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by: Martha Entwistle - Friday, November 9, 2007
Everyone has their own unique preferences for consuming information. Well, we've got another way for you to get information from Security Systems News: our digital edition. If you're a registered user of the site, you can now read our monthly issues digitally, in a format that mirrors our newspaper, but offers searchable text, the ability to email articles to other people, and clickable ads, just for a start. If you're unsure how to use it, click on the "help" tab once you get to the digital edition interface.
Click on the comments link below to give me feedback on the edition - I think it's pretty neat, but you may have suggestions for us to make it better. Also, some of you have complained about having a difficult time logging in. If that's the case, email our web guy, Mark MacKenzie and he'll take care of you.

by: Martha Entwistle - Tuesday, November 6, 2007
Quickly, I thought I'd give you an update on Cross Match: From a press release: Cross Match Amends Registration Statement in Connection with its Initial Public Offering PALM BEACH GARDENS, Fla.--(BUSINESS WIRE)--Nov. 6, 2007--Cross Match Technologies, Inc. announced today that it has amended its Form S-1 registration statement on file with the U.S. Securities and Exchange Commission in connection with the initial public offering of its common stock. The Company amended its expected public offering price to now range between $11.00 and $13.00 per share. In addition, the offering will include 8,333,334 primary shares, no secondary shares and the Company granted the underwriters the right to purchase up to 1,250,000 additional shares from the Company to cover over-allotments, if any. WR Hambrecht + Co is the sole bookrunner for the offering. Stanford Group Company and E*TRADE Securities LLC are the co-managers. The shares are being offered through WR Hambrecht + Co's OpenIPO(R), an auction that allows investors to participate in the pricing and allocation process of the IPO shares. Copies of the prospectus relating to the offering, when available, may be obtained from WR Hambrecht + Co's prospectus department at 555 Lancaster Avenue, Suite 200, Berwyn, PA 19312, by telephone at 877-828-5200 or by email at [email protected]. Click on the Cross Match tag below and you'll get my other post on this.
by: Martha Entwistle - Monday, November 5, 2007
In their first U.S. acquisition as an independent firm, Securitas Systems announced on Thursday the purchase of PEI Systems, an integrator serving New York and New Jersey. They're pretty vague with the numbers, saying they paid somewhere between six and nine times EBITDA, which who knows how much that is for a company with a little more than $11m in revenues. I'm guessing it works out to about one times revenues, maybe a little more to account for the 20 percent of revenues collected via service contracts. I'll have a little more on the newswire Thursday, but no one is calling me back on this.

by: Martha Entwistle - Friday, November 2, 2007
With a number of security firms posting earnings lately, I thought a Friday round-up might be interesting: • L1's business is finally rolling like they've promised. These strike me as particularly positive developments: Revenue for the third quarter of 2007 was $115.5 million compared to $39.8 million in the third quarter of 2006, an increase of $75.7 million or 190 percent. The Company had impressive organic growth of 32 percent for the quarter. The Company’s net income in the third quarter amounted to $1.5 million, or $0.02 per diluted share, compared to a net loss of $29.3 million, or $0.66 per diluted share, in the third quarter of 2006, which included asset impairments and merger-related charges of $22.8 million. It's certainly always better to make $2 million rather than lose $29 million. • Stanley's security segment sales are up 24 percent • UTC Fire & Security's organic revenue growth in the quarter was 4%, led by Lenel, the security businesses in the Americas, and Asia. • Honeywell's income is up 14 percent, but see these paragraphs: "People might be concerned whether there is the margin potential in ACS that the company has intimated," he said. The ACS business, representing nearly 40% of Honeywell's quarterly revenue, provides technology and services to improve efficiency in manufacturing and home and building climates, as well as provides products for security and fire detection. • Brink's third-quarter revenue was $817.0 million, up 15.2% (10% on a constant currency basis) from $709.5 million in the third quarter of 2006. Operating profit increased to $60.5 million, up 11.2 % from $54.4 million in the year- ago period. • Ingersoll Rand'srevenues from continuing operations for the first nine months of 2007 have increased approximately 9 % compared with the same period of 2006, and remember that: The Company's Bobcat, Utility Equipment, Attachments and Road Development business units are now being reported as discontinued operations. It's still a good time to be a security company, but not as good as it has been.
