 June 30, 2022 Cash $ 20,713 $ 41,667 Money Market Fund 63 63 Certificates of Deposit 15,179 — $ 35,955 $ 41,730 |
Schedule of investments - other | Investments-other consists of the following as of (in thousands): June 30, 2023 June 30, 2022 Certificates of Deposit $ 25,660 $ — $ 25,660 $ — |
Schedule of Certificates of Deposit | Certificates of deposit are recorded at the original cost plus accrued interest. The Company’s Certificates of Deposit consist of the following as of (in thousands): June 30, 2023 Balance Sheet Classification Interest Rate Maturity Date Cost Carrying Value Cash and Cash Equivalents 4.59% - 5.00% 7/30/2023 - 8/29/2023 $ 15,112 $ 15,179 Investments - other 4.80% - 5.15% 7/24/2023 - 10/24/2023 25,359 25,660 |
Schedule of changes in intangible assets | Changes in intangible assets are as follows (in thousands): June 30, 2023 June 30, 2022 June 30, 2021 Carrying Accumulated Net book Carrying Accumulated Net book Carrying Accumulated Net book value amortization value value amortization value value amortization value Customer relationships $ 9,800 (9,302) $ 498 $ 9,800 (9,143) $ 657 $ 9,800 $ (8,955) $ 845 Trade name 4,048 (607) 3,441 4,048 (405) 3,643 4,048 (202) 3,846 $ 13,848 $ (9,909) $ 3,939 $ 13,848 $ (9,548) $ 4,300 $ 13,848 $ (9,157) $ 4,691 |
Schedule of reconciliation of earnings per share | The following provides a reconciliation of information used in calculating the per share amounts for the fiscal years ended June 30 (in thousands, except per share data): Weighted Average Net Income per Net Income Shares Share 2023 2022 2021 2023 2022 2021 2023 2022 2021 Basic EPS $ 27,127 $ 19,599 $ 15,413 36,741 36,725 36,696 $ 0.74 $ 0.53 $ 0.42 Effect of Dilutive Securities: Stock Options — — — 264 142 112 (0.01) — — Diluted EPS $ 27,127 $ 19,599 $ 15,413 37,005 36,867 36,808 $ 0.73 $ 0.53 $ 0.42 |
Revenue Recognition and Contr_2
Revenue Recognition and Contracts with Customers (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
Revenue Recognition and Contracts with Customers | |
Schedule of disaggregation of revenues | Fiscal year ended June 30, 2023 2022 2021 Major Product Lines: Intrusion and access alarm products $ 47,344 $ 49,606 $ 36,794 Door locking devices 62,718 48,006 43,337 Services 59,935 45,981 33,904 Total Revenues $ 169,997 $ 143,593 $ 114,035 |
Schedule of the allowance for doubtful accounts | Balance at beginning of period Charged to costs and expenses Deductions/ (recoveries) Balance at end of period For the Year Ended June 30, 2021: Allowance for credit losses $ 326 $ 30 $ (130) $ 226 For the Year Ended June 30, 2022: Allowance for credit losses $ 226 $ 17 $ — $ 243 For the Year Ended June 30, 2023: Allowance for credit losses $ 243 $ 6 $ (118) $ 131 |
Marketable Securities (Tables)
Marketable Securities (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
Marketable Securities | |
Schedule of net gains and losses of marketable securities | Year ended June 30, 2023 2022 2021 Net gains recognized during the period on marketable securities $ 147 $ 81 $ — Less: Net gains recognized during the period on marketable securities sold during the period — — — Unrealized gains (losses) recognized during the reporting period on marketable securities still held at the reporting date (79) (426) (9) $ 68 $ (345) $ (9) |
Schedule of fair value of marketable securities | June 30, 2023 June 30, 2022 Unrealized Unrealized Cost Fair Value Gain (Loss) Cost Fair Value Gain (Loss) Mutual Funds - Level 1 $ 5,651 5,136 $ (515) $ 5,504 $ 5,068 $ (436) |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
Inventories | |
Schedule of inventory | June 30, June 30, 2023 2022 Component parts $ 29,939 $ 32,656 Work-in-process 7,726 10,085 Finished product 10,684 7,045 $ 48,349 $ 49,786 Classification of inventories, net of reserves: Current $ 35,062 $ 40,781 Non-current 13,287 9,005 $ 48,349 $ 49,786 |
Schedule of the inventory obsolescence and net realizable value inventory reserves | Balance at beginning of period Charged to costs and expenses Deductions/ (recoveries) Balance at end of period For the Year Ended June 30, 2021: Inventory obsolescence and net realizable value reserve $ 2,913 $ — $ (79) $ 2,834 For the Year Ended June 30, 2022: Inventory obsolescence and net realizable value reserve $ 2,834 $ 1,187 $ — $ 4,021 For the Year Ended June 30, 2023: Inventory obsolescence and net realizable value reserve $ 4,021 $ 460 $ (905) $ 3,576 |
Property, Plant, and Equipment
Property, Plant, and Equipment (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
Property, Plant, and Equipment | |
Schedule of property, plant and equipment | June 30, 2023 June 30, 2022 Useful Life in Years Land $ 904 $ 904 N/A Buildings 8,911 8,911 30 to 40 Molds and dies 7,517 7,480 3 to 5 Furniture and fixtures 3,387 3,030 5 to 10 Machinery and equipment 28,574 26,696 3 to 10 Building improvements 3,078 2,464 Shorter of the lease term or life of asset 52,371 49,485 Less: accumulated depreciation and amortization (43,063) (41,546) $ 9,308 $ 7,939 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
Income Taxes | |
Schedule of provision for income taxes | For the Year ended June 30, 2023 2022 2021 Current income taxes: Federal $ 5,899 $ 2,161 $ 1,912 State 1,020 300 265 6,919 2,461 2,177 Deferred income taxes: Federal (2,334) (214) 337 State (484) — — (2,818) (214) 337 Provision for income taxes $ 4,101 $ 2,247 $ 2,514 |
Schedule of effective income tax rate reconciliation | 2023 2022 2021 % of % of % of Pre-tax Pre-tax Pre-tax Amount Income Amount Income Amount Income Tax at Federal statutory rate $ 6,558 21.0 % $ 4,588 21.0 % $ 3,765 21.0 % Increases (decreases) in taxes resulting from: Meals and entertainment 48 0.2 % 29 0.1 % 29 0.2 % State income taxes, net of Federal income tax benefit 436 1.4 % 238 1.1 % 135 0.8 % Global intangible low-taxed income 2,739 8.8 % 1,697 7.8 % 1,706 9.5 % R&D Credit (661) (2.1) % (554) (2.5) % (523) (2.9) % Foreign withholding tax — — % — — % 205 1 % Foreign Source income not subject to Tax (5,524) (17.7) % (3,231) (14.8) % (3,353) (19) % Non-taxable debt extinguishment — — % (820) (3.8) % — — % Uncertain Tax Positions 63 0.2 % 20 0.1 % 312 1.7 % IRS examination settlements — — % — — % — — % Other, net 442 1.4 % 280 1.3 % 238 1.3 % Effective tax rate $ 4,101 13.1 % $ 2,247 10.3 % $ 2,514 14.0 % |
