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"The aftermath of 9/11 has created a continuing and accelerating backdrop for revenue in the security companies, whether they be military related or homeland security related or ultimately commercially related," said analyst Jeffrey Kessler of Lehman Bros.

1. Business

The group comprises a disparate lot of companies. But they share a similar
goal: to protect lives and property.

Take Taser International (NASDAQ:TASR) TASR. It caters to law enforcement and the military with its namesake "less-than-lethal weapons."

The Taser uses proprietary technology to stun dangerous subjects with a jolt of electricity. It's a safer alternative to other uses of force, such as firing a gun.

Police departments see an 80% reduction in officer injuries when they roll out Tasers, says Eric Wold, an analyst at Merriman Curhan Ford. And officers don't have to put their lives at risk.

In the U.S., 11,500 of the roughly 18,000 law enforcement agencies are using or testing Taser technology, says Tom Smith, Taser's chairman and co-founder.

"For someone approving a budget for a police department we can show them a return on investment," he said.

Officers using a Taser are injured less often, he says, cutting on paid leave. And the use of Tasers reduces the chances officers will have to wrestle down people they're arresting, curtailing excessive force claims.

Another company in the group is Corrections Corp. of America (NYSE:CXW) CXW, which builds and manages prisons and detention centers.

Most of Correction Corp.'s revenue comes from facilities it owns. CEO John Ferguson says that most of its rivals manage government-owned facilities.

The key to CCA's business is to maintain confidence in the quality of its service, says Ferguson. As a private prison operator, CCA is required to keep nearby communities safe. At the same time it has to provide quality medical care, food service and education to inmates.

"We can provide the services for less money than our customers do," Ferguson said. Those customers are 20 state governments and federal agencies, including the Federal Bureau of Prisons and the U.S. Marshals Service.

The company's biggest value is its ability to provide prisoner space on an as-needed basis, Ferguson says. Governments have a hard time planning and building prisons.

American Medical Alert AMAC provides home health-monitoring systems to the elderly, disabled and chronically ill. Its portfolio includes personal emergency response systems and electronic medication reminders.

It also operates health care communications centers that serve as 24-hour access points for patients.

Its business is driven by subscriptions from older or ill people who want to remain independent, says Frederic Siegel, the firm's executive vice president.

The upshot: savings on medical costs. More than 8 million people with chronic diseases absorb two-thirds of all health care spending.

"When you have adverse risks, these devices allow health care providers to intervene before an episode occurs," Siegel said. "The driver is cost savings."

Increased nurse productivity and early intervention to medical emergencies ultimately reduce hospital admissions and length of stay.

Name Of The Game: The safety and security business hinges on strong ties with customers. Products and services must work as promised. Customer trust is key.

2. Market

U.S. demand for private contracted security services will grow 4.3% a year to $48 billion in 2010, according to a report by analyst Jennifer Mapes of the Freedonia Group, a market research firm. This tally includes alarm monitoring, armored transport and correctional facilities management.

She sees correctional facilities management revenue rising to $2.7 billion by 2010, more than double the $1.2 billion posted in 2000.

Top players in the private prison operators segment include CCA, GEO Group GEO and Cornell Companies (NYSE:CRN) CRN. The four major private correctional facility management firms collectively have about 156,000 beds, or spaces for prisoners, says CCA's Ferguson. CCA, with roughly 72,500 beds, has about half of that total.

In the armored transport market, Brink's BCO is the world's No. 1 player.

Taser's only rival is stun products maker Stinger Systems. "The world is
(Taser's) oyster right now," said analyst Wold.

Taser has proved the value of its product to law enforcement agencies and is now seeing an acceleration in orders, he says. He figures about 20% of police and correctional officers in the U.S. carry a Taser. Overseas, the figure is less than 5%. So there's a lot of opportunity worldwide, he says.

The security market is fragmented and consolidating, says analyst Kessler. British Aerospace and defense company BAE Systems in July bought Armor Holdings, which makes military vehicles, vehicle armor systems and safety gear. Armor is the leader in armored vehicles, Kessler says.

3. Climate

Private prison operators are benefiting from overcrowding and soaring occupancy rates at state and federal facilities.

At the end of 2005 there were about 2.2 million prisoners in state, federal and local jails, says Kevin Campbell, an analyst with Avondale Partners. That figure is expected to grow about 2% annually over the next five years.

States haven't built new prisons since 2001 and the federal government is reluctant to spend money on new facilities. State prisons are at about 14% above planned capacity, and federal prisons are about 34% above, Campbell says.

States have to decide whether they want to make new prisons or outsource to private operators.

"The opportunity for these (private prison operators) is to develop new beds," he said. "The demand should continue to outstrip the supply."

It takes private prison operators about 12 to 15 months to build a new facility, he says. It usually takes states twice as long.

The outlook is similarly bright for Taser, according to Wold, of Merriman Curhan Ford.

