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il hsoa non andrà in bancarotta
(HSOA will not go bankrupt. :)
Non parlo il pozzo italiano abbastanza all'email
(and I don't speak enough italian to email.)
dare il benvenuto e la fortuna buona!
(But Welcome and good luck!)
or something like that. :)
Salve a tutti spero che qlc qui capisca l'italiano
Sto cercando di capire che diavolo sta succedendo alla bellissima societa' HSOA , che giorno dopo giorno scende
Si parla di bancarotta , e' vero??
Se qlc vuole fare due chiacchiere con me ci possiamo scambiare l'E_MAIL
Thanks, I appreciate the info.
http://investorscob.com/earsforum/index.php?topic=8.0
Ah yes, stocklemon the anonymous website probably written by a spotty student.
WHOIS Underlying Registry Data:
Whois Server Version 1.3
Domain names in the .com and .net domains can now be registered
with many different competing registrars. Go to http://www.internic.net
for detailed information.
Domain Name: CITRONRESEARCH.COM
Registrar: WILD WEST DOMAINS, INC.
Whois Server: whois.wildwestdomains.com
Referral URL: http://www.wildwestdomains.com
Name Server: NS3.WEBCONTROLCENTER.COM
Name Server: NS4.WEBCONTROLCENTER.COM
Status: clientRenewProhibited
Status: clientTransferProhibited
Status: clientUpdateProhibited
Status: clientDeleteProhibited
Updated Date: 20-jul-2007
Creation Date: 21-nov-2006
Expiration Date: 21-nov-2008
My first buy was at 3.06 <bg>.
You are sitting pretty comfortable, imo.
I'm one of the bag holders until I average down. LOL
Interesting, they may have already got the money regarding the $23mil
http://www.investorvillage.com/smbd.asp?mb=4195&pt=msg&mn=57611
LOL- yea, I'm thinking the same. I'm not sitting to bad with average around $3
I thought that originally as well, but then I pulled an intraday chart with 60 minute movement and it looks like we move up and fall back more often then not, lately. Perhaps that is just my perception but I'm going with it for now.
May try to set a lower buy today and see what happens but I need to average down at some point.
Kinda leary about that concept with HSOA for some reason. LOL
Yep- the article was misleading. stocklemon miscontrued the facts (they seem to be good at painting the picture they want folks to see), and Matt just followed on that, imo.
The follow on probably justified his point (even though it was buried in another article), in his mind. Shoddy reporting, imo.
But, that being said. The folks at stocklemon seem to have deep pockets, and coniving friends, so it may take a lot to get them to cover.
Today seems like a good start to get some of the shorts to consider it, eh?
Tim,
I thought I would follow thru on those articles so I sent, via email, HSOA the following paragraph that was in that last article
*** However, lenders have still not approved the resolution of a note payable that relates to the company's purchase of its Fireline subsidiary last year."
and asked whether it was approved yet.
(Because that to me, sound fairly serious. But what do I know? LOL)
The reply I got back was....
The note is related to receipt of the FIGA monies. There is no requirement for consent prior to the intent to issue payment to Brian Marshall out of the FIGA funds collected. The credit facility is in good standing as the company stated in its recent PR.
-- Matt
Is Matt saying the lenders don't have to approve that anyway? And if so, then wouldn't that article be stating false information?
I also looked all over for some type of print on the bloomberg TV report but had no luck. Wish I had seen that myself, but Thanks.
Jen
you watch bloomberg TV?
This is from the HSOA yahoo board, so hard to know how true it is, lol:
Joe from R&R on Bloomberg NOW (2 Ratings) 12-Sep-07 07:38 pm It was a brief segment but here's the summary -
1. Sector is out of favor - mentioned HD and Centex are biggest customers (bad trends with those two)
2. 20M shares short
3. best short argument is around liquidity, quality of revs (A/R)
4. He said they have a 10X interest coverage ratio and that's as good as you see with anyone. I guess that means they're bringing in enough to pay interest on debt 10 times over?
5. HSOA can take on a lot more leverage and should have no problem servicing existing debt
6. Reiterated $9 price target
7. Think they can and will gain additional borrowing capacity
8. The host said they "will follow Home Solutions very carefully now"
more than likely, based on is disclaimer at the end of the article. "Flagged", I think, means short.
Interesting thig- he is only up 9% for the year at the time he wrote that article <bg>.
Nicholas Yulico returned my email and pointed out he had addressed his article with a follow up the next day.
It was hidden at the end of the following article. I skipped the beginning part of the article because it didn't have anything to do with HSOA. The link provides the whole article, I think?
This was on AUG. 17th
Bricks and Mortar
Melco Soothes Credit Concerns (the title of the article where info on hsoa was found on the bottom)
By Nicholas Yulico
TheStreet.com Staff Reporter
8/17/2007 12:51 PM EDT
URL: http://www.thestreet.com/newsanalysis/bricks-and-mortar/10375049.html
Home Solutions Plunges
In other Bricks and Mortar mock portfolio news, Home Solutions of America (HSOA - Cramer's Take - Stockpickr - Rating) shares were sinking 22% Friday to $3.16.
Earlier this week, Home Solutions disclosed a major related-party transaction and warned that it has likely violated certain covenants of a credit facility. It also said the Securities and Exchange Commission and Nasdaq made informal inquiries into the company's public disclosures.
As a reminder, I've been flagging the stock as overvalued since late April. The stock has since fallen 37%. (OH! HE IS SO PROUD OF THAT!)
On Friday, the company said it has not defaulted on its credit line and is still able to borrow under the facility. However, lenders have still not approved the resolution of a note payable that relates to the company's purchase of its Fireline subsidiary last year.
Home Solutions plans to scrap a note payable due to Brian Marshall, who owned Fireline and is now Home Solutions' largest shareholder and a company executive, in exchange for letting Marshall collect certain accounts receivable related to Fireline.
The company said Friday that it is in "advanced discussions with its lenders to receive a waiver." If the lenders do not consent to the agreement, then the company will seek to restructure the lending pact in order to comply with the covenants.
"We have an excellent relationship with our lenders and are confident that we will reach a speedy resolution," said Frank Fradella, Chairman and CEO of Home Solutions, in the statement. "However, if we are unable to, we would restructure Marshall's agreement to avoid an event occurring which could trigger a default."
The company also said it is conducting an independent review of all related-party transactions, such as the ones with Marshall. Home Solutions' quarterly report this week revealed that one of its $100 million contracts was with a company that is 50% owned by Marshall.
***So with that said...It still indicates there is much more we need to know about HSOA and the first thing we need to know is the status of the approval of the resolution of a note payable that relates to the company's purchase of its Fireline subsidiary last year. Guess I need to email the company on that one.
