AlarmForce Reports Third Quarter 2015 Financial Results
(firmenpresse) - TORONTO, ONTARIO -- (Marketwired) -- 09/10/15 -- AlarmForce Industries (TSX: AF) -
Third Quarter Operating Highlights
Year-to-Date Operating Highlights
Q3 non-recurring Items
The total impact of extraordinary items during Q3 was approximately $2.5 million. This was comprised of one-time costs associated with the change in management including severance and recruitment expenses, higher than normal legal fees and settlements, and non-cash write-downs associated with ending in-house development of the second generation VideoRelay camera and an aged Accounts Receivable Reassessment.
Anticipated Q4 Impact
The reassessment of aged accounts receivable is ongoing and will result in further reserves and write-offs being taken beyond the third quarter. As subscribers are deemed uncollectible and the associated monitoring contract is cancelled, this will have an adverse impact on subscriber counts. The final subscriber count, of which reserves and write-offs will be taken, is being determined through the review and assessment process and is not anticipated to exceed 6,000 subscriber accounts representing a potential $1 million in rental equipment write-offs and ancillary costs.
(i)EBITDA is a non-IFRS financial measure and is defined in the disclosure section accompanying this press release.
Toronto, Ontario, September 10, 2015 - For the third quarter ended July 31, 2015, AlarmForce Industries (TSX: AF) reported revenues of $14.1 million. Net income fell by 126% in the third quarter year-over-year, driven by one-time non-recurring items totaling $2.5 million. Diluted earnings per share fell to a loss of $0.03 per share in the third quarter of 2015 from $0.13 during the same quarter of 2014.
Total revenues for the first nine months of 2015 increased to $41.7 million vs. $39.3 million over the same period in 2014, or growth of 6% (3% in constant currency). Recurring monthly revenue (RMR) increased to $4.5 million at the end of Q3 2015 from $4.1 million at the end of Q3 2014, or 9% (6% in constant currency). Net income declined by 38% year to date from the same period of 2014. Year-to-date diluted earnings per share declined from $0.49 (2014) to $0.31 (2015) for the same nine-month period year-over-year. Cash flow from operations in the first nine months decreased from $8.5 million to $7.5 million, or 12% due to one-time items in the quarter, including costs related to the change in management, of $1.3 million.
"During the third quarter we saw an accelerated pace of growth in our gross subscriber base in both our Alarm and PERS business lines," said Graham Badun, President and CEO of AlarmForce Industries Inc. "We've strengthened our senior management team with some great additions that position us well for future growth in the residential and commercial security industry."
Other Q3 Events
During the quarter, the Company made a change in the CEO and expanded its financial leadership, complementing its existing team with a new CFO. Subsequent to the quarter end, the Company added a VP of Operations with extensive experience to drive customer service excellence.
Also during the quarter, the Company initiated a thorough operational review and commenced a new strategic planning process. The operational review included a detailed reassessment and analysis of accounts receivable which resulted in the identification of higher delinquent accounts which may be uncollectible. The problem has been addressed and the impact of the change is largely expected to be incurred by the end of Q4, 2015.
Recently, the Company updated its AF Connect mobile app in conjunction with the release of a connected thermostat. "We are excited about the evolution of our products to include these new features to better serve our customers. In fact, 42% of our new subscribers are now choosing the AF Connect service which allows our clients to interact and control their connected devices remotely with their smart phone," said Graham Badun.
AlarmForce also announced its intention to identify and partner with a third-party leading camera manufacturer to enhance its VideoRelay service and realize cost-savings for both customers and stakeholders. "This partnership will address our current and future customers' needs to provide state-of-the-art protection for their homes," added Badun.
In the first nine months of the year the Company repurchased a total of 70,500 common shares for cancellation under the normal course issuer bid for a total cost of $0.7 million and has paid dividends totaling $1.2 million. During the third-quarter $0.5 million was returned to shareholders through the normal course issuer bid and dividends paid. AlarmForce made the decision to repurchase shares as they were available at a price that the Company believes to be below the underlying intrinsic value of the Company. In the future we expect to continue repurchasing shares opportunistically if they trade at a discount to the underlying intrinsic value.
About AlarmForce
AlarmForce provides security alarm monitoring, personal emergency response monitoring, video surveillance and related services to residential and commercial subscribers throughout Canada and the United States. More information about the company's products and services can be found at alarmforce.com.
Disclosure
EBITDA is defined as earnings before interest expenses, income taxes, depreciation and amortization. EBITDA is a key 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 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 measure presented by other issuers.
This document contains forward-looking statements which reflect management's current expectations about future events and financial and operating performance of the Company. Words such as "may", "will", "should", "could", "anticipate", "believe," "expect, "intend", "plan", "potential", "continue" and similar expressions have been used to identify these forward-looking statements. Forward-looking statements contained in this document may include estimates, plans, expectations, opinions, forecasts, projections, guidance or other statements that are not statements of fact. These statements reflect management's current views with respect to future events or conditions, including prospective financial performance, financial position, and predictions of future actions, plans or strategies. Certain material factors and assumptions were applied in drawing our conclusions and making these forward looking statements. These statements reflect management's current views, beliefs and assumptions and are subject to certain inherent risks and uncertainties.
Contacts:
News Media:
Hugh Mansfield
(416)-599-0024 / (212)-370-5045
Investors:
Chris Lynch
(416)-445-2414
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Datum: 10.09.2015 - 20:59 Uhr
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