RESTON, VA -- (MARKET WIRE) -- 03/31/11 --
Comstock Homebuilding Companies, Inc. (NASDAQ: CHCI) ("Comstock" or the "Company"), a multi-faceted real estate
development and services company focused on the Washington, DC market,
announced a net loss for its fourth quarter ended December 31, 2010 of
$(1.5)million or $(0.08) per diluted share. The net loss and diluted loss
per share for the fourth quarter of 2010 compares to net income of $1.4
million or $0.08 earnings per diluted share respectively for 2009. Total
revenue for the fourth quarter of 2010 was $2.7 million compared to $3.8
million for the comparable 2009 quarter.
For the year ended December 31, 2010, the Company reported a net loss of
$(7.7) million or $(0.42) per diluted share. The net loss and diluted loss
per share for the year ended December 31, 2010 compares to a net loss of
$(26.8) million or $(1.51) per diluted share for the year ended December
31, 2009. Total revenue for the year ended December 31, 2010 was $23.9
million as compared to $23.2 million for the year ended December 31, 2009.
In an effort to stabilize the Company, management formulated its Strategic
Realignment Plan in 2009 and spent much of that year negotiating with
lenders to eliminate and restructure debt in order to reposition the
Company with an improved balance sheet and an enhanced ability to pursue
new opportunities as market conditions improve. In 2010, the Company began
rebuilding its operations through a revised operating strategy focused
exclusively on the Washington, DC market with operations including
residential rental property development, residential for-sale property
development, and real estate related contracting services. With that
rebuilding effort firmly underway, the Company is announcing the successful
completion of its Strategic Realignment Plan.
"Our focus during much of the past few years has been stabilizing Comstock
and positioning the Company to rebuild shareholder value," said
Christopher Clemente, Chairman and Chief Executive Officer "Now that we
have accomplished the goals of our Strategic Realignment Plan, Comstock has
significantly less debt, a greatly improved balance sheet, multiple new
revenue generating opportunities in the for-sale, rental and services
divisions, new strategic relationships, a growing pipeline of well
positioned development assets, and an enhanced, focused and energized
management team. As a result, Comstock is now well positioned to leverage
our core operating strengths in the Washington, DC region, which is widely
regarded as the best real estate market in the nation."
Notable Events and Accomplishments
In connection with its efforts to reposition the Company for improved
operating results several noteworthy accomplishments have occurred:
- Deleveraging -- As of December 31, 2010 the Company's total debt was
$28.4 million. The Company's total debt peaked at $340 million on
September 30, 2006
- Monetization of certain key assets -- During 2010 the Company
continued to monetize existing inventory at the Eclipse condominium
project, where it settled 30 units reducing remaining inventory to 44 units
(out of a total of 465 units) and at the Penderbrook Square condominium
project where it settled 29 units reducing remaining inventory to 68 (out
of a total of 424 units)
- Improvement in cash flow -- Net cash provided by operating activities
increased to $15.4 million for the year ended December 31, 2010 up from
$11.9 million in 2009
- Completed exit from unprofitable markets -- As of year-end 2010
Comstock is wholly focused on the Washington, DC market, which has
historically been among the best performing real estate markets in the
nation
- Securing new business opportunities -- In December 2010, the Company
announced that it had formed joint ventures with Four Points, LLC ("Four
Points") for the development of two new communities located in Washington,
DC, combining the residential development expertise of Comstock with the
local knowledge and land position of Four Points. Comstock plans to
commence site improvements and construction on both downtown communities in
2011, upon issuance of final building permits. The Hampshires, located in
the Northeast section of the District of Columbia along New Hampshire
Avenue, will include approximately 110 townhomes and single-family homes,
while Cedar Hill, located in the Southeast section of Washington, DC, near
the home of the Washington Nationals baseball team, will include
approximately 40 townhomes and townhome style condominiums
