Quarterly Revenue Increases 157%, EBITDA Rises 308%, Net Income
Jumps 244%, Diluted EPS of 8 Cents Increases 166.7% DALLAS, Nov. 14
/PRNewswire-FirstCall/ -- Home Solutions of America, Inc.
(AMEX:HOM), a provider of recovery, restoration and
rebuilding/remodeling services, announced today record third
quarter financial results for the period ended September 30, 2005.
The Company generated third quarter revenue of $20.4 million, a
157% increase versus the same period in 2004 when Home Solutions
had revenue of $7.9 million. Home Solutions generated $4.9 million
of EBITDA (which includes $3.5 million of operating income and $1.4
million of depreciation, amortization and variable option expense)
during the 2005 third quarter versus EBITDA of $1.2 million (which
includes $1.0 million of operating income plus $0.2 million of
depreciation and amortization) during the 2004 third quarter. The
Company generated 2005 third quarter net income of $2.4 million, or
$0.08 per diluted share, compared to $0.7 million or $0.03 per
diluted share in the year earlier period. This includes a $0.01
cent non-cash charge for acceleration of amortization of costs
related to the conversion of preferred stock. The Company had
quarterly weighted average fully diluted outstanding shares of 27.8
million for the 2005 fiscal third quarter, compared to 17.0 million
for the same period in fiscal 2004. For the nine months ended
September 30, 2005, the Company generated revenue of $45.8 million,
an increase of 107% compared to $22.1 million for the first nine
months of 2004. The Company generated $9.0 million in EBITDA (which
includes $7.0 million of operating income and $2.0 million of
depreciation, amortization and variable option expense) compared to
$3.0 million (which includes $2.4 million of operating income plus
$0.6 million of depreciation and amortization) in the first nine
months of fiscal 2004. The Company reported net income of $4.4
million, or $0.18 per diluted share for the nine months ended
September 30, 2005, compared to $1.7 million, or $0.07 per diluted
share for the first nine months of fiscal 2004. The Company had
year-to-date weighted average fully diluted outstanding shares of
23.2 million as of September 30, 2005, compared to 16.9 million at
September 30, 2004. The Company ended the third quarter with
approximately $5 million in cash and cash equivalents. Total
indebtedness increased from $15 million at the end of the second
quarter of fiscal 2005 to $26 million at the end of the third
quarter of 2005 as a result of the acquisition of FERS and the
Seller Note the Company issued. The Company's net indebtedness to
projected 2005 EBITDA is approximately 1.5 to 1, at the low range
of historical levels. "We are extremely pleased by the strong third
quarter we recently completed," said Frank Fradella, Chairman and
CEO of Home Solutions. "The acquisition of substantially all the
assets of Florida Environmental Restoration Services, Inc. and the
integration of those assets with our new operations in Louisiana,
Mississippi and Texas has dramatically propelled our revenues and
operating profits as we responded to the demand for our Recovery
Services in the hurricane affected areas. While the hurricane
activity has undoubtedly served as a catalyst for our business, we
believe we have positioned the Company, through synergies between
our businesses, for strong growth during the fourth quarter and
2006, as we are now able to offer customers not only Recovery
Services, but a full line of Restoration and Rebuilding/Remodeling
services." Business Outlook: The Company raised its outlook for
fiscal 2005 for the third time this year. It now expects to
generate record full-year revenue of $73.0 to $76.0 million,
compared to previous guidance of $70.0 to $75.0 million. It expects
record EBITDA of $14.0 to $15.0 million, compared to previous
expectations of $11.0 to $12.0 million. Home Solutions increased
its 2005 guidance for fully diluted earnings per share to $0.25 to
$0.27 compared to previous expectations of $0.23 to $0.25 per
diluted share. This guidance assumes that the Company's tax rate
for GAAP purposes will increase from 10% in the third quarter to an
effective rate of approximately 34% in the fourth quarter. The
Company today also issued the following outlook for 2006. The
Company expects to generate full-year 2006 revenue of $130.0
million to $140.0 million. It expects EBITDA of $25.0 million to
$28.0 million. Home Solutions expects earnings per fully diluted
share of $0.42 to $0.46. The fiscal 2006 guidance excludes any
potential impact from storms, hurricanes or other weather-related
events that may occur during the year. The Company expects its tax
rate in 2006 to be approximately 34%. During the balance of fiscal
2005 and during 2006, the Company expects to make investments from
the cash flow it generates to further build the infrastructure
necessary to support its growth, including through strategic
acquisitions. The Company will hold a conference call and webcast
at 9:00 am eastern time today. Interested participants should call
(888) 554-9234 for domestic access or (706) 758-0142 for
international access. Please reference Conference I.D. Number
2467852. There will be a playback available until midnight,
December 14, 2005. To listen to the playback, please call (800)
642-1687 for domestic access or (706) 645-9291 for international
access. Please use pass code 2467852 for the replay. This call is
being webcast and can be accessed at Home Solutions' Web site at
http://www.homcorp.com/ until December 15, 2005. The Company also
announced today that it has moved its corporate offices to the
following address: 1500 Dragon Street Suite B Dallas, Texas 75207.
