Comstock Holding Companies, Inc. Reports Third-Quarter 2013 Results

  Comstock Holding Companies, Inc. Reports Third-Quarter 2013 Results

  *3Q homebuilding revenue of$9.2 millioncompared to$2.5 millionin 3Q
    last year
  *3Q net income from continuing operations of$0.3 millioncompared to net
    loss of$(4.2) million3Q last year
  *Net new home orders increased to 104 for the first nine months of 2013
    compared to 47 in the first nine months of the prior year
  *Backlog of$22.5 millionat quarter-end, up from$5.1 millionone year
    earlier

Business Wire

RESTON, Va. -- November 12, 2013

Comstock Holding Companies, Inc. (NASDAQ:CHCI) (“Comstock” or the “Company”),
a homebuilding and multi-faceted real estate development and services company
in the Washington, D.C. metropolitan area, today announced results for the
third quarter of 2013, ended September 30.

“The significant increase in new orders, settlements and revenue generated in
the third quarter and the first nine months of 2013 is the result of two
primary factors; a meaningful increase in demand for new homes in our core
market of Washington, DC, and our focus on increasing our open community count
so that we can position Comstock to capitalize on the increased demand” stated
Chairman and CEO, Christopher Clemente. “At year end 2012, we had two open
communities. We expect to have six open communities by year-end 2013. With
additional increases planned for 2014, we expect to continue the progress we
have made over the past year towards our ultimate goal of generating
consistently positive results.

Third-Quarter 2013 Financial Results

Net new orders of homes increased to 27 for the three months ended September
30, 2013 from 13 in the same period last year. For the nine months ended
September 30, 2013, net new orders increased to 104 from 47 in the same period
last year. Backlog totaled 50 units (representing $22.5 million in revenue) as
of September 30, 2013 compared to 9 units (representing $5.1 million in
revenue) as of September 30, 2012. Average backlog price decreased to $449
from $568 in the same period last year, which is largely related to product
mix.

Total revenue for the third quarter of 2013 totaled $9.6 million ($9.2 million
from 20 home settlements) compared to $3.5 million ($2.5 million from 12 home
settlements) for the third quarter of 2012. Total revenue for the nine months
ended September 30, 2013 totaled $33.3 million ($32.6 million from 63 home
settlements) compared to $11.7 million ($9.5 million from 41 settlements) for
the nine months ended September 30, 2012. The Company reported net income from
continuing operations of $0.3 million for the third quarter of 2013 compared
to a net loss from continuing operations of $(4.2) million for the same period
in 2012. In the third quarter of 2013, net loss attributable to Comstock
Holding Companies totaled $(0.7) million, or $(0.03) per diluted share,
compared to $(4.5) million, or $(0.22) per diluted share, in the same period
last year. The 2012 period included a loss of $(0.4) million within net (loss)
income from discontinued operations resulting from the tax impact of the
$19.35 million sale of Cascades Apartments, the Company’s first investment
grade multi-family property.

The Company’s results for the nine months ended September 30, 2013 reflected
the reversal of an impairment charge of $0.7 million reflecting increased
sales activity at its Eclipse project in the first quarter of 2013, which was
fully settled and exited by the Company in the second quarter of 2013.

Backlog and 2013 Revenue Update (see Exhibit 1)

As of November 11, 2013, the Company has total backlog of $24.3 million
representing 51 units. Of these units in backlog, 46 representing $21.3
million in revenue are expected to close this year. Total revenue settled to
date as of November 11, 2013 is $37.6 million representing 73 units.
Consequently, the Company estimates total homebuilding revenue for 2013 will
be approximately $60 million on 120 units settled. Backlog detail by community
is as follows:

                    
                         73 townhome lots and 38 single-family lots in the
                         Lamond Riggs neighborhood in northeast Washington,
                         D.C. Construction on the single-family units began in
                         August 2012, with the first closings occurring in
    •   Hampshires       March 2013. Construction on the townhomes began in
                         April 2013 and the sales center opened in July 2013.
                         There are seven single family units currently in
                         backlog, with average revenue of $736,000. There are
                         nine townhome units currently in backlog, with
                         average revenue of $542,000.
                         
                         36 townhome lots and 117 multi-family lots across the
                         street from the Shady Grove Metro station in
                         Rockville, MD (Montgomery County). Closing on the
    •   Shady Grove      property took place in March 2013 and site
                         development began on schedule in June. The sales
                         center opened in July 2013. There are five townhome
                         units currently in backlog with average revenue of
                         $586,000.
                         