Schedule of deferred tax assets and liabilities | Deferred Tax Assets (Liabilities) 2023 2022 Accounts receivable $ 22 $ 42 Inventories 397 413 Accrued liabilities 857 454 Stock based compensation expense 250 179 Revenue reserves 333 466 Unrealized loss (gain) on marketable securities 124 90 Capitalized research and development cost 2,923 — Other 4 — Total Deferred Tax Assets $ 4,910 $ 1,644 Valuation allowance — — Deferred income tax assets, net of valuation allowance $ 4,910 $ 1,644 Intangibles (916) (615) Property, plant and equipment (729) (582) Other deferred tax liabilities (613) (613) Total Deferred Tax Liability $ (2,258) $ (1,810) Net Deferred Tax Asset/(Liability) $ 2,652 $ (166) |
Schedule of unrecognized tax benefits roll forward | 2023 2022 2021 Balance of gross unrecognized tax benefits as of Beginning of Year $ 678 $ 678 $ 866 Increase (Decrease) to unrecognized tax benefits from deemed dividends for investments in US property — — (3) Increase (Decrease) to unrecognized tax benefits resulting from the release of R&D credits due to the settled IRS audit — — (185) Increase (Decrease) to unrecognized tax benefits resulting from a state filing tax position 22 — — Balance of gross unrecognized tax benefits as of End of Year $ 700 $ 678 $ 678 |
Stock Option (Tables)
Stock Option (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
2012 Employee Stock Option Plan | |
Stock Option | |
Schedule of fair value and valuation assumptions | 2023 2022 2021 Risk-free interest rates 3.03 % 1.64 % n/a Expected lives 7.27 Years 6.18 Years n/a Expected volatility 43 % 43 % n/a Expected dividend yields 0 % 0 % n/a |
Schedule of plan activity | 2023 2022 2021 Weighted average Weighted average Weighted average Options exercise price Options exercise price Options exercise price Outstanding, beginning of year 523,080 $ 18.59 214,080 $ 9.59 235,680 $ 9.42 Granted 37,500 $ 26.94 338,000 $ 23.17 — — Forfeited/Lapsed — — — — (13,000) 6.91 Exercised (39,000) $ 10.44 (29,000) $ 5.45 (8,600) 9.04 Outstanding, end of period 521,580 $ 19.37 523,080 $ 18.59 214,080 $ 9.59 Exercisable, end of period 247,628 $ 17.16 176,752 $ 14.68 98,176 $ 8.07 Weighted average fair value at grant date of options granted $ 13.36 $ 12.16 $ n/a Total intrinsic value of options exercised $ 822,000 $ 502,000 $ 65,000 Total intrinsic value of options outstanding $ 7,968,000 $ 1,916,000 $ 1,840,000 Total intrinsic value of options exercisable $ 4,330,000 $ 1,218,000 $ 993,000 |
Schedule of options outstanding | Options outstanding Options exercisable Weighted average Number remaining Weighted average Number Weighted average Range of exercise prices outstanding contractual life exercise price exercisable exercise price $3.15 ‑ $26.94 521,580 7.67 $ 19.37 247,628 $ 17.16 521,580 7.67 $ 19.37 247,628 $ 17.16 |
2012 Non-Employee Stock Option Plan | |
Stock Option | |
Schedule of fair value and valuation assumptions | 2023 2022 2021 Risk-free interest rates n/a 1.68 % n/a Expected lives n/a 6.18 Years n/a Expected volatility n/a 43 % n/a Expected dividend yields n/a 0 % n/a |
Schedule of plan activity | 2023 2022 2021 Weighted average Weighted average Weighted average Options exercise price Options exercise price Options exercise price Outstanding, beginning of year 20,400 $ 14.39 12,000 $ 6.55 24,000 $ 5.15 Granted — — 9,600 $ 22.93 — — Forfeited/Lapsed — — — — (9,600) $ 3.59 Exercised — — (1,200) $ 4.35 (2,400) $ 4.35 Outstanding, end of period 20,400 $ 14.39 20,400 $ 14.39 12,000 $ 6.55 Exercisable, end of period 13,920 $ 10.99 11,280 $ 8.92 6,240 $ 6.04 Weighted average fair value at grant date of options granted n/a $ 12.58 n/a Total intrinsic value of options exercised n/a $ 19,000 $ 31,000 Total intrinsic value of options outstanding $ 413,000 $ 149,000 $ 140,000 Total intrinsic value of options exercisable $ 329,000 $ 136,000 $ 76,000 |
Schedule of options outstanding | Options outstanding Options exercisable Weighted average Weighted Weighted Number remaining average exercise Number average exercise Range of exercise prices outstanding contractual life price exercisable price $4.35 - $22.93 20,400 6.65 $ 14.39 13,920 $ 10.99 20,400 6.65 $ 14.39 13,920 $ 10.99 |
2018 Non-Employee Stock Option Plan | |
Stock Option | |
Schedule of fair value and valuation assumptions | 2023 2022 2021 Risk-free interest rates n/a 1.68 % n/a Expected lives n/a 6.18 Years n/a Expected volatility n/a 43 % n/a Expected dividend yields n/a 0 % n/a |
Schedule of plan activity | 2023 2022 2021 Weighted average Weighted average Weighted average Options exercise price Options exercise price Options exercise price Outstanding, beginning of year 89,000 $ 14.91 70,100 $ 11.93 96,800 $ 11.74 Granted — — 23,500 $ 22.93 — — Forfeited/Lapsed — — — — (23,500) 11.68 Exercised (14,000) $ 15.32 (4,600) $ 10.43 (3,200) 8.10 Outstanding, end of period 75,000 $ 14.83 89,000 $ 14.91 70,100 $ 11.93 Exercisable, end of period 50,720 $ 12.87 45,040 $ 12.98 29,960 $ 11.68 Weighted average fair value at grant date of options granted n/a $ 12.58 n/a Total intrinsic value of options exercised $ 209,000 $ 58,000 $ 29,000 Total intrinsic value of options outstanding $ 1,486,000 $ 561,000 $ 439,000 Total intrinsic value of options exercisable $ 1,104,000 $ 354,000 $ 195,000 |
Schedule of options outstanding | Options outstanding Options exercisable Weighted average Weighted Weighted Number remaining average exercise Number average exercise Range of exercise prices outstanding contractual life price exercisable price $8.10 - $22.93 75,000 6.76 $ 14.83 50,720 $ 12.87 75,000 6.76 $ 14.83 50,720 $ 12.87 |
2020 Non-Employee Stock Option Plan | |
Stock Option | |
Schedule of fair value and valuation assumptions | 2023 2022 2021 Risk-free interest rates 3.03 - 3.40 % 1.68 % 0.62 % Expected lives 7.23 - 7.27 Years 6.18 Years 10 Years Expected volatility 43 % 43 % 45 % Expected dividend yields 0 % 0 % 0 % |
Schedule of plan activity | 2023 2022 2021 Weighted average Weighted average Weighted average Options exercise price Options exercise price Options exercise price Outstanding, beginning of year 26,900 $ 18.64 10,000 $ 11.40 — — Granted 30,000 $ 27.57 16,900 $ 22.93 10,000 $ 11.40 Forfeited/Lapsed — — — — — — Exercised — — — — — — Outstanding, end of period 56,900 $ 23.35 26,900 $ 18.64 10,000 $ 11.40 Exercisable, end of period 18,760 $ 20.73 7,380 $ 16.68 2,000 $ 11.40 Weighted average fair value at grant date of options granted $ 13.74 $ 12.58 $ 6.10 Total intrinsic value of options exercised n/a n/a n/a Total intrinsic value of options outstanding $ 643,000 $ 92,000 $ 68,000 Total intrinsic value of options exercisable $ 261,000 $ 37,000 $ 14,000 |
