Comstock Holding Companies Reports Third Quarter 2017 Results
November 16 2017 - 5:38PM
Comstock Holding Companies, Inc., (NASDAQ:CHCI), announced results
for the three and nine months ended September 30, 2017:
Highlights of Third Quarter 2017, as
compared to Third Quarter 2016:
- Net loss attributable to common stockholders of $(1.5) million,
or $(0.45) per diluted share for the three months ended September
30, 2017, compared to net loss attributable to common stockholders
of $(1.1) million, or $(0.34) per diluted share for the three
months ended September 30, 2016;
- Total revenue of $13.8 million, including $13.1 million from 24
home deliveries during the three months ended September 30, 2017,
as compared to $13.1 million, including $12.9 million from 33 home
deliveries during the three months ended September 30, 2016;
- Average settlement price of $545,000 for the three months ended
September 30, 2017 as compared to an average settlement price of
$390,000 for the three months ended September 30, 2016;
- Backlog at September 30, 2017 of 27 units valued at $16.4
million, compared to 35 units valued at $16.4 million at September
30, 2016;
- On July 17, 2017, the Company acquired all the business assets
of Monridge Environmental, LLC through a newly formed entity, JK
Environmental Services, which is a wholly owned subsidiary
of CDS Capital Management, L.C., a subsidiary of Comstock. The
total purchase price was $2.3 million.
Chairman and CEO, Christopher Clemente
commented, “As previously disclosed, Comstock secured additional
capital of $5.0 million subsequent to the close of the
3rd quarter. During the 3rd quarter, Comstock took the first
step in a concerted effort to expand our footprint and
generate new sources of revenue in the real estate services market
by acquiring Monridge Environmental, LLC in a transaction that we
believe will be accretive and provide a platform for additional
expansion of the fee-for-service business model of our wholly owned
subsidiary, Comstock Real Estate Services, LLC. Coupled with
additional services that will include commercial mortgage
brokerage, asset management, and related services, we believe that
these new initiatives provide the Company additional means of
utilizing our public company platform to generate new opportunities
to enhance shareholder value.”
COMSTOCK COMMUNITIES NOW OPEN
Comstock currently has 6 communities open for
sale in Virginia, Maryland, and Washington, D.C., including
townhomes and single-family homes priced from the high $300s to the
$900s. For further details, see the attached Pipeline Report
as of September 30, 2017, the Form 10-Q filed by the Company on
November 16, 2017 or visit www.ComstockHomes.com.
COMSTOCK COMMUNITIES COMING
SOON
In addition to the open communities, Comstock
has two additional communities in various stages of planning and
development. The communities, located in Virginia, include
townhomes to be priced from the low and mid-$300s. For
further details on the communities in planning, see the attached
Pipeline Report as of September 30, 2017 and the Form 10-Q filed by
the Company on November 16, 2017 or
visit www.ComstockHomes.com.
About Comstock Holding Companies,
Inc.
Comstock is a 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
homebuilding activities are currently focused in the Washington,
D.C. metropolitan area, which is the sixth largest metropolitan
statistical area in the United States, while providing real estate
related services through our wholly owned subsidiary, Comstock Real
Estate Services, LLC in the New Jersey, Pennsylvania, and
