IASG Announces Fourth Quarter and Fiscal 2006 Financial Results.

ALBANY, N.Y. -- Integrated Alarm Services Group, Inc. (NASDAQ: IASG) a total solution provider to independent security alarm dealers located throughout the United States announced results for the fourth quarter and fiscal year 2006 ended December 31, 2006.

Revenue for the fourth quarter ending December 31, 2006 was $24.1 million down 6 percent from fiscal 2005 fourth quarter revenue of $25.6 million. The net loss for the fourth quarter was $4.7 million, or $0.19 per share, compared to a net loss of $8.0 million, or $0.32 per share, in the fourth quarter of 2005.

Revenue for fiscal 2006 was $94.4 million down 5 percent from fiscal 2005 revenue of $99.2 million. The net loss for fiscal 2006 was $83.9 million, or $3.44 per share compared to a net loss of $22.3 million, or $0.91 per share for 2005. For the full year 2006 the aggregate owned portfolio annualized attrition rate was 12.9 percent versus 13.7 percent for fiscal 2005.

During the third quarter of fiscal 2006 IASG, as it has in past years, performed its annual impairment test under Statement of Financial Accounting Standards No. 142 Goodwill and Other Intangible Assets. After evaluating financial forecasts, operating trends, and comparison of IASG's third quarter common share price to the Company's book value per share, the Company determined that goodwill was impaired at September 30, 2006. As a result, a non-cash goodwill charge of $65 million was recorded in the third quarter of 2006 and is included in the full-year fiscal 2006 net loss.

In announcing the fourth quarter and year-end results, Charles May, President and Chief Executive Officer said, "The major event of the fourth quarter and for that matter fiscal 2006 was the December 20th announced agreement for IASG to merge with Protection One, Inc. Under the terms of the merger agreement, IASG shareholders will receive shares representing ownership of approximately 28% of the merged company outstanding."

May continued, "Our ability to enter into the merger agreement with Protection One is in large part a result of IASG's good operating progress made in 2006. IASG is a much better alarm company than it was this time last year. Excluding the non-cash goodwill impairment charge, the 2006 net loss decreased by 15% from 2005. This is the result of effective work by a diligent group of employees operating in challenging times."

May concluded, "The proposed merger agreement which carries the unanimous endorsement of the IASG Board of Directors is slated for vote of IASG shareholders on March 27, 2007. I encourage all shareholders to vote in this important matter for our Company."

At December 31, 2006, IASG had $13.7 million in cash, $12.3 million of secured notes receivable from dealers' and stockholders' equity of $36.6 million. The Company had $125.8 million of debt and capital leases at December 31, 2006. IASG had no outstanding balance on the $30 million senior credit facility at the end of 2006.

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IASG ended fiscal 2006 with an owned portfolio of approximately 145,000 contract equivalents generating RMR of approximately $4.3 million and wholesale monitoring of approximately 765,000 alarms (including IASG's owned portfolio accounts) generating approximately $3.1 million in RMR ($.5 million from owned accounts). Revenue from the owned portfolio is split approximately 77 percent residential and 23 percent commercial.

The Company employed 682 employees at December 31, 2006 down from 837 a year earlier.

See the attached financial highlights for the fourth quarter of 2006 and the year ended December 31, 2006.

About IASG

Integrated Alarm Services Group provides total integrated solutions to independent security alarm dealers located throughout the United States to assist them in serving the residential and commercial security alarm market. IASG's services include alarm contract financing including the purchase of dealer alarm contracts for its own portfolio and providing loans to dealers collateralized by alarm contracts. IASG, with approximately 4,000 independent dealer relationships, is also the largest wholesale provider of alarm contract monitoring and servicing. For more information about IASG please visit our web site at http://www.iasg.us.

This press release may contain statements, which are not historical facts and are considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements contain projections of IASG's future results of operations, financial position or state other forward-looking information. In some cases you can identify these statements by forward looking words such as "anticipate", "believe", "could", "estimate", "expect", "intend", "may", "should", "will", and "would" or similar words. You should not rely on forward-looking statements because IASG's actual results may differ materially from those indicated by these forward looking statements as a result of a number of important factors. These factors include, but are not limited to: general economic and business conditions; our business strategy for expanding our presence in our industry; anticipated trends in our financial condition and results of operation; the impact of competition and technology change; existing and regulations effecting our company and business, and other risks and uncertainties discussed under the heading "Risks Related to our Business" in IASG's Form 10-K report for the period ending December 31, 2006 as filed with the Securities and Exchange Commission on March 16, 2007, and other reports IASG files from time to time with the Securities and Exchange Commission. IASG does not intend to and undertakes no duty to update the information contained in this press release.

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