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8-K - FORM 8-K - US HOME SYSTEMS INCd324856d8k.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 FINANCIAL RESULTS FOR FOURTH QUARTER

AND FULL YEAR 2011

Revenues Increase 13% to a Record $164.9 Million and EPS Increases 110% for Full Year

2011 Basic EPS $0.65, Diluted EPS $0.63

Board Declares 50% Increase In Dividend to $0.03 Per Share

DALLAS, TX, March 27, 2012 — U.S. Home Systems, Inc. (NasdaqNGM: USHS) today reported financial results for the fourth quarter and year ended December 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.

Fourth Quarter and Full-Year 2011 Highlights

 

   

USHS reported new orders increased to $37.9 million in the fourth quarter 2011 from $37.2 million in the fourth quarter last year.

 

   

Full-year new orders increased 11.7% to $166.1 million from $148.6 million in 2010.

 

   

USHS had a backlog of uncompleted orders of $21.2 million at December 31, 2011.

 

   

Revenues and net income in the fourth quarter 2011 increased to $38.7 million and $0.12 per diluted share from $38.0 million and $0.10 per diluted share in the fourth quarter last year, respectively.

 

   

Revenues from the Company’s SCN market expansion and DIY programs which were initiated in 2010, increased $7.3 million or 122% in 2011. At December 31, 2011 the SCN network served 359 The Home Depot stores, 177 of which are in 17 new expansion markets.

 

   

Full-year revenues increased 13.1% to a record $164.9 million from $145.9 million in 2010.

 

   

Fixed operating costs, consisting only of branch operating and general and administrative expenses, declined to 11.9% of revenues in 2011 from 12.5% of revenues in 2010. The decline principally reflected increased leverage from higher revenues.

Financial Results

For the fourth quarter, USHS revenues increased to $38.7 million as compared to $38.0 million in the fourth quarter 2010. Net income was $927,000 or $0.12 per diluted share as compared to $708,000 or $0.10 per diluted share, respectively.


Murray Gross, chairman and chief executive officer, commented, “In the fourth quarter we continued to deliver solid operating performance and financial results. Our new orders in the fourth quarter 2011 were $37.9 million, up from $37.2 million in the fourth quarter last year, driving a year-over-year increase in revenues. Basic EPS was $0.13 for the fourth quarter and diluted EPS was $0.12 as compared with our guidance of $0.13 per diluted share. The difference in diluted EPS to our guidance is largely in the rounding reflecting a slight increase in dilutive shares resulting from the increase in the stock price. Our backlog of uncompleted orders at December 31, 2011 was $21.2 million as compared to $20.1 million last year.”

“During the fourth quarter 2011 we developed a new line of Martha Stewart LivingTM kitchen cabinet refacing products”, said Mr. Gross. “Due to the popularity and reputation for style and quality inherent in the Martha Stewart brand, this exciting line of replacement kitchen cabinets has been well-received by customers of The Home Depot. Our line of Martha Stewart LivingTM cabinet refacing products provides a ‘refacing’ solution to The Home Depot customers who prefer the look of the Martha Stewart LivingTM line of cabinetry in a refacing product. We commenced offering these products to our The Home Depot customers in late January 2012. We believe the Martha Stewart LivingTM line of kitchen refacing products will be an exciting extension to our kitchen refacing product portfolio.”

“Also during the fourth quarter 2011, we and The Home Depot agreed to test a new ‘installed’ product category, ‘Replacement Kitchen Remodeling’,” continued Mr. Gross. “The pilot program commenced in March 2012 in two markets in Florida. In connection with the test pilot, we will re-market customers who expressed an interest in kitchen refacing, however did not purchase our refacing products. We believe that these customers may be more interested in replacing their complete kitchen cabinetry rather than installing a refacing product.”

USHS also announced its Board has authorized a 50% increase in the quarterly dividend from $0.02 per share to $0.03 per share. The dividend is payable April 26, 2012 to stockholders of record at the close of business on April 12, 2012.

Announcing the dividend, Mr. Gross commented, “We believe the payment of dividends will provide us with an additional means of creating value for our stockholders as we continue to pursue growth opportunities.”

For the year ended December 31, 2011, new orders increased 11.7% to $166.1 million from $148.6 million last year and revenues increased 13.1% to a record $164.9 million from $145.9 million, respectively. The increase in revenues resulted from strong demand for kitchen and bath refacing products and faster sale-to-completion cycle time. Revenues from USHS SCN market expansion and DIY programs (programs which USHS initiated in the first quarter of 2010) increased $7.3 million, or 122.2% as compared to 2010 principally resulting from growth of the program.

USHS net income was $4.7 million or $0.63 per diluted share for the year ended December 31, 2011 as compared to $2.1 million or $0.30 per diluted share in the prior year.

Mr. Gross said, “The number of our diluted shares increased over 200,000 shares in 2011 as compared to 2010 principally reflecting the increase in our stock price. Using the same number of shares as we had in 2010, 2011 EPS would compute to $0.65 per diluted share instead of the actual $0.63 per diluted share. This reflects that the increase in shares in the EPS computation resulted in $0.02 additional dilution per share compared to our 2010 results.”

 

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Mr. Gross concluded, “We overcame economic challenges, and issues related to lower credit approval rates for our customers to deliver another year of increased new orders during 2011. Resolving the credit approval rate remains a top priority. Nevertheless we are very confident that we will continue to deliver solid performance in 2012.”

