Protection One continues to unload
LAWRENCE, Kan.--Protection One continued to reduce its indebtedness in late June as the company cut down its existing debt by $15 million, while at the same time expanding its operations in both the residential and commercial sectors.
The company paid down its debt under its $250 million term loan by using the $4.4 million in proceeds it received from a redemption of its Series A Convertible Preferred Stock in ATX Technologies, as well as additional cash on hand. Protection One received the stock when it sold its mobile services and telematics division to ATX in 1999.
The company's total debt outstanding after the reduction is approximately $345 million, down from the $550 million the company carried when the Quadrangle Group, a private equity firm, purchased the company from Westar Energy in 2004.
According to Richard Ginsberg, the company's president and chief executive officer, the recent transaction proves that the company is continuing to focus on its initiatives to reduce debt and expand business.
"I think this transaction shows we did what we said we were going to do," he said.
Although Ginsberg said there is no specific goal in regards to where he would like to see the debt level lowered to, he did say that the company's current financials are comparable, and in some cases, better than its peers.
With its debt down to a reasonable amount, Protection One is also focused on growth. So far this year, it has expanded and relocated six of its branch offices--most recently relocating its Pompano, Fla., location in early July--with more to come.
"Some of our branches have tripled in size," Ginsberg said. "We are not in the dealer business anymore. We have transformed ourselves from what we used to be and need additional staff. It really is a different business model."
Fueling the company's growth is also its drive to build its commercial brand. Ginsberg admitted that since the company is traditionally known as a residential firm, it takes time to build that end.
"We built a commercial business from scratch," he said. "There is a lot of block and tackling and reintroducing yourself. And letting customers know we are aggressive in the commercial market."
Ginsberg said the company will look to build a balanced accounts base of residential and commercial subscribers,
"That is our goal," he said. "But we also are trying to grow slowly and grow the right way."