                         110 townhome lots and 19 single family lots off Route
                         28 in Manassas, VA (Prince William County). The
                         Company purchased the first seven single-family lots
    •   Falls Grove      in 2011, closing on the remaining lots in May 2013.
                         Site development began on schedule in June 2013 and
                         the community’s sales center opened in July. There
                         are 8 units currently in backlog with average revenue
                         of $293,000.
                         
                         66 finished “six-plex” lots in Chantilly, VA (Loudoun
                         County). Construction on the units began in December
    •   Eastgate         2012, with the first closings occurring in March
                         2013. There are 22 units currently in backlog, with
                         average revenue of $407,000.
                         
                         45 townhome lots in the Historic district of
                         Fredrick, MD. Closing on the property took place in
    •   Maxwell Square   September 2013. The sales center opened in October
                         2013. Development and construction is anticipated to
                         begin in the fourth quarter of 2013.
                         
                         42 townhome lots in Sterling, VA. Closing on the
    •   Hall Crest       property took place in September 2013. Development
                         and construction is anticipated to begin in the first
                         quarter of 2014.
                         

About Comstock Holding Companies, Inc.

Comstock is a homebuilding and multi-faceted real estate development and
services company that builds a wide range of housing products under its
Comstock Homes brand through its wholly owned subsidiary, Comstock Homes of
Washington, LC. Our track record of developing numerous successful new home
communities and more than 5,500 homes, together with our substantial
experience in building a diverse range of products including apartments,
single-family homes, townhouses, mid-rise condominiums, high-rise condominiums
and mixed-use (residential and commercial) developments has positioned
Comstock as a leading residential developer and homebuilder in theWashington,
D.C.metropolitan area. Comstock Holding Companies, Inc. is a publicly traded
company, trading on NASDAQ under the symbol CHCI. For more information about
Comstock or its new home communities, please visit www.comstockhomes.com.

Cautionary Statement Regarding Forward-Looking Statements

This release includes “forward-looking” statements that are made pursuant to
the safe harbor provisions of the Private Securities Litigation Reform Act of
1995. These forward-looking statements can be identified by the use of words
such as “anticipate,” “believe,” “estimate,” “may,” “intend,” “expect,”
“will,” “should,” “seeks” or other similar expressions. Forward-looking
statements are based largely on our expectations and involve inherent risks
and uncertainties, many of which are beyond our control. You should not place
undue reliance on any forward-looking statement, which speaks only as of the
date made. Some factors which may affect the accuracy of the forward-looking
statements apply generally to the real estate industry, while other factors
apply directly to us. Any number of important factors which could cause actual
results to differ materially from those in the forward-looking statements
include, without limitation: general economic and market conditions, including
interest rate levels; our ability to service our debt; inherent risks in
investment in real estate; our ability to compete in the markets in which we
operate; economic risks in the markets in which we operate, including actions
related to government spending; delays in governmental approvals and/or land
development activity at our projects; regulatory actions; fluctuations in
operating results; our anticipated growth strategies; shortages and increased
costs of labor or building materials; the availability and cost of land in
desirable areas; natural disasters; our ability to raise debt and equity
capital and grow our operations on a profitable basis; and our continuing
relationships with affiliates. Additional information concerning these and
other important risk and uncertainties can be found under the heading “Risk
Factors” in our Annual Report on Form 10-K, as filed with the Securities and
Exchange Commission, for the fiscal year ended December 31, 2012. Our actual
results could differ materially from these projected or suggested by the
forward-looking statements. Comstock claims the protection of the safe harbor
for forward-looking statements contained in the Private Securities Litigation
Reform Act of 1995 for all forward-looking statements contained herein.
Comstock specifically disclaims any obligation to update or revise any
forward-looking statements, whether as a result of new information, future
developments or otherwise.

