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Comstock Reports First Quarter 2024 Results

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Comstock Holding Companies (Nasdaq: CHCI) reported its Q1 2024 financial results, highlighting a sustained growth trajectory.

Revenue increased by 4% to $10.6 million, marking the 15th consecutive quarter of year-over-year growth. The company saw a 45% increase in recurring fee-based Property & Parking Management revenue.

Net income rose 21% to $0.9 million, and Adjusted EBITDA came in at $1.5 million. Comstock also executed 10 commercial leases, including 7 new tenants, and expanded its managed commercial portfolio with the delivery of a new office tower at The Row at Reston Station.

The residential portfolio was 96% leased with a 7% in-place rent growth.

The ParkX managed portfolio saw a 44% revenue growth with the addition of 3 new garages and 15 new contracts. Construction is progressing on The Row at Reston Station, set to deliver 4 new buildings and a 1,200-space parking garage within 12 to 24 months.

Positive
  • Revenue increased by 4% to $10.6 million.
  • 15th consecutive quarter of year-over-year revenue growth.
  • Net income rose 21% to $0.9 million.
  • 45% increase in recurring fee-based Property & Parking Management revenue.
  • Adjusted EBITDA of $1.5 million.
  • Executed 10 commercial leases in Q1 2024, including 7 new tenants.
  • Delivered the first trophy-class office tower at The Row at Reston Station.
  • Residential managed portfolio is 96% leased.
  • In-place rent growth of 7% versus the prior year.
  • ParkX managed portfolio revenue grew 44%.
Negative
  • Adjusted EBITDA decreased from $1.6 million in Q1 2023 to $1.5 million in Q1 2024.
  • Despite revenue growth, the increase was only 4%, indicating slower growth than previous quarters.
  • Potential risks with new commercial leases and expansions, as market conditions can change.

Insights

Comstock's Q1 2024 results highlight a steady growth trajectory with a 4% increase in revenue, marking the 15th consecutive quarter of year-over-year growth. This consistent performance is a strong indicator of the company's solid financial health and effective business strategies. The 45% increase in recurring fee-based Property & Parking Management revenue is particularly noteworthy as it suggests a stable and predictable income stream, which is attractive for long-term investors. Additionally, net income grew by 21% to $0.9 million, which indicates improved profitability and efficient cost management.

Adjusted EBITDA, however, shows a slight decline from $1.6 million to $1.5 million, which merits some attention. This could indicate increased operational costs or investments in growth areas that may not have yet yielded returns. The firm’s substantial commercial and residential leasing rates, with managed commercial portfolio leased at 93% and residential at 96%, solidify its position in a competitive market.

From an investor's perspective, these performance metrics suggest a robust and scalable business model with manageable risks. The delivery of new assets from The Row at Reston Station and the ongoing expansion of the ParkX portfolio further underpin future revenue growth potential.

The company's strategic focus on high-quality asset management and development in the Washington, D.C. region appears to be paying off. The addition of new tenants and assets suggests a healthy demand for Comstock's properties, even amid potential market fluctuations. Specifically, the delivery of the first trophy-class office tower and the managed portfolio's high occupancy rates are positive indicators for future leasing activity and revenue streams.

Comstock's managed residential portfolio being 96% leased and showing a 7% increase in in-place rent growth compared to the prior year, reflects strong market positioning and effective property management. The 44% growth in ParkX total revenue also points to successful diversification and increased market penetration.

These developments highlight Comstock's ability to leverage its existing assets while strategically expanding its portfolio. Investors should view these metrics as aligning with a long-term growth strategy, particularly with the anticipated delivery of substantial new assets in the next 12-24 months.