Washington, D.C. metropolitan areas. 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 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.comstockholding.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.
Company: Comstock Holding
Companies, Inc. Christopher Conover, 703-230-1985 Chief Financial
Officer
|
COMSTOCK HOLDING COMPANIES, INC. AND
SUBSIDIARIES |
CONSOLIDATED BALANCE SHEETS |
(Amounts in thousands, except share and per
share data) |
|
|
|
|
|
|
|
|
|
September 30, 2017 |
|
December 31, 2016 |
|
|
|
(unaudited) |
|
|
|
ASSETS |
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
2,086 |
|
|
$ |
5,761 |
|
|
Restricted cash |
|
|
1,014 |
|
|
|
1,238 |
|
|
Trade
receivables |
|
|
1,332 |
|
|
|
613 |
|
|
Real
estate inventories |
|
|
48,501 |
|
|
|
49,842 |
|
|
Fixed
assets, net |
|
|
329 |
|
|
|
255 |
|
|
Goodwill |
|
|
1,702 |
|
|
|
- |
|
|
Other
assets, net |
|
|
1,049 |
|
|
|
2,112 |
|
|
TOTAL
ASSETS |
|
$ |
56,013 |
|
|
$ |
59,821 |
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
Accounts
payable and accrued liabilities |
|
$ |
8,828 |
|
|
$ |
7,721 |
|
|
Notes
payable - secured by real estate inventories, net of deferred
financing charges |
|
|
27,572 |
|
|
|
26,927 |
|
|
Notes
payable - due to affiliates, unsecured, net of discount and
deferred financing charges |
|
|
15,078 |
|
|
|
15,866 |
|
|
Notes
payable - unsecured, net of deferred financing charges |
|
|
1,396 |
|
|
|
911 |
|
|
Income
taxes payable |
|
|
29 |
|
|
|
19 |
|
|
TOTAL
LIABILITIES |
|
|
52,903 |
|
|
|
51,444 |
|
|
|
|
|
|
|
|
Commitments and contingencies (Note 8) |
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS’ EQUITY (DEFICIT) |
|
|
|
|
|
Series C
preferred stock $0.01 par value, 3,000,000 shares authorized,
579,158 and 0 |
|
|
|
|
|
shares
issued and liquidation preference of $2,896 and $0 at September 30,
2017 and |
|
|
|
|
|
December
31, 2016, respectively |
|
$ |
442 |
|
|
$ |
- |
|
|
Series B
preferred stock $0.01 par value, 3,000,000 shares authorized, 0 and
841,848 |
|
|
|
|
|
shares
issued and liquidation preference of $0 and $4,209 at September 30,
2017 and |
|
|
|
|
|
December
31, 2016, respectively |
|
|
- |
|
|
|
1,280 |
|
|
Class A common stock, $0.01 par value, 11,038,071 shares
authorized, 3,347,789 |
|
|
|
|
|
and
3,035,922 issued, and outstanding, respectively |
|
|
33 |
|
|
|
30 |
|
|
Class B
common stock, $0.01 par value, 220,250 and 390,500 shares |
|
|
2 |
|
|
|
4 |
|
|
authorized, issued, and outstanding, respectively |
|
|
|
|
|
Additional paid-in capital |
|
|
177,374 |
|
|
|
176,251 |
|
|
Treasury
stock, at cost (85,570 shares Class A common stock) |
|
|
(2,662 |
) |
|
|
(2,662 |
) |
|
Accumulated deficit |
|
|
(186,545 |
) |
|
|
(184,778 |
) |
|
TOTAL
COMSTOCK HOLDING COMPANIES, INC. DEFICIT |
|
|
(11,356 |
) |
|
|
(9,875 |
) |
|
Non-controlling interests |
|
|
14,466 |
|
|
|
18,252 |
|
|
TOTAL
EQUITY |
|
|
3,110 |
|
|
|
8,377 |
|
|
TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
$ |
56,013 |
|
|
$ |
59,821 |
|
|
|
|
|
|
|
|
|
COMSTOCK HOLDING COMPANIES, INC. AND
SUBSIDIARIES |
UNAUDITED CONSOLIDATED STATEMENTS OF
OPERATIONS |
(Amounts in thousands, except per share
data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
|
Revenues |
|
|
|
|
|
|
|
|
|
Revenue—homebuilding |
|
$ |
13,076 |
|
|
$ |
12,880 |
|
|
$ |
33,375 |
|
|
$ |
32,102 |
|
|
Revenue—other |
|
|
739 |
|
|
|
223 |
|
|
|
1,228 |
|
|
|
685 |
|
|
Total
revenue |
|
|
13,815 |
|
|
|
13,103 |
|
|
|
34,603 |
|
|
|
32,787 |
|
|
|
|
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
|
|
|
Cost of
sales—homebuilding |
|
|
12,482 |
|
|
|
11,985 |
|
|
|
30,804 |
|
|
|
29,815 |
|
|
Cost of
sales—other |
|
|
846 |
|
|
|
85 |
|
|
|
1,366 |
|
|
|
329 |
|
|
Impairment charges and recovery, net |
