SecProbe.io

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 March 18, 2025

Kevin S. Buchel
Chief Financial Officer
Napco Security Technologies, Inc.
333 Bayview Avenue
Amityville, New York 11701

 Re: Napco Security Technologies, Inc.
 Form 10-K for the Fiscal Year Ended June 30, 2024
 File No. 000-10004
Dear Kevin S. Buchel:

 We have completed our review of your filing. We remind you that the
company and
its management are responsible for the accuracy and adequacy of their
disclosures,
notwithstanding any review, comments, action or absence of action by the staff.

 Sincerely,

 Division of Corporation
Finance
 Office of Manufacturing
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CORRESP
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 ​ March 14, 2025 ​ Securities and Exchange Commission Division of Corporation Finance 100F Street NE Washington, DC 20549 ​ Attention: Beverly Singleton ​ Jean Yu ​ ​ ​ RE: Napco Security Technologies, Inc. ​ Form 10-K for the Fiscal Year Ended June 30, 2024 ​ Form 10-Q for the Quarterly Period Ended December 31, 2024 ​ Form 8-K, filed February 3, 2025 ​ File No. 000-10004 Dear Ms. Singleton and Ms. Yu: This letter is in response to the letter (the “Comment Letter”) dated March 6, 2025 from the staff (the “Staff”) of the United States Securities and Exchange Commission (the “Commission”), with respect to the Napco Security Technologies, Inc. (“Napco” or the “Company”) filings referenced above. We have set forth below in bold text the comments contained in the Comment Letter followed by our responses. Form 10-Q for the Quarterly Period Ended December 31, 2024 Note 1 - Nature of Business and Summary of Significant Accounting Policies, page 9 1. Please provide disclosure as to whether all adjustments which are, in the opinion of management, necessary to a fair statement of the quarterly interim financial statements have been made, and if so, further state if all such adjustments are of a normal recurring nature. Refer to Rule 10-01(b)(8) of Regulation S-X. Response. The Company acknowledges the Staff’s comment and respectfully advises the Staff that it has considered Rule 10-01(b)(8) of Regulation S-X, and it is the opinion of management that all adjustments, of a recurring nature, necessary for a fair statement of the quarterly interim financial statements have been made. In response to the Staff’s comment, the following disclosure will be added to Note 1 in all future quarterly interim financial statements on Form 10-Q. Basis of Presentation The accompanying unaudited Condensed Consolidated Financial Statements of Napco Security Technologies, Inc. (Napco) have been prepared in accordance with U.S. GAAP as defined in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification 270 for interim financial information and with the instructions to Rule 10-01 of Securities and Exchange Commission Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. Therefore, the interim condensed consolidated financial statements should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in the Annual Report on Form 10-K for the year ended June 30, 2024 . In the opinion of management, all adjustments considered necessary for a fair presentation have been included. All such adjustments are of a normal, recurring nature. 1 ​ ​ Form 8-K, Filed February 3, 2025 Exhibit 99.1 Earnings Release, page 1 2. Refer to reconciliation table of non-GAAP measures of performance and address the following: · Provide a reconciliation of Adjusted EBITDA per diluted share to the most directly comparable measure of net income per diluted share. Refer to the Staff’s Compliance and Disclosure Interpretations (“C&DIs”) on Non-GAAP Financial Measures, Question 102.05 whereby non-GAAP per share performance measures should be reconciled to GAAP earnings per share. Response. The Company acknowledges the Staff’s comment and respectfully advises the Staff that it has considered the Staff’s Compliance and Disclosure Interpretations (“C&DIs”) on Non-GAAP Financial Measures, Question 102.05 and the presentation of per share non-GAAP financial measures. If we continue to include the non-GAAP measure “Adjusted EBITDA per Diluted Share” in future filings the following reconciliation will be presented in such filings. NAPCO SECURITY TECHNOLOGIES, INC. ADJUSTED EBITDA PER DILUTED SHARE RECONCILIATION (Unaudited) (in thousands, except per share data) ​      Three Months Ended      Six Months Ended ​ ​ December 31, ​ December 31, ​ ​ 2024      2023 ​ 2024      2023 Numerator: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Income (GAAP) ​ $ 10,467 ​ $ 12,610 ​ $ 21,652 ​ $ 23,088 Less: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest Income, net ​ ​ 928 ​ ​ 729 ​ ​ 1,869 ​ ​ 1,169 Add: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Provision for Income Taxes ​ ​ 1,625 ​ ​ 1,924 ​ ​ 3,440 ​ ​ 3,441 Depreciation and Amortization ​ ​ 584 ​ ​ 551 ​ ​ 1,133 ​ ​ 1,088 EBITDA (earnings before interest, taxes, depreciation and amortization ​ ​ 11,748 ​ ​ 14,356 ​ ​ 24,356 ​ ​ 26,448 Adjustments for non-GAAP measures of performance: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Add: Stock Based Compensation ​ ​ 386 ​ ​ 303 ​ ​ 757 ​ ​ 610 Add: Non Recurring Legal Expense (Income) ​ ​ 44 ​ ​ 439 ​ ​ (397) ​ ​ 895 Adjusted EBITDA (Numerator) ​ $ 12,178 ​ $ 15,098 ​ $ 24,716 ​ $ 27,953 Denominator: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic Weighted Average Shares Outstanding ​ ​ 36,538,000 ​ ​ 36,829,000 ​ ​ 36,706,000 ​ ​ 36,743,000 Effect of Dilutive Securities ​ ​ 238,000 ​ ​ 189,000 ​ ​ 277,000 ​ ​ 219,000 Diluted Weighted Average Shares Outstanding (Denominator) ​ ​ 36,776,000 ​ ​ 37,018,000 ​ ​ 36,983,000 ​ ​ 36,962,000 Net Income per Diluted Shares Outstanding (GAAP) ​ $ 0.28 ​ $ 0.34 ​ $ 0.59 ​ $ 0.62 Adjusted EBITDA per Diluted Shares Outstanding ​ $ 0.33 ​ $ 0.41 ​ $ 0.67 ​ $ 0.76 ​ ​ 2 ​ ​ · We note your Adjusted EBITDA computation includes nonrecurring legal expenses (income). Provide disclosure of the nature of these nonrecurring legal expenses (income) in your MD&A discussion in future filings. Further, as legal costs are considered to be normal, recurring, cash operating expenses, it is not clear how you determined these costs to be nonrecurring and eliminating them from non-GAAP performance measures is appropriate or complies with Question 100.01 of the C&DIs on Non-GAAP Financial Measures. Please more fully explain to us why you believe this adjustment is appropriate or tell us how you plan to revise your computation of Adjusted EBITDA in future filings to remove this adjustment. Response. The Company acknowledges the Staff’s comment and respectfully advises the Staff that it has considered the Staff’s Compliance and Disclosure Interpretations (“C&DIs”) on Non-GAAP Financial Measures, Question 100.01. The following table details the adjustments for litigation and related legal costs, net of insurance reimbursement, reflected in the Company’s non-GAAP financial measures for the periods presented. Amounts presented as income represent the difference between the estimated fees