The Company, which raised approximately $73 million when it completed its
initial public offering in December 2004, indicated in its filing that the
proceeds from this offering would be used for general corporate purposes
including working capital and investment in new real estate projects. The
filing referenced several likely new project acquisitions in the greater
Washington, DC area that are anticipated to produce more than 2,000 new
settlements and have an estimated aggregate purchase price of approximately
$135 million.
"The IPO has created more awareness of Comstock and as a result, the
volume of development opportunities we have access to has increased
substantially," said Christopher Clemente, Founder and CEO. "We see no signs
of demand for housing in the Washington region decreasing, and we believe this
additional capital will enhance our position and further enable Comstock to
take advantage of some of the best development opportunities in the market.
Although the short term result will be a slight reduction of per share results
for 2005, we are confident that the additional capital will enable Comstock to
enhance per share results for 2006 and beyond. Bank of America and BB&T have
been commercial lenders to Comstock for approximately 10 years and have helped
finance our growth during that period. I am excited to have them working
together on this transaction."
The Company revised its 2005 earnings guidance to a range of $2.62 to
$2.71 per share (diluted) in consideration of the mid-year offering and its
impact on weighted average shares outstanding which is estimated to be
approximately 13 million for the full year. Previous guidance was $2.85 to
$2.94 per share. The Company does not plan to participate in any over
allotment option that may be exercised by the underwriters.
"We expect that this offering will result in earnings dilution for the
current year," said Bruce Labovitz, Chief Financial Officer. "The real
opportunity here is the ability to invest this new capital in projects which
will deliver additional settlements in 2006. We believe that based on the
timing of the offering and the opportunity to leverage our fixed overhead
costs we will be well positioned to increase 2006 revenues at operating
margins consistent with or better than those we have previously discussed in
earnings conference calls."
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
http://www.comstockhomebuilding.com.
This press release includes "forward-looking statements" within the
meaning of the federal securities laws, which involve uncertainties and risks.
These include statements regarding events or developments that the Company
expects or anticipates will occur in the future, such as statements about the
Company's strategies to improve operating performance. Please refer to the
Company's prospectus and its other filings with the Securities and Exchange
Commission for a complete discussion of these and other important factors that
could cause results to differ materially from those projected by these
forward-looking statements.
SOURCE Comstock Homebuilding Companies, Inc.
CONTACT: Al Black of Qorvis Communications, +1-703-744-7833,
ablack@qorvis.com, for Comstock Homebuilding Companies, Inc.