|
|
- |
|
|
|
91 |
|
|
|
- |
|
|
|
91 |
|
|
Sales and
marketing |
|
|
401 |
|
|
|
427 |
|
|
|
1,122 |
|
|
|
1,313 |
|
|
General
and administrative |
|
|
1,263 |
|
|
|
1,236 |
|
|
|
3,735 |
|
|
|
4,151 |
|
|
Interest
and real estate tax expense |
|
|
16 |
|
|
|
133 |
|
|
|
16 |
|
|
|
655 |
|
|
Operating
loss |
|
|
(1,193 |
) |
|
|
(854 |
) |
|
|
(2,440 |
) |
|
|
(3,567 |
) |
|
Other
income, net |
|
|
21 |
|
|
|
98 |
|
|
|
69 |
|
|
|
119 |
|
|
Loss
before income tax expense |
|
|
(1,172 |
) |
|
|
(756 |
) |
|
|
(2,371 |
) |
|
|
(3,448 |
) |
|
Income
tax expense |
|
|
(29 |
) |
|
|
- |
|
|
|
(29 |
) |
|
|
(57 |
) |
|
Net
loss |
|
|
(1,201 |
) |
|
|
(756 |
) |
|
|
(2,400 |
) |
|
|
(3,505 |
) |
|
Net
income (loss) attributable to non-controlling interests |
|
|
309 |
|
|
|
290 |
|
|
|
(630 |
) |
|
|
1,174 |
|
|
Net loss
attributable to Comstock Holding Companies, Inc. |
|
|
(1,510 |
) |
|
|
(1,046 |
) |
|
|
(1,770 |
) |
|
|
(4,679 |
) |
|
Paid-in-kind dividends on Series B Preferred Stock |
|
|
- |
|
|
|
87 |
|
|
|
78 |
|
|
|
259 |
|
|
Extinguishment of Series B Preferred Stock |
|
|
- |
|
|
|
- |
|
|
|
(1,011 |
) |
|
|
- |
|
|
Net loss
attributable to common stockholders |
|
$ |
(1,510 |
) |
|
$ |
(1,133 |
) |
|
$ |
(837 |
) |
|
$ |
(4,938 |
) |
|
|
|
|
|
|
|
|
|
|
|
Basic net
loss per share |
|
$ |
(0.45 |
) |
|
$ |
(0.34 |
) |
|
$ |
(0.25 |
) |
|
$ |
(1.49 |
) |
|
Diluted
net loss per share |
|
$ |
(0.45 |
) |
|
$ |
(0.34 |
) |
|
$ |
(0.25 |
) |
|
$ |
(1.49 |
) |
|
|
|
|
|
|
|
|
|
|
|
Basic
weighted average shares outstanding |
|
|
3,374 |
|
|
|
3,326 |
|
|
|
3,299 |
|
|
|
3,317 |
|
|
Diluted
weighted average shares outstanding |
|
|
3,374 |
|
|
|
3,326 |
|
|
|
3,299 |
|
|
|
3,317 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pipeline Report as of September 30,
2017 |
|
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 |
- |
- |
- |
- |
$ |
747 |
|
Townes at the
Hampshires (3) |
DC |
TH |
73 |
73 |
- |
- |
- |
- |
$ |
551 |
|
Estates at Falls
Grove |
VA |
SF |
19 |
19 |
- |
- |
- |
- |
$ |
545 |
|
Townes at Falls
Grove |
VA |
TH |
110 |
110 |
- |
- |
- |
- |
$ |
304 |
|
Townes at Shady Grove
Metro |
MD |
TH |
36 |
27 |
- |
9 |
- |
9 |
$ |
583 |
|
Townes at Shady Grove
Metro (4) |
MD |
SF |
3 |
3 |
- |
- |
- |
- |
$ |
- |
|
Momentum | Shady Grove
Metro (5) |
MD |
Condo |
110 |
- |
- |
110 |
- |
110 |
$ |
- |
|
Estates at Emerald
Farms |
MD |
SF |
84 |
84 |
- |
- |
- |
- |
$ |
426 |
|
Townes at Maxwell
Square |
MD |
TH |
45 |
45 |
- |
- |
- |
- |
$ |
421 |
|
Townes at
Hallcrest |
VA |
TH |
42 |
42 |
- |
- |
- |
- |
$ |
465 |
|
Estates at Leeland |
VA |
SF |
24 |
11 |
2 |
11 |
- |
13 |
$ |
451 |
|
Villas | Preserve at
Two Rivers 28' |
MD |
TH |
6 |
6 |
- |
- |
- |
- |
$ |
458 |
|
Villas | Preserve at
Two Rivers 32' |
MD |
TH |
10 |
10 |
- |
- |
- |
- |
$ |
504 |
|
Marrwood East (7) |
VA |
SF |
35 |
13 |
16 |
6 |
- |
22 |
$ |
638 |
|
Townes at Totten Mews
(6) |
DC |
TH |
40 |
5 |
3 |
32 |
- |
35 |
$ |
540 |
|
The Towns at 1333 |
VA |
TH |
18 |
2 |
- |
16 |
- |
16 |
$ |
948 |
|
The Woods at Spring
Ridge |
MD |
SF |
21 |
1 |
6 |
14 |
- |
20 |
$ |
674 |
|
Solomons Choice |
MD |
SF |
56 |
- |
- |
56 |
- |
56 |
$ |
- |
|
Townes at Richmond
Station |
VA |
TH |
104 |
- |
- |
104 |
- |
104 |
$ |
- |
|
Condominiums at
Richmond Station |
VA |
MF |
54 |
- |
- |
54 |
- |
54 |
$ |
- |
|
Total |
|
|
928 |
489 |
27 |
412 |
- |
439 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(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) 16 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. |
|
|
|
|
|
|
|
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|
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