Significant managed portfolio expansion continues recent growth trajectory

  • Revenue increased 4% to $10.6 million; 15th consecutive period of year-over-year growth
    • 45% increase in recurring fee-based Property & Parking Management revenue
    • 20 additional AUM vs. prior year, including 12 new third-party ParkX contracts
  • Net income of $0.9 million, an increase of 21% vs. prior year; Adjusted EBITDA of $1.5 million
  • 10 commercial leases executed in Q124, including 7 new tenants; Commercial portfolio expansion includes delivery of first trophy-class office tower in The Row at Reston Station, expanding capacity for new leasing activity
  • Residential managed portfolio 96% 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 first quarter ended March 31, 2024.

“In Q1 we achieved comparative revenue growth for the 15th consecutive quarter as expected thanks to versatility of our business model,” said Christopher Clemente, Comstock’s Chairman and Chief Executive Officer. “Our impressive increase in fee-based property and parking management revenue will drive future results, thanks particularly to the efforts of our rapidly growing ParkX team. The high-quality assets in our managed portfolio remain in demand, best evidenced by our ability to sign 5 new tenants in Q1 at The Hartford in Arlington’s vibrant Clarendon neighborhood. Finally, we reached a significant milestone this quarter with the initial delivery of managed assets from The Row at Reston Station, the $1.3 billion development that will drive our next significant growth phase. I am pleased with our first quarter progress and look forward to adding to our success story throughout the remainder of 2024.”

Key Performance Metrics

($ in thousands, except per share and portfolio data)

Q1 2024

 

Q1 2023

Revenue

$

10,638

 

$

10,275

 

 

 

 

Net income

 

910

 

 

754

Adjusted EBITDA

$

1,486

 

$

1,626

 

 

 

 

Net income per share — diluted

$

0.09

 

$

0.07

 

 

 

 

Managed Portfolio - # of assets

 

65

 

 

45

 

Please see the included financial tables for a reconciliation of Adjusted EBITDA to the most directly comparable GAAP financial measure.

Additional Information

  • Managed commercial portfolio leased percentage for stabilized assets of 93% (excludes newly delivered office tower from The Row at Reston Station); executed 10 commercial leases representing over 40,000 square feet.
  • Managed residential portfolio leased percentage of 96%, up 3% vs. Q123; more than 170 units leased in Q124.
  • ParkX total revenue grew 44% vs. the prior year due to rapid expansion of ParkX managed portfolio that now includes 3 new garages and 15 new contracts (12 with third-party owners).
  • Significant construction progress made on The Row at Reston Station development that will deliver 4 new buildings representing 1.2 million square feet and a 1,200-plus space parking garage over the next 12 to 24 months.

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 that includes approximately 10 million square feet of stabilized, under construction, and planned assets that are strategically located at key Metro stations, Comstock is at the forefront of the urban transformation taking place in 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. You should not place any undue reliance on any forward-looking statement, which speaks only as of the date made. Any number of important factors could cause actual results to differ materially from those projected or suggested by the forward-looking statements. 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)

 

 

March 31,

 

December 31,

 

2024

 

2023

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

16,222

 

 

$

18,788

 

Accounts receivable, net

 

387

 

 

 

496

 

Accounts receivable - related parties

 

4,862

 

 

 

4,749

 

Prepaid expenses and other current assets

 

609

 

 

 

353

 

Total current assets

 

22,080

 

 

 

24,386

 

Fixed assets, net

 

608

 

 

 

478

 

Intangible assets

 

144

 

 

 

144

 

Leasehold improvements, net

 

82

 

 

 

89

 

Investments in real estate ventures

 

6,328

 

 

 

7,077

 

Operating lease assets

 

6,575

 

 

 

6,790

 

Deferred income taxes, net

 

10,675

 

 

 

10,885

 

Deferred compensation plan assets

 

324

 

 

 

53

 

Other assets

 

30

 

 

 

37

 

Total assets

$

46,846

 

 

$

49,939

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

Current liabilities:

 

 

 

Accrued personnel costs

$

778

 

 

$

4,681

 

Accounts payable and accrued liabilities

 

898

 

 

 

838

 

Current operating lease liabilities

 

871

 

 

 

854

 

Total current liabilities

 

2,547

 

 

 

6,373

 

Deferred compensation plan liabilities

 

324

 

