##### 



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-Q
 þ
    
    Quarterly Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the quarterly period ended June 30, 2006
 o
    
    Transition Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the transition period from  to
 Commission File Number 1-32375
 Comstock Homebuilding Companies, Inc.
  Delaware
    
    20-1164345(State or other jurisdiction of incorporation or organization)
    
    (I.R.S. Employer Identification No.)
 11465 Sunset Hills Road
5thFloor
Reston, Virginia 20190
(703) 883-1700
(Address including zip code, and telephone number, including area code, of
principal executive offices)
 þ o
  o þ o
 o þ




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##### 



COMSTOCK HOMEBUILDING COMPANIES, INC. AND SUBSIDIARIES
FORM 10-Q
INDEX
 PagePART I  FINANCIAL INFORMATIONITEM 1. FINANCIAL STATEMENTS:Consolidated Balance Sheets (unaudited) -
June 30, 2006 and December 31, 2005Consolidated Statements of Operations (unaudited) -
Three and Six Months Ended June 30, 2006 and 2005Consolidated Statements of Cash Flows (unaudited) -
Six Months Ended June 30, 2006 and 2005Notes to Consolidated Financial StatementsITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONSITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKITEM 4. CONTROLS AND PROCEDURESPART II  OTHER INFORMATIONITEM 1. LEGAL PROCEEDINGSITEM 1A. RISK FACTORSITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDSITEM 3. DEFAULTS UPON SENIOR SECURITIESITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERSITEM 5. OTHER INFORMATIONITEM 6. EXHIBITSSIGNATURES




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##### 



COMSTOCK HOMEBUILDING COMPANIES, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share data)
 June 30, 2006
    
    
    December 31, 2005ASSETSCash and cash equivalents
    
    $
    22,739
    
    
    $
    42,167Restricted cash
    
    
    13,157
    
    
    
    10,800Receivables
    
    
    2,528
    
    
    
    6,365Note receivable
    
    
    
    
    
    
    1,250Due from related parties
    
    
    3,381
    
    
    
    2,899Real estate held for development and sale
    
    
    476,534
    
    
    
    263,802Inventory not owned  variable interest entities
    
    
    50,490
    
    
    
    89,890Property, plant and equipment
    
    
    1,814
    
    
    
    605Investment in real estate partnerships
    
    
    (88
    )
    
    
    (35
    )Deferred income tax
    
    
    
    
    
    
    2,545Other assets
    
    
    12,033
    
    
    
    11,031TOTAL ASSETS
    
    $
    582,588
    
    
    $
    431,319LIABILITIES AND SHAREHOLDERS EQUITYAccounts payable and accrued liabilities
    
    $
    50,810
    
    
    $
    59,131Due to related parties
    
    
    39
    
    
    
    40Obligations related to inventory not owned
    
    
    48,206
    
    
    
    83,015Notes payable
    
    
    286,525
    
    
    
    142,994Junior subordinated debt
    
    
    30,000
    
    
    
    Notes payablerelated parties
    
    
    663
    
    
    
    663Deferred income tax
    
    
    8,430
    
    
    
    TOTAL LIABILITIES
    
    
    424,673
    
    
    
    285,843Commitments and contingencies (Note 14)Minority interest
    
    
    402
    
    
    
    400SHAREHOLDERS EQUITYClass A common stock,
$0.01 par value,
77,266,500 shares
authorized, 14,120,222 and
11,532,442 issued and
outstanding
    
    
    141
    
    
    
    115Class B common stock,
$0.01 par value, 2,733,500
shares authorized,
2,733,500 issued and
outstanding
    
    
    27
    
    
    
    27Additional paid-in capital
    
    
    146,620
    
    
    
    126,461Treasury Stock, at cost (258,400 Class A Common Stock)
    
    
    (1,865
    )
    
    
    Retained earnings
    
    
    12,590
    
    
    
    18,473TOTAL SHAREHOLDERS EQUITY
    
    
    157,513
    
    
    
    145,076TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    $
    582,588
    
    
    $
    431,319




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##### 



COMSTOCK HOMEBUILDING COMPANIES, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
 Three Months Ended June 30,
    
    
    Six Months Ended June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005RevenuesSale of real estateHomes
    
