Comstock Holding Companies, Inc., (NASDAQ: CHCI), announced results
for the three and six months ended June 30, 2018:
Highlights of Second Quarter 2018, as
compared to Second Quarter 2017:
- Total revenue of $14.3 million, as compared to $10.5
million.
- Revenue from asset management operations of $3.0 million during
the quarter ended June 30, 2018, representing a new and recurring
revenue stream.
- Revenue from real estate services increased 121% to $0.6
million, compared to $0.3 million.
- G&A expense decreased 70% to $0.4 million, compared to $1.2
million.
- Net loss attributable to common stockholders of ($1.0) million,
or ($0.27) per diluted share, including impairment charges of $0.2
million, as compared to net income attributable to common
stockholders of $0.4 million, or $0.11 per diluted share.
- Pursuant to an asset management agreement, commenced
development and construction of Momentum at Shady Grove, a 110-unit
all workforce housing multifamily building adjacent to the Shady
Grove Metro Station in Rockville, Maryland.
- Continued wind down of for-sale homebuilding operations, on par
with previously announced expectations that wind down of the
for-sale homebuilding operation will be substantially completed by
year-end 2018.
- Homebuilding backlog represents forward revenue of $25.4
million on 40 home sales as compared to $22.4 million on 39
units.
- Completed the conversion of a majority of its notes
payable to affiliates into the Company’s existing Series C
Non-Convertible Preferred Equity.
Highlights of first half 2018, as
compared to first half 2017:
- Total revenue of $23.1 million as compared to $20.8
million.
- Revenue from asset management operations of $5.8 million during
the first half of 2018.
- Revenue from real estate services increased 120% to $1.1
million, compared to $0.5 million.
- G&A expense decreased 71% to $0.7 million, as compared to
$2.5 million.
- Net loss attributable to common stockholders of ($1.7) million,
or ($0.47) per diluted share, including impairment charges of $0.8
million, as compared to net income attributable to common
stockholders of $0.7 million, or $0.20 per diluted share.
"Second quarter results begin to demonstrate
benefits of the previously announced transformation of our business
platform, including among other things, the deleveraging of our
balance sheet,” said Christopher Clemente, Chairman and Chief
Executive Officer of Comstock. “As we continue expanding our
asset management platform I fully expect continued improvement to
bottom line results, which is why I elected to convert significant
debt held by family-owned entities to preferred equity. I am
excited about the progress made in the early months of our
strategic transformation and look forward to reporting on
Comstock’s additional progress in the near future.”
The Company's latest investor relations
presentation describing the strategic vision of the Company can be
found at www.ComstockCompanies.com.
About Comstock Holding Companies,
Inc.
CHCI is a multi-faceted real estate development,
asset management and real estate related services company that,
since 1985, has designed, developed, constructed and managed
several thousand residential units and millions of square feet of
residential and mixed-use projects throughout the Washington, DC
metropolitan market and in other key markets in the southeastern
United States. In early 2018, CHCI transitioned its operating
platform from being primarily focused on developing on-balance
sheet, for-sale, homebuilding projects to being focused on
commercial real estate development, asset management and real
estate related services. As a result, CHCI began operating through
two real estate focused platforms, CDS Asset Management ("CAM") and
Comstock Real Estate Services ("CRES"). CAM provides real estate
development, asset management, and property management services,
while CRES provides development supply chain services, including
capital markets, real estate brokerage, environmental consulting
and design services in the Washington, DC metropolitan area and in
New Jersey and Pennsylvania. Anchoring the transition of CHCI is a
long-term asset management agreement covering two of the largest
transit-oriented, mixed-use developments in the Washington, DC
area; Reston Station, a 3 million square foot transit-oriented,
mixed-use development located in Reston, VA, and Loudoun Station, a
2.5 million square foot transit-oriented, mixed-use development in
Ashburn, VA, as well as other additional development assets.
