AlarmForce Announces Record Q2 Revenue and Change in Dividend Policy
Common shares traded on the Toronto Stock Exchange
Trading symbol: AF
TORONTO, June 13, 2012 /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, 2012:
|April 30, 2012||April 30, 2011||Change|
|(6 months ended)||(6 months ended)||(over same period)|
|Gross profit||$||16,193,000||$||15,272,000||+ 6%|
|Income before income taxes||$||628,000||$||3,560,000||- 81%|
|Net income||$||461,000||$||2,482,000||- 81%|
|Cash flow from operations||$||2,307,000||$||3,512,000||- 34%|
|EBITDA per share||$||0.27||$||0.45||- 40%|
|EBITDA before marketing expenses||$||11,186,000||$||10,333,000||+ 8%|
|Basic Net income / share||$||0.04||$||0.20||- 81%|
|Diluted Net income / share||$||0.04||$||0.20||- 81%|
* EBITDA (Earnings Before Interest, Income Taxes, Depreciation, and Amortization) is a key measure in the security industry and should not be interpreted as IFRS)
EBITDA is defined as earnings before interest expenses, income taxes, depreciation and amortization. EBITDA is a 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 a measure to assess the operating performance of the Company. Yet, since it does not have any standardized meaning defined by Canadian IFRS, it may not be considered in isolation of IFRS 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 allows the Company to assess its ongoing business without the impact of depreciation or amortization expenses. Since EBITDA is not a defined term under IFRS, it is unlikely to be comparable to similar measures presented by other issuers.
Second Quarter Results
Joel Matlin, President and CEO of AlarmForce, announced that, "For the six months ended April 30, 2012 AlarmForce revenues increased to $22.1 million and total subscribers increased to 130,000 accounts. These are both record results for a second quarter in the 24 years of business of the company, reflecting a 10% annual increase in revenues and 9% annual increase in total subscribers, year over year."
"For the six month period, the company achieved an increase of $0.9 million in gross profit, against an increase in selling and marketing expenses of $3.7 million which primarily reflected the company's advertising budget expenditures, and an increase in amortization expenses of $0.4 million which reflected the growth in subscriber equipment. The increase in selling and marketing expenses was the result of additional advertising programs, which in aggregate increased by $3.4 million from the comparative six months of 2011.
"After offsetting a decrease in general and administrative expenses of $0.3 million, the net effect from development, advertising and other growth-related expenses resulted in income before taxes of $ 0.6 million for the six months. This reflects a decrease of $2.9 million from the comparative six months. As a result, net income decreased by $2 million and net income per share decreased from $0.20 to $0.04 for the six months."
"EBITDA before marketing expenses increased by $0.9 million, from $10.3 million to $11.2 million. EBITDA after marketing expenses decreased by $2.5 million, from $5.6 million to $3.1 million, corresponding to the effect of increases in expenses. Similarly, cash flows from operations decreased from $3.5 million to $2.3 million, a 34% decrease over the comparative period. After investing $2.9 million of cash in new subscriber installations in the six month period, the company continues to have a strong cash position and balance sheet without any borrowing need."
"We are pleased to note that approximately 1,000 VideoRelay systems were installed in the second quarter, doubling the 500 systems installed in the first quarter. We expect this trend of market acceptance to continue. With VideoRelay the subscriber enjoys the enhanced benefits of two-way voice video and a higher level of control over home security, all at a substantially lower cost than other home alarm companies. With VideoRelay, we hope to deliver increases in recurring revenues and additional subscriber growth over the next several years."
Mr. Matlin added: "We are confident of being able to meet our operating and capital requirements in the foreseeable future from recurring cash flows and cash resources. And we will continue to leverage the AlarmForce brand and value proposition, offering two-way voice alarm, personal emergency response and remote-access video systems in all our service centres."
Mr. Matlin also announced today that the Board of Directors has adopted a cash dividend policy and declared an initial quarterly cash dividend of $0.025 per share. The initial quarterly cash dividend will be paid on August 21, 2012 to all shareholders of record as of July 31, 2012.
Mr. Matlin said: "The Board expects that future cash dividends will be paid on a quarterly basis such that the total annual dividend rate based on the initial quarterly cash dividend will equal $0.10 per share, which is equivalent to a dividend yield of approximately 1.1% based on the closing price of company's common shares as of May 31, 2012. Any decision to pay future cash dividends will, however, be subject to Board approval, and will depend on the Company's future earnings, cash flow, financial condition and other relevant factors."
"The Board's decision to adopt the cash dividend policy reflects its confidence in AlarmForce's long-term ability to continue generating profits and cash flows, while sustaining a regular dividend to shareholders. Following a period of consistent growth in subscribers and recurring cash flows, the Board wishes that shareholders obtain an additional opportunity to benefit from our success and operational strength."
Mr. Matlin closed by saying: "I would like to thank our investors and all our employees and the Board of Directors for their support and confidence in AlarmForce."
AlarmForce provides security alarm monitoring, personal emergency response monitoring, video surveillance and related services to residential and commercial subscribers throughout Canada and selected centres across the United States. AlarmForce is a leading provider of two-way voice alarm systems in Canada. More information about the Company's products and services can be found at www.alarmforce.com and www.videorelay.com.
SOURCE Alarmforce Industries Inc.