    $
    50,351
    
    
    $
    39,599
    
    
    $
    86,716
    
    
    $
    68,064Other revenue
    
    
    346
    
    
    
    312
    
    
    
    576
    
    
    
    576Total revenue
    
    
    50,697
    
    
    
    39,911
    
    
    
    87,292
    
    
    
    68,640ExpensesCost of sales of real estate
    
    
    41,295
    
    
    
    29,658
    
    
    
    68,456
    
    
    
    47,249Cost of sales of other
    
    
    21
    
    
    
    9
    
    
    
    30
    
    
    
    20Impairments and write-offs
    
    
    12,914
    
    
    
    0
    
    
    
    12,914
    
    
    
    0Selling, general and administrative
    
    
    8,429
    
    
    
    5,608
    
    
    
    16,076
    
    
    
    10,660Operating (loss) income
    
    
    (11,962
    )
    
    
    4,636
    
    
    
    (10,184
    )
    
    
    10,711Other (income) expense, net
    
    
    (355
    )
    
    
    (154
    )
    
    
    (587
    )
    
    
    (190
    )(Loss) income before minority interest and equity in earnings
of real estate partnerships
    
    
    (11,607
    )
    
    
    4,790
    
    
    
    (9,597
    )
    
    
    10,901Minority interest
    
    
    12
    
    
    
    7
    
    
    
    5
    
    
    
    8(Loss) income before equity in earnings of real estate
partnerships
    
    
    (11,619
    )
    
    
    4,783
    
    
    
    (9,602
    )
    
    
    10,893Equity in earnings of real estate partnerships
    
    
    (26
    )
    
    
    4
    
    
    
    (53
    )
    
    
    34Total pre tax (loss) income
    
    
    (11,645
    )
    
    
    4,787
    
    
    
    (9,655
    )
    
    
    10,927Income tax (benefit) provision
    
    
    (4,522
    )
    
    
    1,721
    
    
    
    (3,771
    )
    
    
    4,052Net (loss) income
    
    $
    (7,123
    )
    
    $
    3,066
    
    
    $
    (5,884
    )
    
    $
    6,875Basic earnings per share
    
    $
    (0.47
    )
    
    $
    0.26
    
    
    $
    (0.41
    )
    
    $
    0.59Basic weighted average shares outstanding
    
    
    15,034
    
    
    
    11,831
    
    
    
    14,511
    
    
    
    11,727Diluted earnings per share
    
    $
    (0.47
    )
    
    $
    0.26
    
    
    $
    (0.41
    )
    
    $
    0.58Diluted weighted average shares outstanding
    
    
    15,034
    
    
    
    11,993
    
    
    
    14,511
    
    
    
    11,882




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##### 



COMSTOCK HOMEBUILDING COMPANIES, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
 Six Months Ended June 30,2006
    
    
    2005Cash flows from operating activities:Net (loss) income
    
    $
    (5,884
    )
    
    $
    6,875Adjustment to reconcile net (loss) income to net cash used in operating activitiesAmortization and depreciation
    
    
    259
    
    
    
    81Write-down of land, deposits and pre-acquisition costs
    
    
    12,914
    
    
    
    Loss on disposal of assets
    
    
    
    
    
    
    9Minority interest
    
    
    5
    
    
    
    8Equity in
losses (earnings) of real estate partnerships
    
    
    53
    
    
    
    (34
    )Amortization of stock compensation
    
    
    1,546
    
    
    
    1,086Deferred income taxes
    
    
    (4,769
    )
    
    
    (328
    )Changes in operating assets and liabilities:Restricted Cash
    
    
    (2,357
    )
    
    
    (5,836
    )Receivables
    
    
    5,620
    
    
    
    (5,073
    )Due from related parties
    
    
    (482
    )
    
    
    (203
    )Real estate held for development and sale
    
    
    (108,416
    )
    
    
    (109,493
    )Other assets
    
    
    4,457
    
    
    
    3,249Accounts payable and accrued liabilities
    
    
    (21,581
    )
    
    
    9,120Income tax payable
    
    
    
    
    
    
    863Due to related parties
    
    
    (1
    )
    
    
    (71
    )Net cash used in operating activities
    
    
    (118,636
    )
    
    
    (99,747
    )Cash flows from investing activities:Purchase of property, plant, and equipment
    
