By BUILDER Magazine Staff. Home-networking company Home Director may be turning a corner. The Livermore, Calif.-based firm went public in December 2002, won contracts with two prominent California home builders in January, and is now estimated to hit $14 million in revenue in 2003, with total installations reaching nearly 5,000.

Barrow Street Research, which analyzes niche small-cap companies, reports that Home Director's strengths include a growing home-networking market, strong brand recognition among home builders, including accounts with Centex, K.B. Home, Lennar, and Toll Brothers, and a partnership with Sears to sell home-networking products.

Peter Mintz, a Barrow Street analyst, says if the positive trend continues, Home Director could become profitable in 2004 with $25 million in revenue. "The only thing that can slow it down is a prolonged downturn in the economy," says Mintz, who adds that Home Director raised more than $9 million in equity capital last year and eliminated more than $7 million in liabilities.

Home Director markets a system of home-networking products that lets new-home buyers network PCs, cable TVs, telephones, home theater, and security systems. The company has received $64 million in funding from IBM, Cisco, and Motorola since being founded by IBM in 1996. Two recent contracts with California builders were with Palo Alto, Calif.-based SummerHill Homes and the Los Angeles/Ventura branch of Richmond American Homes in Van Nuys, Calif.

"We're reaching the point where a significant number of home builders are starting to realize that home buyers expect these products. So builders are more willing to include home networking as standard, and not offer it as an option," says Gary Aiello, Home Director's vice president of sales and marketing.

SummerHill Homes is installing Home Director in 66 high-end condos at the University Park redevelopment project in Palo Alto, Calif. The condos sell from $900,000 to $1.4 million. Each unit will have Home Director's Network Connection Center, an expandable foundation for a complete structured wiring system, video connections to distribute television signals to four rooms in the home, accommodations for eight telephone/data lines with support for four incoming telephone numbers, and prewired windows and doors for security devices. Home Director also offers upgrades, including fully monitored security systems and computer networking options.

"What we've found is that 80 percent of our buyers select home networking as their preferred upgrade," says Roger Menard, president of SummerHill Homes. "That's well ahead of standard upgrades such as carpets, appliances, countertops, and lighting."

The Richmond American Homes project calls for Home Director to install its products in 89 residential units at the Tesoro del Valle project in Santa Clarita, Calif. The Richmond American homes will also have Home Director's Network Connection Center, with support for up to eight video and eight phone/data locations. The houses start at roughly $450,000.

Although it makes sense that Home Director would play well in tech-savvy California, the company's products are also being installed in much more moderately priced communities. One example is Arvida, a home builder based in Boca Raton, Fla., that is installing Home Director products in projects that start at $150,000.

Kevin Grossman, Arvida's director of residential technology and telecommunications, says Arvida is installing Home Director at three of its ongoing projects: Victoria Park, 4,000 residential units in De Land, Fla.; SouthWood, 5,000 residential units in Tallahassee, Fla.; and Paseos, a 350-unit residential development in Jupiter, Fla. The new homes in De Land and Tallahassee start at roughly $150,000 while the project in Jupiter starts at roughly $200,000.