Shorts are normally here for a reason. It obviously needs resolution before they would consider covering. That also is our catalyst should a PR be put out regarding that resolution.
Shorts would have to cover and I think that may mean N. Yulico, our author, as well? :)
Jen
TM,
Interesting conversation from them. Not real giving are they? Sorry I can't respond to the PM. Not a paying customer here at IHUB and have limited benefits. Email (on profile) me anytime about HSOA.
J
I just emailed the author. with the following...
Great article. The day after it came out HSOA addressed the note payable and has also updated news on the contract.
Why haven't you done a new article in response to this new information?
http://money.aol.com/news/articles/_a/home-solutions-of-america-updates-note/n20070817093309990010
( Side note for this board...I would like to know why this isn't kept fair and balanced. If there are still issues...address them via articles. More power to the media!I'm all for honesty. But If they (HSOA)have found a remedy to a problem then state it as well. Keep it fair. Keep it honest.)
2nd article. Which came a day later and still has not been addressed by the author of the original article
Home Solutions of America Updates Note Settlement Status
BUSINESS WIRE
Posted: 2007-08-17 09:33:04
DALLAS--(BUSINESS WIRE)----Home Solutions of America, Inc. (Nasdaq:HSOA) (the "Company" or "Home Solutions"), a provider of restoration, construction and interior services to commercial and residential customers, updated shareholders today regarding the settlement status of its $21.65 million note (the "Note") and credit agreement. There is no Event of Default as a result of the Company entering into the Note agreement with Brian Marshall, a director and the Executive Vice President of the Company, and the Company is able to borrow under its credit facility.
The Company entered into an agreement (the "Agreement") with Marshall, which resolved the Note which was issued to Mr. Marshall in partial consideration for the Company's acquisition (the "Acquisition") of the capital stock of Fireline Restoration, Inc. ("Fireline"). The Agreement was modified from the previous agreement in principle, after discussions with the Company's lenders, to make it more favorable to the Company and the lenders. Under the Agreement, Home Solutions receives the first $9 million of net proceeds collected from receivables that were assumed by the Florida Insurance Guarantee Association ("FIGA), an entity created by the Florida legislature to handle claims of insolvent property and casualty companies. Under the previous agreement, Mr. Marshall and the Company were to share equally in the first $14 million of net proceeds collected from FIGA.
The Company recognizes that lender consent is required before any funds are transferred to Mr. Marshall. However, no proceeds have been collected from FIGA subsequent to the signing of the Agreement, and no payments have been made to Mr. Marshall under the Agreement. It is currently in advanced discussions with its lenders to receive a waiver, which will enable it to make payments to Mr. Marshall if the receivables are collected. In the event that the lenders do not consent to the agreement, Mr. Marshall and the Company intend to restructure the agreement in order to comply with the covenants contained in its credit agreement.
"We have an excellent relationship with our lenders and are confident that we will reach a speedy resolution," said Frank Fradella, Chairman and CEO of Home Solutions. "However, if we are unable to, we would restructure Marshall's agreement to avoid an event occurring which could trigger a default."
The Company also noted that its Audit Committee is conducting an independent review of all related party transactions. The Company's management believes that these transactions were entered into on terms that were comparable to what unrelated third parties transacting similar business with the Company would have received.
About Home Solutions of America, Inc.
Home Solutions of America, Inc. is a provider of restoration, construction and interior services to commercial and residential customers. Its Fireline subsidiary is involved in providing construction services, rebuilding, catastrophic storm response and contents restoration for commercial, industrial and residential properties. Based in Tampa, Fireline is certified in multiple aspects of the restoration industry, including smoke, fire, water and mold. The Company has operations in California, Texas, Florida, Alabama, Georgia, Louisiana, Mississippi and North Carolina. Home Solutions Restoration of Louisiana, Inc., which does business as Associated Contractors ("Associated"), is a Louisiana based commercial, industrial and residential contractor working in the governmental and private arenas. Associated has been one of the larger players in redeveloping public schools in the aftermath of Hurricane Katrina. Its clients include the State of Louisiana, the City of New Orleans, the Louisiana National Guard, the historic French Market, Louis Armstrong International Airport and the N.A.S.A. Stennis Space Center in Mississippi. For additional information, please visit the Company's Web site at http://www.hsoacorp.com.
old article #1
Homebuilders/Construction
Home Solutions Reveals Ugly Details
By Nicholas Yulico
TheStreet.com Staff Reporter
8/16/2007 3:24 PM EDT
URL: http://www.thestreet.com/newsanalysis/homebuildersconstruction/10374797.html
Editor's note: "Bricks and Mortar" is a series of columns written by real estate reporter Nicholas Yulico meant to help TheStreet.com readers generate real estate and gaming-related stock ideas.
The situation is getting worse at Home Solutions of America (HSOA) .
The small-cap construction firm's shares were tumbling 11% Thursday after the company filed a delayed quarterly report that contains numerous ugly details. Among the issues raised were potential liquidity problems, new related-party transactions and an informal inquiry by the Securities and Exchange Commission.
For my Bricks and Mortar mock portfolio, I've flagged the stock as overvalued since April, when it traded near $5. The shares recently were down 52 cents to $4.18, and they earlier hit an intraday 52-week low of $4.03.
I originally flagged the stock because I felt Home Solutions' future earnings growth potential was cloudy, since the company was transitioning from a business model that relied on high-margin hurricane cleanup work to lower-margin construction management work. That thesis remains intact.
The latest developments, however, point to larger management credibility issues and worries of a cash crunch at the company.
Home Solutions said in its filing that it has likely violated covenants of its credit facility, since the lenders have yet to give approval for its plans to resolve a note payable related to its purchase of the disaster-recovery firm Fireline Restoration last year.
If the covenants have been violated, lenders may call the loan into default and foreclose on the assets of the company, Home Solutions said in its filing.
The banks that supplied the credit line did not return calls seeking comment.
Home Solutions also admitted it has faced informal inquiries from the SEC and Nasdaq that are related to certain public disclosures in recent months.
Although the specific disclosures weren't mentioned, they likely involve the two "record" $100 million contracts that Home Solutions issued press releases on in recent months. Home Solutions has given barely any details on the two contracts, which are a huge piece of the company's future growth prospects.
One contract was for a series of projects in New York City, where there recently were no building permits in place for two of the three jobs.
The other contract was for a large project in Tampa, Fla., that the Tampa Business Journal has been unable to locate.
In its latest filing, Home Solutions revealed that the Tampa deal is being done with a real estate development firm that is 50% owned by Brian Marshall, who heads the Fireline division and is Home Solutions' largest shareholder, owning 4.1 million shares of the company.
Just last week, Marshall told investors on the Home Solutions' earnings call that a nondisclosure agreement for the Tampa deal prevented the company from providing additional details on the project.