    
    (1,236
    )
    
    
    (121
    )Distributions of capital from investments in real estate partnerships
    
    
    
    
    
    
    60Business acquisitions, net of cash acquired
    
    
    (15,491
    )
    
    
    Net cash used in investing activities
    
    
    (16,727
    )
    
    
    (61
    )Cash flows from financing activities:Proceeds from notes payable
    
    
    160,798
    
    
    
    116,276Proceeds from junior subordinated debt
    
    
    30,000
    
    
    
    Proceeds from related party notes payable
    
    
    
    
    
    
    444Payments on notes payable
    
    
    (91,635
    )
    
    
    (50,156
    )Payments on related party notes payable
    
    
    
    
    
    
    (8,125
    )Contribution from minority shareholders
    
    
    
    
    
    
    79Distributions paid to minority shareholders
    
    
    (3
    )
    
    
    (2,409
    )Distributions paid to shareholders
    
    
    
    
    
    
    (6,309
    )Proceeds from shares issued under employee stock purchase plan
    
    
    78
    
    
    
    36Purchase of treasury stock
    
    
    (1,864
    )
    
    
    Net proceeds from equity offerings
    
    
    18,561
    
    
    
    52,810Net cash provided by financing activities
    
    
    115,935
    
    
    
    102,646Net
(decrease) increase in cash and cash equivalents
    
    
    (19,428
    )
    
    
    2,838Cash and cash equivalents, beginning of period
    
    
    42,167
    
    
    
    67,559Cash and cash equivalents, end of period
    
    $
    22,739
    
    
    $
    70,397




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##### 



COMSTOCK HOMEBUILDING COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 1. ORGANIZATION AND BASIS OF PRESENTATION
       2. RECENT ACCOUNTING PRONOUNCEMENTS




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COMSTOCK HOMEBUILDING COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   3. REAL ESTATE HELD FOR DEVELOPMENT AND SALE




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##### 



COMSTOCK HOMEBUILDING COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  June 30,
    
    
    December 31,2006
    
    
    2005Land and land development costs
    
    $
    250,436
    
    
    $
    119,530Cost of construction (including capitalized interest and real estate taxes)
    
    
    226,098
    
    
    
    144,272$
    476,534
    
    
    $
    263,802
 4. CONSOLIDATION OF VARIABLE INTEREST ENTITIES
    5. WARRANTY RESERVE




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##### 



COMSTOCK HOMEBUILDING COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Three Months Ended June 30,
    
    
    Six Months Ended June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Balance at beginning of period
    
    $
    1,310
    
    
    $
    954
    
    
    $
    1,206
    
    
    $
    916Additions
    
    
    514
    
    
    
    153
    
    
    
    814
    
    
    
    309Releases and/or charges incurred
    
    
    (267
    )
    
    
    (162
    )
    
    
    (463
    )
    
    
    (280
    )Balance at end of period
    
    $
    1,557
    
    
    $
    945
    
    
    $
    1,557
    
    
    $
    945
 6. CAPITALIZED INTEREST AND REAL ESTATE TAXES
   Three Months Ended June 30,
    
    
    Six Months Ended June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Total interest incurred
    
    $
    6,844
    
    
    $
    3,254
    
    
    $
    11,612
    
    
    $
    5,767Beginning interest capitalized
    
    
    15,562
    
    
    $
    5,987
    
    
    
    11,590
    
    
    $
    4,524Plus: Interest incurred on notes payable
    
    
    6,824
    
    
    
    2,993
    
    
    
    11,572
    
    
    
    5,096Plus: Interest incurred on related party notes payable
    
    
    20
    
    
    
    188
    
    
    
    40
    
    
    
    269Less: Interest expensed as a component of cost of
sales
    
    
    (1,567
    )
    
    
    (1,159
    )
    
    
    (2,363
    )
    
    
    (1,880
    )Ending interest capitalized
    
    $
    20,839
    
    
    $
    8,009
    
    
    $
    20,839
    
    
    $
    8,009
 7. EARNINGS PER SHARE
  Three Months Ended June 30,
    
    
    Six Months Ended June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Basic earnings per shareNet (loss) income
    
    $
    (7,123
    )
    
    $
    3,066
    
    
    $
    (5,884
    )
    
