Comstock Homebuilding Companies, Inc. Reports Results for Three Months and Six Months Ended June 30, 2011
August 12 2011 - 4:00PM
Comstock Homebuilding Companies, Inc. (Nasdaq:CHCI) ("Comstock" or
the "Company"), a multi-faceted real estate development and
services company focused on the Washington, D.C. market, announced
a net loss for its second quarter ended June 30, 2011 of $(1.7)
million or $(0.09) per diluted share. The net loss and diluted loss
per share for the second quarter of 2011 compares to net loss of
$(1.8) million or $(0.10) earnings per diluted share for the
comparable 2010 quarter. Total revenue for the second quarter of
2011 was $5.9 million compared to $6.4 million for the comparable
2010 quarter. The net loss and diluted loss per share for the six
months ended June 30, 2011 was $(2.7) million or $(0.15) per share
which compares to a net loss of $(2.7) million and $(0.15) per
share for the same period a year ago. Total revenue for the
first half of 2011 was $10.5 million which compares to $15.6
million for the comparable 2010 period.
Notable Events
- Strategic Alliance with Sunbridge Capital – On
July 12, Comstock announced that it had formed a strategic alliance
with SunBridge Capital Management, LLC ("SunBridge"), a private
investment management firm supported by the Bainum family, a
prominent Washington, DC family with investment interests that
include Choice Hotels International. The purpose of the strategic
alliance is to facilitate Comstock's and SunBridge's ongoing
pursuit of certain homebuilding and multi-family rental projects in
the Washington, DC market. The strategic alliance calls for project
funding of up to $25 million from each party to capitalize
agreed-upon potential investments. In support of the relationship,
SunBridge funded a senior secured loan for approximately $13.8
million that closed on July 12, 2011, (the "Initial Loan") and has
committed to provide an additional secured loan to refinance the
Company's Penderbrook project. The proceeds of the Initial Loan
were used to refinance existing indebtedness on the Company's
Eclipse project and for general corporate purposes.
- Resolution of Balfour Beatty Litigation -On
July 21, 2011, Comstock Potomac Yard, L.C. a subsidiary of Comstock
Homebuilding Companies, Inc. (the "Company"), entered into a
settlement agreement with Balfour Beatty Construction, L.C.,
successor in interest to Centex Construction, ("Balfour") whereby
Comstock Potomac Yard agreed to a settlement in satisfaction of
certain claims and a previous judgment entered in its favor.
The settlement was the result of a voluntary mediation
process between Comstock Potomac Yard, Balfour and one of the major
subcontractors on the Company's Eclipse high rise condominium
project (the Project"). The judgment resulted from litigation
initiated by Comstock Potomac Yard in September of 2008 against
Balfour as a result of delays in completion of the
Project. Comstock received the settlement proceeds on August
4, 2011.
- Cascades Apartment Project – Comstock began
construction on a 103 unit rental project in the Cascades planned
community in Loudoun County Virginia in February of 2011. The
Company anticipates completing construction in the fall of 2011
with full lease-up expected in early 2012. Leasing activity
commenced in June with the first occupancies beginning in July.
Strong demand is supporting the Company's decision to market the
property as a stabilized asset upon completion.
- Ongoing monetization of real estate assets -
Comstock continues to monetize inventory units from its Eclipse and
Penderbrook projects. Total units delivered in the second
quarter of 2011 were 13. An additional 2 units were delivered
during the month of July. There are 37 units remaining for
sale at Eclipse and 55 units remaining for sale at
Penderbrook.
"We accomplished significant key initiatives during the second
quarter that enhance our ability to execute our Washington, DC
focused strategy," said Christopher Clemente, Chairman and Chief
Executive Officer. "The added capabilities that our new partnership
with SunBridge provides coupled with the new capital obtained
through the successful resolution of long pending litigation
positions Comstock to pursue attractive development opportunities
in the best real estate market in the nation while focusing
entirely on restoring profitability and shareholder value".
