Protection One Announces Third Quarter 2008 Results




              Commercial RMR Additions Increased 6%

     Conference Call Scheduled for 10 a.m. Eastern Time Today
                        to Review Results

LAWRENCE, Kan., Nov. 7, 2008 (GLOBE NEWSWIRE) -- Protection One, Inc. (Nasdaq:PONE), one of the leading providers of security monitoring services in the United States, today reported financial results for the third quarter ended September 30, 2008. All comparisons below are to the quarter ended September 30, 2007 unless otherwise indicated.

Richard Ginsburg, Protection One's president and chief executive officer, said, "Despite the difficult economic environment, our results this quarter indicate progress in the key areas we've previously identified. Internal commercial RMR additions increased 6% this quarter. Internal residential additions outside the Southeast also increased 3%. Commercial and residential average revenue per unit increased year over year and on a sequential quarter basis. Sales of e-Secure, our web-based interactive monitoring service, continued to grow in units and as a percentage of total sales. We've also made significant process improvements in our Retail business, which we expect will help monitoring margin in coming quarters. Finally, attrition on the acquired IASG portfolio was lower than last year."

Ginsburg closed, "We are pleased to have ample liquidity and are not anticipating a need to access the capital markets any time soon to refinance debt. We believe we have more than adequate financial resources to execute our plans."

Consolidated third quarter revenue increased slightly to $94.1 million. Consolidated RMR increased to $26.9 million as of September 30, 2008 from $26.7 million as of September 30, 2007. The Company's net loss for the quarter ended September 30, 2008 increased to $(11.1) million, or $(0.44) per share, from $(8.7) million, or $(0.34) per share in 2007 and adjusted EBITDA declined to $27.1 million from $30.2 million. The decline in EBITDA is due to the Company spending more on brand awareness and lead generation activities to create RMR additions; experiencing higher costs to service its Retail account base, which it is addressing with process improvements; incurring higher health benefit costs; and realizing less contribution from Multifamily due to attrition.

Adjusted EBITDA, Recurring Monthly Revenue ("RMR") and net debt, as described in this release, are all non-GAAP financial measures and are described in greater detail in the attached schedules. For a reconciliation of these non-GAAP measures, see the attached schedules.

Segment Results

Retail

The Company's Retail segment directly sells, installs, monitors and maintains electronic security and life safety systems for residential and commercial customers. As of September 30, 2008, the Company served approximately 582,000 retail customers, generating approximately $20.6 million RMR.

Total Retail segment revenue of $73.6 million in the third quarter of 2008 was slightly higher than revenue reported in the same period last year. Retail installation revenue increased from higher levels of amortization on previously deferred revenue. Monitoring and service revenue decreased by less than one percent to $64.0 million in the third quarter of 2008 as a result of slightly lower RMR during the period. The Retail segment's operating income was in a break even position compared to operating income of $1.2 million in the third quarter of 2007, due to increased spending on brand awareness and lead generation activities and higher costs to service its customer base, as mentioned above, as well as higher amortization of previously deferred customer acquisition costs. Retail is presently centralizing certain customer care functions to improve efficiency and reduce costs, the benefits of which are expected to be realized in 2009.

Retail RMR decreased by only 0.2%, or $40,000, from the year ago period. RMR additions of $617,000, including account purchases, were 1.0% higher than in the third quarter of 2007. Protection One increased internal residential RMR additions outside the Southeast region by 3% despite a difficult housing market, and increased internal commercial additions by 6%, both of which indicate that the Company's marketing initiatives are gaining traction. RMR additions decreased in the Southeast region as the Company wound down its relationship with BellSouth this quarter. Average revenue per new residential and commercial customer continued to increase as the Company's distinctive e-Secure offering represented an increasing percentage of sales.

Retail gross attrition in the third quarter of 2008 increased from the prior year period to 14.6% in 2008 from 14.4% in 2007. Attrition on the non-IASG Retail base increased slightly due primarily to higher incidence of non-payment and other financial cancelations. Attrition on the IASG base improved compared to one year ago since peaking in the fourth quarter of 2007.

Wholesale

The Company's Wholesale business, CMS, contracts with independent security alarm dealers nationwide to provide alarm system monitoring services to residential and business customers. As of September 30, 2008, this unit served approximately 4,600 dealers by monitoring over 1.0 million homes and businesses on their behalf.

