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So who's gonna 'revolutionize third party monitoring?'

Wednesday, September 2, 2009
My publisher Tim Purpura and I just got back from the inaugural Rapid Response Users Group in Verona, N.Y. What a time. Everyone I spoke to at the event had the same impression: that the event was a well-oiled machine and that Rapid really was there to support it's dealers and integrators. One attendee even went so far as to tell me, basically, (I'm paraphrasing) "this may look like a whole lot of showing off, but it's not. Jeff Atkins backs it up." The impression I got was that Rapid would do whatever it could to curtail turnover in it's central station, provide new applications and services as dealer differentiators, lower costs, and improve service. Overall, it was a well-done event with lots of staff from RR and AE ventures--who did PR and event planning and execution--checking in to be sure everyone had everything they needed. I got to sit down with RR president Jeff Atkins and chairman and CEO Russ MacDonnell and Secure Global Solutions' VPs Hank Goldberg and Thom Meyer to discuss what Goldberg said was a "15-year quest to get Rapid as a client." Atkins used his welcome breakfast address to announce that Rapid was in the process (projected to be complete in early 2010) of converting to the stages central station monitoring platform. Atkins went so far as to say the "synergy of Rapid Response and stages will revolutionize third party monitoring." I chuckled a little and he just said "You watch. You just watch us." We're watching. Check out the Rapid Response Users Group site for more material from the RRUG.

That's the way to step up

Wednesday, September 2, 2009
Just a little story I came across on the web today: Hi-Tech, out of Houston, helped out a youth center that's been victimized frequently lately by donating some surveillance equipment. Well done. Great magnanimous quote, too:
"It just touched me that I had the opportunity to do something about it," said Eric Cooley, Vice Principal of Hi-Tech Integrated Solutions.
I know you guys do stuff like this all the time, but it's good to see the local news types appreciate it.

Bruce Springle, dead at 46

Wednesday, September 2, 2009
I never met Bruce Springle, but he's had a long career in the security industry and I wanted to pass along news of his death. According to his obituary, he died August 25, leaving behind his wife Linda and two children, daughters Emily and Rebecca. Most recently, he was working as a regional sales manager for Mace, and Mace sent out a nice note alerting me to his death:
Bruce Springle had been involved in the security industry for over 20 years and had extensive experience in alarm monitoring, video surveillance and access control business segments. In addition to Mace, Mr. Springle worked for several excellent security companies including Guardian Protection Services, Monitronics, JCI/Cardkey and ADT. ... Dennis Raefield, CEO of Mace Security International, Inc. stated, “We are very saddened by the sudden and unexpected death of Bruce Springle. He was highly regarded in the industry and by everyone at Mace. Our prayers go out to his wife and family. ”
According to the obit, in lieu of flowers, donations may be made to the Bruce Springle Memorial Fund, f/b/o his children, c/o The Bank, 315 S. Black Horse Pike, Williams-town, NJ 08094; or American Red Cross, 5425 Route 70 West, Penn-sauken, NJ 08109. Expressions of sympathy can be e-mailed to: [email protected].

Tips on "switchover sales" from Pinnacle

Tuesday, September 1, 2009
One of my favorite things to do is surf You Tube for alarm company news. You too? Have you seen this trilogy? The titles in parentheses are mine. Switchover Sales Technique Part I: Part I (Engaging the MAN of the house) Switchover Sales Technique Part II: ("Is there a fire or is your wife burnin' the food?) Switchover Sales Technique Part III (If for any reason you can't pay the $39.99 a month, you'll still be responsible for it. I wouldn't worry about that.) It's a three-part instructional video, starring Scott Warner of Pinnacle Security about how to talk customers into switching from their alarm company to Pinnacle. This Scott Warner is some kind of fast-talkin' sales guy! And the homeowner, who looks a little like Will Ferrell don't you think?, is pretty easily convinced to do stuff. I love the pitch on installing smoke detectors. "Over the two-way voice, they'll ask ya, 'Is there a fire or is your wife burnin' the food?" That's what he says: "Your wife burnin' the food?" He also asks the homeowner if he's the "man of the house." I haven't heard this kind of banter since the last time I watched "Leave it to Beaver" on Jet Blue. And when it comes to contract time, the homeowner wanted to know if if he can get out of the contract if he can't pay the monthly fee? Well, Scott says, he's gonna give the homeowner the "three-year corporate agreement" and that, yeah, he'll still be liable for the whole contract no matter what, but "I wouldn't worry about that." And that line of reasoning convinced the homeowner to sign up with Scott. Maybe the homeowner is Will Ferrell? Does Scott's name sound familiar? It did to me too. That's because Scott Warner was one of the "rogue summer sales people" sued by ADT last month. I've got a call into Pinnacle to see if Video Trainer Scott Warner and Lawsuit Scott Warner are one and the same. "Lawsuit Scott Warner" is VP of Sales for Pinnacle and is accused by ADT of summer-sales mischief (telling a customer that Pinnacle was taking over the monitoring of ADT) in Illinois. The lawsuit says that Scott had a "trainee" with him at the time.

