8-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K/A

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities and Exchange Act of 1934

Date of Report (date of earliest event reported): March 6, 2006

DEVCON INTERNATIONAL CORP.

(Exact Name of Registrant as Specified in Its Charter)

Florida	000-07152	59-0671992
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

595 South Federal Highway, Suite 500

Boca Raton, Florida 33432

(Address of principal executive office)

Registrant’s telephone number, including area code (954) 429-1500

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

EXPLANATORY NOTE

This current report on Form 8-K/A amends and supplements a current report on Form 8-K filed by Devcon International Corp., a Florida corporation (“Devcon”), through Devcon Security Holdings, Inc. (“Devcon Security”), one of its wholly owned subsidiaries, on March 8, 2006 in connection with the purchase on March 6, 2006 of all of the issued and outstanding capital stock of Guardian International, Inc., a Florida corporation (“Guardian”).

Item 9.01 Financial Statements and Exhibits

(a) Financial Statements of Businesses Acquired

The following financial statements filed as Exhibit 99.1 hereto are incorporated herein by reference:

	Exhibit 99.1 Page
Guardian International, Inc. — Consolidated Financial Statements
Report of Independent Certified Public Accountants
Consolidated Balance Sheet as of December 31, 2005 and December 31, 2004	1
Consolidated Statements of Operations for the years ended December 31, 2005 and December 31, 2004	2
Consolidated Statement of Changes in Shareholders’ Deficit for the years ended December 31, 2005 and December 31, 2004	3
Consolidated Statements of Cash Flows for the years ended December 31, 2005 and December 31, 2004	4
Notes to Consolidated Financial Statements for the years ended December 31, 2005 and December 31, 2004	6

(b) Pro Forma Financial Information

The following financial statements filed as Exhibit 99.2 hereto are incorporated herein by reference:

	Exhibit 99.2 Page
Devcon International Corp. — Pro Forma Condensed Consolidated Financial Statements
Unaudited Pro Forma Condensed Consolidated Financial Statements – Basis of Presentation	1
Pro Forma Consolidated Statement of Operations for the year ended December 31, 2005 (Unaudited)	2
Pro Forma Consolidated Balance Sheet as of December 31, 2005 (Unaudited)	3
Notes to Pro Forma Condensed Consolidated Financial Statements (Unaudited)	5

(c) Exhibits

Exhibit No.	Document
2.1	Agreement and Plan of Merger, dated as of November 9, 2005, by and among the Company, Devcon Acquisition, Inc. and Guardian International, Inc. (incorporated by reference to Exhibit 2.1 filed with the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 16, 2005).
10.1	Form of Promissory Note (incorporated by reference to Exhibit 10.1 filed with the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 8, 2006).
10.2	Amendment to Promissory Note (HBK Main Street Investments L.P.) (incorporated by reference to Exhibit 10.46 filed with the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on April 17, 2006).
10.3	Amendment to Promissory Note (CS Equity II LLC) (incorporated by reference to Exhibit 10.47 filed with the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on April 17, 2006).
10.4	Amendment to Promissory Note (Castlerigg Master Investments Ltd.) (incorporated by reference to Exhibit 10.48 filed with the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on April 17, 2006).
10.5	Second Amendment to Promissory Note (HBK Main Street Investments L.P.) (incorporated by reference to Exhibit 10.2 filed with the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 22, 2006).
10.6	Second Amendment to Promissory Note (CS Equity II LLC) .) (incorporated by reference to Exhibit 10.3 filed with the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 22, 2006).
10.7	Second Amendment to Promissory Note (Castlerigg Master Investments Ltd.) .) (incorporated by reference to Exhibit 10.4 filed with the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 22, 2006).
10.8	Form of Warrant (incorporated by reference to Exhibit 10.1 filed with the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 8, 2006).
10.9	Securities Purchase Agreement, dated as of February 10, 2006, among the Company and the buyers named therein (incorporated by reference to Exhibit 10.1 filed with the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 14, 2005).
10.10	Amendment to Securities Purchase Agreement, dated as of February 24, 2006 (incorporated by reference to Exhibit 10.45 filed with the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on April 17, 2006).
10.11	Second Amendment to Securities Purchase Agreement, dated as of May 10, 2006, by and among the Company and the Investors set forth therein (incorporated by reference to Exhibit 10.1 filed with the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 22, 2006).
23.1	Consent of McKean, Paul, Chrycy, Fletcher & Co.
99.1	Guardian International, Inc. Consolidated Financial Statements.
99.2	Devcon International Corp. Unaudited Consolidated Pro Forma Data.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	DEVCON INTERNATIONAL CORP.
Date: May 22, 2006	By:	/s/ Stephen J. Ruzika
		Stephen J. Ruzika
		Chief Executive Officer and President

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EXHIBIT INDEX

Exhibit No.	Description
23.1	Consent of McKean, Paul, Chrycy, Fletcher & Co.
99.1	Guardian International, Inc. Consolidated Financial Statements
99.2	Devcon International Corp. Unaudited Consolidated Pro Forma Data

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EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

As independent certified public accountants, we hereby consent to the use of our report dated March 6, 2006 relating to the consolidated financial statements of Guardian International, Inc. and its subsidiaries, as of December 31, 2005 and 2004, by Devcon International Corp. as part of this Form 8-K. It should be noted that we have performed no audit procedures subsequent to March 6, 2006, the date of our report. Furthermore, we have not audited any financial statements of Guardian International, Inc. as of any date or for any period subsequent to December 31, 2005.

McKEAN, PAUL, CHRYCY, FLETCHER & CO.

Miami, Florida,

    May 19, 2006.

EX-99.1

Exhibit 99.1

6401 Southwest 87th Avenue	Phone (305) 270-0880
Suite 210	Fax (305) 598-1011
Miami, FL 33173	www.mpcf.com

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Board of Directors and Shareholders of

    Guardian International, Inc.:

We have audited the accompanying consolidated balance sheets of Guardian International, Inc. (a Florida corporation) and subsidiaries (the “Company”) as of December 31, 2005 and 2004, and the related consolidated statements of operations, changes in shareholders’ deficit and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal controls over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal controls over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Guardian International, Inc. and subsidiaries as of December 31, 2005 and 2004, and the results of their operations and their cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 12 to the financial statements, on November 9, 2005, the Company entered into a merger agreement with Devcon Acquisition, Inc., a subsidiary of Devcon International, Corp. (“Devcon”). Devcon provided as consideration a $3,000,000 deposit which was held in escrow. On March 6, 2006, the Company completed the merger transaction with Devcon. The merger resulted in the sale of all Class A and Class B common shares, the redemption of all Series E preferred shares (including accrued cash dividends to March 6, 2006), the redemption of all Series D preferred shares and the repayment in full of the senior credit facility. In conjunction with the closing of the merger transaction, no further dividends accrued on the Series D preferred shares after December 31, 2005.

McKEAN, PAUL, CHRYCY, FLETCHER & CO.

Miami, Florida,

    March 6, 2006.

GUARDIAN INTERNATIONAL, INC.

CONSOLIDATED BALANCE SHEETS

	As of December 31,
	2005			2004
ASSETS
Current assets:
Cash and cash equivalents	$	808,193		$	892,764
Accounts receivable, net of allowance for doubtful accounts of $224,385 and $344,936, respectively		2,101,217			2,318,897
Inventories		1,500,819			1,476,491
Prepaid expenses and other		748,969			314,448
Total current assets		5,159,198			5,002,600
Property and equipment, net		13,049,814			12,784,689
Customer accounts, net		5,405,282			8,464,401
Goodwill, net		1,405,091			1,405,091
Other intangible assets, net		146,515			210,292
Capitalized commissions and other assets		1,900,081			1,902,767
Total assets	$	27,065,981		$	29,769,840
LIABILITIES AND SHAREHOLDERS’ DEFICIT
Current liabilities:
Trade accounts payable	$	1,090,772		$	843,327
Accrued expenses		3,060,650			2,793,351
Current portion of unearned revenue		4,822,335			4,359,232
Current portion of long-term obligations		126,804			147,832
Total current liabilities		9,100,561			8,143,742
Unearned revenue, less current portion		11,296,459			10,813,712
Long-term obligations, less current portion		14,333,728			18,750,168
Total liabilities		34,730,748			37,707,622
Commitments and contingencies (Note 8)
Shareholders’ deficit:
Preferred stock, $.001 par value, 30 million shares authorized
Series D preferred stock, 15,214 and 14,353 shares issued and outstanding, respectively, $15.2 million and $14.4 million liquidation preference, respectively		14			14
Series E preferred stock, 8,000 shares issued and outstanding, $8.0 million liquidation preference, in both years respectively		8			8
Class A voting common stock, $.001 par value, 100,000,000 shares authorized, 8,096,441 issued and outstanding, in both years respectively		8,097			8,097
Class B non-voting common stock, $.001 par value, 1,000,000 shares authorized, 634,035 shares issued and outstanding, in both years respectively		634			634
Additional paid-in capital – preferred stock		20,413,230			19,552,050
Additional paid-in capital – common stock		9,599,954			9,580,800
Accumulated deficit		(37,686,704	)		(37,079,385	)
Total shareholders’ deficit		(7,664,767	)		(7,937,782	)
Total liabilities and shareholders’ deficit	$	27,065,981		$	29,769,840

The accompanying notes are an integral part of these consolidated financial statements.