Wholesale monitoring and service revenue increased 7.6% to $12.6 million in the third quarter of 2008 as a result of growth by its largest dealer customer. RMR additions more than doubled from $149,000 one year ago to $337,000 in the third quarter of 2008.

Wholesale monitoring and service margin decreased slightly to $5.4 million in the third quarter of 2008 from $5.5 million one year ago, although the business unit recorded sequential quarter improvement that exceeded $0.6 million. Operating income was $0.5 million in 2008 compared to $1.4 million in the same period in 2007. Excluding the impact of an increase in Wholesale's portion of corporate shared service costs, Wholesale operating income would have increased from the prior year.

Multifamily

The Company's Multifamily business unit provides monitoring and maintenance of electronic security systems for tenants of multifamily residences under long-term contracts with building owners and managers. As of September 30, 2008, Multifamily had $2.3 million of RMR arising from approximately 250,000 units in more than 1,500 rental properties.

Multifamily total revenue decreased 3.5% in the third quarter of 2008 compared to 2007. Monitoring and related services revenue also declined by 4.7% to $7.6 million due to a decrease in RMR of 7.6% from the third quarter of 2007. Multifamily RMR was $2.3 million versus $2.5 million in the year ago period. Multifamily operating income decreased to $0.4 million compared to $1.6 million in the third quarter of 2007 principally from lower revenues, increased monitoring and general and administrative costs as well as a $0.5 million trade name impairment recorded in the third quarter of 2008. Multifamily is scaling its operations to keep future costs in alignment with revenue levels.

Multifamily experienced elevated attrition from the uncertain collection status of a few large customers. The Company's policy is to consider these at-risk customers as attrition which caused Multifamily's annualized gross attrition rate to increase to 21.2% in 2008 from 9.6% in 2007. As of September 30, 2008, Multifamily's backlog of sold but uninstalled units and installed units not yet billed was nearly 6,500 units.

Balance Sheet

The Company is not expected to require any refinancing of its existing debt until November 15, 2011, the date on which its Senior Secured Notes mature. The Company ended the third quarter of 2008 with $40.5 million cash on hand, with excess cash and cash equivalents conservatively invested in United States treasury portfolios. As of November 5, 2008, the Company also had a minimum of $19.7 million available for borrowing under its revolving credit facility.

The Company's net debt decreased to $483.2 million at September 30, 2008 from $485.0 million at December 31, 2007, as free cash flow offset fees and expenses associated with the first quarter refinancing. With the execution of hedge transactions during 2008, $365.3 million, or approximately 70%, of the Company's debt effectively carries a fixed interest rate. Interest costs on approximately 8%, or $42.5 million, of the Company's debt is variable corresponding to changes in LIBOR. Interest costs on the remaining 22%, or $110.3 million, is variable with the prime rate. The recent reductions in the prime rate lowered the Company's annualized cash interest expense by $1.1 million.

The senior secured credit facility is the only instrument that requires periodic principal payments, which are $750,000 per quarter as well as annual excess cash flow prepayments commencing with the year ending December 31, 2008. Based on projections of excess cash flow through the end of 2008, the Company expects to make a prepayment of approximately $10 million under the senior secured credit facility during the first quarter of 2009.

See "Non-GAAP Reconciliations" in the attached schedules for a reconciliation of net debt to reported debt and cash and equivalents.

Conference Call and Webcast

Protection One will host a conference call and audio webcast today at 10:00 a.m. Eastern time to review these results. The call may be accessed by dialing (877) 681-3377 (inside the United States and Canada) or via a webcast at www.ProtectionOne.com. The reference code associated with the call is 6479194.

A webcast replay will be available shortly after the call at www.ProtectionOne.com. A telephonic replay of the call also will be available until Nov.14, 2008. To listen to the telephonic replay, dial (719) 457-0820 or (888) 203-1112 and enter the following passcode: 6479194.

Forward-looking Statements: Certain matters discussed in this news release are "forward-looking statements." The Private Securities Litigation Reform Act of 1995 has established that these statements qualify for safe harbors from liability. Forward-looking statements may include words or phrases such as "we believe," "we anticipate," "we expect" or words of similar meaning. Forward-looking statements may describe our future plans, objectives, expectations or goals, including, but not limited to, with respect to our earnings and financial condition, customer account acquisition strategy and attrition, liquidity and sources of funding and capital expenditures and debt service capacity. Our actual results may differ materially from those discussed here as a result of numerous factors, including, but not limited to, our significant debt obligations, net losses and competition. See our Quarterly Report on Form 10-Q for the period ended September 30, 2008, which is expected to be filed with the SEC on November 10, 2008 and our Annual Report on Form 10-K for the year ended December 31, 2007, which was filed with the SEC on March 17, 2008, for a further discussion of factors affecting our performance. Protection One disclaims any obligation to update any forward-looking statements as a result of developments occurring after the date of this news release.

