##### 



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
  o
    
    Transition Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934
 
 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
5th Floor
Reston, Virginia 20190
(703) 883-1700
 
  þ o
  o þ o
 o þ




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##### 



COMSTOCK HOMEBUILDING COMPANIES, INC. AND SUBSIDIARIES
FORM 10-Q
INDEX
 PagePART I  FINANCIAL INFORMATION
    
    3ITEM 1. FINANCIAL STATEMENTS:
    
    3Consolidated Balance Sheets (unaudited) -
    
    3March 31, 2006 and December 31, 2005Consolidated Statements of Operations (unaudited) -
    
    4Three Months Ended March 31, 2006 and 2005Consolidated Statements of Cash Flows (unaudited) -
    
    5Three Months Ended March 31, 2006 and 2005Notes to Consolidated Financial Statements
    
    6ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF
               OPERATIONS
    
    16ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    23ITEM 4. CONTROLS AND PROCEDURES
    
    23PART II  OTHER INFORMATION
    
    24ITEM 1. LEGAL PROCEEDINGS
    
    24ITEM 1A. RISK FACTORS
    
    24ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
    
    24ITEM 3. DEFAULTS UPON SENIOR SECURITIES
    
    24ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    24ITEM 5. OTHER INFORMATION
    
    24ITEM 6. EXHIBITS
    
    25SIGNATURES
    
    26
 2




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##### 



COMSTOCK HOMEBUILDING COMPANIES, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share data)
 March 31, 2006
    
    
    December 31, 2005ASSETSCash and cash equivalents
    
    $
    18,175
    
    
    $
    42,167Restricted cash
    
    
    12,841
    
    
    
    10,800Receivables
    
    
    4,656
    
    
    
    6,365Note receivables
    
    
    
    
    
    
    1,250Due from related parties
    
    
    3,138
    
    
    
    2,899Real estate held for development and sale
    
    
    412,514
    
    
    
    263,802Inventory not owned  variable interest entities
    
    
    78,787
    
    
    
    89,890Property, plant and equipment
    
    
    1,347
    
    
    
    605Investment in real estate partnerships
    
    
    (62
    )
    
    
    (35
    )Deferred income tax
    
    
    
    
    
    
    2,545Other assets
    
    
    9,993
    
    
    
    11,031TOTAL ASSETS
    
    $
    541,389
    
    
    $
    431,319LIABILITIES AND SHAREHOLDERS EQUITYAccounts payable and accrued liabilities
    
    
    49,197
    
    
    
    59,131Due to related parties
    
    
    40
    
    
    
    40Obligations related to inventory not owned
    
    
    75,147
    
    
    
    83,015Notes payable
    
    
    262,844
    
    
    
    142,994Notes
payable  related parties
    
    
    663
    
    
    
    663Deferred income tax
    
    
    6,889
    
    
    
    TOTAL LIABILITIES
    
    
    394,781
    
    
    
    285,843Commitments
and contingencies (Note 12)Minority interest
    
    
    393
    
    
    
    400SHAREHOLDERS EQUITYClass A common stock,
$0.01 par value,
77,266,500 shares
authorized,
    
    
    117
    
    
    
    11511,478,218 issued and outstandingClass B common stock,
$0.01 par value, 2,733,500
shares authorized,
    
    
    27
    
    
    
    272,733,500 issued and
outstandingAdditional paid-in capital
    
    
    127,037
    
    
    
    126,461Treasury Stock, at cost (70,300 Class A Common Stock)
    
    
    (678
    )
    
    
    Retained earnings (accumulated deficit)
    
    
    19,713
    
    
    
    18,473TOTAL SHAREHOLDERS EQUITY
    
    
    146,216
    
    
    
    145,076TOTAL LIABILITIES AND SHAREHOLDERS EQUITY (DEFICIT)
    
    $
    541,389
    
    
    $
    431,319
  3




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##### 



COMSTOCK HOMEBUILDING COMPANIES, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
 Three
Months EndedMarch 31,2006
    
    
    2005RevenuesSale of real
estate  Homes
    
    $
    36,365
    
    
    $
    28,465Other revenue
    
    
    230
    
    
    
    264Total revenue
    
    
    36,595
    
    
    
    28,729ExpensesCost of sales of real estate
    
    
    27,161
    
    
    
    17,591Cost of sales of other
    
    
    10
    
    
    
