PSA-TeC, day 2

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05/07/2008
Today was PSA-TEC's trade show day, where about 100 vendors showed their wares. It's like a maxi-boutique atmosphere, as it's a fairly large show floor, but all of the booths are pretty low-key and the only people attending are integrators, since there's really no residential presence in PSA and there aren't any end users here. So it's all business, which is a good thing. Very high-level conversations, and a good amount of time to talk. Here are some of the salient points: This is party because I think a lot of the attendees blow off the trade show part a little bit. They've been busy with the trainings, we just had a big party last night where there was a significant amount of free booze (I also , and this is the hump day of a long conference where they can relax. The morning rain probably kept a number of them off the golf course, but the traffic the show hall was still a bit light in general. Everybody congregated for lunch, though, and that was a good crowd with a full room. Normally I'd give you the details of the lunch-time presentation, but I gave it, so I'm going to go one step further and actually post here my presentation (I did it in iWork's Keyone, so I can export it as a quicktime file, with slides moving every 10 seconds - that may be too long for some of you, but I can assure you it's not more than five minutes). My talking would certainly improve the experience, but I couldn't figure out a good way to do that in iMovie. Maybe I'll try again when I have more time at home and post a presentation with sound next week. Anyway, the gist of the presentation is that integrators need to add more recurring revenue to their businesses, and you've read my remonstrances on that front a number of times if you're a loyal blog reader. The sexiest part of the presentation is in the middle where I compare the SST and HSM buys by ADT and Stanley, respectively. Note the fact that both had roughly $200 million in revenue in the year prior to their purchase, but, due largely to the fact that 11 percent of SST's revenue was recurring and 50 percent of HSM's was recurring, they sold for $187 million and $545 million respectively. You'll see their EBITDA margins compared, etc. Also note at the end of the graphs that some might say Stanley got the better deal, as they only paid 60x RMR for HSM, while ADT paid 89x RMR. It's just one way of looking at a deal, I realize, but interesting nonetheless. So, here it is. I'd appreciate feedback on it if you can glean some of the point.