Comstock's substantial experience in entitling, designing,
developing, and managing a diverse range of properties including
apartments, single-family homes, townhomes, mid-rise condominiums,
high-rise condominiums and mixed-use (residential and commercial)
properties, as well as large scale commercial parking garages and
infrastructure projects, has positioned the Comstock organization
as a premier developer and real estate related service provider in
the mid-Atlantic Region. The Company is a publicly traded company,
trading on NASDAQ under the symbol CHCI. For more information about
CHCI or its businesses, please visit www.ComstockCompanies.com.
About Reston Station
Strategically located mid-way between Tysons
Corner and Dulles International Airport, Reston Station is among
the largest mixed-use, transit-oriented developments in the
Washington, DC area. Located at the terminus of Phase I of Metro's
Silver Line, Reston Station is already home to more than 1,000
residents, numerous businesses, multiple retail establishments, and
several restaurants. With more than 1 million square feet of
completed and stabilized buildings, more than 2 million square feet
of additional development in various stages of entitlement,
development and construction, and a 3,500-space underground parking
garage and transit facility adjacent to the Wiehle Reston-East
Metro Station, the Reston Station neighborhood is taking shape and
quickly becoming Fairfax County's urban focal point in the Dulles
Corridor. For more information about Reston Station, please
visit www.RestonStation.com
About Loudoun Station
Located at the terminus station on Metro's
Silver Line, minutes from Dulles International Airport, Loudoun
Station represents Loudoun County's first (and currently its only)
Metro-connected development. Loudoun Station has approximately
700,000 square feet of mixed-use development completed, including
hundreds of rental apartments, approximately 150,000 square feet of
retail, restaurants, and entertainment venues, 50,000 square feet
of Class-A office, and a 1,500-space commuter parking garage. More
than 2 million square feet of additional development is slated for
Loudoun Station. Located adjacent to Metro's Ashburn Station,
the Loudoun Station neighborhood represents Loudoun County's
beginning transformation into a transit connected community with
direct connectivity to Dulles International Airport, Reston, Tysons
Corner and downtown Washington, DC. As Loudoun County's only
transit connected neighborhood, Loudoun Station has become the new
downtown of Loudoun County in the Dulles Corridor. For more
information about Loudoun Station, please
visit www.LoudounStation.com
Comstock New Home Communities Currently
Open
Comstock, having significantly reduced its focus
on on-balance sheet development of new home communities is working
through its remaining inventory of building lots to maximize
revenue from all sources as it transitions away from the capital
intensive for-sale homebuilding business toward commercial
development, asset management and real estate services. Currently
the Company has 6 remaining communities open for sale in Virginia,
Maryland, and Washington, D.C., including townhomes and
single-family homes priced from the high $370s to the $900s.
For further details, see the attached Pipeline Report as of June
30, 2018, the Form 10-Q filed by the Company on August 14, 2018 or
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; the reliance of substantially all
of our revenues derived from our provision of management services
to a limited number of companies; the Asset Management Agreement
and other agreements with clients are subject to termination; 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,
2017. 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 Guthrie, 703-230-1292 Chief Financial
OfficerSource: Comstock Holding Companies, Inc.