Schedule of options outstanding | Options outstanding Options exercisable Weighted average Number remaining Weighted average Number Weighted average Range of exercise prices outstanding contractual life exercise price exercisable exercise price $11.40 - $30.71 56,900 8.59 $ 23.35 18,760 $ 20.73 56,900 8.59 $ 23.35 18,760 $ 20.73 |
2022 Employee Stock Option Plan | |
Stock Option | |
Schedule of fair value and valuation assumptions | 2023 Risk-free interest rates 3.84 % Expected lives 7.28 Years Expected volatility 45 % Expected dividend yields 0.62 % |
Schedule of plan activity | 2023 Weighted average Options exercise price Outstanding, beginning of year — — Granted 5,000 $ 40.01 Forfeited/Lapsed — — Exercised — — Outstanding, end of period 5,000 $ 40.01 Exercisable, end of period 1,000 $ 40.01 Weighted average fair value at grant date of options granted $ 19.77 Total intrinsic value of options exercised n/a Total intrinsic value of options outstanding $ — Total intrinsic value of options exercisable $ — |
Schedule of options outstanding | Options outstanding Options exercisable Weighted average Number remaining Weighted average Number Weighted average Range of exercise prices outstanding contractual life exercise price exercisable exercise price $40.01 5,000 9.95 $ 40.01 1,000 $ 40.01 5,000 9.95 $ 40.01 1,000 $ 40.01 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies | |
Schedule of supplemental balance sheet information | Weighted-average remaining lease term 69 Years Weighted-average discount rate 6.25 % |
Schedule of maturities of lease liabilities | Year Ending June 30, Amount 2024 $ 316 2025 299 2026 282 2027 267 2028 253 Thereafter 4,380 Total $ 5,797 |
Geographical Data (Tables)
Geographical Data (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
Geographical Data | |
Schedule of sales to external customers | Fiscal Year ended June 30, 2023 2022 2021 Sales to external customers (1): Domestic $ 168,619 $ 142,059 $ 112,618 Foreign 1,378 1,534 1,417 Total Net Sales $ 169,997 $ 143,593 $ 114,035 (1) All of the Company’s sales originate in the United States and are shipped primarily from the Company’s facilities in the United States. There were no sales into any one foreign country in excess of 10% of total Net Sales. |
Schedule of assets in individual foreign country by country | 2023 2022 Identifiable assets: United States $ 122,995 $ 98,791 Dominican Republic (2) 43,659 49,785 Total Identifiable Assets $ 166,654 $ 148,576 (2) Consists primarily of inventories (2023 = $33,477 ; 2022 = $38,755 ), operating lease assets (2023 = $5,797 ; 2022 = $7,350 ) and fixed assets (2023 = $3,958 ; 2022 = $3,253 ) located at the Company’s principal manufacturing facility in the Dominican Republic. |
Nature of Business and Summar_4
Nature of Business and Summary of Significant Accounting Policies (Details) | 1 Months Ended | 12 Months Ended | |||
Dec. 31, 2021 | Jun. 30, 2023 USD ($) segment shares | Jun. 30, 2022 USD ($) shares | Jun. 30, 2021 USD ($) shares | Jun. 30, 2020 shares | |
Accounting policies | |||||
Stock split | 2 | ||||
Percentage of stock dividend | 100% | ||||
Allowance for credit losses | $ 131,000 | $ 243,000 | |||
Warranty term | 24 to 36 | ||||
Stock-Based Compensation | |||||
Number of share incentive programs | five | ||||
Stock based compensation expense | $ 1,464,000 | 1,649,000 | $ 435,000 | ||
Foreign currency realized/unrealized gains(loss) | $ 0 | $ 0 | $ 0 | ||
Segment Reporting | |||||
Number of operating segments (in segments) | segment | 1 | ||||
Equipment | |||||
Accounting policies | |||||
Payment terms | 30 and 180 | ||||
Services | |||||
Accounting policies | |||||
Payment terms | 30 days | ||||
Common Stock | |||||
Accounting policies | |||||
Number of shares outstanding | shares | 39,663,812 | 39,628,197 | 39,595,883 | 39,588,417 |
Nature of Business and Summar_5
Nature of Business and Summary of Significant Accounting Policies -Cash Dividend (Details) - USD ($) | 12 Months Ended | |
May 05, 2023 | Jun. 30, 2023 | |
Nature of Business and Summary of Significant Accounting Policies | ||
Dividends payable per share | $ 0.0625 | |
Payments of dividends | $ 2,298,000 | $ 2,298,000 |
Nature of Business and Summar_6
Nature of Business and Summary of Significant Accounting Policies - Cash and Cash Equivalents and Investments (Details) - USD ($) | Jun. 30, 2023 | Jun. 30, 2022 |
Accounting policies | ||
Short-term time deposits | $ 15,242,000 | $ 63,000 |
Certificate of deposits, value | 15,179,000 | |
Money market fund, Value | 63,000 | 63,000 |
Cash and Cash Equivalents, at Carrying Value, Total | 35,955,000 | 41,730,000 |
Investments - other | 25,660,000 | |
Certificate of Deposits | ||
Accounting policies | ||
Investments - other | 25,660,000 | |
Cash | ||
Accounting policies | ||
Cash and Cash Equivalents, at Carrying Value, Total | 20,713,000 | 41,667,000 |
Money Market Fund | ||
Accounting policies | ||
Cash and Cash Equivalents, at Carrying Value, Total | 63,000 | $ 63,000 |
Certificate of Deposits | ||
Accounting policies | ||
Cash and Cash Equivalents, at Carrying Value, Total | 15,179,000 | |
Cash and Cash Equivalents | ||
Accounting policies | ||
Cost | 15,112,000 | |
Carrying Value | $ 15,179,000 | |
Cash and Cash Equivalents | Minimum | ||
Accounting policies | ||
Interest Rate | 4.59% | |
Cash and Cash Equivalents | Maximum | ||
Accounting policies | ||
Interest Rate | 5% | |
Interest-Bearing Deposits | ||
Accounting policies | ||
Cost | $ 25,359,000 | |
Carrying Value | $ 25,660,000 | |
Interest-Bearing Deposits | Minimum | ||
Accounting policies | ||
Interest Rate | 4.80% | |
Interest-Bearing Deposits | Maximum | ||
Accounting policies | ||
Interest Rate | 5.15% |
Nature of Business and Summar_7
Nature of Business and Summary of Significant Accounting Policies - Intangible Assets (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | |
Intangible assets | |||
Amortization expense | $ 361,000 | $ 391,000 | $ 425,000 |
Changes in intangible assets | |||
Carrying value | 13,848,000 | 13,848,000 | 13,848,000 |
Accumulated amortization | (9,909,000) | (9,548,000) | (9,157,000) |
Net book value | 3,939,000 | $ 4,300,000 | 4,691,000 |
Future amortization expense | |||
2024 | 336,000 | ||
2025 | 315,000 | ||
2026 | 297,000 | ||
2027 | 283,000 | ||
2027 | $ 269,000 | ||
Weighted average remaining period | 15 years 6 months | 16 years 2 months 12 days | |
Customer relationships | |||
Changes in intangible assets | |||
Carrying value | $ 9,800,000 | $ 9,800,000 | 9,800,000 |
Accumulated amortization | (9,302,000) | (9,143,000) | (8,955,000) |
Net book value | 498,000 | 657,000 | 845,000 |
