|By Marketwired .||
|March 5, 2014 05:00 PM EST||
TORONTO, ONTARIO -- (Marketwired) -- 03/05/14 -- 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 three months ended January 31, 2014:
January 31, January 31, 2014 2013 Change ----------------------------------- ($ in thousands, except per share and subscriber amounts) Total revenue $ 12,985 $ 11,922 9% Net income $ 2,405 $ 1,375 75% Shares outstanding, diluted 11,978 12,285 -2.5% Diluted net income per share $ 0.20 $ 0.11 84% Cash flows from operations $ 5,001 $ 1,650 203% EBITDA(i) $ 4,672 $ 3,216 45% Adjusted EBITDA(i) (before marketing expenses) $ 7,427 $ 6,429 16% Adjusted EBITDA(i) per diluted share $ 0.62 $ 0.52 18% Recurring monthly revenue (RMR) $ 3,905 $ 3,650 7% Total subscribers 142,400 135,600 5% ----------------------------------------------------------------------------
(i)EBITDA is a non-IFRS financial measure and is defined in the disclosure section accompanying this press release.
AlarmForce closed the first quarter ended January 31, 2014 with net income of $2.4 million and diluted earnings per share of $0.20. The Company ended the quarter with 142,400 subscribers, reflecting an annualized growth rate of 5% over the comparative quarter of 2013.
Revenue for the quarter increased by $1.1 million to $13 million, an increase of 9% over the comparative quarter of 2013 while RMR increased by 7%. Canadian revenue increased by 3% to $9.6 million and US revenue increased by 29% to $3.4 million.
EBITDA increased by $1.5 million to $4.7 million, an increase of 45% from the comparative quarter. Although marketing expenses decreased by $458,000 in the first quarter, the Company expects to maintain the same advertising spend as in 2013. Excluding the impact of these marketing expenses, which represent a charge against operating income, adjusted EBITDA increased by 16% from $6.4 million to $7.4 million for the quarter.
Cash flows from operations increased to $5.0 million from $1.7 million for the quarter, an increase of $3.3 million, or 203%. In 2014, the Company plans to continue funding all growth and product development from internal cash flows in 2014, operating with no debt on its balance sheet.
There was a decrease in total shares outstanding from the comparative quarter due to shares repurchased by the Company for cancellation under its share buyback program. This had a 2.5% positive effect on diluted net income per share and EBITDA per share.
Mr. Pizzonia, interim President and CEO, stated that "We are focusing on customer retention by better servicing our customers and retaining them in the long run. In addition, we will continue to focus on our value proposition and core competitive strengths to drive subscriber growth. We also expect to increase RMR though the adoption of enhanced services 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 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.