"You're seeing more departments embrace the product and see it's a necessary piece of equipment," he said.

While the company has faced lawsuits filed on behalf of people who've died or been hurt being stunned with the device, Taser has won all of them so far, says Smith, the firm's chairman.

"We haven't lost because the science is there," he said. Still, it has settled several suits filed by police officers who say the device injured them.

4. Technology

The big three private prison operators will likely use a new monitoring technology in their newer facilities, says analyst Campbell.

This involves using cameras to monitor inmates from a centralized command center. Instead of having guards patrolling every cell block, a prison may have a few guards on rolling patrol and cameras monitoring from afar.

Taser is betting on the consumer markets for growth. In July, it debuted the Taser C2. The device, which comes in a variety of colors, has a 15-foot range.

It also unveiled the Taser Shockwave for military use. It's a modular system that can be upgraded as needed. Units can be stacked side by side, vertically or in a daisy chain formation. They can also be mounted on vehicles.

5. Outlook

The sector should benefit from the sharp focus on safety and security on the part of government, corporations and consumers.

Upside: People always want to feel safe. Despite falling crime rates, consumers are worried about crime and overburdened public safety officials, according to the Freedonia Group's Mapes.

"These perceptions, as well as the perceived risk of nontraditional threats like computer-based, and other white-collar crimes and terrorism present significant opportunities for private security firms," she wrote in a report.

Privatization of some public safety operations should also fuel gains. The ongoing outsourcing of in-house security functions will continue to be a factor, she adds.

For prison operators, short supply of prison space should continue to fuel demand.

Risks: Government funding for security could tighten.

One potential issue for private prison operators is mounting concern that some are skimping on inmate health care, Campbell says.

For Taser, there's continued controversy over the devices, including lawsuits from police officers and cities that have used the device. Wider consumer usage raises the risks of more legal hassles.

Newstex ID: IBD-0001-18980384
Originally published in the August 17, 2007 version of Investor's Business Daily.

"During the past quarter the Company has commenced marketing its product and service to the pre-trial and bail bond market through one of its distributors. "This opportunity has blossomed as some of the largest bail bond companies in the United States have embraced the TrackerPAL service," stated James Dalton, President of RemoteMDx. "Our sales force and distribution network that has been built over the past 12 months has given the Company the base from which it can continue to grow and progress in meeting the needs of the criminal justice market."

http://www.sys-con.com/read/416678.htm

RemoteMDx Announces Third Quarter Results
By: Marketwire .
Aug. 15, 2007

SANDY, UT -- (MARKET WIRE) -- 08/15/07 -- RemoteMDx (OTCBB: RMDX) reported operating revenue of $3,118,947 for the quarter ended June 30, 2007, a 13 fold increase compared to $237,496 for the same period last year. Revenues increased by nearly 90% from the previous quarter ending March 31, 2007. The primary reason for the increase was the introduction and market acceptance of the Company's TrackerPAL product and service that was introduced to the criminal justice market late in 2006. The Company also reported a $5,336,000 loss (with a major portion being non-cash) for the quarter ended June 30, 2007 compared to a $11,688,000 loss (with a major portion being non-cash) for the June 30, 2006 quarter one year ago. In addition, the loss was reduced by $1,918,000 from the previous quarter ended March 31, 2007.

RemoteMDx's product and service continue to grow and become established in the criminal justice system. It has a broad base of agencies that utilize the Company's service and products. There are in excess of 8,000 units that have either been sold or leased pursuant to the Company's monitoring service. During the past quarter the Company has commenced marketing its product and service to the pre-trial and bail bond market through one of its distributors. "This opportunity has blossomed as some of the largest bail bond companies in the United States have embraced the TrackerPAL service," stated James Dalton, President of RemoteMDx. "Our sales force and distribution network that has been built over the past 12 months has given the Company the base from which it can continue to grow and progress in meeting the needs of the criminal justice market."

About RemoteMDx

Through its SecureAlert subsidiary, RemoteMDx offers a unique personal security service combining two-way communications, patented wireless location technology and affordable real-time 24/7 mobile monitoring to assist law enforcement in protecting neighborhoods from predators and to provide peace of mind for families with elderly loved ones who live alone or far away. More information is available on the Company's website, www.remotemdx.com.

Safe Harbor Statement

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act, including future growth and earnings opportunities of the Company. Actual results could differ materially from those projected in these forward-looking statements, which involve a number of risks and uncertainties, including the Company's ability to retain and to promptly satisfy current backorders and other economic, competitive, governmental, technological, regulatory, manufacturing and marketing risks associated with the Company's business and financial plans. The contents of this release should be considered in conjunction with the risk factors, warnings, and cautionary statements that are contained in the Company's most recent filings with the Securities and Exchange Commission.

SecureAlert, TrackerPAL and Offender Monitoring Center are trademarks of SecureAlert. RemoteMDx is a trademark of RemoteMDx, Inc.