There continue to be question marks surrounding how much of the company's accounts receivables -- which continue to balloon each quarter -- will actually be collected. Many of these receivables relate to a now-bankrupt Florida insurance carrier that supplied insurance to two of Fireline's significant customers.
The company's cash position fell to $4.6 million at the end of the quarter, from $5.5 million in the first quarter and $8.7 million at the end of last year.
Operating cash flow was once again negative, with $13.5 million used in the quarter. The company continues to rely on debt financing to fund its operations.
Home Solutions now owes $27 million on its credit line. That means that if the company does lose its credit facility, investors are in for a nasty ride ahead.
Another source of cash for the company would be the collection of the Florida insurance receivables. Home Solutions says it expects to collect $30 million to $49 million of receivables tied to the matter, but it said such collection cannot be guaranteed.
The first $9 million of those proceeds would go to Home Solutions. The next $21.7 million of receivables would go to Marshall as part of an agreement Home Solutions signed to rid itself of a $21.7 million note payable to Marshall. Any receivables above that $30.7 million go to Home Solutions.
Of course, this agreement depends on the approval of lenders, which have yet to sign off on that agreement. Given the mountain of questions surrounding Home Solutions, investors are better off not hanging around waiting for the lender approvals.
Buying a company's stock shouldn't involve this much headache and questions concerning management's credibility.
Thanks. That's what I am hoping for is a short squeeze.
I'm going to post two articles that I believe have something to do with all this. The first is pretty nasty. The second repairs it a bit. They are both older. See the following posts.
Lower bollie is at 2.32, fwiw. Money flow improving, and the stock is way oversold, imo.
Should see a bounce to at least the 20 average of 3.30ish- of course, if it does start bouncing, the large short position may start covering to lock in profits, and make the one heck of a ride <bg>. A break over $4 would propel that, imo (that is 50 average, and upper bollie).
okay. How low is this baby going before we find some sort of support? Just enough to get a pop and get the hell outta it? :)
It's the only stock in my portfolio making a fool of me!
Any chart lovers out there that can give me a number to add at before I lose my mind and take an undue loss?
Sure, they are probably full of BS but maybe they aren't? If not then we are oversold in a big way and due a bounce.
interesting. Thanks
date of gap was 8/30/05 to 8/31/05
Takes a three year interactive chart to see
J
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It will be interesting to see if you hear anything back.
Sent this off to the SEC:
Sir/ Ma'am,
Please look into the activity regarding Home Solutions Of America (HSOA) stock.
Seems that short sellers are talking about having an insiders providing information
This is part of a public message:
"But people who really buy the shares are actually helping the shorts to short more because short sellers know very well what is going on with the company as they have their people in very important places so to speak. "
http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_H/threadview?m=tm&bn=25547&tid=....
This is the profile of the poster:
http://profiles.yahoo.com/maarrb2001
There are several others that seem to be in collusion, so I hope you can take a look into this matter, to ensure they stock is reacting in acordance with regulations.
http://messages.finance.yahoo.com/mb/HSOA
As you can see, the stock has been on the SHO list for some time (99 days now):
http://www.nasdaqtrader.com/aspx/regsho.aspx
http://www.buyins.net/tools/short_list.php?dys=%3E12
Thank you
Home Solutions of America Updates New York Projects
Thursday , September 06, 2007 13:06ET
DALLAS, Sep 06, 2007 (BUSINESS WIRE) -- Home Solutions of America, Inc. (Nasdaq: HSOA, the "Company" or "Home Solutions"), a provider of restoration, construction and interior services to commercial and residential customers, provided an update on the transactions that its Fireline Restoration, Inc. subsidiary ("Fireline") announced on May 18, 2007 in connection with entering into a joint venture agreement with Blue Diamond Group, Corp. ("Blue Diamond Group"), a New York-based construction management firm. The joint venture, Blue Diamond Ventures, LLC ("Blue Diamond Ventures"), intends to develop and construct approximately 339 residential condominiums and approximately 160,000 square feet of mixed use retail space located in the boroughs of Brooklyn, Manhattan and Queens, New York. The aggregate revenue to Fireline under the joint venture is expected to exceed $100 million. Fireline is expected to complete and recognize revenue of approximately $12 million in work by virtue of its ownership in the joint venture this calendar year.
Construction on the first project, N6th Street, is currently underway. This project includes ground up development of 44 residential condominiums located in Brooklyn at 142 N6th Street. The construction contract for this project between the owner of the property and Blue Diamond Ventures, is expected to generate $15.6 million in construction services revenue to Fireline during the life of the project. Work currently underway at the property includes excavation and foundation work.
The second Blue Diamond Ventures project, located in Queens, New York, involves the joint venture providing manager/contractor services for the project. The proposed project will be located on approximately a two-acre parcel and under current plans will involve the construction of a 350,000 square foot mixed use development that is expected to generate a minimum of approximately $85 million in revenue to Fireline's interest Development work under the project began during the 2007 third quarter and initially includes pre-construction and development services. Blue Diamond Ventures is in the process of obtaining the necessary zoning and engineering approvals and pursuing other pre-construction activities. The project is expected to be completed between the 2009 fourth quarter and the 2010 third quarter. The project is subject to certain conditions including, but not limited to, zoning and financing and other conditions customary in for projects of this nature.
The third Blue Diamond Ventures project is located on the Upper East Side of Manhattan and is anticipated to generate revenue to Fireline's interest of approximately $38 million. Blue Diamond Ventures is currently in advanced stages of negotiations with the project owner and is expected to provide construction management services, including new construction of a 20-story mixed-use building. The joint venture has secured a bonding commitment letter for the availability of $40 million bonding capacity to cover the work that would be performed on this project. Work is expected to commence during the fourth quarter of 2007 and be completed during the winter of 2008. The project is subject to certain conditions including, but not limited to, the issuance of the final bond and finalization of the contracts related to work to be performed and other conditions customary for projects of this nature.
"Since announcing the joint venture in mid-May, we are pleased by the progress we have made in advancing many of the tasks required during the early stages of large construction projects," said Brian Marshall, President of the Company's Restoration and Construction Services Division. "Construction has resumed on the property in Brooklyn, and our joint venture with Blue Diamond has made progress in zoning, engineering and site work in Queens. Although Fireline has not completed projects of this size in New York, as a private company it completed a condominium project of over 1,500 units and four clubhouses, another condo community of 246 units and clubhouse, as well as several other condominium and commercial projects. Rick Holowchak, the President of Blue Diamond, has extensive development and construction experience in both commercial and residential properties in the tri-State New York area, giving us the experience and confidence to complete these significant projects in the New York market."