    11Selling, general and administrative
    
    
    7,646
    
    
    
    5,052Operating income
    
    
    1,778
    
    
    
    6,075Other (income) expense, net
    
    
    (233
    )
    
    
    (36
    )Income before minority interest and equity in earnings
of real estate partnerships
    
    
    2,011
    
    
    
    6,111Minority interest
    
    
    (7
    )
    
    
    1Income before equity in earnings of real estate
partnerships
    
    
    2,018
    
    
    
    6,110Equity in earnings of real estate partnerships
    
    
    (27
    )
    
    
    30Total pre tax income
    
    
    1,991
    
    
    
    6,140Income tax
provision
    
    
    751
    
    
    
    2,331Net Income
    
    $
    1,240
    
    
    $
    3,809Basic earnings per share
    
    
    0.09
    
    
    
    0.33Basic weighted average shares outstanding
    
    
    13,981
    
    
    
    11,621Diluted earnings per share
    
    
    0.09
    
    
    
    0.32Diluted weighted average shares outstanding
    
    
    14,071
    
    
    
    11,769
  4




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##### 



COMSTOCK HOMEBUILDING COMPANIES, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
 Three Months Ended March 31,2006
    
    

2005Cash flows from operating activities:Net income
    
    $
    1,240
    
    
    $
    3,809Adjustment to reconcile net income to net cash provided by operating activitiesDepreciation
    
    
    73
    
    
    
    39Loss on disposal of assets
    
    
    
    
    
    
    8Minority interest
    
    
    (7
    )
    
    
    1Equity in earnings of real estate partnerships
    
    
    27
    
    
    
    (30
    )Amortization of stock compensation
    
    
    540
    
    
    
    535Deferred income tax
    
    
    (170
    )
    
    
    (188
    )Changes in operating assets and liabilities:Restricted cash
    
    
    (2,041
    )
    
    
    (3,120
    )Receivables
    
    
    1,935
    
    
    
    165Note receivables
    
    
    1,250
    
    
    
    Due from related parties
    
    
    (239
    )
    
    
    (156
    )Real estate held for development and sale
    
    
    (66,589
    )
    
    
    (106,884
    )Other assets
    
    
    5,256
    
    
    
    4,145Accounts payable and accrued liabilities
    
    
    (15,095
    )
    
    
    (706
    )Income tax payable
    
    
    
    
    
    
    2,172Due to related parties
    
    
    
    
    
    
    1Net cash (used in) provided by operating activities
    
    
    (73,820
    )
    
    
    (100,209
    )Cash flows from investing activities:Purchase of property, plant, and equipment
    
    
    (747
    )
    
    
    (55
    )Distributions of capital from investments in real estate partnerships
    
    
    
    
    
    
    30Acquisition of Parker Chandler Homes, net of cash acquired
    
    
    (9,937
    )
    
    
    Net cash (used in) provided by investing activities
    
    
    (10,684
    )
    
    
    (25
    )Cash flows from financing activities:Proceeds from notes payable
    
    
    95,607
    
    
    
    93,458Proceeds from related party notes payable
    
    
    
    
    
    
    200Payments on notes payable
    
    
    (34,455
    )
    
    
    (16,336
    )Payments on related party notes payable
    
    
    
    
    
    
    (2,002
    )Contribution from minority shareholders
    
    
    
    
    
    
    79Distributions paid to minority shareholders
    
    
    
    
    
    
    (2,409
    )Distributions paid to shareholders
    
    
    
    
    
    
    (2,978
    )Proceeds from shares issued under employee stock purchase plan
    
    
    38
    
    
    
    Purchase of
treasury stock
    
    
    (678
    )Net cash provided by (used in) financing activities
    
    
    60,512
    
    
    
    70,012Net increase (decrease) in cash and cash equivalents
    
    
    (23,992
    )
    
    
    (30,222
    )Cash and cash equivalents, beginning of period
    
    
    42,167
    
    
    
    67,559Cash and cash equivalents, end of period
    
    $
    18,175
    
    
    $
    37,337
  5




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##### 



COMSTOCK HOMEBUILDING COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 1. ORGANIZATION AND BASIS OF PRESENTATION
       2. REAL ESTATE HELD FOR DEVELOPMENT AND SALE
    6




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##### 



COMSTOCK HOMEBUILDING COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   March 31,
    