accrued in prior periods in excess of amounts actually billed by the service provider in the reporting periods. These legal costs were associated with non-ordinary course litigation in which the Company was involved, namely (i) the Company’s securities class action and putative derivative lawsuits (“Class Action/Putative Derivative”), (ii) an independent investigation of a letter received from a short-seller (“Short-Seller Investigation”), and (iii) representation of non-executive employees in a regulatory inquiry (“Employee Regulatory Matter”). A description or reference to the disclosure of the above mentioned matters in our existing filings is provided below: ​      Three Months Ended      Six Months Ended ​ ​ December 31, ​ December 31, ​ ​ 2024      2023 ​ 2024      2023 Securities Class Action and Putative Derivative Suit ​ $ 55 ​ $ 159 ​ $ 330 ​ $ 245 Independent Investigation of Short-Seller Letter ​ ​ 2 ​ ​ — ​ ​ 158 ​ ​ — Representation of Non-Executive Employees in Regulatory Inquiry ​ ​ (13) ​ ​ 280 ​ ​ (172) ​ ​ 650 Insurance Reimbursement ​ ​ — ​ ​ — ​ ​ (713) ​ ​ — Total Non Recurring Legal Expense (Income) ​ $ 44 ​ $ 439 ​ $ (397) ​ $ 895 The Company respectfully advises the Staff that the Company does not exclude legal costs associated with its products and services that it determines to be normal, recurring expenses necessary to operate its business when calculating its non-GAAP financial measures. As an example, the Company considers legal expenses occurring during the ordinary course of business to include recurring fees relating to product development, warranty and compliance, regulatory compliance (including SEC filings), data privacy, real estate matters, and employment advisory work. The Company also incurs legal expenses in connection with litigation during the ordinary course of business, including but not limited to commercial litigation and disputes, and labor and employment litigation and disputes, which are considered routine. While the Company is involved in routine legal matters, certain matters, as described above, have arisen that are significantly outside the Company’s normal operating activities. In determining whether expenses directly related to the Company’s litigation do not constitute normal, recurring, expenses necessary to operate the business, the Company considers the frequency, scope and complexity of the case or related cases. 3 ​ ​ For the periods referenced in the Staff’s comment, the expenses excluded when calculating non-GAAP financial measures have primarily been related to the Class Action/Putative Derivative and the Short-Seller Investigation. The Company plans to continue to adjust for expenditures related to the Class Action/Putative Derivative in the future and, in response to the Staff’s comment, will reference the Class Action/Putative Derivative with specificity in the footnote describing adjustments for litigation and related costs in its future disclosures. If the Class Action/Putative Derivative is not dismissed additional costs associated with the Class Action/Putative Derivative may span over an extended period and impact multiple fiscal periods. That said, the Company does not consider these potential expenses as recurring since they are related to a discrete and clearly defined matter. Each of the matters discussed above has been assessed on a case-by-case basis. The Class Action/Putative Derivative suit is disclosed in Note 13 – Commitments and Contingencies under the heading Litigation on Page 28 of the Company’s Form 10-Q for the quarterly period ending December 31, 2024, and in Note 14 – Commitments and Contingencies under the heading Litigation on Pages FS-31 and FS-32 of the Company’s Form 10-K for the fiscal year ending June 30, 2024 . In regards to the Short-Seller Investigation, we reference the Staff to the Company’s 8-K filing date September 6, 2024 (Commission File Number 0-10004) and Exhibit 99.1 Statement filed on the Company’s website . The adjustment for the Employee Regulatory Matter is related to the following: In June 2024, the Company’s Former Vice President of Finance and Controller (the “Employee”) reached an agreement with the Staff (the “Staff”) of the U.S. Securities and Exchange Commission (the “Commission”) to settle allegations that the Employee sold shares of the Company’s common stock while in possession of material non-public information. The Employee did not admit nor deny the Commission’s allegations but agreed to disgorge certain alleged gains from the sale and paid a monetary penalty and other ancillary relief. The Employee is no longer the Company’s Vice President of Finance or the Controller but remains employed by the Company. The agreement related solely to the Employee’s action and not the Company. The Company incurred legal costs in conjunction with cooperating in the Commission’s investigation. The Company believes that adjusting expenses related to the matters described above is appropriate given the unusual and unanticipated nature of the related expenditures and is beneficial for users of the Company’s financial statements as these expenses (net) are not indicative of the Company’s ongoing operational performance. By adjusting these expenses, the Company’s period-to-period results from business operations become more comparable, helping to form a better understanding of the Company’s underlying financial results and performance. Further, although some of these litigation and related expenses have been incurred over an extended period and impact multiple fiscal periods, the Company does not consider these expenses as recurring since they are related to a limited set of discrete and clearly defined matters. Moreover, in determining to adjust for these matters, the Company considered that similarly sized and complex matters are uncommon for the Company. With respect to the Staff’s comment to provide disclosure of the Company’s nonrecurring legal expenses (income) in its MD&A disclosure in future filings, the Company has not typically presented Adjusted EBITDA in its periodic reports and thus does not believe that it is necessary to discuss with specificity the nonrecurring legal expenses (income) that are reflected as adjustments in its calculation of Adjusted EBITDA in its MD&A disclosure. That said, to the extent that nonrecurring legal expenses (income) become a material factor that impact any line item that is discussed in the context of the Company’s MD&A disclosure, in response to the Staff’s comment, the Company will enhance its disclosure to discuss the nature of these nonrecurring expenses (income). ​ 4 ​ ​ For the reasons noted above, the Company believes that these litigation-related adjustments do not cause its non-GAAP financial measures to be misleading or inconsistent with the guidance in Question 100.01. Should the Staff have additional questions or comments regarding the foregoing, please do not hesitate to contact the undersigned at (631) 842-9400. Very truly yours, ​ ​ /s/ Kevin S. Buchel ​ ​ ​ Kevin S. Buchel President, Chief Financial Officer and Chief Operating Officer ​ 5 ​

