Thursday, monitored security service provider Brink's Home Security Holdings, Inc., doing business as Broadview Security (CFL), reported a dip in third quarter profit from a year ago, notwithstanding a 6.1% rise in revenues, reflecting higher expenses. Going forward, the company provided an update to its fiscal 2009 and 2010 expectations.
The Irving, Texas-based company's third-quarter net income declined to $13.1 per share or $0.28 per share from $14.0 million or $0.30 per share in the prior year period. On average, five analysts polled by Thomson Reuters expected the company to report earnings of $0.27 per share for the quarter.
Excluding items, non-GAAP net income for the quarter increased to $19.6 million or $0.42 per share from $18.8 million or $0.40 per share in the comparable period.
Brink's Home Security Holdings, Inc., doing business as Broadview Security, markets, installs, services, and monitors security alarm systems for residential and commercial properties in North America.
Quarterly revenues rose 6.1% to $143.7 million from $135.4 million in the year-ago period. Analysts estimated revenues of $144.06 million for the quarter.
Broadview attributed the increase in revenues to a continued growth in the subscriber base, up 4.9% from a year ago, and a 4% increase in average monthly recurring revenue per ending subscriber, partially offset by lower pre-wire and trim-out revenues from new home builder customers.
Monthly recurring revenues increased 9% at quarter-end over prior year to $43.4 million, driven by a 4.9% increase in ending subscribers and a 4.0 percent growth in average monthly recurring revenue per subscriber.
Selling, general and administrative expenses during the quarter rose to $51.3 million from $36.9 million a year ago.
Expenses included introduction costs and, to a lesser extent, increased impairment costs related to subscriber disconnects. Higher expenses were somewhat offset by lower royalty expense in the third quarter of 2009 and, to a lesser extent, the profit impact of the larger subscriber base.
Brand introduction costs reduced net income by $6.5 million, or $0.14 per share, in the third quarter of 2009.
For the nine-month period, Broadview posted net income of $44.9 million or $0.98 per share, up from $42.3 million or $0.92 per share last year. Revenues advanced to $419.7 million from $397.1 million in the corresponding period last year.
Bob Allen, president and chief executive, said despite a weak housing market and high unemployment, for fiscal 2009 the company expects revenues to grow in the mid single digit range, driven by mid single digit growth in the subscriber base, and upper single digit growth in monthly recurring revenue. The company anticipates growth in GAAP operating profit for full year 2009.
Looking forward to 2010, the company expects mid single digit growth in net subscribers, high single digit growth in revenue and monthly recurring revenue, and positive growth in GAAP operating profit.
CFL is trading at $31.67, up $0.37 or 1.18%, on a volume of about 314 thousand shares.
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