First graph, fourth sentence should read: Fourth quarter net income
from continuing operations increased 300% to $3.6 million, or $0.10
per diluted share, compared to net income from continuing
operations of $0.9 million, or $0.03 per diluted share, in the same
period for the prior year (sted Fourth quarter net income from
continuing operations increased 287% to $4.1 million, or $0.09 per
diluted share, compared to net income from continuing operations of
$0.9 million, or $0.03 per diluted share, in the same period for
the prior year). Second graph, sixth sentence should read:
Including this charge, net income for the quarter increased 200% to
$2.7 million or $0.08 per diluted share, compared to $0.9 million
or $0.03 per diluted share in the year-earlier period (sted
Including this charge, net income for the quarter increased 287.3%
to $3.3 million, or $0.09 per diluted share, compared to $0.9
million or $0.03 per diluted share in the year-earlier period).
Also, the last table, entitled Income statement from continuing
operations, has been replaced. The corrected release reads: HOME
SOLUTIONS ANNOUNCES RECORD FOURTH QUARTER AND YEAR-END FINANCIAL
RESULTS; 2005 INCOME FROM CONTINUING OPERATIONS INCREASES 237%
RESULTING IN DILUTED EPS OF $0.30; OPERATING MARGINS EXPAND IN
FOURTH QUARTER Home Solutions of America, Inc. (Amex: HOM); the
"Company" or "Home Solutions"), a provider of recovery, restoration
and rebuilding/remodeling services, announced record financial
results for its fourth quarter and year-ended December 31, 2005.
Fourth quarter revenue from continuing operations increased 186% to
$25.5 million, compared to revenue of $9.0 million in the fourth
quarter of fiscal 2004. Fiscal 2005 fourth quarter EBITDA from
continuing operations increased 221% to $5.7 million (including
$5.4 million of operating income and $.3 million of depreciation
and amortization), compared to $1.8 million (including $1.5 million
of operating income and $.3 million of depreciation and
amortization) in the 2004 fourth quarter. Fourth quarter net income
from continuing operations increased 300% to $3.6 million, or $0.10
per diluted share, compared to net income from continuing
operations of $0.9 million, or $0.03 per diluted share, in the same
period for the prior year. Operating profit for the quarter
increased 260% to $5.4 million from $1.5 million in the same period
for the prior year. The fourth quarter results exclude the results
from discontinued operations of certain assets and liabilities
("net assets") of one of the Company's subsidiaries, which the
Company first marketed for sale in the fourth quarter of 2005 and
recently sold for $3.5 million. These net assets have been
classified on the balance sheet as discontinued operations held for
sale. In connection with the decision to sell the net assets, the
Company reclassified the results of the operation held for sale,
reflecting a loss of $.9 million, net of tax. The operations that
were classified as discontinued generated $1.1 million in revenue
in the fourth quarter, that were previously included in the
Company's business outlook. The Company elected to wind down
operations during December in connection with the sale. Including
this charge, net income for the quarter increased 200% to $2.7
million or $0.08 per diluted share, compared to $0.9 million or
$0.03 per diluted share in the year-earlier period. For the year
ended December 31, 2005, the Company generated revenue of $72.4
million, a 132% increase versus $31.1 million in the year ended
December 31, 2004. Sales from discontinued operations were $4.2
million for the year. EBITDA increased 196% to $14.4 million from
continuing operations in 2005 (including $13.3 million of operating
income and $1.1 million of depreciation and amortization), compared
to $4.9 million (including $4.0 million of operating income and $.9
million depreciation and amortization) of EBITDA in 2004. Net
income from continuing operations increased 231% to $8.6 million,
or $.30 per diluted share in 2005, compared to net income from
continuing operations of $2.6 million or $.10 per diluted share in
the prior year. Net income increased 180% to $7.2 million, or $.25
per diluted share in 2005, compared to net income of $2.6 million
or $.10 per diluted share in 2004. The December 31, 2005 year-end
