Alarmguard Holdings, Inc. Reports Third Quarter 1998 Results.

ORANGE, Conn.--(BUSINESS WIRE)--Nov. 13, 1998--Alarmguard Holdings, Inc. (AMEX:AGD) today reported its results for the third quarter and nine months ended September 30, 1998.

For the quarter, revenues increased 40.5% to $13.5 million, compared with $9.6 million in the third quarter of 1997. Two acquisitions completed in 1998 accounted for $2.7 million, or 70%, of the increase.

For the nine months, revenues increased 52.6% to $37.6 million, compared with $24.6 million in the same period in 1997. A significant portion of this growth was related to acquisitions completed in 1997 and 1998.

Applicable accounting principles required the Company to record an imputed one-time non-cash dividend of approximately $9.0 million resulting from the February 3, 1998 sale of Convertible Preferred Stock, which had conversion prices below the quoted common stock price on the date of closing. This dividend has no effect on shareholders deficiency or Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("Adjusted EBITDA").

Alarmguard employs three internal measurements to assess its growth and the performance of operations: (1) Monthly Recurring Revenue ("MRR"), a key measure of growth; (2) Adjusted EBITDA (as defined in the financial table), which compares companies that grow both internally and through acquisitions with those that grow primarily through acquisitions; and, (3) Gross MRR attrition.

MRR was approximately $3.1 million at September 30, 1998, versus $3.0 million at June 30, 1998, and $2.1 million at September 30, 1997. Adjusted EBITDA increased 30.6% to $2.5 million in third quarter 1998 from $1.9 million in third quarter 1997. For the nine months, Adjusted EBITDA was $6.9 million versus $4.6 million in the comparable period in 1997, a 49.8% increase. Gross MRR attrition was 12.0% for the twelve months ended September 30, 1998, versus 11.8% for the twelve months ended December 31, 1997.

Russell R. MacDonnell, Chairman and Chief Executive Officer, said, "Our focus during the third quarter was the integration of two significant acquisitions completed in the first quarter of 1998. Our integration efforts continued to prove successful, both from an operational and financial standpoint. Customer service, billing, and all accounting functions are now completed, with the integration of the Malden, Massachusetts Central Station into our recently renovated 24-hour Orange, Connecticut facility scheduled for completion by December."

Mr. MacDonnell added, "Our strong performance in the third quarter reflects both internal growth resulting from our dealer and direct marketing programs, as well as acquisition-related growth. We completed the quarter with approximately 101,000 subscribers and $3.1 million of MRR. Growth in the quarter was fueled by our dealer program, which has grown from $1,100 of MRR added in January 1998 to approximately $31,000 of MRR added in September."

Alarmguard sells and installs burglar and fire systems and provides security monitoring services and security system repair and maintenance services to homeowners and businesses, principally in the Northeast and Mid-Atlantic regions of the United States. Alarmguard provides its security alarm systems and services primarily under its trademark "Alarmguard".

Certain statements in this release that are not historical fact constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results of Alarmguard Holdings to be materially different from historical results or from any results expressed or implied by such forward-looking statements. These factors are discussed under the caption "Risk Factors" in a Registration Statement on Form S-4 (File No. 333-23307) filed with the Securities and Exchange Commission on March 14, 1997, and in other filings with the Securities and Exchange Commission. -0-

                       ALARMGUARD HOLDINGS, INC.
            CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
           (Unaudited; In thousands, except per share data)

                                 Three Months           Nine Months
                                    Ended                  Ended
                                 September 30,          September 30,
                               1998        1997       1998       1997

Revenue                    $  13,523     $ 9,627   $ 37,561   $ 24,611
Cost of revenue                5,938       4,204     16,710     10,445
Gross profit                   7,585       5,423     20,851     14,166

Sales and marketing
 expense                       1,616       1,252      4,395      3,447
General and administrative
 expense                       4,006       2,745     11,002      7,749
Acquisition integration
 expense                          36          --        743         --
Amortization and
 depreciation expense          4,932       3,309     12,989      8,776
Total operating expense       10,590       7,306     29,129     19,972
Operating loss                (3,005)     (1,883)    (8,278)    (5,806)
Other income (expense):
  Interest expense, net       (1,482)     (1,334)    (4,582)    (3,329)
  Other, net                      96         103        247         91
Net loss before
 extraordinary item           (4,391)     (3,114)   (12,613)    (9,044)

Extraordinary loss from
 early extinguishment
 of debt                          --          --         --       (813)
Net loss                      (4,391)     (3,114)   (12,613)    (9,857)

Dividend requirement on
 preferred stock,
 including imputed
 non-cash dividend of
 $9,024 recorded in
 February 1998(1)              (560)          --    (10,485)      (200)
Loss applicable to
 common shares             $ (4,951)    $ (3,114) $ (23,098) $ (10,057)


Basic and diluted loss per
common share:
Net loss before
 extraordinary item        $  (0.79)    $  (0.56) $  (2.26)   $  (2.05)
Extraordinary item               --           --        --       (0.18)
Net loss                   $  (0.79)    $  (0.56) $  (2.26)   $  (2.23)
Dividend requirement on
preferred stock(1)            (0.10)          --     (1.87)      (0.04)
Loss per common share      $  (0.89)    $  (0.56) $  (4.13)   $  (2.27)
Weighted average number of
 basic and diluted common
 shares                       5,593        5,592     5,593       4,422

EBITDA                     $  1,927     $  1,426  $  4,711    $  2,970
Net Dealer and Direct Marketing
 Program Expenses               574          516     1,495       1,669
Acquisition integration
 expense                         36           --       743          --
Adjusted EBITDA(2)         $  2,537        1,942     6,949       4,639

(1)  The one-time imputed non-cash dividend of $9,024, or $1.61 per
     share, is included in the nine-month results for 1998.

(2)  Adjusted EBITDA is derived by adding to EBITDA (earnings before
     interest, income taxes, depreciation and amortization) the
     expenses net of related revenues associated with the Company's
     Dealer and Direct Marketing Programs and acquisition integration
     expenses.


                       ALARMGUARD HOLDINGS, INC.
                 CONDENSED CONSOLIDATED BALANCE SHEETS
                            (In thousands)

                                      September 30,  December 31,
                                         1998           1997
                                      (Unaudited)
  ASSETS
  Current assets                      $ 19,869      $ 11,595
  Property and equipment, net            4,508         2,133
  Customer contracts, intangibles &
  installation costs, net               88,848        51,895
  Investment and other assets            3,731         4,227
  Total assets                        $116,956        69,850

  LIABILITIES & STOCKHOLDERS' DEFICIENCY
  Current liabilities                 $ 25,280        21,088
  Long term debt, less current
  portion                               70,577        51,959
  Preferred stock                       38,793            --
  Total stockholders' deficiency       (17,694)       (3,197)
  Total liabilities and
  stockholders' deficiency            $116,956      $ 69,850