Imperial Capital Security Investor Conference 2018 Review - ADT, Resideo, Alarm.com, Arlo, Eagle Eye, ACRE, More

By John Honovich, Published Dec 14, 2018, 11:25am EST (Info+)

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Imperial Capital Security Investor Conference is an event matching industry executives with financiers that frequently leads to future funding and acquisitions. Among the 60+ companies presenting this year were ADT, Resideo (i.e., Honeywell Home / ADI), Alarm.com, Arlo, Eagle Eye, ACRE and more.

We bought a ticket and attended. In this note, we examine:

  • How ADT is pitching its commercial (re-)expansion to investors and how it views the Amazon threat
  • What Resideo is most bullish about going forward
  • How Alarm.com is pitching the business market expansion to investors
  • How Arlo plans to compete against the growing number of low-cost wirefree competitors
  • Why Eagle Eye says it has supercharged its growth through the Brivo acquisition
  • How OpenEye did or did not pitch investors and how it contrasted to Eagle Eye
  • How ACRE is expanding again with a new acquisition and why they dislike the camera business
  • What a Columbia University professor advocated to these investors and what he got wrong about the video surveillance business
  • Who was there (and not there) not presenting but notable in the industry (Axis, Avigilon, etc.)

Abnormal ******** ********** - **** ****** *****

**** ***** ** **** ********* **** shows ******** ****** ********* ** ** like *** ****, *****, ****. ******** Capital ** **** ********* ********** (*** their ******* ********), ****** **** *********** renting *** ***** *** ********* ** sell ******* ** ********.

******** ******* ** *** ******* ***** but **** ********* *** ****** *** or ** ****** **** **** * banker ** **** ****** *** *******, justify *** *********, ******** *********, ***. Imperial ** *** ** **** * few *** *********** ** **** *** the ******** ******** *** **** *** often ****** *** ****** ** ******* deals, *.*., *** ********* ***********,*******'* ***********,**********'* ***********,***'* ***, ***., ** ***** ***** ***** (with *** *** ********) *****:

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***** *** $*** ****** *** * one-day ***** ** ***** *** ******** standards, **** ******* ********* *******, **** probably **** ***** ** **.

*** ****** *** **** *** *** participants ** **** **** *********** ************* and ********** ******* *** *** ******* Imperial ***** ** ***** ******** ** that **** ** *** **** **** deals *** ******.

Few ********, ****** *********** ** *** *********

***** ** ** ** '********' **********, the ********* ********** *** ****** ***** companies, *** **** ********, ***** ******** the ***** ** ********'* **** ******. It ****** **** **** *** ********* like *** ** ***'* **** ****** where *** ******** ** "***, **** are ***** ** ********", ** *** excerpt **** ***** ******** ***** *****:

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Mostly *****, **** ***** *** ******

*** ********** ** ********* ******** ****** alarm ********** *********, ***** ** ****** a ********** ** ***** ********* ******* more ********* (***** ***** ****** *** based ** ***** **** **** ******** for *** ***** *** ****** ** over *** **** ** *** ******** / ********* *******) *** *** **** of ******** *******'* ******** ********, **** Mack [**** ** ****** *********], ***'* background ** ****** *** ***********.

Valuations ***** ****

**** *****, ** *** ***** ***** expresses, **** ********** *** ***** ****:

ADT ******** ********* **** *******

*** *** ***** ******** ***** **** their ******* ********* ********** ******** ****** by *********** ***** *********** (** *****), most ***********'* *** ****, ** **** ***** *****:

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***'* *** *** *** ********** ********, Dan **********, **** *** ***** *** why *** ********** ********* ** * smart ****. ** *** ***** *****, he ***** ***** *** **** ** the ******** ********* (*** ******* **** those *********) *** ******** '*******' ** him *** **** **** *** ** for *** **** **** **** ***:

*** **** *** *** ** **** their '*******' *****, **** ***** **** of ******** **** *** *** **** contracts ******* *** ** * *** years. ********* ** ****-**** ********** ** acquired ********** ** * *******-******** ******** is *********, ** **** **** ** either ****** ** ***** ** ***** a *** ******* ** **** ** the **** ********** ****-***********.

ADT **** ********* **** ******

*** ******* ***** ******** ***** ** why ****** *** * ******* ** them, ***********, *.*., **** **** **** the **** ************ ******** ** *** upcoming***** *****(****** ****** **** ******'* **** **** also **** ****** ** ***** ***** as ****).

