Comstock Homebuilding Companies, Inc. Reports $0.81 Diluted Earnings Per Share for Third Quarter 2005
For the nine months ended September 30, 2005 the Company reported earnings
per share of $1.47 (basic) and $1.45 (diluted). On a pro forma basis,
adjusted for tax rates and share counts, earnings per share for the nine
months ended September 30, 2004 were $0.53 (basic) and $0.52 (diluted).
The Company will conduct a conference call for interested investors on
Monday, November 7, 2005, at 4:45 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 800-299-8538
and the access code is 89191233; the call may also be accessed on the Internet
at http://www.comstockhomebuilding.com in the Investor Relations section.
Highlights of Financial Results - Three months ended September 30, 2005:
* The Company generated basic earnings per share for the quarter of $0.82
on shares outstanding of 14.0 million and diluted earnings per share of
$0.81 on shares outstanding of 14.2 million;
* Total revenue for the quarter was $78.4 million with $72.4 million of
revenue derived from homebuilding, as compared to total revenue of $25.8
million for the three months ended September 30, 2004 with $23.4 million
of revenue derived from homebuilding. This represents a 204% increase
in total revenue and a 210% increase in revenue from homebuilding;
* The Company delivered 202 new homes in the quarter at an average per
unit revenue of approximately $358,000 as compared to 74 new homes at an
average per unit revenue of $316,000 during the three months ended
September 30, 2004;
* Gross profit from all revenue was $24.5 million for the quarter
representing a 31.2% gross margin. Gross profit from condominium
conversions was $3.4 million representing gross margin of 13.7%.
Exclusive of condominium conversions gross profit for the quarter was
$21.1 million representing a gross margin of 39.2%. Gross profit for
the three months ended September 30, 2004, during which there was no
condominium conversion revenue, was $10.2 million representing a 39.3%
gross margin;
* The Company sold 19 lots at its Woodlands of Round Hill project
(previously known as the Hamlets of Blue Ridge) contributing to $6.0
million of other revenue and a 48.3% gross margin from other revenue;
* Operating income was $17.9 million for the quarter representing a 22.8%
operating margin as compared to operating income of $7.5 million and an
operating margin of 29.1% for the three months ended September 30, 2004.
Selling, general and administrative expenses for the quarter were $6.6
million representing 8.4% of total revenue as compared to $2.6 million
representing 10.2% of total revenue for the three months ended September
30, 2004.
Highlights of Financial Results - Nine months ended September 30, 2005:
* The Company generated basic earnings per share for the nine months of
$1.47 on weighted average shares outstanding of 12.5 million and diluted
earnings per share of $1.45 on weighted average shares outstanding of
12.7 million;
* Total revenue for the nine months was $147.1 million with $140.5 million
of revenue derived from homebuilding, as compared to total revenue of
$74.8 million for the nine months ended September 30, 2004 with $67.6
million of revenue derived from homebuilding. This represents a 96.6%
increase in total revenue and a 107.6% increase in revenue from
homebuilding;
* The Company delivered 403 homes during the nine months at an average per
unit revenue of approximately $349,000 as compared to 208 homes at an
average per unit revenue of $325,000 during the nine months ended
September 30, 2004;
* Gross profit from all revenue was $45.9 million for the nine months
representing a 31.2% gross margin. Gross profit from condominium
conversions was $6.0 million representing gross margin of 13.9%.
Exclusive of condominium conversions gross profit for the nine months
was $39.9 million representing a gross margin of 38.3%. Gross profit
for the nine months ended September 30, 2004, during which there was no
condominium conversion revenue, was $24.7 million representing a 33.1%
gross margin;
* Operating income was $28.6 million for the nine months representing a
19.5% operating margin as compared to operating income of $15.2 million
and an operating margin of 20.3% for the nine months ended September 30,
2004. Selling, general and administrative expenses for the nine months
were $17.2 million representing 11.7% of total revenue as compared to
$9.5 million representing 12.8% of total revenue for the nine months
ended September 30, 2004;
* Backlog revenue at September 30, 2005 was $231.8 million on 567 sold
units of which approximately $148 million is derived from 371 sold units
at the Company's Eclipse on Center Park at Potomac Yard project.
"We are extremely pleased with the results of this quarter," said
Christopher Clemente, Chairman and CEO. "We delivered 202 homes this quarter
alone which represents a record for the company and is in keeping with the
growth strategy we have been implementing over the past several years. We
feel confident that our inventory is well positioned to continue to provide
growth for us. We believe that demand for affordable housing in our core
market, the Greater Washington, DC region, will continue as a result of job
growth and population growth in the region. Our concentration over the past
two years on providing affordably priced product has provided an opportunity
for our primary target markets of first time and early move-up buyers to find
a home they can afford in a desirable location. Our recent entry into the
condominium conversion business has been very successful. The conversion
projects we are currently marketing have helped us meet an immediate demand
for affordable housing in supply constrained locations. We believe that as
long as job growth is strong and incomes remain high, housing demand will
continue in the Washington area. We are excited about our prospects for
growth throughout the region over the next several years."
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 from Operations
Note: The Company's results pre-IPO are referred to as "Predecessor" in
the Company's financial statements.
Three Months Ended Nine Months Ended
Comstock Homebuilding Sept 30, Sept 30,
Companies, Inc.
(In thousands US dollars, 2005 2004 2005 2004
except per share data)
Predecessor Predecessor
Revenues
Sale of real estate -
Homes $ 72,409 $ 23,395 $ 140,473 $ 67,649
Other revenue 6,028 2,437 6,604 7,165
Total revenue 78,437 25,832 147,077 74,814
Expenses
Cost of sales of real
estate 50,838 13,897 98,087 44,665
Cost of sales of other 3,118 1,773 3,138 5,419
Selling, general and
administrative 6,562 2,636 17,222 9,546
Operating income 17,919 7,526 28,630 15,184
Other (income) expense, net (463) 241 (653) 301
Income before minority
interest and equity in
earnings of real estate
partnerships 18,382 7,285 29,283 14,883
Minority interest 6 1,812 14 4,360
Income before equity in
earnings of real estate
partnerships 18,376 5,473 29,269 10,523
Equity in earnings of real
estate partnerships 48 35 82 93
Total pre tax income 18,424 5,508 29,351 10,616
Income Taxes 6,941 - 10,993 -
Net Income $ 11,483 $ 5,508 $ 18,358 $ 10,616
Basic earnings per share 0.82 0.78 1.47 1.50
Basic weighted average
shares outstanding 13,987 7,067 12,491 7,067
Diluted earnings per share 0.81 0.78 1.45 1.50
Diluted weighted average
shares outstanding 14,168 7,067 12,653 7,067
Proforma basic earnings per
share - adjusted for tax
and share count 0.82 0.25 1.47 0.53
Proforma diluted earnings
per share - adjusted for
tax and share count 0.81 0.24 1.45 0.52
SOURCE Comstock Homebuilding Companies, Inc.
CONTACT: Carrie Blewitt, +1-202-448-3129, or [email protected], for
Comstock Homebuilding Companies, Inc.