                                                                
Exhibit 1

Settled Revenue by Community
                                                                            
Three Months Ended Sept. 30, 2013                
                                                          Settled
Community                                 Settled
                                                          Revenue
                                                                            
Eastgate Villas                           13              $4,784,848
The Hampshires - Singles                  3               2,173,990
The Hampshires - Towns                    4               2,251,755
Penderbrook Square (Sold Out Q1)          -
The Eclipse (Sold Out Q2)             -           
Total                                     20              $9,210,593
                                                
                                                                            
                                                                            
Nine Months Ended Sept. 30, 2013                 
                                                          Settled
Community                                 Settled
                                                          Revenue
                                                                            
Eastgate Villas                           24              $8,885,023
The Hampshires - Singles                  13              9,683,517
The Hampshires - Towns                    5               2,755,695
Penderbrook Square (Sold Out Q1)          2               365,000
The Eclipse (Sold Out Q2)             19          10,904,200
Total                                     63              $32,593,435
                                                                            
                                                                            

                                                                   
COMSTOCK HOLDING COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except per share data)
                                                                             
                                    September 30,         December 31,

                                    2013                  2012
ASSETS                              (unaudited)
Cash and cash equivalents           $  4,188             $  3,539
Restricted cash                         3,707                 3,203
Trade receivables                       1,881                 1,611
Real estate inventories                 39,171                27,781
Property, plant and                     250                   222
equipment, net
Other assets                          1,952              2,343    
TOTAL ASSETS                        $  51,149           $  38,699   
                                                                             
LIABILITIES AND
SHAREHOLDERS’ EQUITY
Accounts payable and                $   8,697             $   4,691
accrued liabilities
Notes payable - secured by              18,938                19,492
real estate inventories
Notes payable - due to                  4,797                 5,041
affiliates, unsecured
Notes payable - unsecured               2,709                 3,096
Income taxes payable                  197                -        
TOTAL LIABILITIES                     35,338             32,320   
                                                                             
Commitments and                         -                     -
contingencies (Note 10)
SHAREHOLDERS’ EQUITY
Class A common stock, $0.01
par value, 77,266,500
shares authorized,
18,445,638
and 17,944,503 issued and               184                   176
outstanding, respectively
Class B common stock, $0.01
par value, 2,733,500 shares             27                    27
authorized, issued and
outstanding
Additional paid-in capital              170,672               170,070
Treasury stock, at cost
(426,633 shares Class A                 (2,480   )            (2,480   )
common stock)
Accumulated deficit                   (163,203 )          (162,349 )
TOTAL COMSTOCK HOLDING                  5,200                 5,444
COMPANIES, INC. EQUITY
Non-controlling interest              10,611             935      
TOTAL EQUITY                          15,811             6,379    
TOTAL LIABILITIES AND               $  51,149           $  38,699   
SHAREHOLDERS’ EQUITY
                                                                             
                                                             

                                                                
COMSTOCK HOLDING COMPANIES, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share data)
                                                                            
                                                                            
                               Three Months Ended            Nine Months Ended
                               September 30,                 September 30,
                                2013         2012         2013         2012   
Revenues
Revenue—homebuilding           $ 9,211        $ 2,527        $ 32,594       $ 9,479
Revenue—other                   361          956          748          2,183  
Total revenue                    9,572          3,483          33,342         11,662
                                                                            
Expenses
Cost of                          6,850          2,093          25,267         8,149
sales—homebuilding
Cost of sales—other              59             1,144          556            2,951
Impairment charge                -              2,358          (722   )       2,358
(reversal) (Note 16)
Sales and marketing              477            181            1,434          465
General and                      1,719          2,002          4,974          5,700
administrative
Interest, real
estate taxes and
indirect costs                  61           190          405          1,982  
related to inactive
projects
Operating income                 406            (4,485 )       1,428          (9,943 )
(loss)
Other income                    41           (45    )      199          (8     )
(expense), net
Income (loss) before
income tax (expense)             447            (4,530 )       1,627          (9,951 )
benefit
Income tax (expense)            (197   )      364          (197   )      2,478  
benefit
Net income (loss)
from continuing                  250            (4,166 )       1,430          (7,473 )
operations
Discontinued
operations:
Loss from
discontinued                     -              (6     )       (4     )       (112   )
operations
Gain on sale of real
estate from                      -              -              -              6,466
discontinued
operations
Income tax expense
from discontinued               -            (364   )      -            (2,478 )
operations
Net (loss) income
from discontinued                -              (370   )       (4     )       3,876
operations
Net income (loss)                250            (4,536 )       1,426          (3,597 )
Less: Net income
(loss) from
continuing
operations
attributable
to non-controlling               989            (40    )       2,280          (40    )
interests
Less: Net income
from discontinued
operations
attributable
to non-controlling              -            -            -            103    
interests
Net loss
attributable to                $ (739   )     $ (4,496 )     $ (854   )     $ (3,660 )
Comstock Holding
Companies, Inc.
                                                                            
