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Biggest guard replacement/shrink-reduction services contract in the industry?

Wednesday, May 4, 2011

So I was going through my email the other day and I came across a press release from video monitoring company Iverify. Seems they recently won a pretty hefty video monitoring and loss prevention services (LP) contract with an unnamed major U.S. retailer. I jumped right on it and got some fresh feedback from Iverify president Mike May. I'm still sort of hopeful that the reatiler will come around and release its name, but until that happens, here are the particulars written up along with some of the feedback I got from my interview with Mike:

CHARLOTTE, N.C.—Iverify on April 27 announced it had been awarded a five-year contract valued at $39 million dollars to provide guard replacement and shrink-reduction services for an unnamed national retailer throughout its 550 stores. According to a release from the company, it’s the largest such video monitoring contract in the history of the industry.

Iverify president Mike May said Iverify brought big savings to the table for the client.

“The client is using a robust application that uses Cernium analytics for location-based risk assessment that triggers local announcements in the vicinity of high-shrink products. Further, with sophisticated time-based analysis it then escalates the risk profile and engages a live intervention from a protection specialist,” May told Security Systems News. “They then assess and respond to a protocol based in the actual risk. This is a best case model leveraging intelligent video coupled with a loss-prevention certified specialist that responds and reduces the customer’s potential shrink losses.”

According to May, Iverify will provide its “I Guard” and “I Control” products, delivering projected savings of $62.5–$70 million.  The suite of services will reduce guard costs, lower losses from theft, and improve employee safety, according to May.

“We think we have developed an effective forward-leaning service that drives value and safety to the point of protection,” May said.

Michael Barnes, a partner in the consulting and advisory firm Barnes Associates, which specializes in the security alarm industry, and co-sponsors the Barnes Buchanan Conference, felt Iverify had a lot to offer.

“Iverify has been at the forefront of delivering improved value in security operations for national retailers while reducing the cost of security expense,” Barnes said in a statement. “Mike May has built a sophisticated team of loss prevention professionals that remotely deliver security services at a very low cost. They have driven robbery and shrink rates down by over 50 percent at a number of national retailers.”

Iverify’s May made headlines in SSN a year ago when he was onsite doing a risk assessment for a client, a large, urban retail store in Detroit. While he was there a gang of youths attacked, and brutally beat a lone individual. May’s quick action—prompted by 10 years of law enforcement and EMT experience—very likely saved the victim’s life.


Go to Go!Control for tornado warnings

Tuesday, May 3, 2011

If you’re not tuned in to your TV or radio, you may not be aware that severe weather, including a tornado, is about to hit your neighborhood. But now Vivint is launching a free, in-home severe weather alert via its Go!Control panel for customers who live in states most affected by tornadoes. The service will sound a warning inside the home if there’s a tornado alert.

Vivint, formerly APX Alarm, a security/home automation company based in Provo, Utah, announced the weather alert service today to customers in states that the company said will include Alabama, Arkansas, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Minnesota, Mississippi, Missouri, Nebraska, North Carolina, North Dakota, Oklahoma, South Carolina, South Dakota, Tennessee and Texas.

Over the next week, the company said, “the application will be automatically downloaded to Vivint customers who have the company’s Go!Control panel. Once the application is downloaded, customers will start receiving the free tornado alerts. In addition, all new Vivint customers in the above-mentioned states will receive the alerts as part of their service.”

The company explained how the service works:

“Once a tornado alert has been issued by the National Weather Service, the information is relayed to Vivint customers via the Go!Control panel. A series of three loud beeps sound inside the home, and a detailed warning message appears on the wall-mounted control panel. The alert will continue every minute until the homeowner deactivates the warning, or until the alert is discontinued by the weather service.”

Vivint CEO Alex Dunn said in a statement: “Tornados hit fast and without much warning. Our hearts go out to the friends and families of those who have been affected by the unusually brutal tornado activity we have already seen this spring. I am pleased our team was able to fast-track this feature and get it into our customers’ hands this season.”


Diebold hires/promotes

Monday, May 2, 2011

Diebold, Inc. has just announced two key changes in its corporate leadership team.  The North Canton, Ohio—based security company has hired Alex Brown as VP, corporate strategy and development, according to a recent press release.


Diebold also announced the promotion of Scott Angelo, most recently VP and chief security officer at the company, to VP and chief information officer.


“Brown will be responsible for helping Diebold identify and consummate successful corporate growth strategies and investments with an emphasis on acquisitions and strategic partnerships,” the release said.

It said that Angelo “will be responsible for leading and overseeing the operations of Diebold's global information technology organization. He will also retain oversight of the company's information and global risk and security operations.”

