TORONTO, ONTARIO--(Marketwire - June 13, 2011) - AlarmForce Industries Inc. (TSX:AF), Canada's largest manufacturer and installer of live two-way voice home alarms systems, is pleased to announce results for the six months ended April 30, 2011:
| April 30, 2011 | April 30, 2010 | Change | ||||
| (6 months ended) | (6 months ended) | (over same period) | ||||
| Revenue | $ | 20,033,000 | $ | 18,171,000 | +10 | % |
| Income before income taxes | $ | 3,559,000 | $ | 3,288,000 | +8 | % |
| Net income | $ | 2,539,000 | $ | 2,244,000 | +13 | % |
| Cash flow from operations | $ | 3,512,000 | $ | 3,120,000 | +13 | % |
| EBITDA | $ | 5,636,000 | $ | 5,402,000 | +4 | % |
| EBITDA/share | $ | 0.46 | $ | 0.44 | +4 | % |
| EBITDA before marketing expenses | $ | 10,333,000 | $ | 9,495,000 | +9 | % |
| Basic Net income / share | $ | 0.21 | $ | 0.18 | +17 | % |
| Diluted Net income / share | $ | 0.21 | $ | 0.18 | +17 | % |
| * | EBITDA (Earnings Before Interest, Income Taxes, Depreciation, and Amortization) is a key measure in the security industry and should not be interpreted as GAAP) |
| EBITDA is defined as earnings before interest expenses, income taxes, depreciation and amortization. EBITDA is a standard measure used in the security industry to assist in understanding and comparing operating results and is often referred to by our competitors. Management views EBITDA as an important measure of operating performance of the Company. Yet, since it does not have any standardized meaning defined by Canadian GAAP, it may not be considered in isolation of GAAP measures such as net income/loss or cash flows, as a measure of liquidity. The Company, however, utilizes these measures in making operating decisions and assessing its performance. Management believes that it is an important measure as it allows the Company to assess its ongoing business without the impact of depreciation or amortization expenses. Since EBITDA is not a defined term under Canadian GAAP, it is unlikely to be comparable to similar measures presented by other issuers. |
Joel Matlin, President and CEO, announced that "AlarmForce closed the second quarter of 2011 with total revenues of $20 million, a record quarter in its 23 years of business. Total subscribers increased to 119,600 as of April 30, 2011, which reflects an 11% annual subscriber growth rate.
"As a result of continued growth in subscribers and recurring monthly revenues from subscribers, Net Income increased from $2.2 million to $2.5 million for the six month period, a 13% increase from a year ago.
"While both revenues and net earnings posted double-digit rates of growth, the increase in Net Income continued to outpace revenues. Total revenues for the second quarter increased to $10.1 million, up by 10% from $9.2 million a year ago, and up from $9.9 million in the immediately preceding quarter, achieving a record for quarterly results.
"EBITDA increased from $5.4 million to $5.6 million for the six months, a 4% increase. This figure, a key measure used in the security industry to compare operating results, includes marketing expenses which results in a charge to expense during the period, thus reducing the operating income. Excluding marketing expenses, EBITDA increased from $9.5 million to $10.3 million for the six month period, a 9% increase.
"Monthly recurring subscriber revenues represented approximately 91% of our total revenues and as a result of the increases in recurring revenues from subscribers, cash flows from operations increased from $3.1 million to $3.5, an increase of 13% per annum. Our marketing programs continue to be funded entirely from operating cash flows with no debt on the balance sheet.
Mr. Matlin added that, "Our entry into the state of Florida, as announced in our news release dated April 14, 2001 is on schedule and advertising and installing our systems will begin in the latter part of June in the areas of Tampa-St. Petersburg, Sarasota and Orlando. Thereafter we plan to expand in new markets within Florida over the course of the next twelve months. We are very confident that the entry into Florida and the continuing expansion in brand awareness in all markets will add significant growth in our subscriber base.
"We are very excited about the progress we have seen to date with AlarmForce VideoRelay, our application-based remote video system," continued Mr. Matlin. "The field testing of this product has produced very positive results, of which we are planning in the fourth quarter to announce a confirmed date for starting direct advertising and installations. We believe that the market response to our VideoRelay technology will complement our traditional alarm business and will open up even more opportunities for our existing subscriber services as well as potential new growth. These markets include homeowners who already have an AlarmForce or a competitor's system but want an added layer of security, and also those who do not want a traditional burglar alarm but who want the peace of mind that comes with being in touch with their home at all times. There are also customers who will initially install only the video system but may in the future want to bundle it with our two way-voice alarm. Of course our existing subscriber base is a tremendous source of new business. With this in mind, we believe that our advertising costs per new subscriber will be reduced over time, as a result of the launch of VideoRelay.
"All development costs for VideoRelay were funded entirely from operating cash flows, and we continue to move forward with zero debt on our balance sheet. In addition to the alarm subscriber revenues, our results reflect increases in the AlarmCare subscriber accounts, resulting in additional recurring monthly revenues from subscribers of personal emergency response systems or PERS."
Mr. Matlin closed by saying: "I would like to thank our investors, employees and the Directors for their continuing support and confidence in our company."
AlarmForce provides security and personal emergency response monitoring and related services to residential and commercial subscribers throughout Canada and selected centers across the United States. The Company is a leading provider of two-way voice alarm systems in Canada and sole provider of AlarmPlus, a wireless line-cut protection system. More information about the Company's products and services can be found at www.alarmforce.com.
Contact Information:
Investor Relations Department
(416) 445-2001 ext. 225
(416) 445-9381 (FAX)
investorrelations@alarmforce.com
www.alarmforce.com