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GUARDIAN INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004

	2005			2004
Revenues:
Monitoring	$	16,304,870		$	15,644,724
Installation and service		11,096,293			11,552,195
Other revenues		262,289			238,548
Total revenues		27,663,452			27,435,467
Operating expenses:
Monitoring		2,305,323			2,363,648
Installation and service		7,115,635			8,116,883
Selling, general and administrative		9,101,022			8,981,843
Amortization of customer accounts		3,006,183			3,745,888
Depreciation and amortization		3,700,191			3,480,719
Total operating expenses		25,228,354			26,688,981
Operating income		2,435,098			746,486
Interest expense		1,145,119			1,300,996
Other (income) expense		(2,139	)		89,657
Net income (loss) before income taxes		1,292,118			(644,167	)
Provision for income taxes		478,257			23,118
Net income (loss)		813,861			(667,285	)
Preferred stock dividends		(1,421,180	)		(1,372,436	)
Net loss applicable to common stock	$	(607,319	)	$	(2,039,721	)
Basic and diluted loss per common share:
Net loss	$	(0.07	)	$	(0.23	)
Weighted average common shares outstanding		8,730,476			8,730,476

The accompanying notes are an integral part of these consolidated financial statements.

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GUARDIAN INTERNATIONAL, INC.

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ DEFICIT

FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004

	Preferred Stock Series D			Preferred Stock Series E			Additional Paid-in Capital Preferred Stock		Common Stock Class A			Common Stock Class B			Additional Paid-in Capital Common Stock		Accumulated Deficit			Total
	Shares	Amount		Shares	Amount				Shares	Amount		Shares	Amount
Balance January 1, 2004	13,540	$	14	8,000	$	8	$	18,739,613	8,096,441	$	8,097	634,035	$	634	$	9,546,542	$	(35,039,664	)	$	(6,744,756	)
Series D preferred dividends	—		—	—		—		—	—		—	—		—		—		(812,437	)		(812,437	)
Series E preferred dividends	—		—	—		—		—	—		—	—		—		—		(559,999	)		(559,999	)
Additional Series D preferred shares issued as dividends	813		—	—		—		812,437	—		—	—		—		—		—			812,437
Stock Issuance Costs - Warrant	—		—	—		—		—	—		—	—		—		34,258		—			34,258
Net loss	—		—	—		—		—	—		—	—		—		—		(667,285	)		(667,285	)
Balance at December 31, 2004	14,353	$	14	8,000	$	8	$	19,552,050	8,096,441	$	8,097	634,035	$	634	$	9,580,800	$	(37,079,385	)	$	(7,937,782	)
Series D preferred dividends	—		—	—		—		—	—		—	—		—		—		(861,180	)		(861,180	)
Series E preferred dividends	—		—	—		—		—	—		—	—		—		—		(560,000	)		(560,000	)
Additional Series D preferred shares accrued as dividends	861		—	—		—		861,180	—		—	—		—		—		—			861,180
Stock Issuance Costs - Warrant	—		—	—		—		—	—		—	—		—		19,154		—			19,154
Net loss	—		—	—		—		—	—		—	—		—		—		813,861			813,861
Balance at December 31, 2005	15,214	$	14	8,000	$	8	$	20,413,230	8,096,441	$	8,097	634,035	$	634	$	9,599,954	$	(37,686,704	)	$	(7,664,767	)

The accompanying notes are an integral part of these consolidated financial statements.

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GUARDIAN INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004

	2005			2004
Cash flows from operating activities:
Net loss	$	813,861		$	(667,285	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Gain on sale of property and equipment		(10,994	)		(3,030	)
Amortization of unearned installation revenue		(3,530,202	)		(3,159,026	)
Amortization of capitalized commissions		684,633			717,173
Depreciation and amortization		3,700,191			3,622,196
Amortization of customer accounts		3,006,183			3,745,888
Amortization of deferred financing costs		63,577			103,342
Provision for doubtful accounts		207,342			387,289
Issuance of warrants		19,154			34,258
Changes in assets and liabilities:
Accounts receivable		45,803			(705,218	)
Inventories		(24,328	)		418,368
Prepaid expenses and other		(334,059	)		142,934
Capitalized commissions and other assets		106,640			66,202
Accounts payable and accrued expenses		563,006			(850,296	)
Unearned revenue		114,778			12,433
Net cash provided by operating activities		5,425,585			3,865,228
Cash flows from investing activities:
Purchase of property and equipment		(92,202	)		(437,379	)
Purchase of customer accounts		(127,896	)		(828,673	)
Sale of property and equipment		18,004			10,576
Unearned revenue related to customer installations		4,360,821			4,408,819
Capitalized costs related to customer installations		(4,545,020	)		(4,723,060	)
Net cash used in investing activities		(386,293	)		(1,569,717	)
Cash flows from financing activities:
Debt financing costs		—			(241,630	)
Payments on debt obligations		(4,563,863	)		(11,466,358	)
Borrowings under line of credit		—			8,458,246
Payment of Series cash dividends		(560,000	)		(559,999	)
Net cash used in financing activities		(5,123,863	)		(3,809,741	)
Net decrease in cash and cash equivalents		(84,571	)		(1,514,230	)
Cash and cash equivalents, beginning of year		892,764			2,406,994
Cash and cash equivalents, end of year	$	808,193		$	892,764

(CONTINUED)

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GUARDIAN INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004

(CONTINUED)

	2005		2004
Supplemental disclosure:
Interest paid	$	1,126,056	$	1,127,885
Income taxes paid	$	91,455	$	—
Non-cash investing and financing activities:
Series D preferred stock dividends	$	861,180	$	812,437
Contract holdbacks for purchased accounts	$	18,280	$	163,819
Contract holdbacks applied against purchased accounts written off	$	67,974	$	22,313
Assets acquired under capital leases	$	126,395	$	83,543

The accompanying notes are an integral part of these consolidated financial statements.

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GUARDIAN INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2005

1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Business

Guardian International, Inc. (“Guardian”) is a provider of monitoring (retail and wholesale), maintenance services, sales and installation for high-grade electronic security and fire alarm systems to commercial and residential customers primarily in the states of Florida and New York.

Basis of Consolidation

The consolidated financial statements include the accounts of Guardian, a Florida corporation, and its wholly-owned subsidiaries (collectively, the “Company”). All significant intercompany accounts and transactions have been eliminated in consolidation.

Liquidity

As of December 31, 2005, the Company has an accumulated deficit of approximately $37.7 million and negative working capital of approximately $3.9 million. Net income (losses) for 2005 and 2004 were approximately $0.8 million and $(0.7) million, respectively. As of December 31, 2005, the Company believes it will maintain the ability to generate sufficient cash to fund future operations of the business. Generally, cash flows will be generated from a combination of: (i) recurring revenue from its security monitoring customer base, and (ii) the Company’s existing $25.0 million credit facility (“the Credit Facility”), subject to compliance with the provisions of the debt covenants. At December 31, 2005, there was approximately $10.8 million of excess availability under the credit facility.

Revenue Recognition

Installation Revenue. On installations for which the Company retains title to the electronic security systems or provides monitoring services subsequent to the installation, the installation revenue is deferred and amortized over the longer of the term of the service agreement or the estimated eight year life of the customer relationship. When a customer to whom Guardian is providing monitored services cancels the service, any deferred revenue balance is recognized in the period in which the cancellation occurs. All other installation revenues are recognized in the period in which the installation is completed.