by: Martha Entwistle - Monday, October 29, 2007
Hey folks, sorry I haven't been posting for a few days. I took a vacation to see the in-laws in Ohio and blogging while vacationing is apparently not recommended by 9 out of 10 mental health practicioners. By the way, the in-laws live in a brand-new home in one of those brand-new developments. They have a Brink's panel installed, but they never activated it. However, they have about every home automation product you can imagine, and they use all of those, hooked up through three networked flat-panel TVs. Something about that seems telling. Maybe it's telling me that I should pay more attention to what the folks at CEDIA are up to, as they are in the home like security firms are, just doing different things. I thought things were going hot blazes with CEDIA members, so this news was surprising. To quote: Though there was support for the recently announced Spring EXPO concept initially, member feedback regarding market condition changes and other factors have prompted CEDIA to step back from Spring EXPO at this time and focus on education and expanding the exposure opportunities with architects, builders and interior designers at the third annual Electronic Lifestyles Forum. I'm guessing the downturn in the new home building market is the "market condition changes" part of that statement, which is understandable. But why is this market so dependent on the new builds? If home automation isn't for people like me, who live in houses built in the 1800s, there's an obvious limit to market penetration. Us New Englanders like cool gadgets, too.
by: Martha Entwistle - Thursday, October 25, 2007
After 24 hours getting back to the East Coast from the CSAA show in Hawaii, it's ironic that this article about the consequences of Fontana, California's verified response policy should come across my desk (that desk being in the Newark airport). Wednesday, I sat on a panel with other journalists and was asked if I thought verified response would take hold nationally. I said it was my opinion that public relations nightmares with burglars confronting store- and homeowners in the act of verifying alarms (as happened here in Dallas) would make an increase of fines much more likely, which is the trend we're seeing nationally with our alarm ordinance watch column. I think this article backs me up. Note: Last year the Fontana Police Department responded to more than 8,500 burglar alarm calls -- an average of about 24 a day. More than 99 percent of them proved to be false alarms -- a tremendous waste of money and resources, said Lone Star Security Regional Manager Bruce Boyer. Notwithstanding the overuse of the m-dash in those sentences -- fair enough. Boyer asked: Why have high-trained, highly-skilled police officers responding to burglary alarms when their time could be put to much better use? This, however, is not the next logical question. Why aren't they instead asking how to eliminate the false alarms? Why aren't they talking about enhanced call verification or a CP-01 standard panel? They probably do that later, right? Not so much. Anyway, Fontanta passed a verified response law that went effective Oct. 1, and here are some opinions: And that's important to Gerry Herrera, storeowner and manager of Sonora Tire Shop. "We want a security company coming out and checking on the place," he said. Makes sense. I don't want to go burglar-hunting either. For Mini Perez, Sonora's chief financial officer, the P.D.'s change of policy makes sense. "It's less taxpayer expense," she said. "It was a waste of time for the police coming out. It should be the responsibility of the alarm company to provide the service. Police have better things to do." Aack! Are you people reading this? The police have better things to do than respond to alarms and make sure people are safe? That kind of opinion on the part of the city can only be the result of terrible mismanagement by local alarm companies. Sorry guys. How can it get to the point where you're officially the boys that cry wolf? It's no wonder Lone Star Security has been able to capitalize by offering to "come in and use the existing alarm system" and add on an in-house guard service. (Which is code for come in and get people to break their contract, right? Not that I'm saying I don't understand the business model, just trying to be clear.) Here's Boyer again: "The Police Department is right. It's the alarm company's