This excerpt taken from the USHS 10-K filed Mar 16, 2006.
Termination of our initiatives with The Home Depot would significantly reduce our revenues, net income and available liquidity
Since October 2003, our home improvement operations have engaged in an aggressive expansion program in connection with our agreements with The Home Depot. We believe our relationship with The Home Depot is a significant factor to the achievement of our business strategy and long-term growth. Our current business strategy is to become a principal vendor of installed wood decks, and kitchen and bath refacing products to The Home Depot in designated markets. During 2006 we intend to concentrate our efforts and to allocate our personnel and capital resources to continue the expansion of the roll out of wood decks, and kitchen and bath refacing products in designated The Home Depot stores.
During the year ended December 31, 2005 approximately 71% of our home improvement revenues were attributable to sales under our agreements with The Home Depot of which 20% of our revenues were attributable to sales and installations of wood decks, 45% were derived from kitchen cabinet refacing product sales and 6% were related to the sale of bath refacing products and services.
Our kitchen and bathroom refacing agreements with The Home Depot may be terminated by us or The Home Depot with 30 days written notice to the other party. Our wood deck agreement with The Home Depot may be terminated by either party on January 1st of each year upon 60 days prior notice, and may be terminated by The Home Depot on 60 days notice if we fail to comply with certain service standards under the agreement. If our Home Depot agreements are terminated prior to the end of their terms or are not renewed at the end of their terms, whether as a result of our failure to fulfill our obligations under the agreements or The Home Depots decision to change its business strategy, we would be required to seek alternative channels of distribution for our products and installation services in the markets covered by these agreements. Additionally, our net income and
liquidity would likely be reduced because our anticipated revenues from other programs would probably be less than those anticipated under our agreements with The Home Depot and may not be sufficient to cover expenses incurred in connection with new programs. If our Home Depot agreements are cancelled or not renewed at the end of their term our investment in sales and installation centers may be impaired, which may require a write-down of assets, including goodwill