Comstock Holding Companies, Inc. Reports Results for Three and Six Months Ended June 30, 2012

Company Positions New Homebuilding Projects for Opening


RESTON, Va., July 27, 2012 (GLOBE NEWSWIRE) -- Comstock Holding Companies, Inc. (Nasdaq:CHCI) ("Comstock" or the "Company"), a multi-faceted real estate development and services company focused on the Washington, D.C. metropolitan area, announced a net loss for the three months ended June 30, 2012 of ($3.1) million or ($0.15) per basic and diluted share on total revenue of $4.2 million as compared to a net loss for the three months ended June 30, 2011 of ($1.7) million or $(0.09) per basic and diluted share on total revenue of $5.9 million. For the six months ended June 30, 2012 the Company reported net income of $0.8 million or $0.04 per basic and diluted share on total revenue of $14.6 million as compared to a net loss of ($2.7) million or ($0.15) per basic and diluted share on total revenue of 10.5 million. The six months results reflect the $19.35 million sale of the Cascades Apartment project. The Company realized a gain of $6.5 million on this project in the first quarter of 2012.

Notable Events

  • Net new order revenue in the second quarter of 2012 increased 5% to $4.0 million on 14 units when compared to $3.8 million on 14 units in the second quarter of 2011. Net new order revenue for the six months ended June 30, 2012 increased 15% to $7.8 million on 34 units when compared to $6.8 million on 23 units in the same period of 2011.
     
  • During the second quarter of 2012, the Company continued to monetize existing inventory at the Penderbrook Square condominium project, where it settled 9 units reducing remaining inventory to 14 units (out of a total of 424 units) and at the Eclipse condominium project where it settled 3 units reducing remaining inventory to 23 (out of a total of 465 units). Further, at June 30, 2012, there were 8 units in backlog at the Penderbrook Square condominium project.
     
  • Construction has begun at The Hampshires, a 111-unit new home community located within the Lamond-Riggs neighborhood in the Northeast quadrant of Washington, D.C. The Hampshires is located proximate to two Metro rail stations just inside the Washington, D.C.-Maryland border and includes 38 single-family homes and 73 townhomes. The Company plans to open the model home sales office and commence sales in the 3rd quarter, with prices expected to start from the $500's for townhomes and high $600's for the single family homes.
     
  • The Company prepared a new townhome style condominium project for commencement in Loudoun County, Virginia. Eastgate One is a 66-unit subdivision situated within the 400-unit Eastgate master-planned community proximate to the major employment centers in Loudoun County and Fairfax County.  The Company has acquired the first 6 lots under the land option contract covering the project. Construction on the model home is scheduled to begin in the 3rd quarter, with unit sales expected to commence, and additional building lot acquisitions expected to occur, in the 4th quarter of 2012.  Initial unit pricing is expected to start in the high $200's. 

"As previously reported, the sale of our first investment grade rental apartment community occurred in the first quarter. In keeping with our diversified platform, we have now commenced development and construction on two new for-sale communities, as market conditions continue to improve in the Washington, DC area" said Christopher Clemente, Chairman and CEO. "Results for this quarter reflect our rebuilding process as we position new projects for commencement. I am confident that our diversified platform will yield positive results."  

About Comstock Holding Companies, Inc.

Comstock is a multi-faceted real estate development and services company. Our substantial experience in building a diverse range of products including apartments, single-family homes, townhouses, mid-rise condominiums, high-rise condominiums and mixed-use (residential and commercial) developments has positioned Comstock as a prominent real estate developer and homebuilder in the Washington, D.C. metropolitan area. Comstock Holding Companies, Inc. trades on the NASDAQ Capital Market exchange under the symbol CHCI. For more information on the Company or its projects please visit www.comstockhomebuilding.com

Cautionary Statement Regarding Forward-Looking Statements

This release contains "forward-looking" statements that are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties that may cause actual future results to differ materially from those projected or contemplated in the forward-looking statements including incurring substantial indebtedness with respect to projects, the diversion of management's attention and other negative consequences. Additional information concerning these and other important risks and uncertainties can be found under the heading "Risk Factors" in the Company's most recent Form 10-K, as filed with the Securities and Exchange Commission. 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  
UNAUDITED CONSOLIDATED BALANCE SHEETS  
(Amounts in thousands, except per share data)  
   
 ASSETSJune 30,
2012
December 31,
2011
Cash and cash equivalents $7,011 $5,639
Restricted cash 3,114 3,082
Trade receivables 1,066 2,228
Real estate held for development and sale 16,861 21,212
Operating real estate, net 0 12,095
Property, plant and equipment, net 87 105
Other assets 2,890 2,018
 
TOTAL ASSETS $31,029 $46,379
   
 
LIABILITIES AND SHAREHOLDERS' EQUITY  
Accounts payable and accrued liabilities $3,035 $3,987
Notes payable - secured by real estate held for development and sale, net of discount 7,914 10,541
Notes payable – secured by operating real estate, net 0 9,957
Notes payable - due to affiliates, unsecured 5,008 5,008
Notes payable – unsecured 3,911 4,309
Income taxes payable 23 33
 
TOTAL LIABILITIES 19,891 33,835
 
Commitments and contingencies 0 0
SHAREHOLDERS' EQUITY  
Class A common stock, $0.01 par value, 77,266,500 shares authorized, 18,311,032 and 17,944,503 issued and outstanding, respectively 183 179
Class B common stock, $0.01 par value, 2,733,500 shares authorized, issued and outstanding 27 27
Additional paid-in capital 169,215 168,620
Treasury stock, at cost (391,400 shares Class A common stock) (2,439) (2,439
Accumulated deficit (155,848) (156,684)
 