    $
    6,875Basic weighted-average shares outstanding
    
    
    15,034
    
    
    
    11,831
    
    
    
    14,511
    
    
    
    11,727




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##### 



COMSTOCK HOMEBUILDING COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Three Months Ended June 30,
    
    
    Six Months Ended June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Per share amounts
    
    $
    (0.47
    )
    
    $
    0.26
    
    
    $
    (0.41
    )
    
    $
    0.59Dilutive earnings per shareNet income
    
    $
    (7,123
    )
    
    $
    3,066
    
    
    $
    (5,884
    )
    
    $
    6,875Basic weighted-average shares outstanding
    
    
    15,034
    
    
    
    11,831
    
    
    
    14,511
    
    
    
    11,727Stock options and restricted stock grants
    
    
    
    
    
    
    162
    
    
    
    
    
    
    
    155Dilutive weighted-average shares outstanding
    
    
    15,034
    
    
    
    11,993
    
    
    
    14,511
    
    
    
    11,882Per share amounts
    
    $
    (0.47
    )
    
    $
    0.26
    
    
    $
    (0.41
    )
    
    $
    0.58
  Comprehensive income
  8. INVESTMENT IN REAL ESTATE PARTNERSHIPS
    Investment in real estate partnerships
    
    $
    (88
    )Development and construction loan receivable
    
    $
    3,235




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##### 



COMSTOCK HOMEBUILDING COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  9. ACQUISITIONS
   10. DEBT
   11. INCOME TAX




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##### 



COMSTOCK HOMEBUILDING COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   June 30, 2006
    December 31, 2005Deferred tax assets:Inventory (1)
    
    $
    
    
    
    $
    2,245Warranty
    
    
    583
    
    
    
    417Deferred rent
    
    
    40
    
    
    
    27Accrued expenses
    
    
    64
    
    
    
    73Stock based compensation
    
    
    1,363
    
    
    
    7902,050
    
    
    
    3,552Lessvaluation allowance
    
    
    (569
    )
    
    
    (840
    )Net deferred tax assets
    
    
    1,481
    
    
    
    2,712Deferred tax liabilities:Inventory (1)
    
    $
    (9,756
    )
    
    $
    Investment in affiliates
    
    
    (8
    )
    
    
    (8
    )Depreciation and amortization
    
    
    (147
    )
    
    
    (159
    )Net deferred tax liabilities
    
    
    (9,911
    )
    
    
    (167
    )Net deferred tax (liabilities) assets
    
    $
    (8,430
    )
    
    $
    2,545
 
 (1)
    
    The increase in net deferred tax liabilities of $12,000 is related to deferred tax
liabilities established as a result of the purchase accounting related to acquisition of Parker
Chandler Homes, Inc., and Capitol Homes, Inc. in the amount of $15,000. This amount was offset by
a deferred tax asset in the amount of $3,000 related to impairment charges recorded during the
three months ended June 30, 2006 12. RESTRICTED STOCK, STOCK OPTIONS, AND OTHER STOCK PLANS




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##### 



COMSTOCK HOMEBUILDING COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Stock options
    
    
    213,993Restricted stock grants
    
    
    947,860Total outstanding equity awards
    
    
    1,161,853
  Shares available for issuance at January 1, 2006
    
    
    1,050,231Adjustments:Additional shares added to plan
    
    
    337,757Restricted stock grants  Issued
    
    
    (690,160
    )Shares issued under employee stock purchase plan
    
    
    (7,512
    )Restricted stock grants  Forfeitures
    
    
    16,191Shares available for issuance at June 30, 2006
    
    
    706,507
   Weightedaveragefair valueat dateShares
    
    of grantRestricted shares outstanding at December 31, 2005
    
    
    273,891
    
    
    $
    16.46Granted
    
    
    690,160
    
    
    
    11.84Vested
    
    
    
    
    
    
    Forfeited
    
    
    (16,191
    )
    
    
    15.43Restricted shares outstanding at June 30, 2006
    
    
    947,860
    
    
    $
    13.11




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##### 





COMSTOCK HOMEBUILDING COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS






13. PRIVATE PLACEMENT








14. STOCK REPURCHASE PROGRAM




15. COMMITMENTS AND CONTINGENCIES


Legal proceedings







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##### 





COMSTOCK HOMEBUILDING COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS








Letters of credit and performance bonds




Operating leases




Year Ended:
    