Monitoring/Service Revenue. Customers are billed for monitoring and maintenance services primarily on a monthly or quarterly basis in advance of the period in which such services are provided. Unearned revenues result from billings in advance of performance of services. Contracts for these services are generally for an initial non-cancelable term of three or five years with renewal on an annual basis thereafter, the majority of which are automatic renewals, unless terminated by either party.

Cash and Cash Equivalents

All highly liquid investments purchased with a maturity of three months or less at the date acquired are considered cash equivalents.

Customer Accounts, Net

Customer accounts purchased from alarm dealers are reflected at cost. The cost of purchased accounts is based on the estimated fair value at the date of acquisition. The cost of purchased customer accounts is capitalized and amortized on a straight-line basis over an estimated useful life of ten years. For those accounts which cancel during the amortization period, an estimate of the remaining carrying value of the accounts is expensed in the period in which the accounts

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cancel. It is the Company’s policy to perform periodic evaluations of acquired customer account attrition and, if necessary, to adjust the remaining useful lives. The Company periodically estimates future cash flows from customer accounts to determine whether any impairment has occurred. If the estimated future cash flows are less than their unamortized cost, an impairment charge is recorded for the amount that the unamortized cost of customer accounts exceeds their estimated fair value.

Capitalized Installation Costs

All direct installation costs, which include materials, direct labor and commissions, where the Company retains title to the electronic security system, related to installations that result in deferred installation revenue, are capitalized on an agreement-by-agreement basis to the extent such costs do not exceed the total of deferred installation revenue and expected margin from monitoring services during the initial service contract term. To the extent such costs exceed the total of deferred installation revenue and expected margin from monitoring services during the initial service contract term, the excess is expensed as installation and operating expense in the period in which the installation is completed. Capitalized installation costs, to the extent of deferred installation revenue, are expensed over the longer of the term of the service agreement or the estimated eight-year life of the customer relationship. Capitalized installation costs in excess of deferred installation revenues, but which are less than the expected margin from monitoring services during the initial service contract term, are expensed over the initial term of the service agreement. Capitalized materials and direct labor costs, which are included in property and equipment, net as station equipment at customer location totaling approximately $12.1 million and $11.5 million at December 31, 2005 and 2004, respectively, are expensed as depreciation; capitalized commissions, which are included in capitalized commissions and other assets totaling approximately $1.8 million and $1.7 million at December 31, 2005 and 2004, respectively, are expensed as installation and service operating expense over the same periods as described above. When a customer to whom Guardian is providing monitored services cancels the service, any capitalized cost balance is recognized in the period in which the cancellation occurs.

Goodwill , Net

Goodwill is the excess of purchase price over the fair value of net assets acquired in a purchase business combination. With the adoption of SFAS 142, goodwill is no longer subject to amortization. Rather, goodwill is subject to an annual assessment for impairment by applying a fair-value based test. The impairment loss is the amount, if any, by which the estimated fair value of goodwill and other intangible assets is less than its carrying value. The Company performed the required annual assessment for impairment as of January 1, 2005 and 2004, and determined that no impairment loss was required.

Other Intangible Assets, Net

Intangible assets are recorded at cost and amortized over their estimated useful lives. The carrying value of intangible assets is periodically reviewed and impairments are recognized when expected future cash flows derived from such intangibles are less than their carrying value. Included in other intangible assets are deferred financing costs which are amortized over the respective terms of associated long-term debt obligations using the effective interest method.

Inventories

Inventories are stated at the lower of cost or market and are comprised of alarm systems, parts, and work in process. Cost is determined using the first-in, first-out method.

Concentration of Credit Risk

Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of trade receivables from a large number of customers, including both commercial and residential. The Company extends credit to its customers in the normal course of business, performs periodic credit evaluations and maintains an allowance for potential doubtful accounts.

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Property and Equipment, Net

Property and equipment are stated at cost and consist of station equipment at customer locations, vehicles, furniture and office equipment, and leasehold improvements (see Note 4). Depreciation of property and equipment is provided on the straight-line method. The estimated useful lives for property and equipment range from three to seven years and the estimated useful life for leasehold improvements is the lesser of economic life or the lease term.

Fair Value of Financial Instruments

Carrying amounts of certain of the Company’s financial instruments including cash and cash equivalents, accounts receivable, notes receivable, accounts payable and accrued liabilities approximate fair value because of their short term maturities.

The carrying amount of the Company’s credit facility approximates fair value because the interest rates are based on floating rates identified by reference to market rates. The fair value of the Company’s other long-term debt approximates carrying value. The estimated fair values may not be representative of actual values of the financial instruments that could have been realized at year-end or may be realized in the future.

Income Taxes

The Company has established deferred tax assets and liabilities for temporary differences between financial statement and income tax reporting bases of assets and liabilities, using enacted tax rates in effect in the years in which the differences are expected to reverse.

Recent Accounting Pronouncements

In December 2004, the Financial Accounting Standards Board (“FASB”) issued Revised Statement No. 123, “Accounting for Share-Based Payment” (“SFAS 123R”). The statement is a revision of FASB Statement No. 123, “Accounting for Stock Based Compensation” and supercedes APB Opinion No. 25, “Accounting for Stock Issued to Employees.” This statement requires the Company to recognize the grant-date fair value of stock options in the Statement of Operations. In addition, the Company will be required to calculate this compensation using the fair-value based method, versus the intrinsic value method previously allowed under SFAS No. 123. This revision is effective as of the beginning of the first interim or annual reporting period that begins after December 15, 2005. The Company has not yet determined the amount of impact on the consolidated statements of operations following adoption and subsequent to adoption or the transition method that will be used.

Loss Per Common Share

Basic loss per common share is computed by dividing net loss applicable to common stock by the weighted average number of shares of common stock outstanding during the year. Diluted loss per common share, which assumes that the convertible Preferred Stock is converted (exchange ratio 333.3333:1) into Class A Voting Common Stock, par value $.001 per share (“Class A Common Stock”) and the stock options to purchase shares of Class A Common Stock (see Note 11) are exercised, is the same as basic loss per common share because the effect would be anti-dilutive for both 2005 and 2004. The weighted average shares outstanding used in the computation of net loss attributable to common shares for the years ended December 31, 2005 and 2004, are as follows:

	2005	2004
Class A Common Stock	8,096,441	8,096,441
Class B Common Stock	634,035	634,035
	8,730,476	8,730,476

Stock Based Compensation

Statement of Financial Accounting Standards No. 148, (SFAS No. 148), requires prominent disclosures in financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results. SFAS No. 148 provides alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. The Company applies the recognition and measurement principles of APB Opinion No. 25, Accounting for Stock Issued to Employees, as allowed by SFAS Nos. 123 and 148, and related interpretations in accounting for its stock-based compensation plans. The Company has adopted the disclosure requirements of SFAS No. 148.

8

At December 31, 2005, the Company has one stock-based employee compensation plan, which is described more fully in Note 11. No stock-based employee compensation cost is reflected in net income, as all options granted under that plan had an exercise price equal to the market value of the underlying common stock on the date of grant. The following table illustrates the effect on net loss applicable to common shares and basic and diluted net loss per common share if the Company had applied the fair value recognition provisions of FASB Statement No. 123, Accounting for Stock-Based Compensation, to stock-based employee compensation. These amounts were determined using the Black-Scholes option-pricing model.

	Year Ended December 31
	2005			2004
Net loss applicable to common shares, as reported	$	(607,319	)	$	(2,039,721	)
Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects		(14,542	)		(18,910	)
Pro forma net loss applicable to common shares	$	(621,861	)	$	(2,058,631	)
Earnings per share:
Basic and diluted – as reported	$	(0.07	)	$	(0.23	)
Basic and diluted – pro forma	$	(0.07	)	$	(0.24	)

Segment Reporting

For the years ended December 31, 2005 and 2004, the Company operated under a single reportable segment providing alarm monitoring services and selling and installing alarm systems to residential and commercial customers in the United States. Accordingly, no further segment reporting beyond the consolidated financial statements is presented.

Use of Estimates

The preparation of financial statements, in conformity with accounting principles generally accepted in the United States, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Reclassifications

Certain 2004 amounts have been reclassified to conform to the 2005 presentation.

