- 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
11. COMMITMENT
The Company is committed to operating leases for premises, vehicles, and office equipment expiring at various dates up to June 30, 2011. Future minimum lease payments are as follows:
| Premises $ |
Vehicles $ |
Equipment $ |
Total $ |
|
| 2007 | 52,757 | 39,596 | 22,649 | 115,002 |
| 2008 | 35,171 | 29,912 | 22,649 | 87,732 |
| 2009 | – | – | 10,581 | 10,581 |
| – | – | 4,060 | 4,060 | |
| Total | 87,928 | 69,508 | 68,792 | 226,228 |
12. EARNINGS PER SHARE
The following table sets forth the calculation of the basic earnings and diluted earnings:
| 2006 $ |
2005 $ |
|
| Basic earnings available to common shareholders | $1,492,336 | $810,214 |
| Weighted average number of common shares outstanding – basic | 11,983,870 | 11,615,208 |
| Basic earnings per share | $0.12 | $0.07 |
| Weighted average number of common shares outstanding | 11,983,870 | 11,615,208 |
| Assumed exercise of outstanding dilutive options | 200,000 | 412,300 |
| Shares purchased from proceeds of assumed exercise of options | (155,876) | (95,492) |
| Weighted average number of common shares outstanding– dilutive | 12,027,994 | 11,932,016 |
| Fully diluted earnings per share | $0.12 | $0.07 |
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.
13. FINANCIAL INSTRUMENTS
a) Fair value
The carrying value of the Company’s financial instruments consisting of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities, approximates fair value due to their immediate or short-term maturity. The carrying value of the long-term debt approximates fair value as it bears interest at market rate.
b) Credit risk
Financial instruments, which potentially subject the Company to concentrations of credit risk, consist primarily of cash and cash equivalents, accounts receivable and long-term debt. Cash and cash equivalents are maintained with several financial institutions. Deposits held with banks may exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed upon demand and are maintained with financial institutions of reputable credit and therefore bear minimal credit risk. Credit risk on accounts receivable is minimized as a result of the constant review and evaluation of the account balances.
c) Interest rate risk
The Company is exposed to fluctuations in interest rates in regard to the revolving term loans, which are on a prime plus basis.
(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 $864,000 (2005 - $545,000).
The carrying value of the Company’s financial instruments consisting of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities, approximates fair value due to their immediate or short-term maturity. The carrying value of the long-term debt approximates fair value as it bears interest at market rate.
b) Credit risk
Financial instruments, which potentially subject the Company to concentrations of credit risk, consist primarily of cash and cash equivalents, accounts receivable and long-term debt. Cash and cash equivalents are maintained with several financial institutions. Deposits held with banks may exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed upon demand and are maintained with financial institutions of reputable credit and therefore bear minimal credit risk. Credit risk on accounts receivable is minimized as a result of the constant review and evaluation of the account balances.
c) Interest rate risk
The Company is exposed to fluctuations in interest rates in regard to the revolving term loans, which are on a prime plus basis.
(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 $864,000 (2005 - $545,000).