U.S. Home Systems Reports Financial Results for the Second Quarter and Six Months Ended June 30, 2009
Published In: Business, Texas 
Wednesday, August 12, 2009 4:01 PM
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DALLAS, Aug. 12 /PRNewswire-FirstCall/ -- U.S. Home Systems, Inc. (Nasdaq: USHS) today reported financial results for the second quarter and six month period ended June 30, 2009. USHS is engaged in the specialty products home improvement business. The Company's principal product lines include kitchen cabinet refacing products, bathroom tub liners and wall surround products, storage organization systems for closets and garages and related accessories.
Financial Results

For the second quarter, U.S. Home Systems, Inc. (USHS) had revenues of $25.5 million as compared to $35.5 million in the same quarter last year. Excluding revenues from deck products, which USHS phased out in 2008, revenues declined $5.9 million from $31.4 million in the second quarter last year.

USHS reported a net loss of $1.2 million, or $0.17 per share for the second quarter 2009. The loss in the quarter included a $1.5 million pre-tax charge related to a litigation settlement. Excluding the one time charge, net loss for second quarter 2009 was $286,000, or $0.04 per share as compared to net income of $720,000, or $0.09 per share in the second quarter 2008.

Murray Gross, chairman and chief executive officer, commented, "The second quarter was a challenging quarter for us but we are increasingly confident that the worst is behind us. Our lower revenues, which resulted from the weak economy deleveraged our operating infrastructure and increased our effective cost of marketing in the quarter. However, we are encouraged by the positive early signals of a recovery in the housing sector, and these initial improvements are beginning to be reflected in our business. We have experienced quarter-over-quarter improvement in new orders and sales closing rates, and of particular importance, an increase in the number of customers approved for financing in the second quarter 2009 as compared to the first quarter 2009. This positive trend continued in July and we are encouraged by the very early trends in August. These positive signals increase our confidence that the near-term economic environment will improve and the long-term outlook remains strong. Nevertheless, in the short term, we continue to face challenges of slower demand, particularly in California, Arizona, Michigan and South Florida. We continue to believe, however, that USHS is well positioned with our national presence, relationship with the leader in home improvement, and diverse product offerings, to thrive as the housing market continues to improve."

For the six months ended June 30, 2009, USHS had revenues of $51.7 million as compared to $67.4 million in the prior year period. Excluding revenues from deck products, revenues declined $9.5 million from $60.9 million in the six months ended June 30, 2008.

USHS had a net loss of $2.2 million, or $0.30 per share as compared to net income of $715,000, or $0.09 per share in the six months ended June 30, 2009 and 2008, respectively. Excluding a one-time charge of $1.5 million in the second quarter 2009 related to a litigation settlement, net loss in the six months ended June 30, 2009 was $1.2 million.

Second Quarter 2009 Highlights


-- USHS reported new orders of $26.5 million in the second quarter as
compared to $34.4 million for the second quarter of 2008. Excluding deck
products, which the company phased out offering in 2008, new orders
declined approximately 12.4% as compared to $30.3 million in the same
period last year. However, new orders in the second quarter increased
7.5% sequentially from $24.7 million in the first quarter 2009.
-- Careful cost controls contributed to a 280 basis point improvement in
gross profit margin and reduced branch operating and general and
administrative expenses in the current quarter as compared to the second
quarter last year.

-- USHS continued adjusting its marketing initiatives, including expanding
its employee based in-store marketing program, targeting
higher-performing markets and scaling back its third-party program in
underperforming areas. It is reallocating marketing resources to enhance
efforts in areas with more experienced sales personnel and greater
opportunity for consumer financing approval. The Company expects that
these actions will ultimately reduce lead generation costs, however
start-up costs associated with expanding the Company's employee
in-store program increased marketing cost in the second quarter. USHS
expects improved performance in this area next quarter.



Outlook

"Although we are beginning to see positive signals, we are not yet able to predict the rate of improvement in consumer demand," Mr. Gross concluded. "We expect continued quarter-over-quarter improvement in the near-term and we are confident that our long-term outlook remains strong. We believe the weak economy and tightness in the consumer credit market has created significant pent-up demand which should accelerate our recovery as the credit market and the overall economy improve. We will continue to address the operating environment to focus on our marketing strategy and, as necessary, make additional cost adjustments to support our long-term objectives. We are confident that our financial condition will remain strong as we work through this challenging time."

Conference Call Information

Management of USHS will hold a conference call on August 12, 2009 at 4:30 p.m. ET to discuss its 2009 second quarter financial results. The financial results will be released following the close of trading on August 12, 2009. Interested parties may access the call by calling 877-941-2930 from within the United States, or 480-629-9690 if calling internationally, approximately five minutes prior to the start of the call. A replay will be available through August 19, 2009, and can be accessed by dialing 800-406-7325 (U.S.), 303-590-3030 (Int'l), pass code 4128640.

