NAPCO SECURITY TECHNOLOGIES, INC. 
Overview
Napco Security Technologies, Inc ("NAPCO", "the Company", "we") is one of the leading manufacturers and designers of high-tech electronic security devices, wireless 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 theU.S. While recurring service
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revenues have continued to increase during the COVID-19 pandemic, equipment sales were negatively impacted by the economic slowdown associated with this pandemic.
Since 1969, NAPCO has established a heritage and proven record in the professional security community for reliably delivering both advanced technology and high-quality security solutions, building many of the industry's widely recognized brands, such asNAPCO Security Systems , Alarm Lock, Continental Access,Marks USA , and other popular product lines: including Gemini and F64-Series hardwire/wireless intrusion systems and iSee Video internet video solutions. We are also dedicated to developing innovative technology and producing the next generation of reliable security solutions that utilize remote communications and wireless networks, including our StarLink, iBridge, and more recently the iSecure product lines. Today, millions of businesses, institutions, homes, and people around the globe are protected by products from theNAPCO Group of Companies . Our net sales were$114.0 million ,$101.4 million and$102.9 million for the fiscal years endedJune 30, 2021 , 2020 and 2019, respectively. The change in our net sales from fiscal 2020 to 2021 was driven primarily by increased sales of our products in the recurring revenue business ($9.9 million ) and sales of equipment ($2.7 million ) as compared to the same period a year ago. This increase was due primarily to the recovery from the economic effects of the COVID-19 pandemic and the related closures mandated by federal and state governments. The change in our net sales from fiscal 2019 to 2020 was driven primarily by increased sales of our products in the recurring revenue business as offset by a 34% decrease in sales of equipment in the fourth quarter of fiscal 2020 as compared to the same period a year ago. This decrease was due primarily to the economic effects of the COVID-19 pandemic and the related closures mandated by federal and state governments. Our net income was$14.9 million ,$8.5 million and$12.2 million for the fiscal years endedJune 30, 2021 , 2020 and 2019, respectively. The changes in net income during this period was due primarily to the COVID-19 impact and subsequent recovery described above, as well as by the growth of our recurring revenue business.
Economic and Other Factors
We are subject to the effects of general economic and market conditions. If theU.S. or international economic conditions deteriorate, our revenue, profit and cash-flow levels could be materially adversely affected in future periods. In the event of such deterioration, many of our current or potential future customers may experience serious cash flow problems and as a result may, modify, delay or cancel purchases of our products. Additionally, customers may not be able to pay, or may delay payment of, accounts receivable that are owed to us. If such events do occur, they may result in our fixed and semi-variable expenses becoming too high in relation to our revenues and cash flows.
Seasonality
The Company's fiscal year begins onJuly 1 and ends onJune 30 . Historically, the end users of the Company's products want to install its products prior to the summer; therefore, sales of its products historically peak in the periodApril 1 through June 30 , the Company's fiscal fourth quarter, and are reduced in the periodJuly 1 through September 30 , the Company's fiscal first quarter. In addition, demand for our products is affected by the housing and construction markets. Deterioration of the current economic conditions may also affect this trend. Our fourth quarter of fiscal 2020 and fiscal 2021 reflected the challenging business environment resulting from the COVID-19 pandemic. The COVID-19 pandemic had caused difficulties for security equipment professionals getting access to both commercial and residential installation sites. We sell our products primarily through distribution to dealers and we are now seeing strong sell-through statistics from several of our largest distributors. Increased sell-through of our products from our distributors to the alarm and locking dealers during the third and fourth quarters of fiscal 2021, as compared to the three quarters preceding them, indicates that security equipment professionals are getting increased access to both commercial and residential installation sites and using more and more of our products.
Critical Accounting Policies and Estimates
The Company's significant accounting policies are fully described in Note 1 to the Company's consolidated financial statements included in its 2021 Annual Report on Form 10-K. Management believes these critical accounting policies, among others, affect its more significant judgments and estimates used in the preparation of its consolidated financial statements.
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.
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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 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. 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 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.The Company analyzes 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. As a percentage of gross sales, sales returns, rebates and allowances were 10% and 9% for the fiscal years endedJune 30, 2021 and 2020, respectively.
