TORONTO, ONTARIO–(Marketwired – June 14, 2016) –

Second Quarter Operating Highlights

• Total recurring monthly revenue (RMR) was $4.5 million at the end of Q2 2016, flat to the end of fiscal 2015 (up 0.3% in constant currency)

• Gross new subscriber additions were 4,350, consistent with lower marketing expenditures incurred during Q2 2016 as compared to the same period in 2015, driven by reduced marketing spend across US markets and in advance of third-party product launch

• AlarmForce Connect, our mobile platform for monitoring and controlling AF devices saw a take rate of 48% of new accounts, up from 36% the prior quarter. New bundles launched in February are positively impacting take-rates on enhanced services

• Total revenue in Q2 2016 grew by 3% year-over-year, or flat in constant currency

• EBITDA for the second quarter increased by 9% or $343,234 to $4.3 million year-over year driven by lower marketing expenditures

• Net income through Q2 increased by 6% ($1.8 million from $1.7 million during the same period in 2015)

• Diluted earnings per share for Q2 2016 grew to $0.16 ($0.15 during Q2 2015)

• Average revenue per subscriber at the end of Q2 at $31.37, up 3% year-over-year, or 2% in constant currency

• Average revenue per new user of $36.34 for Q2, up 2% over the same period in 2015 (up 1% in constant currency)

Year-to-Date Operating Highlights

• Revenue of $29.0 million, an increase of 5% over the same period last year or 2% in constant currency

• Net Income of $4.2 million up from $4.0 million during the same period for 2015, diluted EPS of $0.36 versus $0.34 for 2015

• EBITDA increased by 1% to $8.6 million, impacted by the cost associated with the establishment of a new management team in the second half of fiscal 2015 and a one-time settlement with a former executive of AlarmForce occurring in 2016

• Total subscribers of 143,600, behind the same period in 2015, however, the Q2 2015 subscriber count was prior to the Account Review which took place in the fourth quarter that saw the accelerated cancellation of 4,300 incremental subscribers

• Average revenue per new user of $35.68, up 1.3% over the same period in 2015 (flat in constant currency)

AlarmForce Industries (TSX:AF) reports total revenues for the second quarter of $14.5 million up from $14.0 million over the same period in 2015, or growth of 3% (flat in constant currency). Recurring Monthly Revenue (RMR) of $4.5 million at the end of Q2 2016 was flat to both Q2 and Q4 of 2015. Gross profit totalled $9.9 million compared to $10.3 million or -4% over the same period in 2015. Net income grew 6% in the second quarter from the same period of 2015 to $1.8 million. These changes were driven by the decrease in selling and marketing expenses, partially offset by an increase in amortization and general and administrative expenses. Diluted earnings per share increased to $0.16 compared to $0.15 in the same period of 2015.

Year to date revenues totalled $29 million (up 5%), gross profit totalled $20.1 million (down 3%), EBITDA grew to $8.6 million (up 1%), net income totalled $4.2 million (up 5%) and diluted earnings per share grew to $0.36, up from $0.34 for the same period in 2015.

“During the second quarter we reduced marketing expenditures across our US footprint and in advance of our launch of third-party product planned for late summer,” said Graham Badun, President and CEO of AlarmForce Industries Inc. “We are executing on our more focused strategy including enhancing our information technology infrastructure in preparation for our launch of new third-party products and our refreshed brand which will position the company well to take advantage of the opportunities in the home security and personal emergency response markets. The company continues to achieve increased take-rates amongst enhanced services and we are excited by the prospects for the company and the ability to enhance our value proposition to both new and existing customers.”

In the first six months of the year the Company returned $1.0 million to shareholders through dividends paid.

About AlarmForce

AlarmForce provides security alarm monitoring, personal emergency response monitoring, video surveillance and related services to residential and commercial subscribers throughout Canada and select markets in the United States. More information about the company’s products and services can be found at alarmforce.com.

Disclosure

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.

Investors:
Chris Lynch
CFO
(416)-445-2414
[email protected]