responsibility to investigate," he said. "The Police Department has better use for its officers. Cops are highly trained to do dozens of jobs. We are trained to do one thing well -- respond." This guy has completely won the marketing battle. By framing the question as, "Do you want to waste police officers' time?," he's gotten the answer he's looking for: "Of course not. Can we pay you to verify our alarms?" He talks about being partners with the police department, and there is some sense to his policy of alerting the cops that they're responding, kind of a back door dispatch. That's a good thing, but I'm troubled by this part: The gun stays in the holster and only comes out when an officer faces deadly force. And that deadly force must have the ability to deliver it against an officer or customer, said Boyer. "If the deadly force is across the street holding a knife, the gun stays in the holster," he said. "Our job is to investigate alarm calls. If there's criminal activity, we call the cops. We are not Rambo." Well, not only are you not Rambo, you are also not a police officer. Let's hope deadly force is never used, but it's hard to rely on hope in that potential situation. You think people are upset about Blackwater shooting innocent Iraqis (I gave you an Irish link, for non-US perspective)? What happens to a community when a private security company shoots a kid reaching for a cell phone? If a police officer does that, it's one thing. In this case he was placed on leave. I think it's a very different situation if it's a private security officer, where the city doesn't have recourse and the company is not accountable to the citizens. All of this tells me that alarm companies have to make sure their communities don't get to the point where they think they're just crying wolf, and they need to work on programs like those developed by SIAC to work with states on enhanced call verification and CP-01.
by: Martha Entwistle - Tuesday, October 23, 2007
Well, the party a Turtle Point last night was really boffo or groovy or some other '60s term for good. A 10-piece band entertained CSAA members and spouses while most people took the opportunity to avoid talking business for at least a few hours. Very few hijinks ensued. Sorry, no good gossip. This morning was the real meat of the conference, with presenations that got to the heart of members' concerns. Mitchell, Silberberg & Knupp's Alan Pepper gave a sobering presentation on privacy, which, when doubled with Michael Kelly's presentation on insuring against liability in the digital age, sure made me want to go buy a paper shredder. In fact, the day was full of scare tactics, as Gordon Hope from Honeywell presented a chilling picture of the rapid evolution of the communications devices that will be employed by the alarm industry going forward, and John Lombardi (CIA Security), Shane Clary (Bay Alarm), Lou Fiore (AAIC), and Bob Bonifas (Alarm Detection Systems) put forward a call to arms, trying to generate participation in the NFPA standards-creation process. "Where will architects and engineers and code enforcement officers turn for security standards?" Lombardi asked. "To NFPA 731. The NFPA is simply where they go for standards." Now is the time to pay attention. You can track the standard's progress, and that of others vital to the industry, like NFPA 72 and 720, here. The rest of the day was spent golfing and sailing, though I, your dutiful scribe, spent the rest of the day working, of course. Tomorrow I get up on the dais. We'll see what happens.
by: Martha Entwistle - Monday, October 22, 2007
If there's one thing the CSAA knows how to do, it's pick a spot for the annual meeting. Last year, I couldn't quite make it to Rome, but CSAA educational chair John Lombardi, who owns CIA Security in New York, invited me to speak on a panel focusing on the central station of the future, and it was mighty hard to turn down a trip to Hawaii (though I did grouse about the long plane ride quite a bit around the office). Turns out, the plane ride was, indeed, terrible - 10 hours from Newark to Honolulu with an hour-long flight on the front and back end, from Portland and to Kona, respectively. But the reward sure is nice. The Fairmont Orchid is a first-class resort, where you can swim with the turtles and spend a seriously excellent afternoon watching the Red Sox win game 7 of the ALCS. Monday, the events start and I'll give you a few more details. Aloha.