    
    December 31,2006
    
    
    2005Land and land development costs
    
    $
    239,861
    
    
    $
    119,530Cost of construction (including
capitalized interest and real
estate taxes)
    
    
    172,653
    
    
    
    144,272$
    412,514
    
    
    $
    263,802
 3. CONSOLIDATION OF VARIABLE INTEREST ENTITIES
    7




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##### 



COMSTOCK HOMEBUILDING COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 4. WARRANTY RESERVE
  Three Months Ended March 31,2006
    
    
    2005Balance at beginning of period
    
    $
    1,206
    
    
    $
    916Additions
    
    
    300
    
    
    
    156Releases and/or charges incurred
    
    
    (196
    )
    
    
    (118
    )Balance at end of period
    
    $
    1,310
    
    
    $
    954
 5. CAPITALIZED INTEREST AND REAL ESTATE TAXES
   Three Months Ended March 31,2006
    
    
    2005Total interest incurred
    
    $
    4,769
    
    
    $
    2,551Beginning interest capitalized
    
    
    11,590
    
    
    $
    4,524Plus: Interest incurred on notes payable
    
    
    4,749
    
    
    
    2,103Plus: Interest incurred on related party notes payable
    
    
    20
    
    
    
    81Less: Interest expensed as a component of cost of
sales
    
    
    (797
    )
    
    
    (721
    )Ending interest capitalized
    
    $
    15,562
    
    
    $
    5,987
 8




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##### 



COMSTOCK HOMEBUILDING COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 6. EARNINGS PER SHARE
  Three Months Ended March 31,2006
    
    
    2005Basic earnings per shareNet income
    
    $
    1,240
    
    
    $
    3,809Basic weighted-average shares outstanding
    
    
    13,981
    
    
    
    11,621Per share amounts
    
    $
    0.09
    
    
    $
    0.33Dilutive earnings per shareNet income
    
    $
    1,240
    
    
    $
    3,809Basic weighted-average shares outstanding
    
    
    13,981
    
    
    
    11,621Stock options and restricted stock grants
    
    
    90
    
    
    
    148Dilutive weighted-average shares outstanding
    
    
    14,071
    
    
    
    11,769Per share amounts
    
    $
    0.09
    
    
    $
    0.32
 Comprehensive income
  7. INVESTMENT IN REAL ESTATE PARTNERSHIPS
    9




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##### 



COMSTOCK HOMEBUILDING COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 ,
  Investment in real estate partnerships
    
    $
    (62
    )Development and construction loan receivable
    
    $
    3,073
  8. ACQUISITIONS
    9.
    
    INCOME TAX
  2006
    
    
    2005Current:Federal
    
    $
    802
    
    
    $
    2,021State
    
    
    150
    
    
    
    405952
    
    
    
    2,426Deferred:Federal
    
    
    (170
    )
    
    
    (85
    )State
    
    
    (31
    )
    
    
    (10
    )(201
    )
    
    
    (95
    )Total income
tax expense
    
    $
    751
    
    
    $
    2,331
 10




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##### 



COMSTOCK HOMEBUILDING COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  2006
    
    
    2005Deferred tax assets:Inventory
    
    
    
    
    
    $
    2,245Warranty
    
    
    458
    
    
    
    417Deferred rent
    
    
    36
    
    
    
    27Accrued expenses
    
    
    78
    
    
    
    73Stock based compensation
    
    
    989
    
    
    
    7901,561
    
    
    
    3,552Lessvaluation allowance
    
    
    (721
    )
    
    
    (840
    )Net deferred tax assets
    
    
    840
    
    
    
    2,712Deferred tax liabilities:Inventory
    
    $
    (7,596
    )
    
    $
    Investment in Affiliates
    
    
    (8
    )
    
    
    (8
    )Depreciation and amortization
    
    
    (124
    )
    
    
    (159
    )Net deferred tax liabilities
    
    
    (7,728
    )
    
    
    (167
    )Net deferred tax assets (liabilities)
    
    $
    (6,888
    )
    
    $
    2,545
   10. RESTRICTED STOCK, STOCK OPTIONS, AND OTHER STOCK PLANS
    11




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##### 



COMSTOCK HOMEBUILDING COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Stock options
    
    
    213,993Restricted stock grants
    
    
    700,796Total outstanding equity awards
    
    
    914,789
  Shares available for issuance at January 1, 2006
    
    
    1,050Adjustments:
    