Protection One is one of the largest vertically integrated national providers of sales, installation, monitoring, and maintenance of electronic security systems to homes and businesses and has been recognized as one of "America's Most Trustworthy Companies" by Forbes.com. Network Multifamily, Protection One's wholly owned subsidiary, is the largest security provider to the multifamily housing market. The company also owns the nation's largest provider of wholesale monitoring services, the combined operations of CMS and Criticom International. For more information about Protection One, visit www.ProtectionOne.com. (PONENR)

The Protection One, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=5001



                        PROTECTION ONE, INC.
                          and Subsidiaries
   Condensed Consolidated Statements of Operations and Comprehensive Loss
                            (unaudited)
                                 Three Months          Nine Months
                              Ended September 30,  Ended September 30,
                              ------------------  --------------------
 (in thousands, except per
  share amounts)                2008       2007       2008      2007
                                ----       ----       ----      ----
 Revenue

  Monitoring & related
   services                   $ 84,192  $ 84,253  $ 250,020  $ 230,034

 Installation and other          9,864     9,270     28,014     25,294
                              --------  --------  ---------  ---------
   Total revenue                94,056    93,523    278,034    255,328

 Cost of revenue (exclusive
  of amortization and
  depreciation shown below):

  Monitoring & related
   services                     27,948    26,656     83,766     71,650

  Installation and other        13,194    11,173     36,166     30,215
                              --------  --------  ---------  ---------
   Total cost of revenue
    (exclusive of 
     amortization and
     depreciation shown
     below)                     41,142    37,829    119,932    101,865


 Selling expenses               14,647    12,308     42,133     35,080
 General & administrative       20,442    20,178     59,551     57,433
 Merger related severance           --     1,185         --      3,603
 Amortization and depre-
  ciation                       16,431    17,829     50,065     44,387
 Impairment of trade name          475        --       475          --
                              --------  --------  ---------  ---------

   Total operating expenses     51,995    51,500    152,224    140,503
                              --------  --------  ---------  ---------
   Operating income                919     4,194      5,878     12,960


 Other expense (income)
  Interest expense              12,219    13,262     36,876     36,409
  Interest income                (175)     (474)       (752)    (1,940)
  Loss on retirement of debt       --        --      12,788         --
  Other                           (31)       (22)       (77)       (67)
                              --------  --------  ---------  ---------
   Total other expense         12,013     12,766     48,835     34,402
                              --------  --------  ---------  ---------
   Loss before income taxes   (11,094)    (8,572)   (42,957)   (21,442)


  Income tax expense                50       112        354        602
                              --------  --------  ---------  ---------
   Net loss                   $(11,144) $ (8,684) $ (43,311) $ (22,044)

 Other comprehensive income
  net of tax

  Unrealized gain on cash
   flow hedging instruments     (1,120)     (133)     1,004       (124)
                              --------  --------  ---------  ---------
   Comprehensive loss        $ (12,264) $ (8,817) $ (42,307) $ (22,168)
                              ========  ========  =========  =========

 Basic and diluted net loss
  per common share(a)        $   (0.44) $  (0.34) $   (1.71) $   (0.96)


 Weighted average common
  shares outstanding            25,311    25,307     25,308     22,925

 (a) - Options are not included in the computation of diluted earnings
 per share because to do so would have been antidilutive for each of
 the periods presented


                  PROTECTION ONE, INC 
                   and Subsidiaries
            Supplemental Financial Information
                      (unaudited)

                            Three Months         Nine Months
                         Ended September 30, Ended September 30,
                         ------------------  ------------------
  (in thousands)           2008      2007      2008      2007
    Segment Information    ----      ----      ----      ----   

  Retail
  Revenue
   Monitoring & related
    services             $ 64,013  $ 64,584  $191,262  $180,250
   Installation and
    other                   9,546     8,934    27,039    24,577
                         --------  --------  --------  --------
     Total revenue         73,559    73,518   218,301   204,827

