AlarmForce Industries Inc.
TSX : AF

AlarmForce Industries Inc.

March 12, 2009 13:59 ET

AlarmForce Posts Record Revenues and Earnings in First Quarter

TORONTO, ONTARIO--(Marketwire - March 12, 2009) - AlarmForce Industries Inc. (TSX:AF) -

Joel Matlin, President and CEO, is pleased to announce results for the first quarter ended January 31, 2009:



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January 31, 2009 January 31, 2008 Change
(3 months ended) (3 months ended) (over same period)
----------------- ----------------- ---------------
Revenue $ 8,281,727 $ 7,098,867 +17%
Income before income
taxes $ 1,389,792 $ 1,060,071 +31%
Net income $ 922,236 $ 680,071 +36%

Cash flow from operations
excluding working capital $ 1,804,387 $ 1,230,507 +47%

Cash flow from operations $ 590,231 $ 1,368,806 -57%

EBITDA (1) $ 2,191,340 $ 2,035,930 +8%

EBITDA (1) before marketing
expenditure $ 4,577,899 $ 4,041,517 +13%

Basic & Fully Diluted
Net income per Share $ 0.08 $ 0.06 +33%

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(1) EBITDA (Earnings Before Interest, Income Taxes, Depreciation, and
Amortization) is a key measure in the security industry and should not
be interpreted as GAAP.


Mr. Matlin announced that: "AlarmForce closed the first quarter of 2009 with a total subscriber base of 93,500 and record total revenues to mark our 21st year in business. Achieving new records, our total revenues for the three months ended January 31 increased from $7,099,000 in 2008 to $8,282,000 in 2009, a 17% increase. Net income increased from $680,000 to $922,000 for the three months, representing a 36% increase from the comparative quarter in 2008, thus meeting our goal of having earnings outpace revenues."

"Despite general economic indicators that continued to deteriorate, impacting virtually all sectors and companies, AlarmForce continued to increase its subscriber base and recurring revenues in the first quarter. Three-month EBITDA increased from $2,036,000 in 2008 to $2,191,000 in 2009, an 8% increase. Cash flows from operations in the first quarter amounted to $1,804,000 before working capital adjustments, of which $590,000 resulted in net cash flows from operating activities after working capital. The remaining cash resources were reinvested in new subscriber growth and higher recurring monthly revenues. During the first quarter, our investment in marketing and brand development increased, and we remain very confident of sound returns on investment from new subscribers. Even though marketing expenses increased, all our programs are continuing to be funded entirely from internal cash flows. Another measure of operating results is EBITDA before marketing expenses. We write off marketing expenses immediately against earnings, making comparisons with competitors who purchase and capitalize subscriber accounts look deceptive or confusing. Excluding the marketing expenses, EBITDA increased by 13% from $4,042,000 to $4,578,000, a record for quarterly results."

Mr. Matlin went on to add: "As the economy in North America faces prospects of continued contraction in 2009, our outlook is cautiously optimistic for the next three quarters. We believe that our position in the industry as a value player will thrive, built on strong brand differentiation and on the trust of consumers earned through consistent service excellence. Our brand continues to be synonymous with exceptional, affordable value for consumers in the residential alarm market. We are expecting growth to continue in both home alarm subscribers and AlarmCare subscribers, fueling incremental revenue growth in all our Canadian and US markets. We continue to manage and maintain relatively low costs, while leveraging our central station and administration overhead costs, as the AlarmForce account size continues to grow at a double-digit compounded annual rate."

AlarmForce is Canada's largest manufacturer and installer of two-way voice home alarms systems and line-cut protection. The Company has offices serving all major markets in Canada and selected markets in the United States with a subscriber base of 93,500 accounts.

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