Summary of Sales and Settlement Results
(unaudited)
Three months ended September 30, 2007
--------------------------------------------------
(dollars in thousands) CHCI - All Washington Atlanta Raleigh
---------- ------------- ----------- -----------
New Traffic 1,502 758 343 401
Gross sales 81 32 24 25
Cancellations 78 70 3 5
Net new orders 3 (38) 21 20
Gross new order revenue $ 24,504 $ 10,475 $ 7,462 $ 6,566
Cancellation revenue $ 35,995 $ 33,411 $ 1,173 $ 1,411
Net new order revenue $ (11,491) $ (22,936) $ 6,289 $ 5,155
Settlements 141 95 12 34
Settlement revenue $ 47,773 $ 35,639 $ 3,717 $ 8,416
Backlog revenue (3) $ 47,277 $ 22,303 $ 9,131 $ 15,843
Backlog units 100 23 27 50
Nine months ended September 30, 2007
--------------------------------------------------
(dollars in thousands) CHCI - All Washington (1) Atlanta Raleigh (2)
---------- ------------- ----------- -----------
New Traffic 4,766 2,209 1,351 1,206
Gross sales 717 521 87 109
Cancellations 199 164 18 17
Net new orders 518 357 69 92
Gross new order revenue $ 166,683 $ 111,823 $ 27,286 $ 27,573
Cancellation revenue $ 80,776 $ 70,015 $ 5,600 $ 5,161
Net new order revenue $ 85,907 $ 41,808 $ 21,686 $ 22,412
Settlements 777 633 56 88
Settlement revenue $ 201,114 $ 162,536 $ 17,292 $ 21,286
Backlog revenue (3) $ 47,277 $ 22,303 $ 9,131 $ 15,843
Backlog units 100 23 27 50
(1) Includes the sale of 316 units at Bellemeade condominium for
$47.5 million on June 28, 2007.
(2) Does not include $7.1 million of lot sales at Massey Preserve and
$3.8 million sale of North Shore partnership interest.
(3) Includes $14.5 million of backlog revenue from Potomac Yard retail.
The Company provided the following additional information
specifically regarding its Eclipse at Potomac Yard project in
Arlington, Virginia:
Three months Project to
ended Date as of
(dollars in thousands) Sept. 30, 2007 Sept. 30, 2007
-------------- --------------
New Traffic 305 2,014
Gross sales 13 494
Cancellations 67 160
Net new orders (54) 334
Gross new order revenue $5,200 $202,200
Cancellation revenue $32,492 $72,317
Net new order revenue -$27,291 $129,883
Settlements 56 320
Settlement revenue $25,190 $124,713
Backlog revenue (1) $19,669 $19,669
Backlog units 14 14
(1) Includes $14.5 million of backlog revenue from Potomac Yard
retail.
"Market conditions have continued to deteriorate throughout the
year," said Christopher Clemente, Chairman and CEO. "The credit
market crisis that developed over the summer has dampened consumer
confidence in real estate and is contributing to reduced demand for
new homes and rising inventories of new and existing homes. Having
survived previous market downturns we recognize the importance of
lowering costs, reducing inventory, protecting liquidity and
satisfying our customers. We continue to focus on these fundamentals.
We have reduced staffing by more then 35%, reduced production costs
by as much as 22%, reduced inventory of land and spec homes, and
worked with our lenders in ways that have afforded us an opportunity
to manage current market conditions. With continued job creation and
population growth in our markets we believe that this cycle will
follow the same path to recovery that previous cycles have followed.
I believe that the steps we are taking now to reduce costs and
realign our business with current market conditions will position
Comstock to thrive again when market conditions improve."
In response to deterioration of pricing power and consumer demand
during the three months ended September 30, 2007 the Company is
currently in the process of evaluating both its carrying value of
inventory and its remaining exposure to land option deposits. The
Company indicated that it expected to record additional inventory
impairment and option write-off charges for the three months ended
September 30, 2007. In connection with these potential charges and
changing market conditions, the Company is in the process of
negotiating with certain of it lenders to modify existing covenants.
The Company announced that it plans to release its financial results
on Friday, November 9th, 2007 and hold a conference call for investors
on Monday, November 12th, 2007 at 1:00 pm EST to review its 3Q 2007
results.
This investor call will be available via live webcast on the Comstock
Homebuilding Companies' website at
http://www.comstockhomebuilding.com in the "Investor Relations"
section. To participate by telephone, the dial-in number is
866-542-4237 and the access code is 3238679. Investors are advised to
join at least five minutes prior to the call to register. The call
will be archived for seven days: from 6:45 p.m. Monday, November 12,
2007, until 11:59 p.m. Monday, November 19, 2007. To retrieve the
archived call by telephone, the dial-in number is 866-542-4237 and the
access code is 3238679.
About Comstock Homebuilding Companies, Inc.
Established in 1985, Comstock Homebuilding Companies is a diversified
real estate development firm with a focus on moderately priced
for-sale residential products. Comstock builds and markets
single-family homes, townhouses, mid-rise condominiums, high-rise
condominiums, mixed-use urban communities and active adult
communities. The company currently markets its products under the
Comstock Homes brand in the Washington, D.C.; Raleigh, North
Carolina; and Atlanta, Georgia metropolitan areas. Comstock develops
mixed-use, urban communities and active-adult communities under the
Comstock Communities brand. Comstock Homebuilding Companies Inc.
trades on Nasdaq under the symbol CHCI. For more information on the
Company or it projects 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.