TORONTO, ONTARIO--(Marketwired - Jan. 28, 2014) - AlarmForce Industries Inc. (TSX:AF), Canada's largest manufacturer and installer of live two-way voice home alarms systems, is pleased to announce annual results for the year ended October 31, 2013:
|($ in thousands, except per share and subscriber amounts)
|Shares outstanding, diluted
|Diluted net income per share
|Cash flows from operations
|Adjusted EBITDA* (before marketing expenses)
|Adjusted EBITDA* per diluted share
|Recurring monthly revenue (RMR)
|* EBITDA is a non-IFRS financial measure and is defined in the disclosure section accompanying this press release.
AlarmForce closed the fiscal year ended October 31, 2013 with net income of $5.4 million and diluted earnings per share of $0.45. The Company ended the fourth quarter with 141,200 subscribers, reflecting an annualized growth rate of 5%.
Revenue increased by $4.3 million to $49.1 million, an increase of 10% over the comparable year of 2012. Canadian revenue was up by 4% to $37.5 million, and US revenue was up by 30% to $11.6 million. Revenue growth was driven by 25,800 gross new subscriber additions, 15,100 in Canada and 10,700 in the US.
Recurring monthly revenue increased to $3.79 million or 11% from 2012 and accounted for 91% of the total revenue for the year. The growth in recurring monthly revenue was a result of an increase in subscribers as well as a 2% growth in the average revenue per subscriber, which increased from $26.49 to $27.10. Approximately 18% of new alarm customers subscribe to VideoRelay services, contributing to the growth in average revenue per subscriber.
EBITDA increased to $12.8 million, up 105% from the comparable year. The-year over-year growth was mainly attributable to the reduction in advertising expenses related to the launch of VideoRelay services. Excluding the impact of the advertising expenses which represent a charge against operating income, adjusted EBITDA increased by 9% from $23.4 million to $25.4 million.
Cash flows from operations increased from $4.6 million to $10.8 million for the fiscal year, an increase of $6.2 million, or 133%. In addition to returning $4.2 million to shareholders in the form of dividends and buyback of common shares, the Company funded all growth and product development from internal cash flows in 2013, and continues to operate with no debt on its balance sheet.
Mr. Pizzonia, interim President and CEO, stated that "we expect to continue the momentum from the fourth quarter by leveraging our competitive strengths and value proposition to drive organic subscriber growth. We expect to grow our average revenue per subscriber as the market continues to adopt home automation technologies. We will be effectively deploying capital to deliver shareholder value by focusing on our service offering over the subscriber life-cycle to lengthen the time we retain our customers."
AlarmForce provides security alarm monitoring, personal emergency response monitoring, video surveillance and related services to residential and commercial subscribers throughout Canada and the United States. More information about the Company's products and services can be found at www.alarmforce.com.
EBITDA is defined as earnings before interest expenses, income taxes, depreciation and amortization. EBITDA is a key 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 a measure to assess the operating performance of the Company. Yet, since it does not have any standardized meaning defined by IFRS, it may not be considered in isolation of IFRS 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 allows the Company to assess its ongoing business without the impact of depreciation or amortization expenses. Since EBITDA is not a defined term under IFRS, it is unlikely to be comparable to similar measures presented by other issuers.