Comstock Reports Second Quarter 2023 Results
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; $2.7 million YTD
Commercial portfolio remains over 90% leased; in-place rent growth of 6% vs. prior year
Residential portfolio now over 95% leased; in-place rent growth of 7% vs. prior year
RESTON, Va., August 11, 2023--(BUSINESS WIRE)--Comstock Holding Companies, Inc. (Nasdaq: CHCI) ("Comstock" or the "Company"), a leading asset manager, developer, and operator of mixed-use and transit-oriented properties in the Washington, D.C. region, announced its financial results for the second quarter ended June 30, 2023.
"We continue to benefit from the flight-to-quality trend, which in recent years has significantly increased demand for mixed-use and transit-oriented developments in premier suburban locations and contributed to our top-line revenue growth," said Christopher Clemente, Comstock’s Chairman and Chief Executive Officer. "As evidenced by our ability to attract and retain tenants in a challenging environment faced with widespread capital market headwinds, we are well positioned for ongoing success. I am confident our growth will persist well into the future, primarily based on three key factors: our virtually debt-free, asset-light, fee-based business model, the proven demand for the high-quality assets we manage, develop, and operate, and the tireless dedication of our team members, who show up every day and are committed to delivering extraordinary services and experiences for our customers."
Key Performance Metrics1 | |||||||||||||
($ 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.
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Contacts
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