Trade name | |||
Changes in intangible assets | |||
Carrying value | 4,048,000 | 4,048,000 | 4,048,000 |
Accumulated amortization | (607,000) | (405,000) | (202,000) |
Net book value | $ 3,441,000 | $ 3,643,000 | $ 3,846,000 |
Nature of Business and Summar_8
Nature of Business and Summary of Significant Accounting Policies - Income Statement location (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | |
Research and development | $ 9,328,000 | $ 8,024,000 | $ 7,620,000 |
Net sales | 169,997,000 | 143,593,000 | 114,035,000 |
Cost of sales | 96,764,000 | 84,437,000 | 63,287,000 |
Selling, General and Administrative Expenses | |||
Advertising and promotion costs | 2,931,000 | 2,889,000 | 1,306,000 |
Operating Expenses. | |||
Research and development | 9,328,000 | 8,024,000 | 7,620,000 |
Cost of sales | Shipping and Handling | |||
Cost of sales | 1,697,000 | 1,425,000 | 1,058,000 |
Sales revenue, net | Shipping and Handling | |||
Net sales | $ 450,000 | $ 428,000 | $ 395,000 |
Nature of Business and Summar_9
Nature of Business and Summary of Significant Accounting Policies - Net Income per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | |
Nature of Business and Summary of Significant Accounting Policies | |||
Basic EPS | $ 27,127 | $ 19,599 | $ 15,413 |
Diluted EPS | $ 27,127 | $ 19,599 | $ 15,413 |
Weighted average | |||
Basic (in shares) | 36,741,000 | 36,725,000 | 36,696,000 |
Stock Options | 264,000 | 142,000 | 112,000 |
Diluted (in shares) | 37,005,000 | 36,867,000 | 36,808,000 |
Effect of Dilutive Securities: | |||
Basic (in dollars per share) | $ 0.74 | $ 0.53 | $ 0.42 |
Stock Options (in dollars per share) | (0.01) | ||
Diluted (in dollars per share) | $ 0.73 | $ 0.53 | $ 0.42 |
Excluded from diluted EPS | 7,534 | 214,109 | 40,000 |
Revenue Recognition and Contr_3
Revenue Recognition and Contracts with Customers (Details) | 12 Months Ended | ||
Jun. 30, 2023 USD ($) segment | Jun. 30, 2022 USD ($) | Jun. 30, 2021 | |
Revenue: | |||
Number of operating segments (in segments) | segment | 1 | ||
Sales returns, rebates and allowances as a percentage of gross sales | 7% | 10% | 10% |
Current Liabilities | |||
Revenue: | |||
Refund liabilities | $ 5,521,000 | $ 5,863,000 | |
Other current assets | |||
Revenue: | |||
Return-related assets | $ 1,338,000 | $ 974,000 |
Revenue Recognition and Contr_4
Revenue Recognition and Contracts with Customers - Disaggregation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | |
Revenue: | |||
Revenues | $ 169,997 | $ 143,593 | $ 114,035 |
Intrusion and access alarm products | |||
Revenue: | |||
Revenues | 47,344 | 49,606 | 36,794 |
Door locking devices | |||
Revenue: | |||
Revenues | 62,718 | 48,006 | 43,337 |
Services | |||
Revenue: | |||
Revenues | $ 59,935 | $ 45,981 | $ 33,904 |
Revenue Recognition and Contr_5
Revenue Recognition and Contracts with Customers - Allowance (Details) - Allowance for doubtful accounts (deducted from accounts receivable) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | |
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at beginning of period | $ 243 | $ 226 | $ 326 |
Charged to costs and expenses | 6 | 17 | 30 |
(recoveries) | (118) | (130) | |
Balance at end of period | $ 131 | $ 243 | $ 226 |
Business and Credit Concentra_2
Business and Credit Concentrations (Details) - Accounts Receivable - Credit Concentration Risk | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | |
customer One | |||
Business and Credit Concentrations | |||
Concentration risk (as a percent) | 19% | 22% | 19% |
customer Two | |||
Business and Credit Concentrations | |||
Concentration risk (as a percent) | 14% | 11% | |
customer Three | |||
Business and Credit Concentrations | |||
Concentration risk (as a percent) | 16% | 12% |
Marketable Securities (Details)
Marketable Securities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | |
Marketable Securities | |||
Net gains recognized during the period on marketable securities | $ 147 | $ 81 | |
Unrealized gains (losses) recognized during the reporting period on marketable securities still held at the reporting date | (79) | (426) | $ (9) |
Marketable securities | $ 68 | $ (345) | $ (9) |
Marketable Securities - Investm
Marketable Securities - Investments (Details) - Mutual Funds - Level 1 - USD ($) $ in Thousands | Jun. 30, 2023 | Jun. 30, 2022 |
Net Investment Income [Line Items] | ||
Cost | $ 5,651 | $ 5,504 |
Fair Value | 5,136 | 5,068 |
Unrealized Gain (Loss) | $ (515) | $ (436) |
Marketable Securities - Fair Va
Marketable Securities - Fair Value to Amortized Cost (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Marketable Securities: | ||
Transfers between Level 1 to 2 | $ 0 | $ 0 |
Transfers in or out of level 3 | $ 0 | $ 0 |
Inventories - Types (Details)
Inventories - Types (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Jun. 30, 2022 |
Inventories | ||
Component parts | $ 29,939 | $ 32,656 |
Work-in-process | 7,726 | 10,085 |
Finished product | 10,684 | 7,045 |
Inventories, net of reserves | $ 48,349 | $ 49,786 |
Inventories - Classification (D
Inventories - Classification (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Jun. 30, 2022 |
Inventories | ||
Current | $ 35,062 | $ 40,781 |
Non-current | 13,287 | 9,005 |
Inventories, net of reserves | $ 48,349 | $ 49,786 |
Inventories - inventory reserve
Inventories - inventory reserves (Details) - Inventory obsolescence and net realizable value reserve (deducted from Inventory) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | |
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at beginning of period | $ 4,021 | $ 2,834 | $ 2,913 |
Charged to costs and expenses | 460 | 1,187 | |
(recoveries) | (905) | (79) | |
Balance at end of period | $ 3,576 | $ 4,021 | $ 2,834 |
Property, Plant, and Equipmen_2
Property, Plant, and Equipment (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | |
Property plant and equipment | |||
Gross | $ 52,371,000 | $ 49,485,000 | |
Less: accumulated depreciation and amortization | (43,063,000) | (41,546,000) | |
Net | 9,308,000 | 7,939,000 | |
Depreciation and amortization | 1,569,000 | 1,380,000 | $ 1,260,000 |
Land | |||
Property plant and equipment | |||
Gross | 904,000 | 904,000 | |
Buildings | |||
Property plant and equipment | |||
Gross | $ 8,911,000 | 8,911,000 | |
Buildings | Minimum | |||
Property plant and equipment | |||
Useful life | 30 years | ||
Buildings | Maximum | |||
Property plant and equipment | |||
Useful life | 40 years | ||
Molds and dies | |||
Property plant and equipment | |||
