Revenue Recognition and Contracts with Customers

6 Months Ended

Dec. 31, 2022

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 December 31, 2022 and June 30, 2022, the Company included refund liabilities of approximately $4,096,000 and $5,863,000, respectively, in current liabilities. As of December 31, 2022 and June 30, 2022, the Company included return-related assets of approximately $909,000 and $974,000, respectively, in other current assets.

As a percentage of gross sales, returns, rebates and allowances were 5% and 13% for the three months ended December 31, 2022 and 2021, respectively. As a percentage of gross sales, returns, rebates and allowances were 5% and 11% for the six months ended December 31, 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):

	Three months ended December 31,				Six months ended December 31,
	2022		2021		2022		2021
Major Product Lines:
Intrusion and access alarm products	$	11,342	$	10,767	$	24,874	$	20,563
Door locking devices		16,092		11,613		28,247		22,644
Services		14,880		11,028		28,686		21,252
Total Revenues	$	42,314	$	33,408	$	81,807	$	64,459