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NASDAQ:NSSC

Protecting America’s Businesses, Homes, Schools

September 2019 Corporate Presentation

Forward Looking Statements

This presentation may contain forward-looking statements that involve numerous risks and uncertainties. Actual results, performance or achievements could differ materially from those anticipated in such forward-looking statements as a result of certain factors, including those set forth in the Company’s filings with the Securities and Exchange Commission.

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Company Overview

Leader in Designing and Manufacturing

Commercial & Residential Security Products

Corporate Offices : Amityville, NY

Manufacturing :Dominican Republic

Products Sold Through10,000 + Dealers,

Integrators & Distributors in the US

(B2B Business Model)

Established: R&D

Manufacturing *Sales & Marketing

Intellectual Property: Two dozen patents*

Proprietary software and copyrights

Two Major Growth Drivers1) Recurring Revenue

2) School Security

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*(issued & pending)

*(ISO Certified – Highest Quality Standard)

The NAPCO Group of Companies

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50% Commercial

50% Residential

100% Commercial

100% Commercial

Total Revenues = 80% Commercial, 20% Residential

100% Commercial

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Product Examples (Product Portfolio includes 1K SKU’s)

Commercial Buildings Medical Centers & Detention Rooms

Small Business - Residential

NEW

Houses of Worship Airports

Schools - Universities

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Distribution Channels

Distributors(200+ in US)

Independent Integrators2,000 Plus

NAPCO Factory Sales Team Markets Products to

Distributors, Dealers & Integrators

Small Business & Residence

Commercial Access Control & Fire Alarm Systems for K-12 Schools, Universities, Airports, Office Buildings & Hospitals

80% Of Alarm Sales Are Sold Private Labeled For Thousands Of Strategic Partners, A Few Examples Include:

Independent Dealers10,000 Plus

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Recurring Revenue Products

END USERCOMMERCIAL BUSINESS or RESIDENCE

NAPCO NETWORK OPERATIONS

CENTER$ RMR to NAPCO

DEALERS CENTRAL ALARM

STATION

ü Eliminates The Traditional Telephone Land Line ü Alarm Signal Transmitted Via Verizon, AT&T And T-Mobile Cellular Networks ü Signal-Boost™ Technology To Provide Reliability Even In Remote Areasü iBridge Smartphone IoT App Controls Lighting, Locks, Climate & Videoü StarLink Connect Works With Millions of Existing Competitors Alarm Systemsü Upfront Equipment Sales PLUS Recurring Revenue with up to 90% Gross Margin!ü Dealer pays NAPCO RMR Monthly Fee

SMALL BUSINESS / RESIDENTIAL$7 to $13 per month

SMALL BUSINESS / RESIDENTIAL$6-8 per month COMMERCIAL FIRE $12-26 per month

SINGLE PATHCELLULAR

DUAL PATH CELLULAR + IP

FIRELINK FACP+STARLINK COMMUNICATOR

SmartPhoneApp

How StarlinkWorks

Transmits to

Sends to

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School Security & SafetyMajor Growth Driver

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Significant Increase of Incidents Over the Years

Source : Citizen Crime Commission Report October 2016

Shooting Incidents

153%

2001-02 to 2005-06Versus

2011-12 to 2015-16 periods

2001-02 to 2005-06Versus

2011-12 to 2015-16periods

Total Casualties

241%

2018 - 82 school shootings were recorded. The most since 1970!

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Funding for School Security Significantly Increased

Source: the74million.org August 2018

Examples Include:• Florida $500M• Wisconsin $100M• Maryland $125M• Plus More!

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LocDown Systems SolutionsLock down classrooms & offices from inside safely:With a pushbutton on inside door or wireless fob Lock down up to four doors locally at once.

$500 Per Door ASP

Lock down classrooms, offices, common areas, labs, with a key, safely from inside

Retrofits standard lockset, several lock body styles & finishes

$100 Per DoorASP

Lockdown activated by the server or from authorized personnel at an individual access lock

Real-time global lockdown or unlock in under 10 seconds, ideal for offices, labs, dorms & classrooms

$600 Per DoorASP

CardAccess 3000 Enterprise Campus Security System Lockdown/Notification App for Staff & Teacher Smartphones.Emergency notifications and pinpointed statusInternal PA and outbound communications with first responders.

$1,000 Per Door ASP

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Examples of institutions using our LocDown Solutions

plus many more…

K-12 (Market is 100,000 Schools)

Colleges & Universities (Market is 10,000 Campuses)

plus many more…

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Integrated Solutions Enterprise-Class Platform That Integrates Each Of Our Division’s Products

FUSIONTechnology

Systems

ACCESSCONTROL

ALARMS &CONNECTIVITY

• INTRUSION

• FIRE

• SAAS (RMR)

LOCKING

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Alarms&

Connectivity

Locking

Access Control

Competitive LandscapeNAPCO Is The Only Company With Products In All Three Security Verticals

Fourth Quarter Record Sales of $29.6 MillionSales Increased 9%

20 Consecutive Quarters of Sales Growth!!!

Q4 Recurring Revenue Increased 44%

Recurring Revenue Annual Run Rate $20.4 MM*

*based on June 2019

Fiscal Year Sales $103M (up 12%)

