Comstock Reports Fourth Quarter and Fiscal Year 2022 Results

Rhea-AI Summary

Comstock Holdings Companies reported impressive financial results for Q4 and FY 2022, showcasing a 20% increase in revenue to $9.3 million and 26% growth for the year at $39.3 million. Operating income surged 61% in Q4 to $1.6 million, while FY operating income rose 57% to $8 million. Net income increased 39% in Q4 to $1.3 million, but FY 2022 net income was $7.7 million, down from $16 million in 2021 due to a prior-year tax benefit. Adjusted EBITDA jumped 58% in Q4 to $1.9 million and 55% YTD to $9 million. The company emphasized strong performance amid economic uncertainty, enhanced by debt elimination and a growing managed portfolio.

Positive

• Revenue increased 20% in Q4 2022 to $9.3 million and 26% for FY 2022 to $39.3 million.
• Operating income improved 61% in Q4 2022 to $1.6 million and 57% for FY 2022 to $8 million.
• Adjusted EBITDA rose 58% in Q4 2022 to $1.9 million and 55% YTD to $9 million.
• Managed commercial portfolio leased at 86.8%, an increase from 81.4% year-over-year.
• Deleveraging achieved through Series C Preferred Stock redemption and full payoff of $5.5 million revolving credit facility.

Negative

• Net income for FY 2022 fell to $7.7 million, significantly lower than $16 million in 2021 due to a non-cash tax benefit in the previous year.

• Revenue increased 20% to $9.3 million in Q4 2022 vs. $7.8 million in Q4 2021; FY 2022 revenue increased 26% to $39.3 million vs. $31.1 million in 2021
• Operating income increased 61% to $1.6 million in Q4 2022 vs. $1.0 million in Q421; FY 2022 operating income increased 57% to $8.0 million vs. $5.1 million in 2021
• Net income increased 39% to $1.3 million in Q4 2022 vs. $0.9 million in Q4 2021; FY 2022 net income of $7.7 million vs. $16.0 million in 2021, primarily due to $11.2 million non-cash tax benefit in 2021
• Adjusted EBITDA increased 58% to $1.9 million in Q4 2022 vs. $1.2 million in Q4 2021; YTD 2022 Adjusted EBITDA increased 55% to $9.0 million vs. $5.8 million in 2021

RESTON, Va.--(BUSINESS WIRE)-- Comstock Holding Companies, Inc. (Nasdaq: CHCI) (“Comstock” or the “Company”) announced its financial results for the fourth quarter and fiscal year ended December 31, 2022.

“Our Q4 results once again demonstrated significant year-over-year growth in revenue, net income, and Adjusted EBITDA, while our FY 2022 results highlight the benefits and resiliency of our asset-light and debt-free strategy,” said Christopher Clemente, Comstock’s Chairman and Chief Executive Officer. “Comstock’s ability to consistently produce positive financial results quarter after quarter during uncertain economic times speaks to the risk mitigation strategy that is at the core of our business model. The significant transactions we executed in 2022 to streamline our balance sheet, eliminate remaining debt, and further strengthen our robust managed portfolio further enhanced our ability to continue generating excellent results for all stakeholders.”

Key Performance Metrics¹

($ in thousands, except per share and portfolio data)
		Q4 2022			Q4 2021			FY 2022			FY 2021
	Revenue	$	9,302		$	7,765		$	39,313		$	31,093
	Income from operations	$	1,595		$	993		$	7,952		$	5,065
	Net income		1,311			943			7,728			16,039	2
	Adjusted EBITDA	$	1,864		$	1,177		$	8,994		$	5,798
	Net income per share — diluted	$	0.13		$	0.11		$	1.02		$	1.76	2
	Managed Portfolio - # of assets		41			34			41			34
1	All amounts represent continuing operations. Please see the included financial tables for a reconciliation of Adjusted EBITDA to the most directly comparable GAAP financial measure
2	Amounts reflect impact of $11.2 million tax benefit stemming from partial release of deferred tax valuation allowance

Q4 2022 Highlights

• Structured 4.5% fixed-rate $77.5 million refinancing of “Phase II” of its Loudoun Station development.
• Managed commercial portfolio leased at 86.8%, up from 81.4% in the prior year.
• Continued occupancy growth within managed residential portfolio as well as higher in-place rents, which increased 9% vs. the prior year.
• Further expansion of the ParkX managed portfolio with the execution of 6 new management contracts.

