Comstock Holding Companies, Inc. Reports Fourth Quarter and Full Year 2013 Results *4Q homebuilding revenue of$21.2 millioncompared to$2.1 millionin 4Q last year *4Q net income from continuing operations of$1.2 millioncompared to net loss of$(2.1) millionin 4Q last year *Net new orders for 2013 increased 147% to 126 units, compared to 51 units in 2012 *Backlog at year-end 2013 of 28 units valued at $12.3 million, compared to 9 units valued at $5.4 million at year-end 2012 *Community count increased to 11 at year-end 2013 from five at year-end 2012 *Comstock’s pipeline of controlled land inventory expanded to 493 lots at year-end 2013 from 354 lots at year-end 2012. Business Wire RESTON, Va. -- March 28, 2014 Comstock Holding Companies, Inc. (NASDAQ:CHCI) (“Comstock” or the “Company”), a leading homebuilding and multi-faceted real estate development and services company focused on the Washington, D.C. metropolitan area, today announced results for the fourth quarter and full year ended December 31, 2013. “As expected, we resumed growth and regained operating profitability in 2013. Homebuilding revenue, settlements, average settlement prices, gross margin, overhead leverage and net income from continuing operations all improved substantially, reflecting improving economic conditions and growing demand for new homes in our core market of Washington, D.C.,” said Chairman and CEO Christopher Clemente. “Our success in more than doubling our open community count, from five at year-end 2012 to 11 at year-end 2013 contributed to the significant increase of net new orders for the year. “With additional communities planned for opening in 2014 and a growing pipeline of controlled land inventory, Comstock is well positioned to capitalize further on the favorable market trends in the Washington, D.C. region and to generate another year of growth. Although unusually harsh winter conditions will have an impact on deliveries and revenue in the first quarter of this year, new orders YTD have kept pace with 2013 and currently our backlog is above year-ago levels, giving us confidence that we will achieve our objective of continuing the pattern of growth that began with 2013.” Fourth-Quarter and Full Year 2013 Financial Results Net new orders of homes increased to 22 for the three months ended December 31, 2013 from 4 in the same period last year. For the year ended December 31, 2013, net new orders increased to 126 from 51 in 2012. Backlog totaled 28 units (representing $12.3 million in revenue) as of December 31, 2013 compared to 9 units (representing $5.4 million in revenue) as of December 31, 2012. Average backlog price decreased in 2013 to $441,000 from $602,000 in the same period last year, as a result of changes in product mix. Total revenue for the fourth quarter of 2013 was $21.3 million ($21.2 million from 44 home settlements) compared to $2.6 million ($2.1 million from 4 home settlements) for the fourth quarter of 2012. The Company reported net income from continuing operations of $1.2 million for the fourth quarter of 2013 compared to a net loss from continuing operations of $(2.1) million for the same period in 2012. In the fourth quarter of 2013, net loss attributable to the Company totaled $(1.2) million, or $(0.07) per diluted share, compared to $(2.0) million, or $(0.09) per diluted share, in the same period in 2012. Included in net income from continuing operations and net loss attributable to the Company in 2013 was a $1.1 million write-off of costs related to a cancelled land purchase agreement. Excluding this write-off for the fourth quarter of 2013, net income from continuing operations and net loss attributable to the Company was $2.3 million and $(0.1) million, respectively. For the year ended December 31, 2013, total revenue was $54.6 million ($53.8 million from 107 home settlements) compared to $14.3 million ($11.6 million from 45 settlements) for 2012. Net loss attributable to the Company totaled $(2.0) million, or $(0.10) per diluted share, compared to $(5.7) million, or $(0.28) per share for 2012. Backlog and 2013 Revenue Update (see Exhibit 1) As of December 31, 2013, the Company had a total backlog of 28 units representing $12.3 million in revenue. Total revenue settled was $53.8 million, representing 107 units. Backlog detail by community is as follows: 73 townhome lots and 38 single-family lots in the Lamond Riggs neighborhood in northeast • Hampshires Washington, D.C. As of December 31 2013, there tively. were two single-family units and five townhomes units in backlog, with average revenue of $740,000 and $493,000, respec 36 townhome lots, 3 single-family lots and 117 multi-family lots across the street from the • Shady Grove Shady Grove Metro station in Rockville, MD (Montgomery County). As of December 31, there were six townhome units in backlog with average revenue of $590,000. 