Gross | $ 7,517,000 | 7,480,000 | |
Molds and dies | Minimum | |||
Property plant and equipment | |||
Useful life | 3 years | ||
Molds and dies | Maximum | |||
Property plant and equipment | |||
Useful life | 5 years | ||
Furniture and fixtures | |||
Property plant and equipment | |||
Gross | $ 3,387,000 | 3,030,000 | |
Furniture and fixtures | Minimum | |||
Property plant and equipment | |||
Useful life | 5 years | ||
Furniture and fixtures | Maximum | |||
Property plant and equipment | |||
Useful life | 10 years | ||
Machinery and equipment | |||
Property plant and equipment | |||
Gross | $ 28,574,000 | 26,696,000 | |
Machinery and equipment | Minimum | |||
Property plant and equipment | |||
Useful life | 3 years | ||
Machinery and equipment | Maximum | |||
Property plant and equipment | |||
Useful life | 10 years | ||
Building improvements | |||
Property plant and equipment | |||
Gross | $ 3,078,000 | $ 2,464,000 | |
Property Plant And Equipment Estimated Useful Lives | us-gaap:UsefulLifeShorterOfTermOfLeaseOrAssetUtilityMember |
Income Taxes - Provision (Detai
Income Taxes - Provision (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | |
Current income taxes: | |||
Federal | $ 5,899 | $ 2,161 | $ 1,912 |
State | 1,020 | 300 | 265 |
Total current expense (benefit) | 6,919 | 2,461 | 2,177 |
Deferred income taxes: | |||
Federal | (2,334) | (214) | 337 |
State | (484) | ||
Total deferred Expense (Benefit) | (2,818) | (214) | 337 |
Provision for income taxes | $ 4,101 | $ 2,247 | $ 2,514 |
Income Taxes - Reconciliation (
Income Taxes - Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | |
Income Tax Expense Benefit Continuing Operations Income Tax Reconciliation [Abstract] | |||
Tax at Federal statutory rate | $ 6,558 | $ 4,588 | $ 3,765 |
Meals and entertainment | 48 | 29 | 29 |
State income taxes, net of Federal income tax benefit | 436 | 238 | 135 |
Global intangible low-taxed income | 2,739 | 1,697 | 1,706 |
R&D Credit | (661) | (554) | (523) |
Foreign withholding tax | 205 | ||
Foreign source income not subject to tax | (5,524) | (3,231) | (3,353) |
Non-taxable debt extinguishment | (820) | ||
Uncertain Tax Positions | 63 | 20 | 312 |
Other, net | 442 | 280 | 238 |
Provision for income taxes | $ 4,101 | $ 2,247 | $ 2,514 |
% of Pre-tax Income | |||
Tax at Federal statutory rate | 21% | 21% | 21% |
Meals and entertainment | 0.20% | 0.10% | 0.20% |
State income taxes, net of Federal income tax benefit | 1.40% | 1.10% | 0.80% |
Global intangible low-taxed income | 8.80% | 7.80% | 9.50% |
R&D Credit | (2.10%) | (2.50%) | (2.90%) |
Foreign withholding tax | 1% | ||
Foreign source income not subject to tax | (17.70%) | (14.80%) | (19.00%) |
Non-taxable debt extinguishment | 3.80% | ||
Uncertain Tax Positions | 0.20% | 0.10% | 1.70% |
Other, net | 1.40% | 1.30% | 1.30% |
Effective tax rate | 13.10% | 10.30% | 14% |
Income Taxes - Deferred (Detail
Income Taxes - Deferred (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Jun. 30, 2022 |
Components of deferred tax assets and liabilities | ||
Accounts receivable | $ 22 | $ 42 |
Inventories | 397 | 413 |
Accrued liabilities | 857 | 454 |
Stock based compensation expense | 250 | 179 |
Revenue reserves | 333 | 466 |
Unrealized loss (gain) on marketable securities | 124 | 90 |
Capitalized research and development cost | 2,923 | |
Other | 4 | |
Total Deferred Tax Assets | 4,910 | 1,644 |
Deferred income tax assets, net of valuation allowance | 4,910 | 1,644 |
Intangibles | (916) | (615) |
Property, plant and equipment | (729) | (582) |
Other deferred tax liabilities | (613) | (613) |
Total Deferred Tax Liability | (2,258) | (1,810) |
Net Deferred Tax Asset/(Liability) | $ (166) | |
Net Deferred Tax Asset/(Liability) | $ 2,652 |
Income Taxes - Unrecognized Rol
Income Taxes - Unrecognized Roll Forward (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | |
Reconciliation of unrecognized tax benefits: | |||
Balance of gross unrecognized tax benefits as of Beginning of Year | $ 678,000 | $ 678,000 | $ 866,000 |
Increase (Decrease) to unrecognized tax benefits from deemed dividends for investments in US property | 0 | 0 | (3,000) |
Increase (Decrease) to unrecognized tax benefits resulting from the release of R&D credits due to the settled IRS audit | 0 | 0 | (185,000) |
Increase (Decrease) to unrecognized tax benefits resulting from a state filing tax position | 22,000 | 0 | 0 |
Balance of gross unrecognized tax benefits as of End of Year | $ 700,000 | $ 678,000 | $ 678,000 |
Income Taxes - Narratives (Deta
Income Taxes - Narratives (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2021 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2020 | |
Income taxes | |||||
Uncertain tax positions increase | $ 22,000 | ||||
Interest expense accrued | 139,000 | ||||
Accrued penalties | 5,000 | ||||
Unrecognized net tax benefits | $ 700,000 | $ 678,000 | $ 678,000 | $ 866,000 | |
Tax Year 2017 | |||||
Income taxes | |||||
Examination, interest expense | $ 68,000 | ||||
Domestic Tax Authority | Tax Year 2017 | |||||
Income taxes | |||||
Penalties and interest expense | 399,000 | ||||
State Jurisdiction | Tax Year 2017 | |||||
Income taxes | |||||
Penalties and interest expense | $ 97,000 |
Debt (Details)
Debt (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2020 | |
The Revolver Agreement | |||
Long-term debt disclosure: | |||
Stock collateral (as a percent) | 65% | ||
The Revolver Agreement | LIBOR [Member] | Minimum | |||
Long-term debt disclosure: | |||
Basis spread | 1.15% | ||
The Revolver Agreement | LIBOR [Member] | Maximum | |||
Long-term debt disclosure: | |||
Basis spread | 2% | ||
The Revolver Agreement | Prime rate | |||
Long-term debt disclosure: | |||
Basis spread | 0.25% | ||
Paycheck Protection Program | |||
Long-term debt disclosure: | |||
Loan forgiven | $ 3,904,000 | ||
Revolving line of credit: | |||
Long-term debt, Net | $ 3,904,000 | ||
The Revolver Agreement | |||
Long-term debt disclosure: | |||
Line of credit, maximum borrowing capacity | $ 11,000,000 |
Stock Option - Plan Information
Stock Option - Plan Information (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||||||
Dec. 31, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2020 | May 31, 2020 | Dec. 31, 2018 | Dec. 31, 2012 | |
Stock Option | ||||||||
Stock-based compensation expense, allocated | $ 1,464,000 | $ 1,649,000 | $ 435,000 | |||||
Basic earnings per share from share based compensation costs | $ 0.04 | $ 0.04 | $ 0.01 | |||||
Diluted earnings per share from share based compensation costs | $ 0.04 | $ 0.04 | $ 0.01 | |||||
