Comstock Holding Companies, Inc. Reports Fourth Quarter and Full Year 2013 Results

  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
hfried@lhai.com
 
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