Net Income $12M (up 60%)Adjusted EBITDA $15M

EPS $0.66

Q4 EPS increased 30% to .26

Adjusted EBITDA Increased 10% to $5.2 M

Cash Balance of $8 MillionZero Debt

Fiscal Fourth Quarter & FY 2019 Performance

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Figures in thousands, except EPS

Fiscal Quarter Performance

FiscalPeriod

3 Months Ended 6/30/19

3 Months Ended 6/30/18

12 Months Ended6/30/19

12 Months Ended6/30/18

Sales $29,584 $27,300 $102,932 $91,746

NetIncome $4,728 $3.697 $12,200 $7,649

EPS $0.26 $0.20 $0.66 $0.41

AdjustedEBITDA

$5,200 $4,700 $15,000 $10,000

AdjustedEBITDAEPS

$0.28 $0.25 $0.81 $0.53

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$10

$15

$20

$25

$30

Q1 Q2 Q3 Q4

Revenues FY 2017 FY 2018 FY 2019

$0

$2

$4

$6

$8

$10

$12

$14

Q1 Q2 Q3 Q4

Gross Profit*FY 2017 FY 2018 FY 2019

Seasonality Impacts Financial PerformanceExpect Recurring Revenue Line Growth To Mute Impact From Seasonality

Milli

ons

Milli

ons

*Certain prior period balances have been reclassified to conform with the current period presentation

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$1.1 $1.5 $1.5

$3.8

$1.4 $1.6

$2.2

$4.7

$2.1

$3.8 $4.0

$5.2

$-

$1.0

$2.0

$3.0

$4.0

$5.0

$6.0

Q1 Q2 Q3 Q4

FY 2017 FY 2018 FY 2019(millions)

Non-GAAP Information Certain non-GAAP measures are included in this presentation, including EBITDA, non-GAAP operating income and Adjusted EBITDA. We define EBITDA as GAAP net income (loss) plus income tax expense (benefit), net interest expense and depreciation and amortization expense. Non-GAAP operating income does not include impairment of goodwill, amortization of intangibles, restructuring charges, stock-based compensation expense and other infrequent or unusual charges. These non-GAAP measures are provided to enhance the user’s overall understanding of our financial performance. By excluding these charges our non-GAAP results provide information to management and investors that is useful in assessing NAPCO’s core operating performance and in comparing our results of operations on a consistent basis from period to period. The presentation of this information is not meant to be a substitute for the corresponding financial measures prepared in accordance with generally accepted accounting principles. Investors are encouraged to review the reconciliation of GAAP to non-GAAP financial measures included in the above.

Adjusted EBITDA by Quarter

June 30, 2019 (Millions)

(1) Working capital shown as total current assets less total current liabilities.(2) Diluted shares outstanding as of June 30, 2019.

Selected Balance Sheet Highlights

Amityville, NY and Dominican Republic Company Owned Facilities on the Books For < $1MM While The Market Value Exceeds $17MM

180,000 Square Feet

100,000 Square Feet

Cash and Cash Equivalents $8.0

Working Capital(1) $51.1

Total Assets $85.9

Debt $0

Total Liabilities $14.7

Stockholders’ Equity $71.1

Diluted Shares Outstanding(2) 18.5

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• Founder, 30+ years security, electronics experience• Founded two previous companies the first of which installed electric

garage door openers and the second manufactured guitar amplifiers, buzz boxes and wah wah pedals

• Winner of numerous awards including Ernst &Young’s Entrepreneur of the Year and holder of patents relating to security products

Richard SolowayPresident & CEO

• Over 25 years of experience in the security industry• Began career at Coopers & Lybrand• Certified Public Accountant

Kevin BuchelSenior Vice President

& CFO

• Over 20 years of experience in the security industry• Successful track record in marketing and sales at leading consumer

product companies such as Colgate-Palmolive and Unilever

Jorge HeviaSVP, Sales and

Marketing

• Over 15 years of experience in the security industry• Extensive knowledge of developing advanced electronic products

with applications in military/defense, media/broadcasting and consumer electronics

• Fire Chief Emeritus of the Fire Department of Melville, Long Island

Michael CarrieriSVP, Engineering

Management

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Stock Price: $34.4852 Week Range : $12.90-34.91Shares Outstanding : 18.5 MM

Market Capitalization : $638.0 MM

Insider Ownership38 Percent

Institutional Holders (33% +)Lord Abbett

Wasatch AdvisorsAllianz Global

Fidelity InvestmentsRanger Investment Mgmt

Analyst CoverageWilliam Blair

Canaccord GenuityLake Street Capital

Imperial Capital

Data as of August 30, 2019

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Financially Strong: TTM Revenue of $103M, Zero Debt

Growth Drivers: Recurring Revenue and School Security

Twenty Consecutive Quarters of Growth!!!

SaaS RMR Now at $20.4 MM* Annual Run Rate

Consistently Profitable Company With 38% Insider Ownership

Summary

*based on June 2019

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If you would like to receive an electronic copy of this presentation:

Visit – www.investor.napcosecurity.com

or

Email – Patrick McKillop / Director of Investor Relations - pmckillop@napcosecurity.com

Follow NAPCO on social mediaTwitter @NSSCSecurityFacebook @Napco-Security-Technologies-Inc