TORONTO, ONTARIO--(Marketwired - June 14, 2017) - AlarmForce Industries ("AlarmForce") (TSX:AF) -

Second Quarter Operating Highlights

  • Consolidated revenue decreased by 3% or $0.5 million for Q2 to a total of $13.7 million compared to $14.2 million in the comparative period of 2016. This reduction was driven by an overall reduction in US revenue, where Canadian revenue increased 1% year over year

  • Recurring monthly revenue was $4.3 million at the end of Q2 2017, down 3% from the end of the fiscal October 31, 2016

  • EBITDA for the second quarter decreased by 2% or $0.1 million to $4.1 million year-over-year. Adjusting for one-time items, EBITDA would have been $4.3 million

  • Net income for Q2 increased by 30% to $2.3 million. This increase is due to lower marketing and advertising activity and a one time legal settlement from the same period last year

  • Diluted earnings per share for Q2 2017 increased to $0.20 (vs. $0.15 during Q2 2016)

  • Total subscribers declined during Q2 to 131,160. This is down 2.7% from Q1 or 3,583 subscribers, over 70% of which were in the US. This reflects the change in focus away from the US market as well as the change in cancellation practices related to last year's restatement, lower advertising expenditures and a focus on higher quality subscribers in the Canadian market

  • Average revenue per new Canadian alarm subscriber (ARPNU CAN) during Q2 was $41.15 while consolidated ARPNU was $39.80, up 10% from the same period last year where the company was still adding new US subscribers in select markets

Year-to-Date Operating Highlights

  • Consolidated revenues decreased by 3% or $0.8 million in the first half of 2017 to a total of $27.6 million compared to $28.4 million in the comparative period of 2016

  • Canadian revenue was flat for the first half of 2017 compared to the same period in 2016 at $19.7 million while US revenue was down 10% to $7.9 million

  • Net Income of $3.3 million, down from $3.8 million during the same period for 2016, diluted EPS of $0.29 versus $0.32 for 2016

  • EBITDA decreased by 16% to $6.8 million, impacted adversely by the cost associated with the one-time legal and advisory fees incurred in relation to the consumer contract and employment classification issues and internal work necessary in implementing the requirements associated with remedying these issues. EBITDA adjusted for one time items is $7.9 million, down 2.8% over the same period last year

  • Total subscribers of 131,160 compared to 141,851 for the same period in 2016 which has been adjusted to reflect the restated related adjustments

  • ARPNU for the first six months of 2017 of $39.01, up from $35.68 for the same period of 2016 when the company was still adding new US subscribers in select markets

Three months ended Six months ended
April 30,
April 30,
Change April 30,
April 30,
($ in thousands, except per share and subscriber amounts)
Total revenue $ 13,727 $ 14,187 -3% $ 27,597 $ 28,431 -3%
Recurring monthly revenue (RMR) $ 4,334 $ 4,466 -3% $ 4,334 $ 4,466 -3%
EBITDA* $ 4,105 $ 4,175 -2% $ 6,804 $ 8,118 -16%
Net income $ 2,256 $ 1,731 30% $ 3,301 $ 3,763 -12%
Shares outstanding, diluted 11,548 11,565 0% 11,562 11,590 0%
Diluted net income per share $ 0.20 $ 0.15 31% $ 0.29 $ 0.32 -12%
Total subscribers 131,160 141,851 -7.5% 131,160 141,851 -7.5%

*EBITDA is a non-IFRS financial measure and is defined in the disclosure section accompanying this press release.

Total revenues for the first six months of 2017 were $27.6 million a decrease of 3% (2% in constant currency) over the same period in 2016. Recurring Monthly Revenue totaled $4.3 million at the end of Q2 2017, down from $4.5 million at the end of fiscal 2016. Gross profit totaled $18.3 million compared to $19.5 million or a decline of 6% over the same period in 2016. Net income increased in the second quarter from the same period of 2016 to $2.3 million from $1.7 million. Average revenue per new Canadian subscriber during the first six months of 2017 increased 9% to $39.01 compared to $35.68 during the same period of 2016. Diluted earnings per share increased to $0.20 compared to $0.15 in the same period of 2016.

