AlarmForce Industries Inc.
TSX : AF

AlarmForce Industries Inc.

September 10, 2008 14:19 ET

AlarmForce Announces Record Third Quarter Revenue and Earnings

TORONTO, ONTARIO--(Marketwire - Sept. 10, 2008) - AlarmForce Industries Inc. (TSX:AF), Canada's largest manufacturer and installer of live two-way voice home alarm systems, is pleased to announce results for the nine months ended July 31, 2008:



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Change
July 31, 2008 July 31, 2007 (over
same
(9 months ended) (9 months ended) period)
---------------- ---------------- -------

Revenue $ 21,993,000 $ 18,473,000 19%
Income before income taxes $ 2,663,000 $ 1,463,000 82%
Net income $ 1,758,000 $ 921,000 91%

Cash flow from operations $ 4,169,000 $ 2,226,000 87%

EBITDA(i) $ 4,949,000 $ 3,417,000 45%

EBITDA before marketing
expenses $ 11,209,000 $ 10,324,000 9%

Basic Net income / share $ 0.15 $ 0.08 88%
Diluted Net income / share $ 0.15 $ 0.08 88%
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(i) EBITDA (Earnings Before Interest, Income Taxes, Depreciation, and
Amortization) is a key measure in the security industry and should not
be interpreted as GAAP).


Joel Matlin, President and CEO, said "We are pleased to report results for our third quarter in which the company's revenue increased to $7,577,000. This brings our total revenue for the nine months to approximately $22 million, a record for the company in our 20-year history. Revenues increased by 3.5 million, which is a 19% increase over 2007. Having achieved increases in monthly recurring revenues and cash flows from subscriber accounts, we closed with approximately 87,500 subscriber accounts at July 31, 2008. The increase in subscribers reflects an annual growth of 17%."

Mr. Matlin went on to add "Income before income taxes increased to $2.6 million in the nine-month period, which represents an annualized increase of 82%. The subscriber growth which resulted in record-setting revenues for the current period partly contributed to this increase. In addition, income increased as a result of a decrease in marketing expenditure of approximately $647,000 during the current period. The company's advertising expenditure, which is a significant component of expenses, is driven by market opportunity and prudent management of cash resources amongst selected advertising channels. As is our customary practice, the results of our operations are presented in terms of EBITDA as well as GAAP earnings in order to provide more insight into the numbers. EBITDA before marketing expenditures increased by 9% to $11.2 million, while EBITDA after deducting marketing expenditures increased by 45% to $4.9 million for the nine months.

"The company installed just over 15,000 new systems during the nine months, a 15% increase compared with 13,100 for the comparative period last year. As investors know, our subscriber growth is driven by advertising programs as well as referrals from existing subscribers. Despite the unpredictability seen in the current period in the general economy and the challenges facing consumers, AlarmForce continues to boast lower attrition rates and lower account creation costs than most of our competitors, attesting to the resilience of our business model."

Mr. Matlin ended saying that "We are optimistic in our outlook for the future and look forward to continued marketing success and record-setting results. We think that our brand is exceptionally well positioned for the future. We aim to give the strongest value proposition to the consumer and in the process, we expect continuing increases in monthly recurring revenues, cash flows and subscriber accounts in the foreseeable future."

AlarmForce Industries Inc. is Canada's largest manufacturer and installer of two-way voice home alarm systems and line-cut protection with offices serving all major markets in Canada and strategically selected markets in the United States, with a base of 87,500 subscriber accounts.

Contact Information

  • AlarmForce Industries Inc.
    Investors Relations Dept.
    (416) 445-2001 ext#225
    (416) 445-9381 (FAX)
    Email: investor@alarmforce.com