AlarmForce posts record revenue increase for 2007



    TORONTO, Jan. 22 /CNW/ - TSX Listed - Joel Matlin, President and CEO is
pleased to announce annual results for the year ended October 31, 2007.

    
                                      2007             2006           Change
                               (year ended)     (year ended) (year over year)
                                         $                $
    -------------------------------------------------------------------------
    Revenue                     25,136,000       20,965,000              20%
    Gross profit                20,006,000       16,459,000              22%
    Gross profit/Revenue %             80%              79%
    Subscriber base                 79,200           66,300              20%
    EBITDA(*)                    4,748,000        5,217,000              -9%
    Income before taxes          2,105,000        2,510,000             -16%
    Net income                   1,280,000        1,492,000             -14%

    Net income per share              0.11             0.12              -8%
    Diluted Net income per share      0.11             0.12              -8%

    (*) Earnings before interest, taxes, depreciation and amortization as
        reconciled to GAAP earnings in management's discussion and analysis
        of annual results
    

    Announcing the annual results for 2007, Mr. Matlin said: "Revenues in
2007 surpassed the $25 million mark, which represents a record annual increase
of $4,171,000 from the preceding year, up 20%. The AlarmForce subscriber base
increased to over 79,000 monitored accounts, up by 20% which is the largest
net increase in our account size ever recorded. We realized economies of scale
and higher gross profit margins, and as a result Gross Profit increased by 22%
to $20,006,000, representing 80% of Revenue in 2007."
    "In 2007, we added 18,000 new accounts, the highest figure in the 19 year
history of the company. Our budgeted marketing expenses increased from the
2006 level by over $3 million, including expenses in both Canada and the US.
In both market segments, subscriber growth was record-setting. The impact of
the higher marketing program expenses, which are charged against income in the
period, is reflected in the decrease in operating bottom line results. The
increase in expenses was somewhat offset by the 20% annual growth rate and
higher gross margins, as a result Income before Taxes decreased by $405,000
and Net Income decreased by $212,000 relative to 2006. Against the increase in
marketing expenses in 2007 of over $3 million, the Company's EBITDA decreased
to $4,748,000 in 2007 from $5,217,000 in 2006. Excluding the marketing
expenses, EBITDA increased to $14,111,000, up by 24% from 2006. This is an
important and key factor given that our marketing expenses are discretionary
as well as a driver of growth in recurring revenue."
    "Looking ahead, the convergence of several market trends and industry
factors are creating attractive opportunities to propel the company to new
heights. We have achieved a significant position in major centres in Canada
and in the three US States, in which our brand has gained a critical mass
providing traction to sustain growth from our existing subscriber base. As a
result, we expect to grow in 2008 with a much lower operational drag than that
in prior years, which reflected the startup of new markets in the US. In
addition, social and demographic trends as well as technology-driven
innovation in product development promise to provide opportunities for new
incremental revenues in the existing markets."
    Mr. Matlin concluded by saying: "We have solidified the foundation for
our subscriber base expansion program for the next five years, which promises
to be the most exciting period to come. The two most salient trends reflected
in our report this year are consistently strong revenue growth on the one
hand, and an expanded marketing budget on the other. Our track record has
continually proven the effectiveness of AlarmForce's marketing model in
directly generating new subscriber growth and we expect that the subscriber
base will continue to grow and revenues and cash flows will continue to
increase."

    AlarmForce Industries Inc. is Canada's largest manufacturer and installer
of two-way voice home alarm systems and line-cut protection with offices
across Canada and in the United States.




For further information:

For further information: Investors Relations Dept., Tel: (416) 445-2001
ext No. 225, Fax: (416) 445-9381, E-mail: investor@alarmforce.com

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