COMSTOCK HOLDING COMPANIES, INC. AND
SUBSIDIARIESCONSOLIDATED BALANCE
SHEETS(Amounts in thousands, except share and per
share data)
|
|
|
|
|
|
|
June 30,
2018 |
|
December 31, 2017 |
|
|
(unaudited) |
|
|
ASSETS |
|
|
|
|
Cash and
cash equivalents |
|
$ |
5,725 |
|
|
$ |
1,806 |
|
Restricted cash |
|
|
1,237 |
|
|
|
1,141 |
|
Trade
receivables |
|
|
596 |
|
|
|
491 |
|
Trade
receivables - related parties |
|
|
11 |
|
|
|
145 |
|
Real
estate inventories |
|
|
34,915 |
|
|
|
44,711 |
|
Fixed
assets, net |
|
|
262 |
|
|
|
309 |
|
Goodwill
and intangibles |
|
|
1,906 |
|
|
|
1,939 |
|
Other
assets, net |
|
|
1,266 |
|
|
|
616 |
|
TOTAL
ASSETS |
|
$ |
45,918 |
|
|
$ |
51,158 |
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
Accounts
payable and accrued liabilities |
|
$ |
4,886 |
|
|
$ |
9,116 |
|
Accounts
payable - related parties |
|
|
687 |
|
|
|
- |
|
Deferred
revenue |
|
|
2,812 |
|
|
|
- |
|
Notes
payable - secured by real estate inventories, net of deferred
financing charges |
|
|
20,188 |
|
|
|
23,215 |
|
Notes
payable - due to affiliates, unsecured, net of discount and
deferred financing charges |
|
|
4,874 |
|
|
|
14,893 |
|
Notes
payable - unsecured, net of deferred financing charges |
|
|
1,096 |
|
|
|
1,285 |
|
Income
taxes payable |
|
|
57 |
|
|
|
39 |
|
TOTAL
LIABILITIES |
|
|
34,600 |
|
|
|
48,548 |
|
|
|
|
|
|
Commitments and contingencies (Note 13) |
|
|
|
|
STOCKHOLDERS’ EQUITY (DEFICIT) |
|
|
|
|
Series C
preferred stock $0.01 par value, 3,000,000 shares authorized,
2,799,848 and 579,158 |
|
|
|
|
shares issued and outstanding and liquidation preference of $13,999
and $2,896, |
|
|
|
|
at
June 30, 2018 and December 31, 2017, respectively |
|
$ |
7,193 |
|
|
$ |
442 |
|
Class A common stock, $0.01 par value, 11,038,071 shares
authorized, 3,690,693 |
|
|
|
|
and 3,295,518 issued, and outstanding, respectively |
|
|
37 |
|
|
|
33 |
|
Class B
common stock, $0.01 par value, 220,250 shares authorized,
issued, |
|
|
2 |
|
|
|
2 |
|
and outstanding, respectively |
|
|
|
|
Additional paid-in capital |
|
|
181,009 |
|
|
|
177,612 |
|
Treasury
stock, at cost (85,570 shares Class A common stock) |
|
|
(2,662 |
) |
|
|
(2,662 |
) |
Accumulated deficit |
|
|
(191,528 |
) |
|
|
(189,803 |
) |
TOTAL
COMSTOCK HOLDING COMPANIES, INC. DEFICIT |
|
|
(5,949 |
) |
|
|
(14,376 |
) |
Non-controlling interests |
|
|
17,267 |
|
|
|
16,986 |
|
TOTAL
EQUITY |
|
|
11,318 |
|
|
|
2,610 |
|
TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
$ |
45,918 |
|
|
$ |
51,158 |
|
|
|
|
|
|
COMSTOCK HOLDING COMPANIES, INC.
AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF
OPERATIONS(Amounts in thousands, except per share
data)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
Revenue—homebuilding |
|
$ |
10,709 |
|
|
$ |
10,235 |
|
|
$ |
16,270 |
|
|
$ |
20,299 |
|
Revenue—asset management |
|
|
2,960 |
|
|
|
- |
|
|
|
5,751 |
|
|
|
- |
|
Revenue—real estate services |
|
|
631 |
|
|
|
285 |
|
|
|
1,078 |
|
|
|
489 |
|
Total
revenue |
|
|
14,300 |
|
|
|
10,520 |
|
|
|
23,099 |
|
|
|
20,788 |
|
|
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
|
|
Cost of
sales—homebuilding |
|
|
11,543 |
|
|
|
9,221 |
|
|
|
17,038 |
|
|
|
18,322 |
|
Cost of
sales—asset management |
|
|
2,606 |
|
|
|
- |
|
|
|
5,147 |
|
|
|
- |
|
Cost of
sales—real estate services |
|
|
676 |
|
|
|
296 |
|
|
|
853 |
|
|
|
520 |
|
Impairment charges |
|
|
216 |
|
|
|
- |
|
|
|
774 |
|
|
|
- |
|
Sales and
marketing |
|
|
209 |
|
|
|
340 |
|
|
|
428 |
|
|
|
721 |
|
General
and administrative |
|
|
368 |
|
|
|
1,226 |
|
|
|
728 |
|
|
|
2,472 |
|
Interest
and real estate taxes |
|
|
24 |
|
|
|
- |
|
|
|
109 |
|
|
|
- |
|
Operating
loss |
|
|
(1,342 |
) |
|
|
(563 |
) |
|
|
(1,978 |
) |
|
|
(1,247 |
) |
Other
income, net |
|
|
41 |
|
|
|
28 |
|
|
|
55 |
|
|
|
48 |
|
Loss
before income tax benefit |
|
|
(1,301 |
) |
|
|
(535 |
) |
|
|
(1,923 |
) |
|
|
(1,199 |
) |
Income
tax benefit |
|
|
484 |
|
|
|
- |
|
|
|
478 |
|
|
|
- |
|
Net
loss |
|
|
(817 |
) |
|
|
(535 |
) |
|
|
(1,445 |
) |
|
|
(1,199 |
) |
Net
income (loss) attributable to non-controlling interests |
|
|
185 |
|
|
|
(922 |
) |
|
|
280 |
|
|
|
(939 |
) |
Net
(loss) income attributable to Comstock Holding Companies,
Inc. |
|
|
(1,002 |
) |
|
|
387 |
|
|
|
(1,725 |
) |
|
|
(260 |
) |
Paid-in-kind dividends on Series B Preferred Stock |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
78 |
|
Extinguishment of Series B Preferred Stock |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(1,011 |
) |
Net
(loss) income attributable to common stockholders |
|
$ |
(1,002 |
) |
|
$ |
387 |
|
|
$ |
(1,725 |
) |
|
$ |
673 |
|
|
|
|
|
|
|
|
|
|
Basic net
(loss) income per share |
|
$ |
(0.27 |
) |
|
$ |
0.12 |
|
|
$ |
(0.47 |
) |
|
$ |
0.20 |
|
Diluted
net (loss) income per share |
|
$ |
(0.27 |
) |
|
$ |
0.11 |
|
|
$ |
(0.47 |
) |
|
$ |
0.20 |
|
|
|
|
|
|
|
|
|
|
Basic
weighted average shares outstanding |
|
|
3,759 |
|
|
|
3,359 |
|
|
|
3,684 |
|
|
|
3,351 |
|
Diluted
weighted average shares outstanding |
|
|
3,759 |
|
|
|
3,397 |
|
|
|
3,684 |
|
|
|
3,403 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pipeline Report as of June 30,
2018 |
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 |
- |
- |
- |
- |
$ |
26 |
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 |
17 |
4 |
3 |
- |
7 |
$ |
379 |
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 |
30 |
4 |
1 |
- |
5 |
$ |
645 |
Townes at Totten Mews
(6) |
DC |
TH |
40 |
13 |
18 |
9 |
- |
27 |
$ |
589 |
The Towns at 1333 |
VA |
TH |
18 |
7 |
6 |
5 |
- |
11 |
$ |
928 |
The Woods at Spring
Ridge |
MD |
SF |
21 |
5 |
7 |
9 |
- |
16 |
$ |
681 |
Solomons Choice |
MD |
SF |
56 |
- |
1 |
55 |
- |
56 |
$ |
653 |
Townes at Richmond
Station |
VA |
TH |
104 |
- |
- |
104 |
- |
104 |
$ |
- |
Condominiums at
Richmond Station |
VA |
MF |
54 |
- |
- |
54 |
- |
54 |
$ |
- |
Total |
|
|
928 |
639 |
40 |
249 |
- |
289 |
|
|
|
|
|
|
|
|
|
|
|
(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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