Completion of these projects is subject to certain conditions including, but not limited to zoning, financing, bonding, permitting, contracts relating to work to be performed and other conditions customary for projects of this nature.
The Company expects to hold a conference call to update investors on these projects and other corporate developments on Thursday, September 20th. Details on the conference call will be provided at a later date.
Home Solutions of America Subsidiary Selected For $12 Million in New Orleans Infrastructure Projects
Monday , August 27, 2007 10:21ET
DALLAS, Aug 27, 2007 (BUSINESS WIRE) -- Home Solutions of America, Inc. (NASDAQ: HSOA, the "Company" or "Home Solutions"), a provider of restoration, construction and interior services to commercial and residential customers, announced today that its Home Solutions Restoration of Louisiana, Inc. subsidiary ("HSRLA") has in July and August been awarded new construction projects in New Orleans and the surrounding areas expected to generate revenue of approximately $12 million. The projects are in addition to the Company's previously announced Restoration and Construction Services Division backlog announced on August 9, 2007.
The projects recently awarded include four kitchen renovations for the New Orleans Public School System, renovations at the New Orleans Armstrong International Airport, construction of a new Veterans Administration Pharmacy, renovations on the Soulet Apartments, a Canal Street condominium build-out project, repairs to St. Paul the Apostle Elementary School, renovations to the Slidell Housing Authority Building, and renovations to the Salvador Liberto Jefferson Parish Office Building.
"These new contract awards, and the significant increase in work this year in New Orleans, reflect the increasing activity surrounding the rebuilding of Louisiana and the surrounding areas," said Scott Sewell, Chairman of HSRLA. "While the Company has diversified its business through its participation in large new multi-use construction projects so that it is no longer reliant on money flowing to the Gulf Coast for rebuilding efforts, Louisiana and the nearby areas still represent significant long-term potential for growth. Construction and renovations in the region are still just ramping up and should represent continued growth opportunities."
About Home Solutions of America, Inc.
Home Solutions of America, Inc. is a provider of restoration, construction and interior services to commercial and residential customers. Its Fireline subsidiary is involved in providing construction services, rebuilding, catastrophic storm response and contents restoration for commercial, industrial and residential properties. Based in Tampa, Fireline is certified in multiple aspects of the restoration industry, including smoke, fire, water and mold. The Company has operations in California, Texas, Florida, Alabama, Georgia, Louisiana, Mississippi, North Carolina , New York and Washington. Home Solutions Restoration of Louisiana, Inc., which also does business as Associated Contractors ("Associated"), is a Louisiana based commercial, industrial and residential contractor working in the governmental and private arenas. Associated has been one of the larger players in redeveloping public schools in the aftermath of Hurricane Katrina. Its clients include the State of Louisiana, the City of New Orleans, the Louisiana National Guard, the historic French Market and Louis Armstrong International Airport. For additional information, please visit the Company's Web site at http://www.hsoacorp.com.
Cautionary Notice
This press release contains forward-looking statements made in reliance upon the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The statements contained herein which are not historical facts are considered forward-looking statements under federal securities laws. Such forward-looking statements are based on the beliefs of the Company's management as well as assumptions made by and information currently available to them. The Company has no obligation to update such forward-looking statements. Actual results may vary significantly from these forward-looking statements based on a variety of factors. These risks and uncertainties include, but are not limited to, the Company's future financial performance, business prospects, ability to win new contracts, the performance under existing contracts, the timing of completion of projects, ability to secure bonding, ability to secure labor in markets where it does not have a labor force, performance of subcontractors, delays related to weather, ability of government entities to fund certain projects and the ability to collect accounts receivable. In addition, there can be no assurance that the actions taken or to be taken by the Company as described herein will result in increased revenues. Other important factors are described in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2006 in the section entitled "Risk Factors" and in the Company's other filings with the SEC.
SOURCE: Home Solutions of America, Inc.
Home Solutions of America, Inc., Dallas
Matt Kreps, 214-623-8486
Copyright Business Wire 2007
**********************************************************************
As of Thursday, 08-23-2007 23:59, the latest Comtex SmarTrend® Alert,
an automated pattern recognition system, indicated an UPTREND on
06-07-2006 for HOM @ $14.99.
As of Thursday, 08-23-2007 23:59, the latest Comtex SmarTrend Alert,
an automated pattern recognition system, indicated a DOWNTREND on
06-15-2007 for HSOA @ $5.99.
For more information on SmarTrend, contact your market data
provider or go to www.mysmartrend.com
SmarTrend is a registered trademark of Comtex News Network, Inc.
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One other thing...as far as gaps go, and I am a strong believer in fills even years after..I just pulled a three year daily and found...
8/30/05 closed at 2.74
8/31/05 opened at 2.82
My theory has always been...If we are down there anyway (near an open gap) Might as well finish the job and fill it.
Guess I will wait to add and see if that 2.74 fills unless you have another suggestion.
Hockmir...good DD on your earlier post questioning if "this" could be the contract.
Do you have a "low" pps expectation for me because I'm not seeing a thing on a chart except that we were at $2.81 in 05 and next step down if this is broken is $1.96.
On a positive note...We have touched close enough to that 05 low and have pulled outta there for the time being so maybe this drop like a rock action is almost done?
What are we looking at here?
Jen
PR Released About Tampa Project
DALLAS--(BUSINESS WIRE)--Home Solutions of America, Inc. (Nasdaq: HSOA, the "Company" or "Home Solutions"), a provider of restoration, construction and interior services to commercial and residential customers, provided an update on the contract that its Fireline Restoration, Inc. subsidiary ("Fireline") announced on May 31, 2007, when it disclosed that it had been awarded a contract to provide construction management, general contracting and development services for a 635,000 plus square foot retail center and corporate office site located in Hillsborough County, Florida (the "Project"). Fireline has been engaged by South Shore Ventures, LLC ("South Shore Ventures") to develop the Project. Fireline anticipates recognizing approximately $100 million in revenue over the course of the Project's development, anticipated to take 30 to 48 months to complete. The Company expects to begin to recognize revenue during the 2007 third quarter. The Project is located at Highway 41, in Apollo Beach, Florida, directly across from Mirabay Village, a high-end subdivision complex of 1,700 units which is being developed by a leading national developer.
Fireline has retained Genesis Civil Engineering to assist in providing South Shore Ventures with the civil engineering design in connection with the permitting process. In addition to construction services, Fireline will provide various services which are typical during the development phase of the Project. South Shore Ventures has advised the Company that it recently commenced marketing activities relating to the Project. South Shore Ventures has already received zoning approval for the Project, which approval includes a 300,000 square foot retail location and 335,000 square feet planned for business, professional and light industrial purposes. Civil permitting for the Project is underway.