110 townhome lots and 19 single-family lots off • Falls Grove Route 28 in Manassas, VA (Prince William County). As of December 31, there were 11 units in backlog with average revenue of $295,000. 66 finished “six-plex” lots in Chantilly, VA (Loudoun County). During 2013, the Company • Eastgate settled 53 units and 4 units were in backlog as of December 31, 2013 with average revenue of $398,000. 45 finished townhome lots in the Historic district of downtown Fredrick, MD (Frederick • Maxwell Square County). Closing on the property took place in September 2013. Construction and sales began during the first quarter of 2014. 42 townhome lots in Sterling, VA (Loudoun County). Closing on the property took place in • Hall Crest September 2013. Development, construction, and sales are anticipated to begin in the second quarter of 2014. 24 finished single-family lots located in Fredericksburg, VA (Stafford County). Closing on • Oaks of Highlands the property took place in December 2013. Construction and sales activities are anticipated to begin in mid 2014. Recent Developments In December 2013, the Company raised approximately $4.0 million of equity capital through a newly formed subsidiary, Comstock Investors VIII, L.C. (“Comstock VIII’). The private placement provides capital related to the current and planned construction of The Townes at Hall Crest in Sterling, • VA and the Maxwell Square condominium in Frederick, MD. Accredited investors participating in Comstock VIII include unrelated third parties as well as members of the Company’s management team and certain members of the Board of Directors of the Company. The terms of the offering include a preferred return of 20% per annum compounded annually on capital account balances. On December 31, 2013, the Company completed a $9.2 million financing with Cardinal Bank consisting of a $3.7 million acquisition and development • loan, a $3.5 million revolving construction loan and a $2.0 million letter of credit facility (collectively, the “Hall Cardinal Loan”). Proceeds of the Hall Cardinal Loan are to be used to finance the development of the Townes at Hall Crest in Sterling, VA. 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, townhomes, 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 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; adverse weather conditions or 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, 2013. 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 Dec. 31, 2013 (000s) Settled Community Settled Revenue Eastgate Villas 29 $11,620 The Hampshires - Singles 7 5,103 The Hampshires - Towns 8 4,490 Penderbrook Square (Sold Out Q1) - - The Eclipse (Sold Out Q2) - - Total 44 $21,213 Twelve Months Ended Dec. 31, 2013 (000s) Settled Community Settled Revenue Eastgate Villas 53 $20,504 The Hampshires - Singles 20 14,787 The Hampshires - Towns 13 7,246 Penderbrook Square (Sold Out Q1) 2 365 The Eclipse (Sold Out Q2) 19 10,904 Total 107 $53,806 COMSTOCK HOLDING COMPANIES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Amounts in thousands, except per share data) December 31, December 31, 2013 2012 ASSETS Cash and cash equivalents $ 11,895 $ 3,539 Restricted cash 2,458 3,203 Trade receivables 346 1,611 Real estate inventories 39,843 27,781 Property, plant and equipment, net 243 222 Other assets 2,094 2,343 TOTAL ASSETS $ 56,879 $ 38,699 LIABILITIES AND SHAREHOLDERS’ EQUITY Accounts payable and accrued liabilities $ 7,506 $ 4,691 Notes payable - secured by real estate 22,701 19,492 inventories Notes payable - due to affiliates, 4,687 5,041 unsecured Notes payable - unsecured 2,580 3,096 Income taxes payable 346 - TOTAL LIABILITIES 37,820 32,320 Commitments and contingencies - - SHAREHOLDERS’ EQUITY Class A common stock, $0.01 par value, 77,266,500 shares authorized, 18,445,638 and 17,627,826 issued and outstanding, 186 176 respectively Class B common stock, $0.01 par value, 2,733,500 shares authorized, issued and 27 27 outstanding Additional paid-in capital 170,811 170,070 Treasury stock, at cost (426,633 shares (2,480 ) (2,480 ) Class A common stock) Accumulated deficit (164,379 ) (162,349 ) TOTAL COMSTOCK HOLDING COMPANIES, INC. 4,165 5,444 EQUITY Non-controlling interest 14,894 935 TOTAL EQUITY 19,059 6,379 TOTAL LIABILITIES AND SHAREHOLDERS’ $ 56,879 $ 38,699 EQUITY - - COMSTOCK HOLDING COMPANIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Amounts in thousands, except per share data) Three months ended Twelve months ended December 31, December 31, 2013 2012 2013 2012 (unaudited) Revenues Revenue—homebuilding $ 21,212 $ 2,154 $ 53,806 $ 11,633 Revenue—other 60 486 808 2,669 Total revenue 21,272 2,640 54,614 14,302 Expenses Cost of 16,329 1,543 41,596 9,692 sales—homebuilding Cost of sales—other 252 533 808 3,484 Impairment charges 1,070 - 348 2,358 and write-offs, net Sales and marketing 541 159 1,975 624 General and 1,761 2,334 6,735 8,034 administrative Interest, real estate taxes and indirect costs 3 153 408 2,135 related to inactive projects Operating income 1,316 (2,082 ) 2,744 (12,025 ) (loss) Other income, net 68 26 267 18 Income (loss) before income tax (expense) 1,384 (2,056 ) 3,011 (12,007 ) benefit Income tax (expense) (149 ) 6 (346 ) 2,484 benefit Net income (loss) from continuing 1,235 (2,050 ) 2,665 (9,523 ) operations Discontinued operations: Income (Loss) from discontinued - 14 (4 ) (98 ) operations Gain on sale of real estate from - - - 6,466 discontinued operations Income tax expense from discontinued - (6 ) - (2,484 ) operations Net income from discontinued - 8 (4 ) 3,884 operations Net income (loss) 1,235 (2,042 ) 2,661 (5,639 ) Less: Net income (loss) from continuing operations 2,411 (37 ) 4,691 (77 ) attributable to non-controlling interests Less: Net income from discontinued operations - - - 103 attributable to non-controlling interests Net loss attributable to $ (1,176 ) $ (2,005 ) $ (2,030 ) $ (5,665 ) Comstock Holding Companies, Inc. Basic (loss) income per share from: Continuing $ (0.06 ) $ (0.11 ) $ (0.10 ) $ (0.47 ) operations Discontinued - 0.01 - 0.19 operations Net loss per share $ (0.06 ) $ (0.10 ) $ (0.10 ) $ (0.28 ) Diluted (loss) income per share from: Continuing $ (0.06 ) $ (0.11 ) $ (0.10 ) $ (0.47 ) operations Discontinued - 0.01 - 0.19 operations Net loss per share $ (0.06 ) $ (0.10 ) $ (0.10 ) $ (0.28 ) Basic weighted average shares 20,753 19,970 20,681 19,970 outstanding Diluted weighted average shares 20,753 19,970 20,681 19,970 outstanding Net loss attributable to Comstock Holding Companies, Inc.: Loss from continuing $ (1,176 ) $ (2,013 ) $ (2,026 ) $ (9,446 ) operations Income (loss) from discontinued - 8 (4 ) 3,781 operations Net loss $ (1,176 ) $ (2,005 ) $ (2,030 ) $ (5,665 ) COMSTOCK HOLDING COMPANIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in thousands, except per share data) For the three months ended December 31, 2013 2012 (unaudited) Cash flows from operating activities: Net income (loss) $ 1,235 $ (2,042 ) Adjustment to reconcile net income to net cash used in operating activities Amortization of loan discount 62 49 and deferred financing fees Depreciation expense 23 15 Provision for bad debt - 60 Undistributed earnings from (43 ) - unconsolidated joint venture Impairment charges and 970 - write-offs, net Amortization of stock 91 519 compensation Changes in operating assets and liabilities: Restricted cash 249 (3 ) Trade receivables 1,535 (361 ) Real estate inventories (1,588 ) (10,138 ) Other assets (106 ) 100 Accrued interest 261 101 Accounts payable and accrued (1,191 ) 989 liabilities Income taxes payable 149 - Net cash provided by (used in) 1,647 (10,711 ) operating activities Cash flows from investing activities: Purchase of property, plant (16 ) (52 ) and equipment Release of insurance deposit 1,000 - Net cash provided by (used in) 984 (52 ) investing activities Cash flows from financing activities: Proceeds from notes payable 15,058 11,324 Payments on notes payable (11,795 ) (2,229 ) Loan financing costs (55 ) (180 ) Distributions to (1,997 ) - non-controlling interests Contributions from 4,000 945 non-controlling interests Taxes paid related to net share settlement of equity (135 ) - awards Net cash provided by financing 5,076 9,860 activities Net increase (decrease) in 7,707 (903 ) cash and cash equivalents Cash and cash equivalents, 4,188 4,442 beginning of period Cash and cash equivalents, end $ 11,895 $ 3,539 of period Supplemental disclosure for non-cash activity: Interest paid, net of interest $ 28 $ (82 ) capitalized Reduction in proceeds from sale of Cascades Apartment and increase in other assets $ - $ - 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 $ 2 $ - compensation and warrants exercise Increase in treasury stock and accrued liabilities for $ - $ 41 net-settlement of stock compensation 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 Fourth Quarter and Full Year 2013 Results
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