RESTON, VA, Nov 06, 2006 (MARKET WIRE via COMTEX News Network) -- Comstock Homebuilding Companies, Inc. (NASDAQ: CHCI) ("Comstock or
the "Company") today announced financial results for three and nine
months ended September 30, 2006. For the three months ended
September 30, 2006 the Company reported a net loss of $5.8 million or
($0.36) per share basic and diluted on total revenue of $35.3 million
as compared to net income of $11.5 million or $0.82 per share basic
and $0.81 per share diluted on $78.4 million of total revenue for the
three months ended September 30, 2005. The Company reported a net
loss for the nine months ended September 30, 2006 of $11.6 million or
($0.78) per share basic and diluted as compared to net income of
$18.4 million or $1.47 per share basic and $1.45 per share diluted on
total revenue of $147.1 million for the nine months ended September
30, 2005.
The Company announced that for the three months ended September 30,
2006 it had recorded a non-cash pre-tax charge to assets of $1.8
million as a result of impairments to its real estate inventory. The
Company announced that it had not written off any option deposits
during the three months ended September 30, 2006. The total non-cash
pre-tax impairment charges for the nine months ended September 30,
2006 was $14.7 million.
The Company will conduct a conference call for interested investors
on Monday, November 6, 2006, at 10:00 a.m. Eastern Standard Time.
During the call the Company will discuss the financial results
detailed in this release. The dial-in number for the conference call
is (800) 632-2975 and the access code is 8046790; the call may also
be accessed on the Internet at www.comstockhomebuilding.com in the
Investor Relations section.
Summary of Sales and Settlement Results
----------------------------------
Three months ended September 30,
----------------------------------
($ in 000s except units) 2006 2005 % Change
----------- ----------- ----------
Net new orders 93 117 -20.5%
Net new order revenue $26.3 $34.4 -23.5%
Settlements 110 202 -45.5%
Settlement revenue $30.4 $72.4 -58.0%
Backlog units 549 567 -3.2%
Backlog revenue $211.0 $231.8 -9.0%
----------------------------------
Nine months ended September 30,
----------------------------------
($ in 000s except units) 2006 2005 % Change
----------- ----------- ----------
Net new orders 466 523 -10.9%
Net new order revenue $139.3 $197.8 -29.6%
Settlements 387 403 -4.0%
Settlement revenue $117.1 $140.5 -16.7%
Backlog units 549 567 -3.2%
Backlog revenue $211.0 $231.8 -9.0%
Highlights of Financial Results - Three months ended September 30,
2006:
-- The Company reported a net loss of $5.8 million or ($0.36) per share
basic and diluted, as compared to net income of $11.5 million or $0.82 per
share basic and $0.81 per share diluted for the three months ended
September 30, 2005;
-- As a result of softening market conditions and project repositioning
in the Company's markets, the Company recorded a $1.8 million non-cash
charge to assets for impairments to its real estate inventory at four
projects, two of which were in Atlanta and two in Raleigh;
-- On a pro-forma basis, before impairments option contract related write
offs, the Company reported a net loss after tax of $4.7 million or ($0.29)
per share for the three months ended September 30, 2006 as compared to net
income of $0.73 per share on a pro-forma basis for the three months ended
September 30, 2005, as adjusted for the current share count;
-- Total revenue was $35.3 million with $30.4 million of revenue from
homebuilding as compared to total revenue of $78.4 million for the three
months ended September 30, 2005 with $72.4 million of revenue derived from
homebuilding;
-- The Company delivered 110 new homes at an average per unit revenue of
approximately $276,000 as compared to 202 new homes at an average per unit
revenue of $358,000 for the three months ended September 30, 2005;
-- Gross profit from homebuilding was $2.1 million on a pro-forma basis
before impairments representing a 6.8% gross margin as compared to $21.6
million for the three months ended September 30, 2005 representing a gross
margin from homebuilding of 30.0%;
-- New order revenue was $26.3 million on 93 new orders for an average
new order revenue of $283,000 as compared to $34.4 million of new order
revenue on 117 new orders for an average of $294,000 per new order for the
three months ended September 30, 2005;
-- Backlog at September 30, 2006 was $211.0 million on 549 units as
compared to $231.8 million on 567 units at September 30, 2005.
Highlights of Financial Results - Nine months ended September 30,
2006:
-- The Company reported a net loss of $11.6 million or ($0.78) per share
basic and diluted, as compared to net income of $18.4 million or $1.47 per
share basic and $1.45 per share diluted for the nine months ended September
30, 2005;
-- On a pro-forma basis, before impairments and non-cash option contract
related write offs, the Company reported a net loss after tax of $2.7
million or ($0.18) per share for the nine months ended September 30, 2006
as compared to net income of $1.23 per share on a pro-forma basis for the
nine months ended September 30, 2005, as adjusted for the current share
count;
-- Total revenue was $122.6 million with $117.1 million of revenue from
homebuilding, as compared to total revenue of $147.1 million for the nine
months ended September 30, 2005 with $140.5 million of revenue derived from
homebuilding;
-- The Company delivered 387 new homes at an average per unit revenue of
approximately $303,000 as compared to 403 new homes at an average per unit
revenue of $349,000 for the nine months ended September 30, 2005;
-- Gross profit from homebuilding was $20.3 million on a pro-forma basis
before impairments and write-offs representing a 17.4% gross margin as
compared to $42.4 million for the nine months ended September 30, 2005
representing a gross margin from homebuilding of 30.2%;
-- New order revenue was $139.3 million on 466 new orders for an average
new order revenue of $299,000 as compared to $197.8 million of new order
revenue on 523 new orders for an average of $378,000 per new order for the
nine months ended September 30, 2005.