Pelco merges with Crockett

Tuesday, September 1, 2009
I don't have many details because I learned of this via Twitter: "Message from Dean Meyer: Crockett International merges with Pelco. Effective immediately, all Crockett personnel are Pelco employees." This would be the Twitter drawback - I know just enough to know that I need to know more. So now I've got to go look around. This is Crockett. Here's the release from Pelco. Beware of the pdf that's going to make you download. Anyway, the gist of it is that Crockett was their manufacturer's rep in Asia/Central America:
According to Pelco President and CEO Dean Meyer, this merger will benefit customers in Asia and Latin America by providing them the assurance of Pelco’s lasting commitment. “Sales projections clearly indicate that Asia and Latin America are key emerging markets for the video industry. As such, acquiring Crockett International is a logical step that will allow Pelco to better leverage the combined resources in order to create a larger and more efficient sales team over time.”
So, basically, it's irrelevant to you, my North American readers. Still, cool to find out something I give a crap about via Twitter. If you want to follow Pelco, go here. If you want to follow me, go here.

Vuance update

Tuesday, September 1, 2009
Some of you may remember that Vuance had some questions about whether it could remain a going concern, so I thought I'd give you an update now that their 2Q numbers are out. They've been posted here. They say they're getting close to cash-flow positive, but here are the numbers:
Revenues for the quarter ended June 30, 2009 decreased 30.9% to $3.7 million from $5.3 million in the year-ago second quarter. The decrease was largely driven by a decrease in revenues from the airport security project that was nearly completed during second quarter 2009 as well as a delay in revenues of over $200,000 that is expected to be recognized in third quarter 2009.
That's sort of a big decrease in revenues and shows how project-driven the company is. There are not a lot of small deals going down - it's all or nothing. Luckily, they recently announced a $5 million deal with a family-run company that packages vegetables.
Eyal Tuchman, Chief Executive Officer of VUANCE Ltd., commented, "Demand for our expertise remained strong across our entire business, with particular strength in government and public safety sectors. We are active in bidding projects financed by government funds, and believe these projects will become revenue-generating beginning in the second half of this year and throughout 2010. Excluding sales related to the airport in Eastern Europe, revenues across our business increased both sequentially and year-over-year.
So, other than the huge block of revenue that's not there anymore, revenues increased? Okay.
Gross profit decreased 32.0% to $2.2 million for the second quarter compared to $3.2 million for the prior-year second quarter. Gross profit margin for the quarter was 59.2%, compared to the 60.1% for the second quarter of 2008. Total operating expenses for the quarter were $2.8 million, down 8.6% sequentially compared to the $3.1 million for the first quarter 2009 and down 37.3% compared to the $4.5 million for the second quarter last year. The Company reported a loss from operations for the quarter of $647,000 compared sequentially to a loss from operations of $744,000 and down 50.2% compared to the $1.3 million for the second quarter last year.
So, they did $3.7 million in revenue and lost $647,000. That doesn't seem particularly sustainable.
The net loss from continuing operations was $819,000, or $(0.15) per basic and diluted share, compared sequentially to a net loss from continuing operations of $875,000, or $(0.17) per basic and diluted share, for the three months ended March 31, 2009 and compared with a net loss from continuing operations of $1.6 million, or $(0.30) per basic and diluted share, in the second quarter of 2008.
So, actually, they lost more than that. I'm foggy on the difference between loss from operations and net loss from continuing operations. Maybe the latter accounts for debt service? I should probably know that. Anyway, how did they spin the overall results?
Non-GAAP operational losses continued to narrow substantially. On a non-GAAP basis (see reconciliation between GAAP and non-GAAP results at the end of this press release) the Company reported a non-GAAP operating loss of $267,000 in the second quarter of 2009 compared sequentially to a non-GAAP operating loss of $481,000 in the first quarter of 2009 and compared to a non-GAAP operating loss of $984,000 in the second quarter last year.
Wow! Non-GAAP operational losses continued to narrow? Why didn't you say so in the first place? Oh, that's right, you did say that first. I just kind of chose to ignore it. Whenever I see "non-GAAP," I read, "non-real."

