RESTON, VA, Mar 31, 2009 (MARKET WIRE via COMTEX) -- Comstock Homebuilding Companies, Inc. (NASDAQ: CHCI) ("Comstock" or
the "Company") today released audited financial results for 2008,
information regarding the status of its delisting and a general
update on operations.
Results of Operations
On March 31, 2009 the Company filed its 2008 Form 10-K with the
Securities and Exchange Commission. For the twelve months ending
December 31, 2008 the company generated the following results of
operations:
Twelve Months Ended
December 31,
--------------------------
(dollars in 000s except per share) 2008 2007
------------ ------------
Total revenue $ 46,662 $ 266,159
Impairments & write-offs 18,022 78,264
Gross profit (10,634) (57,414)
Operating loss (32,719) (92,085)
Gain on troubled debt restructuring 12,851 -
Net loss (17,058) (87,510)
Diluted earnings per share $ (0.98) $ (5.42)
The Company reported the following summary balance sheet information for
December 31, 2008:
December 31, December 31,
(dollars in 000s except per share) 2008 2007
------------ ------------
Cash and cash equivalents $ 5,977 $ 6,822
Real estate held for sale 129,542 203,860
Notes payable 102,829 171,214
Shareholder equity 30,525 46,519
Book value per share $ 1.66 $ 2.61
The Company also announced that in connection with their unqualified
opinion regarding the Company's 2008 audit, the Company's independent
registered public accounting firm, PricewaterhouseCoopers, indicated
their belief that declining market conditions create substantial doubt
that the Company would continue operating throughout 2009 as a going
concern. As such, PricewaterhouseCoopers included a Going Concern
opinion along with its 2008 audit report.
Status of Delisting
The Company disclosed that on March 23, 2009 the Company received a
notice from NASDAQ indicating that NASDAQ had elected to once again
extend its suspension of the bid-price and market value of publicly
held shares requirements until July 20, 2009. As such, the Company's
delisting deadline was automatically extended. The Company now has
until on or about October 13, 2009 to regain compliance with the
NASDAQ bid-price requirements and until on or about November 8, 2009
to regain compliance with the NASDAQ market value of publically held
shares requirements.
Update on Operations and Cash Resources
The Company disclosed that sales during the first quarter remained
weak as general economic conditions in its three primary markets
continued to generate low levels of consumer demand for new home
sales. The Company reported that it projected 23 net new orders
during the first quarter of 2009 representing approximately $7.4
million in net new order revenue. The Company projected that it will
deliver 13 homes during the first quarter representing homebuilding
revenue of approximately $5.7 million.
During the first quarter of 2009 the Company sold 7 units at its
Eclipse project representing $4.4 million of new order revenue. As of
March 31, 2009 the Company had sold a total of 371 of the 465 units
at its Eclipse project. Of the remaining 94 unsold units, 63 units
were being rented. The rented units are generating approximately
$133,000 per month of gross rental income to help cover the cost of
operating the project.
The Company reported that its unrestricted cash balance as of March
31, 2009 was projected to be approximately $3.0 million with an
additional $3.0 million of restricted cash which is being held as
collateral in connection with a letter of credit issued by Wachovia
Bank related to a discontinued captive general liability insurance
policy. The Company is working to try to secure the release of the
restricted cash. In connection with its limited liquidity the
Company has elected not to make the March 31, 2009 interest payment
due on its senior unsecured debt to JP Morgan Ventures. The amount of
the interest payment due is approximately $218,000.
The Company also announced that it is working on multiple strategic
plans aimed at generating unrestricted cash flow to shore up its
balance sheet and secure its ability to continue operating. These
strategies include further restructuring of the Company's debts with
its lenders as well as aggressive and non-conventional approaches to
bulk selling inventory units. The Company warned that if unsuccessful
in its efforts to generate free cash flow and restructure its debts
with its lenders, the Company may be forced to seek bankruptcy
protection while it reorganizes.