Basic loss per share
from:
Continuing                     $ (0.03  )     $ (0.20  )     $ (0.04  )     $ (0.36  )
operations
Discontinued                    -            (0.02  )      -            0.18   
operations
Net loss per share             $ (0.03  )     $ (0.22  )     $ (0.04  )     $ (0.18  )
                                                                            
Diluted loss per
share from:
Continuing                     $ (0.03  )     $ (0.20  )     $ (0.04  )     $ (0.36  )
operations
Discontinued                    -            (0.02  )      -            0.18   
operations
Net loss per share             $ (0.03  )     $ (0.22  )     $ (0.04  )     $ (0.18  )
                                                                            
Basic weighted
average shares                   20,739         20,653         20,646         20,433
outstanding
Diluted weighted
average shares                   20,739         20,653         20,646         20,433
outstanding
                                                                            
Net loss
attributable to
Comstock Holding
Companies, Inc.:
Loss from continuing           $ (739   )     $ (4,126 )     $ (850   )     $ (7,433 )
operations
(Loss) income from
discontinued                    -            (370   )      (4     )      3,773  
operations
Net loss                       $ (739   )     $ (4,496 )     $ (854   )     $ (3,660 )
                                                                                     

                                                                 
                                                                             
COMSTOCK HOLDING COMPANIES, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands, except per share data)
                                                                             
                                       Nine Months Ended September 30,
                                       2013                2012
Cash flows from operating
activities:
Net income (loss)                      $  1,426           $  (3,597  )
Adjustment to reconcile
net income to net cash
used in operating
activities
Amortization of loan
discount and deferred                      359                 1,234
financing fees
Depreciation expense                       47                  107
Provision for bad debt                     (22     )           -
(Gain) loss on
extinguishment of notes                    (27     )           73
payable
Undistributed earnings
from unconsolidated joint                  (16     )           -
venture
Gain on sale of operating                  -                   (6,466  )
real estate, net
Impairment (reversal)                      (722    )           2,358
charge
Loss on disposal of
property, plant and                        -                   1
equipment
Amortization of stock                      392                 928
compensation
Changes in operating
assets and liabilities:
Restricted cash                            (504    )           (118    )
Trade receivables                          (248    )           930
Real estate inventories                    (10,825 )           1,154
Other assets                               (36     )           (340    )
Accrued interest                           (13     )           (596    )
Accounts payable and                       4,006               (777    )
accrued liabilities
Income taxes payable                     197              (28     )
Net cash used in operating               (5,986  )         (5,137  )
activities
                                                                             
Cash flows from investing
activities:
Investment in
unconsolidated joint                       (7      )           -
venture
Purchase of property,                      (75     )           (106    )
plant and equipment
Proceeds from sale of
Cascades Apartments -                    279              18,882  
operating real estate, net
Net cash provided by                     197              18,776  
investing activities
                                                                             
Cash flows from financing
activities:
Proceeds from notes                        22,984              13,662
payable
Payments on notes payable                  (23,893 )           (25,283 )
Loan financing costs                       (188    )           (338    )
Distribution to                            -                   (2,944  )
non-controlling interests
Contribution from                          614                 67
non-controlling interests
Proceeds from Comstock
Investor VII, L.C. private                 7,295               -
placement
Distribution to Comstock
Investor VII, L.C.                         (367    )           -
investors
Proceeds from exercise of                  1                   -
stock options
Taxes paid related to net
share settlement of equity               (8      )         -       
awards
Net cash provided by (used               6,438            (14,836 )
in) financing activities
                                                                             
Net increase (decrease) in                 649                 (1,197  )
cash and cash equivalents
Cash and cash equivalents,               3,539            5,639   
beginning of period
Cash and cash equivalents,             $  4,188          $  4,442   
end of period
                                                                             
Supplemental disclosure
for non-cash activity:
Interest paid, net of                  $   184             $   1,308
interest capitalized
Reduction in proceeds from
sale of Cascades Apartment
and increase in other
assets
                                       $   -               $   418
related to amounts placed
in escrow upon settlement
of Cascades Apartments
sale
Increase in class A common
stock par value in
connection with issuance
of stock                               $   8               $   -

compensation and warrants
exercise
                                                                             

Contact:

Comstock Holding Companies, Inc.
Joe Squeri, 703-230-1229
Chief Financial Officer
or
Investor Relations:
LHA
Jody Burfening / Harriet Fried
212-838-3777
hfried@lhai.com
 
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