Proceeds from stock option exercises | $ 85,000 | $ 155,000 | ||||||
2012 Employee Stock Option Plan | ||||||||
Stock Option | ||||||||
Shares authorized (in shares) | 1,900,000 | |||||||
Premium on fair market value (as a percent) | 110% | |||||||
Threshold percentage of voting rights | 10% | |||||||
Term | 10 years | |||||||
Vesting rights percentage | 20% | |||||||
Outstanding (in shares) | 521,580 | 523,080 | 214,080 | 235,680 | ||||
Exercisable, end of period | 247,628 | 176,752 | 98,176 | |||||
Available for grant (in shares) | 0 | |||||||
Granted | 37,500 | 338,000 | 0 | |||||
Exercised | 39,000 | 29,000 | 8,600 | |||||
Number of Stock options settled by exchange of shares | 29,600 | 1,000 | ||||||
Shares converted (in shares) | 10,150 | 153 | 4,604 | |||||
Deferred tax benefit | $ 0 | $ 0 | $ 0 | |||||
Unearned stock based compensation | $ 1,971,000 | $ 2,489,000 | ||||||
Vested | 109,876 | 107,576 | 44,776 | |||||
Fair Value | $ 981,000 | $ 1,040,000 | $ 244,000 | |||||
Proceeds from stock option exercises | $ 84,000 | $ 155,000 | $ 0 | |||||
2012 Non-Employee Stock Option Plan | ||||||||
Stock Option | ||||||||
Shares authorized (in shares) | 100,000 | |||||||
Term | 10 years | |||||||
Vesting rights percentage | 20% | |||||||
Outstanding (in shares) | 20,400 | 20,400 | 12,000 | 24,000 | ||||
Exercisable, end of period | 13,920 | 11,280 | 6,240 | |||||
Available for grant (in shares) | 0 | |||||||
Granted | 0 | 9,600 | 0 | |||||
Exercised | 0 | 1,200 | 2,400 | |||||
Deferred tax benefit | $ 0 | $ 4,000 | $ 6,000 | |||||
Conversion of stock, shares issued | 258 | 612 | ||||||
Unearned stock based compensation | $ 46,000 | $ 70,000 | ||||||
Vested | 2,640 | 6,240 | 5,520 | |||||
Fair Value | $ 24,000 | $ 39,000 | $ 18,000 | |||||
Proceeds from stock option exercises | $ 0 | $ 0 | $ 0 | |||||
2018 Non-Employee Stock Option Plan | ||||||||
Stock Option | ||||||||
Shares authorized (in shares) | 100,000 | |||||||
Term | 10 years | |||||||
Vesting rights percentage | 20% | |||||||
Outstanding (in shares) | 75,000 | 89,000 | 70,100 | 96,800 | ||||
Exercisable, end of period | 50,720 | 45,040 | 29,960 | |||||
Available for grant (in shares) | 0 | |||||||
Granted | 0 | 23,500 | 0 | |||||
Exercised | 14,000 | 4,600 | 3,200 | |||||
Deferred tax benefit | $ 44,000 | $ 12,000 | $ 6,000 | |||||
Conversion of stock, shares issued | 7,235 | 2,075 | 1,518 | |||||
Unearned stock based compensation | $ 135,000 | $ 265,000 | ||||||
Vested | 19,680 | 19,680 | 19,680 | |||||
Fair Value | $ 149,000 | $ 160,000 | $ 133,000 | |||||
Proceeds from stock option exercises | $ 0 | $ 0 | $ 0 | |||||
2020 Non-Employee Stock Option Plan | ||||||||
Stock Option | ||||||||
Shares authorized (in shares) | 100,000 | |||||||
Term | 10 years | |||||||
Vesting rights percentage | 20% | |||||||
Outstanding (in shares) | 56,900 | 26,900 | 10,000 | |||||
Exercisable, end of period | 18,760 | 7,380 | 2,000 | |||||
Available for grant (in shares) | 43,100 | |||||||
Granted | 30,000 | 16,900 | 10,000 | |||||
Exercised | 0 | 0 | 0 | |||||
Unearned stock based compensation | $ 344,000 | $ 135,000 | ||||||
Vested | 11,380 | 5,380 | 2,000 | |||||
Fair Value | $ 129,000 | $ 55,000 | $ 12,000 | |||||
2022 Employee Stock Option Plan | ||||||||
Stock Option | ||||||||
Shares authorized (in shares) | 950,000 | |||||||
Premium on fair market value (as a percent) | 110% | |||||||
Threshold percentage of voting rights | 10% | |||||||
Term | 10 years | |||||||
Vesting rights percentage | 20% | |||||||
Outstanding (in shares) | 5,000 | |||||||
Exercisable, end of period | 1,000 | |||||||
Available for grant (in shares) | 945,000 | |||||||
Granted | 5,000 | |||||||
Exercised | 0 | |||||||
Unearned stock based compensation | $ 74,000 | |||||||
Vested | 1,000 | |||||||
Fair Value | $ 20,000 |
Stock Option - Fair Value Assum
Stock Option - Fair Value Assumptions (Details) | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | |
2012 Employee Stock Option Plan | |||
Stock option | |||
Risk-free interest rates | 3.03% | 1.64% | |
Expected lives | 7 years 3 months 7 days | 6 years 2 months 4 days | |
Expected volatility | 43% | 43% | |
Expected dividend yields | 0% | 0% | |
2012 Non-Employee Stock Option Plan | |||
Stock option | |||
Risk-free interest rates | 1.68% | ||
Expected lives | 6 years 2 months 4 days | ||
Expected volatility | 43% | ||
Expected dividend yields | 0% | ||
2018 Non-Employee Stock Option Plan | |||
Stock option | |||
Risk-free interest rates | 1.68% | ||
Expected lives | 6 years 2 months 4 days | ||
Expected volatility | 43% | ||
Expected dividend yields | 0% | ||
2020 Non-Employee Stock Option Plan | |||
Stock option | |||
Risk-free interest rates, min | 3.03% | ||
Risk-free interest rates, max | 3.40% | ||
Risk-free interest rates | 1.68% | 0.62% | |
Expected lives | 6 years 2 months 4 days | 10 years | |
Expected volatility | 43% | 43% | 45% |
Expected dividend yields | 0% | 0% | 0% |
2020 Non-Employee Stock Option Plan | Minimum | |||
Stock option | |||
Expected lives | 7 years 2 months 23 days | ||
2020 Non-Employee Stock Option Plan | Maximum | |||
Stock option | |||
Expected lives | 7 years 3 months 7 days | ||
2022 Employee Stock Option Plan | |||
Stock option | |||
Risk-free interest rates | 3.84% | ||
Expected lives | 7 years 3 months 10 days | ||
Expected volatility | 45% | ||
Expected dividend yields | 0.62% |
Stock Option - Activity (Detail
Stock Option - Activity (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | |
2012 Employee Stock Option Plan | |||
Options | |||
Outstanding, beginning of year | 523,080 | 214,080 | 235,680 |
Granted | 37,500 | 338,000 | 0 |
Forfeited/Lapsed | (13,000) | ||
Exercised | (39,000) | (29,000) | (8,600) |
Outstanding, end of period | 521,580 | 523,080 | 214,080 |
Exercisable, end of period | 247,628 | 176,752 | 98,176 |
Weighted average exercise price | |||
Weighted average exercise price, beginning of year | $ 18.59 | $ 9.59 | $ 9.42 |
Granted (per share) | 26.94 | 23.17 | |
Forfeited/Lapsed (per share) | 6.91 | ||
Exercised (per share) | 10.44 | 5.45 | 9.04 |
Weighted average exercise price, end of period | 19.37 | 18.59 | 9.59 |
Exercisable, end of period, weighted average exercise price | 17.16 | 14.68 | $ 8.07 |
Additional disclosures | |||
Weighted average fair value at grant date of options granted | $ 13.36 | $ 12.16 | |
Total intrinsic value of options exercised | $ 822,000 | $ 502,000 | $ 65,000 |
Total intrinsic value of options outstanding | 7,968,000 | 1,916,000 | 1,840,000 |
