RESTON, VA -- (MARKET WIRE) -- 11/12/10 --
Comstock Homebuilding Companies, Inc. (NASDAQ: CHCI) ("Comstock" or the "Company"), a prominent real estate development
and homebuilding firm in the Washington, D.C. area announced a net loss for
its third quarter ended September 30, 2010 of $(3.4) million or $(0.18) per
diluted share. This compares to net income of $2.3 million or $0.12
earnings per diluted share for the third quarter of 2009. Total revenue for
the third quarter of 2010 was $5.6 million compared to $11.8 million for
the comparable 2009 quarter.
For the nine months ended September 30, 2010, the Company reported a net
loss of $(6.2) million or $(0.34) per diluted share. This compares to a net
loss of $(28.1) million or $(1.60) per diluted share for the first nine
months of 2009. Total revenue for the first nine months of 2010 was $21.2
million and $19.4 million for the comparable 2009 period.
As of September 30, 2010 the Company's total debt was $30 million. Of this
amount, approximately $20 million is secured by real estate projects of the
Company. Total debt balance has declined from $67.6 million as of December
31, 2009 and from $83.4 million at the end of the same period a year ago.
"The improvement to our balance sheet over the past year is the result of
the implementation of our Strategic Realignment Plan," said Christopher
Clemente, Comstock's Chairman and Chief Executive Officer. "As we focus on
implementing the final stages of this plan we continue to monetize
inventory, reduce debt, and pursue new opportunities in the Washington,
D.C. market. We believe that the fundamental economic strength of the
Washington, D.C. market provides opportunity to leverage our core
multifaceted operating capabilities in for-sale residential, multifamily
rental and general contracting services. We remain committed to taking the
steps necessary to return Comstock to regular profitability as quickly as
possible."
New orders, net of cancellations, in the third quarter of 2010 decreased
33% to 18 units, when compared to 27 units in the third quarter of 2009.
There were zero cancellations in the third quarter of 2010 compared to 2 in
the third quarter of 2009. New orders, net of cancellations, for the nine
months ended September 30, 2010 decreased 12.5% to 49 units, when compared
to 56 units for the nine months ended September 30, 2009. There was 1
cancellation during the nine months ended September 30, 2010 compared to 7
cancellations for the same period in 2009.
The number of units settled decreased 56.4% to 17 units in the third
quarter of 2010 as compared to 39 settlements during the comparable quarter
in 2009. The number of units settled decreased 3.8% to 51 units for the
nine months ended September 30, 2010 as compared to 53 settlements during
the first nine months of 2009.
The Company ended the third quarter of 2010 with 1 backlog unit sold but
not settled, compared to a backlog of 6 units for the same period in 2009.
The value of gross revenue applicable to the backlog units at the end of
the third quarter in 2009 was $230,000. Because unit sales in 2010 are
being generated with completed inventory of units, the time between sale
and settlement tends to be as little as thirty days, thereby generating low
backlog at period ends.
Homebuilding revenues for the three months ended September 30, 2010 totaled
$5.2 million compared to $11.1 million for the same period of 2009.
Homebuilding revenues for the nine months ended September 30, 2010 totaled
$16.8 million compared to $17.1 million for the same period of 2009.
Shareholders' equity as of September 30, 2010 increased to $7.9 million,
from $4.1 million as of December 31, 2009 and from $2.6 million at the end
of the same period a year ago. The increase in shareholders' equity during
the nine months ended September 30, 2010 was in large part driven by the
restructuring of the Company's Senior Subordinated Note ("Senior Note"), as
reported on February 17, 2010. As a result of the restructuring of the
Senior Note the principal balance due was reduced to $4.5 million. Prior to
the restructuring, the carrying value of the Senior Note debt was $12.7
million. As reported by the Company on December 31, 2009, the Senior Note
was acquired by Stonehenge Funding, LC, ("Stonehenge") an entity wholly
owned by Comstock's Chief Executive Officer, Christopher Clemente.
Subsequent to the purchase of the Senior Note by Stonehenge, Gregory
Benson, the Company's Chief Operating Officer and a member of the Board of
Directors, purchased a participating interest in the Senior Note. In
accordance with the rules of accounting applicable to the restructuring of
debt held by insiders, the $7.7 million gain on the transaction was treated
as a capital contribution to the Company and is not included in the
calculation of net income for the nine months ended September 30, 2010.
About Comstock Homebuilding Companies, Inc.
