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Comstock Homebuilding Companies, Inc. Reports $0.26 Earnings Per Share for Second Quarter of 2005

08/01/2005

Comstock Homebuilding Companies, Inc. Reports $0.26 Earnings Per Share for Second Quarter of 2005

"This was an exciting quarter for us at Comstock," said Christopher Clemente, Chairman and CEO. "We were successful in raising an additional $56 million of capital to accelerate our growth, we added demographically diverse land positions to our inventory, we delivered on the commitments we made to our investors, and we realized a 28 percent increase of revenue for the same quarter last year. Demand for affordable new homes in our core market, the Greater Washington, DC region, is still strong and our land inventory remains well aligned with the homeownership trends in the market."

    Highlights of Financial Results -- Three months ended June 30, 2005:

      * The Company generated basic earnings per share for the second quarter
        of $0.26 on a weighted average shares outstanding of 11.8 million and
        diluted earnings per share of $0.26 on a weighted average shares
        outstanding of 12.0 million;

      * Total revenue for the second quarter was $39.9 million with $39.6
        million of revenue derived from homebuilding, compared to total
        revenue of $31.1 million for the three months ended June 30, 2004 with
        $29.1 million of revenue derived from homebuilding.  This represents a
        36% increase in revenue from homebuilding;

      * The Company delivered 123 new homes in the second quarter at an
        average per unit revenue of approximately $322,000 as compared to 88
        new homes at an average per unit revenue of $331,000 during the three
        months ended June 30, 2004.  This reduction in average per unit
        revenue was a direct result of the Company's mix of delivered units
        with 74 of the second quarter 2005 settlements coming from the
        Company's new Penderbrook project where average revenue per settlement
        was $249,000;

      * Gross profit was $10.2 million for the second quarter and operating
        income was $4.6 million representing a 25.7% gross margin and an 11.6%
        operating margin compared to 29.4% and 15.0% respective gross and
        operating margins for the three months ended June 30, 2004.  Exclusive
        of Penderbrook, the Company's gross profit on the balance of revenue
        for the second quarter was $7.3 million representing a gross margin of
        34.6%;

      * The contract value of new orders (net of cancellations) for the second
        quarter was $59.2 million on 160 new orders representing a 127.0%
        increase in the contract value of new orders and an 125.4% increase in
        new orders as compared to the three months ended June 30, 2004.


    Highlights of Financial Results -- Six months ended June 30, 2005:

      * The Company generated basic earnings per share for the six months
        ended June 30, 2005 of $0.59 on a weighted average shares outstanding
        of 11.7 million and diluted earnings per share of $0.58 on a weighted
        average shares outstanding of 11.9 million;

      * Total revenue for the six months ended June 30, 2005 was $68.6 million
        with $68.1 million of revenue derived from homebuilding, compared to
        total revenue of $49.0 million for the six months ended June 30, 2004
        with $44.3 million of revenue derived from homebuilding;

      * The Company delivered 201 new homes in the six months ended June 30,
        2005 at an average per unit revenue of approximately $339,000 as
        compared to 134 new homes at an average per unit revenue of $330,000
        during the six months ended June 30, 3004;

      * Gross profit was $21.4 million for the six months ended June 30, 2005
        and operating income was $10.7 million representing a 31.1% gross
        margin and a 15.6% operating margin compared to 29.7% and 15.6%
        respective gross and operating margins for the six months ended June
        30, 2004.  Exclusive of Penderbrook, the Company's gross profit on the
        balance of it revenue for the six months ended June 30, 2005 was $18.2
        million representing a gross margin of 36.7%;

      * The contract value of new orders (net of cancellations) for the six
        months ended June 30, 2005 was $165.0 million on 416 new orders
        representing a 125.6% increase in the contract value of new orders and
        a 104.9% increase in new orders as compared to the six months ended
        June 30, 2004;

      * Backlog revenue at June 30, 2005 was $268.6 million of which $146.2
        million was related to the Company's Eclipse at Potomac Yard project
        where settlements will begin in the second half of 2006.


    Guidance for Full Year 2005:

During the Company's investor conference call, expectations for 2005 results will be discussed in detail by the Company.



      * The Company raised its 2005 earnings guidance slightly stating that it
        expects to deliver approximately 715 homes and generate full year
        earnings, adjusted for the dilution of its follow-on offering, in the
        range of $2.68 to $2.73 per share (diluted) based on an estimated
        weighted average shares outstanding of approximately 13.0 million --
        previous guidance had been a range of $2.62 to $2.71, also diluted for
        the follow-on offering.


    About Comstock Homebuilding Companies, Inc.

Comstock is a production homebuilder and real estate developer that develops, builds, and markets single-family homes, townhouses, mid-rise condominiums and high-rise 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.

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.
    (Amounts in thousands, except share data)

                                Three Months Ended        Six Months Ended
                                     June 30,                 June 30,
                                 2005        2004         2005         2004
                                         Predecessor               Predecessor
    Revenues
      Sale of real estate
       -- Homes               $  39,599   $  29,118    $  68,064    $  44,254
      Other revenue                 312       1,983          576        4,728
    Total revenue                39,911      31,101       68,640       48,982

    Expenses
      Cost of sales of
       real estate               29,658      20,455       47,249       30,768
      Cost of sales of
       other                          9       1,498           20        3,646
      Selling, general and
       administrative             5,608       4,479       10,660        6,910

    Operating income              4,636       4,669       10,711        7,658
    Other (income) expense,
     net                           (154)         (3)        (190)          60

    Income before minority
     interest and equity in
     earnings of real estate
     partnerships                 4,790       4,672       10,901        7,598
    Minority interest                 7       1,700            8        2,548

    Income before equity
     in earnings of real
     estate partnerships          4,783       2,972       10,893        5,050

    Equity in earnings of
     real estate partnerships         4          30           34           58

    Total pre tax income          4,787       3,002       10,927        5,108
    Income Taxes                   1721          -         4,052           -

    Net Income                $   3,066   $   3,002    $   6,875    $   5,108

    Basic earnings per
     share                         0.26        0.42         0.59         0.72

    Basic weighted average
     shares outstanding          11,831       7,067       11,727        7,067

    Diluted earnings per
     share                         0.26        0.42         0.58         0.72

    Diluted weighted
     average shares
     outstanding                 11,993       7,067       11,882        7,067


    Pro forma as adjusted
     for tax and share count

    Net Income                                1,923                     3,214
    Basic earnings per share                   0.16                      0.27
    Diluted earnings per share                 0.16                      0.27



SOURCE Comstock Homebuilding Companies, Inc.

CONTACT: Carrie Blewitt, +1-202-448-3129, [email protected]
for Comstock Homebuilding Companies, Inc.

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