2012 SDM 100: Facts and Figures
8 Percent Jolt in RMR Rate
Source: 2012 SDM 100, SDM Magazine, May 2012
Recurring monthly revenue (RMR) — a prime revenue stream for SDM 100 companies — improved 8 percent in 2011. While it doesn’t match the 10 percent growth in RMR in 2010, it is certainly a healthy increase and is supported by the fact that 9 out of 10 SDM 100 companies individually improved.
Security’s Positive Viewpoint for 2012 Revenue
*percentage of SDM 100 companies, based on 96 responses
Source: 2012 SDM 100, SDM Magazine, May 2012
This time last year, 82 percent of SDM 100 companies predicted that their total annual revenue would improve in 2011 compared with 2010. They predicted correctly: In fact, 87 percent of companies for which revenue could be compared year-over-year, experienced an actual increase in total gross revenue in 2011. The outlook is also positive for 2012.
SDM 100 Profit Margin Results
SDM 100 companies were asked, “Did your company’s net profit margin increase, decrease or stay about the same in 2011 compared with 2010?”
Most SDM 100 companies reported that they increased their net profit margins in 2011, and among those who did, the average rate of increase was 41 percent. For the 13 percent of companies that reported a decrease in net profit, the average rate of decrease was just 4 percent.
Total Annual Revenue: $9.3 Billion
Source: 2012 SDM 100, SDM Magazine, May 2012
Total annual revenue for the SDM 100 companies was $9.32 billion, a 1.5 percent improvement in 2011 compared with the prior year. As many as 87 percent of ranked companies registered an increase in their total revenue. No. 1, ADT, reported total revenue of $5.1 billion compared with $4.4 billion in 2010. Also notable, Stanley Convergent Security reported 2011 revenue of $798.4 million compared with 2010 revenue of $467 million.
Dealer Revenue Across Technology Categories
Average percentage of total revenue among SDM 100 companies, distributed by types of products
*includes intercom, badging systems, perimeter security, IT hardware/software Source: 2012 SDM 100, SDM Magazine, May 2012
Security companies derive their total revenue from a wide variety of product categories, including the most sizeable, burglar alarm systems, which comprised 33 percent of dealers’ revenue in 2011. The category of integrated commercial systems is growing to be a larger piece of the pie, at 20 percent of the total in 2011, up from 17 percent the previous year. This could be attributed to more systems integrators joining the ranks of RMR-based security providers.
Dealer Revenue Across Business Services
Average percentage of total revenue among SDM 100 companies, distributed by types of services
*includes equipment leases and consulting
Source: 2012 SDM 100, SDM Magazine, May 2012
Security alarm companies derive their revenue from a wide variety of service categories, including the most sizeable — monitoring, which comprises nearly half of all revenue. The SDM 100 recently began tracking the average percentage of revenue from managed services; at only 2 percent of 2010 revenue and 1 percent of 2011 revenue, it is expected to grow significantly in 2012 based on what SDM 100 companies are saying about implementing more services.
Window to a Security Staff
Average percentage of staff employed in various departments at SDM 100 companies
Installation and technical service comprise the majority of positions within an SDM 100 company, together accounting for approximately one-third (32 percent) of employees on a security company’s workforce. However, they accounted for a larger share (40 percent) of staff in 2010.
Source: 2012 SDM 100, SDM Magazine, May 2012
Key to Using the SDM 100
Click here to see aggregate figures from SDM 100.
The 2012 SDM 100 ranks U.S. companies that provide electronic security systems and services to both residential and non-residential customers. This ranking is based on information provided to or, in few cases, estimated by SDM. Ranked companies were asked to submit either an audited or reviewed financial statement, or a copy of their income tax return showing total gross receipts for the stated period. The vast majority of the firms ranked are privately held.
The main table ranks 100 firms by their recurring monthly revenue (RMR) of December 31, 2011. The firm with the highest RMR is ranked as No. 1, and so on. For each of the 100 companies, the following information is provided, from left to right:
- Current year rank, which is based on December 31, 2011, RMR.
- Prior year rank.
- Company name, as used in the marketplace, and headquarters location.
- Amount of RMR billed on December 31, 2011.
- Indication of whether the RMR amount increased, decreased or stayed the same as RMR of December 31, 2010.
- Number of subscribers (recurring-billable customers) at year-end 2011.
- Amount of sales revenue from residential system installations in 2011.
- Amount of sales revenue from non-residential system installations in 2011.
- Total gross revenue in millions of dollars. This number represents total revenue in calendar-year or (the company’s) fiscal-year 2011 from security system sales/installation, service, leasing, and monitoring.
- Number of full-time employees.
- Number of business locations, including headquarters.
Note: An e following the figure indicates it is an SDM estimate.
SDM 100: Its Purpose & Approach
The SDM 100 has been published since 1991. Its primary objective is to measure consumer dollars gained by alarm companies, in order to present an account of the size of the market captured by the 100 largest security providers. SDM 100 firms are ranked by their recurring monthly revenue. RMR is the amount of contractually recurring revenues due from customers, for such services as monitoring, contracted service and system maintenance, and leasing of security systems. It is the revenue associated with the contractual agreement between an alarm company and its subscriber — derived from customer billing for services such as monitoring, contracted service, managed solutions, and leasing of security systems — and is typically the basis for valuation of an alarm company. RMR is the language of alarm company executives and is meaningful in comparative analysis among industry peers. Of the 100 security dealers ranked, 35 of them earned more than $1 million in RMR in 2011.
How to Purchase the SDM 100 Directory
Wouldn’t it be useful to have more information about each of the 100 firms ranked here? The 2012 SDM 100 Directory includes contact names, mailing addresses, telephone numbers, Web site URLs, branch office locations, product buyer names, installation data, revenue sources, and more. The SDM 100 Directory comes in Microsoft Excel format. To order the SDM 100 Directory, contact Heidi Fusaro at (630) 518-5470 or by e-mail to fusaroh@bnpmedia.com.
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