Fiscal Year 2022 Highlights

• Welcomed Dwight Schar, recently retired founder, CEO, and Chairman of NVR, Inc. (NYSE: NVR) as a major shareholder of the Company, further enhancing alignment of Anchor Portfolio asset ownership with the Company.
• Significant balance sheet deleveraging through redemption of Series C Preferred Stock at a substantial discount to redemption value.
• Paid off entire $5.5 million outstanding balance of revolving credit facility, both eliminating impact of rising variable interest rates and ensuring full $10 million line is available for strategic use.
• Increased managed portfolio of assets, including BLVD Ansel (Rockville, Md.) and two developments that further expanded the Reston Station community - Midline and 1891 Reston Station (Reston, Va.).
• Executed a new asset management agreement covering the Anchor Portfolio, extending the term through 2035 while adding significant additional revenue streams.
• Finalized divestiture of Comstock Environmental Services (“CES”) line of business, enhancing our ability to focus resources on growth of core business.

About Comstock

Founded in 1985, Comstock is a leading asset manager and developer of mixed-use and transit-oriented properties in the Washington, D.C. region. With a managed portfolio comprising approximately 10 million square feet of transit-oriented and mixed-use properties, including stabilized and development assets strategically located at key Metro stations, Comstock is at the forefront of the urban transformation taking place in the fastest growing segments of one of the nation’s best real estate markets. Comstock’s developments include some of the largest and most prominent mixed-use and transit-oriented projects in the mid-Atlantic region, as well as multiple large-scale public-private partnership developments. For more information, please visit Comstock.com.

Cautionary Statement Regarding Forward-Looking Statements

This release may include "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. Any number of important factors could cause actual results to differ materially from those in the forward-looking statements. Additional information concerning important risk factors and uncertainties can be found under the heading "Risk Factors" in our latest Annual Report on 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. Consolidated Balance Sheets (Unaudited; In thousands)
	December 31,				December 31,
		2022				2021
Assets
Current assets:
Cash and cash equivalents	$	11,722			$	15,823
Accounts receivable, net		504				46
Accounts receivable - related parties		3,291				1,697
Prepaid expenses and other current assets		264				197
Current assets held for sale		—				2,313
Total current assets		15,781				20,076
Fixed assets, net		421				264
Intangible assets		144				—
Leasehold improvements, net		119				—
Investments in real estate ventures		7,013				4,702
Operating lease assets		7,625				7,245
Deferred income taxes, net		11,355				11,300
Other assets		15				15
Total assets	$	42,473			$	43,602
Liabilities and Stockholders' Equity
Current liabilities:
Accrued personnel costs		4,959				3,468
Accounts payable and accrued liabilities		742				783
Current operating lease liabilities		791				616
Current liabilities held for sale		—				1,194
Total current liabilities		6,492				6,061
Credit facility - due to affiliates		—				5,500
Operating lease liabilities		7,127				6,745
Total liabilities		13,619				18,306
Stockholders' equity:
Series C preferred stock		—				6,765
Class A common stock		93				81
Class B common stock		2				2
Additional paid-in capital		201,535				200,617
Treasury stock		(2,662	)			(2,662	)
Accumulated deficit		(170,114	)			(179,507	)
Total stockholders' equity		28,854				25,296
Total liabilities and stockholders' equity	$	42,473			$	43,602

