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 email@example.com
Comstock Holding Companies, Inc. Reports Third-Quarter 2013 Results
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