Harbor Custom Development Inc. (NASDAQ:HCDI) announced that it has downsized its land development infrastructure division, reducing the company’s total head count by 56% since the third quarter.
The real estate development firm also said it has sold off $7.5 million in heavy equipment that was previously utilized by the land development infrastructure division, eliminating about $1.1 million in annual depreciation expense.
“By materially downsizing our fee build horizontal division and wrapping up our quarry operations, we have significantly reduced a considerable drag on our earnings and refocused the company’s efforts on our core strengths of permitting, land entitlement, and vertical construction of single-family homes, townhomes, and multi-family units,” Harbor Custom Development CEO Sterling Griffin said in a statement.
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Lance Brown, Harbor Custom Development’s chief financial officer, also commented, stating: “The sale of the equipment has reduced our annual cash outlay on loans and lease payments associated with this equipment by more than $2 million annually.”
“Downsizing the land development infrastructure division and wrapping up our fee build projects and quarry operations is a good outcome for us as these projects had a negative impact on our 2022 cash flows and financial results,” Brown added.
Harbor Custom Development is involved in all aspects of land development, including acquisition, entitlements, construction, home building, marketing, and managing projects. The company is focused on Western Washington's Puget Sound region, Sacramento in California, Austin in Texas, and Punta Gorda in Florida.
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