2. INVENTORIES

Inventories consist of the following at December 31, 2005 and 2004:

	2005		2004
Electronic security systems and parts	$	982,370	$	821,657
Work in process-parts		255,531		379,282
Work in process-labor		262,918		275,552
	$	1,500,819	$	1,476,491

9

3. CUSTOMER ACCOUNTS, NET

The following is an analysis of the changes in acquired customer accounts for the year ended December 31, 2005 and 2004:

	2005			2004
Balance, beginning of year	$	8,464,401		$	11,213,760
Purchase of customer accounts from dealers		15,038			1,018,842
Charges against contract holdbacks		(67,974	)		(22,313	)
Amortization of customer accounts		(3,006,183	)		(3,745,888	)
Balance, end of year	$	5,405,282		$	8,464,401

The accumulated amortization of customer accounts was approximately $30.5 million and $28.4 million at December 31, 2005 and 2004, respectively.

4. PROPERTY AND EQUIPMENT, NET

Property and equipment, net, consists of the following at December 31, 2005 and 2004:

	2005
	Cost		Accumulated Depreciation			Net
Station equipment at customer location	$	27,605,752	$	(15,507,517	)	$	12,098,235
Transportation vehicles		1,289,622		(845,159	)		444,463
Furniture and office equipment		782,436		(472,808	)		309,628
Leasehold improvements		619,354		(421,866	)		197,488
	$	30,297,164	$	(17,247,350	)	$	13,049,814
	2004
	Cost		Accumulated Depreciation			Net
Station equipment at customer location	$	23,852,023	$	(12,304,032	)	$	11,547,991
Transportation vehicles		1,139,869		(650,984	)		488,885
Furniture and office equipment		743,371		(312,878	)		430,493
Leasehold improvements		619,374		(302,054	)		317,320
	$	26,354,637	$	(13,569,948	)	$	12,784,689

Included in property and equipment at December 31, 2005 and 2004 was approximately $930,000 and approximately $780,000 of assets held under capital leases. The accumulated depreciation on such assets at December 31, 2005 and 2004 was approximately $498,000 and $344,000, respectively.

Depreciation and amortization related to property and equipment (including amortization of assets held under capital leases) was approximately $3.7 million and $3.5 million for the years ended December 31, 2005 and 2004, respectively.

10

5. GOODWILL AND OTHER INTANGIBLE ASSETS, NET

Goodwill, net

Goodwill, net consists of the following at December 31, 2005 and 2004:

	2005			2004
Goodwill	$	2,413,902		$	2,413,902
Accumulated Amortization		(1,008,811	)		(1,008,811	)
	$	1,405,091		$	1,405,091

Other intangible assets, net

Other intangible assets, net, consist of the following at December 31, 2005 and 2004:

	Amortization period in years	2005			2004
Deferred Financing Costs	4		241,831			241,831
Accumulated Amortization			(95,316	)		(31,539	)
		$	146,515		$	210,292

Amortization of deferred financing costs, included in interest expense, was approximately $64,000 and $103,000 for the years ended December 31, 2005 and 2004, respectively.

At December 31, 2005, future amortization of deferred financing costs are estimated to be as follows:

2006	$	60,400
2007		60,400
2008		25,715
	$	146,515

6. ACCRUED EXPENSES

Accrued expenses consist of the following at December 31, 2005 and 2004:

	2005		2004
Contract holdbacks	$	68,630	$	196,642
Preferred dividends payable		140,008		140,007
Customer deposits		772,319		754,398
Accrued expenses		2,079,693		1,702,304
	$	3,060,650	$	2,793,351

11

7. LONG-TERM OBLIGATIONS

Long-term obligations consist of the following at December 31, 2005 and 2004:

	2005			2004
Credit facility with financial institution	$	14,200,000		$	18,600,000
Capital lease obligations		260,532			297,196
Equipment notes payable and other		—			804
		14,460,532			18,898,000
Less current portion		(126,804	)		(147,832	)
Long-term obligations, less current portion	$	14,333,728		$	18,750,168

At December 31, 2005, estimated maturities of long-term debt are as follows:

2006	$	126,804
2007		68,534
2008		14,250,224
2009		14,970
		$14,460,532

Credit Facility. On May 26, 2004, the Company amended its existing $20.0 million senior credit facility (“Credit Facility”) with a financial institution, increasing the Credit Facility to $25.0 million. The Credit Facility has an expiration date of May 2008. Under the Credit Facility, borrowings bear interest at floating rates, either at a certain index rate plus 1 ³/4% (7.25% at December 31, 2005) or, at the Company’s election, LIBOR plus a range between 3.0% and 3.5 %, depending upon a certain financial covenant. The Credit Facility is secured by substantially all of the assets of the Company. Under the terms of the Credit Facility, the Company is required to meet certain financial performance covenants. The Company is in compliance with all such covenants as of December 31, 2005. At December 31, 2005, $10.8 million was available under the Credit Facility.

Capital Lease Obligations. The Company has entered into various lease agreements for vehicles. These leases have been capitalized in accordance with accounting principles generally accepted in the United States using interest rates which vary from 4.44% to 7.86%. See Note 8.

Equipment Notes. Equipment notes payable and other related to the purchase of a vehicle. The interest rate was 5.9%. The notes were repaid during 2005.

8. COMMITMENTS, CONTINGENCIES AND RELATED PARTY TRANSACTIONS

Legal Proceedings

The Company experiences routine litigation in the normal conduct of its business. The Company believes that any such pending litigation will not have, individually or in the aggregate, a material adverse effect on its business, financial condition or results of operations.

The Company is being examined by New York State taxing authorities for the tax years 2000 through 2002. The examination concerns the combined filing status of the Company as it reports its business operations in New York State and the amount of assessments paid as it relates to these operations. No assessments have been levied to date. The Company believes that the tax returns have been accurately filed and that no further assessments are warranted.

Leased Facilities

The Company leases its corporate headquarters from a corporation owned by individuals who are directors, officers and principal shareholders of the Company. The current lease commenced on January 1, 2003 and expires on December 31, 2007, with a renewal option for an additional five years under the same terms and conditions. The annual rent is approximately $241,000, with annual increases equal to the Consumer Price

12

Index for All Urban Consumers but not less than three percent (3%). The Company records minimal rental expenses on a straight-line basis over the life of the lease to accommodate the scheduled rent escalations. For 2005 the rent increased at a 3% rate. The terms of the lease are no less favorable to the Company than those which could be obtained from an unaffiliated third party.

The Company leases space in New York, New York from an independent third party. The lease expires in December 2009. The annual rent is approximately $117,000.

The Company also leases office space in Miami and Tampa, Florida and in Staten Island, New York. The leases expire on various dates through July 2008 and most are renewable at the option of the Company. The annual rent for these three facilities is approximately $155,000.

At December 31, 2005 future minimum payments under operating leases and capital leases are as follows:

	Operating		Capital
2006	$	561,061	$	136,781
2007		468,478		74,338
2008		191,680		52,741
2009		149,775		17,088
2010		6,720		—
	$	1,377,714		280,948
Less interest				(20,416	)
Capital lease obligations reflected as current (approximately $127,000) and non-current (approximately $134,000) portions of long-term obligations
			$	260,532

9. INCOME TAXES

At December 31, 2005 the Company has net operating loss carryforwards for federal income tax purposes of approximately $2 million, which begin to expire in 2009. The components of deferred tax assets and liabilities at December 31, 2005 and 2004 are as follows:

	2005			2004
Deferred Tax Asset:
Allowance for doubtful accounts, inventory obsolescence and accrued vacation	$	185,010		$	147,023
Difference in amortization of customer contracts, equipment and intangibles		1,572,270			3,209,128
Net operating loss carryforwards		732,312			2,230,041
Installation revenue		5,681,156			5,357,214
		8,170,748			10,943,406
Less valuation allowance		(8,170,748	)		(10,943,406	)
Net deferred tax assets	$	—		$	—

The Company’s deferred tax assets have not been benefited for financial reporting purposes because there is no assurance that the Company will be able to generate sufficient future taxable income to offset such losses.

As discussed in Note 12, on March 6, 2006, there was a change in control of the Company. This change in control may limit or prohibit the future utilization of the net operating losses.

10. PREFERRED STOCK

The Company, Westar Energy, Inc. and its subsidiary, Westar Investments, Inc. (collectively referred to as “Westar”) are parties to a stockholders agreement (“Stockholders Agreement”) relating to Westar’s

13

ownership of shares of the Company’s Series C, Series D and Series E Preferred Stock. The Stockholders Agreement, among other things, (i) places certain restrictions on the transfer of the shares held by the stockholders; (ii) grants the Company a first offer right to purchase shares prior to the transfer of such shares by a stockholder; and (iii) imposes certain limitations on the voting rights of the stockholders.

