How ASG Security Achieved $10M in RMR

ASG Security’s executive management explains how they created a platform that ensures continued growth.

The number of installing electronic security systems and services providers that have managed to top $10 million in recurring monthly revenue (RMR) could be counted on 10 fingers. Fewer still are the number of regional companies reaching that figure. That is what makes ASG Security‘s just-accomplished milestone all the more significant. Consider also that it took just a dozen years, during which America suffered a brutal recession, and ASG’s achievement is nothing short of astonishing.

The Beltsville, Md.-headquartered firm is no stranger to accolades, having among other honors captured Security Sales & Integration‘s Installer of the Year (Large Company) in 2010 and numerous SAMMY (Sales & Marketing) Awards. In addition, its president and CEO, Joe Nuccio, who was already known as one of security’s great business leaders before joining ASG, was inducted into SSI‘s Industry Hall of Fame in 2012.

ASG Security sells, installs, monitors and services intrusion and fire systems, home automation, access control, and IP/cloud-based video systems to a nearly 50-50 split of residential and small business/commercial customers throughout the Eastern and Southwest United States. Built on a steady diet of organic and acquired growth, today the firm does $140 million in annual revenues, has 215,000 customers, employs 1,220 people, and operates out of 25 locations with three monitoring centers.

“This company is the very definition of how to build a business slowly, and methodically, customer-focused, with tight geographies,” says Nuccio. “It’s been all about everything that would give customers the best possible solution and serviceability – that’s how we’ve always thought about it.”

In addition to his company’s conquests, Nuccio is a highly visible participant in trade association meetings and magnanimously offers feedback and advice to industry colleagues. It is in that spirit that SSI caught up with Nuccio and his understandably celebratory executive management team (CMO Bob Ryan, COO Bill Rose and CFO Ralph Masino). Together, they describe ASG’s approach and why $10 million in RMR is a stepping stone to even greater success.

I’d like to contrast ASG’s growth arc from inception through today. How has that arc gone versus projections, and where are we today?

Joe Nuccio: One of the things we’ve always done very well is zero-base budget in our thought process. We’ve done it since inception. When we take a look at an oncoming year, we look at a couple of things. We look first at what our internal growth channel is going to look like, how it is going to increase and what it will take to increase that channel. Then we look at our acquisitions, how we fit them in and they strategically affect our business.

If you look through our history, we always add somewhere between one to three new market opportunities, depending on what’s available and what’s out there. We look at being able to continue to grow and build a footprint out pretty much contiguously to our existing markets. We look at where we can add value in creating more internal sales. We’ve always been very, very good at that. We’ve always pretty much hit the plans, and have done the things we’ve said we were going to do.

As I look at it today, times change; 2015 is a different year than 2014 and so how do we relate to that? I really feel strongly that we’ve always put the principles and methodologies in to succeed. We’re always on the forefront of technology. We’re so excited that technology actually has advanced so much the past three years, and we’ve been on that first mover circuit, so to speak. It’s given us a chance to be able to shift and move.

Sometimes we balance our residential growth with some of our small business, or some of our commercial growth – we have all those existing channels. Some-times one market is in favor, and sometimes one’s out of favor. But we’ve always kept that really steady growth trajectory. We feel we’re going to continue to be able to do that. We put a plan together for 2015 again targeting very good growth, very similar to all our existing years.

Let’s talk mergers and acquisitions, an area in which ASG clearly excels. How many acquisitions has the company done to date, and what have been some of the most recent ones?

Ralph Masino: We’ve averaged about eight transactions a year. Anywhere from one to three have been new, strategic transactions, allowing us to enter into a new market. The remainder three to five a year have been what we call “tuck-in” acquisitions, where we’re buying either just the accounts or a local company in an existing market, where we’ll get some techs and sales folks and customers that will fold into an existing branch We have completed 109 acquisitions since 2003: 16 strategic transactions in new markets and 93 fold-in transactions. In 2014, we entered South Florida through the acquisition of National Alarm Systems; southern Connecticut though the acquisition of Home Technologies; Laredo, Texas, through the acquisition of Laredo Alarm; and Corpus Christi, Texas, through the acquisition of Advantage Protection Systems. All of these transactions were quality, well-run independent companies with attractive operating metrics and quality customer bases. Equally important, they provided us with a local platform to roll out our sales and marketing programs to continue to build subscriber density in these new markets.

With our cross-departmental integration team and supportive lender group, we’ve developed efficient and seamless sourcing, closing and assimilation acquisition processes. The team has done a great job the past 10 years, making sure the integrations have gone as seamlessly as possible, from a customer perspective but also from an employee perspective.

About the Author

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Scott Goldfine is Editor-in-Chief and Associate Publisher of Security Sales & Integration. Well-versed in the technical and business aspects of electronic security (video surveillance, access control, systems integration, intrusion detection, fire/life safety), Goldfine is nationally recognized as an industry expert and speaker. Goldfine is involved in several security events and organizations, including the Electronic Security Association (ESA), Security Industry Association (SIA), Security Industry Alarm Coalition (SIAC), False Alarm Reduction Association (FARA), ASIS Int'l and more. Goldfine also serves on several boards, including the SIA Marketing Committee, CSAA Marketing and Communications Committee, PSA Cybersecurity Advisory Council and Robolliance. He is a certified alarm technician, former cable-TV tech, audio company entrepreneur, and lifelong electronics and computers enthusiast. Goldfine joined Security Sales & Integration in 1998.

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