"The challenges currently facing the home building industry and the
economy are unprecedented," said Christopher Clemente, Comstock's
Chairman and Chief Executive Officer. "The absolute lack of capital
available to homebuilders is not only contributing to the downward
spiral of the real estate market, it is costing this country hundreds
of thousands of jobs and is causing an untold loss of wealth. While
we applaud the federal government's effort to stimulate the economy
we believe that the approach is flawed, as it has to date overlooked
one of the most meaningful contributors to the U.S. economic engine
-- the homebuilding industry. As the government uses vast resources
to prop up Wall Street, 'Main Street' is crumbling. In spite of these
overwhelming obstacles, we remain committed to doing everything
possible to reach amicable arrangements with our lenders, generate
free cash flow from our existing assets and continue in our effort to
stabilize the long term viability of this company."
About Comstock Homebuilding Companies, Inc.
Comstock Homebuilding Companies, Inc. is a publically traded real
estate enterprise with a focus on a variety of affordably priced,
for-sale residential products. The company currently operates as
Comstock Homes in the Washington, D.C.; Raleigh, NC; and Atlanta, GA
markets. Comstock trades on Nasdaq as CHCI. 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.
INCOME STATEMENT Twelve Months Ended December 31,
-------------------------------
2008 2007 2006
--------- --------- ---------
Revenues
Revenue - homebuilding $ 44,097 $ 232,805 $ 240,093
Revenue - other 2,565 33,354 5,788
--------- --------- ---------
Total revenue 46,662 266,159 245,881
Expenses
Cost of sales - homebuilding 39,246 211,068 211,408
Cost of sales - other 28 34,241 5,249
Impairments and write-offs 18,022 78,264 57,426
Selling, general and administrative 16,400 34,671 37,500
Interest, real estate taxes and indirect
costs related to inactive projects 5,685 - -
--------- --------- ---------
Operating loss (32,719) (92,085) (65,702)
Loss (Gain) on troubled debt restructuring (12,851) - -
Other income, net (2,850) (1,886) (1,487)
--------- --------- ---------
Loss before minority interest (17,018) (90,199) (64,215)
Minority interest (8) (137) 15
--------- --------- ---------
Loss before equity in loss earnings of
real estate partnership (17,010) (90,062) (64,230)
Equity in loss of real estate partnership - - (135)
--------- --------- ---------
Total pre tax loss (17,010) (90,062) (64,365)
Income taxes expense (benefit) 48 (2,552) (24,520)
--------- --------- ---------
Net loss $ (17,058) $ (87,510) $ (39,845)
========= ========= =========
Basic loss per share $ (0.98) $ (5.42) $ (2.63)
Basic weighted average shares outstanding 17,462 16,140 15,148
========= ========= =========
Diluted loss per share $ (0.98) $ (5.42) $ (2.63)
Diluted weighted average shares outstanding 17,462 16,140 15,148
========= ========= =========
BALANCE SHEET December 31, December 31,
2008 2007
------------ ------------
ASSETS
Cash and cash equivalents $ 5,977 $ 6,822
Restricted cash 3,859 4,985
Receivables - 370
Due from related parties - 92
Real estate held for development and sale 129,542 203,860
Inventory not owned - variable interest
entities 19,250 19,250
Property, plant and equipment, net 829 1,539
Other assets 1,402 22,058
------------ ------------
TOTAL ASSETS $ 160,859 $ 258,976
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable and accrued liabilities $ 8,232 $ 21,962
Obligations related to inventory not owned 19,050 19,050
Notes payable 84,563 135,367
Unsecured debt 18,266 35,847
------------ ------------
TOTAL LIABILITIES 130,111 212,226
------------ ------------
Commitments and contingencies
Minority interest 223 231
------------ ------------
SHAREHOLDERS' EQUITY
Class A common stock, $0.01 par value,
77,266,500 shares authorized, 15,608,438 and
15,120,955 issued and outstanding,
respectively 156 151
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 157,058 155,998
Treasury stock, at cost (391,400 Class A
common stock) (2,439) (2,439)
Accumulated deficit (124,277) (107,219)
------------ ------------
TOTAL SHAREHOLDERS' EQUITY 30,525 46,519
------------ ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 160,859 $ 258,976
============ ============
Contact:
Bruce Labovitz
Email Contact
703.230.1131
SOURCE: Comstock Homebuilding Companies, Inc.
http://www2.marketwire.com/mw/emailprcntct?id=B5D812BED06B4076