Comstock is a multi-faceted real estate development company engaged in the
development of for-sale residential, multifamily rental and general
contracting services. Our substantial experience in building a diverse
range of products including single-family homes, townhouses, mid-rise
condominiums, high-rise condominiums and mixed-use (residential and
commercial) developments has positioned Comstock as a prominent real estate
developer and homebuilder in the Washington, D.C. market place. For more
information please visit www.comstockhomebuilding.com.
Cautionary Statement
This release may contain "forward-looking" statements made pursuant to the
Safe Harbor provisions of the Private Securities Litigation Reform Act of
1995. Additional information concerning these and other important risks and
uncertainties can be found under the heading "Risk Factors" in the
Company's Form 10-K as filed with the Securities and Exchange Commission on
March 31, 2010. Comstock specifically disclaims any obligation to update or
revise any forward-looking statements, whether as a result of new
information, future developments or otherwise.
COMSTOCK HOMEBUILDING COMPANIES, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except per share data)
September 30, December 31,
2010 2009
------------ ------------
ASSETS
Cash and cash equivalents $ 759 $ 1,085
Restricted cash 3,093 3,249
Real estate held for development and sale 35,953 70,890
Property, plant and equipment, net 57 144
Other assets 1,862 1,963
------------ ------------
TOTAL ASSETS $ 41,724 $ 77,331
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable and accrued liabilities $ 3,825 $ 5,579
Notes payable - secured by real estate held
for development and sale 20,478 50,530
Notes payable - due to affiliates, unsecured 5,008 12,743
Notes payable - unsecured 4,493 4,346
------------ ------------
TOTAL LIABILITIES 33,804 73,198
------------ ------------
SHAREHOLDERS' EQUITY
Class A common stock, $0.01 par value,
77,266,500 shares authorized, 16,995,031
and 15,608,438 issued and outstanding,
respectively 170 156
Class B common stock, $0.01 par value,
2,733,500 shares authorized, 2,733,500
issued and outstanding 27 27
Additional paid-in capital 166,417 157,418
Treasury stock, at cost (391,400 Class A
common stock) (2,439) (2,439)
Accumulated deficit (156,255) (151,029)
------------ ------------
TOTAL EQUITY 7,920 4,133
------------ ------------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $ 41,724 $ 77,331
============ ============
COMSTOCK HOMEBUILDING COMPANIES, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------- ----------------------
2010 2009 2010 2009
---------- ---------- ---------- ----------
Revenues
Revenue - homebuilding $ 5,153 $ 11,116 $ 16,766 $ 17,053
Revenue - other 436 679 4,390 2,304
---------- ---------- ---------- ----------
Total revenue 5,589 11,795 21,156 19,357
Expenses
Cost of sales -
homebuilding 5,774 10,459 17,138 15,908
Cost of sales - other 382 508 3,666 1,458
Impairments and
write-offs 1,548 -- 1,548 15,351
Selling, general and
administrative 1,341 1,095 4,202 4,984
Interest, real estate
taxes and indirect
costs related to
inactive projects 143 421 1,812 3,015
---------- ---------- ---------- ----------
Operating loss (3,599) (688) (7,210) (21,359)
Gain on troubled debt
restructuring -- (2,803) -- (2,803)
Other (income) loss, net (171) (86) (1,047) (358)
---------- ---------- ---------- ----------
(Loss) Income from
continuing operations
before income taxes (3,428) 2,201 (6,163) (18,198)
Income tax expense -- -- -- --
---------- ---------- ---------- ----------
(Loss) Income from
continuing operations (3,428) 2,201 (6,163) (18,198)
Discontinued operations:
Income (loss) from
discontinued operations,
net of taxes -- 78 -- (9,910)
---------- ---------- ---------- ----------
Net (loss) income $ (3,428) $ 2,279 $ (6,163) $ (28,108)
========== ========== ========== ==========
Basic (loss) income per
share
Continuing operations $ (0.18) $ 0.13 $ (0.34) $ (1.04)
Discontinued operations -- -- -- (0.56)
---------- ---------- ---------- ----------
Net (loss) income per share $ (0.18) $ 0.13 $ (0.34) $ (1.60)
Diluted (loss) income per
share
Continuing operations $ (0.18) $ 0.12 $ (0.34) $ (1.04)
Discontinued operations -- -- -- (0.56)
---------- ---------- ---------- ----------
Net (loss) income per share $ (0.18) $ 0.12 $ (0.34) $ (1.60)
Basic weighted average
shares outstanding 18,567 17,618 18,299 17,575
========== ========== ========== ==========
Diluted weighted average
shares outstanding 18,567 19,467 18,299 17,575
========== ========== ========== ==========
Contact:
Joseph M. Squeri
Chief Financial Officer
(703) 230-1229
Source: Comstock Homebuilding Companies, Inc.
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