    
    0Additional shares added to plan
    
    
    338Restricted
stock grants  issued
    
    
    (437
    )Shares issued under employee stock purchase plan
    
    
    (3
    )Restricted
stock grants  forfeitures
    
    
    10Shares available for issuance at March 31, 2006
    
    
    958
   Weighted averagefair value at dateShares
    
    
    of grantRestricted shares outstanding at December 31, 2005
    
    
    273,891
    
    
    
    16.46Granted
    
    
    437,035
    
    
    
    12.48Vested
    
    
    
    
    
    
    Forfeited
    
    
    (10,130
    )
    
    
    16.00Restricted shares outstanding at March 31, 2006
    
    
    700,796
    
    
    $
    13.96
    11. STOCK REPURCHASE PROGRAM
  12




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##### 





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




12. COMMITMENTS AND CONTINGENCIES


Litigation
      Letters of credit and performance bonds
  Operating leases
  Year Ended: Amount2006
    
    
    8712007
    
    
    1,1812008
    
    
    1,0692009
    
    
    8502010
    
    
    110Thereafter
    
    
    
  13. RELATED PARTY TRANSACTIONS
    13




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##### 



COMSTOCK HOMEBUILDING COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
        14




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##### 



COMSTOCK HOMEBUILDING COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    14. SUBSEQUENT EVENTS
     
    
    Post Road II, a 85 unit single family home subdivision in Atlanta, Georgia for $1.3 million
    
    East Capitol Street, a 120 unit condominium project in Washington, D.C. for $9.0 million
    
    Settingdown Creek, a 162 unit single family home subdivision
in Atlanta, Georgia for $6.0 million
    
    Station View, a 47 unit town home development in Washington, D.C. for $4.7 million
    
    Holland Road, a 81 unit single family home subdivision in Raleigh, North Carolina for $1.6 million
  15




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##### 



ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
    16




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##### 



COMSTOCK HOMEBUILDING COMPANIES, INC. AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS Overview
   2006
    
    
    2005Mid Atlantic
    
    
    Mid South
    
    
    Total
    
    
    Mid Atlantic
    
    
    Mid South
    
    
    TotalRegion
    
    
    Region
    
    
    
    
    
    Region
    
    
    RegionNew orders
    
    
    111
    
    
    
    68
    
    
    
    179
    
    
    
    246
    
    
    
    
    
    
    
    246New order revenues
    
    $
    40,371
    
    
    $
    18,459
    
    
    $
    58,830
    
    
    $
    103,300
    
    
    $
    
    
    
    $
    103,300Average new order price
    
    $
    364
    
    
    $
    271
    
    
    $
    329
    
    
    $
    420
    
    
    $
    
    
    
    $
    420Settlements
    
    
    91
    
    
    
    21
    
    
    
    112
    
    
    
    78
    
    
    
    
    
    
    
    78Settlement revenue
    
    $
    31,679
    
    
    $
    4,673
    
    
    $
    36,352
    
    
    $
    28,500
    
    
    $
    
    
    
    $
    28,500Average settlement price
    
    $
    348
    
    
    $
    223
    
    
    $
    325
    
    
    $
    365
    
    
    $
    
    
    
    $
    365Backlog units
    
    
    493
    
    
    
    47
    
    
    
    540
    
    
    
    615
    
    
    
    
    
    
    
    615Backlog
    
    $
    198,185
    
    
    $
    13,786
    
    
    $
    211,971
    
    
    $
    248,300
    
    
    $
    
    
    
    $
    248,300Average backlog price
    
    
    402
    
    
    
    293
    
    
    
    393
    
    
    
    404
    
    
    
    
    
    
    
    404
  As of March 31, 2006Estimated Units at
    
    
    
    
    
    
    
    
    
    
    
    
    
    Lots under OptionProject
    
    Status (1)
    
    Completion
    
    Units Settled
    
    Backlog(2)
    
    Lots Owned Unsold
    
    Agreement Unsold
    
    Average Sales PriceVirginiaBarrington Park
    
    Active
    
    
    148
    
    
    
    -
    
    
    
    3
    
    
    
    145
    
    
    
    -
    
    
    $
    286,567Beacon Park at Belmont Bay 8&9
    
    Active
    
    
    600
    
    
    
    -
    
    
    
    -
    
    
    
    112
    
    
    
