RESTON, VA -- (MARKET WIRE) -- 05/13/11 --
Comstock Homebuilding Companies, Inc. (NASDAQ: CHCI) ("Comstock" or the "Company"), a multi-faceted real estate
development and services company focused on the Washington, DC market,
announced a net loss for its first quarter ended March 31, 2011 of $(1.0)
million or $(0.05) per diluted share. The net loss and diluted loss per
share for the first quarter of 2011 compares to a net loss of $(0.9)
million or $(0.05) earnings per diluted share for the comparable 2010
quarter. Total revenue for the first quarter of 2011 was $4.6 million
compared to $9.1 million for the comparable 2010 quarter.
"Having completed our strategic realignment plan in 2010, our sole mission
in 2011 is rebuilding shareholder value," said Christopher Clemente,
Chairman and Chief Executive Officer. "Our renewed focus on the Washington,
DC region, which is widely regarded as the best real estate market in the
nation, and our stabilized operating platform and improved balance sheet
allows us to be wholly focused on restoring Comstock to profitability. To
accomplish this we will continue working on bringing previously announced
DC projects to market while pursuing additional opportunities in for-sale
and rental properties and in our construction services business."
Notable Events During The Quarter
Several key events occurred during the first quarter of 2011:
- Restart in construction - On February 17, 2011, the Company announced
that it started construction on a 103-unit rental apartment community in
the Cascades master planned community located in the Potomac Falls area of
Loudoun County, Virginia. The project is being financed with a five-year,
$11.0 million construction/mortgage loan provided by Cardinal Bank of
Tysons Corner, Virginia. Comstock will begin leasing units in the summer of
2011 and expects construction to be completed in early 2012.
- Ongoing monetization of real estate assets - Comstock continues to
monetize inventory units from its Eclipse and Penderbrook projects. Total
units delivered in the first quarter of 2011 were 7. An additional 5 units
were delivered during the month of April. There are 38 units remaining for
sale at Eclipse and 62 remaining for sale at Penderbrook.
- Successful refinancing of maturing debt - On February 2, 2011 the
Company entered into an $11.85 million refinancing of its Eclipse on Center
Park condominium project. The new loan was completed with Eagle Bank and
proceeds of the loan were utilized to pay off existing indebtedness owed to
KeyBank, N.A. in advance of the KeyBank loan maturity in March 2011. The
Eagle Bank loan provides the Company several key benefits including a lower
overall cost of financing, a reduced sales quota requirement that better
reflects current market conditions and an extended three year term, which
Comstock believes will allow for the value of the asset to be maximized
through the orderly sale of the remaining condominium units.
On May 6, 2011, Comstock announced that its Board of Directors adopted a
Section 382 stockholder rights plan (the "Rights Plan") designed to protect
stockholder value by preserving the value of certain deferred tax assets
primarily associated with net operating loss carryforwards ("NOLs") under
Section 382 of the Internal Revenue Code. The Company currently has
approximately $72 million in Federal and State NOLs with a potential value
of up to $25 million in tax savings. The Rights Plan was adopted to reduce
the likelihood of an unintended "ownership change" which could jeopardize
the availability of the Company's NOLs to offset potential tax liabilities
resulting from future taxable income. The Rights Plan will be presented to
the Company's stockholders for approval at the 2011 Annual Meeting of
Stockholders.
About Comstock Homebuilding Companies, Inc.
Comstock is a multi-faceted real estate development and services company.
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, DC market. Comstock Homebuilding Companies, Inc. trades on
NASDAQ under the symbol CHCI. For more information on the Company or its
projects please visit www.comstockhomebuilding.com.
Cautionary Statement Regarding Forward-Looking Statements
This release contains "forward-looking" statements that are made pursuant
to the Safe Harbor provisions of the Private Securities Litigation Reform
Act of 1995. Forward-looking statements involve known and unknown risks and
uncertainties that may cause actual future results to differ materially
from those projected or contemplated in the forward-looking statements
including incurring substantial indebtedness with respect to projects, the
diversion of management's attention and other negative consequences.
Additional information concerning these and other important risks and
uncertainties can be found under the heading "Risk Factors" in the
Company's most recent Form 10-K, as filed with the Securities and Exchange
Commission and other filings with the Securities and Exchange Commission.
Comstock specifically disclaims any obligation to update or revise any
forward-looking statements, whether as a result of new information, future
developments or otherwise, except as required by law.
