SAI faces delisting, UL complaint
ARLINGTON HEIGHTS, Ill. -Following months of steadily declining stock prices and public complaints from dealers regarding operational issues at the company, troubled wholesale monitoring company Security Associates International in late November announced that it was in danger of being delisted from the American Stock Exchange because of its financial status and is also the subject of a complaint letter filed with Underwriters Laboratories.
Officials at SAI said they did not plan to appeal the decision by the American Stock Exchange to apply to the Securities and Exchange Commission for the removal of SAIÃ¢â‚¬â„¢s stock (SAI) from the AMEX. The company was granted a new symbol, SECA, on the OTC Bulletin Board, which should be effective sometime in mid-January, said Ray Gross, chief executive officer of SAI. As of press time, the companyÃ¢â‚¬â„¢s stock was trading at $0.15, down from a 52-week high of $2.
According to the companyÃ¢â‚¬â„¢s third quarter filing on Nov. 14, the company lost about 50,610 accounts as of Sept. 30, when compared to the 360,134 accounts it was monitoring at the same time in 2001.
The bulk of the attrition happened during the first half of 2002 because of the implementation of a consolidation plan then, the filing said. That plan called for the closing of central stations in Seattle, Dallas and Cleveland, with the funneling of those accounts to SAIÃ¢â‚¬â„¢s monitoring stations at its headquarters here and one in Pompano Beach, Fla.
Gross said he was not aware of the letter filed with UL, although officials at the organization confirmed receipt of a complaint. Inspectors from UL had just visited SAIÃ¢â‚¬â„¢s facilities in mid-December for an audit, Gross said, with no mention of the complaint.
The letter, dated in late November, cites what the letter terms as SAIÃ¢â‚¬â„¢s failure to document operations for the past six months, such as histories of generator testing, UPS testing and receiver testing. Written by a former employee, who asked not to be named, the letter characterized the companyÃ¢â‚¬â„¢s consolidation plan as Ã¢â‚¬Å“haphazardÃ¢â‚¬Â and said that the company is Ã¢â‚¬Å“blatantly disregarding the standards they are obliged to abide by.Ã¢â‚¬Â
Dan Parker, alarm system team leader and a supervisor for UL, said that any complaint against a UL certified service company would begin with a review of ULÃ¢â‚¬â„¢s records of a company to determine whether a visit is warranted. The severity of the complaint, as well as the record review, would then determine the next action. The complaint process prohibited him from commenting on any one particular case, he said.
The companyÃ¢â‚¬â„¢s expected delisting from the AMEX will likely not have an effect on SAIÃ¢â‚¬â„¢s operations because the company is not leveraging its public status through the liquidation of its shares for current investors, launching secondary offerings of its stock for additional capital or using shares instead of cash in acquisitions, said industry analyst John Mack, senior managing director and founder of USBX Advisory Services in Santa Monica, Calif.