The ratings on Protection One Alarm Monitoring Inc. (PONE) reflect the company's highly leveraged financial profile and second-tier position in the highly competitive and fragmented U.S. security alarm monitoring industry. A weak economic environment, which has weakened the residential security alarm market, further compounds these factors. PONE's largely recurring revenue base and good liquidity offset those challenges in part. PONE provides electronic security alarm monitoring services to residential, commercial, and wholesale markets. As of March 31, 2009, the company served about 1.8 million customers directly and about 1 million more indirectly through its dealer relationships. About 90% of PONE's revenue is derived from its recurring monitoring and maintenance contracts. PONE is the No. 3 company in the industry, but it
