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Comstock Holding Companies Reports Third Quarter 2017 Results

WASHINGTON, D.C. and RESTON, Va., Nov. 16, 2017 (GLOBE NEWSWIRE) -- 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
ProjectStateProduct 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 HampshiresDCSF 38 38 - - - - $ 747
Townes at the Hampshires (3)DCTH 73 73 - - - - $ 551
Estates at Falls GroveVASF 19 19 - - - - $ 545
Townes at Falls GroveVATH 110 110 - - - - $ 304
Townes at Shady Grove MetroMDTH 36 27 - 9 - 9$ 583
Townes at Shady Grove Metro (4)MDSF 3 3 - - - - $ -
Momentum | Shady Grove Metro (5)MDCondo 110 - - 110 - 110$ -
Estates at Emerald FarmsMDSF 84 84 - - - - $ 426
Townes at Maxwell SquareMDTH 45 45 - - - - $ 421
Townes at HallcrestVATH 42 42 - - - - $ 465
Estates at LeelandVASF 24 11 2 11 - 13$ 451
Villas | Preserve at Two Rivers 28'MDTH 6 6 - - - - $ 458
Villas | Preserve at Two Rivers 32'MDTH 10 10 - - - - $ 504
Marrwood East (7)VASF 35 13 16 6 - 22$ 638
Townes at Totten Mews (6)DCTH 40 5 3 32 - 35$ 540
The Towns at 1333VATH 18 2 - 16 - 16$ 948
The Woods at Spring RidgeMDSF 21 1 6 14 - 20$ 674
Solomons ChoiceMDSF 56 - - 56 - 56$ -
Townes at Richmond StationVATH 104 - - 104 - 104$ -
Condominiums at Richmond StationVAMF 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.

Source:Comstock Holding Companies, Inc.