U.S. Home Systems, Inc.
), engaged in the business of specialty home improvement products,
recently posted earnings of 11 cents per share in the first quarter
of 2012, beating the Zacks Consensus Estimate of 9 cents and the
year-ago quarter earnings of 8 cents per share. Reported earnings
were also above management's guidance of 9 cents per share. The
strong first quarter results were attributable to record revenues
and new orders.
U.S. Home Systems achieved record revenue of $42.2 million in
the quarter, up 8.3% year over year and also marked the tenth
consecutive quarter of year-over-year growth. The upside in revenue
reflects increased consumer demand and benefits of marketing
initiatives. The company's strategic partner, The Home Depot, also
contributed to the significant increase in sales.
During the quarter, gross profit expanded 8.2% year over year to
$22.5 million while gross margin remained flat year over year at
During the quarter, fixed operating costs, which include branch
operating and general and administrative expenses, plunged 140
basis points as a percentage of revenue to 11.4%, thanks to the
increased leverage from higher revenues.
Operating margin enhanced 90 basis points to 3.3% due to lower
operating expenses as a percentage of revenue.
The company also achieved record new orders, which increased
7.4% from $43.2 million in the prior-year quarter to $46.4 million.
This upside marks the11th consecutive quarter of year-over-year
growth. As of March 31, 2012, the company recorded backlog of
uncompleted orders of $25.3 million versus $24.3 million at March
As of March 31, 2012, U.S. Home Systems had cash and cash
equivalents of $13.2 million versus $13.7 million at December 31,
2011. Shareholders' equity as of March 31, 2012 was $26.7 million
versus $25.5 million as of December 31, 2011.
For second quarter of 2012, management expects revenue to be
$46.5 million and earnings to be 23 cents per share.
Irving, Texas-based U.S. Home Systems will succeed in driving
sales based on its efforts to expand its relationship with The Home
Depot into new avenues. Moreover, to improve its sales, the company
is focusing on store expansion, new product introduction and new
technology development. The company reported better-than-expected
first quarter results; hence we expect estimates to go up in the
coming days. The Zacks Consensus Estimates for 2012 and 2013 are
pegged at 73 cents and 88 cents a share, respectively.
U.S. Home Systems, which competes with
), currently retains a Zacks #3 Rank, which translates into a
short-term Hold rating. We are also maintaining our long-term
Neutral recommendation on the stock.
CABELAS INC (CAB): Free Stock Analysis Report
US HOME SYS INC (USHS): Free Stock Analysis
To read this article on Zacks.com click here.