The Series C Redeemable Preferred Stock (“the Series C”) was reflected as a liability at December 31, 2003, in accordance with SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity”, at its redeemable liquidation value of $8.4 million. The adoption of SFAS No. 150 as of July 1, 2003 resulted in the related dividends being recorded as interest expense rather than a charge to equity. The interest expense for the year ended December 31, 2004 was approximately $336,000. In July 2004, the Series C was redeemed for $8.4 million in accordance with its redemption provisions (which mandated redemption no later than October 2004). Prior to this redemption, the Company executed an agreement with Westar, the record owner of the Series C, dated July 2, 2004, whereby Westar agreed to indemnify and hold the Company harmless from any losses the Company may suffer as a result of its payment of the redemption proceeds to Westar.

The Series D Preferred Stock is currently convertible at a rate of 333.3333 shares of Class A Common Stock for each share of Series D Preferred Stock. The holders of Series D Preferred Stock have no voting rights until such shares are converted into Class A Common Stock, except at any time the Series D Preferred Stock is outstanding, upon the occurrence of an Event of Default (as defined in Article III of the Company’s Articles of Incorporation and except for certain statutory voting rights which may arise under Florida law). During November 2000, the Company amended the terms of its Series D Preferred Stock to eliminate the redemption feature that occurred upon a Change of Control, as defined. The Series D Preferred Stock allows for redemption by the holder of the Series D Preferred Stock in the event that certain significant shareholders dispose of their holdings. However, those significant shareholders must seek the approval of the Company prior to disposing of their shares. These changes were effected to more clearly reflect the intentions of the parties at the time of the issuance of the Series D Preferred Stock. The Company can elect to redeem the Series D Preferred Stock. Dividends are payable annually either in cash or in additional shares of Series D Preferred Stock, at the Company’s option. To date, the Company has elected to issue additional Series D Preferred Stock to satisfy the dividend. As of December 31, 2005, 861 shares of Series D Preferred Stock are reflected, representing the 2005 dividend. See Note 12.

The Series E Preferred Stock is non-voting, except upon the occurrence of an Event of Default (as defined in Article III of the Company’s Articles of Incorporation and except for certain statutory voting rights which may arise under Florida law). The Series E Preferred Stock allows for redemption by the holder of the Series E Preferred Stock in the event that certain significant shareholders dispose of their holdings. However, those significant shareholders must seek the approval of the Company prior to disposing of their shares. The Company can elect to redeem the Series E Preferred Stock. Dividends are payable quarterly in cash and have been declared each quarter since the issuance of the Series E Preferred Stock. See Note 12.

For the period from January 2003 to January 2004, cash dividends on the Series C and Series E Preferred Stock were paid into escrow and the shares of Series D Preferred Stock to be issued as dividends on the Series D Preferred Stock were not issued, due to a dispute among Westar, as the record owner of the Preferred Stock, and certain of its former executive officers regarding entitlement to those dividends. On April 2, 2004, the cash dividends were paid to Westar and the stock dividends were issued to Westar upon receipt by the Company of an agreement dated March 30, 2004 from Westar indemnifying and holding the Company harmless from any losses the Company may suffer as a result of its payment of the cash dividends and issuance of the stock dividends to Westar.

The 2005 and 2004 cash dividends paid on the Series E Preferred Stock and the preferred stock dividends on the Series D Preferred Stock are reflected as having been paid or issued in the applicable year in the accompanying consolidated statements of changes in shareholders’ deficit.

11. STOCK OPTIONS AND WARRANTS

The Company has established the 1999 Stock Option Plan (the “Plan”), pursuant to which both incentive stock options and non-qualified stock options may be granted to employees, officers, directors, and consultants of the Company or its subsidiaries.

14

The Plan is administered by a committee of the Board of Directors of the Company. Under the Plan, the Company may award options to purchase a total of 500,000 shares of Class A Common Stock. Stock options may be granted at exercise prices not less than the fair market value at the date of grant, and incentive stock options granted to persons owning more than 10% of the outstanding voting power must be granted at not less than 110% of the fair market value at the date of grant. Incentive stock options issued by the Company may not be exercised within less than one year from the date of the grant.

During 2005 and 2004, there were no stock options issued.

The following is a summary of stock option activity for the years ended December 31, 2005 and 2004:

	Option Shares	Weighted Average Exercise Price
Outstanding at December 31, 2003	759,341	$	1.16
Granted	—		—
Cancelled	110,000		3.02
Expired	—		—
Outstanding at December 31, 2004	649,341		0.84
Granted	—		—
Cancelled	—		—
Expired	—		—
Outstanding at December 31, 2005	649,341		0.84
Exercisable at December 31, 2005	636,841	$	0.85

Exercise prices on the outstanding options range from $.69 to $1.73 and have remaining contractual lives of 2 to 6 years.

In February 2003, the Company granted 75,000 warrants to purchase Class A Common Stock to one director and 25,000 warrants to another director for assisting management with certain services during the year. The warrants were issued at an exercise price of $0.56 per share (the fair value of the Class A Common Stock on the date of the grant). These warrants vest equally over three years and expire ten years from the date they were granted. These warrants were valued using the Black-Scholes option-pricing model based on a risk-free interest rate of 3.95%, an expected volatility of common stock of 120%, a dividend yield of 0%, and an expected life of 10 years for the warrants.

Approximately $19,000 and $34,000 was recorded as an expense for these warrants within the Consolidated Statement of Operations for the years ended December 31, 2005 and 2004.

12. SUBSEQUENT EVENT

On November 9, 2005, the Company entered into a merger agreement with Devcon Acquisition, Inc., a subsidiary of Devcon International, Corp. (“Devcon”). Devcon provided as consideration a $3,000,000 deposit which was held in escrow.

On March 6, 2006, the Company completed the merger transaction with Devcon. The merger resulted in the sale of all Class A and Class B common shares, the redemption of all Series E preferred shares (including accrued cash dividends to March 6, 2006), the redemption of all Series D preferred shares and the repayment in full of the senior credit facility. In conjunction with the closing of the merger transaction, no further dividends accrued on the Series D preferred shares after December 31, 2005.

15

EX-99.2

Exhibit 99.2

Devcon International Corp.

Unaudited Pro Forma Condensed Consolidated Financial Statements

Basis of Presentation

The following unaudited pro forma condensed consolidated financial statements give effect to the acquisition (the “Transaction”) of the stock of Guardian International, Inc. (“Guardian”) by Devcon International Corp. (the “Company”) for approximately $65.5 million using the purchase method of accounting.

The unaudited pro forma condensed consolidated financial statements also give effect to other transactions that occurred during the period, based on unaudited pro forma information presented in previously filed Annual Reports on Form 8-K for the acquisition of Starpoint Limited and Coastal Security Company.

The following presents the Company’s unaudited pro forma condensed consolidated financial information as of December 31, 2005 and for the fiscal year ended December 31, 2005. The unaudited pro forma condensed consolidated balance sheet as of December 31, 2005 gives effect to the transaction as if it had occurred on December 31, 2005. The unaudited pro forma condensed consolidated statements of operations for the year ended December 31, 2005 give effect to the Transaction as if it had occurred as of the beginning of such period.

The unaudited pro forma condensed consolidated financial statements should be read together with the Company’s consolidated financial statements as of December 31, 2005, including the notes thereto, included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2005.

We are providing the unaudited pro forma condensed consolidated financial information for illustrative purposes only. The results may have been different had these transactions actually occurred during the periods presented. You should not rely on the unaudited pro forma condensed consolidated financial information as being indicative of the historical results that would have been achieved had the transactions actually occurred during the periods presented or the future results that the Company will experience. The unaudited pro forma condensed consolidated statements of operations do not give effect to any cost savings or operating synergies expected to result from the acquisition and divestiture or the costs to achieve such cost savings or operating synergies.

