Comstock Homebuilding Companies (CHCI)

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http://geoinvesting.com/companies/chci_comstock_holdings/research/comments_business_outlook/0045814
August 13, 2013 04:05 PM Eastern Daylight Time


Comstock Holding Companies, Inc. Reports Second-Quarter 2013 Results

•2Q homebuilding revenue of $12.0 million compared to $3.8 million in Q2 last year
•2Q net income from continuing operations of $0.1 million compared to net loss of $(1.9) million last year
•Net new home orders increased to 77 for the first six months of 2013 compared to 34 in the prior year
•Backlog of $18.8 million at quarter-end, up from $1.5 million one year earlier


RESTON, Va.--(BUSINESS WIRE)--Comstock Holding Companies, Inc. (NASDAQ: CHCI) (“Comstock” or the “Company”), a homebuilding and multi-faceted real estate development and services company in the Washington, D.C. metropolitan area, today announced results for the second quarter of 2013, ended June 30.


“We anticipate that our production cycle will normalize by early 2014, as critical subcontractor trades increase their workforce to meet the resurgent demand in the Washington, D.C. market. The demonstrated demand for our products, tightening inventory and improved market pricing trends bode well for a 2014.”
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Business Update

“For the second consecutive quarter, our homebuilding revenue for just three months approximated the homebuilding revenue we generated for the full year 2012,” remarked Chairman and CEO Christopher Clemente. “These results reflect the rebounding demand for new homes in the Washington, D.C. area and the positive response to the new communities and products Comstock is bringing to market.

“Sales at our open communities continue to reflect increased demand for new homes and the reduced inventory of existing homes for sale. Our robust sales in the first half of 2013 enabled us to generate total first-half revenue of $23.8 million, significantly outpacing last year’s results, while generating current backlog as of August 13th of $23.2 million on 52 pre-sold units.

“However, delays in permitting for our newer projects and the well-publicized shortage of skilled labor have resulted in what we believe are temporary production cycle delays. We are now projecting settlements of 125-130 units with a significant number of these settlements to occur in the fourth quarter of 2013. As a result, we expect to report revenue from our homebuilding operations to approximate $64 million and break-even or marginal profitability for 2013.”

Clemente added, “Returning Comstock to profitability for 2013 while positioning for additional growth and profitability in 2014 remains a top priority. We are confident in the steps we have taken to position Comstock for further growth in 2014 and look forward to opening additional communities that will build on the progress we have made this year. Recently, we started site development at two new communities: The Townes at Shady Grove Metro (36 townhouses located in Rockville, MD) and Falls Grove (19 single family homes and 110 townhomes located in Manassas, VA). We are also preparing to commence work on additional projects in Loudoun County, VA and Frederick, MD, with the goal of having seven active communities by early 2014.

“We anticipate that our production cycle will normalize by early 2014, as critical subcontractor trades increase their workforce to meet the resurgent demand in the Washington, D.C. market. The demonstrated demand for our products, tightening inventory and improved market pricing trends bode well for a 2014.”

Second-Quarter 2013 Financial Results

Net new orders of homes increased to 44 for the three months ended June 30, 2013 from 14 in the prior year. For the six months ended June 30, 2013, net new orders increased to 77 from 34 in the prior year. The improved order trends resulted in increased backlog of 43 units (representing $18.8 million in revenue) for the six months ended June 30, 2013 compared to eight (representing $1.5 million in revenue) in the prior year. Average backlog price increased to $438,000 from $187,000 in the prior year.

Total revenue for the second quarter of 2013 totaled $12.2 million ($12.0 million from 22 home settlements) compared to $4.2 million ($3.8 million from 12 home settlements) for the 2012 second quarter. The Company reported net income from continuing operations of $0.1 million for the second quarter of 2013 compared to a net loss from continuing operations of $(1.9) million for the same period in 2012. In the second quarter of 2013, net loss attributable to Comstock Holding Companies totaled $(0.8) million, or $(0.04) per diluted share, compared to $(3.1) million, or $(0.15) per diluted share, in the prior-year period. The 2012 period included a loss of $(1.2) million within net (loss) income from discontinued operations resulting from the tax impact of the $19.35 million sale of Cascades Apartments, the Company’s first investment grade multi-family property. The Company’s first-quarter 2013 results reflected the reversal of an impairment charge of $0.7 million reflecting increased sales activity at its Eclipse project, which was fully settled and exited by the Company in the second quarter of 2013.