AlarmForce Industries has issued its 2016 financial report and restated results for previous periods following a review of its prior handling of service cancellations for some of its customers.
The Toronto-based company says the 2016 fiscal year saw revenues of $56.4 million compared to $55.2 million in 2015 and net income fell by 112 per cent or $4.9 million year-over-year, driven by one-time, non-recurring items totalling $5.9 million. As a result, diluted earnings per share were $(0.04) in 2016, down from $0.38 (restated) during 2015, the company stated.
“Recurring monthly revenue (RMR) decreased to $4.45 million from $4.51 million at the end of 2015, or 1 per cent”, the report continued. “Cash flow from operations increased from $8.9 million in 2015 to $13.2 million in 2016, or 48 per cent driven by changes in non-cash working capital.”
According to previous news reports, AlarmForce originally reported $56.1 million in revenue and $4.98 million or 43 cents per share of net income for fiscal 2015.
The company also restated its results for the first and second quarters of its 2016 financial year.
The restatements came after potential buyers of the company noticed that some residential contracts didn’t give customers the right to cancel payments and services, as required in some jurisdictions.
AlarmForce says it estimates that it spent $1.2 million on reviewing its revenue and other internal practices (such as classification of installers), and that additional costs will be incurred in fiscal 2017.
“With the challenges of the review process and restatements firmly behind us, we will continue to focus on implementing the company’s new strategic plan and build our momentum as the leading home security and automation company in the Canadian market,” Graham Badun, president and CEO of AlarmForce, said in a statement. “Customer loyalty and retention remain at the very core of our company’s operation. New product technologies, diversification and strategic partnerships will all lead to a better customer experience and continued growth. Our strong cash position of $12 million plus our debt free balance sheet provide more than enough liquidity to not only address the cash needs of the review process but also many opportunities for us to invest to return value to our shareholders in 2017 and beyond.”
Q4 highlights were also revealed and included: revenue of $14 million, including an increase in revenue from Canadian operations of 1 per cent and a decrease in revenue from US operations of 9 per cent from Q4 2015.