Are you an NBFAA member with a high school senior?

Tuesday, September 1, 2009
It's the first day of school in my town here on the coast of Maine. I love the first day of school! Kids getting on the bus, Canadian geese flying overhead, perfect sweater-and-shorts weather outside. My oldest starts high school today and the only thing that gives me a little pause on a day like today is the thought of her going off to college in four short years ... and, even more bittersweet, the thought of paying for it. So on that note, lookee what Tri-Ed is offering.
INDUSTRY ADVOCATE TRI-ED DISTRIBUTION IS AWARDING THREE COLLEGE SCHOLARSHIPS Woodbury, New York . . . August, 2009 Tri-Ed Distribution is pleased to announce that it will be offering three college scholarships for the 2010-2011 Academic Year. Tri-Ed’s Scholarship Program is open to any graduating high school senior who is a child of a current NBFAA member. The $1,500.00, $1,000.00 and $500.00 scholarships will be awarded on the basis of academic merit. To be considered, applicants are required to provide: * A copy of their high school transcript, including college entrance exam scores (SAT or ACT) * A copy of their college application essay * A letter of recommendation from their high school guidance counselor or high school teacher of their choice * A list of the colleges they are applying to * NBFAA member name & company The deadline for completed applications is January 31, 2010. All applications are being accepted via e-mail at [email protected]. Names of the three winning students will be announced at the Tri-Ed booth during ISC West 2010. All winners will also be notified in writing. (more) Scholarship award checks will be made payable to the college or university the winners will be attending - upon their acceptance - and will be for the sole use of tuition Tri-Ed is a strong advocate of industry causes and this scholarship program is indicative of its commitment to supporting the industry’s largest association – the National Burglar & Fire Alarm Association – and its members. “Tri-Ed is pleased to help ease some of the financial burdens of higher education for three deserving scholarship winners and their families,” says Pat Comunale, COO. Customers turn to Tri-Ed for superior customer service, same day shipping, flexible credit terms, online ordering, customer appreciation events, purchasing rewards, technical systems support, and ongoing product training. North America’s largest independent wholesale distributor of security and low voltage products, Tri-Ed and has served customers longer than any other distributor in the industry. For more information, visit

Eating my way through that savory security sandwich

Monday, August 31, 2009
Security Systems News publisher Tim Purpura and I pulled into the lot of the Fairfield Inn late last night after an hours long quest for an Applebees. (Note to those traveling I90: There is nothing for food but little pizza houses between West Springfield, Mass. and Albany, N.Y.) This morning dawned clear and cool & I feel ready to embrace the Rapid Response Users Group, meet some people and learn more. On tap for today? Here you go: 7:30 a.m. - 9:00 a.m.: Welcome breakfast 9:00 - 10 a.m.: Welcome by Jeffrey Atkins & overview of Rapid Response monitoring facility 10:15 - 12:45: Exhibit viewing, vendor demos and product training. (Group 1 tour of RR monitoring facility) 1:00 - 2:30 - Luncheon Presentation - Introducing the Rapid Response Monitoring Dealer Network 2:30 - 6:00 Exhibit viewing, vendor demos and product training (Group 2 tour of RR monitoring facility) 7:00 - 9:00 Opening Night Reception & Dinner featuring Stand-up comedian Nick DiPaolo I'm looking forwared to the exhibits and training, at which I hope to meet lots of people. I'm also looking forward to a tour of the facility. Depending on how the day goes, I might just heckle DiPaolo, too... we'll see. I can't help notice (I'm in the lobby of the Fairfield waiting for Tim to head over to the Turning Stone Resort, and the news is on) that the New York State Fair is going on right now, as well. They're focusing on all things dairy at the fair right now, with cheese auctions, milk tastings and other events where the bovine is divine. Looks like this year is eclipsing last year as far as attendance goes. I Love security as much as the next guy, but I may just sneak out of the security extravaganza of the RRUG and go bid on some cheese. I'll let you know how it goes. Check later for more.

