SAN ANTONIO, Texas, Oct. 21 /PRNewswire-FirstCall/ -- Argyle Security, Inc. (OTC Bulletin Board: ARGL), ('Argyle') a service and solutions provider in the physical electronic security industry, today announced that pro forma revenues are expected to be within the previously forecasted guidance range of $128 to $142 million. EBITDA is now expected to be below the previously expected amount of approximately 7% for the full-year 2008, and the EBITDA margin run rate is expected to be significantly lower than the previous estimate of 9 to 10% in the second half of 2008, due to increased costs for raw materials as well as significant cost increases on a number of projects in the Argyle Corrections Group. Argyle expects to provide final guidance for full-year 2008 when it releases its financial results for the quarter ended September 30, 2008 when it files its Form 10-Q during November 2008.
Disclosure Regarding Non-GAAP Financial Measures
Adjusted pro forma revenues are an alternative view of performance used by management and we believe that investors' understanding of our performance is enhanced by disclosing this performance measure. We report adjusted pro forma revenues in order to present the results of our major operations - the construction, installation, marketing, and sale of various electronic security systems for commercial accounts and detention hardware (including security doors and frames, jail furniture, security glazing, and other security-based systems) and electronic control systems for correctional facilities - prior to considering certain income statement elements, principally amortization of intangible assets. We have defined adjusted pro forma revenues as revenues before the impact of purchase accounting for acquisitions, acquisition-related costs, discontinued operations and certain significant items including one-time expenses associated with stock appreciation rights. The adjusted pro forma revenues measure is not, and should not be viewed as, a substitute for U.S. GAAP revenues.
EBITDA (earnings before interest, taxes, depreciation and amortization) is used by management as a performance measure for benchmarking against the Company's peers and competitors. The Company believes EBITDA is useful to investors, because it is frequently used by securities analysts, investors and other interested parties to evaluate companies in the security industry. EBITDA is not a recognized term under GAAP. Argyle and Argyle Security USA compute EBITDA using the same consistent method from quarter to quarter.
