TORONTO, March 11 /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 three months ended January 31, 2010:
January 31, 2010 January 31, 2009 Change
(3 months ended) (3 months ended) (over same
Revenue $ 9,017,000 $ 8,282,000 9%
Income before income taxes $ 1,809,000 $ 1,390,000 30%
Net income $ 1,198,000 $ 922,000 30%
Cash flow from operations $ 1,292,000 $ 590,000 119%
EBITDA* $ 2,823,000 $ 2,334,000 21%
EBITDA* before marketing
expenses $ 4,927,000 $ 4,720,000 4%
Basic Net income / share $0.10 $0.08 25%
Diluted Net income / share $0.10 $0.08 25%
* 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, announced that, "AlarmForce closed the first quarter of 2010 with a total subscriber base of 105,300 accounts and revenue of $9.0 million, achieving the highest first quarter revenue in 22 years of business. This reflects a 9% increase over the previous record from 2009 and resulted in a gross margin of 77% as a percentage of revenue, up from 76% in the comparative quarter. Net income increased from $922,000 to a record $1,198,000 for the quarter, representing a 30% increase from the comparative quarter. The company is continuing to meet its goal for growth in bottom-line earnings to outpace revenues.
"While the subscriber base and recurring revenues increased in the first quarter, we spent 12% less on advertising programs than the comparative quarter, which is a result of the timing of budgeted expenditures. As recently announced, our entry in the state of Minnesota will add amarket of another 5 million to the existing U.S. population market of 30 million already being served in the U.S. by AlarmForce. We are planning to commence installations in Minneapolis and the surrounding area next month, and our budget plan for 2010 is expected to be achieved with higher overall expenditure on advertising than the comparative period. Our marketing model uses advertising programs which have been proven to drive subscriber growth, and we are looking ahead to adding more subscribers through organic growth, which is efficient and accretive to our earnings.
"EBITDA, after adding back the marketing expenses, increased by 4% from $4,720,000 to $4,927,000, while EBITDA (net of marketing expenses) increased from $2,334,000 to $2,823,000, a 21% increase over the comparative quarter. Cash flows from operations increased from $590,000 to $1,292,000, a 119% increase over the comparative quarter. Both trends reflect positively on our low cost of creating new accounts and prudent management of advertising and brand development. Our marketing activities continue to be funded entirely from operating cash flows.
"The company repaid $1.2 million of bank loans, bringing its total financial debt as well as debt per subscriber, to zero at the end of the quarter. Our future cash requirement to finance growth in subscribers is expected to continue to be funded internally."
Mr. Matlin added that: "In the future we expect to expand our product line as a result of our current research and development projects which are funded from our operating cash flows. Our vision encompasses remote monitoring capabilities, which will enable live video streaming over the client's broadband connection, allowing the customer to view and interact with the home from anywhere in the world, twenty four hours a day. "We are excited about our growth in the next few years as a result of our continuing U.S. expansion, increasing brand recognition, and new subscriber services that will be made possible by the digital revolution in broadband and internet devices."
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 sole 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.
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