March 6, 2025
Kevin S. Buchel
Chief Financial Officer
Napco Security Technologies, Inc.
333 Bayview Avenue
Amityville, New York 11701
Re:Napco Security Technologies, Inc.
Form 10-K for the Fiscal Year Ended June 30, 2024
Form 10-Q for the Quarterly Period Ended December 31, 2024
Form 8-K, filed February 3, 2025
File No. 000-10004
Dear Kevin S. Buchel:
            We have limited our review of your filing to the financial statements and related
disclosures and have the following comments.
            Please respond to this letter within ten business days by providing the requested
information or advise us as soon as possible when you will respond. If you do not believe a
comment applies to your facts and circumstances, please tell us why in your response.
            After reviewing your response to this letter, we may have additional comments.
Form 10-Q for the Quarterly Period Ended December 31, 2024
Note 1 - Nature of Business and Summary of Significant Accounting Policies, page 9
1.Please provide disclosure as to whether all adjustments which are, in the opinion of
management, necessary to a fair statement of the quarterly interim financial
statements have been made, and if so, further state if all such adjustments are of a
normal recurring nature. Refer to Rule 10-01(b)(8) of Regulation S-X.

Form 8-K, Filed February 3, 2025
Exhibit 99.1 Earnings Release, page 1
Refer to reconciliation table of non-GAAP measures of performance and address the
following:
 2.

