News Details

WASHINGTON & RESTON, Va.--(BUSINESS WIRE)-- Comstock Holding Companies, Inc., (NASDAQ: CHCI), announced 2016 results and provided preliminary highlights on the first quarter 2017 performance:

2016 year-end financial results:

• Backlog at year-end 2016 of 35 units valued at $16.7 million, compared to 25 units valued at $10.8 million at year-end 2015;
• Unit deliveries of 94 units, generating homebuilding revenue of $40.7 million in 2016, compared to 123 units generating $60.1 million of revenue in 2015;
• Net loss of $(9.3) million, or $(2.81) per diluted share in 2016, which includes an impairment charge of $(1.7) million, or ($0.51) per diluted share, compared to net loss of $(4.6) million or $(1.43) per diluted share in 2015, which includes an impairment charge of $(2.8) million, or ($0.86) per diluted share;
• Controlled community count and open community count of 16 and 12, respectively, at year-end 2016 compared to 17 and 10, at year-end 2015.

2017 1^st quarter preliminary highlights:

• The Company began sales at two new projects, the Townes at Totten Mews in Washington, D.C. (priced from $599,990) and the Towns at 1333 in Alexandria, Virginia (priced from $899,990). These projects represent a continuation of the highly successful product line that the Company offered in its Hampshire's project in Washington, D.C. (sold out in 2015), and the Company's first project in the highly sought after location of old town Alexandria, and are expected to generate gross revenue of approximately $40 million, with revenue beginning in the second quarter of 2017;
• The Townes at Totten Mews and the Towns at 1333 represent the deployment of the capital raised through the Company's Comstock Investor X, L.C. 6% per annum preferred private placement offering of $14.5 million. These projects are expected to begin generating revenue in 2017 and based on the favorable terms of the Comstock Investor X offering, the Company expects attractive margins to be generated by sales at these projects;
• Backlog at March 31, 2017 of 44 units valued at $23.9 million, including the first sale at the Towns at 1333, and the first 3 sales at the Townes at Totten Mews, compared to 38 units valued at $16.3 million at March 31, 2016;
• Unit deliveries of 25 units, generating homebuilding revenue of $10.1 million in the three-month period ended March 31, 2017, compared to 22 units generating $9.5 million of revenue for the same period in 2016;
• Operating expenses for 2017 are projected to be lower than in any recent year, enhancing the Company's ability to protect and potentially enhance margins. For the year ended December 31, 2016, general and administrative expenses decreased $1.8 million (25%) to $5.6 million compared to $7.4 million in 2015;
• Efforts to reduce our cost-of-capital, such as the recent Comstock Investors X, L.C. private placement offering is expected to begin impacting the Company's earnings potential in the first quarter of 2017;
• On March 22, 2017, the Company entered into a Share Exchange Agreement with the holders of the Company's Series B Non-Convertible Preferred Stock, pursuant to which the Company exchanged 772,210 shares of the Company's newly created Series C Non-Convertible Preferred Stock, par value $0.01 per share and a stated liquidation value of $5.00 per share, for all outstanding Series B Non-Convertible Preferred Stock, including accrued preferred dividends earned on the Series B Preferred Stock. The Series C Preferred Stock has a discretionary dividend feature, as opposed to the mandatory dividend feature in the Series B Preferred Stock.
• On April 4, 2017, the Company completed the purchase of all Series C Preferred Stock held by Gregory Benson, the Company's former President and Chief Operating Officer, for $88,619. The transaction resulted in the retirement of 193,052.50 shares of Series C Preferred Stock, with a stated liquidation value of $965,263. This transaction results in improved flexibility for the Company in connection with recognition of costs associated with the remaining Series C Preferred Stock, which now are held solely by the Company's Chief Executive Officer, Christopher Clemente, and his family members;
• On April 4, 2017, a group of insiders, including the Company's Chief Executive Officer, Christopher Clemente, several board members, and executive managers, competed the purchase of a significant portion of the Class A common stock, together with, all of the Class B common stock shares held by the Company's former President and Chief Operating Officer, Gregory Benson, who retired in 2015;
• The Company expects to release financial results for the first quarter of 2017, on or before May 15, 2017.

Chairman and CEO, Christopher Clemente commented, "The volume of qualified traffic and demand for new homes has increased in the Washington, D.C. market. We believe this is due in part to the dramatic rise in the value of the stock market since the 2016 elections, as well as concerns about interest rates rising this year. Based on these conditions continuing, coupled with the impact of the subsequent events discussed in this press release, we expect 2017 may prove to be a positive year for Comstock. We believe that the significant steps we have taken to reduce operating costs over the last few years, recent steps we have taken to thoroughly re-evaluate the earnings potential of our current portfolio and generally improving market fundamentals in the Washington, D.C. market, position Comstock to generate earnings in near term future periods."

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 $900s. For further details on the open communities, see the attached Pipeline Report as of December 31, 2016 and the Form 10-K filed by the company on April 17, 2017.

COMSTOCK COMMUNITIES COMING SOON

In addition to the 10 communities already open, Comstock has four communities in various stages of planning and development. The communities, located in Maryland and Virginia, include townhomes, single-family homes and condominium units to be priced from the lower $300s. For further details on the communities in planning, see the attached Pipeline Report as of December 31, 2016 and the Form 10-K filed by the company on April 17, 2017.

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 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 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, 2016. 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.

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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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