InvestorsHub Logo
Join InvestorsHub

Join the InvestorsHub Community

Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.

Live Updating
profile icon
Mr. Zen Free
06/29/07 9:26 AM
profile icon
Mr. Zen Free
06/21/07 9:29 AM
profile icon
Mr. Zen Free
06/12/07 4:39 PM
profile icon
Mr. Zen Free
06/08/07 9:11 AM
profile icon
odi33 Free
06/06/07 9:35 AM
profile icon
Mr. Zen Free
06/06/07 9:14 AM
profile icon
Mr. Zen Free
03/28/07 9:29 AM
profile icon
Mr. Zen Free
03/22/07 11:53 AM
profile icon
Mr. Zen Free
02/14/07 9:07 AM
profile icon
Mr. Zen Free
02/08/07 3:04 PM
profile icon
Mr. Zen Free
01/23/07 9:12 AM
profile icon
Mr. Zen Free
01/17/07 9:30 AM
profile icon
Mr. Zen Free
12/19/06 9:20 AM
profile icon
Mr. Zen Free
12/07/06 9:13 AM
profile icon
Mr. Zen Free
11/30/06 9:24 AM
profile icon
Mr. Zen Free
11/28/06 10:54 AM
profile icon
Mr. Zen Free
11/16/06 9:15 AM
profile icon
Mr. Zen Free
11/01/06 9:13 AM
profile icon
Mr. Zen Free
10/25/06 12:04 PM
profile icon
Mr. Zen Free
10/20/06 10:52 AM
profile icon
Mr. Zen Free
10/18/06 9:56 AM
profile icon
Mr. Zen Free
10/12/06 9:05 AM
profile icon
Mr. Zen Free
10/10/06 9:18 AM
profile icon
Mr. Zen Free
10/05/06 1:40 PM
profile icon
Mr. Zen Free
10/04/06 12:16 PM