results include a $1.4 million (net of tax) charge, or $.06 per
diluted share, from the discontinued operations of net assets of
one of the Company's subsidiaries, which the Company sold in March
2006. As of December 31, 2005, Home Solutions had cash and cash
equivalents of $8.2 million and long-term debt of $4.7 million. "We
are pleased by the tremendous progress we made in the fourth
quarter and in 2005, and the improvement to our balance sheet,"
said Rick O'Brien, President and Chief Operating Officer of Home
Solutions. "Our results demonstrate that we are able to integrate
the acquisitions we have made in our target markets, and grow our
business organically. The fourth quarter demonstrated that through
the value-added services we provide that we are able to expand our
operating margins. This helped to drive a 368% increase in
operating income from our Recovery/Restoration Services segment and
a 62% increase in operating income from our Rebuilding/Remodeling
business for the year ended December 31, 2005. In addition, we
further built the infrastructure to support our growth in 2006 and
beyond and improved our balance sheet through the completion of a
$26.5 million private placement, which provides us with the
financial strength to continue to invest in our business and to
support synergistic acquisitions." "We believe the opportunities
for growth across our business lines remain strong," said Frank
Fradella, Chairman and Chief Executive Officer. "While we
undoubtedly benefited from hurricane activity in 2005, we feel that
the rebuilding activity in the affected areas over the next 3-5
years represents a far greater opportunity for the Company. We will
continue to focus on strategic growth opportunities with our major
customers such as Home Depot and Centex. We continue to invest in
infrastructure to support strong anticipated growth. In addition,
we expect our focus on Recovery/Restoration projects in Louisiana,
Mississippi, Florida, and Texas to significantly contribute to our
organic growth for the next several years." Business Outlook: Due
to uncertainty in the timing of allocation of funding for projects
as a result of political uncertainty in New Orleans and the
distribution of funds by FEMA, the Company today elected to
reiterate its full year guidance for the year ending December 31,
2006, of revenue of $130 million to $140 million and diluted
earnings per share of $0.42 to $0.46. The Company will increase its
guidance as developments warrant. The Company believes that it
provides meaningful information and therefore uses pro forma
non-GAAP reporting to supplement its GAAP reporting and internally
in evaluating operations, managing and benchmarking performance,
and determining a portion of bonus compensation. Home Solutions has
chosen to provide this supplemental information to investors,
analysts and other interested parties to enable them to perform
additional analyses of the Company's operating results and to
illustrate the results of operations giving effect to such pro
forma non-GAAP adjustments. The pro forma non-GAAP financial
information presented herein should be considered supplemental to,
and not as a substitute for, or superior to, financial measures
calculated in accordance with GAAP. The Company's executives will
host a conference at 4:30 p.m. eastern time today to discuss the
results and outlook for 2006. Interested participants should call
(877) 776-4984 for domestic access or (706) 679-7077 for
international access. Please reference Conference I.D. Number
7032074. There will be a playback available until midnight, April
30, 2006. To listen to the playback, please call (800) 642-1687 for
domestic access or (706) 645-9291 for international access. Please
use pass code 7032074 for the replay. This call is being webcast
and can be accessed at Home Solutions' web site at www.homcorp.com
until April 30, 2006. 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. -0- *T HOME
SOLUTIONS OF AMERICA, INC. CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Amounts) Years Ended December 31,
------------------------ 2005 2004 --------- ---------- Net sales $
68,135 $ 31,121 --------- ---------- Costs and expenses: Cost of
sales 38,372 16,718 Selling, general and administrative expenses
16,485 10,356 --------- ---------- 54,857 27,074 ---------
---------- Operating income 13,278 4,047 --------- ---------- Other