March 6, 2025
Page 2
•Provide a reconciliation of Adjusted EBITDA per diluted share to the most
directly comparable measure of net income per diluted share. Refer to the Staff's
Compliance and Disclosure Interpretations ("C&DIs") on Non-GAAP Financial
Measures, Question 102.05 whereby non-GAAP per share performance measures
should be reconciled to GAAP earnings per share.

•We note your Adjusted EBITDA computation includes nonrecurring legal
expenses (income). Provide disclosure of the nature of these nonrecurring legal
expenses (income) in your MD&A discussion in future filings. Further, as legal
costs are considered to be normal, recurring, cash operating expenses, it is not
clear how you determined these costs to be nonrecurring and eliminating them
from non-GAAP performance measures is appropriate or complies with Question
100.01 of the C&DIs on Non-GAAP Financial Measures. Please more fully
explain to us why you believe this adjustment is appropriate or tell us how you
plan to revise your computation of Adjusted EBITDA in future filings to remove
this adjustment.

            In closing, we remind you that the company and its management are responsible for
the accuracy and adequacy of their disclosures, notwithstanding any review, comments,
action or absence of action by the staff.
            Please contact Beverly Singleton at 202-551-3328 or Jean Yu at 202-551-3305 with
any questions.
Sincerely,
Division of Corporation Finance
Office of Manufacturing

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NAPCO Security Technologies, Inc.

333 Bayview Avenue

Amityville, New York 11701

(631) 842-9400

August 20, 2020

VIA EDGAR

United States Securities and Exchange Commission

Division of Corporation Finance

100 F. Street, N.E.

Washington, DC 20549

    Attn:
    Mr. Thomas Jones

    Re:

        NAPCO Security Technologies, Inc.

        Acceleration Request for Registration Statement on Form S-3

    Commission File No. 333-248078

Dear Mr. Jones:

Pursuant to Rule 461
under the Securities Act of 1933, as amended (the “Act”), NAPCO Security Technologies, Inc. (the “Company”)
hereby requests that the effective date for the above captioned Registration Statement be accelerated so that it will be declared
effective on August 24, 2020 at 4:00 p.m. Eastern time, or as soon thereafter as practicable. In making this acceleration request,
the Company acknowledges that it is aware of its responsibilities under the Act.

If you have any questions,
please contact Mr. Albert Lung, of Morgan Lewis, at (650) 843-7263, or, in his absence, Mr. Richard Soloway, the Company’s
Chief Executive Officer, at (631) 842-9400.

    Sincerely,

    NAPCO Security Technologies, Inc.

    By:
    /s/ Richard L. Soloway

    Richard L. Soloway, CEO

United States securities and exchange commission logo
August 20, 2020
Richard L. Soloway
President and Chief Executive Officer
NAPCO Security Technologies, Inc.
333 Bayview Avenue
Amityville, New York 11701
Re:NAPCO Security Technologies, Inc.
Registration Statement on Form S-3
Filed August 17, 2020
File No. 333-248078
Dear Mr. Soloway:
            This is to advise you that we have not reviewed and will not review your registration
statement.
            Please refer to Rules 460 and 461 regarding requests for acceleration.  We remind you
that the company and its management are responsible for the accuracy and adequacy of their
disclosures, notwithstanding any review, comments, action or absence of action by the staff.
            Please contact Thomas Jones at 202-551-3602 with any questions.
Sincerely,
Division of Corporation Finance
Office of Manufacturing
cc:       Albert Lung

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Mail Stop 04-07

      						May 17, 2005

Mr. Kevin S. Buchel
Chief Financial Officer
Napco Security Systems, Inc.
333 Bayview Avenue
Amityville, NW 11701

	RE:	Napco Security Systems, Inc.
		Form 10-K for the fiscal year ended June 30, 2004
		Filed September 27, 2004
      File No. 000-10004

Dear Mr. Buchel:

	We have completed our review of your Form 10-K and related
filings and do not, at this time, have any further comments.

								Sincerely,

								Larry Spirgel
								Assistant Director

??

??

??

??

Mr. Robin N. Dickson
Harmonic Inc.
Page 1

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                  SHAPIRO FORMAN ALLEN SAVA & MCPHERSON LLP
                              380 MADISON AVENUE
                           NEW YORK, NEW YORK 10017

STUART L. SHAPIRO             (212)972-4900                    JOAN DACEY-SEIB
ROBERT W. FORMAN            FAX (212) 557-1275                    OF COUNSEL
MICHAEL I. ALLEN
LAURIE J. MCPHERSON                                             YORAM J. MILLER
MATTHEW J. SAVA                                                  JASON C. VIGNA

                                 May 9, 2005

Mr. Larry Spirgel
Assistant Director
Division of Corporate Finance
Securities and Exchange Commission
450 Fifth Street, N.W.
Mail Stop 04-07
Washington, DC 20549

                Re:     Napco Security Systems, Inc
                        Form 10-K for the fiscal year ended June 30, 2004
                           Filed September 27, 2004

                           Form 10-Q for the quarter ended September 30, 2004
                           Form 10-Q for the quarter ended December 31, 2004
                           File No. 000-10004
Dear Mr. Spirgel:

We represent Napco Security Systems, Inc. ("Napco" or the "Company") and write
in response to the Staff's comment letter dated May 3, 2005.