"Market conditions continue to present challenges for our industry,"
said Christopher Clemente, Chairman and Chief Executive Officer.
"Currently, our focus is on balance sheet enhancement, risk
mitigation, project positioning, cost controls, and lender
relationships. We believe we will weather this storm and that the
upcoming settlements at the Eclipse project will position Comstock
for a better 2007 and beyond."
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.; Raleigh, North
Carolina; and Atlanta, Georgia metropolitan areas. 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 on the
Company or it projects 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 Three Months Ended Nine Months Ended
INCOME STATEMENT September 30, September 30,
-------------------- --------------------
2006 2005 2006 2005
--------- --------- --------- ---------
Revenues
Sale of real estate--Homes $ 30,367 $ 72,409 $ 117,083 $ 140,473
Other revenue 4,913 6,028 5,489 6,604
--------- --------- --------- ---------
Total revenue 35,280 78,437 122,572 147,077
Expenses
Cost of sales of real estate 28,290 50,838 96,746 98,087
Cost of sales of other 4,994 3,118 5,024 3,138
Impairments and write-offs 1,802 0 14,717 0
Selling, general and
administrative 9,903 6,562 25,978 17,222
--------- --------- --------- ---------
Operating income (9,709) 17,919 (19,893) 28,630
Other (income) expense, net (330) (463) (918) (653)
--------- --------- --------- ---------
Income before minority interest
and equity in earnings of real
estate partnerships (9,379) 18,382 (18,975) 29,283
Minority interest 12 6 17 14
--------- --------- --------- ---------
Income before equity in
earnings of real estate
partnerships (9,391) 18,376 (18,992) 29,269
Equity in earnings of real
estate partnerships (13) 48 (66) 82
--------- --------- --------- ---------
Total pre-tax income (9,404) 18,424 (19,058) 29,351
Income taxes (3,650) 6,941 (7,421) 10,993
--------- --------- --------- ---------
Net income $ (5,754) $ 11,483 $ (11,637) $ 18,358
========= ========= ========= =========
Basic earnings per share (0.36) 0.82 (0.78) 1.47
========= ========= ========= =========
Basic weighted average shares
outstanding 15,804 13,987 14,946 12,491
========= ========= ========= =========
Diluted earnings per share (0.36) 0.81 (0.78) 1.45
========= ========= ========= =========
Diluted weighted average shares
outstanding 15,804 14,168 14,946 12,653
========= ========= ========= =========
COMSTOCK HOMEBUILDING COMPANIES, INC. September December
BALANCE SHEET 30, 2006 31, 2005
--------- ---------
ASSETS
Cash and cash equivalents $ 10,840 $ 42,167
Restricted cash 16,330 10,800
Receivables 3,906 6,365
Note receivables - 1,250
Due from related parties 3,567 2,899
Real estate held for development and sale 509,692 263,802
Inventory not owned - variable interest entities 54,666 89,890
Property, plant and equipment 2,071 605
Investment in real estate partnerships (101) (35)
Deferred income tax - 2,545
Other assets 18,305 11,031
--------- ---------
TOTAL ASSETS $ 619,276 $ 431,319
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable and accrued liabilities 66,668 59,131
Due to related parties 40 40
Obligations related to inventory not owned 52,032 83,015
Notes payable 310,274 142,994
Junior subordinated debt 30,000 -
Notes payable--related parties 663 663
Deferred income tax 6,986 -
--------- ---------
TOTAL LIABILITIES 466,663 285,843
--------- ---------
Commitments and contingencies (Note 15)
Minority interest 414 400
--------- ---------
SHAREHOLDERS' EQUITY
Class A common stock, $0.01 par value, 77,266,500
shares authorized, 14,231,822 issued and
outstanding 142 115
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 147,633 126,461
Treasury stock, at cost (391,400 class A common
stock) (2,439) -
Retained earnings (accumulated deficit) 6,836 18,473
--------- ---------
TOTAL SHAREHOLDERS' EQUITY 152,199 145,076
--------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY --------- ---------
(DEFICIT) $ 619,276 $ 431,319
========= =========
Media Contact:
Bryan Murray
Contact via http://www.marketwire.com/mw/emailprcntct?id=25E8119FD20405F6
703.883.1700 ext. 217
SOURCE: Comstock Homebuilding Companies, Inc.