  Cost of revenue
  (exclusive of 
   amortization and 
   depreciation shown 
   below):

   Monitoring & related
    services               18,737    18,628    57,027    53,202
   Installation and 
    other                  12,535    10,485    34,306    28,306
                         --------  --------  --------  --------
     Total cost of
      revenue (exclusive
      of amortization
      and depreciation 
      shown below)         31,272    29,113    91,333    81,508

  Selling expenses         13,836    11,436    39,121    33,070
  General & admini-
   strative expense        15,514    16,514    45,938    46,405
  Merger related
   severance                   --     1,185        --     3,603
  Amortization of
   intangibles and depre-
   ciation expense         12,968    14,022    39,546    35,413
                         --------  --------  --------  --------
     Total operating
      expenses             42,318    43,157   124,605   118,491

     Operating income    $    (31) $  1,248  $  2,363  $  4,828
     Operating margin        0.0%      1.7%      1.1%      2.3%

  Wholesale
  Revenue
   Monitoring & related
    services             $ 12,574  $ 11,687  $ 35,761  $ 25,722
   Other                      184       301       646       301
                         --------  --------  --------  --------
     Total revenue         12,758    11,988    36,407    26,023

  Cost of revenue
  (exclusive of 
   amortization and 
   depreciation 
   shown below):
  Monitoring & related
   services                 7,189     6,147    20,928    12,714

  Selling expenses            466       539     1,800       962
  General & admini-
   strative expense         2,655     1,718     7,289     5,157
  Amortization of intan-
   gibles and depreci-
   ation expense            1,925     2,229     5,913     4,230
                         --------   -------  --------  --------
     Total operating
      expenses              5,046     4,486    15,002    10,349

     Operating income    $    523  $  1,355  $    477  $  2,960
     Operating margin        4.1%     11.3%      1.3%     11.4%


  Multifamily
  Revenue
  Monitoring & related
   services              $  7,605  $  7,982  $ 22,997  $ 24,062
  Installation and other      134        35       329       416
                         --------  --------  --------  --------
     Total revenue          7,739     8,017    23,326    24,478

  Cost of revenue
  (exclusive of amorti-
   zation and depreci-
   ation shown below):
   Monitoring & related
    services                2,022     1,881     5,811     5,734
  Installation and other      659       688     1,860     1,909
                         --------  --------  --------  --------
   Total cost of
    revenue (exclusive
    of amortization
    and depreciation
    shown below)            2,681     2,569     7,671     7,643


  Selling expenses            345       333     1,212     1,048
  General & adminis-
   trative expense          2,273     1,946     6,324     5,871
  Amortization of intan-
   gibles and depreci-
    ation expense           1,538     1,578     4,606     4,744
  Impairment of trade
   name                       475        --       475        --
                         --------  --------  --------  --------
     Total operating
      expenses              4,631     3,857    12,617    11,663

     Operating income    $    427  $  1,591  $  3,038  $  5,172
     Operating margin        5.5%     19.8%     13.0%     21.1%



                        PROTECTION ONE, INC.
                          and Subsidiaries
             Supplemental Financial Information (cont.)
                             (unaudited)

                                Three Months Ended   Nine Months Ended
                                   September 30,       September 30,
                                ------------------  ------------------
 (in thousands)                    2008      2007      2008      2007
   Supplemental Financial          ----      ----      ----      ----
    Information

 FAS 123(R) Expense in G&A
  Retail                        $    376  $    385  $  1,090  $  1,128
  Wholesale                           --        --        --        --
  Multifamily                         --        --        --        --
                                --------  --------  --------  --------
   FAS 123(R) expense in G&A         376       385     1,090     1,128

 Amortization of Deferred Costs
  in Excess of Amort. of
  Deferred Rev
  Retail                        $  7,994  $  5,969  $ 21,316  $ 16,472
  Wholesale                           --        --        --        --
  Multifamily                        521       656     1,499     1,398
                                --------  --------  --------  --------
   Amort. of deferred costs in
    excess of amort. of deferred
    rev.                           8,515     6,625    22,815    17,870


 Investment in New Accounts and
  Rental Equipment, Net
  Retail                        $  9,409  $  8,318  $ 29,248  $ 23,690
  Wholesale                           --        --        --        --
  Multifamily                      1,316     1,019     3,012     2,475
                                --------  --------  --------  --------
   Investment in new accounts
    and rental equipment, net     10,725     9,337    32,260    26,165