Thomas Swidarski, Diebold president and CEO, said the company is pleased to have Brown on its team.

“Our company has definitive needs and aggressive goals from a growth perspective, and Alex's extensive management and advisory experience in corporate and business strategy will be invaluable moving forward in our development efforts,” Swidarski said in a statement.

He said of Angelo: “Scott has played an integral role in building our world-class information security organization, and he possesses a refined knowledge of information systems and processes. Scott's experience at Diebold and diverse background in security, IT systems and processes will drive improvements crucial to maintaining a successful IT organization.”

The release stated that Brown most recently served as a partner at Marakon, an executive management-consulting firm based in Chicago.  In addition, according to Diebold, he has held management and consultancy positions at Huron Consulting Group, Axeleration Inc., and A.T. Kearney Inc., and held leadership positions in the U.S. Army from 1990-1992.

Angelo joined Diebold in 2006 as vice president and chief information security officer, the release said. According to the company, he previously held security management positions with Ernst & Young LLP, the Defense Advanced Research Projects Agency, the National Aeronautics and Space Administration (NASA) and McDonnell Douglas Corporation, and served as a military intelligence officer in the U.S. Army Reserve from 1986 through 2001.


UTC Fire & Security acquires Simtronics

Friday, April 29, 2011

UTC Fire & Security is making news again.

I just wrote recently that the Farmington, Conn.-based company has a new president, Scott Buckhout, and has aligned its United States fire and security services under the Chubb brand.


Now UTC Fire & Security, a unit of United Technologies Corp., just announced today that it has acquired “a Norway-based provider of sophisticated gas and flame detection systems, extinguishing solutions and fire prevention systems for marine and off-shore industries.”


Here’s more from the written announced the company issued about the acquisition of Simtronics ASA:


“UTC Fire & Security purchased more than 85 percent of the outstanding shares of Simtronics through its subsidiary Autronica Fire and Security AS. Autronica plans to initiate a compulsory acquisition of the remaining shares and delist Simtronics from the Oslo Stock Exchange. The full acquisition and delisting is expected to be completed in the second quarter of 2011.

'This is an important strategic acquisition for UTC Fire & Security. We will beexpanding our offering of high quality gas and flame detection products, as well as increasing our ability to provide gaseous suppression solutions for our customers,' stated Scott Buckhout, President, UTC Fire & Security.

Simtronics Chairman, John Afseth noted, 'I am pleased with this transaction. UTCFire & Security will enable Simtronics to expand to even further horizons, bringing the Simtronics brand and knowledge to more customers around the world.'"

I've contacted UTC Fire & Security to find out what this means for fire dealers and installers here in North America.


False alarms/reports are not funny

Friday, April 29, 2011

So I'm getting ready for an interview I have today with Keyscan director of marketing Steve Dentinger when I notice an intriguing tweet from Monitronics. It linked to a sad (not sad as in, "oh, that's so sad, I think I'll cry," but sad as in "Wow... That guys a complete idiot... I'm amazed his head hasn't frozen from lack of neural activity.") story about this guy John Paul Rorech who purposefully perpetrated a false alarm in order to  escape being issued a speeding ticket.

I've written plenty about false alarms and how they're no joke. I've covered how they've lead end users to disillusionment and even inspired some to wax poetical about the false alarm.

I'm just glad they caught the guy... Calling in a fake shooting and wasting officer time and tax payers' money to avoid a speeding fine? Not cool, man, not cool.




Talk of Tyco earnings and PULSE performance. Schneider rumors not addressed--directly anyhow

Thursday, April 28, 2011

This morning’s Tyco International conference call started with a warning that it is Tyco’s policy not to respond to questions from the press or anyone else about rumors and speculations [ie talk of a Schneider takeover]. The speaker said there would not be any more comments on this issue today.

There were not any more comments directly on that issue today ... but Tyco chief Ed Breen did answer a questions from a JP Morgan analyst about his “philosophy on strategic corporate actions and how he looks at the company portfolio.” That’s not the exact question. It was something along those lines--a heapin’ helpin’ of corporate business speak, but it did elicit some sort of interesting thoughts from Breen about the three businesses that currently make up Tyco.

Breen said he’s very happy with the ‘07 split up of Tyco and the combination of companies that now make up Tyco International. “It’s a combinations that’s created value I’m very proud of ... we’ve got an all-time high stock price.” All three businesses are doing very well he said. “I love the status of the company and I love the mix of businesses.” They’ll continue to grow and play well in emerging markets, he said. He did add that “we always present to our board all alternatives ... for long term [options] to sustain shareholder value.”