"During the second quarter we successfully launched 'AlarmCare Go', our new mobile PERS offering, and we are very encouraged by the early results in this burgeoning demographic segment," said Graham Badun, President and CEO of AlarmForce Industries Inc. "We continue to drive both ARPU and ARPNU higher as a result of the multiple service offerings and bundled products in home automation and security. We remain focused on growing our existing subscriber base and increasing RMR in the Canadian market."

During the first half of 2017, the Company paid quarterly cash dividends to shareholders totaling $1,041,324 compared to $1,042,264 in the comparative period of 2016. The Board of Directors declared a cash dividend of $0.045 payable for all issued and outstanding shares of the Company on record as at April 28, 2017, paid on May 19, 2017.

With the Company's Normal Course Issuer Bid ("NCIB") approved by the Toronto Stock Exchange in March 2017, the Company purchased 38,000 common shares at an average price of $10.71 and subsequently cancelled these shares during the first six months of 2017. The Board believes repurchasing shares for cancellation at the right price is in the best interest of the Company and such purchases constitute an attractive investment opportunity and a desirable use of cash that enhances shareholder value.

Subsequent Events

Following the second quarter the Company commenced discussions regarding the sale of its US subscription base. As previously discussed, part of our long-term strategy involved the departure from the US market as the cost per acquisition for new subscribers had turned out to be cost prohibitive and not consistent with parallel opportunities in the Canadian market. On June 14, 2017, the Company entered into an agreement to sell it US subscribers to Lancaster, PA headquartered Select Security for total consideration of US$11.6 million (approximately CAD$15.3 million). The transaction is expected to close on or around June 23, 2017.

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


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 measures presented by other issuers.

Forward-Looking Statements

Certain statements contained in this press release constitute forward-looking statements or information (collectively forward-looking statements) within the meaning of applicable securities legislation. Forward-looking statements are often identified by words such as "may", "will", "should", "could", "anticipate", "believe", "expect", "intend", "plan", "potential", "continue" and similar expressions. Forward-looking statements contained or referred to in this press release includes, but may not be limited to, the Company's expectation that its focus on the Canadian markets will continue to yield encouraging results.

The forward‐looking statements in this press release reflect the current expectations, assumptions and/or beliefs of AlarmForce about future events based on information currently available to AlarmForce. In connection with the forward‐looking statements contained in this press release, AlarmForce has made assumptions about, among other things: the quality of its subscriber base will improve through a focus on the Canadian markets; the ability to close the sale of its US subscriber base as scheduled, no significant events occur outside of AlarmForce's normal course of business; general economic conditions; the Company's business plans; hiring and labour trends and conditions; timing and payment of dividends; treatment under governmental regulatory regimes and tax laws; and currency, exchange and interest rates.

Although AlarmForce believes that the expectations reflected in the forward‐looking statements contained in this press release, and the assumptions on which such forward‐looking statements are made, are reasonable, there can be no assurance that such expectations will prove to be correct. Readers are cautioned not to place undue reliance on forward‐looking statements included in this press release, as there can be no assurance that the plans, intentions or expectations upon which the forward‐looking statements are based will occur. By their nature, forward‐looking statements involve risks, uncertainties and other factors that could cause actual events, results, liabilities and financial results in future periods to differ materially from those expressed or implied by such forward‐looking statements. These risks and uncertainties include, among other things: the Company may be unsuccessful in improving the quality and the size of its subscriber base, the sale of the US subscriber base may not close as scheduled or at all, and other risks, and the risks discussed in the "Risk Factors" section of the Company's Annual Information Form and the "Risks and Uncertainties" section of the Company's MD&A, copies of which may be obtained at

The forward-looking statements contained in this press release speak only as of the date of this press release. Except as may be required by applicable securities laws, AlarmForce disclaims any intent or obligation to update any forward-looking statements, whether as a result of new information, future events or results or otherwise.

Contact Information:

News Media:
Hugh Mansfield
(416)-599-0024 ext. 237

Chris Lynch