Financial Information
7. DISCUSSION OF FOURTH QUARTER 2010
In the fourth quarter of fiscal 2010, total revenues were $9,553,949 million up by 8% from the corresponding quarter in 2009. Total revenues have grown consistently from quarter to quarter, reflecting the stability and positive growth that AlarmForce experienced throughout the four quarters of fiscal 2010. The Company’s net income in the fourth quarter is $1,176,619 compared to $680,361 in the corresponding quarter of 2009. In the fourth quarter of 2010, selling expenses amounted to $3,113,232, an increase of $458,121 or 17% from the corresponding quarter of 2009. This increase is a direct result of increased advertising in the US with the newly introduced market of Minnesota.
Income before taxes in the fourth quarter amounted to $1,832,177. This again follows the same trend of increased marketing efforts in the fourth quarter incurred in an effort to boost the subscriber base for fiscal 2010, which drives the accelerated growth in the subscriber account base. Operating results for the fourth quarter were impacted by the same factors as the full year.
With the strong cash position on the Company’s balance sheet maintaining consistency throughout the year, management invested a portion of the cash equivalents during the fourth quarter of 2010 in guaranteed investment certificates for one year periods.
8. LIQUIDITY AND CAPITAL RESOURCES
As at October 31, 2010, the Company had cash and cash equivalents of $5,510,396 along with short-term investments amounting to $4,052,180 and unused credit facilities of approximately $5,800,000 available for future operating and capital requirements.
In 2010, AlarmForce repaid the fixed rate term loan and the revolving demand loan in full, reducing the bank debt to nil. With consistent subscriber growth, a strong cash position and zero bank debt, the Company has built a sturdy foundation to fund research and development, capital requirements to grow the subscriber base, all advertising costs and physical expansion internally. Our cash resources and internal operating cash flows are sufficient to fund the foreseeable capital and operating requirements. As at October 31, 2010, the Company’s assets totaled $36,587,551, of which the majority represented revenue generating capital assets.
The cash flows from operations and financing activities, and cash flows used in financing and investing activities for fiscal years ending October 31, 2010 and 2009 are summarized below:
| 2010 $ |
2009 $ |
|
| Operating activities: | ||
| Cash flow from operations | 8,294,343 | 6,718,308 |
| Changes in non-cash operating items | (1,085,739) | (250,856) |
| 7,208,604 | 6,467,452 | |
| Investing activities | (8,882,332) | (3,665,483) |
| Financing activities | (1,131,668) | 105,461 |
| Net change in cash and cash equivalents | (2,805,396) | 2,907,430 |
| Cash and cash equivalents, beginning of period | 8,315,792 | 5,408,362 |
| Cash and cash equivalents, end of period | 5,510,396 | 8,315,792 |
In fiscal 2010, cash flows from operating activities was $7,208,604 compared to $6,467,452 in 2009, an increase of $741,152 or 11%. This increase reflects a higher net income, increased amortization of property, plant and
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Testimonials
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The response the day I fell was great. The police were here within 10 minutes and an ambulance shortly after. I live in the country and the response time was extremely good for the location.
-Mattie, NC -
Four years ago my husband started working steady midnight shift. That left me alone in our home by myself with our dog Daisy. She was just 8 1/2 lbs. and blind with one eye as she had been in an accident. She had also gone deaf. I figured that she would never hear anyone if they got into our house and I was scared to stay here by myself night after night so we got AlarmForce and I felt a lot better about staying here and going to sleep in the house. My husband felt better about going to work and not worrying.
-Diane - Hamilton, ON -
On a spring day my family went out to grab a bite to eat for lunch. Upon their return my wife found that our front door was kicked in. This is the worst feeling to find that your home was burglarized. You no longer feel safe in your neighborhood or home. Since we are renters no other alarm company wanted to give us valuable service and a reasonable system to put in our home. My wife searched the Internet and found Alarm Force. From the very first call we were greeted with sales associate who actually gave us the feeling that we were in good hands with Alarm Force. We were offered a very reasonable plan to ensure our home was alarmed with the best equipment. We have not had any problems with our system. Two incidents happened that persuaded me Alarm Force is the company that I will continue to allow the services. First incident is my cable was having an outage for days and AlarmForce called me to inquire about the situation because they were no longer receiving a signal through the system. The second incident was we had family in town and the alarm went off due to some early risers who wanted to feel the early morning breeze outside. Hearing the loud voice of an AlarmForce representative through the system woke the entire house out of their sleep. Thanks to AlarmForce for helping us to feel safe again in our home.
-David - Fayetteville, NC -
Kenneth was professional, polite, patient. verbally skilled, helpful, i.e. excellent in every aspect.
-Caroly, Charlotte, NC -
AlarmForce is our best choice because it is completely wireless and there is contact with your security instantly if needed. We use AlarmForce all the time and really like the feature of protection when we go to bed on the second floor of our home we can move around upstairs but we know we are secure with the perimeter secure. We have had very good experience with all of your staff and when I first bought the service I had the minimum security but since then I have upgraded with more motion detectors and a fire alarm which is just great. We have a beagle and he has full access in the house when the alarm is on which is very satisfying. I have recommended AlarmForce to my neighbors and two alarms were activated one was for Health Security. When the alarm is on all is well.
-Roy Z. - Alberta -
Fantastic in all ways. I tell everyone about you.
-Deb, BC -
ALARM FORCE WAS EASY TO DEAL WITH.THEY CAME IN AND HAD MY HOME FINISHED IN LESS THAN AN HOUR.AND THE PRICE IS SO ECONOMICAL EVEN NOW WITH OUR ECONOMY IN THE SHAPE IT IS IN EVERYONE SHOULD BE AFFORDABLE FOR ALL.I COULD HAVE WENT WITH DIFFERENT COMPANIES BUT ALARM FORCE WASNT PUSHY AND THEY OFFERED ME A GREAT OFFER AND THE PAYMENTS ARE LESS THAN A CUP OF COFFEE DAILY.I REFUSE TO SWITCH TO ANOTHER COMPANY AS I FEEL THAT WE GET THE BEST SERVICE FROM ALARM FORCE.
-Vicki - Cincinnati, OH -
Thanks for helping to protect our family.
-Marshall, GA
