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TORONTO, ONTARIO--(Marketwired - Jan 21, 2016) - AlarmForce Industries (TSX:AF) -
Full Year Highlights
Q4 Non-Recurring Items
During Q4, we concluded our reassessment of the aged accounts receivable with the following impact:
The total impact of extraordinary items during Q4 was approximately $1.2 million bringing the YTD total of non-recurring expenses to $3.7 million. These were largely comprised of one-time costs associated with higher than normal legal fees and settlements, costs associated with the change in management including severance and recruitment expenses and non-cash write-downs associated the aged accounts receivable assessment and the previously announced cancellation of the in-house development of a second generation camera.
US Market Discussion
During Q4 and after careful analysis, we concluded that marketing investments in certain US markets have not generated the returns that are expected - and necessary - to justify the capital investment. We will continue to service all of the US markets that we are in, but we will be focusing our marketing efforts in selected markets to improve our metrics and bring them more in line with the performance of our Canadian operations. While we do expect the rate of growth from our US markets will be impacted from the reduction in marketing spend, we are working to replace this lost growth with new initiatives in Canada. These initiatives will leverage and build our brand recognition to further attract and retain AlarmForce customers.
|Three months ended October 31,||Twelve months ended October 31,|
|($ in thousands, except per share and subscriber amounts)||-||-||-|
|Recurring monthly revenue (RMR)||$4,480||$4,196||7||%||$4,480||$4,196||7||%|
|Shares outstanding, diluted||11,629||11,707||-1||%||11,644||11,857||-2||%|
|Diluted net income per share||$0.12||$0.17||-29||%||$0.43||$0.65||-34||%|
*EBITDA is a non-IFRS financial measure and is defined in the disclosure section accompanying this press release.
Toronto, Ontario, January 21, 2016 - For the fiscal year ended October 31, 2015, AlarmForce Industries (TSX:AF) reported revenues of $56.1 million. Net income fell by 36% or $2.8 million year-over-year, driven by one-time non-recurring items totalling $ 3.7 million. As a result, diluted earnings per share were $0.43 in 2015 down from $0.65 during 2014.
Total revenues for 2015 increased to $56.1 million vs. $52.6 million in 2014, or growth of 7% (3% in constant currency). Recurring monthly revenue (RMR) increased to $4.48 million from $4.20 million at the end of 2014, or 7% (3% excluding the effect of foreign exchange). Cash flow from operations decreased from $11.8 million to $9.0 million, or 24% driven by one-time items in the second half of the year related to the change in management.
"During the fourth quarter we were pleased that our gross subscriber additions had double digit growth," said Graham Badun, President and CEO of AlarmForce Industries Inc. "We have a renewed focus on growing our business in Canada and 2016 promises to be a productive year as we prepare the company for accelerated growth."
During 2015, the Company repurchased a total of 113,100 common shares for cancellation under the normal course issuer bid for a total cost of $1.3 million and has paid dividends totalling $1.7 million. During the fourth-quarter, $1.5 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.
AlarmForce provides security alarm monitoring, personal emergency response monitoring, video surveillance and related services to residential and commercial subscribers throughout Canada and selected markets in the United States. More information about the company's products and services can be found at 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 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.