Revenue Recognition and Contracts with Customers

6 Months Ended

Dec. 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 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 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 December 31, 2024 and June 30, 2024, the Company included refund liabilities of approximately $4,814,000 and $6,295,000, respectively, in current liabilities. As of December 31, 2024 and June 30, 2024, the Company included return-related assets of approximately $1,263,000 and $1,586,000, respectively, in other current assets.

As a percentage of gross sales, returns, rebates and allowances were 4% and 6% for the three months ended December 31, 2024 and 2023, respectively. As a percentage of gross sales, returns, rebates and allowances were 7% and 5% for the six months ended December 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 December 31,				Six months ended December 31,
	2024		2023		2024		2023
Major Product Lines:
Intrusion and access alarm products	$	7,556	$	11,258	$	16,619	$	20,554
Door locking devices		14,169		17,749		28,023		32,844
Services		21,208		18,540		42,294		35,825
Total Revenues	$	42,933	$	47,547	$	86,936	$	89,223