Diamond Home Services, Inc. Reports First Quarter 1998 Results.

WOODSTOCK, Ill.--(BUSINESS WIRE)--April 30, 1998--Diamond Home Services, Inc. (Nasdaq: DHMS) today reported financial results for its first quarter ended March 31, 1998.

For the 1998 first quarter, net sales were $28,876,000 compared with $30,175,000 in the prior-year period. Net income for the 1998 first quarter was $185,000 or $0.02 per share, on 8,507,375 diluted weighted average shares outstanding, compared with net income of $155,000 or $0.02 per share, on 9,192,000 diluted weighted shares outstanding in the 1997 first quarter.

"Commencing in the fourth quarter of 1997, we undertook to reduce direct advertising expenditures, sales associates recruitment costs and turnover, and back office costs. These actions contributed toward improving first quarter 1998 operating income on reduced net sales. We expect to continue to reduce our operating break-even levels," stated C. Stephen Clegg, Chairman, President, and CEO. "However, our efforts and programs to improve selling efficiencies and lead management have not kept pace with our cost-containment programs. Coupled with a low backlog level going into the first quarter, this result contributed to the modest decrease in net sales from the comparable quarter period."

"We are confident that with the lessons learned in 1997 and the programs now in place, the Company is better positioned as it goes into its busy season - mid-March through October - to record increased net sales and improved operating results," Mr. Clegg continued.

On April 20, 1998, the Company finalized its previously announced acquisition of Reeves Southeastern Corporation. The terms of the acquisition provide for an aggregate consideration of up to $41,700,000, comprised of $30,000,000 in cash at closing, $3,700,00 in non-interest bearing, short term notes, and long term notes of indeterminable value of up to $8,000,000. The Company financed the acquisition through $45,000,000 of syndicated senior secured credit facilities.

"The acquisition of Reeves Southeastern Corporation on April 20, 1998, is an important milestone in our growth and expansion programs. We are confident in the opportunities provided by the $3.2 billion fencing industry, the proven profitability of this 50-year-old company, and the strong management team. We look forward to reporting future progress with this new acquisition." Mr. Clegg concluded.

Diamond Home Services, Inc. is a leading national marketer and contractor of installed home improvement products, including roofing systems, gutters, doors, and fencing. The Company markets its installed home improvement products and services directly to consumers, primarily under the "SEARS" name. Through its finances subsidiary, Marquise Financial Services, Inc., the Company also offers financing to its customers. The Company has 70 sales offices located in major cities across the U.S., providing the Company with a presence in markets covering approximately 80% of the owner-occupied households in the U.S. In addition, the Company, through its subsidiary, Reeves Southeastern Corporation, is one of the largest manufacturers and distributors of fencing and perimeter security products to the industrial and residential markets in the U.S. Reeves Southeastern operates 31 distribution centers primarily in the eastern half of the U.S.

Certain statements contained herein, including without limitation, statements addressing the beliefs, plans, objectives, estimates or expectations of the Company or future results or events constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known or unknown risks, including, but not limited to, general economic and business conditions, matters related to the licensing agreements between Diamond Exteriors, Inc. and Sears Roebuck and Co., warranty exposure, the Company's reliance on sales associates and on the availability of qualified independent installers, and condition in the installed home improvement industry including, without limitation, the fencing and perimeter security products business. There can be no assurance that the actual future results, performance, or achievements expressed or implied by such forward-looking statements will occur. Users of forward-looking statements are encouraged to review Item 7 of the Company's 1997 annual report on Form 10-K, its filings on Form 10-Q, management's discussion and analysis in the Company's 1997 annual report to stockholders, and other federal securities law filings for a description of other important factors that may effect the Company's business, results of operations and financial condition. -0-

                     DIAMOND HOME SERVICES, INC.
                    Summary of Operating Results
                             (Unaudited)
              ($ in thousands, excepts per share data)


                                        Three Months Ended
                                              March 31,
                                       -----------------------
                                           1998          1997
                                           ----          ----

Net Sales                              $   28,876   $   30,175
Gross Profit                               12,687       13,363
Operating Expenses:
 Selling, General, and Administrative      12,289       13,186
 Operating Interest Expense                    55           --
 Amortization Expense                        160          143
                                       ----------   ----------
 Total Operating Expenses                  12,504       13,329
                                       ----------   ----------
Operating Income                              183           34
Interest Income, Net                          126          220
Net Income                             $      185   $      155
                                       ==========   ==========
Earnings per Common Share:
  Basic                                $      .02   $      .02
                                       ==========   ==========
  Diluted                              $      .02   $      .02
Weighted Average Number of
 Common Shares Outstanding
- Diluted                               8,507,375    9,192,000
                                       ==========   ==========

CONTACTS: Diamond Home Services, Inc.

Richard G. Reece, 815/334-1414 or 815/334-2414

or

The Investor Relations Company

Brien Gately, 847-564-5610