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8-K - FORM 8-K - US HOME SYSTEMS INCd8k.htm

Exhibit 99.1

 

Contacts:    
Murray H. Gross   Brett Maas
Chairman & CEO   Hayden IR
Email: mgross@ushomesystems.com   Email: brett@haydenir.com
(214) 488-6300   (646) 536-7331

U.S. HOME SYSTEMS REPORTS $39 MILLION IN REVENUE FOR FIRST QUARTER ENDED MARCH 31, 2011

Revenues Increase 18% to $39 Million, Record for First Quarter;

EPS Increases 60% to $0.08 vs. $0.05

DALLAS, TX, May 12, 2011 — U.S. Home Systems, Inc. (NasdaqNGM: USHS) today reported financial results for the first quarter ended March 31, 2011. USHS is engaged in the specialty products home improvement business. The Company’s principal product lines include kitchen cabinet refacing products, bathroom remodeling products, storage organization systems for closets and garages and related accessories.

First Quarter 2011 Highlights

 

 

The Company reported $39 million in revenue, the highest first quarter revenue in USHS history, exceeding guidance of $36 to $37 million and up 17.7% compared to $33.1 million in the first quarter last year.

 

 

USHS reported earnings per share of $0.08, better than guidance of $0.06 to $0.07 per share and compared to $0.05 per share in the first quarter last year.

 

 

USHS reported new orders increased to a record $43.2 million in the first quarter 2011 from $34.4 million in the first quarter last year. USHS had backlog of uncompleted orders of $24.3 million at March 31, 2011.

 

 

In connection with USHS market expansion program, since January 2010 through March 31, 2011, USHS initiated service in fourteen new markets, encompassing 191 The Home Depot stores.

 

 

During the first quarter 2011 USHS expanded its bath product offering to an additional 109 The Home Depot stores.

 

 

Fixed operating costs, consisting of branch operating and general and administrative expenses, declined to 12.8% of revenues in the first quarter 2011 from 14.2% in the same quarter last year. The decline reflected increased leverage from higher revenues.

Financial Results

For the first quarter, USHS had record revenues of $39.0 million, an increase of 17.7%, as compared to $33.1 million in the first quarter 2010. Net income was $560,000 or $0.08 per share as compared to $365,000 or $0.05 per share, respectively.

Murray Gross, chairman and chief executive officer, commented, “We recorded our seventh consecutive year-over-year quarterly increase in revenues in the first quarter and reached $39 million, the best first quarter in our history. Our new orders increased 25.5%, from $34.4 million in the first quarter last year to a record $43.2 million in the first quarter 2011, enabling us to exceed guidance for both revenue and earnings per share. Our revenue exceeds pre-recession highs, demonstrating renewed consumer interest and increased demand for our solutions.”

 

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Mr. Gross continued, “The marketing programs we initiated in 2010 are continuing to drive demand and new orders. In addition, as I stated last quarter, we believe that homeowners who are ‘stuck’ in their homes due to declining values have decided to stay in their homes, upgrading economically to make them more appealing now and easier to sell when real estate values recover. The National Association of Home Builders recently reported that remodeling is on the rise and the Remodeling Market Index (RMI) in the first quarter was the highest level since the fourth quarter of 2006, and we are benefitting from this trend.”

Mr. Gross concluded, “I consider it quite an accomplishment that we have significantly grown our revenues while simultaneously increasing customer satisfaction levels. We have been successful adopting and achieving the high standards of customer satisfaction levels set by our strategic partner, The Home Depot, as measured through The Home Depot’s Voice of The Customer (VOC) survey. The increase in our customer satisfaction ratings is a testament to the commitment and dedication of our associates around the country.”

Second Quarter 2011 Outlook

USHS expects:

 

   

Revenues in the second quarter 2011 of $40 to $41 million as compared to revenues of $35 million in the second quarter 2010.

 

   

Net income of $0.11 to $0.13 per share, compared to $0.06 per share in the second quarter 2010.

Conference Call Information

Management of USHS will hold a conference call on May 12, 2011 at 4:30 p.m. ET to discuss its 2011 first quarter financial results. The financial results will be released following the close of trading on May 12, 2011.

Interested parties may access the call by calling 1-877-941-2068 from within the United States, or 1-480-629-9712 if calling internationally, approximately five minutes prior to the start of the call. A replay will be available through May 19, 2011, and can be accessed by dialing 1-877-870-5176 (U.S.), 1-858-384-5517 (international), passcode 4436520.