South Shore Ventures, which is owned by Commercial Capital Ventures, LLC ("Capital Ventures"), has a binding agreement to purchase the land underlying the Project. Capital Ventures is 50% owned by an entity that Brian Marshall, a director and the Executive Vice President of the Company, owns a 50% interest (effectively a 25% interest in South Shore Ventures) in, and 50% by unrelated third parties. In addition to its proximity to Mirabay Village, the Project is located adjacent to Waterset, a 4,500 unit complex under development, which is part of the estimated $400-million waterfront community being developed in the Apollo Beach area, approximately 20 minutes from downtown Tampa. To view an artist's rendering of the project, click here: http://www.firelinerestoration.com/content/5940-001-BASE4.pdf
The Company expects to provide an update on the New York projects within the next two weeks, and to hold a conference call for the investment community during the third quarter to further discuss both the Tampa and New York projects.
News release this morning about new teaming arrangement with AshBritt
Subsidiary of Home Solutions of America Enters into Teaming Agreement with Leading Environmental Company
Tuesday August 21, 8:30 am ET
Fireline to Join With AshBritt To Provide First Responder Services
DALLAS--(BUSINESS WIRE)--Home Solutions of America, Inc. (NASDAQ: HSOA - News; the "Company" or "Home Solutions"), a provider of restoration, construction and interior services to commercial and residential customers, announced today that its Fireline Restoration, Inc. subsidiary ("Fireline") has entered into a teaming agreement for disaster and recovery services with AshBritt, a leading provider of environmental services based in Pompano Beach, Florida. AshBritt's clients include numerous counties and cities around the country, and among its past jobs is the cleanup and recovery from several hurricanes and tornados. AshBritt has "first responder" contracts throughout the Gulf Coast and has the potential to provide similar services in the Caribbean in connection with Hurricane Dean and other future storm-related activity. Under the agreement, Fireline is expected to support AshBritt's "first responder" services by providing pre-positioned infrastructure restoration services while AshBritt will be responsible for debris removal, demolition operations and logistical support. AshBritt currently has pre-positioned contracts throughout the United States with communities that are predisposed to disaster events in any form (hurricanes, tornados, ice storms) which may benefit from securing a contract for response and recovery services prior to an actual event. "We selected Fireline because of its proven and reliable labor force," said Randy Perkins, AshBritt's CEO. "Through this agreement, we will be able to offer restoration services in addition to immediate first responder services, such as the hauling of debris. With clients located throughout the country, it was important to us to find a contractor that has a reliable pool of labor and could respond quickly."
"Home Solutions has worked hard to diversify its business, so it is no longer highly dependent on catastrophic events," said Brian Marshall, President of the Company's Restoration and Construction Services Division. "However, we believe it is important to be prepared in the event that we are called upon to respond to storm-related damages. We are pleased that AshBritt, which has a national reputation for providing first responder services in catastrophic events, has selected Fireline."
AshBritt is a 12-year-old environmental services company providing engineering, construction management, operations/privatization, and other related services. AshBritt is organized in four divisions: disaster recovery services, solid waste services, engineering services, and special environmental services. The company sees six potential hazards that may result in destruction - hurricanes, tornados, floods, wildfires, ice storms, and terrorist activities. AshBritt prepares itself to deal with the damage caused by these events. It also provides non-hazardous waste collection throughout the United States. Among AshBritt's clients are numerous counties and cities around the country, and among its past jobs is the cleanup and recovery from several hurricanes and tornados. Further information is available at www.ashbritt.com.
I think the PR they released this morning may set some of your concerns aside for the time being. They specifically address the default issue.
I think that the issues you raise are not at the top of the list for things to be concerned about at this time.
Aug 17 (Reuters) - Home Solutions of America Inc. (HSOA.O: Quote, Profile, Research) said it was seeking lender consent to make payments to Brian Marshall, a director and executive vice president, as part of a deal related to the Fireline Restoration seller note.
If the company did not get their consent, it would restructure Marshall's agreement to avoid triggering of a default, the company said in a statement.
However, there is no default due to entering into a deal with Marshall and the company is able to borrow under its credit facility, the provider of recovery and restoration services said.
One more thing - The loan to Brian for the Fireline purchase is subordinate to the credit line which is secured by receivables and equipment. Why would the syndicate of banks agree to surrender their first collateral right? What's Brian going to do - he can sue for non-payment, but that is similar to a class action lawsuit since he is a shareholder. If the banks do not consent, then HSOA probably would be in default for conveying an interest in the collateral without lender consent
Even if this the project in Tampa - I'd be worried about it coming to pass. While it may be different in the Tampa area, the condo market in Florida is very soft and that is being kind. From what my brother who is involved in FL real estate indicates, this softness is starting to affect the views on new construction in other areas such as retail.
I disagree. It has already been clearly stated in the CC that there is a Non-disclosure agreement in place which precludes the release of significant detail on the project.
However, all of the details about this project fit the announced contract, including usage and square footage. Also, if you do a bit of DD yourself, which, I know from your postings on other message boards you encourage people to do for themselves, you will find that the company mentioned in the news article is connected to HSOA behind the scenes.
That's a good question. Why exactly do people have to post messages guessing about where HSOA major projects are? If they exist, why just give the details? So far, the reason is always the same, because the details make HSOA look very bad indeed.
Is this the Tampa Bay contract that folks keep saying doesn't exist?
http://www.sptimes.com/2007/01/05/Brandontimes/Proposal_would_mean_c.shtml
HSOA (close $4.05, last $3.80)
Here's an interesting article:
Home Solutions Reveals Ugly Details
By Nicholas Yulico
TheStreet.com Staff Reporter
8/16/2007 3:24 PM EDT
URL: http://www.thestreet.com/newsanalysis/homebuildersconstruction/10374797.html
Editor's note: "Bricks and Mortar" is a series of columns written by real estate reporter Nicholas Yulico meant to help TheStreet.com readers generate real estate and gaming-related stock ideas.
The situation is getting worse at Home Solutions of America (HSOA) .
The small-cap construction firm's shares were tumbling 11% Thursday after the company filed a delayed quarterly report that contains numerous ugly details. Among the issues raised were potential liquidity problems, new related-party transactions and an informal inquiry by the Securities and Exchange Commission.
For my Bricks and Mortar mock portfolio, I've flagged the stock as overvalued since April, when it traded near $5. The shares recently were down 52 cents to $4.18, and they earlier hit an intraday 52-week low of $4.03.
I originally flagged the stock because I felt Home Solutions' future earnings growth potential was cloudy, since the company was transitioning from a business model that relied on high-margin hurricane cleanup work to lower-margin construction management work. That thesis remains intact.
The latest developments, however, point to larger management credibility issues and worries of a cash crunch at the company.
