Home Security International, Inc. operates as a direct sales company, which, sells, installs, monitors, and services a residential security alarm system marketed under the trade name SecurityGuard, principally in Australia and New Zealand, with international operations in Europe, South Africa, and North America. The SecurityGuard System is a wireless alarm system, which uses radio signals from transmitters incorporated into the protective devices to communicate activation signals from such devices to the customer's centralized processing unit. The security system provides home protection to a customer's premises through interior heat sensitive motion detectors, and a centralized processing unit, which communicates signals to a central monitoring station. As at June 30, 2000, there were 39 distributor offices in Australia and five distributor offices in New Zealand. In April 2001, Home Security voluntarily filed a de-listing application to remove its shares from trading on the American Stock Exchange.
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Home Security International, Inc. is a direct sales company which, through a distributor network (the Distributor Network), sells, installs, monitors and services a residential security alarm system marketed under the trade name SecurityGuard, principally in Australia and New Zealand, with international operations in Europe, South Africa and North America. The Company's security system (the SecurityGuard System) provides home protection to a customer's premises through interior heat sensitive motion detectors, and a centralized processing unit (CPU) which communicates signals to a central monitoring station. The SecurityGuard alarm and other major components are manufactured exclusively for the Company by Ness Security Products Pty Limited, a wholly owned subsidiary.
The Company was founded by Bradley D. Cooper and commenced business in Sydney, Australia in 1988. At its inception, the Company sold alarms through part-time dealers who purchased franchises from the Company. Initially, the Company successfully generated revenues from the margins realized on sales of unmonitored SecurityGuard Systems, resulting in a base of customers with installed SecurityGuard Systems of approximately 264,000. Over the last twelve months the Company has focused on generating recurring revenue, through the sale of extended warranties to its customers and the introduction of on-line alarm monitoring services in Australia, New Zealand, North America, and Europe.
The SecurityGuard System
The SecurityGuard System installed by the Company is a wireless alarm system, which uses radio signals from transmitters incorporated into the protective devices to communicate activation signals from such devices to the customer's CPU. By comparison, hard-wire devices, which are characterized by substantially higher initial costs to the customer, use actual wires to connect each of the protective devices to the customer's CPU. Wireless devices can generally be installed more simply and quickly than those that require alarm wiring, thus reducing labor costs. In addition, wireless devices are also easy to remove and reinstall when a customer relocates to a new residence.
The Company's monitored SecurityGuard alarm provides protection to the premises through interior heat sensitive motion detectors, and a CPU, which communicates signals to the Company's designated central monitoring station. The SecurityGuard System also features the ability to arm and disarm the alarm via a wireless remote control device which also acts as a panic button. The remote control feature of the SecurityGuard System helps differentiate the Company's alarm from those of its competitors whose alarm systems generally require the input of a security code into a keypad to arm and disarm the alarm.
The Company began selling twenty-four hour on-line monitoring services as an upgrade to its Australian and New Zealand customers during the second half of fiscal 1999. As at June 30, 2000, the Company had installed approximately 9,700 monitored lines as upgrades for its existing customers in Australia and New Zealand. The Company commenced selling on-line monitoring services as part of its point of sale products and services to new customers in Australia and New Zealand in September 1999. As of June 30, 2000, the Company had installed approximately 6,400 monitored lines as part of its point of sale for new customers in Australia and New Zealand.
The Company is currently outsourcing the monitoring services in Australia and New Zealand to a central station in Sydney, Australia that utilizes advanced communications and computer systems to route incoming alarm signals and telephone calls to operators. Depending on the type of service chosen by the customer, central monitoring personnel will respond to alarms by relaying information to local security patrols or police departments, notifying the customer or taking other appropriate action. Non-emergency administrative signals will include power failures, low battery signals, deactivation and reactivation of the alarm monitoring system, and test signals, and will be processed automatically by central monitoring station computers.
Historically, the Company offered twenty-four hour emergency response service to its customers as part of its SecurityGuard System for five years from the date of installation free of charge. As part of this service the Company contracts with local security patrol services to send personnel to a residence upon telephonic notification that an alarm has sounded. With the introduction of the On-Line Monitoring Program the Company has continued to offer this service to verified alarm notifications.
OUTSTANDING SHARES 5.8M