This call is being web cast by ViaVid Broadcasting and can be accessed at U.S. Home Systems’ website at www.ushomesystems.com. The web cast may also be accessed at ViaVid’s website at www.viavid.net. The web cast can be accessed until June 12, 2011 on either site. To access the web cast, you will need to have the Windows Media Player on your desktop. For the free download of the Media Player please visit:

http://www.microsoft.com/windows/windowsmedia/en/download/default.asp.

About U.S. Home Systems, Inc.

U.S. Home Systems, Inc. (www.ushomesystems.com) manufactures or procures, designs, sells and installs custom quality specialty home improvement products. The Company’s product lines include kitchen cabinet refacing products utilized in kitchen remodeling, bathroom tub liners and wall surround products utilized in bathroom remodeling, and storage organization systems for closets and garages. The Company manufactures its own cabinet refacing products and bathroom cabinetry.

 

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This press release contains certain statements that may include “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact included herein are “forward-looking statements” including statements regarding the Company’s business strategy, plans and objective and statements of non-historical information. These forward looking statements are often identified by the use of forward-looking terminology such as “believes,” “expects” or similar expressions, involve known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company’s periodic reports that are filed with and available from the Securities and Exchange Commission. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.

-tables follow-

 

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USHS REPORTS FIRST QUARTER 2011 RESULTS

FINANCIAL HIGHLIGHTS

Consolidated Statements of Operations

(In thousands, except shares and per share amounts)

 

      Three Months Ended
March 31,
 
     2011      2010  
     (Unaudited)  

Revenues

   $ 38,990       $ 33,127   

Cost of remodeling contracts

     18,182         14,695   
                 

Gross profit

     20,808         18,432   

Costs and expenses:

     

Branch operations

     1,921         1,962   

Sales and marketing

     14,843         13,070   

General and administrative

     3,090         2,753   
                 

Total costs and expenses

     19,854         17,785   
                 

Operating income

     954         647   

Interest expense

     13         34   

Other income (expense)

     4         (7
                 

Income before income taxes

     945         606   

Income tax expense

     385         241   
                 

Net income

     560         365   
                 

Net income per common share: basic and diluted

   $ 0.08       $ 0.05   
                 

Number of weighted-average shares of common stock outstanding – basic

     7,175,127         7,136,846   
                 

Number of weighted-average shares of common stock outstanding – diluted

     7,356,740         7,172,275   
                 

 

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USHS REPORTS FIRST QUARTER 2011 RESULTS

U.S. Home Systems, Inc.

Consolidated Balance Sheets

 

     March 31,
2011
    December 31,
2010
 
     (Unaudited)        

ASSETS

    

Current assets:

    

Cash and cash equivalents

   $ 6,755,261      $ 8,027,353   

Marketable securities

     805,549        802,634   

Accounts receivable-trade, net of allowance for doubtful accounts of $74,103 and $28,109

     8,713,155        6,168,778   

Accounts receivable-other

     315,221        729,602   

Income tax receivable

     37,313        47,383   

Commission advances

     1,348,761        1,430,869   

Inventories

     3,541,757        3,816,907   

Prepaid advertising and marketing

     1,858,265        1,785,555   

Prepaid expenses

     513,840        809,803   

Deferred income taxes

     880,580        880,882   
                

Total current assets

     24,769,702        24,499,766   
                

Property, plant, and equipment, net

     2,294,912        2,362,624   

Goodwill

     3,589,870        3,589,870   

Other assets

     486,908        496,413   
                

Total assets

   $ 31,141,392      $ 30,948,673   
                

LIABILITIES AND STOCKHOLDERS’ EQUITY

    

Current liabilities:

    

Accounts payable

   $ 5,169,804      $ 4,644,331   

Accrued wages, commissions, bonuses and vacation

     1,609,488        1,995,570   

Federal and state taxes payable

     1,968,237        1,735,045   

Long-term debt, current portion

     —          333,333   

Other accrued liabilities

     525,188        641,256   
                

Total current liabilities

     9,272,717        9,349,535   

Deferred income taxes

     403,630        403,630   

Long-term debt, net of current portion

     —          555,556   

Stockholders’ equity:

    

Common stock – $0.001 par value, 30,000,000 shares authorized, 7,247,064 and 7,192,886 shares issued; 7,206,896 and 7,152,718 shares outstanding at March 31, 2011 and December 31, 2010, respectively

     7,247        7,193   

Additional capital

     14,492,394        14,227,828   

Retained earnings

     7,055,127        6,494,654   

Treasury stock, at cost, 40,168 shares at March 31, 2011 and December 31, 2010

     (89,723     (89,723
                

Total stockholders’ equity

     21,465,045        20,639,952   
                

Total liabilities and stockholders’ equity

   $ 31,141,392      $ 30,948,673   
                

 

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