Home Solutions said in its filing that it has likely violated covenants of its credit facility, since the lenders have yet to give approval for its plans to resolve a note payable related to its purchase of the disaster-recovery firm Fireline Restoration last year.
If the covenants have been violated, lenders may call the loan into default and foreclose on the assets of the company, Home Solutions said in its filing.
The banks that supplied the credit line did not return calls seeking comment.
Home Solutions also admitted it has faced informal inquiries from the SEC and Nasdaq that are related to certain public disclosures in recent months.
Although the specific disclosures weren't mentioned, they likely involve the two "record" $100 million contracts that Home Solutions issued press releases on in recent months. Home Solutions has given barely any details on the two contracts, which are a huge piece of the company's future growth prospects.
One contract was for a series of projects in New York City, where there recently were no building permits in place for two of the three jobs.
The other contract was for a large project in Tampa, Fla., that the Tampa Business Journal has been unable to locate.
In its latest filing, Home Solutions revealed that the Tampa deal is being done with a real estate development firm that is 50% owned by Brian Marshall, who heads the Fireline division and is Home Solutions' largest shareholder, owning 4.1 million shares of the company.
Just last week, Marshall told investors on the Home Solutions' earnings call that a nondisclosure agreement for the Tampa deal prevented the company from providing additional details on the project.
There continue to be question marks surrounding how much of the company's accounts receivables -- which continue to balloon each quarter -- will actually be collected. Many of these receivables relate to a now-bankrupt Florida insurance carrier that supplied insurance to two of Fireline's significant customers.
The company's cash position fell to $4.6 million at the end of the quarter, from $5.5 million in the first quarter and $8.7 million at the end of last year.
Operating cash flow was once again negative, with $13.5 million used in the quarter. The company continues to rely on debt financing to fund its operations.
Home Solutions now owes $27 million on its credit line. That means that if the company does lose its credit facility, investors are in for a nasty ride ahead.
Another source of cash for the company would be the collection of the Florida insurance receivables. Home Solutions says it expects to collect $30 million to $49 million of receivables tied to the matter, but it said such collection cannot be guaranteed.
The first $9 million of those proceeds would go to Home Solutions. The next $21.7 million of receivables would go to Marshall as part of an agreement Home Solutions signed to rid itself of a $21.7 million note payable to Marshall. Any receivables above that $30.7 million go to Home Solutions.
Of course, this agreement depends on the approval of lenders, which have yet to sign off on that agreement. Given the mountain of questions surrounding Home Solutions, investors are better off not hanging around waiting for the lender approvals.
Buying a company's stock shouldn't involve this much headache and questions concerning management's credibility.
And it looks like there just might be a 'cane developing out off the coast of Africa right now. We'll see in a few days.
Greetings, been lurking here since June, bought in on the downturn. This stock is HEAVILY manipulated, I should have done more DD before entering my small position. Nonetheless, I believe it has tremendous upside potential and this heavy short interest can't last forever. A hurricane or two wouldn't hurt either =)
Here's the link to the 2Q AH release...
http://biz.yahoo.com/bw/070809/20070809006090.html?.v=1
Flatsixer
Home Solutions of America Announces Record Second Quarter Results
Thursday , August 09, 2007 16:17ET
DALLAS, Aug 09, 2007 (BUSINESS WIRE) -- Home Solutions of America, Inc. (Nasdaq:HSOA) (the "Company" or "Home Solutions"), a provider of restoration, construction and interior services to commercial and residential customers, announced today results for the second quarter ended June 30, 2007. The Company reported record 2007 second quarter revenue of $51.0 million, an increase of 111% compared to revenue of $24.2 million in the second quarter of 2006. The Company previously provided 2007 second quarter guidance for revenue of $44 to $48 million.
The Company had 2007 second quarter net income from continuing operations of $7.4 million, or $0.15 per diluted share, an increase of 111% compared to $3.5 million, or $0.09 per diluted share in the same period a year earlier. The Company reported record net income of $7.4 million or $0.15 per diluted share, compared to $4.5 million or $0.11 per diluted share in the fiscal 2006 second quarter. Home Solutions recognized a net gain of $975,000, or $0.02 per diluted share in fiscal 2006 from the sale of discontinued operations. The Company previously provided for net income of $0.14 to $0.17 per diluted share. The fiscal 2007 second quarter results were impacted by legal and accounting costs of approximately $470,000 due to transaction work and expanded compliance activities. In addition, in connection with the Company expanding its Sarbanes-Oxley compliance activities and as a result of the rollout of Timberline, a new Enterprise Resource Planning System designed to centralize all of the reporting functions, the Company incurred professional and accounting fees of approximately $250,000.
The second quarter sales increase was due to the acquisition of Fireline effective July 1, 2006 and strength in the Company's Restoration and Construction Services Division, due to geographic expansion, partially offset by weakness in Home Solutions' Interior Products and Manufacturing Division due primarily to a decrease in cabinet and countertop sales as new construction in the Florida market experienced a decrease from 2006. Overall gross margin decreased slightly to 46.6% compared to 47.1% in the second quarter of fiscal 2006, due to a shift in the Company's mix of business from higher margin reconstruction services in the second quarter of 2006, to a combination of reconstruction and general construction services, which traditionally are lower margin, in the second quarter of 2007. For the second quarter of 2007, the Company recognized expense of $310,000 under SFAS No. 123R compared to $144,000 in the year-earlier period. The Company's effective tax rate for the second quarter of fiscal 2007 was 37.9% compared to 37.8% in the year-earlier period.
Revenue from the Restoration and Construction Services Division was $45.3 million for the second quarter of 2007, compared to $15.0 million in the year-earlier period, due to the acquisition of Fireline and geographic expansion of this division. Revenue from the Interior Services Division was $5.6 million, versus $9.2 million in the year-earlier period due primarily to the downturn in the housing sector.
For the six months ended June 30, 2007, Home Solutions had revenue of $90.0 million compared to $43.4 million in the year earlier six months. The Company had net income of $13.1 million, or $0.27 per diluted share, compared to $7.6 million, or $0.19 per diluted share in the year-earlier period. The 2006 six month results include a gain of $1.7 million, or $0.04 per diluted share from discontinued operations.
The Company also announced that it had received approval from its independent directors of the terms of an agreement in principle that was announced yesterday, with Brian Marshall, a director and the Executive Vice President of the Company, which will resolve the $21.65 million note (the "Note") which was issued to Mr. Marshall in partial consideration for the Company's acquisition (the "Acquisition") of the capital stock of Fireline Restoration, Inc. ("Fireline"). Under the Agreement, the Company would agree to allocate an amount of future collections from certain unpaid Fireline receivables approximately equal in value to the outstanding $21.65 million principal amount of the Fireline Note. The obligations for the receivables were assumed by the Florida Insurance Guarantee Association ("FIGA), an entity created by the Florida legislature to handle claims of insolvent property and casualty companies.
