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The ADT Corp.

Vivint gets new CIO

 - 
Tuesday, July 2, 2013

Vivint has a new chief information officer, Todd Thompson, who hails from the hotel and airline industries, the company announced today.

Another home security giant also just hired a new CIO. The ADT Corp., based in Boca Raton, Fla., recently tapped Kathleen McLean, a former telecom exec, as CIO.

But while the position of CIO is a newly created one for ADT, that’s not the case with Provo, Utah-based Vivint. The Vivint CIO job that Thompson is stepping into was formerly held by JT Hwang, who will become chief technology officer, focusing on the development and integration of the company's products and platform, the company said in a news release.

Thompson will be responsible for companywide information technology functions, Vivint said.

Vivint President Alex Dunn said in a prepared statement, “Supporting our culture of innovation with advanced technology and effective processes has always been a priority, and Todd's experience in IT leadership will be a huge asset to our business.”

One thing both ADT’s McLean and Vivint’s Thompson have in common is that each comes from outside the security industry.

According to the Vivint news release, Thompson most recently "was CIO for Starwood Hotels & Resorts Worldwide, where he led the team that implemented the industry's first new-age reservation system, drove initiatives to enhance revenue and the guest experience, and streamlined the IT function." Prior to Starwood, the company said, Thompson was CIO for JetBlue Airways and before that led consulting practices for SBI.Razorfish and Arthur Andersen Business Consulting.

“Vivint presents a lot of exciting advantages from a technological perspective,” Thompson said in a statement. “As a company, we have the opportunity to do things that have never been done before, and we want to do the same thing with information technology. We, in IT, are committed to continuously helping reimagine our business so it's more effective than anything else out there as we contribute to the company's future success.”

Thompson holds a BS in computer science and an MBA from Brigham Young University.
 

ADT taps former telecom exec as new CIO

In the newly created position, Kathleen McLean will use IT strategy to support business operations
 - 
06/24/2013

BOCA RATON, Fla.—The ADT Corp. recently created a new position—that of chief information officer—and has appointed a former telecom executive to the position.

Readers divided on need for early termination fees

SSN News Poll finds sharp split on long-term contracts
 - 
06/04/2013

YARMOUTH, Maine—Early termination fees are a standard in the security industry, but now The ADT Corp. is facing a class-action lawsuit over them on consumer protection grounds. Are the fees necessary to help companies recover installation costs and the loss of profit, or are they just an anti-competitive tool used to lock in customers?

ADT shares predicted to rise 20 percent

 - 
Wednesday, February 27, 2013

An article in Barron’s has the financial media world abuzz because it predicts shares of The ADT Corp. “could climb by more than 20 percent over the next year.”

The article in the latest edition of the weekly financial newspaper owned by Dow Jones cites the push into home automation by the publicly traded ADT, which spun off from Tyco in September. ADT Pulse, introduced in 2010, is the driver of much of ADT’s growth, the article said.

Barron’s also indirectly suggests ADT could buy a rival like Vivint or that ADT itself could be acquired. The article refloats the rumor that AT&T could acquire ADT.

The article concludes: “It may be time for investors to pick up the smartphone and tap the ADT Pulse icon.”

Here’s some more details summarized by Reuters:
 

According to [Barrons], the Boca Raton, Florida-based company is already benefiting from a stronger housing market, rising demand for home healthcare services, and recent acquisitions, and commands 25 percent of the home alarm business and 14 percent of the small business segment.

… At the center of ADT's expansion effort is Pulse, a nearly 2-1/2 year old product that lets customers control settings remotely through devices such as smartphones and tablets.

While Pulse serves just 4 percent of ADT customers overall, the company in January said 19 percent of new customers use it.

ADT last month also set plans to quickly buy back $600 million of stock under an existing $2 billion repurchase program.

… It also said ADT could buy rivals, which are mainly owned by private equity firms such as Blackstone Group LP.  [which owns Vivint]

Based on recent transactions for security companies, ADT could fetch $59 per share in takeover, the newspaper said.

Shares of ADT closed yesterday at $46.57.

 

Q1 sales, profits up for ADT

 - 
Wednesday, January 30, 2013

Sales of Pulse are up more than 6 percent and recurring revenue up more than 5 percent, The ADT Corp reported today as it released its results from its first quarter ending Dec. 28. The home security/home automation giant also said it added 257,000 new customers and has 6.4 million customer accounts.

When ADT on Sept. 28 became an independent, publicly traded company after spinning off from Tyco International, CEO Naren Gursahaney told me that it was not "a moonshot” for ADT’s residential penetration rate to rise from around the industry standard of about 20 percent to 40 percent.