    Amount2006
    
    $
    6082007
    
    
    1,2312008
    
    
    1,1202009
    
    
    9032010
    
    
    164Thereafter
    
    
    5




16. RELATED PARTY TRANSACTIONS







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##### 





COMSTOCK HOMEBUILDING COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



















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##### 





COMSTOCK HOMEBUILDING COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS












17. SUBSEQUENT EVENTS










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##### 



ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
    Overview




---



##### 



Three Months Ended June 30,
    
    Six Months Ended June 30,2006
    
    2005
    
    2006
    
    2005New orders
    
    
    199
    
    
    
    160
    
    
    
    379
    
    
    
    406New order revenues
    
    $
    55,992
    
    
    $
    59,134
    
    
    $
    115,211
    
    
    $
    162,417Average new order price
    
    $
    281
    
    
    $
    370
    
    
    $
    304
    
    
    $
    400Settlements
    
    
    165
    
    
    
    123
    
    
    
    277
    
    
    
    201Settlement revenue
    
    $
    50,351
    
    
    $
    39,599
    
    
    $
    86,716
    
    
    $
    68,064Average settlement price
    
    $
    305
    
    
    $
    322
    
    
    $
    313
    
    
    $
    339Backlog units
    
    
    575
    
    
    
    666
    
    
    
    575
    
    
    
    666Backlog
    
    $
    218,393
    
    
    $
    268,579
    
    
    $
    218,393
    
    
    $
    268,579Average backlog price
    
    $
    380
    
    
    $
    403
    
    
    $
    380
    
    
    $
    403
  As of June 30, 2006Lots underEstimated
    
    
    
    
    
    
    
    
    
    Lots
    
    Option
    
    Average NewUnits at
    
    Units
    
    
    
    
    
    Owned
    
    Agreement
    
    Order RevenueProject
    
    State
    
    Completion
    
    Settled
    
    Backlog(2)
    
    Unsold
    
    Unsold
    
    to DateStatus:
Active (1)Allen Creek
    
    GA
    
    
    26
    
    
    
    11
    
    
    
    6
    
    
    
    9
    
    
    
    
    
    
    $
    211,183Arcanum
    
    GA
    
    
    34
    
    
    
    3
    
    
    
    6
    
    
    
    25
    
    
    
    
    
    
    $
    401,254Brentwood Estates
    
    GA
    
    
    32
    
    
    
    8
    
    
    
    5
    
    
    
    3
    
    
    
    16
    
    
    $
    134,813Falling Water
    
    GA
    
    
    23
    
    
    
    2
    
    
    
    6
    
    
    
    15
    
    
    
    
    
    
    $
    422,581Gates of Luberon
    
    GA
    
    
    32
    
    
    
    1
    
    
    
    1
    
    
    
    30
    
    
    
    
    
    
    $
    392,000Glenn Ivey
    
    GA
    
    
    104
    
    
    
    
    
    
    
    8
    
    
    
    33
    
    
    
    63
    
    
    $
    230,806Highland Station
    
    GA
    
    
    105
    
    
    
    1
    
    
    
    27
    
    
    
    77
    
    
    
    
    
    
    $
    287,030Maristone
    
    GA
    
    
    40
    
    
    
    
    
    
    
    
    
    
    
    40
    
    
    
    
    
    
    $
    Senators Ridge
    
    GA
    
    
    88
    
    
    
    8
    
    
    
    7
    
    
    
    45
    
    
    
    28
    
    
    $
    247,662Traditions
    
    GA
    
    
    21
    
    
    
    
    
    
    
    
    
    
    
    21
    
    
    
    
    
    
    $
    Sub-Total /
Weighted Average (3):
    
    
    
    
    
    
    505
    
    
    
    34
    
    
    
    66
    
    
    
    298
    
    
    
    107
    
    
    $
    267,168Emerald Farm
    
    MD
    
    
    84
    
    
    
    74
    
    
    
    
    
    
    
    10
    
    
    
    
    
    
    $
    455,443Sub-Total/Weighted Average:
    
    
    
    
    
    
    84
    
    
    
    74
    
    
    
    
    
    
    
    10
    
    
    
    
    