by: Martha Entwistle - Monday, October 22, 2007
Following soon after treasurer Daniel Demers' (Reliance Protectron) report that the CSAA now has a year's worth of dues in reserve, it was hardly a surprise to hear that next year's annual meeting will be at the Ritz Carlton Grand Cayman, and that they'll travel to Athens, Greece, in 2009. Still, the 150 members in attendance here were all business this morning, toiling through a business meeting run by CSAA outgoing president John Murphy (Vector Security) that also saw presentations from NBFAA president George Gunning (USA Alarm Systems) and newly elected SIA president Wendy Diddell (Richardson Electronics/ADI). Some notable items: • Everyone moved up one step on the chain of command: Bud Wulforst (A-1 Security) moved from vice president to president, Ed Bonifas (Alarm Detection Systems) from second VP to VP, Bob Bean (Alert Alarm) from secretary to second VP, John Lombardi (CIA Security) from assistant secretary to secretary, with Pam Petrow (Vector Security) stepping into the assistant secretary's role. Demers will continue as treasurer. • Executive director Steve Doyle announced plans for a new web site to be launched this year, which will offer five languages of translation. This is partly due to an increased interest by foreign counties in the CSAA programs. Did you know Brazil alone has 2000 centrals? That was schocking to me. • Stan Martin, executive director of SIAC, outlined a number of efforts for false alarm reduction, including, where you can download any number of tools for fighting verification efforts in your home town. • There was discussion of the legal implications of the AMPS sunset. Specifically, could you be punished by the FCC for not notifying your customers of the sunset? Probably not, since centrals are commonly believed to exist as end users and not carriers, and the FCC only has jurisdiction over carriers, but it's better not to test it. If some event happens where the analog backup doesn't work following the sunset and you've neglected to alert your customers, however, it's likely you'd be liable for damages, so there's another good reason to get the word out. • There are now more than 80 Five Diamond certified central stations, those that have lived up to a number of CSAA requirements and have had all of their operators trained. Following the business meeting, Ed Turzanski, senior fellow, Center for Terrorism, Counter-Terrorism and Homeland Security, at the Foreign Policy Research Institute, delivered a keynote address that outlined a plan for winning the war on Islamic extremists that resonated strongly with the members, even if it touched only slightly on the sort of security practiced by alarm dealers. If anything, the most relevant portion of the keynote dealt with encouraging energy independance and conservation and breaking our ties with Middle East oil supplies. Then, with that presentation pushing the conference a half-hour behind schedule, the heads of AHJs APCO, the International Association of Fire Chiefs, the International Association of Chiefs of Police, and the National Sheriff's Association outlined their goals for the coming year, and how the CSAA might be able to collaborate in accomplishing some of those goals. Finally, Chief Harlin McEwan, chair of the communication and technology committee for the IACP, spoke about the impending national wireless public safety broadband network and the very interesting Public Safety Spectrum Trust, a new non-profit organization that will hold the license to a very powerful piece of wireless real estate. How this will affect the security industry remains to be seen. With that completed, attendess dispersed for lunch, next to meet at the Turtle Point Beach Party. I'll have a report of those activities anon.
by: Martha Entwistle - Friday, October 19, 2007
In a ruling that could have a major impact on the residential market, especially, Curt Woodward at the Olympian reports today that the state Supreme Court has ruled in favor of 70 Brink's Home Security techs who say they deserve to be paid for their trips from home to the job site and from the job site home each day. Per the story: The majority opinion, written by Justice Susan Owens, said the technicians were clearly on duty and in a prescribed workplace while driving the company trucks - satisfying state rules that define working hours. ... The court's two dissenters, Justices Richard Sanders and James Johnson, said the technicians weren't on the clock because the company trucks aren't necessarily a workplace. The Brink's technicians, Sanders pointed out, didn't claim they were entitled to pay when driving a work truck to the company office - only when they were driving to and from a job site. "Here, the technicians' principal work consists of installing and repairing alarm systems in customers' homes," Sanders wrote. "Hence, this work is done only at the homes of the customers and not while commuting." There's, of course, no reaction from Brink's or interviews with any industry observers, or even HR lawyers, to talk about the impact this decision might have. We're going to get cracking, however, calling people to find out what this case, which has been rumbling through the legal system since 2002, means for the security biz.