Comstock Homebuilding Companies, Inc. today reported a net loss of $4.7 million (-$0.29 per share) for its second quarter on a 118.8% increase in home building revenue to $110.3 million and total revenue of $114.3 million. The results fell 5 cents per share below what Wall Street was expecting, and Comstock stock was down 12% in late afternoon trading to $1.60.
The company's miss was not as bad as the same quarter last year, when it lost $7.1 million $(-0.47 per share). Included in the results was a non-cash impairment and write-off charge of $7.5 million, which also was less than the write-off at this time last year, which was $12.9 million.
The company also announced that it had reduced its debt by $63.3 million to $230.1 million as compared to March 31, 2007 and by $86.4 million as compared to June 30, 2006, bringing its debt-to-cap ratio down to 65%, a reduction of 5 percentage points from the end of March. Comstock also said it was in compliance with all of its financial covenants and had been successful in extending the maturities and cash obligations associated with the debt.
Comstock delivered 505 new homes including 316 units at its Bellemeade project at an average per-unit revenue of approximately $218,000 as compared to 165 new homes at an average per-unit revenue of $305,000 for the three months ended June 30, 2006. Net of the $47.5 million of revenue from the Bellemeade units the Company's average revenue per delivery was $332,000.
Gross profit from homebuilding, was $7.4 million on a proforma basis before impairments and write-offs representing a 6.7% gross margin as compared to $9.1 million representing a gross margin from homebuilding of 18% for the three months ended June 30, 2006. Net of the Bellemeade units the Company's gross margin from homebuilding was 11.9%.
Gross new order revenue was $99.1 million on 494 new orders including 316 units at its Bellemeade project for an average new order revenue of $201,000 as compared to $66.3 million of new order revenue on 199 new orders for an average of $285,000 per new order for the three months ended June 30, 2006. Net of the Bellemeade units the Company's average new order was $290,000.
Backlog at June 30, 2007 was $92.8 million on 241 units as compared to $218.4 million on 575 units at June 30, 2006.
For the six months ended June 30, 2007 the Company reported a net loss of $6.3 million or (-$0.40 per share) on total revenue of $161.0 million as compared to a net loss of $5.9 million or $(-0.41 per share) a year earlier. Impairments totaled $8.4 million for the six months ended June 30, 2007, compared to a $12.9 million charge for the six months ended June 30, 2006.
"We recognize the challenges that this market presents and feel that we are taking the necessary steps to strengthen our balance sheet and manage our liquidity," said Christopher Clemente, Comstock CEO. "The significant reduction in debt this quarter is an indication of our commitment to selling through our inventory and reducing our exposure to unfunded interest costs."