    
    $
    455,443Allyns Landing
    
    NC
    
    
    117
    
    
    
    24
    
    
    
    10
    
    
    
    83
    
    
    
    
    
    
    $
    221,043Brookefield Station
    
    NC
    
    
    130
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    130
    
    
    $
    Carpenter Pointe
    
    NC
    
    
    5
    
    
    
    
    
    
    
    
    
    
    
    5
    
    
    
    
    
    
    $
    Deerfield
    
    NC
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    
    
    
    $
    Haddon Hall
    
    NC
    
    
    90
    
    
    
    
    
    
    
    
    
    
    
    90
    
    
    
    
    
    
    $
    Kelton at Preston
    
    NC
    
    
    56
    
    
    
    33
    
    
    
    2
    
    
    
    21
    
    
    
    
    
    
    $
    308,003North Farms
    
    NC
    
    
    138
    
    
    
    11
    
    
    
    9
    
    
    
    4
    
    
    
    114
    
    
    $
    179,145Pine Hollow
    
    NC
    
    
    10
    
    
    
    
    
    
    
    
    
    
    
    6
    
    
    
    4
    
    
    $
    Providence-SF
    
    NC
    
    
    148
    
    
    
    
    
    
    
    
    
    
    
    34
    
    
    
    114
    
    
    $
    Riverbrooke
    
    NC
    
    
    66
    
    
    
    11
    
    
    
    6
    
    
    
    49
    
    
    
    
    
    
    $
    171,256Strathaven
    
    NC
    
    
    6
    
    
    
    
    
    
    
    1
    
    
    
    4
    
    
    
    1
    
    
    $
    376,995Wakefield Plantation
    
    NC
    
    
    77
    
    
    
    35
    
    
    
    6
    
    
    
    36
    
    
    
    
    
    
    $
    497,284Wheatleigh Preserve
    
    NC
    
    
    28
    
    
    
    
    
    
    
    10
    
    
    
    18
    
    
    
    
    
    
    $
    289,018Sub-Total / Weighted Average:
    
    
    
    
    
    
    872
    
    
    
    114
    
    
    
    44
    
    
    
    351
    
    
    
    363
    
    
    $
    306,618Carolina Waterway
    
    SC
    
    
    15
    
    
    
    
    
    
    
    
    
    
    
    15
    
    
    
    
    
    
    $
    Sub-Total / Weighted Average:
    
    
    
    
    
    
    15
    
    
    
    
    
    
    
    
    
    
    
    15
    
    
    
    
    
    
    $
    Barrington Park
    
    VA
    
    
    148
    
    
    
    
    
    
    
    12
    
    
    
    136
    
    
    
    
    
    
    $
    310,200Beacon Park at Belmont Bay 8&9
    
    VA
    
    
    600
    
    
    
    
    
    
    
    
    
    
    
    112
    
    
    
    488
    
    
    $
    Blooms Mill Carriage
    
    VA
    
    
    91
    
    
    
    90
    
    
    
    
    
    
    
    1
    
    
    
    
    
    
    $
    453,794Carter Lake
    
    VA
    
    
    258
    
    
    
    
    
    
    
    
    
    
    
    258
    
    
    
    
    
    
    $
    Commons at Bellemeade
    
    VA
    
    
    316
    
    
    
    49
    
    
    
    4
    
    
    
    263
    
    
    
    
    
    
    $
    218,039Commons on Potomac Sq
    
    VA
    
    
    192
    
    
    
    22
    
    
    
    8
    
    
    
    162
    
    
    
    
    
    
    $
    255,593Commons on Williams Sq
    
    VA
    
    
    180
    
    
    
    88
    
    
    
    3
    
    
    
    89
    
    
    
    
    
    
    $
    352,584Countryside
    
    VA
    
    
    102
    
    
    
    64
    
    
    
    2
    
    
    
    36
    
    
    
    
    
    
    $
    287,308Penderbrook
    
    VA
    
    
    424
    
    
    
    223
    
    
    
    5
    
    
    
    196
    
    
    
    
    
    
    $
    254,371River Club at Belmont Bay 5
    
    VA
    
    
    84
    
    
    
    76
    
    
    
    1
    
    
    
    7
    
    
    
    
    
    
    $
    455,533The Eclipse on Center Park
    
    VA
    
    
    465
    
    
    