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,
D.C. market place. 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.
The Comstock Homebuilding Companies, Inc. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=5034
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) |
|
|
|
|
June 30,
2011 |
December 31,
2010 |
|
|
|
ASSETS |
|
|
Cash and cash
equivalents |
$609 |
$475 |
Restricted cash |
3,089 |
5,201 |
Real estate held for
development and sale |
26,687 |
34,008 |
Construction in process –
Variable Interest Entity |
8,559 |
0 |
Property, plant and equipment,
net |
40 |
50 |
Other assets |
3,520 |
1,194 |
|
|
|
TOTAL ASSETS |
$42,504 |
$40,928 |
|
|
|
LIABILITIES AND SHAREHOLDERS'
EQUITY |
|
|
Accounts payable and accrued
liabilities |
$5,925 |
$5,884 |
Notes payable - secured by real
estate held for development and sale |
14,062 |
18,853 |
Notes payable - Variable
Interest Entity |
6,205 |
0 |
Notes payable - due to
affiliates, unsecured |
5,008 |
5,008 |
Notes payable -
unsecured |
4,383 |
4,515 |
|
|
|
TOTAL LIABILITIES |
35,583 |
34,260 |
|
|
|
Commitments and contingencies
(Note 9) |
|
|
SHAREHOLDERS' EQUITY |
|
|
Class A common stock,
$0.01 par value, 77,266,500 shares authorized, 17,405,474 and
17,120,467 issued and outstanding, respectively |
174 |
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 |
167,051 |
166,700 |
|
|
|
Treasury stock, at cost
(391,400 shares Class A common stock) |
(2,439) |
(2,439) |
Accumulated deficit |
(160,492) |
(157,791) |
|
|
|
TOTAL COMSTOCK HOMEBUILDING
EQUITY |
4,321 |
6,668 |
Non-controlling interest –
Variable Interest Entity |
2,600 |
0 |
|
|
|
TOTAL EQUITY |
6,921 |
6,668 |
|
|
|
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY |
$42,504 |
$40,928 |
|
|
|
|
|
|
|
|
|
COMSTOCK HOMEBUILDING
COMPANIES, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF
OPERATIONS (Amounts in thousands, except per share
data)
|
|
|
|
|
|
|
Three Months Ended June 30, |
Six Months Ended June 30, |
|
2011 |
2010 |
2011 |
2010 |
Revenues |
|
|
|
|
Revenue - homebuilding |
$ 3,120 |
$ 5,919 |
$ 6,139 |
$ 11,613 |
Revenue - apartment buildings
and real estate services |
2,783 |
509 |
4,350 |
3,955 |
|
|
|
|
|
Total revenue |
5,903 |
6,428 |
10,489 |
15,568 |
Expenses |
|
|
|
|
Cost of sales -
homebuilding |
2,736 |
5,673 |
5,458 |
11,364 |
Cost of sales - apartment
buildings and real estate services |
2,628 |
413 |
3,901 |
3,285 |
Impairments and write-offs |
0 |
0 |
0 |
0 |
Selling, general and
administrative |
1,933 |
1,405 |
3,318 |
2,861 |
Interest, real estate taxes and
indirect costs related to inactive projects |
451 |
821 |
820 |
1,670 |
|
|
|
|
|
Operating loss |
(1,845) |
(1,884) |
(3,008) |
(3,612) |
Gain on debt restructuring |
0 |
0 |
(146) |
0 |
Other (income) loss, net |
(287) |
(41) |
(411) |
(877) |
|
|
|
|
|
Loss before income taxes |
(1,558) |
(1,843) |
(2,451) |
(2,735) |
Income taxes expense |
0 |
0 |
0 |
0 |
|
|
|
|
|
Net loss |
(1,558) |
(1,843) |
(2,451) |
(2,735) |
Less: Net income attributable to
non-controlling interests |
118 |
0 |
250 |
0 |
|
|
|
|
|
Net loss attributable to Comstock
Homebuilding Co., Inc. |