    488
    
    
    
    n/aCommons at Bellemeade
    
    Active
    
    
    316
    
    
    
    32
    
    
    
    5
    
    
    
    279
    
    
    
    -
    
    
    $
    215,942Blooms Mill TH 22
    
    Active
    
    
    113
    
    
    
    105
    
    
    
    7
    
    
    
    1
    
    
    
    -
    
    
    $
    415,978Blooms Mill Carriage
    
    Active
    
    
    91
    
    
    
    84
    
    
    
    5
    
    
    
    2
    
    
    
    -
    
    
    $
    454,055Carter Lake
    
    Active
    
    
    258
    
    
    
    -
    
    
    
    -
    
    
    
    258
    
    
    
    -
    
    
    
    n/aCommons on Potomac Sq
    
    Active
    
    
    192
    
    
    
    -
    
    
    
    25
    
    
    
    167
    
    
    
    -
    
    
    $
    249,343Commons on Williams Sq
    
    Active
    
    
    180
    
    
    
    67
    
    
    
    8
    
    
    
    105
    
    
    
    -
    
    
    $
    351,752Countryside
    
    Active
    
    
    102
    
    
    
    61
    
    
    
    5
    
    
    
    36
    
    
    
    -
    
    
    $
    287,718The Eclipse on Center Park
    
    Active
    
    
    465
    
    
    
    -
    
    
    
    399
    
    
    
    66
    
    
    
    -
    
    
    $
    406,791Penderbrook
    
    Active
    
    
    424
    
    
    
    197
    
    
    
    7
    
    
    
    220
    
    
    
    -
    
    
    $
    255,155River Club at Belmont Bay 5
    
    Active
    
    
    84
    
    
    
    73
    
    
    
    1
    
    
    
    10
    
    
    
    -
    
    
    $
    460,365Woodlands at Round Hill
    
    Active
    
    
    46
    
    
    
    19
    
    
    
    6
    
    
    
    21
    
    
    
    -
    
    
    $
    750,139Total VA Active and Completed
    
    
    
    
    3,019
    
    
    
    638
    
    
    
    471
    
    
    
    1,422
    
    
    
    488
    
    
    $
    375,800Total VA Active and
Completed Weighted Avg(3)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    328,566Aldie Singles
    
    Development
    
    
    15
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    15
    
    
    
    n/aBlakes Crossing
    
    Development
    
    
    130
    
    
    
    -
    
    
    
    -
    
    
    
    130
    
    
    
    -
    
    
    
    n/aBrandy Station
    
    Development
    
    
    350
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    350
    
    
    
    n/aLake Pelham
    
    Development
    
    
    185
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    185
    
    
    
    n/aLoudoun Station Condominiums
    
    Development
    
    
    484
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    484
    
    
    
    n/aTotal VA Development
    
    
    
    
    1,164
    
    
    
    -
    
    
    
    -
    
    
    
    130
    
    
    
    1,034Total Virginia
    
    
    
    
    4,183
    
    
    
    638
    
    
    
    471
    
    
    
    1,552
    
    
    
    1,522MarylandEmerald Farm
    
    Active
    
    
    84
    
    
    
    67
    
    
    
    6
    
    
    
    11
    
    
    
    -
    
    
    $
    452,799Total Maryland
    
    
    
    
    84
    
    
    
    67
    
    
    
    6
    
    
    
    11
    
    
    
    -North CarolinaAllyns Landing
    
    Active
    
    
    117
    
    
    
    18
    
    
    
    2
    
    
    
    97
    
    
    
    -
    
    
    $
    218,991Kelton at Preston
    
    Active
    
    
    56
    
    
    
    30
    
    
    
    5
    
    
    
    21
    
    
    
    -
    
    
    $
    307,994Wakefield Plantation
    
    Active
    
    
    77
    
    
    
    31
    
    
    
    9
    
    
    
    37
    
    
    
    -
    
    
    $
    492,552Total North Carolina Active
    
    
    
    
    250
    
    
    
    79
    
    
    
    16
    
    
    
    155
    
    
    
    -
    
    
    $
    339,846Total North Carolina Active Weighted Average(3)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    323,184Holland Road
    
    Development
    
    
    81
    
    
    
    -
    
    
    
    -
    
    
    
    81
    
    
    
    -
    
    
    
    n/aTotal North Carolina Development
    
    
    
    
    81
    
    
    
