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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