AlarmForce Announces Record Q2 Revenues and Earnings

    
             Common shares traded on the Toronto Stock Exchange
                             Trading symbol: AF
    

TORONTO, June 10 /CNW/ - TSX - Trading symbol - 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 six months ended April 30, 2010:

    
    -------------------------------------------------------------------------
                        April 30, 2010    April 30, 2009    Change
                       (6 months ended)  (6 months ended)  (over same period)
                       ----------------  ----------------  ------------------

    Revenue               $ 18,171,000      $ 16,750,000           +8%

    Income before income
    taxes                 $  3,288,000      $  2,525,000          +30%

    Net income            $  2,244,000      $  1,679,000          +34%

    Cash flow from
     operations           $  3,120,000      $  1,908,000          +64%

    EBITDA                $  5,402,000      $  4,372,000          +24%

    EBITDA/share          $       0.44      $       0.36          +22%

    EBITDA before
     marketing expenses   $  9,495,000      $  9,029,000           +5%

    Basic Net income /
     share                $       0.18      $       0.14          +29%
    Diluted Net income /
    share                 $       0.18      $       0.14          +29%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    * 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 second quarter of 2010 with record revenues. Total AlarmForce subscribers increased to 107,900 accounts, which reflects a 5% annual growth rate in the net subscriber base. Total revenues increased to $18.2 million, which reflects an 8% increase over the previous record from 2009. As a result of continued growth in subscribers and economies of scale in our operations, Net Income increased to $2.2 million for the six month period, a 34% increase from the comparative period. I am pleased that the company is continuing to meet its goal for growth in bottom-line earnings to outpace revenues. The company's gross margin as a percentage of revenue was 77% for the six months ended April 30, 2010. This is an increase from 76% in the comparative six months."

Mr. Matlin added: "Revenue increased to $9,155,000 for the second quarter, up by 8% from $8,468,000 a year ago, achieving a record for quarterly results. These results are even more satisfying in light of the general economic conditions carrying over from 2009 which has been described as one of the worst periods for public companies. We are very optimistic of continuing to grow successfully for the remainder of 2010. This is in no small part due to the strength of our brand, in Canada, as well as the increasing traction in our US markets."

"EBITDA increased from $4.4 million to $5.4 million for the six months, a 24% increase that continues the historical trend for our operations. This measure includes marketing expenses which results in a charge to expense during the period, thus reducing the operating income. Excluding marketing expenses, EBITDA increased from $9.0 million to $9.5 million for the six months, a 6% increase. Monthly recurring subscriber revenues represented 90% of our total revenues. With increasing recurring revenues, cash flows from operations increased to $3.1 million for the six months, an increase of 64% per annum."

"Pursuant to our earlier product development announcement, we are continuing with the development of an application-based remote video system called ViewForce. We anticipate that this product will expand AlarmForce's market reach and will enhance our existing alarm technology, through making it available to existing AlarmForce subscribers. The ViewForce system will also be offered to the general consumer market, where we believe it will fill a need which goes beyond the benefits of the traditional alarm system. The ViewForce system is expected to be launched this fall."

"In addition to the alarm subscriber revenues, our results reflect increases in the AlarmCare subscriber accounts, which added to overall subscriber growth. These accounts contribute recurring monthly revenues from subscribers of personal emergency response systems or PERS."

Mr. Matlin closed by saying: "We are moving forward with zero debt on our balance sheet and an exciting outlook for brand expansion. Our video product development is under way, enabling us to offer new subscriber applications to enhance our existing two-way voice technology."

"I would like to thank our investors, employees and the Directors for their support and confidence. I believe that the future will reward all our efforts with even more success."

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.

For further information: 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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