Reserve for Doubtful Accounts
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%, 24% and 19% of the Company's accounts receivable atJune 30, 2021 , 2020 and 2019, respectively. Sales to this customer did not exceed 10% of net sales in either of the fiscal years endedJune 30, 2021 or 2020. Sales to this customer comprised 10% of net sales during fiscal year endedJune 30, 2019 . The Company had another customer with an accounts receivable balance that comprised 10% of the Company's accounts receivable atJune 30, 2021 . Sales to this customer did not exceed 10% of net sales in any of the fiscal years endedJune 30, 2021 , 2020 and 2019, respectively. The Company had another customer with an accounts receivable balance that comprised 10% of the Company's accounts receivable atJune 30, 2020 . Sales to this customer did not exceed 10% of net sales in any of the fiscal years endedJune 30, 2021 , 2020 and 2019, respectively. The Company had another customer with an accounts receivable balance that comprised 10% of the Company's accounts receivable atJune 30, 2021 and 2019. Sales to this customer did not exceed 10% of net sales in any of the fiscal years endedJune 30, 2021 , 2020 and 2019. In the ordinary course of business, we have established a reserve for doubtful accounts and customer deductions in the amount of$226,000 and$326,000 as ofJune 30, 2021 and 2020, respectively. Our reserve for doubtful accounts is a subjective critical estimate that has a direct impact on reported net earnings. This reserve is based upon the evaluation of accounts receivable agings, specific exposures and historical or anticipated events.
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 Table of Contents
application, and the resulting overhead included in ending inventory, are based in part on subjective estimates and actual results could differ from those estimates.
In addition, the Company records an inventory obsolescence reserve, which represents the difference between the cost of the inventory and its estimated realizable value, based on various product sales projections. This reserve is calculated using an estimated obsolescence percentage applied to the inventory based on age, historical trends, 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. There is inherent professional judgment and subjectivity made by both production and engineering members of management in determining the estimated obsolescence percentage. In addition, and as necessary, the Company may establish specific reserves for future known or anticipated events. 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.
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. The Company's acquisition of substantially all of the assets and certain liabilities ofG. Marks Hardware, Inc. ("Marks") inAugust 2008 included intangible assets recorded at fair value on the date of acquisition. The customer relationships are amortized over their estimated useful lives of twenty years. At the acquisition date, the Marks trade name was deemed to have an indefinite life. During the 4th quarter of fiscal 2020, the Company determined that the trade-name was impaired. Accordingly, the Company recorded an impairment charge of$1,852,000 and reclassified the remaining balance of the underlying asset from indefinite-lived to a long-lived asset with a remaining useful life of 20 years as ofJune 30, 2020 .
Income Taxes
The Company has identifiedthe United States andNew 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 aFree Zone in theDominican Republic ("DR") and is exempt from DR income tax. For the year endedJune 30, 2021 , the Company recognized a net income tax expense of$2,429,000 . During the year endingJune 30, 2021 , the Company decreased its reserve for uncertain income tax positions by$208,000 . The Company's practice is to recognize interest and penalties related to income tax matters in income tax expense and accrued income taxes. As ofJune 30, 2021 , the Company had accrued interest totaling$63,000 and$678,000 of unrecognized net tax benefits that, if recognized, would favorably affect the Company's effective income tax rate in any future period. The Company claims research and development ("R&D") tax credits on eligible research and development expenditures. The R&D tax credits are recognized as a reduction to income tax expense. 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.
Leases
EffectiveJuly 1, 2019 , the Company adopted the new lease accounting standard using the modified retrospective transition option of applying the new standard at the adoption date. In addition, we elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed us to not reassess (1) whether any expired or existing Table of Contents contracts are or contain leases, (2) lease classification for any expired or existing leases, and (3) initial direct costs for any existing leases. Adoption of the new standard resulted in the recording of an operating ROU asset and lease liabilities of approximately$7.7 million . Given the length of the lease term, the right-of-use asset and corresponding liability assume a weighted discount rate as disclosed below. A change in the rate utilized could have a material effect on the amounts reported. Financial positions for reporting periods beginning on or afterJuly 1, 2019 are presented under new guidance, while prior period amounts are not adjusted and continue to be reported in accordance with previous guidance.
