- We protect over 150,000 people across North America
- Over 20 years experience in the industry
- One of the few alarm companies to manufacture our own technology
- You deal directly with AlarmForce at all times
- Lowest prices and best value in the business
Financial Information
14. EARNINGS PER SHARE
The following table sets forth the calculation of the basic earnings and diluted earnings:
| 2004 | 2003 | |
| $ |
$ | |
| Basic earnings available to common shareholders | 1,275,986 | 1,301,509 |
| Weighted average number of common shares outstanding – basic |
10,610,052 | 9,029,259 |
| Basic earnings per share | 0.12 | 0.14 |
| Weighted average number of common shares outstanding | 10,610,052 | 9,029,259 |
| Assumed exercise of outstanding dilutive options | 543,900 | 1,008,000 |
| Shares purchased from proceeds of assumed exercise of options | (135,970) | (323,737) |
| Weighted average number of common shares outstanding - dilutive | 11,017,982 | 9,713,522 |
| Diluted earnings per share | 0.11 | 0.13 |
Basic net income per common share is determined using the weighted-average number of common shares
outstanding during the respective year.
The treasury stock method is used to compute the dilutive effect of options. In determining the denominator for the diluted net income per share computation, 407,930 shares were added to the denominator for the basic net income per share computation in 2003 (684,263 shares in 2003). In determining the weighted average number of common shares outstanding – dilutive, 200,000 options @ $ 3.78 were anti-dilutive and excluded from the denominator.
15. FINANCIAL INSTRUMENTS
(a) Fair value
The company’s financial instruments consist of cash, accounts receivable, other assets, accounts payable and accrued liabilities, and long-term debt. The carrying amounts of financial instruments approximate their fair values due to their short-term maturities, or the market rate of interest in the case of long-term debt.
(b) Credit risk
The company does not have a significant exposure to any individual customer or counterpart.
(c) Interest rate risk
The company is exposed to fluctuations in interest rates as described in note 7.
(d) Foreign currency risk
The company’s activities involve purchases denominated in foreign currencies. These activities result in exposure to fluctuations in foreign currency rates. At statement date, the company had net liabilities denominated in U.S. currency of approximately $450,000 (2003 - $ 36,000).
16. COMPARATIVE FIGURES
Certain of the 2003 figures have been reclassified from the preceding year’s presentation to conform to the presentation followed in 2004.
17. SUBSEQUENT EVENTS
On December 21, 2004, 1,800 outstanding stock options, and on January 3, 2005, 30,000 outstanding stock options that had vested were exercised at a price of $0.85 per share.
18. SEGMENTED INFORMATION
The company operates primarily in one industry segment, in Canada, which is the monitoring of residential security systems. Accordingly, no additional information has been presented.