Comstock Holding Companies, Inc. Reports First Quarter 2014 Results

  Comstock Holding Companies, Inc. Reports First Quarter 2014 Results    *1Q homebuilding revenue totaled $7.8 million on 19 deliveries   *Backlog doubles to 41 units valued at $18.5 million compared to a year     earlier   *Community count of 11 at quarter-end 2014 compared to 5 a year earlier  Business Wire  RESTON, Va. -- May 15, 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 first quarter ended March 31, 2014.  Chairman and CEO Christopher Clemente commented, “As noted in our year-end press release on March 28, 2014, unusually harsh winter conditions delayed development and construction activities and impacted Comstock’s deliveries and revenue for the first quarter. However, in spite of the weather conditions, sales during the first quarter of this year kept pace with the strong sales we experienced during the same period last year. Comstock generated 32 new orders valued at approximately $14 million during the first quarter of this year compared to 33 sales valued at $15.2 million during the same period last year. Sales during the first quarter of this year expanded our backlog as of quarter end to 41 units, valued at $18.5 million, as compared to 21 units, valued at $9.2 million, as of March 31, 2013.Our open community count stands at 11, up from five at the same time last year. Based on continued healthy activity in the market, a limited supply of existing homes listed for sale, and our expanded pipeline of building lots, we believe Comstock is well positioned to capitalize on the favorable market trends in the Washington, D.C. region.”  First Quarter 2014 Financial Results  Net new orders of homes totaled 32 for the three months ended March 31, 2014 compared to 33 in the same period last year. Backlog totaled 41 units (representing $18.5 million in revenue) as of March 31, 2014 compared to 21 units (representing $9.2 million in revenue) as of March 31, 2013. Average backlog price increased to $452,000 from $439,000 in the same period last year.  Total revenue for the first quarter of 2014 totaled $8.0 million ($7.8 million from 19 home settlements) compared to $11.6 million for the 2013 first quarter ($11.4 million from 21 home settlements). The Company reported a consolidated net loss of $0.8 million for the first quarter of 2014 compared to net income of $1.1 million for the 2013 period. In the first quarter of 2014, net loss attributable to Comstock Holding Companies totaled $1.6 million, or $0.08 per diluted share, compared to net income of $0.7 million, or $0.03 per diluted share, in the prior-year period. The 2013 period included the reversal of a $0.7 million impairment charge reflecting increased sales activity at the Company’s Eclipse project in Arlington, 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 March 31, 2014 (000’s)             Community                                     Settled     Settled                                                           Revenue Villas as Eastgate                            1           $ 351 City Homes at the Hampshires                  2             1,480 Townes at the Hampshires                      6             3,063 Townes at Falls Grove                         10            2,937                                                      Total                                         19          $ 7,831                                                        Exhibit 2 Backlog by Community                                                       Three Months Ended March 31, 2014 (000’s)             Community                                     Backlog     Backlog                                               Units       Revenue Villas at Eastgate                            10          $ 3,964 City Homes at the Hampshires                  1             747 Townes at the Hampshires                      6             3,343 Townes at Falls Grove                         11            3,317 Townes at Maxwell Square                      4             1,635 Townes at Shady Grove Metro                   9             5,524                                                      Total                                         41          $ 18, 530                                                                                                                     COMSTOCK HOLDING COMPANIES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Amounts in thousands, except per share data)                                                                                                                                                                                        March 31,        December 31,                                                  2014             2013 ASSETS                                           (unaudited) Cash and cash equivalents                        $ 7,363          $ 11,895 Restricted cash                                    2,764            2,458 Trade receivables                                  523              346 Real estate inventories                            41,075           39,843 Property, plant and equipment, net                 223              243 Other assets                                      2,162          2,094     TOTAL ASSETS                                     $ 54,110        $ 56,879                                                                       LIABILITIES AND STOCKHOLDERS’ EQUITY Accounts payable and accrued liabilities         $ 7,139          $ 7,506 Notes payable - secured by real estate             23,481           22,701 inventories Notes payable - due to affiliates, unsecured       4,575            4,687 Notes payable - unsecured                          2,451            2,580 Income taxes payable                              144            346       TOTAL LIABILITIES                                 37,790         37,820                                                                       Commitments and contingencies (Note 8)             -                - STOCKHOLDERS’ EQUITY Class A common stock, $0.01 par value, 77,266,500 shares authorized, 18,780,754 and 18,629,638 issued and outstanding,             188              186 respectively Class B common stock, $0.01 par value, 2,733,500 shares authorized, issued and            27               27 outstanding Additional paid-in capital                         171,030          170,811 Treasury stock, at cost (426,633 shares            (2,480   )       (2,480   ) Class A common stock) Accumulated deficit                               (165,958 )      (164,379 ) TOTAL COMSTOCK HOLDING COMPANIES, INC.             2,807            4,165 EQUITY Non-controlling interest                          13,513         14,894    TOTAL EQUITY                                      16,320         19,059    TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY       $ 54,110        $ 56,879                                                                         COMSTOCK HOLDING COMPANIES, INC. AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS (Amounts in thousands, except per share data)                                                                                                       For the three months ended March 31,                                           2014                   2013 Revenues Revenue—homebuilding                      $   7,831              $  11,396 Revenue—other                                123                 161      Total revenue                                 7,954                 11,557                                                                   Expenses Cost of sales—homebuilding                    6,256                 8,796 Cost of sales—other                           93                    221 Impairment reversal                           -                     (722    ) Sales and marketing                           538                   446 General and administrative                    1,889                 1,555 Interest, real estate taxes and indirect costs related to inactive           2                   226      projects Operating (loss) income                       (824     )            1,035 Other income, net                            55                  27       Loss (income) before income tax               (769     )            1,062 expense Income tax expense                           (74      )           -        Net (loss) income                             (843     )            1,062 Less: Net income attributable to             736                 339      non-controlling interests Net (loss) income attributable to         $   (1,579   )         $  723      Comstock Holding Companies, Inc.                                                                   Basic net (loss) income per share         $   (0.08    )         $  0.04 Diluted net (loss) income per share       $   (0.08    )         $  0.03                                                                   Basic weighted average shares                 20,935                20,524 outstanding Diluted weighted average shares               20,935                21,717 outstanding                                                                     COMSTOCK HOLDING COMPANIES, INC. AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in thousands, except per share data)                                                                                                                  Three Months Ended March 31,                                                   2014             2013 Cash flows from operating activities: Net (loss) income                                 $  (843    )     $ 1,062 Adjustment to reconcile net (loss) income to net cash used in operating activities Amortization of loan discount and deferred           69              166 financing fees Depreciation expense                                 24              11 Provision for bad debt                               -               7 Undistributed earnings from unconsolidated           34              - joint venture Impairment reversal                                  -               (722    ) Amortization of stock compensation                   134             171 Changes in operating assets and liabilities: Restricted cash                                      (199    )       (104    ) Trade receivables                                    (177    )       (76     ) Real estate inventories                              (1,216  )       3,160 Other assets                                         (171    )       (148    ) Accrued interest                                     194             107 Accounts payable and accrued liabilities             (238    )       445 Income taxes payable                                (202    )      -        Net cash (used in) provided by operating            (2,591  )      4,079    activities                                                                     Cash flows from investing activities: Investment in unconsolidated joint venture           -               - Purchase of property, plant and equipment            (4      )       (26     ) Restricted cash                                      (107    )       - Proceeds from sale of Cascades Apartments -         -             274      operating real estate, net Net cash (used in) provided by investing            (111    )      248      activities                                                                     Cash flows from financing activities: Proceeds from notes payable                          5,405           9,301 Payments on notes payable                            (5,060  )       (14,744 ) Loan financing costs                                 -               (83     ) Distributions to non-controlling interests           (2,117  )       - Contributions from non-controlling interests         -               6,995 Proceeds from exercise of stock options              -               - Taxes paid related to net share settlement of       (58     )      -        equity awards Net cash (used in) provided by financing            (1,830  )      1,469    activities                                                                     Net (decrease) increase in cash and cash             (4,532  )       5,796 equivalents Cash and cash equivalents, beginning of             11,895        3,539    period Cash and cash equivalents, end of period          $  7,363        $ 9,335                                                                        Supplemental disclosure for non-cash activity: Interest paid, net of interest capitalized        $  (263    )     $ (30     ) Increase in class A common stock par value in connection with vesting and issuance of stock     $  2             $ 6 compensation Accrued liability settled through issuance of     $  129           $ - stock                                                                      Contact:  Company: 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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