IASG results lower than expected
ALBANY, N.Y. - Integrated Alarm Services Group posted a $4.4 million loss in the third quarter ended Sept. 30, which was larger than analysts had expected.
For the same period last year, IASG posted $0.7 million in losses. Nine-month net loss for the company was $20.5 million this year, compared to $3.1 million last year.
Year-to-year revenues increased 68 percent from $5.8 million to $9.7 million. Nine-month revenues also increased 68 percent from $16.8 million to $28.2 million.
According to Chief Financial Officer Michael Moscinsky, the company is in discussions with Ã¢â‚¬Å“a major banking institutionÃ¢â‚¬Â on a commercial lending agreement that would lower IASGÃ¢â‚¬â„¢s cost of capital by leveraging its equity. The agreement should be complete within three to six months, he said.
Company Chairman and Chief Executive Officer Timothy McGinn said while third-quarter contract acquisitions were disappointing, they have been trending upward since Labor Day and continued to increase after the close of the quarter.
Ã¢â‚¬Å“We continue to believe this is a target-rich environment and we are both active in due diligence and legal documentation on several meaningful contract and business acquisition opportunities which we would expect to close in November or early December,Ã¢â‚¬Â he said.
The company is also in the process of consolidating its corporate activities into a more efficient, newly remodeled facility in Albany.
For the third quarter, IASG spent $1.2 million on acquisitions and paid $4.2 million in interest expense. Going forward, McGinn said, the new financing will lower those payments to $1.8 million per quarter, McGinn said. The company was also able to retire a large portion of its high-cost debt and retain $195 million in net proceeds after expenses.
The company saw a slight reduction in the number of accounts it monitors in the quarter. McGinn said this was based on two dealers leaving IASGÃ¢â‚¬â„¢s program to sign with a lower-cost provider. The result was a loss of approximately 1.4 percent of its contracts. The company currently monitors approximately 496,000 wholesale accounts and owns an additional 45,000 itself.
IASG plans to reduce this negative trend through customer retention programs and a focus on acquiring commercial and high-end monitoring accounts, which have higher recurring monthly revenues, in 2004 (see related story).