COMSTOCK HOLDING COMPANIES, INC. Consolidated Statements of Operations (Unaudited; In thousands, except per share data)
	Three Months Ended December 31,								Year Ended December 31,
		2022				2021				2022				2021
Revenue	$	9,302			$	7,765			$	39,313			$	31,093
Operating costs and expenses:
Cost of revenue		7,259				6,374				29,371				24,649
Selling, general, and administrative		391				369				1,784				1,285
Depreciation and amortization		57				29				206				94
Total operating costs and expenses		7,707				6,772				31,361				26,028
Income (loss) from operations		1,595				993				7,952				5,065
Other income (expense):
Interest expense		—				(59	)			(222	)			(235	)
Gain (loss) on real estate ventures		(117	)			79				121				(14	)
Other income (expense), net		—				2				2				6
Income (loss) from continuing operations before income tax		1,478				1,015				7,853				4,822
Provision for (benefit from) income tax		167				72				125				(11,217	)
Net income (loss) from continuing operations		1,311				943				7,728				16,039
Net income (loss) from discontinued operations, net of tax		(5	)			(1,706	)			(381	)			(2,430	)
Net income (loss)		1,306				(763	)			7,347				13,609
Impact of Series C preferred stock redemption		—				—				2,046				—
Net income (loss) attributable to common stockholders	$	1,306			$	(763	)		$	9,393			$	13,609
Weighted-average common stock outstanding:
Basic		9,470				8,236				8,974				8,213
Diluted		10,055				8,236				9,575				9,095
Net income (loss) per share:
Basic - Continuing operations	$	0.14			$	0.11			$	1.09			$	1.95
Basic - Discontinued operations		—				(0.2	)			(0.04	)			(0.29	)
Basic net income (loss) per share	$	0.14			$	(0.09	)		$	1.05			$	1.66
Diluted - Continuing operations	$	0.13			$	0.11			$	1.02			$	1.76
Diluted - Discontinued operations		—				(0.2	)			(0.04	)			(0.26	)
Diluted net income (loss) per share	$	0.13			$	(0.09	)		$	0.98			$	1.50

COMSTOCK HOLDING COMPANIES, INC. Non-GAAP Financial Measures (Unaudited; In thousands)

Adjusted EBITDA

The following table presents a reconciliation of net income (loss) from continuing operations, the most directly comparable financial measure as measured in accordance with GAAP, to Adjusted EBITDA:

	Three Months Ended December 31,							Year Ended December 31,
		2022			2021				2022				2021
Net income (loss) from continuing operations	$	1,311		$	943			$	7,728			$	16,039
Interest expense		—			59				222				235
Income taxes		167			72				125				(11,217	)
Depreciation and amortization		57			29				206				94
Stock-based compensation		212			153				834				633
(Gain) loss on equity method investments		117			(79	)			(121	)			14
Adjusted EBITDA	$	1,864		$	1,177			$	8,994			$	5,798

We define Adjusted EBITDA as net income (loss) from continuing operations, excluding the impact of interest expense (net of interest income), income taxes, depreciation and amortization, stock-based compensation, and gain or loss on equity method investments.

We use Adjusted EBITDA to evaluate financial performance, analyze the underlying trends in our business and establish operational goals and forecasts that are used when allocating resources. We expect to compute Adjusted EBITDA consistently using the same methods each period.

We believe Adjusted EBITDA is a useful measure because it permits investors to better understand changes over comparative periods by providing financial results that are unaffected by certain non-cash items that are not considered by management to be indicative of our operational performance.

While we believe that Adjusted EBITDA is useful to investors when evaluating our business, it is not prepared and presented in accordance with GAAP, and therefore should be considered supplemental in nature. Adjusted EBITDA should not be considered in isolation, or as a substitute, for other financial performance measures presented in accordance with GAAP. Adjusted EBITDA may differ from similarly titled measures presented by other companies.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230329005933/en/

Investor Contact

Christopher Guthrie

Executive Vice President & Chief Financial Officer

cguthrie@comstock.com

703-230-1292

Media Contact

Shanna Wilson

shanna.wilson@allisonpr.com

917-674-3096

Source: Comstock Holding Companies, Inc.

FAQ

What were Comstock Holdings' revenue figures for Q4 2022?

Revenue for Q4 2022 was $9.3 million, a 20% increase from $7.8 million in Q4 2021.

How did Comstock's FY 2022 net income compare to FY 2021?

FY 2022 net income was $7.7 million, down from $16 million in FY 2021.

What was the growth in Adjusted EBITDA for Q4 2022?

Adjusted EBITDA increased 58% in Q4 2022 to $1.9 million, compared to $1.2 million in Q4 2021.

What operational changes did Comstock make in FY 2022?

In FY 2022, Comstock paid off its entire $5.5 million revolving credit facility and executed new management contracts, expanding its managed portfolio.

How did Comstock Holdings' operating income perform in Q4 2022?

Operating income for Q4 2022 increased 61% to $1.6 million, up from $1.0 million in Q4 2021.