**** **** ***** ***'* *** ******* and ******** ********* ***** ***** ***** long-term *********** **** ******, ** ********* it ** * *** ******** ****** that ** ***** ****** *** ****** for ******** *** ********** *******, ** the ***** ** *** ******** ***** records:

**** ** ********* ****. *** ******** and ********* *** *** *** ******* that ********* **** **** ** **** ADT's *********** ********. ***** *** ****** for ******** ***** ** ****** **** ever **** ******* *** *******, ***** is ******* *********** ******** ****. ***** *** ** ******** ** meet ***********'* ***** ****, *** ******** pressure ** *******, ******* *** ********* could ** ******.

*******

*** **** ***** *** *** *********'* new ********* / ******** / ********** panel, *****, ** *** ***** *****, they ****** *** '**** **** ******** product ** *** *******'* *******', ****** the ******* ** ~* ***** *** (joking *****, ** *** *** ******* but ********** **** **** ********* **** products *********).

******* ****** *** ***** ***** ** easier *** ******* ** *******, *** even ******** ***-***** ** ******* ********** by ********* '*********' ******* **** *** base ******* ******* ********* ********** '*********' service *****. **** **** ********* *** new ****** **** ******* '*************** **********' for ******* **** *******, ** ********* basic ************ ********** ***** *** ************ is ******** ******* ******** ** *************** of *** ******.

*** ******* **** ***** *** ** plans ** *********** ********* ***** ***** panels *** ****-**** *********** ***** ****** in *** **** ~* *****.

************, ******* ********* *** ****** / next-generation ** *********, ** *** ***** below:

*** *** ****** ******** ***** ****** based ****** ******** ******** '* ** 5 ****' ******* **** **** ********** into * ****-********** ***** ******. *** sensor's ***** ***** **** ** ******** to * ***** ****** *** *** base ******* *** **** ** ********* in **** ****** *** ******* ***** models.

********* ******** *** / *********** **** *** $*** *******.

* **** ***, **************** *********'* ******** ********* *********** **** ************** *** ******** **** * ************ problem. ** **** ***** *** *** version ** ****** ** ** ** released.

*****.***

**** * ***** ****** ** *********** security (**** $***+ ******* ****** ******* and *** ** *** ******* ************* metrics ** *** ********), *****.*** ********* in**** *** ********* **** *** ********** / *** ******.

***** ***** **** ** ***** ******** Officer ******* ****** [**** ** ****** available] *** ******** ********* **** ** side **** ***** ******** *********** ****:

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*************, ** ********* *** ********** ****** as '**********' *** ******* '**** ** competition' ** ****** ******* ** ****. From *** *********** ** *** ************ competitors, **** ** ********* ****, ****** the ********** ****** ** ****** ********** with ************ ***** ************ *******.

*** *** *** ***** ******** ********* is ******** '* ******* ********'. ***** 'unified' *** ****** * ******* ***** among ****** ***** ****** ********* **** Genetec *** **, *****.*** ******** **** in *** ***** ********* **** *** business ******:

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*****.*** ******* ******* ********** ***** *** of ******** ****** ******* - *.*., the ****** ********* ******* * *** going **** *** ******** **** ** the ******, ** *** ***** ***** covers:

****

****'* *** ********* ********** **** *** biggest ********* **** *** **** *** to ******** *** ******** **** ** subscription ********. ***** ****'* ******* ****** has **** ********** (*.*.,**** $*** ******* ** ****), ******* ** ************** **** ******* sales, **** **** ~*% ** ********* subscribing *** **** ********. ** ****, Arlo ***** ***** ******** / ** video *********, ********** ** *** ************:

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** ****** ****'* ********* ** *********** ********* *********** *** * ****** *********** ***********, they ****** **** **** ******* ***** alerts.

********, ****'* *** ******* ***** '***** ********', * ********* ******** ** *** now ******* ***** ******** ******* ** residential *******. ** *** ***** *****, he ****** *** ******** ** ********** the ****** **** *** *** ******** and ***** **** ** ******* ***** quality:

** **** *** ****** ****'* ***** doorbell *** *** ** *** ******.

Eagle ***

*** **** *********** **** ** ***** Eye's ************ *** ********* *** ******* explanation ***** ********'* ****** ** ***** *** $** million************ ***** ***'* ******. *** ***/*** is **** ***** ***** *** *** challenged ** ***** **** ****** ******* like ***, **** ***** ****** **-**** old *****, **** ***** ***** *** to *** ***** ***** **** *** circumvented *** ******* *** ****** ******* process **** ** * ******* *** most ******** **** ***** ***. ** the ***** *****, ******* ******** **:

***** *** *** *** **** *** specific ******* ******* ** **** ********* accepted ****** ******* ****** **** *** present **** ***** **** *** *** interpret ** *** ****:

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***** ** ** ***** **** *** growing ******* *** *** **** ** that ** *** ** *** ***** acquisition ****** ************* ************* *** *****, *** ** ***** total ******* *****.

