RESTON, VA, Aug 07, 2006 (MARKET WIRE via COMTEX News Network) -- Comstock Homebuilding Companies, Inc. (NASDAQ: CHCI) ("Comstock" or
the "Company") today announced financial results for three months
ended June 30, 2006. The Company reported a net loss of $7.1 million
or ($0.47) per share basic and diluted on total revenue of $50.7
million as compared to net income of $3.1 million or $0.26 per share
basic and diluted for the three months ended June 30, 2005. The
Company also announced that it had elected to record a non-cash
charge to assets of $12.9 million as a result of impairments to its
real estate inventory and the write-off of option deposits and
related feasibility costs for land purchase option contracts where
the Company has elected not to exercise its purchase option. The
Company reported a net loss for the six months ended June 30, 2006 of
$5.9 million or ($0.41) per share basic and diluted as compared to
net income of $6.9 million or $0.58 per share for the six months
ended June 30, 2005.
The Company will conduct a conference call for interested investors
on Tuesday, August 8, 2006, at 8:45 AM Eastern Standard Time. During
the call the Company will discuss the financial results detailed in
this release. The dial-in number for the conference call is
888-858-4723 and the access code is 7689463; the call may also be
accessed on the Internet at www.comstockhomebuilding.com in the
Investor Relations section.
Highlights of Financial Results -- Three months ended June 30,
2006:
-- The Company reported a net loss of $7.1 million or ($0.47) on weighted
average shares outstanding of 15.0 million as compared to net income of
$3.1 million or $0.26 per share basic and diluted on 12.0 million weighted
average shares outstanding for the three months ended June 30, 2005;
-- On a proforma basis, before impairments and write-offs, the Company
reported net income after tax of $0.8 million or $0.05 per share or $0.06
per share as adjusted for the weighted average share count for the three
months ended June 30, 2005;
-- Total revenue was $50.7 million with $50.4 million of revenue from
homebuilding, as compared to total revenue of $39.9 million for the three
months ended June 30, 2005 with $39.6 million of revenue derived from
homebuilding;
-- The Company delivered 165 new homes at an average per unit revenue of
approximately $305,000 as compared to 123 new homes at an average per unit
revenue of $322,000 for the three months ended June 30, 2005;
-- Gross profit from homebuilding, was $9.1 million on a proforma basis
before impairments and write-offs representing a 18.0% gross margin as
compared to $9.9 million representing a 25.1% gross margin from
homebuilding for the three months ended June 30, 2005;
-- New order revenue was $56.0 million on 199 new orders for an average
new order revenue of $281,000 as compared to $59.1 million of new order
revenue on 160 new orders for an average of $370,000 per new order for the
three months ended June 30, 2005;
-- Backlog at June 30, 2006 was $218.4 million on 575 units as compared
to $268.6 million on 666 units at June 30, 2005;
-- As a result of softening market conditions and project repositioning
in the Company's markets, the Company elected to record a $9.5 million
non-cash charge to assets for impairments to its real estate inventory
and a $3.5 million write-off of option deposits and related feasibility
costs for land purchase option contracts where the Company has elected
not to exercise its purchase option;
-- On May 1, 2006 the Company closed on the acquisition of Capitol Homes,
Inc. in Raleigh, North Carolina. The acquisition added approximately 1,350
lots to the Company's inventory of controlled land and approximately $7.4
million of backlog on 39 homes which are included as new orders for the
three months ended June 30, 2006.
Highlights of Financial Results -- Six months ended June 30,
2006:
-- The Company reported a net loss of $5.9 million or ($0.41) on weighted
average shares outstanding of 14.5 million as compared to net income of
$6.9 million or $0.58 per share diluted on weighted average shares
outstanding of 11.9 million for the six months ended June 30, 2005;
-- On a proforma basis, before impairments and write-offs, the Company
reported net income after tax of $2.0 million or $0.14 per share or $0.17
per share as adjusted for the weighted average share count for the six
months ended June 30, 2005;
-- Total revenue was $87.3 million with $86.7 million of revenue from
homebuilding, as compared to total revenue of $68.6 million for the six
months ended June 30, 2005 with $68.1 million of revenue derived from
homebuilding;
-- The Company delivered 277 new homes at an average per unit revenue of
approximately $313,000 as compared to 201 new homes at an average per unit
revenue of $339,000 for the six months ended June 30, 2005;
-- Gross profit from homebuilding was $18.3 million on a proforma basis
before impairments and write-offs representing a 21.1% gross margin as
compared to $20.8 million representing a 30.6% gross margin from
homebuilding for the six months ended June 30, 2005;
-- New order revenue was $115.2 million on 379 new orders for an average
new order revenue of $304,000 as compared to $162.4 million of new order
revenue on 406 new orders for an average of $400,000 per new order for the
six months ended June 30, 2005.
