Did cutting costs pay off?
TOPEKA, Kan. - With news of the sale of Protection One to the Quadrangle Group, the security industry is left wondering whether the substantial efforts of Protection One management over the past three years to rein in spending and stabilize Protection OneÃ¢â‚¬â„¢s financial situation has been enough to help turn around the company.
Like many other national residential companies, Protection One grew rapidly with acquisitions in the late 1990s and began the new century with close to $1 billion in debt. Executives, both Westar EnergyÃ¢â‚¬â„¢s Annette Beck, who served as the companyÃ¢â‚¬â„¢s chief executive officer until mid 2001, and Richard Ginsburg, who became chief executive officer and president in 2001, have sold off business units, consolidated facilities and made reductions in staff to help reduce company debt.
Ã¢â‚¬Å“Existing management has worked hard to cut costs and cut attrition,Ã¢â‚¬Â said Jack Mallon, industry analyst. Ã¢â‚¬Å“They have been doing a good job in a difficult environment.Ã¢â‚¬Â
Since 2001, Protection One has sold off both its European and Canadian operations, eliminated its authorized dealer program and restructured its monitoring operations to focus on two key central stations in Wichita, Kan., and Portland, Maine. That restructuring led to the closure of another of the companyÃ¢â‚¬â„¢s flagship call centers in Hagerstown, Md., but eventually standardized all the companyÃ¢â‚¬â„¢s monitoring operations onto a single platform.
The company has also worked to reduce customer attrition, which stood at 8.6 percent company-wide for the period that ended Sept. 30, 2003
Finally, a buyer for Protection One