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 1st 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.
COMSTOCK HOLDING COMPANIES, INC. AND
SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share and
per share data)
December 31, 2016
December 31, 2015
ASSETS Cash and cash equivalents $ 5,761 $ 12,448 Restricted
cash 1,238 2,566 Trade receivables 613 332 Real estate inventories
49,842 38,223 Fixed assets, net 255 394 Other assets, net
2,112 4,197 TOTAL ASSETS $ 59,821 $
58,160
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable and accrued liabilities $ 7,721 $ 7,638 Notes
payable - secured by real estate inventories, net of deferred
financing charges 26,927 24,692 Notes payable - due to affiliates,
unsecured, net of discount and deferred financing charges 15,866
19,028 Notes payable - unsecured, net of deferred financing charges
911 1,361 Income taxes payable 19 -
TOTAL LIABILITIES 51,444 52,719
Commitments and contingencies (Note 14) STOCKHOLDERS’ EQUITY
(DEFICIT) Series B preferred stock, $0.01 par value, 3,000,000
shares authorized, 841,848 and 772,210 shares issued and
liquidation preference of $4,209 and $3,861 at December 31, 2016
and 2015, respectively $ 1,280 $ 1,174 Class A common stock, $0.01
par value, 11,038,071 shares authorized, 3,035,922 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 176,251 175,963 Treasury stock, at
cost (85,570 shares Class A common stock) (2,662 ) (2,662 )
Accumulated deficit (184,778 ) (175,785 ) TOTAL
COMSTOCK HOLDING COMPANIES, INC. DEFICIT (9,875 ) (1,276 )
Non-controlling interests 18,252 6,717
TOTAL EQUITY 8,377 5,441 TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY $ 59,821 $ 58,160
COMSTOCK HOLDING COMPANIES, INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Amounts in thousands, except per share
data)
For the years ended December 31,
2016 2015 Revenues Revenue—homebuilding
$ 40,696
$
60,132
Revenue—other 884 1,244 Total revenue
41,580 61,376 Expenses Cost of sales—homebuilding 38,236
51,583 Cost of sales—other 427 551 Impairment charges and recovery,
net 1,703 2,765 Sales and marketing 1,606 2,076 General and
administrative 5,586 7,410 Interest and real estate tax expense
886 547 Operating loss (6,864 ) (3,556
) Other income, net 157 861 Loss before
income tax expense (6,707 ) (2,695 ) Income tax (expense) benefit
(55 ) 732 Net loss (6,762 ) (1,963 ) Net
income attributable to non-controlling interests 2,231
2,604 Net loss attributable to Comstock
Holding Companies, Inc. (8,993 ) (4,567 ) Paid-in-kind dividends on
Series B Preferred Stock 348 - Net loss
attributable to common stockholders $ (9,341 ) $ (4,567 )
Basic loss per share $ (2.81 ) $ (1.43 ) Diluted loss per share $
(2.81 ) $ (1.43 ) Basic weighted average shares outstanding
3,321 3,198 Diluted weighted average shares outstanding 3,321 3,198
Pipeline Report as of
December 31, 2016 Project State
ProductType (1)
EstimatedUnits atCompletion
UnitsSettled
Backlog (8)
UnitsOwnedUnsold
UnitsUnderControl (2)
Total UnitsOwned,Unsettled andUnder
Control
AverageNewOrderRevenuePer Unitto Date(in
000's)
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 18 - 1 - 1 $
546 Townes at Falls Grove VA TH 110 80 9 21 - 30 $ 302 Townes at
Shady Grove Metro MD TH 36 26 - 10 - 10 $ 581 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 78 5
1 - 6 $ 431 Townes at Maxwell Square MD TH 45 45 - - - - $ 421
Townes at Hallcrest VA TH 42 36 6 - - 6 $ 464 Estates at Leeland VA
SF 24 5 5 14 - 19 $ 461 Villas | Preserve at Two Rivers 28' MD TH 6
5 - 1 - 1 $ 458 Villas | Preserve at Two Rivers 32' MD TH 10 9 - 1
- 1 $ 506 Marrwood East (6) VA SF 35 1 8 26 - 34 $ 638 Townes at
Totten Mews (7) DC TH 40 - 1 39 - 40 $ 650 The Towns at 1333 VA TH
18 - - 18 - 18 $ - The Woods at Spring Ridge MD SF 21 - 1 20 - 21 $
645 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
417 35 262
214 511
(1) "SF" means single family home, "TH" means townhouse,
"Condo" means condominium and "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.
(5) 16 of these units are subject to statutory moderately priced
dwelling unit program. (6) 1 of these units is subject to statutory
affordable dwelling unit program. (7) 5 of these units are subject
to statutory inclusionary zoning program. (8) "Backlog" means we
have an executed order with a buyer but the settlement did not
occur prior to report date.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170417005943/en/
Company:Comstock Holding Companies, Inc.Christopher
Conover, 703-230-1985Chief Financial OfficerorInvestor
Relations:LHAJody Burfening / Harriet Fried,
212-838-3777hfried@lhai.com
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