DALLAS, March 17, 2011  -- U.S. Home Systems, Inc. (Nasdaq: USHS) today reported financial results for the fourth quarter and year ended December 31, 2010. USHS is engaged in the specialty products home improvement business. The Company's principal product lines include kitchen cabinet refacing products, bathroom remodeling products, storage organization systems for closets and garages and related accessories.

Financial Results

For the fourth quarter, USHS revenues increased 23% to $38.0 million as compared to $30.9 million in the fourth quarter 2009.

Net income for the fourth quarter 2010 was $708,000 or $0.10 per share. During the quarter USHS recorded a pre-tax benefit of $370,000 for partial reimbursement of legal fees which the Company incurred defending certain class action lawsuits, which had been settled. Excluding this non-recurring item, USHS net income would have been $494,000 or $0.07 per share. This compares to net loss for the fourth quarter of 2009 of $1.3 million or $0.18 per share. The loss in the fourth quarter of 2009 included non-recurring pre-tax charges of $2.2 million ($1.5 million after tax) related to settlement of a class action lawsuit and an on-going sales tax matter. Excluding these charges, net income was $204,000 or $0.03 per share in the fourth quarter 2009.

Murray Gross, chairman and chief executive officer, commented, "We recorded our sixth consecutive year-over-year quarterly increase in revenues and new orders in the fourth quarter. Our new orders in the fourth quarter increased 13% to $37.2 million from $32.8 million in the fourth quarter last year. This improvement demonstrates the progress we are making and the improvements in demand for our solutions."

Mr. Gross continued, "We have experienced an increase in consumer interest in our kitchen refacing and countertop products since the beginning of the year when The Home Depot included the kitchen refacing category in their new kitchen marketing strategy, 'A Solution for Every Kitchen and Budget - Replace, Reface, Renew'. We are confident that this new marketing strategy, combined with our enhanced in-store marketing initiatives and the installation of new kitchen refacing displays in all The Home Depot stores, has significantly contributed to our increased new orders and revenues.

"We believe that a number of external factors have also contributed to increased consumer interest in our products during 2010 and that these factors will continue to enhance consumer interest in 2011. We know that remodeling activity is generally higher in the first 12 months of home ownership. We have seen increased demand in 2010 from recent home buyers as a result of the first time home buyers tax credit program, however, we believe that a significant number of these home owners will be in the market for home improvements in 2011.

"Additionally, we believe that homeowners who are unable to move up due to eroded equity in their homes are looking for economical alternatives to upgrade their kitchens. We believe these customers are finding that cabinet refacing is an alternative to full kitchen remodeling. We believe that current data from the Joint Center for Housing Studies at Harvard University supports the trend that the cabinet refacing category is growing."

Fourth Quarter 2010 Highlights

* USHS reported new orders increased to $37.2 million in the fourth quarter 2010 from $32.8 million in the fourth quarter last year. USHS had backlog of uncompleted orders of $20.0 million at December 31, 2010.
* In connection with USHS market expansion program, USHS initiated service in five new markets during the fourth quarter 2010. As of December 31, 2010, it had initiated service in fourteen new markets in 2010 encompassing approximately 189 The Home Depot stores.
* Fixed operating costs, consisting of branch operating and general and administrative expenses, declined to 12.0% of revenues in the fourth quarter 2010 from 14.5% in the same quarter last year. The decline reflected increased leverage from higher revenues.

For the year ended December 31, 2010, USHS had revenues of approximately $145.9 million as compared to $111.0 million last year, an increase of 31.4%. Net income was $2.1 million or $0.30 per share as compared to a net loss of $4.0 million, or $0.55 per share, respectively. Both 2010 and 2009 included non-recurring items, including those described above. Excluding one time items, net income for the year ended December 31, 2010 would have been $2.1 million, or $0.30 per diluted share, as compared to net loss of $1.5 million, or $0.21 per diluted share for the year ended December 31, 2009.

Year 2010 Highlights

* The Company reported new orders increased 29.3% to $148.6 million in 2010 from $114.9 million in 2009.
* USHS began offering its kitchen refacing products in the Home Depot Do-It-Yourself (DIY) program.
* The Company installed new kitchen refacing product displays in all U.S. The Home Depot stores.
* USHS initiated a market expansion program, beginning service in fourteen new markets encompassing approximately 189 The Home Depot stores.
* The Company launched an internet micro-site in September 2010 generating $3.3 million in new orders since the site's launch.
* USHS completed in excess of 17,000 jobs and received a VOC (Voice of the Customer) rating of 9.46 out of a maximum of 10.0. The Home Depots VOC rating is based on customer surveys and is an indication of customer satisfaction and service provider quality.
* Fixed operating costs, consisting of branch operating and general and administrative expenses, declined to 12.6% of revenues in 2010 from 16.5% last year. The decline principally reflected increased leverage from higher revenues.

Mr. Gross concluded, "In spite of continuing challenges of lower credit approval rates for our customers, we increased our new orders in 2010. Resolving the credit approval rate remains a top priority. As we enter the first quarter of 2011, our seasonally slower quarter of the year, we remain confident in near term improvement as we work together with our strategic partner."

First Quarter 2011 Outlook

USHS expects:

* Revenues in the first quarter 2011 of $36 to $37 million as compared to revenues of $33.1 million in the first quarter 2010.
* Net income of $0.06 to $0.07 per share, compared to $0.05 per share in the first quarter 2010.

About U.S. Home Systems, Inc.

U.S. Home Systems, Inc. (www.ushomesystems.com) manufactures or procures, designs, sells and installs custom quality specialty home improvement products. The Company's product lines include kitchen cabinet refacing products utilized in kitchen remodeling, bathroom tub liners and wall surround products utilized in bathroom remodeling, and storage organization systems for closets and garages. The Company manufactures its own cabinet refacing products and bathroom cabinetry.

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