Richard Soloway: The new distribution source is another distributor, which is the largest in the industry. And it came to us the last ISC show in Las Vegas and said, we would like to be able to market your products. We have a great network throughout the U.S.A. They have 115 branches and train our guys and we will be a great customer for you. They have a lot of customers there that are new that we don’t have. We have approximately 12,000 dealers all independent business people that run alarm companies and system integration companies. So this new distributor has additional companies that they are going to bring to us to sell our products. We’re very, very unique, the most unique company in the security industry because we manufacture fire alarms, burglar alarms, locking products and access products.
There is no one manufacturer that has all those segments. So we have a great ability with our sales group to explain to these new customers how we have an integrated solution, and we expect it to add a lot of additional volume to our business. So now we have about 300 branches between our independent network, which are fabulous guys that have a great customer base. And this new network, there is going to be lots of Napco company products out there and a lot of our salesmen, as we said, we’ve added additional salespeople to help sell it and to break in these distributors as to what we make and why it’s – so it has such great advantages over anything on the marketplace. So we’re looking for an exciting future with our new distributor.
Jim Ricchiuti: What kind of traction are you seeing? I know it’s early days with Prima, I’m wondering if you can give us a sense as to how you see that potentially ramping as you go through the year? And I assume the margin profile of this is a little bit lower in terms of – as we think about recurring revenue and I wonder if you could also talk to whether there might be some cannibalization of your – perhaps some of your higher-priced offerings.
Richard Soloway: The new Prima is completely different than anything else we have in our line. We’ve been making products called Gemini. The dealers love it. It’s rock solid. It’s fire alarms, it’s burglar alarms. And now Prima is a different type of product. It’s a product designed for smaller enterprises, it’s totally wireless, it can go either a small business or residential. It installs in, we like to say 5 minutes because it’s a lick-and-stick type of product, but it’s very, very reliable, has Napco quality to it. Napco feature sets in it. So, you have a 9-inch keypad that could be put in the front door of a store or a home and has additional satellite keypads, has motion detectors, it has electronic doorbell cameras and it has very, very unique features, which make it easy for the dealer that’s selling the job to actually install it right after the job is sold or we can leave it to the customer and the customer can install himself if he is handy – handy type of customer.
It reports to any central station, the dealer is comfortable with that he has been using for his regular Gemini line of equipment. And we get recurring revenue for everyone because it’s all added to our NOC. It’s enrolled in our NOC, and we get a service fee like we do for any of our products. And the dealer also charges the end-user customer whatever the market will bear for the type of system, the dealer leaves behind. So, it’s a win-win for dealers, and it’s a win-win for us. The volume we expect from this is going to be a very, very high volume because there is lots of stores, lots of resonances that need this type of product. And it’s very, very good for the dealer to utilize this product because this product also eliminates a technical features in it that nothing else in the market has and eliminates truck rolls by the dealer for repairing and adjusting the system because it’s all self-adjusting.
If somebody has a WiFi issue, somebody disconnects the WiFi in a resident, like kids like to play with the WiFi, the network. Currently, the dealers have to go back to that site and reboot and realign all the equipment. With Prima, it’s all automatic. It refines the network and reboots itself on many, many different levels. So, the dealer won’t have to go back and roll a truck. So, that’s a great boom for the dealer. Not only does it have all the fancy features and installs quickly, but also we call self-healing if the system is interrupted with people that are changing the WiFi or adjusting the WiFi system. So, it has a lot of features to it. So, we expect a lot of great things out of it. We started shipping it last month. Typically, it takes nine months to a year for a product really grip and get volume.
This works very similar to Gemini and other products in the marketplace. So, I think the learning curve is going to be quicker.
Jim Ricchiuti: Got it. Thank you. And you guys are running into some tougher comps now as we think about the door lock device business. And I wonder what’s your line of sight into that business as you look out over the next….?
Richard Soloway: The locking business is a strong business for us and it has a lot of tech – our products have a lot of tech. When the business was started, I wanted the business to be very technical. And we acquired two companies, which basically made mechanical things, locks, traditional type mechanical locks like everybody else in the business. But our idea was to add technology to it and radios to it. So, it transfers over distance. It’s cell phone communications to the locks. It’s so many different things that locks that have made locks modern. So, while we still make traditional hardware mechanical locks, we also make a whole line of electronic-oriented which use near-field Z-Wave, cellular because now we are getting locks, we are making locks for the dealers that never got recurring revenue before, a whole line of locks where it’s installed by the dealer, but they get recurring revenue from the customer and for themselves, never been done before in this business.