income (expense): Loss on sale of assets (76) (17) Interest income
61 38 Interest expense (3,351) (930) Other income 97 224 ---------
---------- Total other expense, net (3,269) (685) ---------
---------- Income from continuing operations before income taxes
and minority interest 10,009 3,362 Income taxes 446 219 Minority
interest (933) (580) --------- ---------- Income from continuing
operations 8,630 2,563 --------- ----------- Loss from discontinued
operations, net of tax benefit (1,445) - --------- ---------- Net
income $ 7,185 $ 2,563 ========= ========== Net income (loss)
available to common shareholders per share: Basic Net income from
continuing operations $ 0.34 $ 0.11 Net loss from discontinued
operations, net of tax benefit (0.06) - --------- ---------- Net
income $ 0.28 $ 0.11 ========= ========== Diluted Net income from
continuing operations $ 0.30 $ 0.10 Net loss from discontinued
operations, net of tax benefit $ (0.05) - --------- ---------- Net
income $ 0.25 $ 0.10 ========= ========== Weighted average number
of common shares outstanding: Basic 23,210 16,393 Diluted 26,315
17,192 *T -0- *T HOME SOLUTIONS OF AMERICA, INC. CONSOLIDATED
BALANCE SHEET DECEMBER 31, 2005 (In Thousands, Except Per Share
Data) ASSETS Current assets: Cash $ 8,225 Accounts receivable, net
of allowance for doubtful accounts of $70 20,585 Note receivable
361 Inventories 1,026 Current assets of discontinued operations
held for sale 767 Prepaid expenses and other current assets 1,041
Assets held for sale 840 -------- Total current assets 32,845
Property and equipment, net of accumulated depreciation of 2,466
Intangibles, net 9,501 Goodwill 41,882 Note Receivable, net of
current portion 525 Non-current assets of discontinued operations
held for sale 391 Deferred tax asset 793 Other assets 264 --------
$ 88,667 ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current
liabilities: Accounts payable and accrued expenses $ 6,712 Current
portion of debt 3,382 Current portion of capital lease obligations
76 Current liabilities of discontinued operations held for sale
1,216 -------- Total current liabilities 11,386 Long-term
liabilities: Debt, net of current portion 1,363 Minority interest
38 Non-current liabilities of discontinued operations held for sale
158 Capital lease obligations, net of current portion 117 --------
Total liabilities 13,062 -------- Commitments and contingencies
Stockholders' equity: Common stock, $0.001 par value, 50,000 shares
authorized; 35,510 shares issued and outstanding 36 Additional
paid-in capital 90,122 Accumulated deficit (14,553) -------- Total
stockholders' equity 75,605 -------- $ 88,667 ======== *T -0- *T
Home Solutions of America, Inc. Income statement from continuing
operations For the three months ended December 2005 and 2004
---------------------- ($ in thousands, except per share data)
------------------------ 2005 2004 4th 4th Quarter Quarter
------------------------ Net Sales $ 25,502 $ 8,991 Gross profit
margin % 40.0% 47.0% Costs and expenses: Cost of sales 15,300 4,769
Selling, general and administrative expenses 4,790 2,719 ----------
---------- 20,090 7,488 Operating income 5,412 1,503 Operating
profit margin % 21.2% 16.7% Other income (expense): Gain (loss) on
sale of assets (101) (3) Interest income 15 28 Interest expense
(1,956) (264) Other Income 23 24 ---------- ---------- Total other
(expense) (2,019) (215) Income before income taxes and minority
interest 3,393 1,288 Income taxes 391 (219) Minority interest in
income of consolidated subsidiary (202) (193) ---------- ----------
Net income from continuing operations 3,582 876 Loss on
Discontinued operation (net of tax) (840) - ---------- ----------
Net income $ 2,742 $ 876 ========== ========== Net income available
to common stockholders $ 2,742 $ 535 ========== ========== EPS
Basic Income from continuing operations $ 0.12 $ 0.03 Loss from
discontinued operations $ (0.03) $ - ---------- ---------- Net
Income $ 0.09 $ 0.03 ========== ========== Diluted Income from
continuing operations $ 0.10 $ 0.03 Loss from discontinued
operations $ (0.02) $ - ---------- ---------- Net Income $ 0.08 $
0.03 ========== ========== Weighted average number of common shares
outstanding: Basic 31,047 16,781 Diluted 35,713 17,652 EBITDA 5,741
1,783 22.5% 19.8% *T
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