 

 

77

 

Operating lease liabilities

 

6,047

 

 

 

6,273

 

Total liabilities

 

8,918

 

 

 

12,723

 

 

 

 

 

Stockholders' equity:

 

 

 

Class A common stock

 

96

 

 

 

94

 

Class B common stock

 

2

 

 

 

2

 

Additional paid-in capital

 

201,912

 

 

 

202,112

 

Treasury stock

 

(2,662

)

 

 

(2,662

)

Accumulated deficit

 

(161,420

)

 

 

(162,330

)

Total stockholders' equity

 

37,928

 

 

 

37,216

 

Total liabilities and stockholders' equity

$

46,846

 

 

$

49,939

 

COMSTOCK HOLDING COMPANIES, INC.

Consolidated Statements of Operations

(Unaudited; In thousands, except per share data)

 

 

Three Months Ended March 31,

 

2024

 

2023

Revenue

$

10,638

 

 

$

10,275

 

Operating costs and expenses:

 

 

 

Cost of revenue

 

8,885

 

 

 

8,323

 

Selling, general, and administrative

 

535

 

 

 

564

 

Depreciation and amortization

 

68

 

 

 

67

 

Total operating costs and expenses

 

9,488

 

 

 

8,954

 

Income (loss) from operations

 

1,150

 

 

 

1,321

 

Other income (expense):

 

 

 

Interest income

 

141

 

 

 

 

Gain (loss) on real estate ventures

 

(193

)

 

 

(411

)

Other income (expense), net

 

22

 

 

 

 

Income (loss) from operations before income tax

 

1,120

 

 

 

910

 

Provision for (benefit from) income tax

 

210

 

 

 

156

 

Net income (loss)

$

910

 

 

$

754

 

 

 

 

 

Weighted-average common stock outstanding:

 

 

 

Basic

 

9,794

 

 

 

9,583

 

Diluted

 

10,169

 

 

 

10,069

 

 

 

 

 

Net income (loss) per share:

 

 

 

Basic

$

0.09

 

 

$

0.08

 

Diluted

$

0.09

 

 

$

0.07

 

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 March 31,

 

2024

 

2023

Net income (loss)

$

910

 

 

$

754

Interest income

 

(141

)

 

 

Income taxes

 

210

 

 

 

156

Depreciation and amortization

 

68

 

 

 

67

Stock-based compensation

 

246

 

 

 

238

(Gain) loss on real estate ventures

 

193

 

 

 

411

Adjusted EBITDA

$

1,486

 

 

$

1,626

The $0.1 million decrease in Adjusted EBITDA is primarily driven by higher supplemental revenue from leasing finders' fees in 2023, partially offset by an increase in recurring fee-based property management revenue in the current period.

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 in real estate ventures.

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.

Investor Contact

Christopher Guthrie

Executive Vice President & Chief Financial Officer

cguthrie@comstock.com

703-230-1292

Media Contact

publicrelations@comstock.com

301-785-6327

Source: Comstock Holding Companies, Inc.

FAQ

What were Comstock's Q1 2024 revenue and net income?

Comstock's Q1 2024 revenue was $10.6 million, and net income was $0.9 million.

How much did Comstock's Property & Parking Management revenue increase in Q1 2024?

Property & Parking Management revenue increased by 45% in Q1 2024.

What was Comstock's Adjusted EBITDA for Q1 2024?

Comstock's Adjusted EBITDA for Q1 2024 was $1.5 million.

How many commercial leases did Comstock execute in Q1 2024?

Comstock executed 10 commercial leases in Q1 2024.

What is the occupancy rate of Comstock's residential managed portfolio?

Comstock's residential managed portfolio is 96% leased.

What growth did ParkX see in Q1 2024?

ParkX experienced a 44% revenue growth in Q1 2024.

What are the new developments in The Row at Reston Station?

The Row at Reston Station will deliver 4 new buildings and a 1,200-space parking garage over the next 12 to 24 months.

Comstock Holding Companies, Inc.

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