SDM - May 2008 - (Page 41)

The 100 largest security installation and monitoring companies, the SDM 100, attained double-digit growth in 2007 in both recurring monthly revenue and total revenue. By Laura E. Stepanek, Editor Double Digits W hat do you remember about 1991? In May of that year, SDM marked publication of the first annual SDM 100, a ranking by revenue of the largest security installation companies in the United States. The SDM 100 proved to be a cornerstone of the security industry, as it heralded in a new era of public information about an industry that was — and still is — largely privately held. Although some entities exist only in the memories of today’s security dealers, it is encouraging that many of the companies ranked 18 years ago still rank among the largest today. In May 1991, the first annual SDM 100 had total annual revenue of $2.32 billion. This year’s 18th annual SDM 100 brings the total to $7.58 billion. The primary objective of the SDM 100 is to measure consumer dollars gained by alarm companies, in order to present an account of the size of the market captured by the 100 largest security providers. SDM 100 firms are actually ranked, not by their total gross revenue, but by their recurring monthly revenue (RMR). RMR is the amount of contractually recurring revenues due from customers, for such services as monitoring, contracted service, system maintenance and leasing of security systems. RMR is typically the basis for valuation of an alarm company. The amount of RMR, along with other factors, is assigned a multiple, such as 40 times RMR, to determine a firm’s value in an acquisition. RMR is the language of alarm company executives and is meaningful in comparative analysis among industry peers. Only 28 companies on the SDM 100 earned more than $1 million in recurring monthly revenue in 2007. Overall, it appears that the 100 firms collectively grew RMR by less than 1 percent. However, that number is misleading due to an adjustment of ADT’s recurring revenue. (In 2007 SDM provided an estimated figure for ADT of $240 million; in 2008, ADT reported its own RMR of $219 million, causing an effect on the total SDM 100 figures that appear to show flat growth.) If ADT is omitted from total figures, then growth in RMR for the other 99 companies proves to be a healthier 14 percent. The health of the security installation and monitoring industry also was proven by the addition of nearly 5,000 more people employed by these 100 largest firms in 2007. Notable Achievements • No. 2, Brink’s Home Security, achieved greater than 12 percent RMR growth in 2007. The firm added 300 full-time positions in 2007. • No. 3, Protection One grew its RMR by 34 percent compared with the 2007 SDM 100 report, and added 600 employees. • No. 6, Slomins Inc., broke the $10 million mark in RMR in 2007. • No. 7, Vector Security, added 40 new full-time employees in 2007. • No. 9, Guardian Protection Services, added 133 full-time positions. • No. 10, Bay Alarm Company, operating since 1946, broke the 100,000 mark for total customers. It also added 40 full-time employees in 2007. • No. 11, Apx Alarm Security Solutions Inc., rose up from a ranking of No. 18 last year; the firm reached more than 100,000 subscribers. • No. 12, ASG Security, gained more than 37,000 accounts through acquisition in 2007, helping to grow its RMR by 53 percent to $3.8 million. The firm now employs nearly 600 people. May 2008 41

Table of Contents Feed for the Digital Edition of SDM - May 2008

SDM - May 2008 Contents Editor’s Angle Exclusive ISC West Coverage Stanley Convergent’s Newest Acquisition Cisco Introduces New IP Cameras, Expands Physical Security Solution Portfolio Ionit Technologies Partners with Walgreens; Places DVR Systems in Stores Nationwide Pennsylvania-Based Security System Providers Merge Custom Home Electronics Distributor Inks Distribution Agreement Security and the Law Integration Intelligence 18th Annual SDM 100: Double Digits Fire Systems: State of the Market Addressable Fire Control Systems Storage: Where Can We Put All This? Central Station Managed Access Technology at Work 5-Minute Tech Quiz Technology Solutions & Skills Security NetWorkings SDM Marketplace Classifieds

SDM - May 2008

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