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AlarmForce Announces 2014 Q2 Results
|By Marketwired .
|June 12, 2014 05:02 PM EDT
TORONTO, ONTARIO -- (Marketwired) -- 06/12/14 -- AlarmForce Industries Inc., (TSX: AF) Canada's largest manufacturer and installer of live two-way voice home alarm systems, is pleased to announce results for the six months ended April 30, 2014:
Three months ended Six months ended
April 30, April 30, April 30, April 30,
2014 2013 2014 2013
--------- ------------ --------- ---------
($ in thousands, except per
share and subscriber amounts)
Total revenue $ 13,153 $ 12,104 $ 26,138 $ 24,026
Net income $ 1,772 $ 1,319 $ 4,177 $ 2,694
Shares outstanding, diluted 11,929 12,275 11,957 12,275
Diluted net income per share $ 0.15 $ 0.11 $ 0.35 $ 0.22
Cash flows from operations $ 624 $ 2,009 $ 5,626 $ 3,659
EBITDA(i) $ 3,717 $ 2,936 $ 8,388 $ 6,152
Adjusted EBITDA(i) (before
marketing expenses) $ 7,007 $ 6,324 $ 14,435 $ 12,753
Adjusted EBITDA(i) per diluted
share $ 0.59 $ 0.52 $ 1.21 $ 1.04
Recurring monthly revenue (RMR) $ 3,984 $ 3,750 $ 3,984 $ 3,750
Total subscribers 143,800 135,600 143,800 135,600
(i)EBITDA is a non-IFRS financial measure and is defined in the disclosure section accompanying this press release.
AlarmForce closed its second quarter of 2014 with 143,800 subscribers, reflecting a growth rate of 6% in subscriber accounts.
The Company's net income for the six months ended April 30, 2014 was $4.2 million, reflecting a 55% increase over the comparative 2013 period, while diluted net income per share was $0.35, reflecting a 60% increase.
For the six month period, AlarmForce revenues increased to $26.1 million, reflecting a growth in revenues of 9%, while RMR increased by 6% during the same period. Canadian revenue increased by 4% to $19.2 million and US revenue increased by 27% to $6.9 million.
EBITDA increased by $2.2 million, an increase of 36% over 2013. Although marketing expenses decreased by $0.6 million when compared to the same period in 2013, the Company expects to maintain the same advertising spend in 2014 as in 2013. Excluding the impact of these marketing expenses, adjusted EBITDA for the six month period increased by 13% from $12.8 million to $14.4 million.
Cash flows from operations increased to $5.6 million from $3.7 million, an increase of $1.9 million or 54%. The Company plans to continue its growth without adding debt, funding all growth and product development from the Company's internal cash flows in 2014.
During the second quarter, the Board announced an increase in its quarterly dividend to $0.03 per share from $0.025 per share. A quarterly dividend of $0.03 was declared and subsequently paid on May 20, 2014.
During the second quarter, the Board also declared a special one-time dividend of $0.60 per common share for all shareholders on record as at April 30, 2014, which was subsequently paid on May 20, 2014. The special dividend, which was in addition to the regular quarterly dividend reflects the Company's strong cash position. It demonstrates the Company's ability to continue investing in growth from internally generated cash, while at the same time giving shareholders an additional opportunity to benefit from our operational strength.
The Company purchased for cancellation a total of 73,600 shares for a total price of $0.7 million under the NCIB in 2014.The decrease in total shares outstanding from the comparative six month period is due to shares repurchased by the Company for cancellation under its share buyback program, partly offset by the exercise of stock options in the same period. This had a 2.7% positive effect on diluted net income per share and EBITDA per share.
Mr. Pizzonia, interim President and CEO, stated that "Our vertical integration and competitive cost structure enable us to compete favourably on both price and service, resulting in a better customer experience and higher retention of accounts created through organic growth. Our focus continues to be on providing an integrated customer experience with increased efforts on retention. We will continue leveraging our value proposition and core competitive strengths to drive subscriber growth, and increase RMR though the adoption of enhanced service offerings such as VideoRelay and CellWave."
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 www.alarmforce.com.
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 this measure 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.
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