***** *** *** ********* *** **** are ***** **** *** *****-**** ****** (lots ** *********, *** ******* *** site), ***** ** ******* *** *** as * **** *** *** * cloud ******* *******. ** *** ***** below, ******* ******* * ******** ***** competing ** *** ********** ******** ** that *****-**** ******:

** ***** ** ************ '**********' (*.*., airports, ******* ***, ******, ***.),*** **** ***** *** ************ *** ******* ***** *** *********** deficiencies ** ********** **** ******* ******** Center, ********* ********, ***.

*******

*******'* *** **** ******** ********* ** the **********, ****** $** ******* ****** revenue *** ******* **% ****** ** their ****** '****** *******' ******** **** year ** ***** *****:

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*******'* *** **** ****** *** '****** story' **** **** * ******* **** his *********** *** ********:

**** ********** *** ** ********'* **********, he ***** **** ******* *** ***** received *** ******** **********. *** **** that ** *** ********** **** ***** that **** *** **** ** **. We ***** **** **** **** ** to ******* **** ****-****** ********* **** Eagle *** (*****) *** *** ***** charge ***** ****** ** ********* *****.

****

*** ********, ******** *** ***** ******** presentation ** *** ** *** ********'**** *** ****** [**** ** ****** available]. *** *******, ** *** ***** history, *** ******* **** ***** **** buying *** *********** *** ********** * *********** ******, ** ** mentioned ** *** ***** *****:

****** **** ********* **********, **** **** more ** * ******* ******* *** growing ** ********* ******** **********, ********* those **** *** **** *****.

******** *********** ******* ********:

  • ********* ******* ****** ****** '****** **** margins' *** **** ********** ******.
  • *** *********** ** ******* ******** ******** being * '**** ***** *****' **** 'had **** ****** * *** ** money'. **** ***** **** **** **** been ******* **** ******.

*** ******* ********* ** **** ******* at $*** *******, ** *** ***** below *****:

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Grillo ********* ****** ********

****'* *** ********** ********** *** ***** surveillance ****** ******** ** * **** business *** ** *** **** ** the ******, ***** ********, ***. ** the ****** **** "**'* *** *****". We ** ***** *** ****** ******** future ********* *** **** ****** ******* with *** ******* '********' *** ********* and *** ****** ** ** *** cloud ** * ************** **** ** not ** **** ** *********.

ACRE ******** ***********

**** **** ** ********** ** *********** of ** ****** ******* ******* ** Monday, *** ****. ** ****** ** not ******** *** **** ***** ** is ********* ** ********** ************* **** the ******** *******'* ****.

Columbia ********* ** ************

*** **** ******** ************ ** *** day *** **** ******** ******* ******** Professor **** ********** *** ******** * high ***** ******** ** ** *** investors ** ***** ** ************* ******* 'strong' *** '****' **, *********** **** while '******' ** ** ******* ******* that '****' ** *** ******* *********** financial ********, ** **** ***** *****:

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*** ******* ** **** **** ***** surveillance ** ************ **** **** * 'medium' ********. **** *** *** ** infeasible ** ******** * ********** ***** but **** *** *** **** *********** than ****** *** ************ ********* *****. Facial *********** ** ****** ********* ** a ***** *******. ****** ***** ** 'weak', ** *** *************** *** ******** faces ********* ** *** ***** ***** out ** * ******* **, ** not '******' **, ********* *** ****.

**** '******' ********** ************ ** * danger ****.

*** ********* **** *********** '**** ********' issues *** ************** *** **** ** a ******** ******* **** ** *** customers ******** ****** *** ****, ** he ********* ** *** **** *****:

*************, ** ****** * ********* **** from ***** ****-*********** ******* ********* ********* this '************ *********** **********'.

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***, ** ********, **** ********* ** AI ********* ** ** '************ ***********' element *** ********** ** ** **** to **** *********** ********* ** ***. And ***** **** *******, ****** *** Chinese ********** ***** ** ******** ** subsidize ****-******* ******* (*****, ** ********, made ** *** *****, *** ****** for **** ********** **** ** *****.

