Comstock Reports Second Quarter 2023 Results

Rhea-AI Summary

Comstock Holding Companies, Inc. (Nasdaq: CHCI) announced its financial results for the second quarter ended June 30, 2023, with a 6% increase in revenue to $9.0 million, representing the 12th consecutive quarter of YoY growth. YTD revenue increased 12% to $19.2 million, including 25% growth in recurring fee-based revenue streams. Net income was $0.5 million for the quarter and $1.2 million YTD, with over $1.0 million of Adjusted EBITDA generated for the quarter and $2.7 million YTD. The commercial portfolio remains over 90% leased, with in-place rent growth of 6% vs. the prior year. The residential portfolio is now over 95% leased, with in-place rent growth of 7% vs. the prior year.

Positive

• 12th consecutive quarter of YoY revenue growth
• YTD revenue increased 12%
• Net income of $0.5 million for the quarter and $1.2 million YTD
• Generated over $1.0 million of Adjusted EBITDA for the quarter and $2.7 million YTD
• Commercial portfolio remains over 90% leased with 6% in-place rent growth
• Residential portfolio now over 95% leased with 7% in-place rent growth

Negative

• None.

• Revenue increased 6% to $9.0 million, representing 12th consecutive quarter of YoY growth

• YTD revenue increased 12% to $19.2 million, including 25% growth in recurring fee-based revenue streams

• Net income of $0.5 million; $1.2 million YTD

• Generated over $1.0 million of Adjusted EBITDA; $2.7 million YTD

• Commercial portfolio remains over 90% leased; in-place rent growth of 6% vs. prior year

• Residential portfolio now over 95% leased; in-place rent growth of 7% vs. prior year

RESTON, Va.--(BUSINESS WIRE)-- Comstock Holding Companies, Inc. (Nasdaq: CHCI) (“Comstock” or the “Company”), a leading asset manager, developer, and operator of mixed-use and transit-oriented properties in the Washington, D.C. region, announced its financial results for the second quarter ended June 30, 2023.

“We continue to benefit from the flight-to-quality trend, which in recent years has significantly increased demand for mixed-use and transit-oriented developments in premier suburban locations and contributed to our top-line revenue growth,” said Christopher Clemente, Comstock’s Chairman and Chief Executive Officer. “As evidenced by our ability to attract and retain tenants in a challenging environment faced with widespread capital market headwinds, we are well positioned for ongoing success. I am confident our growth will persist well into the future, primarily based on three key factors: our virtually debt-free, asset-light, fee-based business model, the proven demand for the high-quality assets we manage, develop, and operate, and the tireless dedication of our team members, who show up every day and are committed to delivering extraordinary services and experiences for our customers.”

Key Performance Metrics1
($ in thousands, except per share and portfolio data)		Q2 2023			Q2 2022			YTD 2023			YTD 2022
	Revenue	$	8,967		$	8,467		$	19,242		$	17,198
	Income from operations	$	643		$	1,117		$	1,964		$	2,482
	Net income		475			714			1,229			2,728	3
	Adjusted EBITDA	$	1,027		$	1,388		$	2,653		$	2,994
	Net income per share — diluted	$	0.05		$	0.30	2	$	0.12		$	0.53	2, 3
	Managed Portfolio - # of assets		45			36			45			36
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 $2.0 million positive impact of Q2 2022 Series C Preferred Stock redemption
3	Amounts reflect impact of $0.5 million non-cash tax benefit stemming from partial release of deferred tax valuation allowance

Q2 2023 Highlights

• Welcomed Seerist, Inc. to Reston Station’s Commerce District, the fifth new lease signed to Reston Station in 2023.
• Increased leased percentage of managed commercial portfolio to 91%, up from 85% in Q2 2022.
• Increased leased percentage of managed residential portfolio to 97%, up from 89% in Q2 2022.
• Significant construction progress on Reston Row development (Phase II of Reston Station), while advancing plans for multiple properties in the development pipeline to prepare them for commencement in 2024.

About Comstock

Founded in 1985, Comstock is a leading asset manager, developer, and operator of mixed-use and transit-oriented properties in the Washington, D.C. region. With a managed portfolio comprising approximately 10 million square feet at full build-out that includes 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)
	June 30,				December 31,
	2023				2022
Assets
Current assets:
Cash and cash equivalents	$	9,031			$	11,722
Accounts receivable, net		499				504
Accounts receivable - related parties		4,984				3,291
Prepaid expenses and other current assets		532				264
Total current assets		15,046				15,781
Fixed assets, net		471				421
Intangible assets		144				144
Leasehold improvements, net		104				119
Investments in real estate ventures		6,234				7,013
Operating lease assets		7,212				7,625
Deferred income taxes, net		11,052				11,355
Other assets		43				15
Total assets	$	40,306			$	42,473
Liabilities and Stockholders' Equity
Current liabilities:
Accrued personnel costs		1,739				4,959
Accounts payable and accrued liabilities		840				742
Current operating lease liabilities		822				791
Total current liabilities		3,401				6,492
Operating lease liabilities		6,707				7,127
Total liabilities		10,108				13,619
Stockholders' equity:
Class A common stock		94				93
Class B common stock		2				2
Additional paid-in capital		201,649				201,535
Treasury stock		(2,662	)			(2,662	)
Accumulated deficit		(168,885	)			(170,114	)
Total stockholders' equity		30,198				28,854
Total liabilities and stockholders' equity	$	40,306			$	42,473