    -
    
    
    
    -
    
    
    
    81
    
    
    
    -Total North Carolina
    
    
    
    
    331
    
    
    
    79
    
    
    
    16
    
    
    
    236
    
    
    
    -GeorgiaAllen Creek
    
    Active
    
    
    26
    
    
    
    7
    
    
    
    4
    
    
    
    15
    
    
    
    -
    
    
    $
    211,668Arcanum
    
    Active
    
    
    34
    
    
    
    3
    
    
    
    5
    
    
    
    26
    
    
    
    -
    
    
    $
    397,543Brentwood Estates
    
    Active
    
    
    32
    
    
    
    4
    
    
    
    4
    
    
    
    9
    
    
    
    15
    
    
    $
    131,407Falling Water
    
    Active
    
    
    22
    
    
    
    -
    
    
    
    4
    
    
    
    18
    
    
    
    -
    
    
    $
    421,306Gates of Luberon
    
    Active
    
    
    32
    
    
    
    -
    
    
    
    2
    
    
    
    30
    
    
    
    -
    
    
    $
    392,000Glenn Ivey
    
    Active
    
    
    107
    
    
    
    -
    
    
    
    3
    
    
    
    22
    
    
    
    82
    
    
    $
    241,824Highland Station
    
    Active
    
    
    105
    
    
    
    -
    
    
    
    22
    
    
    
    83
    
    
    
    -
    
    
    $
    285,525Maristone
    
    Active
    
    
    40
    
    
    
    -
    
    
    
    -
    
    
    
    40
    
    
    
    -
    
    
    
    n/aSenators Ridge
    
    Active
    
    
    92
    
    
    
    7
    
    
    
    3
    
    
    
    82
    
    
    
    -
    
    
    $
    242,295Traditions
    
    Active
    
    
    22
    
    
    
    -
    
    
    
    -
    
    
    
    22
    
    
    
    -
    
    
    
    n/aTotal Georgia Active
    
    
    
    
    512
    
    
    
    21
    
    
    
    47
    
    
    
    347
    
    
    
    97
    
    
    $
    290,446Total Georgia Active
Weighted Average(3)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    273,742Highland Avenue
    
    Development
    
    
    30
    
    
    
    -
    
    
    
    -
    
    
    
    30
    
    
    
    -
    
    
    
    n/aJames Road
    
    Development
    
    
    54
    
    
    
    -
    
    
    
    -
    
    
    
    54
    
    
    
    -
    
    
    
    n/aKelly Mill Road
    
    Development
    
    
    28
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    28
    
    
    
    n/aMcGinnis Ferry SF
    
    Development
    
    
    48
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    48
    
    
    
    n/aMcGinnis Ferry TH
    
    Development
    
    
    88
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    88
    
    
    
    n/aPost Road
    
    Development
    
    
    59
    
    
    
    -
    
    
    
    -
    
    
    
    59
    
    
    
    -
    
    
    
    n/aPost Road II
    
    Development
    
    
    54
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    54
    
    
    
    n/aShiloh Road
    
    Development
    
    
    61
    
    
    
    -
    
    
    
    -
    
    
    
    61
    
    
    
    -
    
    
    
    n/aStowe Road
    
    Development
    
    
    110
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    110
    
    
    
    n/aTribble Lakes
    
    Development
    
    
    200
    
    
    
    -
    
    
    
    -
    
    
    
    200
    
    
    
    -
    
    
    
    n/aWyngate
    
    Development
    
    
    31
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    31
    
    
    
    n/aTotal Georgia Development
    
    
    
    
    763
    
    
    
    -
    
    
    
    -
    
    
    
    404
    
    
    
    359Total Georgia
    
    
    
    
    1,275
    
    
    
    21
    
    
    
    47
    
    
    
    751
    
    
    
    456South CarolinaCarolina Waterway
    
    Active
    
    
    15
    
    
    
    -
    
    
    
    -
    
    
    
    15
    
    
    
    -
    
    
    
    n/aTotal South Carolina Active
    
    
    
    
    15
    
    
    
    -
    
    
    
    -
    
    
    
    15
    
    
    
    -Total South Carolina
    
    
    
    
    15
    
    
    
    -
    
    
    
    -
    
    
    
    15
    
    
    
    -TOTAL ACTIVE AND COMPLETED
    
    
    
    
    3,880
    
    
    
