The ratings on Lawrence, Kan.–based Protection One Alarm Monitoring Inc. reflect its second-tier position in the highly competitive, fragmented U.S. security alarm monitoring industry and highly leveraged financial profile. These factors are offset partially by a 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. Protection One's pro forma consolidated revenues for the 12 months ended in the second quarter of 2007 totaled $367.8 million, with more than 90% derived from recurring monitoring and maintenance contracts. Although Protection One is No. 3 in the industry, ADT Security Services Inc. is estimated to be more than 10x larger (by revenues). From 1999 through fiscal