FORM 10-K FOR THE YEAR ENDED JUNE 30, 2004
------------------------------------------

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

1.   In future filings, where appropriate, Napco will provide a detailed,
     quantified discussion of any material change in its inventory reserves in
     its MD&A inventory discussions similar to the type of information provided
     to you in Napco's response to comment 2 of your comment letter dated
     March 22, 2005.

<PAGE>
Mr. Larry Spigel
May 9, 2005
page 3

NOTE 5 - INCOME TAXES, PAGES FS-16 - FS-18
------------------------------------------

2.     In future filings, where appropriate, Napco will provide a
       detailed discussion of the facts and circumstances concerning the tax
       issue and will describe the potential outcome should the IRS question
       Napco's qualification for the exemption provided in IRC Section
       943(a)(4)(c). In such discussion, Napco will refer to paragraph
       10 of SFAS 5 and 10-01(a)(5) of Regulation S-X.

                If you have any questions or comments regarding the foregoing,
please contact me.

                                                        Very truly yours,

                                                        /s/ Robert W. Forman

                                                        Robert W. Forman

RWF/gc

cc: Kevin Buchel

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Mail Stop 04-07

      						May 3, 2005

Mr. Kevin S. Buchel
Chief Financial Officer
Napco Security Systems, Inc.
333 Bayview Avenue
Amityville, NW 11701

	RE:	Napco Security Systems, Inc.
		Form 10-K for the fiscal year ended June 30, 2004
		Filed September 27, 2004

      Form 10-Q for the quarter ended September 30, 2004
      Form 10-Q for the quarter ended December 31, 2004
      File No. 000-10004

Dear Mr. Buchel:

      We have reviewed your supplemental response letter dated
April
8, 2005 as well as the above referenced filings and have the
following comments.  As noted in our comment letter dated March
22,
2005, we have limited our review to your financial statements and
related disclosures and will make no further review of your
documents.  As such, all persons who are responsible for the
adequacy
and accuracy of the disclosure are urged to be certain that they
have
included all information required pursuant to the Securities
Exchange
Act of 1934.

Form 10-K for the year ended June 30, 2004

Item 7. Management`s Discussion and Analysis of Financial
Condition
and Results of Operations

1. We note your response to comment 2.  We believe the increase in
your inventory reserve balance of $1,035,000 is material and
should
be clearly explained to investors.  Provide a sufficiently
detailed,
quantified discussion in your future MD&A inventory discussions,
similar to the information provided to us in response to comment
2.

Note 5 - Income Taxes, pages FS-16 - FS-18

2. We note your response to comment 6. Provide in future filings a
detailed discussion of the facts and circumstances concerning the
tax
issue and describe for readers the potential outcome should the
IRS
question Napco`s qualification for the exemption provided in IRC
Section 943 (a)(4)(c).  Refer to paragraph 10 of SFAS 5 and 10-
01(a)(5) of Regulation S-X.

*    *    *    *

      Please respond to these comments within 10 business days or
tell us when you will provide us with a response.  Please furnish
a
letter that keys your responses to our comments and provides any
requested supplemental information.  Please file your response
letter
on EDGAR. Please understand that we may have additional comments
after reviewing your amendment and responses to our comments.

      You may contact Kenya Wright, Staff Accountant, at (202)
551-
3373 or Robert S. Littlepage Jr., Accountant Branch Chief, at
(202)
551-3361 if you have questions regarding comments on the financial
statements and related matters.  Please contact me at (202) 551-
3810
with any other questions.

							Sincerely,

							Larry Spirgel
							Assistant Director

??

??

??

??

Mr. Kevin S. Buchel
Napco Security Systems, Inc.
May 3, 2005
Page 1

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SHAPIRO FORMAN ALLEN MILLER & McPHERSON LLP

380 MADISON AVENUE

NEW YORK, NEW YORK 10017

    STUART L. SHAPIRO

ROBERT W. FORMAN

MICHAEL I. ALLEN

LAURIE J. McPHERSON

MATTHEW J. SAVA

    (212) 972-4900

FAX (212) 557-1275

    JOAN DACEY-SEIB

of counsel

YORAM J. MILLER

JASON C. VIGNA

April 8, 2005

Mr. Larry Spirgel

Assistant Director

Division of Corporate Finance

Securities and Exchange Commission

450 Fifth Street, N.W.

Mail Stop 04-07

Washington, DC 20549

    Re:

    Napco Security Systems, Inc

Form 10-K for the fiscal year ended June 30, 2004

     Filed September 27, 2004

     Form 10-Q
for the quarter ended September 30, 2004

     Form 10-Q for the quarter ended December 31, 2004

     File No. 000-10004

Dear Mr. Spirgel:

          We represent Napco Security Systems, Inc. (“Napco” or the “Company”) and write in response to
the Staff’s comment letter dated March 22, 2005.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of
Operations

    1.
    In future filings, Napco will provide a discussion of its expected future operating
performance arising from known material trends and uncertainties to the extent management
believes it is reasonably predictable. In addition, Napco will provide an overview of its
current business, economic and other factors impacting its business and the current challenges
and areas of focus for its business.

