Financial Information
4. SELECTED ANNUAL INFORMATION
The following summary of selected audited financial information is derived from, and should be read in conjunction with, the Company’s audited financial statements, including the notes thereto, for the years ended October 31,2008, 2007, and 2006:
| 2008 | 2007 | 2006 | |
| $ | $ | $ | |
| Subscriber base | 91,000 | 79,200 | $66,300 |
| OPERATIONS: | |||
| Total revenue | 29,942,385 | 25,136,125 | 20,964,877 |
| Gross margin | 23,346,082 | 20,005,802 | 16,458,835 |
| EBITDA*** | 7,407,647 | 4,747,901 | 5,217,159 |
| Income before income taxes | 3,885,740 | 2,105,091 | 2,509,697 |
| Net income | 2,610,585 | 1,280,172 | 1,492,336 |
| Cash flow from operating activities | 6,812,715 | 2,737,038 | 4,945,232 |
| Basic earnings per share | 0.22 | 0.11 | 0.12 |
| Basic earnings per share | 0.22 | 0.11 | 0.12 |
| Diluted EBITDA*** per share | 0.61 | 0.39 | 0.43 |
| FINANCIAL POSITION: | |||
| Total assets | 29,311,049 | 25,251,571 | 23,880,550 |
| Total long-term debt** | 1,454,167 | 1,759,369 | 1,256,062 |
| Shareholders’ equity | 19,582,560 | 16,839,675 | 15,521,703 |
| Debt/Equity ratio** | 0.07 | 0.10 | 0.08 |
| Debt** per subscriber account | 16 | 22 | 19 |
** Includes building loan and revolving term loans (see Long-term Debt section)
*** Earnings Before Interest Tax Depreciation and Amortization is a key performance indicator in the security industry and should not be interpreted as GAAP earnings.
Reconciliation of adjusted EBITDA to GAAP earnings
EBITDA is defined as earnings before interest expenses, income taxes, depreciation and amortization. EBITDA is a standard 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 an important measure of operating performance of the Company; however since it does not have any standardized meaning defined by Canadian GAAP, it may not be considered in isolation of GAAP measures such as net income/loss or cash flows, as a measure of liquidity. Management believes, however, that it is an important measure as 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 Canadian GAAP, it is unlikely to be comparable to similar measures presented by other issuers.
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Testimonials
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We had two break-ins in 6 years and both times your response was excellent.
-Aleksandr, BC -
Wonderful, informed, courteous staff - a credit to your company.
-Jago, ON -
Outstanding program - state of the art technology. Well done.
-Charles, AB -
The alarm allows me to sleep at night without worrying too much. I had a house that had several break-ins, hopefully the AlarmForce tags on my doors and windows will discourage thieves.
-Sandra, BC -
Thank you for your efficient service. Your live voice helped minimize damage and speedy police response - within 5 minutes! Congratulations
-A business, ON -
My job requires me to travel quite a bit usually out of the country, and having Alarm Force allows my family to feel safe and gives me peace of mind knowing that they are safe even when I am away. But the best thing about Alarm Force is the fantastic customer service they provide. Setting up the system was quick and easy and they answered all our questions and concerns. They are a great company to have protecting our home and I am glad I switched.
-M.H - Gahanna, OH -
Dear Joel: I have listened to your comments about your service on the radio for a while. As a retired Volunteer Fire Rescue Captain, I realize the importance of a quick response. I am currently looking after my bosses house while he is on vacation. I entered the premises, and hit the wrong button to disarm. Immediately, your dispatcher was talking to me. He called on the land line, and helped me out. I'm extremely impressed with your service, and your personnel. So much so, I want to install Alarm Force in my house. Keep up the good work Joel. I'll rest easier knowing you're on our side
-John, AB -
"I am writing this as a relatively new customer to AlarmForce. Previously we had a "big name" company for our alarm service. When that company's equipment failed to meet our needs on a couple of different levels, including raising the monitoring prices yearly, we decided it was time for a change. I had heard the commercials on the radio for AlarmForce and decided to give them a try. The technician that came out to install was great! I was not home but my wife could say enough about the technician. Everything was installed to our satisfaction and works great! Hopefully we won't have to ever use the system in an "emergency" sense, but it's nice to know that it is there. Thanks for a great service at a great price!"
-John, Maplewood MN