During the past several weeks when rumors of Schnieder making a play for Tyco started to make the rounds, UTC was also mentioned as a possible suitor for Tyco. Some analysts speculated that Tyco was being shopped around. While Schneider issued a statement saying they’re not currently in talks with Tyco, UTC did not comment directly.

Bloomberg reported comments from UTC CFO Greg Hayes on April 20, however, which certainly cast doubt on UTC's interest.

From the Bloomberg report: “I can’t say anything specifically about any particular acquisition target,” Chief Financial Officer Greg Hayes said today in an interview. “I will say it’s very difficult for any U.S. multinational to acquire a company based in Switzerland where the tax rate is 15 percent and our rate, the U.S. statutory rate, is 35 percent.”

Ben Harrington of the UK Daily Telegraph had some interesting speculation on what may have happened with Schneider. Maybe they got mad and called off talks—for right now anyway.

This is from a Harrington column more than a week ago,  “French companies do have a track record of doing that. Last year, for example, GDF-Suez publicly called off its deal talks with London-listed International Power in January after news of the discussions leaked in December 2009. A few weeks later both companies were back in negotiations and a formal transaction was announced to the market .... I suspect the French [Schneider] will get over their temper tantrum over the next few weeks and then talks with Tyco will re-start. Whether a deal ever gets done remains to be seen - it's a difficult market to get transactions over the line.”

OK, back to the earnings call, another analyst asked—in not so many words of course—about the Flow Control business possibly being sold off at some point.

Could the flow business (theoretically of course) be monetized in a way to avoid cost leakage? he asked. After reiterating that he likes how the Tyco portfolio looks right now, but that he and the board are always looking at alternative ways to create shareholder value, Breen said yes. There are always “creative ways to structure deals” and held up the sale of the Electrical and Metal unit as an example of that could be done.

And news on the actual quarterly earnings...a very good quarter for Tyco International.  In the security business: “Revenue of $2.1 billion increased 12% in the quarter with organic revenue growth of 5.5%.  Recurring revenue grew 4.5% organically with growth in all geographic regions.  Non-recurring revenue grew 7% organically led by increased volume in the North American commercial business.”

Here’s an Bloomberg summary  and the actual Tyco press release. 

And one more interesting point that the earnings call touched on this morning: ADT’s PULSE product. Breen had this to say: Only the internal sales team (which makes up about half of the sales team, the other half are the dealers) is currently selling PULSE, but official figures show about 15 percent of customers are buying the PULSE product. However on the “back half the quarter that’s starting to move up to 18 percent,” he said. There are three levels of the PULSE product and 80 percent are taking the first level [least expensive] package.

RMR associated with PULSE accounts is $50, without PULSE $43, ADT heritage accounts $36 and Broadview heritage accounts $33. “The next step is to get the dealers trained up by ’12 and get them cranking along,” Breen said. In the future, the plan is to go back to the $33 and $36 accounts and remarket the PULSE product. Breen also said they company is taking a look at how the PULSE product may “play out in the commercial base, in the small- and mid-tier business base. It’s one thing we’re intrigued with ... we’re working on it but not talking about launching it yet.”


Well known monitoring exec makes a move

Wednesday, April 27, 2011

MJ Vance accepts her Presidential Award from the Missouri Fire Marshal's Association.

I got an email from MJ Vance the other  day and leanrd that she's left CenterPoint Technologies. She's not sure where she's going yet, but is keeping all her prospects open. Asked why she was moving on, MJ said the departure was amicable and simply a sign of growth.

MJ also told me that she wants to stay within the security industry, and is particularly interested in the PERS industry. In the meantime, she said she "may take the summer off and ride cross country on my Harley."

I wrote not too long ago about another well-known and well-liked leader in the central station space moving over into PERS when Southwest Dispatch's VP Ty Davis moved to Life Alert.

I first interviewed MJ back during my first trip to ISC West in 2008. I interviewed her on camera for our then newly-launched ssnTVnews. That was a popular interview on our site--testament to MJ's stature in the industry.

I also spoke with MJ in 2010 when she hired a new operations manager and won the Presidential Award from the Fire Marshal’s Association of Missouri (pictured above).

Good luck MJ! 


Bloomberg profiles Vivint

Tuesday, April 26, 2011

Vivint, the Provo, Utah-based home automation/security services company previously known as APX Alarm Security Solutions, made the Bloomberg business news this month.

The April 20 article, which profiled the company and CEO and co-founder Todd Pedersen, concluded that the 5,000-employee summer-sales-model company, which it said had $245 million in revenue last year, will need “some aggressiveness” to succeed in its push into the home automation market. Vivint rebranded from APX on Feb. 1 to underscore the expansion of its offerings from traditional home security products to home automation.