Mr. Larry Spirgel

April 8, 2005

Page 2

    2.
    The increase in the inventory reserve of $1,035,000 for fiscal 2004 consists of the
following:

    $206,000 of the increase in the reserve was directly related to a burglar alarm product
developed in the mid-1990’s, which has sold much slower than management expected. In fiscal
2004, Napco decided to discontinue the product. $206,000 represents 100% of the costs of
this product that are included in gross inventory.

    $54,000 of the increase in the inventory reserve represents the costs of components and
subassemblies that were included in gross inventory, which were utilized in a product
developed exclusively for one of Napco’s customers. Such items have been recently made
obsolete due to extensive product modifications requested by the customer, which cost is
being borne by Napco.

    $125,000 of the increase in the inventory reserve was directly related to upgrades in the
design of certain of Napco’s Continental products. The $125,000 represents the costs of
components and subassemblies that are included in gross inventory but have recently been
made obsolete due to these product modifications.

    Due to the timing of the disposal of obsolete inventories, there was approximately $245,000
more obsolete inventory on-hand at year-end of June 2004 as compared to 2003.

    $133,000 of the increase in the reserve relates to a reduction in forecasted sales of
certain of Napco’s products, which resulted in more finished goods of these products in
inventory than management believes will be used in the 12 months following year-end.

    $270,000 of the increase relates to the various other differences between fiscal 2003 and
2004 in the specific reserve reviews performed in each year.

Segment Reporting, page FS-13

    3.
    Richard Soloway, Napco’s Chief Executive Officer, is Napco’s chief operating decision maker.
He reviews sales on a consolidated basis to assess Napco’s performance. Because of the
substantial overlap in manufacturing facilities and equipment and sales personnel among its
products, there is no meaningful resource allocation among the products. In other words,
substantially all of Napco’s personnel and equipment work on all of the Company’s products. In
addition, substantially all of Napco’s products are sold in the same distribution channels.

2

Mr. Larry Spirgel

April 8, 2005

Page 3

    4.
    The realignment of the distribution network consisted of the cessation of business with one
of its major customers that was a distributor. A business decision was made by Napco’s
Management to discontinue selling products to that distributor-customer who, by virtue of its
acquisition by a large industrial company, became a zealous competitor of Napco.

    The increase in sales of higher margin products did not result from the decision to realign
the Company’s distribution network. Management does not evaluate the Company’s performance
by type of product or group of products, methods of distribution or type of customer.

    5.
    Attached is an organization chart of Napco.

Note 5- Income Taxes, pages FS-16 B FS-18

    6.
    The Internal Revenue Service has not questioned Napco’s qualification for the exemption
provided in IRC section 943 (a) (4)(c). Napco believes that the most likely outcome of an
IRS examination would be a settlement in which all of its NOL as of June 30, 2002 would be
eliminated in exchange for the imposition of any tax. Because the IRS has not questioned
the Company’s exemption status, and given the Company’s existing NOL for tax purposes, the
Company does not believe that amending prior disclosures to describe the nature and
significance of IRS Revenue Procedures would be meaningful. The Company will add the
following discussion in the future filings:

“The Internal Revenue Service has issued a Revenue Procedure which is inconsistent
with the Code exemption described above. The Code is the actual law; a Revenue
Procedure is the IRS’s interpretation of the law. The Code has a higher level of
authority than a Revenue Procedure. Management believes that is has appropriately
relied on the guidance in the Code when filing its income tax return.”

    7.
    The removal of the deferred tax asset and the elimination of the valuation allowance had the
effect of increasing net income by $688,000 for Napco's fiscal year ended June 30, 2002. The
tax benefit for the fiscal year 2002 is set forth fully in Note 5 to the financial statements
included in Napco’s 10-K for its fiscal year ended 2004. The income tax reconciliation table
clearly indicates the $2.2 million increase in Napco’s tax provision as a result of the
assumed utilization of the NOL related to the foreign source income, and the decrease in the
tax provision as a result of the elimination of the valuation allowance of $2.9 million. Given
the disclosure and the fact that the removal and elimination

3

Mr. Larry Spirgel

April 8, 2005

Page 4

    affected only 2002 net income, we do not believe revising prior disclosure would be
meaningful. In future filings in which fiscal 2002 net income is reported (e.g., selected
financial data in future Forms 10-K), Napco will note the increase in net income resulting
from the foregoing.