COMSTOCK HOMEBUILDING COMPANIES, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except per share data)
March 31, December 31,
2011 2010
------------ ------------
ASSETS
Cash and cash equivalents $ 714 $ 475
Restricted cash 3,128 5,201
Real estate held for development and sale 28,876 34,008
Construction in process - Variable Interest
Entity 4,029 -
Property, plant and equipment, net 45 50
Other assets 2,934 1,194
------------ ------------
TOTAL ASSETS $ 39,726 $ 40,928
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable and accrued liabilities $ 5,020 $ 5,884
Notes payable - secured by real estate held
for development and sale 16,041 18,853
Notes payable - Variable Interest Entity 1,094 -
Notes payable - due to affiliates,
unsecured 5,008 5,008
Notes payable - unsecured 4,383 4,515
------------ ------------
TOTAL LIABILITIES 31,546 34,260
------------ ------------
Commitments and contingencies (Note 9)
SHAREHOLDERS' EQUITY
Class A common stock, $0.01 par value,
77,266,500 shares authorized, 17,159,807
and 17,120,467 issued and outstanding,
respectively 172 171
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 166,754 166,700
Treasury stock, at cost (391,400 shares
Class A common stock) (2,439) (2,439)
Accumulated deficit (158,816) (157,791)
------------ ------------
TOTAL COMSTOCK HOMEBUILDING EQUITY 5,698 6,668
Non-controlling interest - Variable
Interest Entity 2,482 --
------------ ------------
TOTAL EQUITY 8,180 6,668
------------ ------------
Accumulated deficit
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $ 39,726 $ 40,928
============ ============
COMSTOCK HOMEBUILDING COMPANIES, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share data)
Three Months Ended
March 31,
--------------------------
2011 2010
------------ ------------
Revenues
Revenue--homebuilding $ 3,019 $ 5,693
Revenue--other 1,567 3,446
------------ ------------
Total revenue 4,586 9,139
Expenses
Cost of sales--homebuilding 2,722 5,692
Cost of sales--other 1,273 2,872
Selling, general and administrative 1,385 1,455
Interest, real estate taxes and indirect
costs related to inactive projects 369 848
------------ ------------
Operating loss (1,163) (1,728)
Other income, net 270 836
------------ ------------
Loss before income taxes (893) (892)
Income taxes expense -- --
------------ ------------
Net loss (893) (892)
Less: Net income attributable to
non-controlling interests - Variable Interest
Entity 132 --
------------ ------------
Net loss attributable to Comstock Homebuilding $ (1,025) $ (892)
============ ============
Basic loss per share $ (0.05) $ (0.05)
Diluted loss per share $ (0.05) $ (0.05)
Basic weighted average shares outstanding 18,645 18,096
============ ============
Diluted weighted average shares outstanding 18,645 18,096
============ ============
COMSTOCK HOMEBUILDING COMPANIES, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands, except per share data)
Three Months Ended
March 31,
--------------------------
2011 2010
------------ -------------
Cash flows from operating activities:
Net loss $ (1,025) $ (892)
Adjustment to reconcile net loss to net
cash provided by operating activities
Net income attributable to
non-controlling interest - Variable
Interest Entity 132 --
Amortization and depreciation 4 75
Gain on M&T note retirement (196) --
Gain on trade payable settlements (135) (770)
Changes in operating assets and
liabilities:
Restricted cash (27) (28)
Real estate held for development and
sale 2,706 7,911
Other assets (1,739) 148
Accounts payable and accrued
liabilities 1,650 280
------------ -------------
Net cash provided by operating
activities 1,370 6,724
------------ -------------
Cash flows from investing activities:
Investment in Cascades Apartments -
construction in process (1,603) --
Purchase of property, plant and equipment -- (4)
------------ -------------
Net cash used in investing
activities (1,603) (4)
------------ -------------
Cash flows from financing activities:
Proceeds from notes payable 12,233 267
Payments on notes payable (14,111) (7,036)
Proceeds from Cascades Private Placement 2,350 --
------------ -------------
Net cash provided by (used in)
financing activities 472 (6,769)
------------ -------------
Net increase (decrease) in cash and cash
equivalents 239 (49)
Cash and cash equivalents, beginning of period 475 1,085
------------ -------------
Cash and cash equivalents, end of period $ 714 $ 1,036
============ =============
Supplemental disclosure for non-cash activity:
Interest incurred but not paid in cash $ 223 $ 655
Reduction in notes payable in connection
with troubled debt restructuring $ -- $ 7,689
Increase in additional paid in capital in
connection with troubled debt
restructuring $ -- $ 7,689
Reduction in real estate held for
development and sale in connection with
deconsolidation of subsidiaries $ -- $ 15,407
Reduction in notes payable in connection
with deconsolidation of subsidiaries $ -- $ 15,893
Reduction in accrued liabilities in
connection with deconsolidation of
subsidiaries $ -- $ 449
Increase in opening retained earnings in
connection with deconsolidation of
subsidiaries $ -- $ 936
Reduction in accrued liabilities in
connection with issuance of stock
compensation $ 55 $ 571
Increase in class A common stock par value
in connection with issuance of stock
compensation $ -- $ 3
Increase in additional paid in capital in
connection with issuance of stock
compensation $ 54 $ 568
Reduction in accounts payable due to
Cascades Private Placement closing $ 2,100 $ --
Reduction in restricted cash due to
Cascades Private Placement closing $ 2,100 $ --
Contact:
Joe Squeri
Chief Financial Officer
703.230.1229
Source: Comstock Homebuilding Companies, Inc.
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