Of course, it’s too soon to tell if ADT will succeed in that goal, but the company is performing well according to the report it released on Jan. 30. Here’s a synopsis from a Reuters story on the earnings results:
 

Home security services company ADT Corp reported a higher quarterly profit on Wednesday and announced a $600 million accelerated share repurchase.

The company, formerly a part of Tyco, said net earnings had risen 12.9 percent to $105 million, or 44 cents per share, from $93 million, or 39 cents per share, a year earlier.

Analysts on average were expecting a profit of 43 cents per share, according to Thomson Reuters I/B/E/S.

Sales rose 1.8 percent to $809 million, with recurring revenue from existing customers accounting for 92 percent of the total and increasing 5.1 percent from a year earlier.

The Boca Raton, Florida-based company, which provides security monitoring services to homes and small businesses in North America, said it still expected a rise of 4.9 percent to 5.2 percent in recurring revenue in fiscal 2013.

Here’s also some of what ADT had to say in its report:

Naren Gursahaney, ADT’s Chief Executive Officer, said … “Looking ahead to the balance of the year we will continue to focus on our ultimate objective of creating long-term value for our shareholders by reinvesting in our business to drive profitable growth, and returning excess cash to our shareholders.”

Recurring revenue, which made up 92% of total revenue in the quarter, was up 5.1%. Recurring revenue growth was driven by a 4.7% increase in ending average revenue per customer, which rose to $39.27, and 0.5% net growth in ending customer accounts. Non-recurring revenue declined 25.3% as the company’s mix of newly installed systems continues to shift toward more ADT-owned systems, increasing deferred revenue and reducing current period installation revenue. Total revenue of $809 million increased 1.8%, compared to the first quarter of 2012. Attrition was flat sequentially at 13.8%. ADT added 257,000 new customers and closed the quarter with 6.4 million customer accounts.

EBITDA before special items was $417 million, 6.1% higher than the first quarter of the prior year, and EBITDA margin before special items was 51.5%, a 210 basis point improvement. The margin expansion was mainly due to the favorable impact from the mix shift to more ADT-owned systems and was also aided by cost control initiatives that helped to offset the expense impact of dis-synergies caused by the separation from the Tyco commercial business and Hurricane Sandy.

 

ADT performing well

 - 
Wednesday, January 16, 2013

Since ADT spun off from Tyco International Sept. 28 and began trading on the New York Stock Exchange, the news about its performance has been upbeat. And earlier this week, according to news reports, Credit Suisse Group reaffirmed its outperform rating of the The ADT Corp. and raised its target price from $50 to $54. It cited ADT mergers and acquisitions as a factor.

Here’s more from Credit Suisse’s Jan. 14 assessment of ADT:
 

Some investors think they "missed" the chance to own ADT. We disagree, and see upside to the mid/high $50's over the next 12 months. TP raised to $54 (from $50). We think ADT's M&A spend will exceed their budgeted $150mn in 2013 and drive revenue and earnings growth above current market expectations. The fragmented security monitoring industry is filled with potential targets for ADT and given most industry competitors operate near identical business models, most M&A should offer significant cost synergies and earnings accretion. An additional half turn of EBITDA leverage to ADT's current targets would give ADT $700mn to spend on M&A; this could mean $175m in incremental EBITDA before synergies (10%+ accretive).

In trading yesterday, ADT closed at $47.25. Its 52-week range went from $35.38 to $47.50.

 

Spinoff enhances ADT as job creator

Additional employees to fill corporate positions previously covered by Tyco and because ADT is growing
 - 
01/04/2013

BOCA RATON, Fla.—The ADT Corp. already has about 16,000 employees, but since spinning off from Tyco International in the fall, the home security giant has become even more of a job creator, adding hundreds of new hires around the country.

ADT to add 120 jobs at Florida HQ

 - 
Friday, November 30, 2012

The ADT Corp. won praise from Florida Gov. Rick Scott at an event this week at which ADT announced it will add 120 jobs at its Boca Raton headquarters, according to a newspaper report.

Florida state, county and local governments have pledged $1.6 million in a public funding incentive package to persuade ADT to stay in Florida and create the jobs, according to the South Florida Sun-Sentinel. It said the jobs would be created over the next couple of years and be in “human resources, information technology, finance, legal and other positions needed at a corporate headquarters and public company.”

The paper quoted ADT CEO Naren Gursahaney as saying at the event that ADT already has added 600 new employees this year in its offices throughout the state, and that ADT has “committed to continue to grow our workforce here."