    The disclosure referred to in Note 5 was not in error, resulting from the issuance of the
Revenue Procedure. Had the Revenue Procedure not been issued, there would have been no doubt
that the Company qualified for the exemption contemplated by section 943 (a) (4) (c). The
Company would have only eliminated the valuation allowance because the election to treat the
Dominican Republic subsidiary as a U.S. company made it likely that the Company would fully
utilize the NOL in the foreseeable future. However, because of the doubt created by the
Revenue Procedure, Napco wrote off (for book purposes) its NOL. It is management’s opinion,
based upon outside tax advice, that if the IRS were to challenge the Company’s
qualification, the mostly likely settlement would involve the Company agreeing to relinquish
its NOL in exchange for a termination of the matter.

Note 7 B Stock Options, pages FS-21

    8.
    The non-employee directors referred to in the first and last sentences of Notes 7 are
the same. In September 2001, two non-employee directors were each granted 20,000 stock
options under the Plan. The purpose of the Plan and the grant, as disclosed to shareholders
in the Proxy Statement, was to provide incentives to those directors and align their
interest with shareholders. As a result, Napco does not believe that these options trigger
recognition of compensation income. In making this determination, Napco looked to the
guidance in FASB Interpretation No. 44, AAccounting for Certain Transactions
involving Stock Compensation, an Interpretation of APB Opinion No. 25 (“FIN 44”).
The interpretation to question 2 addresses this issue. While non-employee directors do not
qualify as employees, FIN 44 provides a specific exception to require the application of
APB Opinion 25 (i.e. intrinsic value method) to stock compensation granted to non-employee
members of a company’s board of directors “for services provided as a director if the
non-employee director (a) was elected by the grantor’s shareholders.” Napco’s non-employee
directors were all elected by its shareholders. Additionally, the stock compensation was
not granted to the directors for advisory or consulting services in a non-elected capacity
or for services outside their role as a director, such as legal advice, investment banking
advice, or loan guarantees.

    Even if the options to non-employee directors were deemed compensatory, the aggregate
compensation expense for these options, utilizing the Black-Scholes method, is $70,000 which
would be evenly allocated over the 5 fiscal years beginning with the fiscal year ended 2001.
In these circumstances, we do not believe that the amount is material.

4

Mr. Larry Spirgel

April 8, 2005

Page 5

Quarterly Results, page FS- 25

    9.
    Napco’s fiscal year begins on July 1 and ends on June 30. Historically, the end users of
Napco’s products want to install Napco’s products prior to the summer; therefore sales of its
products peak in the period April 1 through June 30, Napco’s fiscal fourth quarter, and are
reduced in the period July 1 through September 30, Napco’s fiscal first quarter. To a lesser
degree, sales in Europe are also adversely impacted in the period July 1 through September 30
because of European vacation patterns, i.e., many distributors and installers are closed for
the month of August. In future filings, Napco will discuss such quarterly fluctuations.

If you have any questions or comments regarding the foregoing, please contact me.

Very truly yours,

/s/ ROBERT W. FORMAN

Robert W. Forman

RWF/cpl

cc: Kevin Buchel

5

<DOCUMENT>
<TYPE>LETTER
<SEQUENCE>1
<FILENAME>filename1.txt
<TEXT>

Mail Stop 04-07

      March 22, 2005

Mr. Kevin S. Buchel
Chief Financial Officer
Napco Security Systems, Inc.
333 Bayview Avenue
Amityville, NW 11701

	RE:	Napco Security Systems, Inc.
		Form 10-K for the fiscal year ended June 30, 2004
		Filed September 27, 2004

      Form 10-Q for the quarter ended September 30, 2004
      Form 10-Q for the quarter ended December 31, 2004
      File No. 000-10004

Dear Mr. Buchel:

We have reviewed your filings and have the following comments.  We
have limited our review to only your financial statements and
related
disclosures and will make no further review of your documents.  As
such, all persons who are responsible for the adequacy and
accuracy
of the disclosure are urged to be certain that they have included
all
information required pursuant to the Securities Exchange Act of
1934.
Where indicated, we think you should revise your documents in
response to these comments.  If you disagree, we will consider
your
explanation as to why our comment is inapplicable or a revision is
unnecessary.  Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
supplemental information so we may better understand your
disclosure.
After reviewing this information, we may or may not raise
additional
comments.

	Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects.  We welcome
any questions you may have about our comments or on any other
aspect
of our review.  Feel free to call us at the telephone numbers
listed
at the end of this letter.

