Revenue Recognition and Contracts with Customers

9 Months Ended

Mar. 31, 2024

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. All of these products and services are used for commercial, residential, institutional, industrial and governmental applications, and are sold primarily to independent distributors, dealers and installers of security equipment. Sales to unaffiliated customers are primarily shipped from the United States.

As of March 31, 2024 and June 30, 2023, the Company included refund liabilities of approximately $5,224,000 and $5,521,000, respectively, in current liabilities. As of March 31, 2024 and June 30, 2023, the Company included return-related assets of approximately $1,316,000 and $1,338,000, respectively, in other current assets.

As a percentage of gross sales, returns, rebates and allowances were 6% and 8% for the three months ended March 31, 2024 and 2023, respectively. As a percentage of gross sales, returns, rebates and allowances were 6% for both the nine months ended March 31, 2024 and 2023, 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):

	Three months ended March 31,				Nine months ended March 31,
	2024		2023		2024		2023
Major Product Lines:
Intrusion and access alarm products	$	10,139	$	11,530	$	30,693	$	36,405
Door locking devices		19,596		16,860		52,440		45,106
Services		19,532		15,142		55,357		43,828
Total Revenues	$	49,267	$	43,532	$	138,490	$	125,339