Under the Agreement, Home Solutions and Mr. Marshall will share equally in the first $14 million of net proceeds collected from FIGA. Mr. Marshall will receive the next $14.65 million in net proceeds, and any remaining balance will be split between Mr. Marshall and Home Solutions with Home Solutions receiving 60% of the balance and Mr. Marshall receiving 40% of the balance.
Although the parties have reached an agreement in principle, the agreement is subject to the approval of the Company's lender. The Company is diligently working with its lender to obtain approval; however, there is no guaranty that the approval will be obtained and the transaction will be closed.
As such, the Company intends to file an extension for its 10-Q submission and has not attached a balance sheet to this announcement. Once discussion with the Company's lenders is concluded the Company will file its 10-Q with a complete balance sheet update.
"We are pleased to report strong revenue growth reflecting our transition to a construction services company, with a more predictable revenue base," said Frank J. Fradella, Chairman and CEO of Home Solutions. "The growth in this business reflects some of the investments we made in opening new offices in the fourth quarter of 2006 to support geographic expansion. In addition, Associated Contractors continues to win infrastructure projects in New Orleans as we capitalize on rebuilding opportunities in the region. However, due to our diversification efforts, we are no longer reliant on disaster-related work to meet our growth objectives, as demonstrated by the vast majority of our business coming from areas beyond Louisiana and the surrounding areas. Our growth and future opportunities required us to invest significant resources during the second quarter to improve internal controls and reporting systems and enhance corporate governance. We believe that the steps we are taking, although significantly increasing SG&A, will allow us to better manage our business and increase investor confidence, as we intend to pursue many of the large construction services opportunities in the future. The settlement of the Note issued in connection with the acquisition of Fireline will increase our financial flexibility. In addition, the shift in the mix of our business from restoration work, which is primarily performed for insurance companies, to construction services, which has a broader customer base including private customers, should allow us to receive faster payment on our receivables."
Business Outlook:
Historically the Company has had its strongest quarters in the second half of the year. Due to the changing business mix, the Company anticipates a slight decrease in operating margins compared to the second quarter. The company currently has approximately $332 million in backlog, of which the Company anticipates not less than approximately $80 million being executed in the second half. The Company currently has in excess of $1 billion of bid opportunities that it continues to pursue. This backlog excludes any revenue to be generated from its Interior Services Division.
Conference Call
The Company will hold a conference call that will take place today at 4:30 p.m. eastern time. Interested participants should call 888-578-6632 within the United States or 719-955-1564 internationally. Please use passcode 4897627. A playback of the conference will be available two hours after the completion of the call. To listen to the playback, please call 888-203-1112 within the United States or 719-457-0820 internationally. Please use passcode 4897627. The call will also be webcast and will be available on the Company's web site at www.hsoacorp.com in the Investor Relations section under Presentations.
About Home Solutions of America, Inc.
Home Solutions of America, Inc. is a provider of restoration, construction and interior services to commercial and residential customers. Its Fireline subsidiary is involved in providing construction services, rebuilding, catastrophic storm response and contents restoration for commercial, industrial and residential properties. Based in Tampa, Fireline is certified in multiple aspects of the restoration industry, including smoke, fire, water and mold. The Company has operations in California, Texas, Florida, Alabama, Georgia, Louisiana, Mississippi and North Carolina. Home Solutions Restoration of Louisiana, Inc., which does business as Associated Contractors ("Associated"), is a Louisiana based commercial, industrial and residential contractor working in the governmental and private arenas. Associated has been one of the larger players in redeveloping public schools in the aftermath of Hurricane Katrina. Its clients include the State of Louisiana, the City of New Orleans, the Louisiana National Guard, the historic French Market, Louis Armstrong International Airport and the N.A.S.A. Stennis Space Center in Mississippi. For additional information, please visit the Company's Web site at http://www.hsoacorp.com.
To sign up for investor email alerts please visit: http://www.b2i.us/irpass.asp?BzID=1448&to=ea&s=0.
Cautionary Notice
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, contracts to be performed, and new opportunities associated with the anticipated rebuilding of the New Orleans area, 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.
Home Solutions of America, Inc.
Condensed Consolidated Statements of Income
(Dollars and shares in thousands)
(unaudited)
Three months ended Six months ended
June 30, June 30,
2007 2006 2007 2006
---------- -------- -------- --------
Net sales $50,960 $24,154 $90,045 $43,433
Costs and expenses:
Cost of sales 27,213 12,781 46,573 22,112
Selling, general and
administrative expenses 10,482 5,471 19,712 11,420
---------- -------- -------- --------
37,695 18,252 66,285 33,532
---------- -------- -------- --------
Operating income 13,265 5,902 23,760 9,901
Other income (expense), net:
Gain (loss) on sale of
assets 2 -- (5) 22
Interest income 56 74 119 124
Interest expense (1,209) (58) (2,273) (118)
Other income, net 24 29 52 55
---------- -------- -------- --------
Total other (expense)
income, net (1,127) 45 (2,107) 83
---------- -------- -------- --------
Income from continuing
operations before income
taxes and minority interest 12,138 5,947 21,653 9,984
Income taxes (4,602) (2,246) (8,254) (3,668)
Minority interest (164) (208) (319) (466)
---------- -------- -------- --------
Income before discontinued
operations 7,372 3,493 13,080 5,850
Gain on disposal, net of
loss from discontinued
operations, net of tax of
$0, 527, $0 and $971,
respectively -- 975 -- 1,741
---------- -------- -------- --------
Net income $ 7,372 $ 4,468 $13,080 $ 7,591
========== ======== ======== ========
Earnings per common share -
basic:
Continuing operations $ 0.16 $ 0.09 $ 0.28 $ 0.16
Discontinued operations -- $ 0.03 -- $ 0.04
---------- -------- -------- --------
Net earnings per share available
to common stockholders $ 0.16 $ 0.12 $ 0.28 $ 0.20
========== ======== ======== ========
Earnings per common share -
diluted:
Continuing operations $ 0.15 $ 0.09 $ 0.27 $ 0.15
Discontinued operations -- $ 0.02 -- $ 0.04
---------- -------- -------- --------
Net earnings per share available
to common stockholders $ 0.15 $ 0.11 $ 0.27 $ 0.19
========== ======== ======== ========
Weighted average number of common
shares outstanding:
Basic 47,361 38,295 47,337 37,103
Diluted 48,129 40,594 48,102 39,642
SOURCE: Home Solutions of America, Inc.
Off topic: Ban's for HSOA...
I have NEVER noticed that before but next to "post a new message" we now list current ban(s)from the board.