    
    
    
    
    413
    
    
    
    52
    
    
    
    
    
    
    $
    409,361Woodlands at Round Hill
    
    VA
    
    
    46
    
    
    
    23
    
    
    
    2
    
    
    
    21
    
    
    
    
    
    
    $
    752,399Sub-Total / Weighted Average:
    
    
    
    
    
    
    2,906
    
    
    
    635
    
    
    
    450
    
    
    
    1,333
    
    
    
    488
    
    
    $
    364,778Total Active
    
    
    
    
    
    
    4,382
    
    
    
    857
    
    
    
    560
    
    
    
    2,007
    
    
    
    958
    
    
    $
    356,139Status: DevelopmentEast Capitol
    
    DC
    
    
    130
    
    
    
    
    
    
    
    
    
    
    
    130
    
    
    
    
    
    
    
    n/aSub-Total:
    
    
    
    
    
    
    130
    
    
    
    
    
    
    
    
    
    
    
    130
    
    
    
    Cedars Road
    
    GA
    
    
    109
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    109
    
    
    
    n/aHighland Avenue
    
    GA
    
    
    30
    
    
    
    
    
    
    
    
    
    
    
    30
    
    
    
    
    
    
    
    n/aJames Road
    
    GA
    
    
    49
    
    
    
    
    
    
    
    
    
    
    
    49
    
    
    
    
    
    
    
    n/aKelly Mill Road
    
    GA
    
    
    28
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    28
    
    
    
    n/aMcGinnis Ferry SF
    
    GA
    
    
    48
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    48
    
    
    
    n/aPost Road
    
    GA
    
    
    59
    
    
    
    
    
    
    
    
    
    
    
    59
    
    
    
    
    
    
    
    n/aPost Road II
    
    GA
    
    
    54
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    54
    
    
    
    n/aSettingdown Circle
    
    GA
    
    
    172
    
    
    
    
    
    
    
    
    
    
    
    172
    
    
    
    
    
    
    
    n/aShiloh Road
    
    GA
    
    
    61
    
    
    
    
    
    
    
    
    
    
    
    61
    
    
    
    
    
    
    
    n/aTribble Lakes
    
    GA
    
    
    200
    
    
    
    
    
    
    
    
    
    
    
    200
    
    
    
    
    
    
    
    n/aWyngate
    
    GA
    
    
    28
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    28
    
    
    
    n/aSub-Total:
    
    
    
    
    
    
    838
    
    
    
    
    
    
    
    
    
    
    
    571
    
    
    
    267Boyce Road
    
    NC
    
    
    33
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    33
    
    
    
    n/aCleveland Springs
    
    NC
    
    
    88
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    88
    
    
    
    n/aHolland Road
    
    NC
    
    
    81
    
    
    
    
    
    
    
    
    
    
    
    81
    
    
    
    
    
    
    
    n/aLakeshore Hills
    
    NC
    
    
    34
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    34
    
    
    
    n/aMassey Preserve
    
    NC
    
    
    297
    
    
    
    
    
    
    
    
    
    
    
    185
    
    
    
    112
    
    
    
    n/aProvidence-TH
    
    NC
    
    
    80
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    80
    
    
    
    n/aStowe Road
    
    NC
    
    
    110
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    110
    
    
    
    n/aSub-Total:
    
    
    
    
    
    
    723
    
    
    
    
    
    
    
    
    
    
    
    266
    
    
    
    457Aldie Singles
    
    VA
    
    
    15
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15
    
    
    
    n/aBlake Crossing
    
    VA
    
    
    130
    
    
    
    
    
    
    
    
    
    
    
    130
    
    
    
    
    
    
    
    n/aBrandy Station
    
    VA
    
    
    350
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    350
    
    
    
    n/aLoudoun Station Condominiums
    
    VA
    
    
    484
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    484
    
    
    
    n/aStation View
    
    VA
    
    
    47
    
    
    
    
    
    
    
    
    
    
    
    47
    
    
    
    
    
    
    
    n/aSub-Total:
    
    
    
    
    
    
    1,026
    
    
    
    
    
    
    
    
    
    
    
    177
    
    
    
    849Total Development
    
    
    
    
    
    
    2,717
    
    
    
    
    
    
    
