HOM LifeGoal Home Down Payment Investment ETF

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