Brink's Home Security - Alarm Monitoring - Category Directory

972-871-3500

8880 Esters Boulevard

Irving, TX 75063

www.brinkshomesecurity.com

Business Description 
Brink's Home Security is a division of the publicly traded company, The Brink's Companies.

BHS believes that it is the second largest provider of monitored security
services to single family residences and commercial properties in North America.
BHS is primarily engaged in the business of marketing, selling, installing,
monitoring and servicing electronic security systems in owner-occupied,
single-family residences. At December 31, 2003, BHS had more than 833,000
systems under monitoring contracts, including approximately 122,000 new
subscribers added during the year. BHS provides services to subscribers located
in most metropolitan areas in 44 states, the District of Columbia and several
markets in two western provinces in Canada.

BHS' typical security system installation consists of sensors and other devices
which are installed at a customer's home or commercial location. The equipment
can be configured to signal intrusion, fire, medical and other alerts. When an
alarm is triggered, a signal is sent by telephone line to BHS' central
monitoring station in Irving, Texas. The monitoring station holds an
Underwriters' Laboratories, Inc. ("UL") listing. UL specifications for service
centers include building integrity, back-up computer and power systems, staffing
and standard operating procedures. In the event of an emergency, such as fire,
tornado, major interruption in telephone or computer service, or any other event
affecting the Irving facility, monitoring operations can be transferred to a
backup facility located in Carrollton, Texas.

BHS markets its alarm systems primarily through television and direct mail
advertising, yellow page and internet advertising, alliances with other service
companies, inbound telemarketing and field sales employees. BHS employees
install and service most of the systems; however, dealers and subcontractors are
utilized on occasion in some service areas. BHS does not manufacture the
equipment used in its security systems. Equipment is purchased from a limited
number of suppliers and no interruptions in supply are expected. Equipment
inventories are maintained at each branch office.

BHS has an authorized dealer program to expand its geographic coverage and
leverage its national advertising. The dealer program accounted for 12% of new
installations during 2003 and, as of December 31, 2003, 4% of BHS' total
subscriber base. Approximately 81 dealers were authorized to participate in the
program as of December 31, 2003. BHS requires that its dealers install the same
type of equipment as is installed by its own branches, and adhere to the same
installation quality standards.

In addition to initiating subscriber relationships through its branch and dealer
networks, BHS obtains new residential subscribers through its Brink's Home
Technologies ("BHT") division. BHT markets residential security systems, as well
as a variety of low-voltage security, home networking, communications and
entertainment options, directly to major home builders. New system activations
from BHT accounted for 9% of new subscribers added during 2003.

BHS also provides monitored security to residents of apartment and condominium
complexes; however, these customers currently represent less than 2% of
subscribers.

Although its core business is focused on the monitoring of residential security
systems, BHS installs and monitors commercial security systems. Commercial
customers represented approximately 4% of subscribers at year end.

Government Regulation
BHS and its employees are subject to various federal, state and local consumer
protection, licensing and other laws and regulations. Most states in which BHS
operates have licensing laws directed specifically toward the alarm industry.
BHS' business relies upon the use of wireline telephone service to communicate
signals. Wireline telephone companies are currently regulated by both the
Federal and state governments. BHS' wholly owned Canadian subsidiary is subject
to the laws of Canada, British Columbia and Alberta.

The alarm service industry experiences a high incidence of false alarms. BHS
believes its false alarm rate compares favorably to other companies' rates. The
high incidence of false alarms in the industry has caused some local governments
to impose assessments, fines and penalties on either subscribers or the alarm
companies. A few municipalities have adopted ordinances under which both permit
and alarm dispatch fees are charged directly to the alarm companies. BHS' alarm
service contracts generally allow BHS to pass these charges on to customers.

Police departments in two major western U.S. cities are not required to respond
to calls from alarm companies unless an emergency has been visually verified. If
more police departments in the future refuse to respond to calls from alarm
companies without visual verification, this could have an adverse effect on
future results of operations for BHS.

On October 1, 2003, the Federal Communications Commission/ Federal Trade
Commission "Do Not Call" list went into effect. Federal law prohibits telephone
solicitations to phone numbers on the Do Not Call list. BHS has implemented
policies, procedures and training to help ensure compliance with this law. This
law constrains BHS' ability to contact prospects referred to it by customers or
other businesses with whom BHS has marketing alliance agreements. However, as
there are other ways to initiate a sale, the overall impact that the "Do Not
Call" list will have on BHS' ability to attract new subscribers, or the costs to
attract new subscribers, cannot be determined at present.

Competition
BHS competes in most major metropolitan markets in the U.S. and several markets
in western Canada through BHS owned branch operations or its authorized dealer
program. The monitored security alarm market has a large number of competitors,
including thousands of local and regional companies. BHS believes it is now the
second largest provider of monitored security services to single-family
residences and commercial properties in North America.

Competition is based on a variety of factors including, but not limited to,
company reputation and service quality, product quality and price. There is
substantial competitive pressure on installation fees. Several significant
competitors offer installation prices which match or are less than BHS' prices;
however, many of the small local competitors in BHS' markets continue to charge
significantly more for installation. Competitive pressure on monitoring rates,
while less intense than on installation fees, is still substantial. BHS believes
that the monitoring rates it offers are generally comparable to the rates
offered by other major security companies.

BHS believes its customer retention rate is the highest among the major home
security service companies. BHS believes this favorable retention rate is due to
its focus on selecting new customers with strong credit backgrounds and the high
quality of customer service it provides.

Properties
BHS has approximately 60 leased offices and warehouse facilities located
throughout the U.S. and two leased offices in Canada. The lease for the central
monitoring station in Irving, Texas expires in 2005, but includes several
renewal options. This facility also serves as BHS' headquarters and houses most
administrative, technical and marketing services personnel. Additional
administrative personnel are located in a portion of an adjacent building in
office space that is leased for a term ending in 2009. The lease for the backup
monitoring center in Carrollton, Texas, expires in 2005. BHS leases
approximately 1,200 vehicles which are used in the process of installing and
servicing its security systems.

BHS retains ownership of most of the more than 833,000 systems currently being
monitored. When a customer cancels monitoring services, BHS typically disables
the system. In a limited number of cases, BHS removes the equipment. When a
residential customer cancels monitoring services because of an impending
household move, the retention of the BHS system in the residence facilitates the
marketing of monitoring services to the subsequent homeowner.

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