 Property Additions, Exclusive
  of Rental Equipment
  Retail                        $  1,223  $  3,638  $  4,343  $  6,166
  Wholesale                          819       317     1,407       545
  Multifamily                        315        19       433       266
                                --------  --------  --------  --------
   Property additions, exclusive
    of rental equipment            2,357     3,974     6,183     6,977



                       PROTECTION ONE, INC.
                        and Subsidiaries
                 Supplemental Financial Information (cont.)
                           (unaudited)

                                Three Months Ended  Nine Months Ended
                                   September 30,       September 30,
                                ------------------  ------------------
 (in thousands)                   2008      2007      2008      2007
                                  ----      ----      ----      ----
  Supplemental Financial
   Information (Non-GAAP)

 Recurring Monthly Revenue
  (RMR)                         $ 26,883  $ 26,651  $ 26,883  $ 26,651
                                ========  ========  ========  ========

 RMR Rollforward - Retail
  Beginning RMR                 $ 20,572  $ 20,661  $ 20,628  $ 16,429
  RMR additions from direct
   sales                             594       600     1,784     1,732
  Additions from the Merger           --        --        --     4,133
  RMR additions from account
    purchases                         23        11        29        30
  RMR losses                        (749)     (744)   (2,111)   (1,896)
  Price increases and other          111        63       221       163
                                --------  --------  --------  --------
   Ending RMR                   $ 20,551  $ 20,591  $ 20,551  $ 20,591


 RMR Rollforward - Wholesale
  Beginning RMR                 $  3,965  $  3,679  $  3,615  $    963
  RMR additions from direct
   sales                             337       149     1,107       571
  Additions from the Merger           --        --        --     2,549
  RMR losses                        (264)     (211)     (694)     (465)
  Price increases and other           --       (39)       10       (40)
                                --------  --------  --------  --------
   Ending RMR                   $  4,038  $  3,578  $  4,038  $  3,578


 RMR Rollforward - Multifamily
  Beginning RMR                 $  2,378  $  2,505  $  2,463  $  2,596
  RMR additions from direct
   sales                              24        26        86        61
  RMR losses                        (124)      (61)     (308)     (213)
  Price increases and other           16        12        53        38
                                --------  --------  --------  --------
   Ending RMR                   $  2,294  $  2,482  $  2,294  $  2,482


 RMR Rollforward - 
  Consolidated
  Beginning RMR                 $ 26,915  $ 26,845  $ 26,706  $ 19,988
  RMR additions from direct
   sales                             955       775     2,977     2,364
  Additions from the Merger           --        --        --     6,682
  RMR additions from account
   purchases                          23        11        29        30
  RMR losses                      (1,137)   (1,016)   (3,113)   (2,574)
  Price increases and other          127        36       284       161
                                --------  --------  --------  --------
   Ending RMR                   $ 26,883  $ 26,651  $ 26,883  $ 26,651



                                  Annualized Three      Twelve Months
                                    Months Ended            Ended
                                    September 30,        September 30,
 RMR Attrition                    -----------------     ---------------
                                   2008      2007      2008      2007
                                   ----      ----      ----      ----

 RMR Attrition - Gross
  Retail                           14.6%     14.4%     13.6%     12.8%
  Wholesale                        26.4%     23.3%     23.4%     22.3%
  Multifamily                      21.2%      9.6%     15.2%     13.7%

 RMR Attrition - Net of
  New Owners  Retail               12.7%     12.5%     11.8%     10.8%


                                   September 30,       
                                   2008     2007 
                                  ------   -----
 Monitored Sites 
                
 Retail Monitored Sites          582,293   608,752

 Wholesale Monitored Sites     1,004,947   839,571 

 Multifamily Monitored Sites     254,840   281,265





                        PROTECTION ONE, INC.
                          and Subsidiaries
                      Non-GAAP Reconciliations
                             (unaudited)

 Recurring Monthly Revenues (RMR)

 RMR is the sum of all the monthly revenue we are entitled to receive
 under contracts with customers in effect at the end of a period.

