IASG Announces Third Quarter 2006 Financial Results.ALBANY, N.Y. -- Integrated Alarm Services Group, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : IASG IASG Intelligent Autonomous Systems Group (University of Amsterdam) IASG Internet Address Subgroup ) a total solution provider to independent security alarm dealers located throughout the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. announced results for the third quarter of fiscal 2006 ending September 30, 2006. Operating Results Revenue for the third quarter of 2006 was $23.1 million down 6 percent over the same period in 2005 and essentially unchanged from the second quarter of 2006. The net loss for the third quarter ending September 30, 2006 was $69.3 million, or $2.85 per share, compared to a net loss of $5.4 million, or $0.22 per share, when compared to the same period in 2005, and a net loss of $6.4 million, or $0.26 per share, in the second quarter of 2006. During the third quarter as it has in past years the Company performed its annual impairment test under Statement of Financial Accounting Standards No. 142 Goodwill and Other Intangible Assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. ("SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System 142"). After evaluating financial forecasts, operating trends and comparison of IASG's recent 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. Revenue for the first nine months of fiscal 2006 ending September 30, 2006 was $70.3 million down 5 percent from the same period in 2005. The net loss including the non-cash impairment charge for the first nine months of 2006 was $79.2 million, or $3.25 per share, compared to a net loss of $14.4 million, or $0.58 per share, for the first nine months of fiscal 2005. In announcing the financial results, Charles May For the Michigan politician, see Charles S. May. Charles May (born June 30, 1858; died 1932) was a politician in Alberta, Canada and a mayor of Edmonton Biography May was born in Wellington County, Ontario on June 30, 1858. , President and Chief Executive Officer, said "The impairment charge on our goodwill is significant but we must remember this is a non-cash charge Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. associated with numerous acquisitions made over several years. Third quarter attrition increased as a result of alarm contract pricing increases and reduced recovery of over 90-day accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying balances relative to recent quarterly periods. Changes in over 90-day accounts receivable balances can have a dramatic effect on attrition as a result of the formula used to calculate attrition. I would also note that the third quarter has typically been IASG's highest quarter of attrition." Balance Sheet At September 30, 2006, IASG had $16.2 million in cash, $13.3 million of collateralized notes receivable from dealers and stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. of $41.2 million. The Company had $125.7 million of debt and capital leases at September 30, 2006. IASG had no outstanding balance on the $30 million senior credit facility at September 30, 2006. Review of Strategic Alternatives During 2006, IASG has conducted an extensive review of its strategic alternatives and in the second and third quarters the Company received inquiries and offers regarding certain of its assets. The Company's Board of Directors has hired and independent investment banker Investment Banker A person representing a financial institution that is in the business of raising capital for corporations and municipalities. Notes: An investment banker may not accept deposits or make commercial loans. and counsel to assist with this review. IASG has had discussions with certain parties regarding their interests in the Company and these discussions are continuing as is the review of strategic alternatives. The Company does not expect to make any further updates regarding its strategic review and the discussions unless required by federal securities laws. IASG Portfolio Data Annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. Attrition Rate Noun 1. attrition rate - the rate of shrinkage in size or number rate of attrition rate - a magnitude or frequency relative to a time unit; "they traveled at a rate of 55 miles per hour"; "the rate of change was faster than expected" : [TABLE OMITTED] Annualized Growth Rate - excluding acquisitions [TABLE OMITTED] IASG ended the third quarter of fiscal 2006 with an owned portfolio of approximately 148,000 contract equivalents generating RMR RMR Resting Metabolic Rate RMR Registered Merit Reporter RMR Reliability Must-Run (electric generation plant's status to maintain grid voltage/reliability) RMR Recurring Monthly Revenue (finance) of approximately $4.4 million and wholesale monitoring of over 746,000 alarms generating approximately $2.9 million in RMR (including IASG's owned portfolio accounts). Revenue from the owned portfolio is split 78 percent residential and 22 percent commercial. The Company had 730 employees at September 30, 2006 down from 837 at December 31, 2005. See the attached financial highlights for the third quarter of 2006 and comparative periods. Conference Call IASG will hold a conference call at 8:30 AM EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT on Friday November 10, 2006 to discuss third quarter financial results. Investors may participate in the conference call by dialing 800-510-0178 and entering the access code of 39945421 or by logging onto the investor relations Investor relations The process by which the corporation communicates with its investors. section of the IASG website at www.iasg.us. The international dial in number is 617-614-3450 with the same access code. A replay of the conference call will be available through November 30, 2006 by dialing 888-286-8010 (international dial in - 617 801-6888) and entering the access code of 75955043 or by visiting the investor relations section of the IASG website. 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 5,000 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 The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 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 and strategic alternatives; 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 Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. report for the period ending December 31, 2005 as filed with the Securities and Exchange Commission on March 16, 2006, 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. [TABLE OMITTED] [TABLE OMITTED] |
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