Diamond Home Services, Inc. Reports Third Quarter and Nine-Month 1999 Results.

WOODSTOCK, Ill.--(BUSINESS WIRE)--Nov. 15, 1999--

Diamond Home Services, Inc. (Nasdaq: DHMS) today reported financial results for its third quarter and nine-month periods ended September 30, 1999.

For the 1999 third quarter, net sales were $65,942,000 compared with $76,505,000 in the prior-year period. The net loss for the 1999 third quarter was $6,059,000 or $0.71 per share, on 8,507,000 diluted weighted average shares outstanding, compared with net income of $566,000 or $0.07 per share, on 8,508,000 diluted weighted average shares outstanding in the 1998 third quarter.

For the first nine months, net sales were $188,907,000 compared with $170,996,000 in the prior-year period. The net loss for the first nine months was $9,239,000, or $1.09 per share on 8,507,000 diluted weighted average shares compared with net income of $1,374,000 or $0.16 per share on 8,508,000 diluted weighted average shares in the comparable year-ago period.

"Obviously, the third quarter and first nine months of 1999 have been difficult for the Company," stated C. Stephen Clegg, Diamond Home Services, Inc.'s Chairman and CEO. "We are grateful for all the support we have received from our customers, suppliers, and employees. We are confident that the commitment shown by our business partners - as evidenced by the recent agreements with our banks and Sears - provides us the opportunity to succeed in the future."

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, 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 32 distribution centers primarily in the eastern half of the U.S. In addition, Reeves Southeastern furnishes and installs private-label fencing home improvement products. Through its subsidiary Diamond Exteriors, Inc.(R) the Company markets installed home improvement products and services directly to consumers, primarily under the "SEARS" name. Through its finance subsidiary Marquise Financial Services, Inc. the Company also offers financing to its customers. The Company has home consultants 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.

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, as amended. Such forward-looking statements involve known or unknown risks, including, but not limited to, general economic and business conditions, matters related to the licensing agreement between Diamond Exteriors, Inc. and Sears, Roebuck and Co., warranty exposure, the Company's reliance on home consultants and on the availability of qualified independent installers, lead activity and costs related thereto, the outcome of discussions with its creditors and other constituencies, and conditions in the installed home improvement industry. 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 most recent annual report on Form 10-K, its filings on Form 10-Q, management's discussion and analysis in the Company's most recent annual report to stockholders, the Company's filings on Form 8-K, and other federal securities law filings for a description of other important factors that may affect the Company's business, results of operations and financial condition.

For additional information on Diamond Home Services free of charge via

the internet, please go to

http://www.tirc.com/invest/diamond/dhms-profile.htm

                      Diamond Home Services, Inc.
                     Summary of Operating Results
                              (Unaudited)
                ($ in thousands, except per share data)

                             Three Months Ended    Nine Months Ended
                                September 30,         September 30,
                             ------------------    -----------------

                                 1999      1998      1999      1998
                                 ----      ----      ----      ----
Net Sales                     $65,942   $76,505  $188,907  $170,996
Gross Profit                   20,427    26,492    62,054    62,843
Operating Expenses:
  Selling, General,
   and Administrative          22,648    24,104    64,402    57,995
  Restructuring (1)             1,393        --     2,706        --
  Operating Interest Expense      107        83       316       206
  Amortization Expense            694       316     2,129       750
                              -----------------   ------------------
Total Operating Expenses       24,842    24,503    69,553    58,951
                              -----------------   ------------------
Operating Income (Loss)        (4,415)    1,989    (7,499)    3,892
Interest Expense                1,122     1,039     3,375     1,791
Interest Income and Other         163       147       472       403
                              -----------------   ------------------
Net Income (Loss)             ($6,059)     $566   ($9,239)   $1,374
                              =================   ==================
Earnings (Loss) per Common Share:
     Basic                     ($0.71)    $0.07    ($1.09)    $0.16
                              =================   ==================
     Diluted                   ($0.71)    $0.07    ($1.09)    $0.16
                              =================   ==================
Weighted Average Number of
Common Shares
Outstanding -- Diluted          8,507     8,508     8,507     8,508
                              =================   ==================

(1) Represents incurred restructuring charges for installed home
improvement segment including severance ($1.0 million), restructuring
consultancy and related expenses ($500 thousand) and out-of-pocket
expenses related to restructuring implementation ($1.2 million).

                   Summary of Operations Information
                              (Unaudited)
                           ($ in thousands)

                             Three Months Ended    Nine Months Ended
                               September 30,         September 30,
                             ------------------    -----------------
                                 1999      1998      1999      1998
                                 ----      ----      ----      ----
Net Sales:
 Installed Home Improvement
  Products (Diamond Exteriors)$34,235   $45,984   $94,169  $115,429
 Finance Revenues (Marquise)      344       632     1,111     1,194
 Manufacturing and
  Distribution (Reeves)        31,363    29,889    93,627    54,373

Operating Income (Loss)
 Installed Home Improvement
   Products                    (5,205)      420   (10,742)      756
 Finance Revenues
  (Marquise)                     (103)      (99)     (184)     (277)
 Manufacturing and
  Distribution (Reeves)(3)        893     1,668     3,427     3,413

(2) 1999 operating income excludes restructuring charges of $2.7
million for the nine months 1999.
(3) Reeves's results for 1998 are from April 20, 1998, the date the
Company acquired Reeves.