Form 10-K for the year ended June 30, 2004

Item 7. Management`s Discussion and Analysis of Financial
Condition
and Results of Operations

1. Regulation S-K requires that management`s discussion and
analysis
of financial condition and results of operations (MD&A) provide
material historical, as well as prospective, textual disclosure to
enable investors to assess the financial condition and results of
operations of the registrant, with particular emphasis on the
registrant`s prospects for the future. Specifically, expected
future
operating performance should be discussed.  Pease provide
additional
discussion of your financial condition and results of operations
on a
prospective basis. In that regard, refer to your discussion of
other
income/expense on page 16 of your December 31, 2004 form 10-Q
where
you mention a joint venture in the Middle East formed in April
2004.
Consider providing a discussion in MD&A on this joint venture, and
any others that you may be involved with and how they support your
overall short or long term strategic goals. Refer to our
interpretive
release issued in December 2003 regarding Management`s Discussion
and
Analysis that is available on our website at
http://www.sec.gov/rules/interp/33-8350.htm for additional
guidance.

2. Refer to discussion of Inventory on page 12 where you state
that
the $2,328,000 decrease in inventory which occurred between 2003
and
2004 was primarily the result of reductions in the Company`s
manufacturing overhead costs due, in part, to a favorable change
in
the exchange rate relating to the Company`s Dominican Republic
manufacturing facility as well as cost reductions of certain of
the
Company`s raw material costs.  Please provide a comprehensive
discussion of the facts and circumstances concerning the charge to
inventory reserve of $1,035,000 in 2004 mentioned in Inventory
discussion on page FS-8.

Segment Reporting, page FS-13

3. Please identify for us your chief operating decision maker and
explain to us how this person is able to make reasonable
assessments
of performance and informed decisions about resource allocation by
only reviewing the Company`s results of operations on a
consolidated
basis.  Does your CODM review any other information or do the
persons
who report to your CODM review any other information?  If so,
explain
to us in detail.

4. In this regard, we note in MD&A you describe the Company`s
realignment of the burglar alarm products distribution network and
its shift in product mix towards higher gross margin products such
as
door locking devices and access control products.  Tell us what
information was considered by management when making these
decisions.
Does management evaluate the Company`s performance by type of
product
or groups of products, method of distribution, or type of
customer?

5. Please provide an organizational chart of the Company that
identifies the various levels of management and summarizes their
responsibilities.

Note 5 - Income Taxes, pages FS-16 - FS-18

6. Please clarify if the IRS has specifically questioned the
Company`s qualification for the exemption provided in the recently
enacted Code provision and advise us.  If so, disclose the amount
of
reasonably possible loss pursuant to paragraph 10 of SFAS 5 and
explain to us your consideration of SFAS 5 and SFAS 109 when
accounting for this matter.  Also explain for readers the nature
and
significance of the IRS issuing a Revenue Procedure.

7. It appears that your removal of the $2,225,000 deferred tax
asset
and the elimination of the $2,913,000 valuation allowance resulted
in
a $688,000 increase in your net income.  Please clarify your
disclosure and advise us.  Also, your disclosure seems to suggest
that because of the issuance of the Revenue Procedure these
adjustments may have been made in error, please advise us and
clarify
your disclosures.

Note 7 - Stock Options, page FS-21

8. Refer to the first and last sentences of the last paragraph of
Note 7. Clarify for us whether you are referring to the same
"nonemployee directors" in the last sentence as you mention in the
first. In this regard, tell us in detail how your directors met
the
definition of employee per APB 25 such that their options would
not
trigger recognition of compensation expense. Include reference to
authoritative literature used as guidance.

Quarterly Results, page FS-25

9. We note in both 2003 and 2004 you began with a loss in the
first
quarter and ended with income in the fourth quarter. Tell us, and
in
future filings provide a MD&A discussion on, what contributed to
the
fluctuations in your Operating income (loss) from operations and
your
Income (loss) from continuing operations from quarter to quarter.
Specifically discuss whether specific events resulted in losses in
the first quarters of 2003 and 2004, and explain any operational
trends or seasonal fluctuations in your business.

* * * * *

      As appropriate, please amend your Form 10-K and respond to
these comments within 10 business days or tell us when you will
provide us with a response.  You may wish to provide us with
marked
copies of the amendment to expedite our review.  Please include a
cover letter with your amendment that keys your responses to our
comments and provides any requested supplemental information.
Please
file your cover letter on EDGAR.  Please understand that we may
have
additional comments after reviewing your responses to our
comments.

 	 We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision.  Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have made.

	In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that

* the company is responsible for the adequacy and accuracy of the
disclosure in the filings;

* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filings; and

* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.

      In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filings or
in
response to our comments on your filings.

      You may contact Kenya Wright, Staff Accountant, at (202)
824-
5446 or Robert S. Littlepage Jr., Accountant Branch Chief, at
(202)
942-1947 if you have questions regarding comments on the financial
statements and related matters.  Please contact me at (202) 942-
1990
with any other questions.

      			Sincerely,

						Larry Spirgel
						Assistant Director

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Mr. Kevin S. Buchel
Napco Security Systems, Inc.
March 22, 2005
Page 1 of  4

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