Total intrinsic value of options exercisable | $ 4,330,000 | $ 1,218,000 | $ 993,000 |
2012 Non-Employee Stock Option Plan | |||
Options | |||
Outstanding, beginning of year | 20,400 | 12,000 | 24,000 |
Granted | 0 | 9,600 | 0 |
Forfeited/Lapsed | (9,600) | ||
Exercised | 0 | (1,200) | (2,400) |
Outstanding, end of period | 20,400 | 20,400 | 12,000 |
Exercisable, end of period | 13,920 | 11,280 | 6,240 |
Weighted average exercise price | |||
Weighted average exercise price, beginning of year | $ 14.39 | $ 6.55 | $ 5.15 |
Granted (per share) | 22.93 | 0 | |
Forfeited/Lapsed (per share) | 3.59 | ||
Exercised (per share) | 4.35 | 4.35 | |
Weighted average exercise price, end of period | 14.39 | 14.39 | 6.55 |
Exercisable, end of period, weighted average exercise price | $ 10.99 | 8.92 | $ 6.04 |
Additional disclosures | |||
Weighted average fair value at grant date of options granted | $ 12.58 | ||
Total intrinsic value of options exercised | $ 19,000 | $ 31,000 | |
Total intrinsic value of options outstanding | $ 413,000 | 149,000 | 140,000 |
Total intrinsic value of options exercisable | $ 329,000 | $ 136,000 | $ 76,000 |
2018 Non-Employee Stock Option Plan | |||
Options | |||
Outstanding, beginning of year | 89,000 | 70,100 | 96,800 |
Granted | 0 | 23,500 | 0 |
Forfeited/Lapsed | (23,500) | ||
Exercised | (14,000) | (4,600) | (3,200) |
Outstanding, end of period | 75,000 | 89,000 | 70,100 |
Exercisable, end of period | 50,720 | 45,040 | 29,960 |
Weighted average exercise price | |||
Weighted average exercise price, beginning of year | $ 14.91 | $ 11.93 | $ 11.74 |
Granted (per share) | 22.93 | ||
Forfeited/Lapsed (per share) | 11.68 | ||
Exercised (per share) | 15.32 | 10.43 | 8.10 |
Weighted average exercise price, end of period | 14.83 | 14.91 | 11.93 |
Exercisable, end of period, weighted average exercise price | $ 12.87 | 12.98 | $ 11.68 |
Additional disclosures | |||
Weighted average fair value at grant date of options granted | $ 12.58 | ||
Total intrinsic value of options exercised | $ 209,000 | $ 58,000 | $ 29,000 |
Total intrinsic value of options outstanding | 1,486,000 | 561,000 | 439,000 |
Total intrinsic value of options exercisable | $ 1,104,000 | $ 354,000 | $ 195,000 |
2020 Non-Employee Stock Option Plan | |||
Options | |||
Outstanding, beginning of year | 26,900 | 10,000 | |
Granted | 30,000 | 16,900 | 10,000 |
Exercised | 0 | 0 | 0 |
Outstanding, end of period | 56,900 | 26,900 | 10,000 |
Exercisable, end of period | 18,760 | 7,380 | 2,000 |
Weighted average exercise price | |||
Weighted average exercise price, beginning of year | $ 18.64 | $ 11.40 | |
Granted (per share) | 27.57 | 22.93 | $ 11.40 |
Weighted average exercise price, end of period | 23.35 | 18.64 | 11.40 |
Exercisable, end of period, weighted average exercise price | 20.73 | 16.68 | 11.40 |
Additional disclosures | |||
Weighted average fair value at grant date of options granted | $ 13.74 | $ 12.58 | $ 6.10 |
Total intrinsic value of options outstanding | $ 643,000 | $ 92,000 | $ 68,000 |
Total intrinsic value of options exercisable | $ 261,000 | $ 37,000 | $ 14,000 |
2022 Employee Stock Option Plan | |||
Options | |||
Granted | 5,000 | ||
Exercised | 0 | ||
Outstanding, end of period | 5,000 | ||
Exercisable, end of period | 1,000 | ||
Weighted average exercise price | |||
Granted (per share) | $ 40.01 | ||
Weighted average exercise price, end of period | 40.01 | ||
Exercisable, end of period, weighted average exercise price | 40.01 | ||
Additional disclosures | |||
Weighted average fair value at grant date of options granted | $ 19.77 |
Stock Option - Exercise Price R
Stock Option - Exercise Price Range (Details) | 12 Months Ended |
Jun. 30, 2023 $ / shares shares | |
Share based compensation, exercise prices | |
Options outstanding (in shares) | shares | 5,000 |
Weighted average remaining contractual life | 9 years 11 months 12 days |
Weighted average exercise price | $ 40.01 |
Number exercisable | shares | 1,000 |
Exercisable, Weighted average exercise price | $ 40.01 |
2012 Employee Stock Option Plan | |
Share based compensation, exercise prices | |
Options outstanding (in shares) | shares | 521,580 |
Weighted average remaining contractual life | 7 years 8 months 1 day |
Weighted average exercise price | $ 19.37 |
Number exercisable | shares | 247,628 |
Exercisable, Weighted average exercise price | $ 17.16 |
2012 Employee Stock Option Plan | Exercise price range | |
Share based compensation, exercise prices | |
Exercise price upper limit | 26.94 |
Exercise price lower limit | $ 3.15 |
Options outstanding (in shares) | shares | 521,580 |
Weighted average remaining contractual life | 7 years 8 months 1 day |
Weighted average exercise price | $ 19.37 |
Number exercisable | shares | 247,628 |
Exercisable, Weighted average exercise price | $ 17.16 |
2012 Non-Employee Stock Option Plan | |
Share based compensation, exercise prices | |
Options outstanding (in shares) | shares | 20,400 |
Weighted average remaining contractual life | 6 years 7 months 24 days |
Weighted average exercise price | $ 14.39 |
Number exercisable | shares | 13,920 |
Exercisable, Weighted average exercise price | $ 10.99 |
2012 Non-Employee Stock Option Plan | Exercise price range | |
Share based compensation, exercise prices | |
Exercise price upper limit | $ 22.93 |
Options outstanding (in shares) | shares | 20,400 |
Weighted average remaining contractual life | 6 years 7 months 24 days |
Weighted average exercise price | $ 14.39 |
Number exercisable | shares | 13,920 |
Exercisable, Weighted average exercise price | $ 10.99 |
2018 Non-Employee Stock Option Plan | |
Share based compensation, exercise prices | |
Options outstanding (in shares) | shares | 75,000 |
Weighted average remaining contractual life | 6 years 9 months 3 days |
Weighted average exercise price | $ 14.83 |
Number exercisable | shares | 50,720 |
Exercisable, Weighted average exercise price | $ 12.87 |
2018 Non-Employee Stock Option Plan | Exercise price range | |
Share based compensation, exercise prices | |
Exercise price upper limit | 22.93 |
Exercise price lower limit | $ 8.10 |
Options outstanding (in shares) | shares | 75,000 |
Weighted average remaining contractual life | 6 years 9 months 3 days |
Weighted average exercise price | $ 14.83 |
Number exercisable | shares | 50,720 |
Exercisable, Weighted average exercise price | $ 12.87 |
2020 Non-Employee Stock Option Plan | |
Share based compensation, exercise prices | |
Options outstanding (in shares) | shares | 56,900 |