Liquidity and Capital Resources
During the year endedJune 30, 2021 the Company utilized a portion of its cash generated from operations ($6,429,000 of$22,987,000 ) to purchase property, plant and equipment ($1,007,000 ) and marketable securities ($5,422,000 ). The Company believes its current working capital, cash flows from operations and its revolving credit agreement will be sufficient to fund the Company's operations through the next twelve months. As ofJune 30, 2021 , the Company maintained a revolving credit facility of$11,000,000 which expires inJune 2024 and term loans from theU.S. Small Business Administration totaling$3,904,000 through its Payroll Protection Program ("PPP"). As ofJune 30, 2021 , the Company had no outstanding borrowings and$11,000,000 in availability under the revolving credit facility and$3,904,000 outstanding under the PPP term loans. Pursuant to the CARES Act, the loans may be forgiven by the SBA. The Company has applied to have the balance of the Loan forgiven. Following year-end,$2,850,000 of the PPP Loan was forgiven in accordance with guidelines set for in the PPP. The Company will recognize debt forgiveness in the first quarter of 2022 in the amount of$2,850,000 and will recognize further forgiveness income in the quarter that the remaing forgiveness application may be granted. While the Company believes that it meets to requirements for forgiveness, there can be no assurance that its remaining application will be granted. The revolving credit facility contains various restrictions and covenants including, among others, restrictions on borrowings and compliance with certain financial ratios, as defined in the agreement. The Company's long-term debt is described more fully in Note 8 to the condensed consolidated financial statements. The Company believes its current working capital, anticipated cash flows from operations and its Revolving Credit Agreement will be sufficient to fund the Company's operations through at least the next twelve months.
The Company takes into consideration several factors in measuring its liquidity, including the ratios set forth below:
As of June 30,
2021 2020 2019
Current Ratio 4.8 to 1 4.5 to 1 4.6 to 1
Sales to Receivables 4.1 to 1 4.4 to 1 4.0 to 1
Total debt to equity 0.0 to 1 0.1 to 1 0.0 to 1
As of June 30, 2021 , the Company had no material commitments for capital
expenditures or inventory purchases other than purchase orders issued in the
normal course of business. On April 26, 1993 , the Company's foreign subsidiary
entered into a 99-year land lease of approximately 4 acres of land in the
Dominican Republic , on which the Company's principle manufacturing facility is
located, at an annual rent of approximately $288,000 .
Working Capital. Working capital increased by $14,764,000 to $75,810,000 at June
30, 2021 from $61,046,000 at June 30, 2020 . Working capital is calculated by
deducting Current Liabilities from Current Assets.
Accounts Receivable. Accounts Receivable increased by $5,149,000 to $28,081,000
at June 30, 2021 as compared to $22,932,000 at June 30, 2020 . The increase in
Accounts Receivable was due primarily to an increase in net sales for the
quarter ended June 30, 2021 as compared to the same quarter a year ago.
Inventories. Inventories, which include both current and non-current portions,
decreased by $9,313,000 to $32,442,000 at June 30, 2021 as compared to
$41,755,000 at June 30, 2020 . The decrease was due, in part, to the Company
completing the rollout of several new products that were introduced during
fiscal 2020. Inventories of these items were built up during fiscal 2020 in
anticipation of initial stocking orders from the Company's customers. The
decrease in inventory was also due to the Company's efforts to move closer to
"just in time" procurement and production cycles where component parts and
finished goods are scheduled for delivery closer to the expected requirement
date.
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Accounts Payable and Accrued Expenses. Accounts payable and accrued expenses,
not including income taxes payable, increased by $1,683,000 to $16,155,000 as of
June 30, 2021 as compared to $14,472,000 at June 30, 2020 . This increase is
primarily due to an increase in the Company's accrued refund liability, which is
explained in Note 2 to the Notes to the Company's Consolidated Financial
Statements, as well as higher accrued incentive compensation as of June 30, 2021
as compared to June 30, 2020 .
Off-Balance Sheet Arrangements
The Company does not maintain any off-balance sheet arrangements.
