917857--3/30/2006--DOMINION_HOMES

related topics

{financial, litigation, operation}

{condition, economic, financial}

{debt, indebtedness, cash}

{cost, contract, operation}

{gas, price, oil}

{regulation, change, law}

{loan, real, estate}

{competitive, industry, competition}

{personnel, key, retain}

{stock, price, operating}

{cost, operation, labor}

{product, market, service}

Our business is cyclical and significantly affected by changes in national and local economic, business and other conditions, most of which are beyond our control. We operate in a limited number of geographic areas. The nature of the homebuilding process makes it difficult to quickly respond to rapid changes in housing demand. Interest rate increases or changes in federal lending programs could adversely affect sales of our homes. High foreclosure rates in communities where we build may adversely affect our sales results. The outcome of lawsuits brought against the Company may materially and adversely affect our business, financial condition or operating results. Pending regulatory audits and investigations could adversely affect our business. Unfavorable media reports regarding the Company may materially and adversely affect our sales. We are significantly leveraged and depend on the availability of financing. Covenants in our bank credit facility restrict our ability to engage in certain activities. If we do not satisfy the terms of our bank credit facility, our lenders could declare a default and demand repayment. Our business is subject to substantial government regulation which could cause delays, increase costs, and restrict or prohibit homebuilding activity in certain regions. Our success depends on the availability of undeveloped land that is suitable for our development. Our success depends on our ability to manage our developed lot inventory and speculative home inventory. Adverse weather conditions may prevent or delay the construction of homes and reduce the number of home sales Delays in construction of our homes could cause mortgage commitments to expire. Our new product offerings may not be attractive to customers. The loss of certain key personnel could adversely effect our operations. Our operating results vary on a quarterly basis. We are subject to warranty claims arising in the ordinary course of business that could be costly. Litigation related to construction defects could adversely affect our business. Our financial results are subject to inflation and other cost increases. Material or labor shortages can adversely affect our business. Tax law changes could make home ownership more expensive or less attractive The homebuilding industry is highly competitive. Application of critical accounting policies requires management to make certain estimates and assumptions that may impact our future financial results.

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917857--3/30/2006--DOMINION_HOMES_INC