United Protection Security Group Inc. - Q3-2012 - RESULTS

(TSX - V: UZZ)

EDMONTON, Nov. 30, 2012 /CNW/ - F.V.Ramsoondar, President and Chief Executive Officer of United Protection Security Group Inc. (UPSG or the Company), (TSXV: UZZ) is pleased to announce that the Company has released its Q3- 2012 results.

UPSG PERFORMANCE Q3

a)	Revenue
	Revenue was $11,162,502 for the quarter ended September 30, 2012 compared to $8,758,376 for the comparative quarter, an increase of $2,404,126 or 27.45%.  Acquisitions in the current year have been a significant reason for the increase in revenue.  The Company expects that its future operating results may be subject to quarterly and annual fluctuations resulting from a variety of factors, including market conditions, changes in customers and geographic distribution.  In the Electronic Security division, revenues are primarily derived from the number of new installation and monitoring contracts.
b)	Gross margin
	Gross margin was $2,327,090 (20.85%) for the quarter ended September 30, 2012, compared to $1,635,321 (18.67%) for the comparative quarter.  In 2011, the Company outsourced some of its operations to a subcontractor and therefore accounted for the costs as cost of sales. This arrangement has ended in the current year, resulting in a decrease in cost of sales and an increase in overhead costs in the quarter compared to the three months ended September 30, 2011. The improvement in the gross margin also arose due to synergies utilized in the Ontario operations in 2012.
c)	Selling, general and administrative expenses ("SG&A")
	SG&A totalled $1,615,972 for the current quarter, compared to $1,225,926 for the quarter ended September 30, 2011, an increase of $390,046 or 31.82%. The increase is attributed to the change in the subcontractor arrangement noted above, as well as increased overhead in support of the Company's expanding scope of operations.  Management will continue to review SG&A for additional cost reduction opportunities.

		Quarter ended Sept 30,
		2012		2011
Revenue	$	11,162,502	$	8,758,376
EBIITDAS		711,118		409,395
Net income		235,539		230,374

Reconciliation of EBIITDA and EBIITDAS
			Quarter ended Sept 30,
			2012		2011
Net income		$	235,539	$	230,374
Add:	Income taxes (recovery)		17,000		(63)
	Finance costs		233,814		59,837
	Depreciation and amortization		224,765		141,961
EBIITDA			711,118		432,109
Add:	Other gains (losses)		-		(30,000)
	Share-based compensation		-		7,286
EBIITDAS		$	711,118	$	409,395

UPSG PERFORMANCE Q3 YEAR TO DATE

a)	Revenue
	Revenue was $31,452,140 for the nine months ended September 30, 2012 compared to $25,267,648 for the comparative period, an increase of $6,184,492 or 24.48%.  Organic growth and acquisitions have been the primary reasons for the increase in revenue.  The Company expects that its future operating results may be subject to quarterly and annual fluctuations resulting from a variety of factors, including market conditions, changes in customers and geographic distribution.  In the Electronic Security division, revenues are primarily derived from the number of new installation and monitoring contracts.
b)	Gross margin
	Gross margin was $6,333,727 (20.14%) for the nine months ended September 30, 2012, compared to $4,528,350 (17.92%) for the comparative quarter.  In 2011, the Company outsourced some of its operations to a subcontractor and therefore accounted for the costs as cost of sales.  As discussed above, the end of this subcontractor relationship in the current year has contributed to increased gross margins. The improvement in the gross margin also arose due to synergies utilized in the Ontario operations in 2012 since May, 2012.
c)	Selling, general and administrative expenses ("SG&A")
	SG&A totalled $4,368,800 for the current period, compared to $3,651,831 for the nine months ended September 30, 2011, an increase of $716,969 or 19.63%. Additional overhead in support of our expanding scope of operations have been the primary reasons for the increase in SG&A.  Management will continue to review SG&A for additional cost reduction opportunities.

	Nine months ended September 30,
		2012		2011
Revenue	$	31,452,140	$	25,267,648
EBIITDAS		1,964,927		876,519
Net income		723,052		268,715

Reconciliation of EBIITDA and EBIITDAS
			Nine months ended September 30,
			2012		2011
Net income		$	723,052	$	268,715
Add:	Income taxes (recovery)		227,800		(24,939)
	Finance costs		429,784		215,225
	Depreciation and amortization		584,291		434,440
EBIITDA			1,964,927		893,441
Add:	Other gains (losses)		-		(46,667)
	Share-based compensation		-		29,745
EBIITDAS		$	1,964,927	$	876,519

Stock Awareness Activities
To find out more about United Protection Security Group Inc. (TSX-V: UZZ), visit our website at www.unitedprotection.com.  To join the 'request for information', go to the web page www.unitedprotection.com and click the tab 'request information' and follow the prompts.

Statements in this press release other than purely historical information, including statements relating to the Company's future plans and objectives or expected results, are forward-looking statements. Forward-looking statements are based on numerous assumptions and are subject to all of the risks and uncertainties inherent in the Company's business, including risks related to business development and retention, and risks related to the current economic and credit conditions. As a result, actual results may vary materially from those described in the forward-looking statements.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

 

SOURCE: United Protection Security Group Inc.

For additional investor and media relations inquiries contact:
Fredy Ramsoondar CEO and Director
Email:  [email protected]
Tel: [phone]