First Quarter 2012 Outlook

USHS expects:

 

   

Revenues in the first quarter 2012 of $40.5 million as compared to revenues of $39.0 million in the first quarter 2011.

 

   

Net income of $0.09 per share, compared to $0.08 per share in the first quarter 2011.

Conference Call Information

Management of USHS will hold a conference call on March 27, 2012 at 4:30 p.m. ET to discuss its 2011 fourth quarter and year end financial results.

Interested parties may access the call by calling 1-877-941-1427 from within the United States, or 1-480-629-9664 if calling internationally, approximately five minutes prior to the start of the call. A replay will be available through April 3, 2012, and can be accessed by dialing 1-877-870-5176 (U.S.), 1-858-384-5517 (international), passcode 4523824.

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 April 27, 2012 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.

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.

 

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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.

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USHS REPORTS FOURTH QUARTER 2011 RESULTS

FINANCIAL HIGHLIGHTS

Consolidated Statements of Operations

(In thousands, except shares and per share amounts)

 

      Three Months Ended
December 31,
     Year Ended
December 31,
 
     2011      2010      2011      2010  
     (Unaudited)                

Revenues

   $ 38,681       $ 38,004       $ 164,945       $ 145,873   

Cost of remodeling contracts

     18,228         18,383         76,517         68,552   
  

 

 

    

 

 

    

 

 

    

 

 

 

Gross profit

     20,453         19,621         88,428         77,321   

Costs and expenses:

           

Branch operations

     1,738         1,858         7,286         7,618   

Sales and marketing

     14,759         14,162         61,050         55,281   

General and administrative

     2,611         2,351         12,396         10,620   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total costs and expenses

     19,108         18,371         80,732         73,519   
  

 

 

    

 

 

    

 

 

    

 

 

 

Operating income

     1,345         1,250         7,696         3,802   

Interest expense

     5         16         25         99   

Other income

     18         20         26         10   
  

 

 

    

 

 

    

 

 

    

 

 

 

Income (loss) before income taxes

     1,358         1,254         7,697         3,713   

Income tax expense

     431         546         3,025         1,556   
  

 

 

    

 

 

    

 

 

    

 

 

 

Net income

     927         708         4,672         2,157   
  

 

 

    

 

 

    

 

 

    

 

 

 

Net income per common share: basic and diluted

           

- Basic

   $ 0.13       $ 0.10       $ 0.65       $ 0.30   
  

 

 

    

 

 

    

 

 

    

 

 

 

- Diluted

   $ 0.12       $ 0.10       $ 0.63       $ 0.30   
  

 

 

    

 

 

    

 

 

    

 

 

 

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

     7,256,385         7,143,145         7,228,138         7,138,105   
  

 

 

    

 

 

    

 

 

    

 

 

 

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

     7,468,690         7,261,054         7,418,566         7,205,774   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

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USHS REPORTS FOURTH QUARTER 2011 RESULTS

U.S. Home Systems, Inc.

Consolidated Balance Sheets

 

     December 31  
      2011      2010  

ASSETS

     

Current assets:

  

Cash and cash equivalents

   $ 13,682,779       $ 8,027,353   

Marketable securities

     816,510         802,634   

Accounts receivable-trade, net

     5,768,948         6,168,778   

Accounts receivable-other

     611,640         729,602   

Income tax receivable

     22,175         47,383   

Commission advances, net

     1,072,250         1,430,869   

Inventories, net

     3,802,255         3,816,907   

Prepaid advertising and marketing

     1,908,021         1,785,555   

Prepaid expenses – other

     766,295         809,803   

Deferred income taxes, net

     856,750         880,882   
  

 

 

    

 

 

 

Total current assets

     29,307,623         24,499,766   
  

 

 

    

 

 

 

Property, plant, and equipment, net

     2,486,965         2,362,624   

Goodwill

     3,589,870         3,589,870   

Other assets

     463,863         496,413   
  

 

 

    

 

 

 

Total assets

   $ 35,848,321       $ 30,948,673   
  

 

 

    

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

     

Current liabilities:

  

Accounts payable

   $ 5,607,866       $ 4,644,331   

Accrued wages, commissions, bonuses and vacation

     2,044,694         1,995,570   

Federal and state taxes payable

     1,237,762         1,735,045   

Long-term debt, current portion

     0         333,333   

Other accrued liabilities

     692,206         641,256   
  

 

 

    

 

 

 

Total current liabilities

     9,582,528         9,349,535   

Deferred income taxes, net

     581,162         403,630   

Long-term debt, net of current portion

     0         555,556   

Other liabilities, long-term

     195,993         0   

Stockholders’ equity:

  

Common stock – $0.001 par value, 30,000,000 shares authorized, 7,288,776 and 7,192,886 shares issued; 7,288,776 and 7,152,718 shares outstanding at December 31, 2011 and December 31, 2010, respectively

     7,289         7,193   

Additional capital

     14,677,025         14,227,828   

Retained earnings

     10,804,324         6,494,654   

Treasury stock, at cost, 0 and 40,168 shares at December 31, 2011 and December 2010, respectively

     0         (89,723
  

 

 

    

 

 

 

Total stockholders’ equity

     25,488,638         20,639,952   
  

 

 

    

 

 

 

Total liabilities and stockholders’ equity

   $ 35,848,321       $ 30,948,673   
  

 

 

    

 

 

 

 

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