AlarmForce Industries Inc.
TSX : AF

AlarmForce Industries Inc.

June 10, 2009 17:00 ET

AlarmForce Posts Record Revenues and Profit in the Second Quarter

TORONTO, ONTARIO--(Marketwire - June 10, 2009) - 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, 2009:

    April 30, 2009   April 30, 2008   Change
    (6 months ended)   (6 months ended)   (over same period)
             
Revenue   $16,749,576   $14,416,266   +16%
             
Income before  income taxes   $2,524,803   $ 1,824,296   +38%
             
Net income   $1,678,994   $ 1,203,802   +39%
             
Cash flow from operations excluding working capital   $3,440,837   $ 2,120,657   +62%
             
EBITDA   $4,372,000   $ 3,367,000   +30%
             
EBITDA/share   $0.36   $ 0.28   +30%
             
EBITDA before marketing expenses   $9,028,000   $ 7,573,000   +19%
             
Basic & Diluted Net income / share   $0.14   $0.10   +40%
             
             

* 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, President and CEO reported: "The first six months of our 2009 fiscal year saw AlarmForce continue to set new records for revenue and net income, as the total subscriber base increased to 96,000 accounts. The net change in subscribers represents a 12% annualized increase from the comparative 2008 figure."

Mr. Matlin added: "Revenue increased to $8,468,000 for the second quarter, up by 16% from $7,317,000 a year ago. This was a record quarterly increase bringing our total consolidated revenues for the six months to $16.7 million, a 16% increase from a year ago. These increases in revenue and earnings were achieved during a very difficult economic climate and are in excess of the average for the security industry as a whole which was an annual 6% increase in recurring monthly revenues. As a result of the growth in the period, Income before taxes for the six months increased by 38% and Net income increased by 39%."

"EBITDA increased from $3.4 million to $4.4 million for the six months, a 30% increase from the corresponding 2008 period. This measure includes the effect of the marketing expenses which results in a charge to expense during the period, thus reducing the operating income. Excluding marketing expenses, EBITDA increased from $7.5 million to $9 million for the six months, a 19% increase from the corresponding 2008 period."

"There were corresponding increases in recurring revenues and cash flows and at the end of the period, the company's outstanding balance of debt decreased by $150,000. On a net basis the company continues to remain debt-free. Cash flows from operations in the six months amounted to $3.4 million before working capital adjustments, of which $1.9 million resulted in net cash flows from operating activities after working capital. The remaining cash resources from operations were reinvested in new subscriber growth, working capital and enhancing shareholder value. During the period we purchased 37,130 of our common shares for cancellation under our stock buyback issuer bid, for a total consideration of $144,540. The issuer bid expires in December 2009 and a maximum number of 350,000 shares may be bought back under the issuer bid."

"AlarmCare subscriber accounts increased steadily during the period, which added to overall subscriber growth. These accounts contribute recurring monthly revenues from subscribers of personal emergency response systems ("PERS"). Now in its second year, our PERS subscriber base is at the stage where the current AlarmVoice base was when we started twenty-one years ago. We expect PERS revenues to grow significantly in the next few years, as a seamless extension of our brand. Our wireless two-way voice communication is a natural fit for this newest application for subscribers. In particular the retirement segment, which is essentially the key market for AlarmCare, is expected to be one of the fastest growing demographic segments in North America. The exciting growth in our share of this market has already begun as we look forward to potentially higher growth rates in the future."

Mr. Matlin closed by saying: "Although the deep financial downturn is cause for caution for even the best managed companies, we see a future that is very bright. Demographic trends continue to favour our growth outlook. Companies that can innovate and bring technology that add value for consumers are positioned to reap the biggest rewards. At the same time, longer life expectancy, smaller households, and more second homes for the baby boom generation approaching retirement age in the next decade, are expected to result in increased demand for our brand of subscriber services. As wireless devices become smarter and broadband usage becomes more affordable, we are constantly monitoring trends and opportunities to expand our brand into new applications and increased recurring revenues."

AlarmForce is Canada's largest manufacturer and installer of two-way voice home alarms systems and line-cut protection. The Company serves all major markets in Canada and selected markets in the United States.

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