Electronic Security Sees Delayed Sept. 11 Bounce
By CHRIS CZIBORR
Companies are taking a new look at electronic security as a rush to add guards after Sept. 11 proved too costly to maintain, industry officials say.
Security guard providers said they saw an upswing after the terrorist attacks, which has tapered off as building owners and managers confronted the expense of large guard teams.
But with security still a concern, companies now are turning to alarms and other electronic systems as a cheaper alternative.
“This thing skyrocketed real big and then all of the sudden companies got the bills and said, ‘We can’t afford this,'” said Edward Klosterman Jr., president of Orange-based Shield Security Inc., a guard provider. “So they went away with it. For a few months after Sept. 11, we had three or four clients with up to a dozen guards around their buildings, and they went back to their pre-Sept. 11 security plans.”
This week’s Business Journal lists look at both segments of the security industry,guards and systems. For the 12 months ended Sept. 30, the 10 largest security guard providers in Orange County saw their hours billed rise 12% to $9.4 million vs. the year-ago period.
But the growth rate in security guards was down from 2000’s 21% surge, in part due to the real estate slowdown. The number of licensed workers at the guard companies increased 8% to 4,708 for the recent period.
Orange-based Universal Protection Services Inc. grabbed the top spot this year with a 23% gain in hours billed. Licensed workers jumped 18% to 1,165.
“Certainly the events of Sept. 11 had an impact, not so much in Orange County for us but really in Los Angeles and other areas,” said Steve Jones, Universal’s executive vice president. “The major impact from our standpoint was that we continued to grow in other market segments.”
The downtrodden real estate market stands to slow overall growth in hours billed, according to Jones.
“We expect 10% growth in the real estate market and 10% to 15% growth in other sectors,” he said.
No. 3 Orange-based Shield Security showed no change in hours billed and shrunk its number of licensed workers 27% to 460.
Security companies, which include providers of surveillance systems and alarms, grew more modestly for the 12 months ended Sept. 30. But some segment officials expect higher growth this year as companies consider beefing up security electronically rather than through guards.
The Anaheim office of No. 1 Boca Raton, Fla.-based ADT Security Service Inc., part of Tyco International Ltd., saw no change in OC employees this year with 225, despite recently acquiring San Dimas-based Edison Security and its Garden Grove office, as well as San Antonio, Texas-based SecurityLink and that company’s Irvine office.
ADT, which declined to disclose revenue, likely absorbed the customers of the two acquired companies but not their workers. Edison and SecurityLink both fell off this year’s list as a result of the buys.
Anaheim-based NAVCO Security Services moved up two notches to No. 2, with a 1% increase in county employees to 140, and sales of $9 million for the period, down 10%
“Our proposal activity has gone up dramatically since Sept. 11,” said Jim Kauker, vice president sales of NAVCO.
NAVCO officials anticipate spending time in the next several months replacing money now being spent on guards, Kauker said. The company is forecasting 10% revenue growth for 2002, he said.
No. 3 Irvine-based Greater Alarm Co. saw employment grow 5% to 123 and revenue increase 7% to $20.8 million.
“The awareness since Sept. 11 among building owners and facility managers is there,” said Don Meadows, marketing director with Greater Alarm. “We’re seeing a lot more interest in integrated access control systems and camera systems in office buildings.”
