| Home Security International, Inc. | |||
| Ticker: | HSI | Level 7, 77 Pacific Higway | |
| Exchange: | American Stock Exchange | North Sydney, AUSTR NSW 2060 | |
| Industry: | Construction (SIC Code 1731) | ||
| Type of Shares: | Common Shares | Filing Date: | 5/2/97 | |
| U.S. Shares: | 2,400,000 | Offer Date: | 7/15/97 | |
| Non-U.S. Shares: | 0 | Filing Range: | $12.00 - $14.00 | |
| Primary Shares: | 2,400,000 | Offer Price: | $10.00 | |
| Secondary Shares: | 0 | Gross Spread: | $0.80 | |
| Offering Amount: | $31,200,000 | Selling: | $0.40 | |
| Expenses: | $715,000 | Reallowance: | $0.10 | |
| Shares Out After: | 5,000,000 | |||
| Spin out parent firm: | FAI Home Security Holdings Pty Ltd. | |||
| Manager | Tier | Phone |
| National Securities Corp. | Lead Manager | (800) 800-9217 |
| Issuer's Law Firm: | D'Ancona & Pflaum |
| Bank's Law Firm: | Camhy Karlinsky & Stein |
| Auditor: | Arthur Andersen |
| Registrar/Transfer Agent: | Bank of New York |
Dollar amounts in U.S. millions except for per share data | |||||
| 6 Month Ending Financials | |||||
| Full Year Audited Income | Latest Unaudited Income | Prior Unaudited Income | Balance Sheet | ||
| 6/30/96 | 3/31/97 | 3/31/96 | 3/31/97 | ||
| Revenue: | $26.70 | $23.23 | $18.81 | Assets: | $20.98 |
| Net Income: | $1.66 | $1.84 | $1.22 | Curr Assets: | |
| EPS: | Liabilities: | $6.94 | |||
| Prior EPS: | $3.35 | $0.19 | Curr Liabilities: | ||
| Cash Flow/Oper: | $0.49 | Equity: | $14.04 | ||
| Cash Flow/Fin: | Cash: | ||||
| Cash Flow/Inv: | |||||
| Business Description |
| The company operates an incentive based distributor network to sell, install and service residential security alarms systems called SecurityGuard Alarm. The company markets its services and products in Australia and New Zealand. The company's mission is to offer consumers a quality home security alarm package to protect their families and property. The company intends to expand its business services to include, in addition to residential alarm systems, on-line monitoring services and extended warranties. Outside of Australia and New Zealand, the company has established distributor networks in the United Kingdom, Belgium, the Netherlands, Germany and Canada. The company has also successfully test marketed its product in the United States through a sales representative, and anticipates opening a distribution office by June of 1997. The company believes it is one of the fastest growing residential security alarm businesses in Australia and New Zealand and that the characteristics of the Australian and New Zealand and that the characteristics of the Australian and new Zealand market are representative of the conditions that exist in other countries in which the company operates or plans to commence operations. |
| Competition |
| The security alarm industry highly competitive and fragmented. The company competes with numerous other companies for new customers. Although the company believes that it is the leading seller of residential alarm systems in Australia and New Zealand, there is no assurance that the company will continue to have a competitive advantage in these countries. The loss of any competitive position by the company in its target market would have a material adverse effect on the company. In marketing the SecurityGuard Alarm outside of Australia and New Zealand, the company will compete with larger national and international companies that are better capitalized than the company. The company's three major competitors for first-time purchasers of alarm systems in Australia are Brambles Industries Ltd, Chubb Security Holdings Australia Ltd, and Tempo Services Ltd. Competition for new accounts by many of these competitors is based primarily on installation price, monthly monitoring fee, the range of services offered, and reputation for quality. However, the company believes it has a superior marketing strategy because of its policy of selling directly to the end user through the Distributor Network. The company believes that similar competition exists in markets throughout the areas in which it seeks to operates. In the United States, the company will face competition from alarm installation and monitoring companies which are better capitalized than the company and which offer low-priced, subsidized installations of security systems. However, the company believes that it will be able to successfully penetrate and compete in such markets using the same systems that it uses in Australia and New Zealand. The company has expanded its business services to include, in addition to residential alarm systems, on-line monitoring services and extended warranties in Australia. Outside of Australia and New Zealand, the company has established distributor networks in the United Kingdom, Belguim, the Netherlands, Germany, Canada and South Africa. |
| Business Plan |
| The company's strategy is to grow by increasing its Distributor Network in its existing markets as well as in new international markets. In addition, the company plans to expand its product and service offerings with extended warranties and on-line alarm monitoring. The company also seeks to become more efficient and cost-effective by taking advantage of increased economies of scale afforded by its growth. The key elements of the company's strategy are: (I) International Expansion, (ii) Direct Approach to Households, (iii) Increasing Account Density in Existing Markets and (iv) Additional Services and Recurring Revenue. |
| Use of Proceeds |
| The proceeds from the proposed offering will be distributed to parent shareholder and used to reduce indebtedness acquired by the company pursuant to the reorganization and for general corporate purposes. |
| Name of Shareholder | % Owned Before | % Owned After |
| Bradley D. Cooper | 5.20% | 5.00% |
| Officer Name | Title | Age |
| Bradley D. Cooper | Chairman of the Board of Directors, Chief Executive Officer and Assistant Secretary, Member of the Compensation and Executive Committees | 38 |
| Mark Whitaker | Chief Fianancial Officer, Treasurer, Executive Vice President of Finance | 30 |
| Robert D. Appleby | Executive Vice President of International Business Development | 47 |
| Geoffrey D. Knowles | Executive Vice President of Marketing | 32 |
| Felicity A. Hilbert | Executive Vice President of Operations | 27 |
| Terrance J. Youngman | President | 44 |