Comstock Holding Companies, Inc., (NASDAQ: CHCI), Reston, Va. late Monday reported a net loss of $9.3 million ($2.81 per share) for the year ended Dec. 31, 2016. The loss includes an impairment charge of $(1.7) million, or ($0.51) per diluted share and compared to a net loss of $(4.6) million or $(1.43) per diluted share in 2015, which included an impairment charge of $(2.8) million, or ($0.86) per diluted share. The results were delayed by a a preferred stock conversion and the buyback of shares held by the company’s retired president and COO. There were no analyst estimates.
Deliveries fell to 94, generating home building revenue of $40.7 million in 2016, compared to 123 units generating $60.1 million of revenue in 2015. Controlled community count and open community count were 16 and 12, respectively, at year-end 2016 compared to 17 and 10, at year-end 2015. Backlog at year-end 2016 was 35 units valued at $16.7 million, compared to 25 units valued at $10.8 million at year-end 2015.
The company recently 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). The company said it expects these projects 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.
It issued the following preliminary guidance for the first quarter of 2017:
- 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 home building 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 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.
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.”
He continued, “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.”
The company expects to release financial results for the first quarter of 2017, on or before May 15, 2017.
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. 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.