Results of Operations
Fiscal 2021 Compared to Fiscal 2020
Fiscal year
ended
% Increase/
2021 2020 (decrease)
Net sales $ 114,035 $ 101,359 12.5 %
Gross profit 50,151 43,592 15.0 %Gross profit as a % of net sales 44.0 % 43.0 % 2.3 % Research and development 7,620 7,257 5.0 % Selling, general and administrative 25,196 23,670 6.4 % Selling, general and administrative as a % of net sales 22.1 % 23.4 % (5.6) % Impairment of intangible asset -
1,852 (100.0) %
Income from operations 17,335 10,813 60.3 %
Interest expense, net 5 9 (44.4) %
Provision for income taxes 2,429 2,284 6.3 %
Net income 14,901 8,520 74.9 %
Net sales in fiscal 2021 increased by $12,676,000 to $114,035,000 as compared to
$101,359,000 in fiscal 2020. The increase in net sales was primarily due to
increased sales of the Company's recurring alarm communication services
($9,859,000 ), Napco brand intrusion products ($5,972,000 ) and Marks brand
door-locking products ($2,051,000 ), as partially offset by decreased sales of
the Company's Alarm Lock brand door-locking products ($4,720,000 ) and
Continental brand access control products ($191,000 ). The Company's increase in
equipment sales was primarily due to customer demand returning after the decline
during the COVID-19 pandemic and the related closures throughout the United
States . This was partially offset by a decrease in the Company's Alarm Lock
products, which was due primarily to school districts and other institutions
postponing their capital projects in the latter portion of the Company's 2020
fiscal year and throughout fiscal 2021.
The Company's gross profit increased by $6,559,000 to $50,151,000 or 44.0% of
net sales in fiscal 2021 as compared to $43,592,000 or 43.0% of net sales in
fiscal 2020. Gross profit on equipment sales was $21,133,000 or 26.4% of net
equipment sales in fiscal 2021 and $23,880,000 or 30.9% of net equipment sales,
in fiscal 2020. Gross profit on service revenues was $29,018,000 or 85.6% of net
service revenues in fiscal 2021 and $19,712,000 or 82.0% of net service
revenues, in fiscal 2020. Gross profit on equipment sales was primarily affected
by the shift in sales to the Company's Starlink radio products, which typically
have lower margins but result in recurring service revenues, and from the
Company's Alarm Lock products as discussed above. The Alarm Lock products are
among the Company's highest margin equipment products. Gross profit on equipment
sales was also affected by the Company's reduction in it's production and
inventories which impacted it's overhead absorption rate.
Research and Development expenses increased by $363,000 to $7,620,000 in fiscal
2021 as compared to $7,257,000 in fiscal 2020. This increase was due primarily
to salary increases and additional staff.
Selling, general and administrative expenses for fiscal 2021 increased by
$1,526,000 to $25,196,000 as compared to $23,670,000 in fiscal 2020. Selling,
general and administrative expenses as a percentage of net sales decreased to
22.1% in fiscal 2021 from 23.4% in fiscal 2020. The increase in dollars resulted
primarily from increases in employee compensation. The decrease as a percentage
of sales was primarily the result of the increase in net sales as described
above, as partially offset by the aforementioned increase in employee
compensation expenses.
During the 4th quarter of fiscal 2020, the Company determined that its
indefinite-lived intangible asset relating to its Marks
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remaining balance of the underlying asset from indefinite-lived to a long-lived asset with a remaining useful life of 20 years as ofJune 30, 2020 . There was no impairment charge for the year endedJune 30, 2021 .
Interest and other expense, net for fiscal 2021 remained relatively constant at
The Company's provision for income taxes for fiscal 2021 increased by$145,000 to$2,429,000 as compared to$2,284,000 for the same period a year ago. The Company's effective tax rate decreased to 14% for fiscal 2021 as compared to 21% for fiscal 2020. The decrease in the Company's fiscal 2021 effective tax rate is a direct result of additional tax expense recorded in fiscal 2020 for theIRS audit of the Company's 2016 fiscal year.