"We realize the second quarter results we are reporting today are a
disappointment," said Christopher Clemente, Chairman and Chief
Executive Officer. "Nonetheless, the accelerating deterioration of
market conditions during the second quarter made it necessary to
evaluate the assets comprising our work in process to ensure that we
can provide accurate information to the market. While it is
impossible to predict the duration of current market conditions, it
is our belief that continued job growth and population growth in our
core markets continues to create pent up demand for the affordable
products that Comstock offers. As in previous cycles the question is
not if demand will improve but when demand will improve. We are
committed to taking the steps necessary to manage our business
prudently in light of current market conditions while positioning
Comstock to benefit when market conditions stabilize."
About Comstock Homebuilding Companies, Inc.
Established in 1985, Comstock Homebuilding Companies is a diversified
real estate development firm with a focus on moderately priced
for-sale residential products. Comstock builds and markets
single-family homes, townhouses, mid-rise condominiums, high-rise
condominiums, mixed-use urban communities and active adult
communities. The company currently markets its products under the
Comstock Homes brand in the Washington, D.C. and Raleigh, North
Carolina markets, under the Capitol Homes brand in Raleigh, North
Carolina and under the Parker Chandler Homes brand in Atlanta,
Georgia and parts of the Carolinas. Comstock develops mixed-use,
urban communities and active-adult communities under the Comstock
Communities brand. Comstock Homebuilding Companies Inc. trades on
Nasdaq under the symbol CHCI. For more information please visit
http://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. Statements that are predictive in
nature, that depend upon or refer to future events or conditions, or
that include words such as "may," "will," "expects," "projects,"
"anticipates," "estimates," "believes," "intends," "plans," "should,"
"seeks," and similar expressions, including statements related to
Comstock's expected future financial results and anticipated growth
in the Washington, D.C. housing market, are forward-looking
statements. 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. These risks and uncertainties include,
but are not limited to, economic, market and competitive conditions
affecting Comstock and its operations and products, risks and
uncertainties relating to the market for real estate generally and in
the areas where Comstock has projects, the availability and price of
land suitable for development, materials prices, labor costs,
interest rates, Comstock's ability to service its significant debt
obligations, fluctuations in operating results, anticipated growth
strategies, continuing relationships with affiliates, environmental
factors, government regulations, the impact of adverse weather
conditions or natural disasters and acts of war or terrorism.
Additional information concerning these and other important risks and
uncertainties can be found under the heading "Risk Factors" in the
prospectus from Comstock's initial public offering, as filed with the
Securities and Exchange Commission on December 15, 2004. Comstock
specifically disclaims any obligation to update or revise any
forward-looking statements, whether as a result of new information,
future developments or otherwise.
Preliminary Financial Results from Operations
Comstock Homebuilding Companies Inc
Income Statements
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ------------------
2006 2005 2006 2005
-------- -------- -------- --------
Revenues
Sale of real estate--Homes $ 50,351 $ 39,599 $ 86,716 $ 68,064
Other revenue 346 312 576 576
-------- -------- -------- --------
Total revenue 50,697 39,911 87,292 68,640
Expenses
Cost of sales of real estate 41,295 29,658 68,456 47,249
Cost of sales of other 21 9 30 20
Impairments and write-offs 12,914 0 12,914 0
Selling, general and
administrative 8,429 5,608 16,076 10,660
-------- -------- -------- --------
Operating income (11,962) 4,636 (10,184) 10,711
Other (income) expense, net (355) (154) (587) (190)
-------- -------- -------- --------
Income before minority interest and
equity in earnings of real estate
partnerships (11,607) 4,790 (9,597) 10,901
Minority interest 12 7 5 8
-------- -------- -------- --------
Income before equity in earnings of
real estate partnerships (11,619) 4,783 (9,602) 10,893
Equity in earnings of real estate
partnerships (26) 4 (53) 34
-------- -------- -------- --------
Total pre tax income (11,645) 4,787 (9,655) 10,927
Income Taxes (4,522) 1,721 (3,771) 4,052
-------- -------- -------- --------
Net Income (Loss) $ (7,123) $ 3,066 $ (5,884) $ 6,875
======== ======== ======== ========
Basic earnings per share (0.47) 0.26 (0.41) 0.59
======== ======== ======== ========
Basic weighted average shares
outstanding 15,034 11,831 14,511 11,727
======== ======== ======== ========
Diluted earnings per share (0.47) 0.26 (0.41) 0.58
======== ======== ======== ========
Diluted weighted average shares
outstanding 15,034 11,993 14,511 11,882
======== ======== ======== ========
Media Contact:
Bryan Murray
Contact via http://www.marketwire.com/mw/emailprcntct?id=E5748EB2E41A4CE1
703.883.1700 ext. 217
SOURCE: Comstock Homebuilding Companies, Inc.