The rating on Protection One Alarm Monitoring Inc. reflects Standards&Poor's Ratings Services' view that the company's "highly leveraged" financial risk profile (based on our criteria) and modest cash flows are likely to preclude sustained de-leveraging. We consider the company's business risk profile "weak" (according to our criteria), reflecting its limited scale compared with its largest competitor, and the fact that its revenue has only recently stabilized. Protection One provides electronic security alarm monitoring services mainly to residential and commercial customers, but also to independent alarm dealers. It is the No. 2 company in the industry, but we estimate its revenues to be approximately 7x smaller than the industry leader, ADT. The company uses the internal generation/direct sales model