Weighted average remaining contractual life | 8 years 7 months 2 days |
Weighted average exercise price | $ 23.35 |
Number exercisable | shares | 18,760 |
Exercisable, Weighted average exercise price | $ 20.73 |
2020 Non-Employee Stock Option Plan | Exercise price range | |
Share based compensation, exercise prices | |
Exercise price upper limit | 30.71 |
Exercise price lower limit | $ 11.40 |
Options outstanding (in shares) | shares | 56,900 |
Weighted average remaining contractual life | 8 years 7 months 2 days |
Weighted average exercise price | $ 23.35 |
Number exercisable | shares | 18,760 |
Exercisable, Weighted average exercise price | $ 20.73 |
2022 Employee Stock Option Plan | Exercise price range | |
Share based compensation, exercise prices | |
Exercise price lower limit | $ 4.35 |
Options outstanding (in shares) | shares | 5,000 |
Weighted average remaining contractual life | 9 years 11 months 12 days |
Weighted average exercise price | $ 40.01 |
Number exercisable | shares | 1,000 |
Exercisable, Weighted average exercise price | $ 40.01 |
Stockholders' Equity Transact_2
Stockholders' Equity Transactions (Details) | 1 Months Ended | 12 Months Ended | ||||||
May 05, 2023 USD ($) $ / shares | Dec. 31, 2021 | Jun. 30, 2023 USD ($) $ / shares shares | Jun. 30, 2022 USD ($) $ / shares shares | Jun. 30, 2021 shares | Feb. 13, 2023 $ / shares | Dec. 06, 2021 $ / shares shares | Sep. 16, 2014 shares | |
Equity | ||||||||
Authorized to be repurchased (in shares) | 2,000,000 | |||||||
Common Stock Shares Outstanding | 36,770,097 | 36,734,482 | 38,800,000 | |||||
Stock repurchased (in shares) | 0 | 0 | 0 | |||||
Share Price | $ / shares | $ 31.50 | |||||||
Common stock, authorized (in shares) | 100,000,000 | 100,000,000 | 100,000,000 | |||||
Par value per share | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | |||||
Percentage of stock dividend | 100% | |||||||
Stock split | 2 | |||||||
Dividends payable per share | $ / shares | $ 0.0625 | |||||||
Payments of dividends | $ | $ 2,298,000 | $ 2,298,000 | ||||||
Proceeds from stock option exercises | $ | $ 85,000 | $ 155,000 | ||||||
Certain employees and directors | ||||||||
Equity | ||||||||
Exercised | 53,000 | 34,800 | ||||||
Exercised, cashless | 43,600 | 6,800 | 14,200 | |||||
Surrendered (in shares) | 17,385 | 2,486 | 6,734 |
Related Party Transaction (Deta
Related Party Transaction (Details) - USD ($) | Feb. 15, 2023 | Feb. 13, 2023 |
Related party transactions | ||
Share Price | $ 31.50 | |
Green Shoe Option | ||
Related party transactions | ||
Proceeds from the offering | $ 0 | |
Green Shoe Option | Selling, General and Administrative Expenses | ||
Related party transactions | ||
Stock issuance costs | $ 509,000 | |
President And Chairman & Executive Vice President And Chief Financial Officer | Green Shoe Option | ||
Related party transactions | ||
Additional shares issued | 300,000 | |
President And Chairman | ||
Related party transactions | ||
Shares of common stock issued | 2,012,500 | |
Executive Vice President And Chief Financial Officer | ||
Related party transactions | ||
Shares of common stock issued | 87,500 |
401(k) Plan (Details)
401(k) Plan (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | |
401(k) Plan | |||
Employer contribution | $ 251,000 | $ 191,000 | $ 138,000 |
Commitments and Contingencies -
Commitments and Contingencies - Leases (Details) | 12 Months Ended | ||||
Sep. 14, 2022 USD ($) | Sep. 13, 2022 USD ($) | Jun. 30, 2023 USD ($) a | Jun. 30, 2022 USD ($) | Jun. 30, 2021 USD ($) | |
Commitments and Contingencies | |||||
Operating lease term | 99 years | ||||
Area of land | a | 4 | ||||
Annual minimum rent | $ 235,000 | $ 235,000 | |||
Annual service charges | $ 105,000 | $ 53,000 | |||
Percentage of service charges increase | 2% | ||||
Deduction of operating lease asset and liability, remeasurement | $ 1,300,000 | ||||
Operating lease payments | $ 335,000 | $ 288,000 | |||
Operating lease expense | $ 458,000 | $ 319,000 | $ 316,000 | ||
Weighted-average remaining lease term | 69 years | ||||
Weighted-average discount rate | 6.25% |
Commitments and Contingencies_2
Commitments and Contingencies - Lease maturities (Details) $ in Thousands | Jun. 30, 2023 USD ($) |
Schedule, by years, of maturities of lease liabilities | |
2024 | $ 316 |
2025 | 299 |
2026 | 282 |
2027 | 267 |
2028 | 253 |
Thereafter | 4,380 |
Total | $ 5,797 |
Commitments and Contingencies_3
Commitments and Contingencies - Litigation, etc. (Details) - Employment Contracts | 12 Months Ended |
Jun. 30, 2023 USD ($) | |
Chief executive officer | |
Loss Contingencies [Line Items] | |
Annual salary commitment | $ 872,000 |
Termination pay commitment rate applied to the average of the prior five calendar years compensation | 299% |
SVP of Engineering | |
Loss Contingencies [Line Items] | |
Annual salary commitment | $ 361,000 |
Geographical Data (Details)
Geographical Data (Details) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2023 USD ($) segment | Jun. 30, 2022 USD ($) | Jun. 30, 2021 USD ($) | |
Domestic and Foreign Operations | |||
Number of operating segments (in segments) | segment | 1 | ||
Net Sales | $ 169,997 | $ 143,593 | $ 114,035 |
Identifiable Assets | 166,654 | 148,576 | |
United States | |||
Domestic and Foreign Operations | |||
Net Sales | 168,619 | 142,059 | 112,618 |
Identifiable Assets | 122,995 | 98,791 | |
Foreign | |||
Domestic and Foreign Operations | |||
Net Sales | 1,378 | 1,534 | $ 1,417 |
Dominican Republic | |||
Domestic and Foreign Operations | |||
Identifiable Assets | $ 43,659 | $ 49,785 |
Geographical Data - Additional
Geographical Data - Additional information (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Jun. 30, 2022 |
Domestic and Foreign Operations | ||
Inventories, net | $ 35,062 | $ 40,781 |
Operating lease asset | 5,797 | 7,350 |
Fixed assets | 9,308 | 7,939 |
Dominican Republic | ||
Domestic and Foreign Operations | ||
Inventories, net | 33,477 | 38,755 |
Operating lease asset | 5,797 | 7,350 |
Fixed assets | $ 3,958 | $ 3,253 |
Subsequent Events (Details)
Subsequent Events (Details) - $ / shares | Aug. 18, 2023 | May 05, 2023 |
Subsequent Event [Line Items] | ||
Dividends payable per share | $ 0.0625 | |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Dividends payable per share | $ 0.08 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2021 | |
Pay vs Performance Disclosure | |||
Net Income (Loss) | $ 27,127 | $ 19,599 | $ 15,413 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Jun. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |