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Comstock Holding Companies Reports Second Quarter 2016 Results

August 15, 2016
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WASHINGTON & RESTON, Va.--(BUSINESS WIRE)-- Comstock Holding Companies, Inc., (NASDAQ: CHCI), announced results for the first three and six months ended June 30, 2016:

Highlights of Second Quarter 2016:

  • Backlog at June 30, 2016 of 50 units valued at $21.5 million, compared to 43 units valued at $22.3 million at June 30, 2015;
  • Unit deliveries of 21, generating homebuilding revenue of $9.7 million for the three months ended June 30, 2016 compared to unit deliveries of 25 generating $12.1 million of homebuilding revenue for the same period in 2015;
  • Controlled community count and open community count of 17 and 10, respectively, at June 30, 2016 compared to 19 and 10, respectively at June 30, 2015;
  • Comstock is preparing to commence sales and development of five new communities located in Virginia, Maryland, and Washington, DC, and
  • Subsequent to the quarter end, the Company completed Comstock Investors X, L.C. a private placement offering of $14.0 million to provide capital for certain projects scheduled to commence in the second half of 2016.

Chairman and CEO, Christopher Clemente commented, "Our second quarter and first half results are in line with our expectations for early 2016. Our focus continues to be increasing revenue while reducing fixed operating costs. Our efforts in this regard over the past two years has substantially rationalized overhead expenses. The result of our cost reduction efforts resulted in reductions of fixed operating costs of 29% in the second quarter of this year and 24% year-to-date, as compared to a year ago. We expect this trend to continue with general and administrative costs for full year 2016, expecting at least a 25% reduction, as compared to 2015. We believe that our reduced cost structure coupled with the typical revenue increase that we experience in the second half of each calendar year will contribute towards our effort to generate positive results in the near future."

COMSTOCK COMMUNITIES NOW OPEN

Comstock currently has 10 communities open for sale in Virginia and Maryland, including townhomes, condominiums, single-family homes and villas priced from the high $200s to the $500s. Four additional communities are scheduled to open during the second half of 2016, with prices ranging from high $300s to high $800s. For further details on the open communities, see the attached Pipeline Report as of June 30, 2016 and the Form 10-Q filed by the company on August 15, 2016 or visit www.ComstockHomes.com.

COMSTOCK COMMUNITIES COMING SOON

Comstock has seven new communities in various stages of planning and development. The new communities, located in Maryland, Virginia and Washington, DC, include townhomes, single-family homes and multi-family units. Comstock plans to open five of these communities before year-end 2016, with the balance of them expected to open before the end of 2017. The communities opening in mid-to-late 2016 include:

  • The Townes at 1333 (Old Town Alexandria, VA) - townhomes priced from the high $800s.
  • Townes at Totten Mews (Washington, DC) - townhomes priced from the high $500s.
  • Marwood East (Loudoun County, VA) - single family homes priced from the high $500s.
  • Estates at Emerald Farm, final section (Frederick, MD) - single family homes priced from the high $300s.
  • Woods at Stone Ridge (Frederick, MD) - single family homes priced from the upper $500s.

For further details on the communities in planning, see the attached Pipeline Report as of June 30, 2016 and the Form 10-Q filed by the company on August 15, 2016.

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 through its wholly owned subsidiary, Comstock Homes of Washington, LC. Our track record of developing numerous successful new home communities and nearly 6,000 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 developer and homebuilder in the Washington, 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: completion of Comstock's financial accounting and review procedures; 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, 2015. 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.

       
COMSTOCK HOLDING COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share and per share data)
 

June 30,
2016

December 31,
2015

(unaudited)
ASSETS
Cash and cash equivalents $ 3,377 $ 12,448
Restricted cash 2,763 2,566
Trade receivables 1,102 332
Real estate inventories 34,914 38,223
Fixed assets, net 291 394
Other assets, net   4,892     4,515  
TOTAL ASSETS $ 47,339   $ 58,478  
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued liabilities $ 8,398 $ 7,638
Notes payable - secured by real estate inventories 21,846 24,823
Notes payable - due to affiliates, unsecured, net of discount 15,692 19,028
Notes payable - unsecured 1,336 1,548
Income taxes payable   21     -  
TOTAL LIABILITIES   47,293     53,037  
 
Commitments and contingencies
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock $0.01 par value, 806,647 and 772,210 shares issued
and liquidation preference of $4,033 and $3,861 at
June 30, 2016 and December 31, 2015, respectively $ 1,226 $ 1,174

Class A common stock, $0.01 par value, 11,038,071 shares authorized, 3,020,810

and 2,997,437 issued, and outstanding, respectively 30 30
Class B common stock, $0.01 par value, 390,500 shares authorized, issued, and outstanding 4 4
Additional paid-in capital 175,982 175,963
Treasury stock, at cost (85,570 shares Class A common stock) (2,662 ) (2,662 )
Accumulated deficit   (179,418 )   (175,785 )
TOTAL COMSTOCK HOLDING COMPANIES, INC. DEFICIT (4,838 ) (1,276 )
Non-controlling interests   4,884     6,717  
TOTAL EQUITY   46     5,441  
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 47,339   $ 58,478  
 
               
COMSTOCK HOLDING COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(Amounts in thousands, except per share data)
 
Three Months Ended June 30, Six Months Ended June 30,
  2016     2015     2016     2015  
(unaudited) (unaudited) (unaudited) (unaudited)
Revenues
Revenue—homebuilding $ 9,699 $ 12,115 $ 19,222 $ 22,125
Revenue—other   279     449     462     756  
Total revenue 9,978 12,564 19,684 22,881
 
Expenses
Cost of sales—homebuilding 9,185 10,594 17,830 19,184
Cost of sales—other 153 188 244 353
Sales and marketing 403 489 886 914
General and administrative 1,373 1,936 2,915 3,833
Interest and real estate tax expense   306     156     522     326  
Operating loss (1,442 ) (799 ) (2,713 ) (1,729 )
Other income, net   13     582     21     774  

Loss before income tax expense

(1,429 ) (217 ) (2,692 ) (955 )
Income tax (expense) benefit   (32 )   (57 )   (57 )   13  
Net loss (1,461 ) (274 ) (2,749 ) (942 )
Net income attributable to non-controlling interests   448     534     884     809  
Net loss attributable to Comstock Holding Companies, Inc. (1,909 ) (808 ) (3,633 ) (1,751 )
Paid-in-kind dividends on Series B Preferred Stock   86     -     172     -  
Net loss attributable to common stockholders $ (1,995 ) $ (808 ) $ (3,805 ) $ (1,751 )
 
Basic net loss per share $ (0.60 ) $ (0.25 ) $ (1.15 ) $ (0.57 )
Diluted net loss per share $ (0.60 ) $ (0.25 ) $ (1.15 ) $ (0.57 )
 
Basic weighted average shares outstanding 3,319 3,173 3,312 3,077
Diluted weighted average shares outstanding 3,319 3,173 3,312 3,077
 
                       
Pipeline Report as of June 30, 2016
Project     State    

Product
Type (1)

   

Estimated
Units at
Completion

   

Units
Settled

    Backlog (8)    

Units
Owned
Unsold

   

Units
Under
Control (2)

   

Total Units
Owned,
Unsettled and
Under Control

   

Average
New Order
Revenue Per
Unit to Date

City Homes at the Hampshires DC     SF     38     38 - - - - $ 728
Townes at the Hampshires (3) DC TH 73 73 - - - - $ 551
Estates at Falls Grove VA SF 19 13 5 1 - 6 $ 544
Townes at Falls Grove VA TH 110 62 12 36 - 48 $ 301
Townes at Shady Grove Metro MD TH 36 26 - 10 - 10 $ 626
Townes at Shady Grove Metro (4) MD SF 3 3 - - - - $ 199
Momentum | Shady Grove Metro (5) MD Condo 110 - - 110 - 110 $ -
Estates at Emerald Farms MD SF 84 78 4 2 - 6 $ 413
Townes at Maxwell Square MD TH 45 41 4 - - 4 $ 421
Townes at Hallcrest VA TH 42 18 16 8 - 24 $ 458
Estates at Leeland VA SF 24 2 6 16 - 22 $ 450
Villas | Preserve at Two Rivers 28' MD TH 10 4 2 4 - 6 $ 450
Villas | Preserve at Two Rivers 32' MD TH 10 8 - 2 - 2 $ 505
Marrwood East (7) VA SF 35 - 1 34 - 35 $ 591
Estates at Popkins Lane VA SF 12 - - - 12 12 $ -
Townes at Richmond Station VA TH 54 - - - 54 54 $ -
Richmond Station Multi-family VA MF 104 - - - 104 104 $ -
Townes at Totten Mews (6) DC TH 40 - - - 40 40 $ -
The Towns at 1333 VA TH 18 - - - 18 18 $ -
The Woods at Spring Ridge MD SF 24     -     -     -     24     24     $ -
Total 891     366     50     223     252     525      
 
(1) "SF" means single family home, "TH" means townhouse, "Condo" means condominium, "MF" means multi-family.
(2) Under land option purchase contract, not owned.
(3) 3 of these units are subject to statutory affordable dwelling unit program.
(4) Units are subject to statutory moderately priced dwelling unit program; not considered a separate community.
(5) 18 of these units are subject to statutory moderately priced dwelling unit program.
(6) 5 of these units are subject to statutory affordable dwelling unit program.
(7) 1 of these units is subject to statutory affordable dwelling unit program.
(8) "Backlog" means we have an executed order with a buyer but the settlement did not occur prior to report date.
 

Company:
Comstock Holding Companies, Inc.
Christopher Conover, 703-230-1985
Chief Financial Officer
or
Investor Relations:
LHA
Jody Burfening / Harriet Fried, 212-838-3777
hfried@lhai.com

Source: Comstock Holding Companies, Inc.

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