COMSTOCK HOLDING COMPANIES, INC.
Consolidated Statements of Operations
(Unaudited; In thousands, except per share data)
	Three Months Ended June 30,								Six Months Ended June 30,
	2023				2022				2023				2022
Revenue	$	8,967			$	8,467			$	19,242			$	17,198
Operating costs and expenses:
Cost of revenue		7,681				6,831				16,004				13,766
Selling, general, and administrative		572				469				1,136				856
Depreciation and amortization		71				50				138				94
Total operating costs and expenses		8,324				7,350				17,278				14,716
Income (loss) from operations		643				1,117				1,964				2,482
Other income (expense):
Interest expense		—				(69	)			—				(128	)
Gain (loss) on real estate ventures		(68	)			17				(479	)			269
Income (loss) from continuing operations before income tax		622				1,066				1,532				2,624
Provision for (benefit from) income tax		147				352				303				(104	)
Net income (loss) from continuing operations		475				714				1,229				2,728
Net income (loss) from discontinued operations, net of tax		—				(10	)			—				(277	)
Net income (loss)		475				704			$	1,229			$	2,451
Impact of Series C preferred stock redemption		—				2,046				—				2,046
Net income (loss) attributable to common stockholders	$	475			$	2,750			$	1,229			$	4,497
Weighted-average common stock outstanding:
Basic		9,632				8,599				9,608				8,470
Diluted		10,052				9,157				10,060				9,033
Net income (loss) per share:
Basic - Continuing operations	$	0.05			$	0.32			$	0.13			$	0.56
Basic - Discontinued operations		—				—				—				(0.03	)
Basic net income (loss) per share	$	0.05			$	0.32			$	0.13			$	0.53
Diluted - Continuing operations	$	0.05			$	0.30			$	0.12			$	0.53
Diluted - Discontinued operations		—				—				—				(0.03	)
Diluted net income (loss) per share	$	0.05			$	0.30			$	0.12			$	0.50

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 June 30,								Six Months Ended June 30,
	2023				2022				2023				2022
Net income (loss) from continuing operations	$	475			$	714			$	1,229			$	2,728
Interest expense		—				69				—				128
Income taxes		147				352				303				(104	)
Depreciation and amortization		71				50				138				94
Stock-based compensation		266				220				504				417
(Gain) loss on equity method investments		68				(17	)			479				(269	)
Adjusted EBITDA	$	1,027			$	1,388			$	2,653			$	2,994

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/20230810597697/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 is the ticker symbol for Comstock Holding Companies, Inc.?

The ticker symbol for Comstock Holding Companies, Inc. is CHCI.

What were the key performance metrics for Q2 2023?

The key performance metrics for Q2 2023 include a 6% increase in revenue to $9.0 million, net income of $0.5 million, and over $1.0 million of Adjusted EBITDA.

What is the percentage of leased commercial portfolio for Comstock Holding Companies, Inc.?

The commercial portfolio remains over 90% leased.

What is the percentage of leased residential portfolio for Comstock Holding Companies, Inc.?

The residential portfolio is now over 95% leased.

What is the business model of Comstock Holding Companies, Inc.?

Comstock Holding Companies, Inc. has a virtually debt-free, asset-light, fee-based business model.

What are the growth factors mentioned by Christopher Clemente, Chairman and CEO of Comstock Holding Companies, Inc.?

The growth factors include the virtually debt-free, asset-light, fee-based business model, the proven demand for high-quality assets, and the dedication of the team members.

What were the highlights for Q2 2023 for Comstock Holding Companies, Inc.?

Highlights include welcoming Seerist, Inc. to Reston Station’s Commerce District, increased leased percentage of managed commercial and residential portfolios, and significant construction progress on Reston Row development.

What was the revenue increase for Comstock Holding Companies, Inc. in Q2 2023?

The revenue increased by 6% to $9.0 million in Q2 2023, representing the 12th consecutive quarter of YoY growth.

What is the net income for Comstock Holding Companies, Inc. in Q2 2023?

The net income was $0.5 million for Q2 2023.

How much Adjusted EBITDA was generated by Comstock Holding Companies, Inc. in Q2 2023?

Over $1.0 million of Adjusted EBITDA was generated for Q2 2023.

What is the percentage of leased commercial portfolio for Comstock Holding Companies, Inc. in Q2 2023?

The leased percentage of the commercial portfolio was over 90% in Q2 2023.

What is the percentage of leased residential portfolio for Comstock Holding Companies, Inc. in Q2 2023?

The leased percentage of the residential portfolio was over 95% in Q2 2023.