*** ******** ***** *** **** ** listed *** ********* ******* *** ** companies ***** ********:

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** ******, ****'* *** *** **** / *** *****, *** ******** ******** companies *** ***** *** ******** *** engineer.

********

*******, ******* ** ****, *** ****** * ***** ******** of ********** *** **** *** ********, like ********* *** *****. ** ** niche ******* **** ***** **** ***** own ********* ******** ********** (*.*., ********* Husky,******* ***********, ***.) *** ** *** ***-***, turnkey ********** *** ******* ** *** for ***** **** ***** *****).

*******'* ******* ********* ** *** ***** and, ** *** ***** *****, ********* their ***** ******* *** ****** *** new **** ******* ** ****:

*** ******* *********** ** * *** ***, **** ********* [**** ** ****** available], **** ******* *** ******** **** month (******** ****).

IHS ****** **** *********

*** *** *** ** *** ******** of *** *****, ********** ***** ****** size *********.

***** ***** ************ ***** *** ******* half ** *** ******** ******** ********* market, *** ********* **** ** ***** under $** *******, *** **** ******* over *** **** *** *****, ** the **** ** *** ****** ****** that **** ****** ******** **** ********* unit ******:

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** *** **** ****, *** ****** of ******* ***** ******* *** **********, over *** ******* *** **** ********* by ***:

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* **** ******** **: *** ** using *** ***** ************ *******? ******: mostly *****. *** ********* **** ***** is **** **** ***** *** **** of *** ** ******:

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***** *** ********* ***** ***** ******** China ******* ** ~$* *******. *** since *** ******* ******* ****** ** cameras ****** ** ***** ** **** than ** *** **, ** ***** that ** * **** *****, ***** is ******** ********* ~*** **** ******* annually **** *** ** *** **** than *** **** ** *** ***** combined.

Who *** ***** *** *** *****

** *** **** *****, *********, ****, Milestone, *******, *** *** ****. ********'* CEO *** ********* ******.***** *******, ****** **** ******* * year ***, *** *** *** ********, *** no ****** * ************ *********, *** also *****.

*******, ***********'* *** *** *****. ****** the ******* *** *** *******, ** was ** ******** ****** *** #* fund ******* ******* ******* ** *** event.

Comments (7)

John Honovich

IPVM | 12/14/18 04:26pm

Note: Arlo and Eagle Eye are not added yet but will be in 1 hour (by 12:30 pm ET). Since its Friday and this is a long post, I wanted to get it out and will fill in those last 2 sections shortly.

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John Honovich

IPVM | In reply to John Honovich | 12/14/18 05:31pm

Arlo and Eagle Eye is added.

Let me know what questions you have. There was a significant amount I did not cover due to time and space limitations. 

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Undisclosed #1

IPVMU Certified | 12/16/18 06:33pm

And since the average selling prices of cameras inside of China is less than in the US, it means that on a unit basis, China is probably deploying ~10x more cameras annually than the US...

The Chinese price is arguably less than the U.S., but is it 4x less?

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John Honovich

IPVM | In reply to Undisclosed #1 | 12/16/18 06:58pm

I don't know for sure but it's a factor of:

(a) the price for a given product in the 2 counties

(b) the mix of products sold in the 2 countries

I think (b) is probably a big factor, i.e., in the US a much higher percentage of much higher cost cameras are sold, i.e., $500 varifocal cameras, $1,500 multi-imagers, $3,000 PTZs, etc. whereas in China, the skew is to more basic fixed focal cameras that can see for $20, etc.

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Undisclosed #1

IPVMU Certified | In reply to John Honovich | 12/16/18 07:43pm

That makes sense.

But coming from a different angle altogether, wouldn’t you expect that the cheapest aliexpress price to be somewhat close to the in-china price, since it only additionally contains the last markup?  

 

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John Honovich

IPVM | In reply to Undisclosed #1 | 12/16/18 07:44pm

What does the cheapest aliexpress price have to do with the US market? As a percentage of cameras sold in the US, alixpress to US sales are tiny.

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Undisclosed #1

IPVMU Certified | In reply to John Honovich | 12/16/18 09:11pm

I’m not making a point about aliexpress in particular, you could use any grey market source.  I’m thinking that the cheapest grey market price of a particular Chinese camera is possibly a  way to estimate the in-China price of the camera.  

Of course, it would still have the additional markup of the seller.

And I do agree that the u.s. sales mix contains more high-end product, which may fully justify your 10x estimate.

Before you mentioned the mix factor, it seemed high to me.

 

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