Comstock Homebuilding Companies, Inc. Reports Record Net Income for First Quarter of 2005


The Company will conduct a conference call for interested investors on Tuesday, May 3, 2005, at 5:00 PM Eastern Standard Time. During the call the Company will discuss the financial results and earnings guidance detailed in this release. The dial-in number for the conference call is 866-761-0749 and the access code is 13645429; the call may also be accessed on the Internet at in the Investor Relations section.

Highlights of Financial Results:

  • The Company generated basic earnings per share of $0.33 on a weighted average shares outstanding of 11.6 million and diluted earnings per share of $0.32 on a weighted average shares outstanding of 11.8 million;

  • Total revenue for the first quarter was $28.7 million with $28.5 million of total revenue derived from homebuilding, as compared to total revenue of $17.9 million for the three months ended March 31, 2004 with $15.1 million of total revenue derived from homebuilding;

  • The Company delivered 78 new homes in the first quarter at an average per unit revenue of $365,000 as compared to 46 new homes at an average per unit revenue of $329,050 during the three months ended March 31, 2004;

  • Gross profit was $11.1 million for the first quarter and operating income was $6.1 million representing a 38.7% gross margin and a 21.1% operating margin as compared to 30.3% and 17.4% respective gross and operating margins for the three months ended March 31, 2004;

  • The contract value of new orders (net of cancellations) for the first quarter was $103.3 million on 246 new orders representing a 119.2% increase in the contract value of the new orders and an 86.4% increase in new orders as compared to the three months ended March 31, 2004;

  • Backlog at March 31, 2005 was 615 units representing future revenue of $248.2 million of which $105.3 million is expected to deliver before December 31, 2005. Of the $248.2 million of backlog, $138.6 million was related to the Company's Eclipse at Potomac Yard project where settlements will begin in the second half of 2006.

Guidance for the Quarters and Full Year 2005:

During the Company's investor conference call, expectations for 2005 quarterly and full year results will be discussed in detail for the first time by the Company.

  • The Company expects that total revenue for the year ending December 31, 2005 will be between $265 million -- $275 million with estimated earnings of $2.85 -- $2.94 per share (diluted) based on an estimated weighted average shares outstanding of 11.9 million;

  • The Company is increasing full year 2005 guidance and is, for the first time, introducing detailed quarterly guidance as follows:
                     Diluted earnings per share estimates
                                Current Range

                     Q1        $0.32      $0.32
                     Q2        $0.22  to  $0.25 estimated
                     Q3        $0.92  to  $0.95 estimated
                     Q4        $1.39  to  $1.42 estimated
                     2005      $2.85  to  $2.94 estimated

                     Previous  $2.15  to  $2.20
  • Based on current backlog and land inventory, the Company estimates that it will generate total revenue in 2006 of between $400 million and $425 million.

  • Like many of its peers, the Company has experienced delays in obtaining permits on certain projects as a result of the adoption of a new building code throughout the country, causing a shift of revenue from the second quarter into the third and fourth quarters of 2005. Management noted that no additional delays are anticipated as a result of these building code changes.

"Comstock is executing the growth plan we detailed in our IPO road show last December," said Christopher Clemente, Chairman and Chief Executive Officer. "This growth is in keeping with the strategic 5 year plan we commenced in 2003 that projects annual revenues reaching $500 million. During the first quarter we continued working to secure some of the best opportunities in our markets (Washington, DC and Raleigh, NC) and we put a significant amount of our new capital to work by closing on over $100 million of new developments throughout the Northern Virginia suburbs. As demonstrated by our growing backlog, demand for our homes remains strong. We see this demand continuing throughout the year. Our most recent project opening, Penderbrook, in Fairfax, Virginia, experienced overwhelming demand in April. Comstock continues to benefit from the tremendous job growth in its core market, the Greater Washington, DC area."

About Comstock Homebuilding Companies, Inc.

Comstock is a production homebuilder that develops, builds, and markets single-family homes, townhouses, and condominiums. The Company currently operates in the Washington, D.C. and Raleigh, North Carolina markets where it targets a diverse range of buyers, including first-time, early move-up, secondary move-up, empty nester move-down and active adult home buyers. For more information on Comstock, please visit

Cautionary Statement Regarding Forward-Looking Statements

This release contains "forward-looking" statements that are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as "may," "will," "expects," "projects," "anticipates," "estimates," "believes," "intends," "plans," "should," "seeks," and similar expressions, including statements related to Comstock's expected future financial results and anticipated growth in the Washington, D.C. housing market, are forward-looking statements. Forward-looking statements involve known and unknown risks and uncertainties that may cause actual future results to differ materially from those projected or contemplated in the forward-looking statements. These risks and uncertainties include, but are not limited to, economic, market and competitive conditions affecting Comstock and its operations and products, risks and uncertainties relating to the market for real estate generally and in the areas where Comstock has projects, the availability and price of land suitable for development, materials prices, labor costs, interest rates, Comstock's ability to service its significant debt obligations, fluctuations in operating results, anticipated growth strategies, continuing relationships with affiliates, environmental factors, government regulations, the impact of adverse weather conditions or natural disasters and acts of war or terrorism. Additional information concerning these and other important risks and uncertainties can be found under the heading "Risk Factors" in the prospectus from Comstock's initial public offering, as filed with the Securities and Exchange Commission on December 15, 2004. Comstock specifically disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise.

    Financial Results

    COMSTOCK HOMEBUILDING COMPANIES, INC.      Three months ended March 31,
    (Amounts in thousands, excpet share
     data)                                   2004                       2005
      Sale of real estate-Homes            $15,136                    $28,465
      Other revenue                          2,745                        264
    Total revenue                           17,881                     28,729

      Cost of sales of real estate          10,313                     17,591
      Cost of sales of other                 2,148                         11
      Selling, general and administrative    2,310                      5,052

    Operating income                         3,110                      6,075
    Other (income) expense, net                184                        (36)

    Income before minority interest and
     equity in earnings of real estate
     partnerships                            2,926                      6,111
    Minority interest                          848                          1

    Income before equity in earnings of
     real estate partnerships                2,078                      6,110
    Equity in earnings of real estate
     partnerships                               28                         30

    Total pre tax income                     2,106                      6,140
    Income Taxes                                                        2,331

    Net Income                              $2,106                     $3,809

    Basic earnings per share                   592                       0.33
    Basic weighted average shares
     outstanding                             3,558                 11,620,667

    Dilutive earnings per share                592                       0.32
    Dilutive weighted average shares
     outstanding                             3,558                 11,768,817

    Proforma basic EPS as adjusted for
     tax and the Company's initial public
     offering                                 0.11                        n/a
    Proforma dilutive EPS as adjusted for
     tax and the Company's initial public
     offering                                 0.11                        n/a

    Select Balance Sheet Data             March 31,                  March 31,
     (Amounts in thousands)                   2004                       2005

    Cash and cash equivalents              $18,699                    $47,957
    Real estate held for development &
     sale                                   73,586                    211,303
    Inventory not owned - variable
     interest entities                        -                        33,547
    Total assets                            97,906                    299,281
    Notes payable-homebuilding              63,005                    152,016
    Shareholders' equity                     7,831                     66,570

SOURCE Comstock Homebuilding Companies, Inc.

CONTACT: Al Black, +1-703-744-7833, or, for Comstock Homebuilding Companies, Inc