    805
    
    
    
    540
    
    
    
    1,950
    
    
    
    585TOTAL DEVELOPMENT
    
    
    
    
    2,008
    
    
    
    -
    
    
    
    -
    
    
    
    615
    
    
    
    1,393TOTAL
    
    
    
    
    5,888
    
    
    
    805
    
    
    
    540
    
    
    
    2,565
    
    
    
    1,978Joint VenturesNorth Shore Condominiums
    
    Active
    
    
    196
    
    
    
    -
    
    
    
    7
    
    
    
    189
    
    
    
    -
    
    
    $
    286,361North Shore Townhomes
    
    Active
    
    
    163
    
    
    
    33
    
    
    
    7
    
    
    
    123
    
    
    
    -
    
    
    $
    239,107Total Joint Ventures
    
    
    
    
    359
    
    
    
    33
    
    
    
    14
    
    
    
    312
    
    
    
    -GRAND TOTAL
    
    
    
    
    6,247
    
    
    
    838
    
    
    
    554
    
    
    
    2,877
    
    
    
    1,978
 
 (1)
    
    Active communities are open for sales or expected
to open in the next 90 days. Development communities are
in the development process and are not expected to open for sales in
the next 90 days.
Completed communities have settled all units during the
three months ended March 31, 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 is calculated as total estimated homes at completion for projects with average sales prices multiplied by
Average sales price divided by total of estimated homes at completion (i.e.: å(estimated homes at completion  ́ average
sales price)  ̧å estimated homes at completion).
 17




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COMSTOCK HOMEBUILDING COMPANIES, INC. AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS Results of Operations
 Three months ended March 31, 2006 compared to three months ended March 31, 2005
 Orders and Backlog
    Revenues.
    Other Revenue
  18




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##### 



COMSTOCK HOMEBUILDING COMPANIES, INC. AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS  Cost of sales
  Selling, general and administrative
  Operating income
  Other (income) expense, net
  Income taxes
  Liquidity and Capital Resources
  19




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COMSTOCK HOMEBUILDING COMPANIES, INC. AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS   Credit Facilities
     Cash Flow
   20




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COMSTOCK HOMEBUILDING COMPANIES, INC. AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS   Acquisitions & Subsequent Events
      
    
    Post Road II, a 85 unit single family home subdivision in Atlanta, Georgia for $1.3 million
    
    East Capitol Street, a 120 unit condominium project in Washington, D.C. for $9.0 million
    
    Settingdown Creek, a 162 unit single family home subdivision
in Atlanta, Georgia for $6.0 million
    
    Station View, a 47 unit town home development in Washington, D.C. for $4.7 million
    
    Holland Road, a 81 unit single family home subdivision in Raleigh, North Carolina for $1.6 million
 Recent Accounting Pronouncements
 21




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##### 



COMSTOCK HOMEBUILDING COMPANIES, INC. AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS  Critical Accounting Policies and Estimates
 Managements Discussion
and Analysis of Financial Condition and Results of Operations
 22




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ITEM 3.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  ITEM 4.
    
    CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
  Limitations on the Effectiveness of Controls
   23




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##### 



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.
  ITEM 5.
    
    OTHER INFORMATION.
  24




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##### 



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
    
    Stock Purchase Agreement with Parker-Chandler Homes, Inc.
and the Selling Stockholders identified therein, dated as
of January 19, 2006 (incorporated by reference to an
exhibit to the Registrants Annual Report on Form 10-K for
the year ended December 31, 2005).10.3
    
    Loan Agreement, dated January 31, 2006, by and between
Comstock Carter Lake, L.C. and Bank of America, N.A.
(incorporated by reference to an exhibit to the
Registrants Annual Report on Form 10-K for the year ended
December 31, 2005).10.4
    
    Guaranty Agreement, dated January 31, 2006, by the
Registrant in favor of Bank of America, N.A. (incorporated
by reference to an exhibit to the Registrants Annual
Report on Form 10-K for the year ended December 31, 2005).31.1
    
    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 amended31.3
    
    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
 25




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##### 



SIGNATURES
  COMSTOCK HOMEBUILDING COMPANIES, INC.Date: May 15, 2006
    By:

/s/
Christopher ClementeChristopher ClementeChairman and Chief Executive Officer By:
    /s/ Bruce J. LabovitzBruce J. LabovitzChief Financial Officer 26