Kudos to those who actually monitor! I hope more boards do that.
Thanks
Home Solutions Announces Agreement in Principle to Resolve Seller Note, Moves Second Quarter Release to Thursday, August 9th
Wednesday, August 08, 2007 08:28ET
DALLAS, Aug 08, 2007 (BUSINESS WIRE) -- Home Solutions of America, Inc. (Nasdaq:HSOA) (the "Company" or "Home Solutions"), a provider of restoration, construction and interior services to commercial and residential customers, announced today that it has reached an agreement in principal to resolve the Fireline Restoration, Inc. ("Fireline") seller note and as a result will delay the conference call announcing release of its second quarter results for the period ended June 30, 2007 until Thursday, August 9, 2007 after the market closes. The Company will hold a conference call and webcast to discuss the results and business outlook at 4:30 p.m. ET that day.
The delay is to give the Company additional time to finalize the definitive terms of its agreement with Brian Marshall, a director and the Executive Vice President of the Company, to settle the $21,650,000 note that was issued to Mr. Marshall in partial consideration for the Company's acquisition of the capital stock of Fireline and to obtain required consents, including its lender and an independent committee of the Board. The Company intends for the settlement to be effective June 30, 2007 and to reflect the financial terms of the settlement of the $21,650,000 note in its second quarter financial statements. The settlement is expected to be reflected as a "Subsequent Event" in the Company's 10-Q for the second quarter and will be discussed in the Company's earnings announcement conference call.
The conference call will take place at 4:30 p.m. eastern time. Interested participants should call (888) 578-6632 within the United States or (719) 955-1564 internationally. Please use passcode 4897627. A playback of the conference will be available two hours after the completion of the call. To listen to the playback, please call (888) 203-1112 within the United States or (719) 457-0820 internationally. Please use passcode 4897627. The call will also be webcast and will be available on the Company's web site at www.hsoacorp.com in the Investor Relations section under Presentations.
Good preview article...mind if I post the whole thing instead of just your link? Some people hate pulling up links.
Earnings Preview: Shares of Home Solutions of America, Inc. (NASDAQ: HSOA), a provider of recovery, restoration and rebuilding/remodeling services to commercial and residential areas, rallied strongly last week, ahead of releasing its second quarter results for the period ended June 30, 2007 on Wednesday before the market opens. Respected Rodman & Renshaw Senior Industrial Services analyst Joe Giamichael initiated coverage of the company last week with a "Market Outperform," the firm highest rating (54% of stocks under coverage carry such a rating) noting that HSOA "provides a compelling long term investment opportunity." Interestingly, he initiated coverage prior to second quarter earnings, and did so despite having Q2 estimates significantly below the other analyst following the company, suggesting a high degree of confidence in the company achieving the near-term catalysts he outlined in his report. His revenue and EPS estimates of $44.2 million and $0.12, which we believe are extremely conservative and we will discuss below, bring the quarterly consensus estimates down to revenue of $46.25 million and EPS of $0.14, making it easier for the company to exceed analyst estimates. The company's guidance was for Q2 revenue of $44-48 million and EPS of 14-17 cents. In his report, which contains a price target of $9, Giamichael noted several near-term catalysts including "A/R Collection, potential resolution of shareholder's lawsuit and a potential strategic partnership with a credible developer would improve the balance sheet and should lead to multiple expansion." There is no banking relationship between the companies. The other firm who covers HSOA, Sanders Morris Harris (SMH), in a savvy call, downgraded Shaw Group (NYSE: SGR), another construction services company, just days before the company said it would restate 2006 results, The stock declined 10% as a result of the news. However, SMH has maintained its Buy rating on shares of HSOA into earnings. So what do we expect from the company? Q2 should represent the first quarter that the company starts to look like a more traditional construction services company, reflecting a transition that began at the start of the year. Construction services should represent a more predictable and stable revenue base than the recovery business, albeit with lower margins, making it a bit easier to forecast. If one takes the backlog HSOA announced at Q1 of $112 million for FY'07 and divides it by three quarters, it would equate to approximately $38 million in revenue per quarter, excluding any new unannounced work that was completed in Q2. In mid-May, HSOA announced $11 million in new contracts which was not included in the '07 backlog. If those burn ratably, it would add nearly $2 million in Q2 revenue. We also know from the New Orleans-based Daily Journal of Commerce, a publication that covers the construction industry, that the company won projects in Q2 after the time it provided its backlog which were not announced, so that could add incremental Q2 revenue. In addition, although the company said it did not expect any revenue from either the Tampa or New York projects until the second half of the year, it said at its Annual Shareholder's Meeting in June that engineering work had already begun at the Tampa project and that Blue Diamond, had already begun construction on the New York project, so we believe it should be able to recognize some revenue from these two projects in Q2. We would expect interior services, which includes business with Home Depot and Centex, to be weak and below the $8.6 million from Q1, due to seasonal factors which boost business with Centex in HSOA's first quarter, as well as multiple warnings from Centex and cautious comments from Depot. We believe that as the company's construction services business continues to grow, the importance of the Depot and Centex relationships will continue to decline, causing weakness in the housing market to become less relevant. As a result of greater predictability in construction services revenue and strength in that business, we believe HSOA could meet the bottom of its revenue guidance without any revenue from interior services . Strong top-line growth should result in an excellent EPS profile, even if EBITDA margins are reduced as the Street expects. The impact of the August 2nd decision by the 5th U.S. Circuit Court of Appeals, which vacated a November ruling by a U.S. District Judge that opened the door for insurance companies to be held liable for flood damage that policyholders claimed was caused by negligent design, construction and maintenance of the levees in New Orleans, should be a non-event for HSOA, as most of their insurance work in the area comes from wind, not flood damage. (and as posted)****However, what will certainly impact its business going forward is what the company says about progress on the two $100 million contracts it previously announced to provide construction services for projects in New York and Tampa. The stock traded as high as $8.24 after those contracts were announced. With 44% of the float short and the company trading at just 11 times trailing 12-month earnings, an in-line or better earnings report could send shares higher. Note that shares jumped more than 8% after the company reported Q1 results. Shares ended the week at $5.40, up 90 cents.
From last Sunday's CEOCast...
"However, what will certainly impact its business going forward is what the company says about progress on the two $100 million contracts it previously announced to provide construction services for projects in New York and Tampa. The stock traded as high as $8.24 after those contracts were announced. With 44% of the float short and the company trading at just 11 times trailing 12-month earnings, an in-line or better earnings report could send shares higher. Note that shares jumped more than 8% after the company reported Q1 results."
http://www.ceocast.com/(3wh3xsasrpr5l333bm4cxqyr)/NewsLetters.aspx?id=407&mode=
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