VOXCOM Income Fund

VOXCOM Income Fund

November 15, 2005 07:00 ET

VOXCOM Income Fund Announces Third Quarter Results

EDMONTON, ALBERTA--(CCNMatthews - Nov. 15, 2005) - VOXCOM Income Fund (TSX:VOX.UN) -

Highlights for the quarter

- Total revenue of $9.1 million increased 23 per cent, compared to third quarter of 2004

- Gross profit increased 23.4 per cent to $6.7 million

- Normalized EBITDA increased by $1.1 million, or 30.4 per cent, to $4.9 million

- Declared cash distributions of $2.3 million, for a payout ratio of 93.7 per cent

- Number of customer accounts increased by 20,300 from same period last year to 106,600

VOXCOM Income Fund (the "Fund") (TSX:VOX.UN) today announced its operating results and financial performance for the three months ended September 30, 2005.

"In our first full quarter operating as an income fund, we continued to build on our record of strong financial and operational performance," said Brad Sparrow, President and CEO of VOXCOM. "Our recurring monthly revenue, or RMR, is up by a half-million dollars from last year. Our results also reflect the positive impact of successfully integrating approximately 1,000 new accounts in Alberta acquired from Stealth Alarm Systems at the end of June. We are pleased with our progress and it demonstrates the ability of our business to increase customers without incurring substantial additions to our fixed costs."

The Fund was established on May 20, 2005, when it indirectly acquired all of the securities of VOXCOM Incorporated.

For the three-month period ended September 30, 2005, compared to the same period last year:

- Total revenue increased by $1.7 million to $9.1 million, an increase of 23 per cent. The Fund's sales efforts remain focused on high margin recurring monthly revenue (RMR).

- Gross profit increased by 23.4 per cent to $6.7 million and represents 73.8 per cent of total revenue. The increased gross profit is attributable to the increase in total revenue arising from the growing total number of customers.

- Sales and marketing expenses and general and administration expenses were consistent with the prior period, as the Fund continues to leverage its existing infrastructure over a larger number of customers and increased revenue base.

- Adjusted earnings from operations before interest, taxes, depreciation and amortization ("Normalized EBITDA") increased by $1.1 million, or 30.4 per cent, to $4.9 million for the quarter, representing 53.5 per cent of total revenue, a margin improvement of 3.0 per cent over the same period last year.

- Cash distributions were on target for the quarter, with distributable cash of $2.404 million for the three-month period, resulting in three declared distributions totaling $2.254 million and a payout ratio of 93.7 per cent.

- Net earnings for the quarter were $1.5 million, or $0.1808 per unit. Comparable information for net earnings per unit for the same quarter last year are not applicable.

- Total number of customers was 106,600, compared to 86,300 in the same period last year. The annualized RMR attrition rate decreased to 8.6 per cent from 9.7 per cent

Interim Statement of Distributable Cash(i)
(Expressed in thousands of Canadian Dollars except per unit amounts)

Quarter ended
September 30, 2005
Net earnings for the period $ 1,481
Financing expenses 630
Income taxes 15
Amortization 2,806
EBITDA 4,905
Amortization of leasehold inducement (29)
Normalized EBITDA 4,876
Customer retention costs (1,833)
Interest expense (580)
Income taxes (15)
Maintenance capital expenditures (44)
Cash available for distribution $ 2,404
Distributions declared $ 2,254
Net earnings per unit $0.1808

Distributable cash per unit $0.2935
Distributions declared per unit $0.2751
Distributions declared/distributable cash 93.7%
(i) While neither EBITDA nor Normalized EBITDA are earnings measures
recognized by GAAP, Management believes that in addition to net income
or loss, they are useful indicators of cash available for distribution
prior to debt service, capital expenditures and taxes.

The Fund met cash distribution targets for the quarter ended September 30, 2005. Distributable cash for the three-month period was $2.404 million, resulting in three declared distributions totaling $2.254 million.

Operating Results for the Three Months ended September 30, 2005
and September 30, 2004

Income Fund Incorporated
Three months ended Three months ended
September 30, 2005 September 30, 2004
(in thousands of dollars)
Monitoring and Service Revenue $ 8,900 $7,220
Installation Revenue $ 212 $ 191
Total Revenue $ 9,112 $7,411
Gross Profit $ 6,725 $5,451
Gross Profit - % of total revenue 73.8% 73.5%
RMR - end of period $ 2,822 $2,292

Operating Expenses
Sales and Marketing $ 278 $210
Sales and Marketing - % of total revenue 3.0% 2.8%
General and Administration $ 1,542 $1,492
General and Administration
- % of total revenue 16.9% 20.1%
Stock-Based Compensation -- $ 116
Amortization $ 2,806 $2,528

Normalized EBITDA $ 4,876 $3,739
Normalized EBITDA - % of total revenue 53.5% 50.5%

Other Expenses
Financing Expenses $ 602 $1,548
Taxes $15 --

Net Earnings/(Loss)
Net Earnings/(Loss) $ 1,481 $ (443)
Net Earnings per Units $0.1808 --

Customer Growth and Retention
Total Number of Customers 106,600 86,300
Total Number of Additional
Value-Added Services 58,500 46,000
RMR Attrition Rate - Security
Accounts (annualized) 8.6% 9.7%

Conference Call and Webcast

Management will host a conference call to discuss third quarter results on Tuesday, November 15, 2005, at 11 a.m. ET. To access the call, dial 416-640-4127 or 1-800-814-3911. A recording of the call will be available as of 1 p.m. the same day until midnight November 22, 2005. To access the recording, dial 416-640-1917 or 1-877-289-8525, followed by passcode 21152797#. The conference call will also be available via webcast at www.voxcomincomefund.com.

Forward Looking Statements

This document may contain "forward-looking" statements which involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Fund, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.

Additional information relating to the Fund, including all public filings, is available at on SEDAR (www.sedar.com) and at www.voxcomincomefund.com.

About VOXCOM Income Fund

VOXCOM Income Fund holds all the issued and outstanding common shares of VOXCOM Incorporated ("VOXCOM"). VOXCOM is a national leader of security alarm installation and monitoring services in Canada, serving more than 106,000 residential and commercial customers. VOXCOM provides monitoring services for security alarm systems and LifeCall emergency response systems to all provinces from its head office and call centre in Edmonton, and has branch offices in major centres across the country. VOXCOM also maintains extensive marketing partnerships and a network of Authorized Dealers throughout Canada. Information about VOXCOM Incorporated can be found at www.voxcom.com.

Contact Information