The rating reflects Protection One Alarm Monitoring Inc.'s (PONE) second-tier position in the highly competitive, fragmented U.S. security alarm monitoring industry and a highly leveraged financial profile. These are partly offset by a largely recurring revenue base, strong industry growth prospects and the expectation for continued positive free operating cash flow, given management's track record of stabilizing account attrition. PONE is a provider of electronic security alarm monitoring services to the residential, commercial, and wholesale markets. As of March 2008, the company served about 1.8 million customers with over 88% of its revenues derived from its recurring monitoring and maintenance contracts. PONE has a No. 3 position behind ADT Security Services Inc., which is estimated to be more than 10
