AlarmForce Announces Record Q3 Revenues

TORONTO, Sept. 14, 2011 /CNW/ - AlarmForce Industries Inc. (TSX:AF) AlarmForce Industries Inc., Canada's largest manufacturer and installer of live two-way voice home alarms systems, is pleased to announce results for the nine months ended July 31, 2011:

  July 31, 2011 July 31, 2010 Change
  (9 months ended) (9 months ended) (over same period)
Revenue $ 30,297,000 $ 27,633,000 +10%
Income before income taxes    $ 4,715,000 $ 5,219,000 -10%
Net income $ 3,370,000 $ 3,605,000   -7%
Cash flow from operations $ 5,603,000 $ 5,340,000   +5%
EBITDA $ 7,802,000 $ 8,274,000   -6%
EBITDA/share $  0.65 $  0.67   -3%
EBITDA before marketing expenses $ 15,293,000 $ 14,923,000    +2%
Basic Net income / share
Diluted Net income / share
$0.28
$0.27
$0.29
$0.29
  -3%
  -7%

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

EBITDA is defined as earnings before interest expenses, income taxes, depreciation and amortization. EBITDA is a standard 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 an important measure of operating performance of the Company. Yet, since it does not have any standardized meaning defined by Canadian GAAP, it may not be considered in isolation of GAAP 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 is an important measure as 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 Canadian GAAP, it is unlikely to be comparable to similar measures presented by other issuers.

Joel Matlin, President and CEO, announced that, "AlarmForce closed the third quarter with record revenues of $30.3 million for the nine months ended July 31, 2011. Total subscribers increased to 121,500, which reflects an annualized growth rate of 10% in the net subscriber base. Net Income for the nine month period decreased by 7% from $3.6 million to $3.4 million, which is a reflection of the increase in marketing expenditures from the opening of new markets, and expenditures related to the anticipated release of VideoRelay in the form of additional installers, sales and support staff and engineering personnel.

For the nine months ended July 31, 2011, EBITDA decreased from $8.3 million to $7.8 million, a 6% decrease. Excluding marketing expenses, EBITDA increased from $14.9 million to $15.3 million, a 2% increase.

Our cash flows from operations increased to $5.6 million for the nine months, an increase of 5% over the comparative period due to the net increase in our subscribers. All our growth, branding and new product development have been funded from internal cash flows with zero debt on our balance sheet.

Our US subscriber base has continued to grow and we are very pleased with the early results of our entry into Florida. AlarmForce is now installing two-way voice and AlarmCare personal emergency response systems in Tampa-St. Petersburg, Orlando and Sarasota. The response to our marketing efforts has been very encouraging and we expect to be statewide by the end of fiscal 2012."

Mr. Matlin continued, "VideoRelay is progressing very well. To date, we have installed systems in selected AlarmForce clients' homes and the feedback to this new video technology has been extremely positive. We are introducing this leading edge product using a staged marketing approach, and we will be expanding distribution this month to additional AlarmForce subscribers in the Toronto area.

All AlarmForce subscribers in Canada and the U.S. will be offered a special bundled price as the VideoRelay product is rolled out. Importantly, the VideoRelay system will be offered to the overall consumer market, including homes that have a competitor's alarm system and homes without an alarm system, thus making the VideoRelay sales opportunity very substantial.

VideoRelay brings a whole new perspective to home security and security control never offered before. Since this product is designed, manufactured and is exclusive to AlarmForce, we expect it to be a catalyst for accelerated growth as the consumer market absorbs the many advantages derived from this leading edge technology."

Mr. Matlin closed by saying: "The progress of VideoRelay represents an extremely exciting and substantial opportunity for growth in Canada and the U.S. and we look ahead optimistically to increasing our market share in both the home alarm and the anticipated consumer video market.

I would like to thank our subscribers, investors, employees and the Directors for their continuing support and confidence in AlarmForce."

AlarmForce provides security and personal emergency response monitoring and related services to residential and commercial subscribers throughout Canada and selected centers across the United States. The Company is a leading provider of two-way voice alarm systems in Canada and provider of AlarmPlus, a wireless line-cut protection system. More information about the Company's products and services can be found at www.alarmforce.com.

SOURCE Alarmforce Industries Inc.

For further information:

Investor Relations Department
Tel: (416) 445-2001 ext. 225
Fax: (416) 445-9381
investorrelations@alarmforce.com.

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Alarmforce Industries Inc.

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