Net income for fiscal 2021 increased by
Results of Operations
Fiscal 2020 Compared to Fiscal 2019
Fiscal year
ended
% Increase/
2020 2019 (decrease)
Net sales $ 101,359 $ 102,932 (1.5) %
Gross profit 43,592 43,890 (0.7) %Gross profit as a % of net sales 43.0 % 42.6 % 0.9 % Research and development 7,257 7,212 0.6 % Selling, general and administrative 23,670 23,212 2.0 % Selling, general and administrative as a % of net sales 23.4 % 22.6 % 3.5 % Impairment of intangible asset 1,852
- 100.0 %
Income from operations 10,813 13,466 (19.7) %
Interest expense, net 9 21 (57.1) %
Provision for income taxes 2,284 1,222 86.9 %
Net income 8,520 12,223 (30.3) %
Net sales in fiscal 2020 decreased by $1,573,000 to $101,359,000 as compared to
$102,932,000 in fiscal 2019. The decrease in net sales was primarily due to
decreased sales of the Company's Alarm Lock brand door-locking products
($2,565,000 ), Marks brand door-locking products ($5,258,000 ), and Continental
brand access control products ($542,000 ) as partially offset by increased sales
of the Company's recurring alarm communication services ($6,608,000 ) and Napco
brand intrusion products ($200,000 ). The Company's equipment sales were
negatively impacted by the COVID-19 pandemic, which has caused difficulties for
security equipment professionals getting access to both commercial and
residential installation sites. The Company believes this access issue is an
industry-wide issue related to COVID-19 and not reflective of the loss of any
market share unique to the Company or any long-term negative reflection of the
post-pandemic vibrancy of the security industry as a whole.
The Company's gross profit decreased by $298,000 to $43,592,000 or 43.0% of net
sales in fiscal 2020 as compared to $43,890,000 or 42.6% of net sales in fiscal
2019. Gross profit on equipment sales was $23,380,000 or 30.1% of net equipment
sales in fiscal 2020 and $30,265,000 or 35.4% of net equipment sales, in fiscal
2019. Gross profit on service revenues was $19,712,000 or 82.0% of net service
revenues in fiscal 2020 and $13,625,000 or 78.2% of net service revenues, in
fiscal 2019. Gross profit was primarily affected by the decrease in equipment
sales as discussed above as partially offset by increased service revenues.
Research and Development expenses remained relatively constant at
Selling, general and administrative expenses for fiscal 2020 increased by$458,000 to$23,670,000 as compared to$23,212,000 in fiscal 2019. Selling, general and administrative expenses as a percentage of net sales increased to 23.4% in fiscal 2020 from 22.6% in fiscal 2019. The increase in dollars resulted primarily from increases in employee compensation. The increase as a percentage of sales was primarily the result of the decrease in net sales as described above and the increased employee compensation expenses.
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During the 4th quarter of fiscal 2020, the Company determined that its indefinite-lived intangible asset relating to its MarksUSA I subsidiary trade-name was impaired. Accordingly, the Company recorded an impairment charge of$1,852,000 and reclassified the remaining balance of the underlying asset from indefinite-lived to a long-lived asset with a remaining useful life of 20 years as ofJune 30, 2020 . There was no impairment charge for the year endedJune 30, 2019 .
Interest expense for fiscal 2020 remained relatively constant at
The Company's provision for income taxes for fiscal 2020 increased by$1,062,000 to$2,284,000 as compared to$1,222,000 for the same period a year ago. The Company's effective tax rate increased to 21% for fiscal 2020 as compared to 9% for fiscal 2019. The increase in the Company's effective tax rate resulted from the resolution of anIRS audit of the Company's 2016 fiscal year, resulting in an additional provision of$1,555,000 . Net income for fiscal 2020 decreased by$3,703,000 to$8,520,000 as compared to$12,223,000 in fiscal 2019. This resulted primarily from the items discussed above.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K and the documents we incorporate by reference contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. All statements, other than statements of historical fact, included or incorporated in this prospectus regarding our strategy, future operations, clinical trials, collaborations, intellectual property, cash resources, financial position, future revenues, projected costs, prospects, plans, and objectives of management are forward-looking statements. The words "believes," "anticipates," "estimates," "plans," "expects," "intends," "may," "could," "should," "potential," "likely," "projects," "continue," "will," "schedule," "would," and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We cannot guarantee that we actually will achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties, and other factors, which may be beyond our control, and which may cause our actual results, performance, or achievements to be materially different from future results, performance, or achievements expressed or implied by such forward-looking statements. There are a number of important factors that could cause our actual results to differ materially from those indicated or implied by forward-looking statements. See "Risk Factors" in our Annual Report on Form 10-K for the year endedJune 30, 2021 for more information. These factors and the other cautionary statements made in this prospectus and the documents we incorporate by reference should be read as being applicable to all related forward-looking statements whenever they appear in this prospectus and the documents we incorporate by reference. In addition, any forward-looking statements represent our estimates only as of the date that this prospectus is filed with theSEC and should not be relied upon as representing our estimates as of any subsequent date. We do not assume any obligation to update any forward-looking statements. We disclaim any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as may be required by law.
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