SOURCE: Packaged Home Solutions

June 08, 2007 09:00 ET

Packaged Home Solutions, Inc. Announces Subsidiary to Expand Coverage Area With the Purchase of an Established Regional South Georgia Home Improvement Company

CINCINNATI, OH and JACKSONVILLE, FL--(Marketwire - June 8, 2007) - Packaged Home Solutions, Inc. (PINKSHEETS: PKGH) ("PHS" or "the Company") today announced that its subsidiary, Southeastern Renovations, Inc., (SER), has signed a letter of intent to acquire Homeworx, Inc., an established and highly successful home improvement company located in Brunswick, GA., which is located between Jacksonville, Florida and Savannah, Georgia. Homeworx has been the area's dominant residential remodeling company for the past 18 years and has established an outstanding reputation in the market, with its familiar showroom located on a busy state thoroughfare with a high traffic count.

Southeastern Renovations gains a significant market share with the acquisition of this successful operation, which will allow the Company to expand its offerings both geographically and in product selection and services, to both its large retail clients, developers in the area, as well as their residential customers. Historically, Homeworx has generated an average of $500,000 per annum of gross sales, with a gross margin exceeding 40%. Homeworx has offered its homeowners Sunrooms, Siding, Windows, Screen Rooms and Entry Doors for many, many years. With this addition to SER, the Company expects to further establish their business model consisting of the consolidation of expenses and resources, while enhancing revenues through symbiotic relationships in a subsidiary network.

SER expects to increase the historical sales of the acquisition by 50%-100% over the first 12 months by bringing in national retailer accounts to perform installation only services, expanding and refining product lines and through a low cost grass roots marketing campaign that will expand the acquisitions market base into twice as many counties. SER itself expects to see a 25% increase in sales due to the acquisition before the enhancements and close to 50% afterward. SER intends to implement these enhancements immediately after the closing of the acquisition, which is scheduled for July 9th. Homeworx management has significant industry experience and will continue to assist in operations for a minimum of one year.

Southeastern Renovations, which the Company purchased in December, 2006 is presently servicing the northern Florida and southern Georgia markets for homeowners and major retailers who need licensed, bonded and financially solvent installation companies to handle the installation of home improvement products bought by homeowners in order to improve their homes. The Company is presently handling over $150,000 per month of such installation services in its geographic areas, at margins that exceed 22%. At the request of several major retailers, Southeast has over the last 60 days began expanding its service area, increased its installation workforce and is adding senior management in order to increase sales to over $300,000 per month in the next 60 days and over $1 million per month by the end of the year.

Todd Medina, the newly appointed CEO of the Company, in describing the rationale for the acquisition said: "This and several other acquisitions are part of the overall restructuring process that we announced this week. PHS and SER are making strategic acquisitions in order to expand our geographic market area rapidly, while adding senior management talent, and additional product lines. We will use the established operations of Homeworx and other acquisitions to provide install only services in their market area, expand to commercial developments in the area, while continuing to service the residential market in their geographic area. These bolt on acquisitions will allow us to expand rapidly in the southeast to meet the needs of our retail clients who want SER to offer installations services in a larger geographical area. Homeworx, like all other acquisitions, will be accretive to our net income immediately as well as our expected valuation in the market. We will continue to pursue acquisitions that further our strategic plan, but also increase our earnings per share and market capitalization, without consideration of the additional revenues, net profits and market opportunities that we will bring to each acquisition."

About Packaged Home Solutions

Packaged Home Solutions, Inc., formed in 2004, has created a systematized approach that makes remodeling fast and as "customer-friendly" as possible. The Company's executives have over 138 years of experience in the home improvement business, including senior positions with several of the largest retail home improvement chains in the US. The Company was established to provide consumers with reliable, attractive home improvement solutions, including kitchens, bathrooms, basement and exterior improvements that provide the best in product selection and installation services. The Company focuses on the middle market home in range of $100,000 to $750,000, specializing in improvements to increase the value of the home, and maximizing value of the home for sale in a softening real estate market.

The Company's subsidiaries, Al- Vent Architectural Products Inc. and PHS Wholesale Inc. focus of providing hurricane windows and doors and general home improvement products manufactured in China. SER, another subsidiary of the Company, focuses on providing installations services directly to homeowners and large national home improvement retailers. By the end of 2008, the Company plans to have 30 operational offices, making it one of, if not the largest, home improvement services company in the United States. At that time, the management of the Company will consider various options to maximize shareholders' value, including a sale to an industry participant.

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Statements about Packaged Home Solutions, Inc.'s expectations, including future revenues and earnings, and all other statements in this press release other than historical facts are "forward-looking statements" within the meaning of section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and as the term is defined in the Private Litigation Reform Act of 1995. Packaged Home Solutions' actual results could differ materially from expected results. Packaged Home Solutions undertakes no obligation to update forward-looking statements to reflect subsequently occurring events or circumstances. Should events occur which materially affect any comments made within this press release; Packaged Home Solutions will appropriately inform the public.

Contact Information

  • Contacts:

    Packaged Home Solutions:
    Todd Medina