    
    
    
    
    1,144
    
    
    
    1,573
    
    
    
    n/aTotal Active & Development
    
    
    
    
    
    
    7,099
    
    
    
    857
    
    
    
    560
    
    
    
    3,151
    
    
    
    2,531
    
    
    $
    356,139
    (4)Status: Joint VentureNorth Shore Condominiums
    
    NC
    
    
    196
    
    
    
    
    
    
    
    7
    
    
    
    189
    
    
    
    
    
    
    $
    286,361North Shore Townhomes
    
    NC
    
    
    163
    
    
    
    33
    
    
    
    7
    
    
    
    123
    
    
    
    
    
    
    $
    239,107Total Joint Venture
    
    
    
    
    
    
    359
    
    
    
    33
    
    
    
    14
    
    
    
    312
    
    
    
    
 
 (1)
    
    Active communities are open for sales. Development communities are in the development
process and have not yet opened for sales. Completed communities have settled all units during the three months
ended June 30, 2006.(2)
    
    Backlog means we have an executed order with a buyer, inclusive of lot sales, but the
settlement has not yet taken place.(3)
    
    Weighted Average means the weighted average new order sale price




---



##### 



Results of Operations
 Three and six months ended June 30, 2006 compared to three and six months ended June 30, 2005
 Orders and Backlog
   Revenues




---



##### 



Other Revenue
  Cost of sales
  Impairments and write-offs
    Selling, general and administrative




---



##### 



Operating (loss) income
  Other (income) expense, net
  Income taxes
   Liquidity and Capital Resources




---



##### 



Credit Facilities
       Cash Flow




---



##### 



Recent Accounting Pronouncements
   Critical Accounting Policies and Estimates
 Managements Discussion and
Analysis of Financial Condition and Results of Operations
 Outlook




---



##### 



ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  ITEM 4. CONTROLS AND PROCEDURES




---



##### 



PART II  OTHER INFORMATION
 ITEM 1. LEGAL PROCEEDINGS.
    ITEM 1A. RISK FACTORS
    ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.




---



##### 



ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
  ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
   Nominee
    
    For
    
    Authority WithheldMr. Gregory V. Benson
    
    
    9,778,018
    
    
    
    1,883,118Mr. Norman D. Chirite
    
    
    11,507,491
    
    
    
    153,645Mr. Socrates Verses
    
    
    11,507,091
    
    
    
    153,045




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##### 



ITEM 5. OTHER INFORMATION.
  ITEM 6. EXHIBITS
 Exhibit Number
    
    Exhibit3.1
    
    Amended and Restated Certificate of Incorporation (incorporated by
reference to an exhibit to the Registrants Annual Report on Form 10-K
for the year ended December 31, 2004)3.2
    
    Amended and Restated Bylaws (incorporated by reference to an exhibit
to the Registrants Annual Report on Form 10-K for the year ended
December 31, 2004)4.1
    
    Specimen Stock Certificate (incorporated by reference to an exhibit
to the Registrants Amendment No. 6 to the Registration Statement on Form
S-1 filed with the Commission on December 9, 2004 (No. 333-118193)10.1
    
    Note Purchase Agreement with Kodiak Warehouse LLC, dated as of May 4, 200610.2
    
    Junior Subordinated Indenture with Wells Fargo Bank, N.A., dated as of
May 4, 200610.3
    
    Credit Agreement with Wachovia Bank, N.A., dated as of May 26, 200610.4
    
    Stock Purchase Agreement with Capitol Homes, Inc. and the Selling
Shareholders identified therein, dated as of May 1, 200631.1
    
    Certification of Chairman and Chief Executive Officer pursuant to Rule
13a-14(a) and Rule 15d-14(a), promulgated under the Securities Exchange
Act of 1934, as amended31.2
    
    Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and
Rule 15d-14(a), promulgated under the Securities Act of 1934, as amended32.1
    
    Certification of Chairman and Chief Executive Officer and Chief Financial
Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002




---



##### 



SIGNATURES
  COMSTOCK HOMEBUILDING COMPANIES, INC.Date: August 9, 2006
    By:
    /s/ Christopher ClementeChristopher ClementeChairman and Chief Executive OfficerBy:
    /s/ Bruce J. LabovitzBruce J. LabovitzChief Financial Officer