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 September 12, 2009 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/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 may contain 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. Such forward-looking statements are based on a number of assumptions, including expectations for continued market growth and anticipated revenue levels. Although the Company believes these assumptions are reasonable, no assurance can be given that they will prove correct. The Company's ability to continue to grow sales and to expand geographically and through new products and acquisitions will be key to its success in the future. If the industry's or the Company's performance differs materially from these assumptions or estimates, U.S. Home Systems' actual results could vary significantly from the estimated performance reflected in any forward-looking statements.

-tables follow-




USHS REPORTS SECOND QUARTER 2009 RESULTS

FINANCIAL HIGHLIGHTS

Consolidated Statements of Operations
(In thousands, except shares and
per share amounts) Three Months Ended Six Months Ended
(Unaudited) June 30, June 30,
------------------ ----------------
2009 2008 2009 2008
---- ---- ---- ----

Revenues $25,503 $35,485 $51,673 $67,432
Cost of remodeling
contracts 11,196 16,561 22,885 31,948
Gross profit 14,307 18,924 28,788 35,484

Costs and expenses:
Branch operations 1,935 2,340 4,031 4,504
Sales, marketing and
license fees 10,378 12,563 21,559 24,269
General and administrative 2,453 2,835 5,213 5,532
Legal settlement 1,500 - 1,500 -
Total costs and expenses 16,266 17,738 32,303 34,305
Operating income (loss) (1,959) 1,186 (3,515) 1,179
Interest expense 36 44 75 84
Other income 30 32 66 72
Income (loss) before
income taxes (1,965) 1,174 (3,524) 1,167
Income tax expense
(benefit) (754) 454 (1,353) 452
Net income (loss) (1,211) 720 (2,171) 715

Net income (loss) per
common share - basic and
diluted: ($0.17) $0.09 ($0.30) $0.09

Number of weighted-average
shares of common stock
outstanding - basic 7,162,477 7,615,984 7,297,224 7,624,423
Number of weighted-average
shares of common stock
outstanding - diluted 7,162,477 7,621,046 7,297,224 7,641,425



USHS REPORTS SECOND QUARTER 2009 RESULTS

U.S. Home Systems, Inc.
Consolidated Balance Sheets



June 30, December 31,
2009 2008
-------- ------------
ASSETS (Unaudited)
Current assets:
Cash and cash equivalents $6,393,084 $9,825,528
Marketable securities 2,074,350 2,036,049
Accounts receivable-trade, net of
allowance for doubtful accounts of
$66,236 and $141,158, respectively 3,969,324 3,060,337
Accounts receivable-other 119,365 28,060
Income tax receivable 565,413 574,303
Commission advances 771,200 863,405
Inventories 3,299,737 3,538,637
Prepaid marketing 869,470 1,272,535
Prepaid expenses 1,060,426 835,512
Deferred income taxes 1,853,215 568,737
--------- -------
Total current assets 20,975,584 22,603,103
---------- ----------
Property, plant, and equipment, net 2,262,399 2,518,849
Assets held for sale 2,514,643 2,514,643
Goodwill 3,589,870 3,589,870
Other assets 829,046 662,391
------- -------
Total assets $30,171,542 $31,888,856
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $2,687,469 $2,968,908
Accrued wages, commissions, bonuses
and vacation 1,413,626 1,396,326
Accrued legal settlement 1,500,000 -
Federal and state taxes payable 672,947 616,182
Long-term debt, current portion 221,817 214,254
Other accrued liabilities 788,052 1,032,778
------- ---------
Total current liabilities 7,283,911 6,228,448
Deferred income taxes 310,491 309,942
Long-term debt, net of current
portion 2,418,841 2,530,636
Stockholders' equity:
Common stock - $0.001 par value,
30,000,000 shares authorized,
7,150,683 and 7,654,196 shares
issued; 7,139,899 and 7,341,943
shares outstanding at June 30,
2009 and December 31, 2008,
respectively 7,151 7,654
Additional capital 14,007,099 15,449,223
Retained earnings 6,166,723 8,337,420
Treasury stock, at cost, 10,784 and
312,253 shares at June 30, 2009
and December 31, 2008,
respectively (22,674) (974,467)
-------- ---------
Total stockholders' equity 20,158,299 22,819,830
---------- ----------
Total liabilities and stockholders'
equity $30,171,542 $31,888,856
=========== ===========




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




SOURCE U.S. Home Systems, Inc.

 
Wednesday, August 12, 2009 4:01 PM

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