The article also contained some interesting tidbits about Pedersen’s plans for positioning Vivint in the new market.

“Pedersen is betting that home automation technology will increase his company’s customer base of 500,000 homes by 40 percent this year and a similar amount next year,” the article states. “While he expects revenue to increase by at least 25 percent this year and next, Pedersen says Vivint won’t be profitable for a few years because it subsidizes the automation equipment and installation. The starting price for a home automation package is $199, with a minimum 42-month “home monitoring” contract of $69 a month. Pedersen says Vivint doesn’t start making money on the packages until the third year.”

The article says that to pay for operations, the company plans to use a $690 million revolving credit line from Goldman Sachs. I just wrote this month about that recently completed new senior debt financing package, which included $125 million in new financing and is said to be the largest of its kind in the industry.


Personnel changes signal new direction for Honeywell’s First Alert, CSS dealer programs?

Thursday, April 21, 2011

Do personnel changes that took place in the last week at Honeywell signify a new direction for two major dealer programs—First Alert Professionals and Commercial Security Systems?

Based on a statement provided to Security Systems News that alludes to “the next stage in its evolution” it appears that Honeywell may intend to make some changes in the dealer programs, but the manufacturer has not publicly released information on any such plans to date.

According to several dealers who spoke to me this week, Honeywell on Monday began contacting dealers from its First Alert Professionals (FAP) dealer program and its Honeywell Commercial Security Systems (CSS) dealer programs to inform them that two longtime and well-known employees: Joe Sausa, president of FAP, and John Lorenty, head of CSS, were no longer employees of Honeywell as of last Friday, April 15.

Dealers told me that the message from Honeywell was essentially this: Honeywell is taking the dealer programs in a new direction with dealers’ needs in mind, and, there will likely be some restructuring of the programs. Dealers I spoke to were eager to hear more specifics of Honeywell’s plan.

I contacted Honeywell with several questions yesterday. Lourdes Pena, Honeywell’s business communications manager, provided the following information for my deadline today.

“Honeywell regularly evaluates its business to identify new opportunities and ensure that we remain competitive. Assessing our dealer programs for their sustained development is part of this ongoing process. We remain committed to the Honeywell’s First Alert Professional (FAP) and Commercial Security Systems (CSS) dealer programs. They deliver great advantages to our community of dealers and have brought continued success to our business. We look forward to the next stage in their evolution and to continue setting the standard in the industry. Dealers should continue contacting their current representatives for updates on our product offerings through FAP and CSS.”

Joe Sausa had served as president of First Alert since 2004. Sausa oversaw both FAP and CSS until last year. At ISC West in March 2010 Honeywell announced that John Lorenty, who previously had been in charge of access control, would take over as head of CSS, and Sausa would continue as president of FAP.


UTC Fire & Security has healthy parent

Wednesday, April 20, 2011

Business wires are abuzz today about the first quarter earnings reported by United Technologies Corp., parent company of UTC Fire & Security, up 19 percent over the quarter a year ago. Word is that the earnings beat estimates.

An April 20 release from Hartford, Conn.-based  UTC, a diversified company that provides high-tech products and services to the building and aerospace industries, said the company "reported first quarter 2011 earnings per share of $1.11 and net income attributable to common shareowners of $1.0 billion, up 19 percent and 17 percent, respectively, over the year ago quarter. Sales for the quarter increased 11 percent to $13.3 billion with 9 percent organic growth. Favorable foreign currency translation and net acquisitions each contributed 1 percent to the sales growth.”

The release continued: “Results for the current quarter include $0.02 per share in restructuring costs. Earnings per share in the year ago quarter included $0.05 in restructuring costs. Before these items, earnings per share increased 15 percent year over year. Foreign currency translation and currency hedges at Pratt & Whitney Canada accounted for $0.01 of the earnings per share increase.”

“This was another solid quarter for UTC with broad-based acceleration in organic growth, as well as strong earnings momentum and cash generation,” Louis Chênevert, UTC chairman & chief executive officer, said in the release. “Nearly 20 percent growth in earnings per share reflects excellent conversion, especially as we continued to increase our investments in game changing products and technologies.”

The release also notes that UTC is now raising its 2011 profit forecast.

“Based on the strong start to the year, particularly in Carrier’s short cycle businesses, we are raising the full year earnings per share expectation to $5.25 to $5.40, from $5.20 to $5.35 previously. We now anticipate 2011 EPS growth to be 11 to 14 percent on sales growth of 5 percent,” Chênevert added in his statement. “The global economic recovery continues to gain traction as evidenced by the momentum of our end markets and we now expect 2011 sales of $57 billion, at the high end of our prior range of $56 billion to $57 billion.”