Home Solutions is a provider of recovery, restoration and
rebuilding/remodeling services to commercial and residential areas
that are (i) prone to flooding, hurricanes, tornados, fires or
other naturally occurring and repetitive weather related
emergencies; and/or (ii) experiencing robust housing development.
The Company has operations in California, Texas, Florida, Alabama,
Georgia, Louisiana, Mississippi and South Carolina through its five
subsidiaries, Cornerstone Building and Remodeling, Southern
Exposure, P.W. Stephens, Home Solutions Restoration of Louisiana
and Fiber Seal Systems. Cornerstone is a leading supplier and
installer of granite materials for kitchens and baths to national
home centers, as well as national builders and remodeling
companies, in the southeastern United States. Southern Exposure and
related companies is a provider of cabinet and countertop
installation services in the Florida marketplace. P.W. Stephens
provides mold and asbestos remediation services, and fire and water
restoration services in California, Florida and Louisiana, Home
Solutions Restoration of Louisiana provides Recovery Restoration
Services in Florida, Louisiana, Mississippi and Texas and Fiber
Seal Systems is a national licensor of cleaning and fabric
protection businesses. For more information on Home Solutions,
please see the Company's website at http://www.homcorp.com/ .
Statements included in this update that are not historical in
nature are intended to be, and are hereby identified as,
"forward-looking statements" for purposes of the safe harbor
provided by Section 21E of the Securities Exchange Act of 1934, as
amended by Public Law 104-67. Forward-looking statements may be
identified by words including "anticipate," "believe," "intends,"
"estimates," "expect," and similar expressions. The Company
cautions readers that forward-looking statements including, without
limitation, those relating to the Company's future business
prospects are subject to certain risks and uncertainties that could
cause actual results to differ materially from those indicated in
the forward-looking statements, due to factors such as those
relating to economic, governmental, technological, and other risks
and factors identified from time to time in the Company's reports
filed with the SEC. CONTACT: Michael Wachs, CEOcast, Inc. PHONE:
212-732-4300 HOME SOLUTIONS OF AMERICA, INC. CONSOLIDATED BALANCE
SHEET (In Thousands, Except Per Share Data) (Unaudited) September
30, 2005 ASSETS Current assets: Cash $ 5,059 Accounts receivable,
net of allowance for doubtful accounts of $557 16,742 Note
receivable 886 Inventories 2,014 Costs in excess of billings 82
Prepaid expenses and other current assets 806 Assets held for sale
940 Total current assets 26,529 Property and equipment, net of
accumulated depreciation of $1,004 2,903 Intangibles, net of
accumulated amortization of $782 8,123 Goodwill 36,260 Due from
related party 5 Other assets 140 $73,960 LIABILITIES AND
STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and
accrued expenses $7,033 Current portion of debt 17,557 Current
portion of capital lease obligations 73 Billings in excess of costs
1,219 Due to related party 492 Notes payable to related party 750
Total current liabilities 27,124 Long-term liabilities: Debt, net
of current portion 7,038 Minority interest 431 Capital lease
obligations, net of current portion 104 Total liabilities 34,697
Commitments and contingencies Stockholders' equity: Common stock,
$0.001 par value, 50,000 shares authorized; 28,224 shares issued
and outstanding 28 Additional paid-in capital 56,528 Accumulated
deficit (17,293) Total stockholders' equity 39,263 $73,960 HOME
SOLUTIONS OF AMERICA, INC. CONSOLIDATED STATEMENTS OF INCOME (In
Thousands, Except Per Share Amounts) (Unaudited) Three Months Ended
Nine Months Ended September 30, September 30, 2005 2004 2005 2004
Net sales $20,376 $7,943 $45,793 $22,131 Costs and expenses: Cost
of sales 11,261 4,266 25,648 11,949 Selling, general and
administrative expenses 5,642 2,651 13,186 7,817 16,903 6,917
38,834 19,766 Operating income 3,473 1,026 6,959 2,365 Other income
(expense): Gain (loss) on sale of assets 25 (3) 26 (14) Interest
income 15 7 46 10 Interest expense (641) (175) (1,434) (483) Other
income 28 23 75 199 Total other (expense) (573) (148) (1,287) (288)
Income before income taxes and minority interest 2,900 878 5,672
2,077 Income taxes (292) -- (498) -- Minority interest in income of
consolidated subsidiary (252) (193) (731) (386) Net income $2,356
$685 $4,443 $1,691 Net income available to common stockholders per
share: Basic $0.08 $0.03 $0.18 $0.08 Diluted 0.08 0.03 0.18 0.07
Weighted average number of common shares outstanding: Basic 23,737
16,528 20,569 16,248 Diluted 27,833 16,950 23,171 16,899
DATASOURCE: Home Solutions of America, Inc. CONTACT: Michael Wachs
of CEOcast, Inc., +1-212-732-4300, for Home Solutions of America,
Inc. Web site: http://www.homcorp.com/
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