1

Pro Forma Financial Statements – Statement of Operations – Unaudited

For the twelve months ended December 31, 2005

	Amounts in thousands except share and per share data
	Devcon International Corp.			Starpoint Historical Unaudited			Pro Forma Adjustments For Starpoint Acquisition			Notes	Coastal Historical Unaudited			Pro Forma Adjustments For Coastal Acquisition			Notes	Guardian Historical			Pro Forma Adjustments For Guardian Acquisition			Notes	Pro Forma Adjustments For Promissory Notes, Credit Facility and Warrant Issuance			Notes	Pro Forma Adjustments For Preferred Stock Issuance			Notes	Pro Forma Information
Materials revenue	$	26,318		$	—		$	—			$	—		$	—			$	—		$	—			$	—			$	—			$	26,318
Construction revenue		32,669			—			—				—			—				—			—				—				—				32,669
Construction revenue, related party		6,665			—			—				—			—				—			—				—				—				6,665
Security revenue		18,515			3,046			—		(5)		15,545			—		(10)		27,401			(3,303	)	(14)		—				—				61,204
Other revenue		701			—			—				—			—				262			—				—				—				963
Total revenue		84,868			3,046			—				15,545			—				27,663			(3,303	)			—				—				127,819
Cost of materials		(24,492	)		—			—				—			—				—			—				—				—				(24,492	)
Cost of construction		(36,909	)		—			—				—			—				—			—				—				—				(36,909	)
Cost of security		(8,044	)		(1,992	)		38		(6)		(7,381	)		—				(9,421	)		(414	)	(14)		—				—				(27,214	)
Cost of other		(407	)		—			—				—			—				—			—				—				—				(407	)
Total cost of sale		(69,852	)		(1,992	)		38				(7,381	)		—				(9,421	)		(414	)			—				—				(89,022	)
Gross profit		15,016			1,054			38				8,164			—				18,242			(3,717	)			—				—				38,797
Selling, general and administrative		(26,085	)		(1,243	)		171		(7)		(7,764	)		(206	)	(11)		(15,807	)		165		(15)(16)		—				—				(50,769	)
Severance and retirement		(1,155	)		—			—				—			—				—			—				—				—				(1,155	)
Impairment of Assets		(4,066	)		—			—				—			—				—			—				—				—				(4,066	)
Operating income (loss)		(16,290	)		(189	)		209				400			(206	)			2,435			(3,552	)			—				—				(17,193	)
Interest (expense) income net		(1,834	)		(4	)		(342	)	(8)		(947	)		(1,828	)	(12)		(1,145	)		1,145		(17)		(13,908	)	(19)(20)		—				(18,863	)
(Loss) on early extinguishment of debt		(1,008	)		—			—				—			—				—			—				—				—				(1,008	)
Joint venture equity earnings		340			—			—				—			—				—			—				—				—				340
Gain on Antigua note		804			—			—				—			—				—			—				—				—				804
Derivative instrument income (expense)		—			—			—				—			—				—			—				—		(20)		—		(20)		—
Other (expense) income		861			(246	)		—				(61	)		—				2			—				—				—				556
Income (loss) before income taxes		(17,127	)		(439	)		(133	)			(608	)		(2,034	)			1,292			(2,407	)			(13,908	)			—				(35,364	)
Income tax (expense) benefit		220			—			194		(9)		51			950		(13)		(478	)		873		(18)		1,720		(21)		—				3,530
Net (loss) income from continuing operations		(16,907	)		(439	)		61				(557	)		(1,084	)			814			(1,534	)			(12,188	)			—				(31,834	)
Income from discontinued operations net of income taxes		2,591			—			—				—			—				—			—				—				—				2,591
Net (loss) income		(14,316	)		(439	)		61				(557	)		(1,084	)			814			(1,534	)			(12,188	)			—				(29,243	)
Preferred dividends		—			—			—				—			—				(1,421	)		1,421		(2)		—				—				—
Dividends and accretion of Series A preferred stock		—			—			—				—			—				—			—				—				(6,078	)	(19)(20)		(6,078	)
Net (loss) income applicable to common stock	$	(14,316	)	$	(439	)	$	61			$	(557	)	$	(1,084	)		$	(607	)	$	(113	)		$	(12,188	)		$	(6,078	)		$	(35,321	)
Per share data:
Net income per common share-basic from continuing operations	$	(2.86	)																														$	(6.42	)
Net income per common share-diluted from continuing operations	$	(2.42	)																														$	(5.98	)
Weighted average number of shares outstanding:
Basic		5,904,043																																5,904,043
Diluted		5,904,043																																5,904,043

2

	Pro Forma Financial Statements – December 31, 2005 Balance Sheet – Unaudited (Amounts shown in thousands except share and per share data)
	Devcon International Corp. (1)		Guardian Historical		Pro Forma Adjustments For Guardian Acquisition			Notes	Pro Forma Adjustments Promissory Notes, Credit Facility and Warrant Issuance		Notes	Pro Forma Adjustments For Preferred Stock Issuance			Notes	Pro Forma Information
ASSETS
Current assets:
Cash and cash equivalent	$	4,634	$	808	$	(66,438	)	(2)(3)	$	68,860	(3)(19)	$	—			$	7,864
Accounts receivable, net		17,575		2,101		—				—			—				19,676
Accounts receivable, related party		469		—		—				—			—				469
Notes receivable		1,622		—		—				—			—				1,622
Notes receivable, related party		2,160		—		—				—			—				2,160
Costs and estimated earnings in excess of billings		2,046		—		—				—			—				2,046
Costs and estimated earnings in excess of billings, related party		20		—		—				—			—				20
Inventories		2,892		1,501		—				—			—				4,393
Other current assets		6,221		749		(516	)	(3)		3,453	(3)		(3,453	)			6,454
Total current assets		37,639		5,159		(66,954	)			72,313			(3,453	)			44,704
Property, plant and equipment, net of accumulated depreciation		21,736		13,050		(11,953	)	(3)		—			—				22,833
Investments in unconsolidated joint ventures and affiliates		339		—		—				—			—				339
Notes receivable, net of current portion		3,504		—		—				—			—				3,504
Customer accounts, net		46,050		5,405		38,595		(3)		—			—				90,050
Goodwill		48,019		1,405		30,230		(3)		—			—				79,654
Intangible assets, net		1,724		147		1,253		(3)		—			—				3,124
Other non-current assets		6,456		1,900		(1,847	)	(2)					—				6,509
Total assets	$	165,467	$	27,066	$	(10,676	)		$	72,313		$	(3,453	)		$	250,717

See accompanying notes to unaudited pro forma financial statements.

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	Pro Forma Financial Statements - December 31, 2005 Balance Sheet Amounts shown in thousands except share and per share data
	Devcon International Corp. (1)			Guardian Historical			Pro Forma Adjustments For Guardian Acquisition			Notes	Pro Forma Adjustments Promissory Notes, Credit Facility and Warrant Issuance			Notes	Pro Forma Adjustments For Preferred Stock Issuance			Notes	Pro Forma Information
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Trade accounts payable and accrued expenses	$	8,094		$	1,091		$	—			$	—			$	—			$	9,185
Deferred revenue		4,808			4,822			(3,271	)	(3)(4)		—				—				6,359
Current installments long-term debt		69			127			—				—				—				196
Current installments long-term debt, related party		1,725			—			—				—				—				1,725
Billings in excess of costs and estimated earnings		1,205			—			—				—				—				1,205
Billings in excess of costs and estimated earnings, related party		51			—			—				—				—				51
Note payable bank		8,000			—			—				(8,000	)			—				—
Income tax payable		846			—			—				—				—				846
Promissory notes		—			—			—				36,439		(2)(20)		(36,439	)	(4)(20)		—
Accrued expenses and other liabilities		10,281			3,061			(142	)	(3)		—				—				13,200
Total current liabilities		35,079			9,101			(3,413	)			28,439				(36,439	)			32,767
Long term debt, excluding current installments		55,521			14,334			(14,220	)	(2)		35,600		(2)(3)		—				91,235
Retirement and severance, excluding current portion		4,098			—			—				—				—				4,098
Long-term deferred tax liability		5,213			—			10,588		(3)		—				—				15,801
Unearned revenue less current portion		—			11,296			(11,296	)	(3)		—				—				—
Derivative instruments		—			—			—				8,561		(2)(20)		11,252		(4)(20)		19,813
Other long term liabilities, excluding current portion		1,899			—			—				—				—				1,899
Total liabilities		101,810			34,731			(18,341	)			72,600				(25,187	)			165,613
Commitments and contingencies		—			—			—				—				—				—
Convertible Redeemable Preferred Series A Stock		—			—			—				—				21,734		(4)(20)		21,734
Stockholders equity:
Class A voting common stock		—			8			(8	)	(2)		—				—				—
Class B non-voting common stock		—			1			(1	)	(2)		—				—				—
Stockholders equity:
Common stock		600			—			—				—				—				600
Additional paid in capital - preferred stock		—			20,413			(20,413	)	(2)		—				—				—
Additional paid in capital		31,325			9,600			(9,600	)	(2)		—				—				31,325
Accumulated deficit		—			(37,687	)		37,687		(2)		—				—				—
Retained earnings		33,624			—			—				(287	)	(19)(20)		—		(20)		33,337
Accumulated other comprehensive loss - cumulative translation adjustment		(1,892	)		—			—				—				—				(1,892	)
Total stockholders’ equity		63,657			(7,665	)		7,665				(287	)			—				63,370
Total liabilities and stockholders’ equity	$	165,467		$	27,066		$	(10,676	)		$	72,313			$	(3,453	)		$	250,717

See accompanying notes to unaudited pro forma financial statements.