GE coverage round-up

Friday, August 28, 2009
Since this is looking like the biggest story - pageview-wise - of the past two years, I thought I'd add a little color by rounding up what other people have to say about it. Here's the Deal's take on things. Of course, I like it because they link back to Martha's interview with Dean Seavers, but I also think Kenneth Klee makes an interesting analogy with HD Supply:
A possibly parallel situation comes to mind in the attempt a fews ago of Home Depot Inc. (NYSE:HD), then being run by GE vet Bob Nardelli, to acquire its way into the contractor-supply business. HD Supply, of course, ended up being sold to a consortium of PE firms in 2007. It would be unwise to push the analogy too far. And GE and many others have, of course, used these tactics successfully in other areas. But both episodes underline the fact that whether it's economic conditions, the dynamics of the market being targeted, or internal hurdles to execution, there's a lot that can happen to trip up such efforts.
Exactly. It's one thing to consolidate for a big share of a part of the market, but to consolidate such disparate pieces as residential alarm, video, and fire was a tall order from the outset. Also, the Financial Times has independently confirmed that JP Morgan is helping conduct the sale. Here's what they have to say. Not much new here, except now Bosch is being thrown in the mix as a potential suitor:
People close to the sale process, which is being managed by JPMorgan, said the business had drawn interest from GE's rivals in the security sector such as United Technologies, Tyco and Germany's Robert Bosch.
I still don't think this makes sense. Why would these companies want what GE has? For the most part, they've already got competing brands and products. Sure, it consolidates the market, but is there value in simply putting your competitors out of business? You still need to see actual value, right? I'm surprised more people aren't talking about a venture firm like Blackstone being in the mix. They bought AlliedBarton - maybe they'd like to consolidate guarding and electronic security, right? Then spin that whole thing off in an IPO? They've got Dean Seavers on record saying he's going to grow sales to $3 billion by 2011. Why wouldn't an outside investor want to buy the property for $2 billion, then take it public for $3 billion? Well, here's FT's thoughts on that theory of mine:
Security assets have historically lured private equity buyers as well, but a combination of the difficult financing environment and an expressed interest by GE in selling the assets to a strategic buyer could hamper any buy-out effort.
There's also this little nugget I didn't know about:
GE suffered a setback this month when it agreed to a $50m settlement with the Securities and Exchange Commission over charges of accounting fraud in 2002 and 2003. GE did not admit nor deny the allegations, which prompted a four-year probe of accounting issues.
That's small change for GE, but the auditing and four-year probe sound nasty. The New York Times Deal Book blog doesn't really have anything new, other than to brag that it, too, confirmed the Bloomberg story. Good for them. Cyrus Sanati repeats the same claims that UTC and Tyco are potential suitors. He also throws this out:
Questions about what would happen to the rest of the security unit have lingered since the Homeland Protection deal was announced in April.
Is that really true? I haven't heard much about that, actually. In fact, notable about all the coverage is the incredibly tight lips at GE. Sure, they issued everyone a no comment, but doesn't one of these awesome blogger guys who cover the street have an inside source at GE who'll drop some unsourced quotes? Disappointing. I will note, selfishly, that my story on the GE sale is the only one to actually interview anyone with a name attached and at least give some background on why the GE Security unit maybe isn't performing all that well. It was pretty hard, though. I had to actually call people on the phone and take notes. I'm still sweating a little bit.

If it were a sandwich, it would be a meaty, stick-to-your-ribs security filling between two slices of hearty six-and-half-hours-in-a-car-with-my-publisher

Friday, August 28, 2009
It's the last weekend of August. It was 52 degrees on the shores of Sebago Lake (where I live in Raymond, Maine) when I got up this morning at 6:30. For the first time since they bloomed earlier this season, my morning glories hadn't yet opened. That means it's getting colder. That means summer (such as it was) is pretty much over. That also means it's time for me to pack my bags and head off to Verona, N.Y. for Rapid Response's Users Group. SSN's publisher Tim Purpura and I will hit the road together and partake of the Users Group, which Rapid promises "to be a 'don't miss' event for Rapid Response Dealers, with workshops, seminars, feedback forums, and top companies from all areas of the Security Industry." I look forward to meeting industry folks in attendance and touring the RR facility. I'm also looking forward to hopefully touring Rapid's EMT-staffed Life Safety Monitoring facility, which handles PERS monitoring for Medical Alarm Concepts. There is even going to be a talk by special keynote speaker, Space Shuttle pilot Colonel Richard Searfoss, which I'm looking forward to (I'm a science/space/sci-fi geek), and, though I don't golf, myself, there's even a golf tournament to cap things off. Overall, it promises to be a productive few days sandwiched between lots of windshield time, during which I'm sure Tim and I will argue over whose iPod takes precedence...