$ (1,676) |
$ (1,843) |
$ (2,701) |
$ (2,735) |
|
|
|
|
|
Basic loss per share |
$ (.09) |
$ (.10) |
$ (.15) |
$ (.15) |
|
|
|
|
|
Diluted loss per share |
$ (.09) |
$ (.10) |
$ (.15) |
$ (.15) |
|
|
|
|
|
Basic weighted average shares
outstanding |
18,784 |
18,365 |
18,407 |
18,231 |
|
|
|
|
|
Diluted weighted average shares
outstanding |
18,784 |
18,365 |
18,407 |
18,231 |
|
|
|
|
|
|
|
|
|
COMSTOCK HOMEBUILDING
COMPANIES, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH
FLOWS (Amounts in thousands, except per share
data)
|
|
|
|
|
Six Months Ended June 30, |
|
2011 |
2010 |
Cash flows from operating activities: |
|
|
Net loss |
$ (2,451) |
$ (2,735) |
Adjustment to reconcile net
loss to net cash provided by operating activities |
|
|
Amortization and
depreciation |
10 |
84 |
Gain on M&T note
retirement |
(146) |
0 |
Gain on trade payable
settlements |
(150) |
(860) |
Changes in operating assets and
liabilities: |
|
|
Restricted cash |
12 |
117 |
Real estate held for
development and sale |
4,816 |
13,338 |
Other assets |
(2,376) |
57 |
Accounts payable and accrued
liabilities |
3,101 |
823 |
|
|
|
Net cash provided by operating
activities |
2,816 |
10,824 |
|
|
|
Cash flows from investing activities: |
|
|
Investment in Cascades
Apartments – construction in process |
(6,054) |
0 |
Purchase of property, plant and
equipment |
0 |
(4) |
|
|
|
Net cash used in investing
activities |
(6,054) |
(4) |
|
|
|
Cash flows from financing activities: |
|
|
Proceeds from notes
payable |
17,273 |
822 |
Payments on notes payable |
(16,250) |
(12,006) |
Proceeds from Cascades Private
Placement |
2,350 |
26 |
|
|
|
Net cash provided by (used in)
financing activities |
3,372 |
(11,158) |
|
|
|
Net increase (decrease) in cash and cash
equivalents |
134 |
(338) |
Cash and cash equivalents, beginning of
period |
475 |
1,085 |
|
|
|
Cash and cash equivalents, end of period |
$ 609 |
$ 747 |
|
|
|
Supplemental disclosure for non-cash
activity: |
|
|
Interest incurred but not paid
in cash |
$ 457 |
$ 1,260 |
Reduction in notes payable in
connection with troubled debt restructuring |
$ 0 |
$ 7,689 |
Increase in additional paid in
capital in connection with troubled debt restructuring |
$ 0 |
$ 7,689 |
Reduction in real estate held
for development and sale in connection with deconsolidation of
subsidiaries |
$ 0 |
$ 15,406 |
Reduction in notes payable in
connection with deconsolidation of subsidiaries |
$ 0 |
$ 15,893 |
Reduction in accrued
liabilities in connection with deconsolidation of subsidiaries |
$ 0 |
$ 449 |
Increase in opening retained
earnings in connection with deconsolidation of subsidiaries |
$ 0 |
$ 936 |
Non-Cash Stock Compensation
Changes |
$ 388 |
$ 619 |
Increase in class A common
stock par value in connection with issuance of stock
compensation |
$ 3 |
$ 5 |
Increase in additional paid in
capital in connection with issuance of stock compensation |
$ 351 |
$ 614 |
Reduction in accounts payable
and restricted cash due to Cascades Private Placement closing |
$ 2,100 |
$ 0 |
CONTACT: Joe Squeri
Chief Financial Officer
703.230.1229
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