916230--3/24/2010--PROTECTION_ONE

related topics

{customer, product, revenue}

{loan, real, estate}

{personnel, key, retain}

{stock, price, operating}

{debt, indebtedness, cash}

{regulation, change, law}

{system, service, information}

{gas, price, oil}

{interest, director, officer}

{acquisition, growth, future}

{competitive, industry, competition}

{cost, operation, labor}

{product, liability, claim}

{condition, economic, financial}

{control, financial, internal}

{product, candidate, development}

We have a substantial amount of indebtedness, which could have a material adverse effect on our financial condition and our ability to obtain financing in the future or to react to changes in our business. Restrictive covenants restrict our ability to operate our business and to pursue our business strategies, and our failure to comply with these covenants could result in an acceleration of our indebtedness. We have a history of losses. Our Board of Directors has announced its intention to explore and evaluate strategic alternatives, which could include a sale of the Company. The price of our common stock may continue to fluctuate or decline over time. Entities affiliated with Quadrangle Group and Monarch Alternative Capital are our principal stockholders and together can exercise a controlling influence over us, which may adversely affect the trading price of our common stock. We rely on technology that may become obsolete, which could require significant capital expenditures. Shifts in our current and future customers' selection of telecommunications services could increase customer attrition and could adversely impact our earnings and cash flow. We depend on our relationships with alarm system manufacturers and suppliers and our hosted services suppliers. If we are not able to maintain or renew these alliances or our manufacturers and suppliers fail to provide us with innovative product offerings or hosted services, our ability to create new customers and service our existing account base could be negatively affected. We face continuing competition and pricing pressure from other companies in our industry and, if we are unable to compete effectively with these companies, our sales and profitability could be adversely affected. We may not be able to realize any or all of the anticipated benefits from prior or future acquisitions of portfolio alarm monitoring contracts. Our customer acquisition and creation strategies and the competitive market for the acquisition and creation of customer accounts may affect our future profitability. Loss of customer accounts could materially adversely affect our operations. Increased adoption of "false alarm" ordinances by local governments may adversely affect our business. Increased adoption of statutes and governmental policies purporting to void automatic renewal provisions in our customer contracts, or purporting to characterize certain of our charges as unlawful, may adversely affect our business. Due to a concentration of accounts in California, Florida and Texas, we are susceptible to environmental incidents that may negatively impact our results of operations. We are susceptible to downturns in the housing market which may negatively impact our results of operations. Declines in rents, occupancy rates and new construction of multifamily dwellings may affect our sales in this marketplace. We could face liability for our failure to respond adequately to alarm activations. In the event that adequate insurance is not available or our insurance is not deemed to cover a claim, we could face liability. Future government regulations or other standards could have an adverse effect on our operations. The loss of our Underwriter Laboratories listing could negatively impact our competitive position. We are dependent upon our experienced senior management, who would be difficult to replace.

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916230--3/24/2010--PROTECTION_ONE_INC