TOTAL COMSTOCK HOLDING COMPANIES, INC. EQUITY 11,138 9,703
Non-controlling interest 0 2,841
 
TOTAL EQUITY 11,138 12,544
   
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $31,029 $46,379
COMSTOCK HOLDING COMPANIES, INC. AND SUBSIDIARIES    
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS    
(Amounts in thousands, except per share data)    
     
 Three Months Ended
June 30,
Six Months Ended
June 30,
  
 2012201120122011
Revenues    
Revenue - homebuilding $3,766 $3,120 $6,952 $6,139
Revenue - other 478 2,783 1,227 4,350
     
Total revenue 4,244 5,903 8,179 10,489
Expenses    
Cost of sales - homebuilding 3,302 2,736 6,056 5,458
Cost of sales - other 743 2,633 1,807 3,906
Selling, general and administrative 2,096 1,888 3,982 3,253
Interest, real estate taxes and indirect costs related to inactive projects 1,192 439 1,792 784
     
Operating loss (3,089) (1,793) (5,458) (2,912)
Other income, net 8 287 37 563
     
Loss before income tax benefit (3,081) (1,506) (5,421) (2,349)
Income tax benefit 1,181 0 2,093 0
     
Net loss from continuing operations (1,900) (1,506) (3,328) (2,349)
Discontinued operations:    
Income (loss) from discontinued operations 16 (52) (106) (102)
Gain on sale of the real estate from discontinued operations (50) 0 6,466 0
Income tax expense from discontinued operations (1,181) 0 (2,093) 0
     
Net (loss) income from discontinued operations (1,215) (52) 4,267 (102)
Net (loss) income (3,115) (1,558) 939 (2,451)
Less: Net income from discontinued operations attributable to non-controlling interests 0 118 103 250
     
Net (loss) income attributable to Comstock Holding Companies, Inc. $ (3,115) $(1,676) $836 $(2,701)
     
Basic (loss) income per share    
 Continuing operations $ (.09) $ (.08) $ (.16) $ (.13)
 Discontinued operations (.06) (.01) .20 (.02)
 Net (loss) income per share $ (.15) $ (.09) $.04 $ (.15)
Diluted (loss) income per share    
 Continuing operations $ (.09) $ (.08) $ (.16) $ (.13)
 Discontinued operations (.06) (.01) .20 (.02)
 Net (loss) income per share $ (.15) $ (.09) $.04 $ (.15)
     
Basic weighted average shares outstanding 20,431 18,784 20,359 18,407
Diluted weighted average shares outstanding 20,431 18,784 20,359 18,407
Net (loss) income attributable to Comstock Holding Companies, Inc.    
 Loss from continuing operations $ (1,900) $(1,506) $ (3,328) $(2,349)
 (Loss) income from discontinued operations (1,215) (170) 4,164 (352)
 Net (loss) income $ (3,115) $(1,676) $836 $(2,701)
     
COMSTOCK HOLDING COMPANIES, INC. AND SUBSIDIARIES  
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS  
(Amounts in thousands, except per share data)  
   
 Six Months Ended June 30, 
 20122011
Cash flows from operating activities:  
Net income (loss) $939 $ (2,451)
Adjustment to reconcile net income (loss) to net cash (used in) provided by operating activities  
Amortization of loan discount and deferred financing fees 1,424 0
Depreciation expense 99 10
Gain on M&T note retirement 0 (146)
Gain on trade payable settlements 0 (150)
Gain on sale of operating real estate, net (6,466) 0
Loss on disposal of property, plant and equipment 1 0
Amortization of stock compensation 599 0
Changes in operating assets and liabilities:  
Restricted cash (32) 12
Trade receivables 1,162 (699)
Real estate held for development and sale 4,294 4,816
Other assets (952) (1,677)
Accrued interest (709) 0
Accounts payable and accrued liabilities (1,398) 3,101
Income taxes payable (10) 0
   
  
Net cash (used in) provided by operating activities (1,049) 2,816
   
  
Cash flows from investing activities:  
Investment in Cascades Apartments – operating real estate, net 0 (6,054)
Proceeds from sale of Cascades Apartments – operating real estate, net 18,400 0
   
Net cash provided by (used in) investing activities 18,400 (6,054)
   
  
Cash flows from financing activities:  
Proceeds from notes payable 9,960 17,272
Payments on notes payable (22,995) (16,250)
Distribution of non-controlling interests and preferred returns (2,944) 0
Proceeds from Cascades Private Placement 0 2,350
   
Net cash (used in) provided by financing activities (15,979) 3,372
   
Net increase in cash and cash equivalents 1,372 134
Cash and cash equivalents, beginning of period 5,639 475
   
Cash and cash equivalents, end of period $7,011 $609
   
  
Supplemental disclosure for non-cash activity:  
Interest paid, net of interest capitalized $1,334 $457
Reduction in proceeds from sale of Cascades Apartment and increase in other assets related to amounts placed in escrow upon settlement of Cascades Apartments sale $950 $0
Reduction in accrued liabilities in connection with issuance of stock compensation $0 $0
Non-cash stock compensation charges $0 $388
Increase in class A common stock par value in connection with issuance of stock compensation $0 $3
Increase in additional paid in capital in connection with issuance of stock compensation $0 $351
Reduction in accounts payable and restricted cash due to Cascades Private Placement closing $0 $2,100
CONTACT: Joe Squeri
         Chief Financial Officer
         703.230.1229