 A reconciliation of RMR to Protection One, Inc.'s reported total
 revenue follows:

                                Three Months Ended   Nine Months Ended
                                   September 30,       September 30,
                                ------------------  ------------------
 (in millions)                    2008      2007      2008      2007
                                  ----      ----      ----      ----

 RMR at September 30            $ 26,883  $ 26,651  $ 26,883  $ 26,651
  Amounts excluded from RMR:
   Amortization of deferred
    revenue                        1,211       941     1,211       941
   Installation and other
    revenue(a)                     3,232     3,414     3,232     3,414
                                --------  --------  --------  --------
  Revenue (GAAP basis)
   September                    $ 31,326  $ 31,006  $ 31,326  $ 31,006
   July - August                  62,730    62,517        --        --
   January - August                   --        --   246,708   224,322
                                --------  --------  --------  --------
   Total period revenue         $ 94,056  $ 93,523  $278,034  $255,328

 (a) Revenue that is not pursuant to periodic contractual billings


 The Company believes the presentation of RMR is useful to investors
 because the measure is often used by investors and lenders to
 evaluate companies such as Protection One with recurring revenue
 streams. Management monitors RMR, among other things, to evaluate the
 Company's ongoing performance.

 Adjusted EBITDA

 A reconciliation of Adjusted EBITDA to Protection One, Inc.'s
 reported loss before income taxes follows:

                                Three Months Ended   Nine Months Ended
                                   September 30,       September 30,
                                ------------------  ------------------
 (in thousands)                   2008      2007      2008      2007
                                  ----      ----      ----      ----

 Loss before income taxes       $(11,094) $ (8,572) $(42,957) $(21,442)
 Plus:
 Interest expense, net            12,044    12,788    36,124    34,469
 Amortization and depreciation
  expense                         16,431    17,829    50,065    44,387
 Amort. of deferred costs in
  excess of amort. of deferred
  revenue                          8,515     6,625    22,815    17,870
 Stock based compensation
  expense                            376       385     1,090     1,128
 Other costs including
  merger-related items               374     1,185       685     3,603
 Loss on retirement of debt           --        --    12,788        --
 Impairment of trade name            475        --       475        --
 Less:
 Other income                        (31)      (22)      (77)      (67)
                                --------  --------  --------  --------
  Adjusted EBITDA               $ 27,090  $ 30,218  $ 81,008  $ 79,948


 Adjusted EBITDA is used by management in evaluating segment
 performance and allocating resources, and management believes it is
 used by many analysts following the security industry. This
 information should not be considered as an alternative to any measure
 of performance as promulgated under accounting principles generally
 accepted in the United States of America, such as loss before income
 taxes or cash flow from operations. Items excluded from Adjusted
 EBITDA are significant components in understanding and assessing the
 consolidated financial performance of the Company. See the table
 above for the reconciliation of Adjusted EBITDA to consolidated loss
 before income taxes. The Company's calculation of Adjusted EBITDA may
 be different from the calculation used by other companies and
 comparability may be limited. Management believes the presentation of
 non-GAAP financial measures such as Adjusted EBITDA is useful because
 it allows investors and management to evaluate and compare the
 Company's operating results from period to period in a meaningful and
 consistent manner in addition to standard GAAP financial measures.


 Net Debt reconciled to GAAP measures

                                            September 30, December 31,
    (in thousands)                              2008          2007
                                            ------------  ------------

 Senior credit facility, maturing March 31,
  2012, variable                            $    292,500  $    294,750
 Senior secured notes, maturing November
  2011, fixed 12.00%, face value                 115,345       115,345
 Unsecured term loan, maturing March 14,
  2013, variable                                 110,340            --
 Senior subordinated notes, maturing
  January 2009, fixed 8.125%, face value                       110,340
 Capital leases                                    5,519         5,599
                                            ------------  ------------
                                            $    523,704  $    526,034

 Less cash and cash equivalents                  (40,478)      (40,999)
                                            ------------  ------------
  Net Debt                                  $    483,226  $    485,035

 Net Debt is utilized by management as a measure of the Company's
 financial leverage and the Company believes that investors also may
 find Net Debt to be helpful in evaluating the Company's financial
 leverage. This supplemental non-GAAP information should be viewed in
 conjunction with the Company's consolidated balance sheets in the
 Company's report on Form 10-Q for the period ended September 30, 2008.
 While not included in net debt, the Company also had notes receivable
 due from its Wholesale dealers of approximately $3.6 million and
 $5.9 million as of September 30, 2008 and December 31, 2007,
 respectively.


            

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