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Devcon International Corp.

Notes to Pro Forma Condensed Consolidated Financial Statements

December 31, 2005

(Unaudited)

Pro Forma Financial Statements – Balance Sheet as of December 31, 2005

(1) The Starpoint and Coastal acquisitions were completed on February 28, 2005 and November 10, 2005, respectively. As such their respective assets and liabilities are included in Devcon’s historical balance sheets as of December 31, 2005. Guardian’s historical balance sheet as of December 31, 2005 is derived from its audited report which is included as an attachment to this Form 8-K.

(2) Guardian International, Inc., (Guardian), was acquired on March 6, 2006, for a purchase price before adjustments of $65.5 million. The acquisition was financed (see notes 4 and 20 to this pro forma balance sheet) through the issuance of $45.0 million of 8% promissory notes payable to private investors and receipt of $35.6 million of debt proceeds from the increase of the Company’s Revolving Credit Facility. Financing proceeds in excess of amounts needed to acquire Guardian of approximately $15.1 million were used by the Company to repay the Company’s $8.0 million bridge loan with accrued interest, preferred stock issuance cost to finance the acquisition of $3.7 million and provide for additional working capital and operating needs. At issuance of the promissory notes, the private investors were also given warrants, with an expiration date of March 6, 2009, to purchase 1,650,956 shares of Company common stock at a strike price of $11.925 per share. At closing on March 6, 2006, the Guardian purchase price of approximately $65.5 million was used to pay $1.0 million of acquisition costs; retire $23.3 million of Guardian’s Preferred Stock ownership, including accumulated and unpaid dividends; $3.3 million to an escrow account which, depending upon satisfactory completed terms of the purchase agreement, will enure to the benefit of Guardian’s common shareholders; allow Guardian to repay $13.3 million of bank debt, including accumulated interest and debt prepayment penalty of $0.3 million; and $24.6 million to acquire the common stock of Guardian. The pro forma financial statements provide for an adjustment to eliminate Guardian’s bank debt and preference stock ownership.

(3) The acquisition of Guardian has been accounted for using the purchase method of accounting. Purchase accounting requires that the assets and liabilities acquired be recorded at their fair value at the date of acquisition. The preliminary purchase price allocations is based on managements best estimate of fair value and is therefore subject to adjustment upon completion of an independent valuation. The purchase price allocation will be finalized and the resulting adjustments will be applied to assets and liabilities.

The preliminary purchase price allocation is detailed as follows:

	March 6, 2006 (thousands of dollars)
Cash and cash equivalents	$	930
Accounts receivable		2,377
Inventory		1,470
Other current assets		281
Fixed assets		1,097
Customer accounts		44,000
Trade name and trademark intangible assets		1,400
Trade accounts payable and accrued expenses		(3,590	)
Deferred revenue		(2,782	)
Deferred tax liability		(10,588	)
Goodwill		32,667
Purchase consideration	$	67,262

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The financing proceeds and acquisition purchase price is summarized as follows:

	March 6, 2006 (thousand of dollars)
Promissory Notes	$	45,000
Revolving Credit Facility		35,600
Total financing proceeds		80,600
Deferred offering costs		3,740
Guardian purchase		67,262
Repayment of Bridge, with accrued interest		8,133
Additional working capital		4,492
Less return of deposit to acquire Guardian		(3,027	)
Total use of financing proceeds	$	80,600

(4) Adjustments were made for the issuance of $45.0 million of Series A Convertible Preferred Stock, in exchange for the promissory notes, and which the Company anticipates will occur following delivery of an information statement or Schedule 14 C being mailed to our shareholders, which will upon completion of Securities and Exchange Commission (“SEC”) review of the information statement. Actual issuance of the Series A Convertible Preferred Stock is expected to occur on or before September 15, 2006 but no later than January 1, 2007 depending on whether the information statement is reviewed by the SEC and, if so, the time needed to complete SEC review. The pro forma December 31, 2005 balance sheet includes an adjustment for issuance of the preferred stock as if it had occurred on December 31, 2005.

Pro Forma Statement of Operations for the year ended December 31, 2005

Star Point Limited Acquisition

(5) The Company’s historical results of operations for the year ended December 31, 2005 include the period from the acquisition date to December 31, 2005. The operating results for the two month period ended February 28, 2005 are adjustments to our own historical financial statements and are presented as “Starpoint Historical Unaudited”.

(6) Adjustments were made to asset balances in applying purchase accounting. The adjustment reflects (i) the decrease in depreciation and amortization expense to the amortization of identifiable intangibles using the straight-line method over a weighted-average life of 10 years and (ii) a decrease in depreciation resulting from a reduction in carrying value of property, plant and equipment, depreciated on a straight-line basis over an average remaining life of four years resulting from purchase accounting.

(7) Starpoint Limited recorded a corporate allocation of $241,000 for the two month period ended February 28, 2005. Because the Starpoint Limited acquisition was an acquisition of assets the foregoing expense is not being assumed. However, the treatment of the foregoing expense is not included as a pro forma adjustment.

(8) Includes interest expense associated with financing of the acquisition consisting of $24.6 million of long-term debt issued under the Credit Agreement at an assumed rate of 7.5%. The Credit Agreement contains provisions regarding unused commitment fees, which costs are included in the adjustment for interest expense on a pro forma basis along with the impact of amortization of loan origination costs over six years.

(9) Starpoint Limited did not record federal and state income tax expense. The Company is currently in a federal taxable position and accordingly calculated a pro forma income tax expense based upon an estimated effective tax rate of 34%.

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Coastal Acquisition

(10) The acquisition of Coastal was completed on November 10, 2005. The Coastal historical results represent operating results for the ten months in 2005 prior to the Company’s acquisition.

(11) As part of its purchase accounting for Coastal, the Company recorded certain definite lived assets at fair value. These assets included customer contracts and non-compete agreements. An adjustment was recorded to amortization expense for the ten months ended October 31, 2005, based on remaining useful lives of between 4 and 17 years for the customer contracts and 3 years for the non-compete agreements.

(12) In order to finance its acquisition of Coastal, the Company used $31.4 million of its Revolving Credit Facility bearing interest at a rate of 10% per annum and subscribed to an $8.0 million Bridge Loan bearing interest at a rate of 7% per annum. Additionally, this Revolving Credit Facility and Bridge Loan allowed the early extinguishment of the Credit Agreement entered into to finance the Starpoint Limited acquisition.

(13) Includes the income tax effects of the adjustments discussed in footnotes (11) and (12), based on a 34% tax rate.

Guardian Acquisition

(14) In accordance with Staff Accounting Bulletin SAB 104, certain costs to sell and install customer contracts were capitalized on Guardian’s historical financial statements. As a result of the purchase accounting, these capitalized costs and the associated deferred revenue are adjusted to fair value in the allocation of the purchase price paid for Guardian to the intangible assets of customer accounts and goodwill.

(15) As part of its purchase accounting, the Company recorded certain definite-lived intangible assets at fair value. These assets included customer contracts and the Mutual trade name used in the New York customer market. An adjustment was recorded to amortization expense to recognize the difference between the amortization expense for customer contracts acquired by Guardian prior to the Company’s acquisition of Guardian and amortization of customer contracts valued at fair value at the date of the Company’s acquisition. The amortization period for customer contracts acquired with Guardian is four (4) and ten (10) years.

(16) As part of its purchase accounting, the Company made certain adjustments to the carrying value of the acquired fixed assets of Guardian. The acquired fixed assets at fair value are being depreciated over an average weighted useful life of five years.