- Launch of a new development and construction services operating unit --
The Company successfully launched a real estate development and
construction services division designed to provide a wide range of real
estate development related services to third party property owners
including financial institutions. Leveraging the core operating
capabilities of the Company the new line of business is providing site
development and construction management services, development entitlement
services, and general contracting services. After launching the business
unit in mid-2010 the Company had completed work with a project value of
approximately $350,000 by year-end 2010 while securing contracts for
additional work with a project value of almost $8 million expected to be
completed in 2011
- Securing a $12 million judgment against Balfour Beatty -- In February
2010, a subsidiary of the Company was awarded a judgment against Balfour
Beatty, in connection with claims brought by the Company against Balfour
Beatty, as successor to Centex Construction Company, related to the
Company's Eclipse condominium project in Arlington, Virginia. The United
States District Court for the Eastern District of Virginia awarded Comstock
Potomac Yard, L.C. damages of approximately $11.9 million plus costs. In
March 2010, Balfour Beatty filed an appeal of the judgment and posted a
supersedeas bond in the amount of $12.5 million. The Company expects a
ruling on the appeal to be issued in 2011
- Successful refinancing of maturing debt -- On February 2, 2011, the
Company entered into a $11.85 million refinancing of its Eclipse on Center
Park condominium project. The new loan was completed with Eagle Bank and
proceeds of the loan were utilized to pay off existing indebtedness owed to
KeyBank, N.A. in advance of the KeyBank loan maturity in March 2011. The
Eagle Bank loan matures in 2014 and provides the Company several key
benefits including a lower overall cost of financing, a reduced sales quota
requirement that better reflects current market conditions and an extended
three-year term, which Comstock believes will allow for the value of the
asset to be maximized through the orderly sale of the remaining condominium
units
- Securing new project financing and restart in construction -- On
February 17, 2011, the Company announced that it has begun construction on
a 103-unit rental apartment community in the Cascades master planned
community located in the Potomac Falls area of Loudoun County, Virginia.
The project is being financed with a five-year, $11.0 million
construction/mortgage loan provided by Cardinal Bank of Tysons Corner,
Virginia
"Our accomplishments in regard to stabilizing Comstock and positioning the
Company to rebuild shareholder value are the result of a team effort. With
these strategic steps completed we are now focused on rebuilding our
business and shareholder value and we are excited about the opportunity for
continued improvement in 2011 and beyond," Mr. Clemente continued.
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, DC 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
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. 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
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share data)
Three Months Ended
December 31,
2010 2009
Revenues
Revenue - homebuilding $ 2,304 $ 3,173
Revenue - other 391 639
Total revenue 2,695 3,812
Expenses
Cost of sales - homebuilding 2,048 2,845
Cost of sales - other 344 -
Selling, general and administrative 1,405 2,550
Interest, real estate taxes and indirect
costs related to inactive projects 423 297
Operating loss (1,525) (1,880)
Gain on troubled debt restructuring -- (600)
Gain on deconsolidation of subsidiaries -- (1,965)
Other income, net (66)
Total pre tax (loss) income (1,525) 751
Income taxes expense (benefit) 11 (931)
Net (loss) income from continuing operations (1,536) 1,682
Loss - discontinued operations -- 326
Net loss attributable to Comstock Homebuilding
Companies, Inc. $ (1,536) $ 1,356
Basic and diluted loss per share
Continuing operations $ (0.08) $ 0.10
Discontinued operations -- (0.02)
Net loss per share $ (0.08) $ 0.08
Weighted average shares outstanding 18,620 17,951
COMSTOCK HOMEBUILDING COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share data)
Twelve Months Ended
December 31,
-------------------------
2010 2009
----------- -----------
Revenues
Revenue - homebuilding $ 19,070 $ 20,226
Revenue - other 4,781 2,944
----------- -----------
