Significant percentage of revenues are recurring; and Alarm monitoring industry is expected to grow at more than 8% over the intermediate term. Second-tier position in a highly competitive and fragmented market; Highly leveraged financial profile; and Integration of International Alarm Services Group (IASG) is compressing margins. The ratings reflect Protection One's (PONE's) second-tier position in the highly competitive and fragmented U.S. security alarm monitoring industry and its highly leveraged financial profile. These are partly offset by its largely recurring revenue base, strong industry growth prospects, and the expectation for continued positive free operating cash flow generation, given management's track record of stabilizing revenue. PONE's reported consolidated revenues were $324 million for the 12 months ended Sept 30, 2007, over 90%