(17) Because the financing of the Guardian acquisition was used to repay the existing bank debt and preferred stock of Guardian, the interest expense recorded in the Guardian historical financial statements is replaced by the cost of the acquisition financing, as presented in the adjustments for the Promissory Notes and Preferred Stock issuance. See Notes (19), (20) and (21).

(18) Includes the income tax effects of the adjustments discussed in footnotes (14), (15), (16) and (17), based on a 34% tax rate.

Promissory Notes, Warrants and Preferred Stock

(19) For purposes of the pro forma financial statements, the proceeds from the issuance of the Promissory Notes and Revolving Credit Facility were reduced by transaction costs and interest expense on the financing for the year ended December 31, 2005. In connection with entering into the Notes, Warrants and Preferred Stock arrangements, we paid fees totaling $3.7 million. Of the total $3.7 million, $3.4 million relates to the Preferred Stock and $0.3 relates to the Notes and Warrants. We will record the amount associated with the Preferred Stock as a deferred offering cost until the issuance of the Preferred Stock. We will record the fee associated with the Notes and Warrants as additional interest expense using the effective interest rate method over the estimated life of the note which is five months. Accordingly for purposes of the pro forma financial statements, the $0.3 million of fees related to the Notes and Warrants has been fully expensed and the $3.4 million related to the Preferred Stock is recorded on the pro forma Balance Sheet as a reduction to the Preferred Stock and will be accreted over the life of the Preferred Stock as charges to dividend expense.

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(20) On February 10, 2006, we entered into a securities purchase agreement with certain accredited investors with respect to the private placement of an aggregate principal amount of $45,000,000 of notes (the “Notes”), along with warrants to acquire an aggregate of 1,650,956 shares of our common stock (the “Warrants”) subject to certain caps based upon the Nasdaq Marketplace Rules. The issuance of the Notes and the Warrants was completed as an initial step to the private placement of the Series A convertible preferred stock (the “Preferred Stock”), which we anticipate issuing to the same accredited investors in exchange for the Notes. The Notes and Warrants were issued to allow us to complete our acquisition of Guardian International, Inc. (“Guardian”) in a timely manner and to avoid certain payments which would have been due to Guardian as a result of our failure to do so, including forfeiture of a $3.0 million deposit. We anticipate that the private placement investors will subsequently receive an aggregate of 45,000 shares of our Preferred Stock in exchange for the Notes, which bear an aggregate principal amount equal to $45,000,000 and for no additional consideration. Each share of our Preferred Stock will have a liquidation preference equal to $1,000. The transaction is subject to customary closing conditions. The sale of the Notes and the Warrants and the closing of the Guardian acquisition occurred on March 6, 2006. The sale of the shares of our Preferred Stock is expected to take place on or before September 15, 2006 but not later than January 1, 2007.

On February 10, 2006, the holders of 3,082,640 shares of our issued and outstanding common stock, representing approximately 51.4% of the votes entitled to be cast at a meeting of our shareholders, executed a written consent approving the amendment to our Articles of Incorporation and the private placement and the issuance of the Preferred Stock and the common stock Warrants. These shareholders have also entered into a voting agreement under the terms of which they have agreed to vote the shares they represent in favor of the same matters when these matters are submitted to a vote of our shareholders. The approval by the shareholders will not become effective until 20 days from the date this information statement is initially transmitted to our shareholders.

The Warrants and an embedded derivative, that being the right to purchase preferred stock in the future (the “Purchase Rights”), were issued in connection with the issuance of the Notes, are detachable, or need to be bifurcated, and will be accounted for as a derivative instrument liability. In accordance with Accounting Principle Board Opinion No. 14, the initial carrying value of the Notes is reduced at issuance by the $8.5 million total value associated with the Warrants and the Purchase Rights (the “Discount”). See below for further details. The resulting discount from the face amount of the Notes will be accreted over the period of expected maturity of the Notes. The accretion amount recorded in each period will be determined using the effective interest method.

Since our Preferred Stock when issued will be convertible at the option of the holder, and we have a call option within the agreement. This Preferred Stock will be classified as temporary equity when issued in accordance with ASR 268. Dividends paid or accrued on these shares will be deducted from net income in determining net income attributable to common shareholders.

We have reviewed the terms of the Preferred Stock to determine whether there are embedded derivative instruments that are required to be bifurcated and accounted for separately as derivative financial instruments. We have determined that the Preferred Stock contains more than one embedded derivative instrument, which includes the conversion feature; a dividend payment conversion feature; and a change in control redemption right, which are required to be bifurcated from the Preferred Stock host instrument. In accordance with Derivative Implementation Group Issue No. B15, the bifurcated derivative instruments embedded in the preferred stock will be accounted for as a single, compound derivative instrument and we have estimated the value to be approximately $19.8 million.

The Preferred Stock to be issued and the Warrants are subject to a registration rights agreement, which imposes significant penalties for failure to register the underlying common stock by a defined date as well as non -standard anti-dilution provisions. The conversion price the Warrants and the Preferred Stock may be adjusted in certain circumstances, such as if we pay a stock dividend, subdivide or combine outstanding shares of common stock into a greater or lesser number of shares, or take such other actions as would otherwise result in dilution. Also, if we issue shares of common stock at a price below the fixed conversion price, the fixed conversion price of the convertible preferred stock will be reduced accordingly. In

8

accordance with EITF-00-19, due to the existence of these conditions, the Preferred Stock are required to be accounted for as a derivative instrument liability.

The derivative financial instrument liability will initially be measured at fair value and will then be re-valued at each reporting date, with changes in the fair value reported as charges or credits to income. We will determine the fair value of these instruments using an appropriate option-pricing model. That model requires assumptions related to the remaining term of the instruments, risk-free rates of return, our current common stock price, expected dividend yield and the expected volatility of our common stock price over the life of the respective option. The assumptions used to value these instruments can significantly affect our financial statements. The initial value of the 1,650,943 Warrants issued to the purchasers of the Notes and the Purchase Rights were initially valued at $4.8 million and $3.7 million, respectively. In addition, the initial fair value of the compound derivative instrument of the Preferred Stock is initially estimated to be $19.8 million. Since the re-valuation of derivative financial instruments can only be determined based upon current market factors which change with the passage of time, the Pro Forma Statement of Operations does not reflect an adjustment with respect to re-valuation of these derivative instruments.

Since the Preferred Stock contains embedded derivative instruments that are to be bifurcated and accounted for as a derivative instrument liability, the total proceeds allocated to the convertible host instruments are first allocated to the fair value of all the bifurcated derivative instruments. The remaining proceeds are then allocated to the Preferred Stock host contract, resulting in the Preferred Stock being recorded at a discount from its face amount. This discount will be accreted using the effective interest method over the term of the preferred stock. Dividends payable on the Preferred Stock will be recognized as they accrue and, together with the periodic amortization of the discount, will be deducted from net income to determine net income attributable to common shareholders. Dividends and accretion of Series A Convertible Preferred Stocks set out in the Pro Forma Statement of Operations has been adjusted to reflect seven (7) months of preference dividends, associated accretion of debt discount (compound embedded derivatives) and associated accretion of deferred financing costs amounting to $2.4 million, $3.3 million and $0.4 million respectively.

The Registration Rights Agreement requires us to file registration statements with the Securities and Exchange Commission to register common shares that may be issued on exercise of the Warrants or of the conversion of the Preferred Stock, to permit re-sale of common shares previously sold under an exemption from registration or to register common shares that may be issued on exercise of outstanding options or warrants. These registration rights agreements require us to pay penalties for any time delay in filing the required registration statements, or in the registration statements becoming effective, beyond dates specified in the Agreement. These penalties are expressed as a fixed percentage, per month, of the original amount we received on issuance of the preferred stock or warrants. We will account for these penalties as a contingent liability and not as a derivative instrument. Accordingly, we will recognize the penalties, if any, when it becomes probable that they will be incurred. Any penalties will be expensed over the period to which they relate.

Interest expense set out in the proforma statement of operations, for pro forma adjustments for Promissory Notes, Credit Facility and Warrant issuance, has been adjusted to reflect the following:

Estimated annual incremental interest expense due to the increased borrowing from CapitalSource	$	3,570
Estimated interest expense on the Notes		1,500
Accretion of Debt Discount over the life of the Notes		8,500
Amortization of transaction fees		338
Total	$	13,908

(21) A tax benefit of 34% of cash interest expense is included for the pro forma year ended December 31, 2005.

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