Total revenue 23,851 23,170
Expenses
Cost of sales - homebuilding 19,186 18,824
Cost of sales - other 4,011 1,387
Impairments and write-offs 1,548 15,351
Selling, general and administrative 5,606 7,534
Interest, real estate taxes and indirect
costs related to inactive projects 2,224 3,310
----------- -----------
Operating loss (8,724) (23,236)
Gain on troubled debt restructuring -- (3,403)
Gain on deconsolidation of subsidiaries -- (1,965)
Other income, net (1,037) (423)
----------- -----------
Total pre tax loss (7,687) (17,455)
Income taxes (benefit) expense 11 (929)
----------- -----------
Net loss from continuing operations (7,698) (16,516)
Loss from discontinued operations -- (10,236)
----------- -----------
Net loss attributable to Comstock Homebuilding
Companies, Inc. $ (7,698) $ (26,752)
=========== ===========
Basic loss per share
Continuing operations $ (0.42) $ (0.93)
Discontinued operations -- (0.58)
----------- -----------
Net loss per share $ (0.42) $ (1.51)
Diluted loss per share
Continuing operations $ (0.42) $ (0.93)
Discontinued operations -- (0.58)
----------- -----------
Net loss per share $ (0.42) $ (1.51)
Basic weighted average shares outstanding 18,313 17,670
=========== ===========
Diluted weighted average shares outstanding 18,313 17,670
=========== ===========
COMSTOCK HOMEBUILDING COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except per share data)
December 31, December 31,
2010 2009
------------ -----------
ASSETS
Cash and cash equivalents $ 475 $ 1,085
Restricted cash 5,201 3,249
Real estate held for development and sale 34,008 70,890
Property, plant and equipment, net 50 144
Other assets 1,194 1,963
------------ -----------
TOTAL ASSETS $ 40,928 $ 77,331
============ ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable and accrued liabilities $ 5,884 $ 5,579
Notes payable - secured by real estate 18,853 50,530
Notes payable - due to affiliates, unsecured 5,008 12,743
Notes payable - unsecured 4,515 4,346
------------ -----------
TOTAL LIABILITIES 34,260 73,198
------------ -----------
SHAREHOLDERS' EQUITY
Class A common stock, $0.01 par value,
77,266,500 shares authorized, 17,025,954
and 15,608,438 issued and outstanding,
respectively 171 156
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 166,700 157,418
Treasury stock, at cost (391,400 Class A
common stock) (2,439) (2,439)
Accumulated deficit (157,791) (151,029)
------------ -----------
TOTAL SHAREHOLDERS' EQUITY 6,668 4,133
------------ -----------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $ 40,928 $ 77,331
============ ===========
COMSTOCK HOMEBUILDING COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands, except per share data)
Twelve Months Ended
December 31,
------------------------
2010 2009
---------- ----------
Cash flows from operating activities:
Net loss from continuing operations $ (7,698) $ (26,752)
Adjustment to reconcile net loss to net cash
provided by operating activities
Amortization and depreciation 98 685
Impairments and write-offs 1,548 22,938
Gain on troubled debt restructuring -- (3,403)
Gain on trade payable settlements (860) (333)
Gain on deconsolidation of subsidiary -- (1,965)
Board of directors compensation -- --
Amortization of stock compensation -- 158
Deferred income tax -- --
Changes in operating assets and liabilities:
Restricted cash (1,952) 610
Receivables -- --
Due from related parties -- --
Real estate held for development and sale 19,927 18,276
Other assets 769 (561)
Accounts payable and accrued liabilities 3,560 2,278
Due to related parties
---------- ----------
Net cash provided by operating
activities 15,392 11,931
---------- ----------
Cash flows from investing activities:
Purchase of property, plant and equipment (4) --
---------- ----------
Net cash used in investing activities (4) --
---------- ----------
Cash flows from financing activities:
Proceeds from notes payable 823 874
Payments on senior unsecured debt -- --
Payments on junior subordinated debt -- --
Payments on notes payable (17,649) (17,697)
Proceeds from option and warrant exercise 828 --
---------- ----------
Net cash used in financing
activities (15,998) (16,823)
---------- ----------
Net decrease in cash and cash equivalents (610) (4,892)
Cash and cash equivalents, beginning of year 1,085 5,977
---------- ----------
Cash and cash equivalents, end of year $ 475 $ 1,085
========== ==========
Contact:
Joe Squeri
Chief Financial Officer
703.230.1229
Source: Comstock Homebuilding Companies, Inc.
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