Comstock Homebuilding Companies, Inc. (NASDAQ: CHCI) ("Comstock" or
the "Company"), a prominent real estate development and home
building firm in the Washington, D.C. area, announced a net loss
for its first quarter ended March 31, 2010 of $892,000, $.05 per
diluted share. Net income and diluted loss per share for the first
quarter of 2010 decreased 66.3% and 64.3%, respectively, when
compared to the first quarter of 2009. Gross revenues for the first
quarter of 2010 increased 84.4% to $9.1 million from $4.9 million
for the comparable 2009 quarter.
New orders, net of cancellations, in the first quarter of 2010
increased 50.0% to 18 units, when compared to 12 units in the first
quarter of 2009. There was one cancellation in the first quarter of
2010 compared to zero in the first quarter of 2009. Settlements
increased 100% to 16 units in the first quarter of 2010 as compared
to 8 settlements during the comparable quarter in 2009.
The Company ended the first quarter of 2010 with a backlog of 5
homes sold but not settled, a decrease of 28.6% on a unit basis
compared to the same period in 2009. The value of gross revenue
applicable to the backlog units decreased 14.1% to $1.9 million,
when compared to the backlog at the end of the first quarter in
2009.
Homebuilding revenues for the three months ended March 31, 2010
totaled $5.7 million, a 35.7% increase over the same period of
2009. Gross margins on homebuilding were zero in the first quarter
of 2010, unchanged from the same period in 2009.
Other revenues for the three months ended March 31, 2010 totaled
$3.4 million, a 325% increase over the same period of 2009. Other
revenue of $2.8 million was generated in the first quarter of 2010
from the sale of land to other builders and rental income. Rental
income of $0.6 million was generated during the three months ended
March 31, 2010 as compared to $0.7 million in the same period of
2009. The decrease in revenue generated from rental operations was
the result of the sale of certain rental inventory units since the
first quarter of 2009.
During the first quarter of 2010, the Company recognized other
income related to settlements with vendors on trade payables of
$0.8 million, as compared to $0.3 million of other income related
to settlements with vendors on trade payables in the same period of
2009.
As of March 31, 2010 the Company's total debts were $37.9
million, representing a decrease of $62.4 million, or 62.2% from
the end of the first quarter of last year and a decrease of $29.7
million, or 43.9% from December 31, 2009. In addition to the
decrease of liabilities resulting from the restructuring of the
Senior Note, the Company recorded an additional $15.9 million
decrease in Wachovia debt in connection with the deconsolidation of
certain subsidiaries of which the Company is no longer the primary
beneficiary.
Shareholder's equity as of March 31, 2010 increased to $12.4
million, or $0.69 per diluted share, from $4.1 million, or $0.23
per diluted share at December 31, 2009. The increase in
shareholder's equity during the first quarter of 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 first quarter.
As previously reported, the Company has completed its Strategic
Realignment Plan, reducing overall debt from a peak of
approximately $340 million in 2006 to approximately $37.9 million
as of March 31, 2010. Among the many benefits to the company of
successfully implementing this strategy to stabilize its business
is the accumulation of significant loss carry forward provision,
which the Company believes will enhance future operating cashflow
due to reduced tax liabilities associated with potential future
profitability.
"We continue to focus on enhancing shareholder value and on
positioning Comstock to capitalize on emerging opportunities in a
stabilizing market," said Christopher Clemente, Comstock's Chairman
and Chief Executive Officer. "We believe our Strategic Realignment
Plan, implemented in the latter half of 2009, has greatly enhanced
our ability to return Comstock to profitability on a regular basis
in the near future."
About Comstock Homebuilding Companies, Inc.
Comstock is a multi-faceted real estate development company
engaged in the development of for-sale residential and mixed use
products. 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 home builder 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,
2009. 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)
March 31, December 31,
2010 2009
------------ ------------
ASSETS
Cash and cash equivalents $ 1,036 $ 1,085
Restricted cash 3,277 3,249
Real estate held for development and sale 47,573 70,890
Property, plant and equipment, net 72 144
Other assets 1,816 1,963
------------ ------------
TOTAL ASSETS $ 53,774 $ 77,331
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable and accrued liabilities $ 3,459 $ 5,579
Notes payable -- secured by real estate held
for development and sale 28,456 50,530
Notes payable -- due to affiliates, unsecured 5,054 12,743
Notes payable -- unsecured 4,369 4,346
------------ ------------
TOTAL LIABILITIES 41,338 73,198
------------ ------------
Commitments and contingencies (Note 8)
SHAREHOLDERS' EQUITY
Class A common stock, $0.01 par value,
77,266,500 shares authorized, 15,901,940
and 15,608,438 issued and outstanding,
respectively 159 156
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 165,674 157,418
Treasury stock, at cost (391,400 Class A
common stock) (2,439) (2,439)
Accumulated deficit (150,985) (151,029)
------------ ------------
TOTAL EQUITY 12,436 4,133
============ ============
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $ 53,774 $ 77,331
============ ============
COMSTOCK HOMEBUILDING COMPANIES, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share data)
Three Months Ended March 31,
-----------------------------
2010 2009
-------------- --------------
Revenues
Revenue -- homebuilding $ 5,693 $ 4,160
Revenue -- other 3,446 797
-------------- --------------
Total revenue 9,139 4,957
Expenses
Cost of sales -- homebuilding 5,692 4,160
Cost of sales -- other 2,872 317
Selling, general and administrative 1,455 2,040
Interest, real estate taxes and
indirect costs related to inactive
projects 848 1,283
-------------- --------------
Operating loss (1,728) (2,843)
Other income, net 836 357
-------------- --------------
Loss from continuing operations before
income taxes (892) (2,486)
Income taxes expense -- 1
-------------- --------------
Loss from continuing operations (892) (2,487)
Discontinued operations:
Loss from discontinued operations, net of
taxes -- (158)
-------------- --------------
Net loss $ (892)$ (2,645)
============== ==============
Basic loss per share
Continuing operations $ (0.05)$ (0.14)
Discontinued operations 0.00 (0.01)
-------------- --------------
Net loss per share $ (0.05)$ (0.15)
Diluted loss per share
Continuing operations $ (0.05)$ (0.14)
Discontinued operations 0.00 (0.01)
-------------- --------------
Net loss per share $ (0.05)$ (0.15)
Basic weighted average shares outstanding 18,096 17,554
============== ==============
Diluted weighted average shares outstanding 18,096 17,554
============== ==============
Contact Information: Jeff Dauer 703-883-1700
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