Here’s more from the Sun-Sentinel report:
 

The security company was offered a $1.6 million incentive package to remain in Boca Raton and create at least 120 jobs. Palm Beach County approved a $184,000 job growth incentive grant as part of the package.

Gov. Scott [who attended the event] said the incentive package is based on a formula to provide a "five times" return on taxpayer dollars. Enterprise Florida has given economic incentives to about 140 companies this year that have made commitments to create 22,000 to 23,000 jobs, he said.   

Scott said he was pleased ADT chose Florida for its headquarters instead of Texas, his rival in job-creation efforts. ADT has a large office in Dallas.

Palm Beach County Commission Chairman Steven Abrams pointed out that of the 46 corporate headquarters in Palm Beach County, nearly half of them are in Boca Raton.

"You have to have a plan. The City of Boca Raton has a plan backed up by dollars and that's making a difference," Abrams said.

In 2010, ADT was offered $1.3 million in incentives to invest in its new North American corporate headquarters at 1501 Yamato Road. At that time, the company committed to creating 20 jobs over five years.

ADT has 16,000 employees worldwide, 700 of whom work in South Florida.

Sarah Cohn, ADT director of media relations, has told me that it is “normal practice” for a lot of companies to seek such public incentives. “Many state and local governments seek to incentivize companies to stay in their areas," she said.

In fact, ADT, which began trading on the New York Stock Exchange on Oct. 1, was just one of three companies that Palm Beach County commissioners recently unanimously approved to receive such incentives, according to the Sun-Sentinel. Aerospace company Pratt & Whitney and Digital Risk, a financial services company, each was approved for $300,000 in county grants and millions more in state and city funding to create jobs, the newspaper said.

 

ADT makes RMR forecast

 - 
Tuesday, November 27, 2012

The ADT Corp., which just became independent in September, says its Pulse product is doing so well that it predicts that recurring revenue will grow by 4.9 percent to 5.2 percent in fiscal year 2013, the company said this week in a report on its Q4 and fiscal year 2012 results.

“We delivered solid recurring revenue growth fueled by the continued success of Pulse in the residential and small business security markets,” ADT CEO Naren Gursahaney said in a statement. “Our focus for 2013 is to deliver meaningful shareholder value by leveraging our competitive strengths to accelerate growth and through the efficient deployment of capital.”

ADT reported that in Q4, recurring revenue was $742 million, up 5.2 percent. The company said that was "driven by 4.4 percent growth in average revenue per customer, which rose to $38.87, and 1.1 percent net growth in customer accounts."

ADT also is initiating a dividend and has a share buyback plan. Here's what Bloomberg News had to say on that this week:
 

ADT Corp. authorized a $2 billion share repurchase program and initiated a quarterly dividend after investors George Soros and hedge-fund manager Keith Meister called on the home-security company to buy back stock.

The buyback will end in November 2015 and the quarterly dividend will amount to 12.5 cents a share, the Boca Raton, Florida-based company said in a statement today. ADT was spun off from Tyco International Ltd. (TYC) in September.

In October, billionaire Soros joined Meister in urging ADT to buy back about 45 percent of its stock with borrowed money to take advantage of low interest rates after they became the company’s biggest investors. ADT today reported adjusted earnings per share of 43 cents in the fourth quarter ended Sept. 30, matching the average analyst estimate. Recurring revenue rose 5.2 percent to $742 million.

The company has more than 6 million customers in the U.S. and Canada, providing security to homes and businesses with products including the ADT Pulse system.

 

ADT holds strategic talks with investment firm; shares up

 - 
Thursday, October 25, 2012

The ADT Corp. has been making headlines ever since it split off from Tyco International on Sept. 28. Here’s the latest from Reuters news service today:
 

ADT Corp ... said on Thursday that it had held constructive discussion with Corvex Management LP, an investment firm that has taken a 5.02 percent stake.

Founded by Keith Meister, one of activist investor Carl Icahn's longtime associates, Corvex said in a filing with the U.S. Securities and Exchange Commission that it believed ADT shares were undervalued and had met with management to discuss strategy. It may buy additional shares.

The purchases began on September 17, when ADT began trading on a when-issued basis, and continued once the stock began trading on the open market on October 1.

George Soros' Soros Fund Management owns a 0.25 percent stake in ADT, the filing showed.

Corvex said it wanted ADT to consider "strategic alternatives including ... improving capital structure and capital allocation," according to the regulatory filing.

Neither ADT nor Corvex had any additional comment.

ADT shares were up 7 percent at $40.99 in morning trading. Earlier in the day, they had risen as much as 11 percent to $42.42, the highest level in the stock's six-week existence.

 

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