Packaged Home Solutions (fka PKGH) RSS Feed

Followers
2
Posters
5
Posts (Today)
0
Posts (Total)
28
Created
10/04/06
Type
Free
Moderators
Packaged Home Solutions, Inc is a publicly traded company that owns 100% of a private company, PHS, Inc (PHS). PHS is a holding company that currently owns 81% of each subsidiary that operates as a Packaged Home Solutions regional branch or satellite office. It is projected that PHS will own 81% to 100% of each remodeling company formed or acquired in each market.. PHS currently has seven offices located in Cincinnati and Dayton Ohio, Indianapolis, Indiana, Louisville, Kentucky, Jacksonville (2) and Miami, Florida. The Company’s intention is to open a regional office in Tampa, Florida prior to the year’s end, as well opening additional satellite offices in Cincinnati and Miami. The Company will be opening regional offices in 2007 in Atlanta, Dallas, Phoenix, Denver and Southern California. These regional offices will then open satellite offices as the market matures. By the end of 2007, the Company should have 30 operational offices, making it one, if not the largest, home improvement services company in the United States. The changing home improvement market has led to significant consolidation among commercial contractors, product manufacturers, distributors, etc. Industry giants like Home Depot, Lowes, Owens Corning, etc., as well as institutional investors have recognized the benefit of acquiring a company that owns and operates residential remodeling companies in various markets, which makes PHS an ideal acquisition candidate when it is operating in over 30 major metro markets under one recognizable brand. The Company has 21 million shares outstanding, with 5 million shares in the float and 16 million shares of restricted stock owned by management. Management has signed a lock up agreement with the Company to not sell their stock for a period of two years, which lapses on October 31,2008. The management of the Company has a combined 138 years of experience in the remodeling and home improvement industries, who have held senior positions at Sears Home Improvement and Home Depot, with additional experience in management and marketing. WHAT MAKES PHS UNIQUE Most home improvement service companies are local in nature, but PHS has a presence in four states. Industry acquirers look for size and geographic distribution, and rarely acquire a company only with a local presence. The Company should achieve gross revenues in 2006 of $5 million and over $15 million in 2007. Average gross profit margins exceed 45%. The Company is not expected to show a bottom line profit until its expansion is completed, but from that time forward should be able to generate net profit margins of 15%. The Company is the only home improvement company that offers a free home inspection to homeowners who are contemplating the sale of their house within the near future. This home inspection determines what improvements should be made to the home prior sale. It is undisputed that improvement in kitchens and baths in a house are the most important improvements that a homeowner can make. This program combines the talents of PHS, leading home inspection companies, and real brokerage companies in each market, which offer the home inspection as part of their services to their listings. In a “down” market, which is evident in certain markets today, the improvements made, as suggested in the home inspection report, not only increase resale value, but also the time to sell the house. The Company has agreements with various preferred vendors in each of its markets, such as roofing, AC and general maintenance companies to perform services for home owners that are beyond the scope of the services provided by PHS. PHS receives 15% of the gross contract amount for such referrals that falls directly to the bottom line. Therefore, through these relationships, the Company can handle all of the needs of the homeowner. These relationships also allow for cross-referrals from the preferred vendors in each market to PHS of kitchen and bath jobs. The Company is the only home improvement services company in the United States that offers to finance kitchen and bathroom improvements made by a homeowner who is selling his or her house. The program allows a selling homeowner to improve the kitchen or bathroom prior to sale with no money out of pocket, with the loan repaid when the house sells, therefore increasing the value of the home and the time to sell in the market. Should the house fail to sell in the first 120 days after the improvements are completed, the loan is amortized over a 3-year period. This financing program is being offered through the major real estate brokers in each area that a PHS office is located. The Company has national marketing ventures with Healthy Gourmet and Mary Kay Cosmetics that call for the joint offering of their products to their various clients. This allows PHS to present its services to many more homeowners than through traditional media employed by competitors. The Company is in negotiations with other national known companies to have similar joint marketing agreements, and expects to announce at least two additional joint marketing agreements before the end of 2006. The Company will rollout within the next 90 days, a website that will allow homeowners to order direct to the home over 22,000 home improvement items. This list includes everything from faucets to entire kitchens or baths. The Company will offer installation services in each market where PHS does not have an office through referral agreements to installation companies in each market. The Company’s management has over 138 years of combined experience in the home improvement industry, including senior positions at Home Depot and Sears Home Improvement Services. The Company contemplates introducing its owned branded products for kitchens and bath, such as cabinets and certain appliances that will be exclusively manufactured for the Company in China. The Remodeling Industry Marketplace The home improvement industry has not seen a major downturn since the early 1990s. Remodeling expenditures by homeowners and rental property owners totaled $233 billion in 2003, accounting for 40 percent of all residential construction and improvement spending and more than 2 percent of the U.S. economy. Most signs point to continued spending growth. Favorable home mortgage rates, together with the overall aging of the population, have pushed the homeownership rate to over 68 percent from under 64 percent in 1993. Most analysts expect the ownership rate to continue to rise over the coming decade. Since owner-occupants on average invest more on home improvements than renters, a higher homeownership rate should translate into even stronger remodeling and repair expenditures, and therefore increased sales and revenues for PHS. As the market softens for new home sales, as is the current condition in certain markets, existing homeowners increase their expenditure on improving their homes, as opposed to selling their homes. After factoring in homeowner and rental-property owner spending, the home improvement market has grown to nearly one-quarter trillion dollars. Homeowners contribute more than 75 percent of all remodeling expenditures, with the vast majority devoted to “do-it-yourself” or “buy-it-yourself” projects and payments to professional contractors for improvements. Maintenance and repair expenditures, in contrast, represent just over 20 percent of homeowner spending. PHS is part of the vast majority of remodeling expenditures, as being part of the ‘improvements’ marketplace rather than the ‘repair’ marketplace. Nearly 45 percent of homeowner spending involves changes to interior space (such as kitchen remodels, bathroom additions and remodels, and room additions) and other structural alterations. These project categories have been among the fastest-growing segments of the owner improvement market, with expenditures approaching $60 billion in 2003. PHS services all major indoor remodeling improvements, such as kitchens, bathrooms, counters, and cabinets, as well as other projects. Replacements to exteriors (including roofing, siding, windows and doors) and interiors (such as flooring, wall finishes, and ceilings) represent about 28 percent of spending. Each PHS branch has both an interiors and exteriors division, which enables PHS to service 63% of all expenditures on remodeling, which accounts for $147 billion every year. A recent survey by trade publisher Hanley-Wood found that “75% of home buyers identify a list of desired home remodeling projects at time of purchase – almost 90% begin work on those improvements within a year of moving into the home.” This presents a unique opportunity for PHS to target new homeowners to drive sales and future business. Spending on home remodeling activities outpaces that in several major industries including legal services, clothing store sales, and the combined cost of the commercial and public works construction categories. DISCLAIMER - Nothing in the contents transmitted on this board should be construed as an investment advisory, nor should it be used to make investment decisions. There is no express or implied solicitation to buy or sell securities. The author(s) may have positions in the stocks or financial relationships with the company or companies discussed and may trade in the stocks mentioned. Readers are advised to conduct their own due diligence prior to considering buying or selling any stock. All information should be considered for information purposes only. No stock exchange has approved or disapproved of the information
Board Info
Posts Today
0
Posts (Total)
28
Posters
5
Moderators
New Post