Dream Homes & Development Corp. (DREM)·Q2 2017 Earnings Summary

Executive Summary

• DREM delivered profitable growth: Q2 revenue rose to $1.04M, gross profit $0.32M, and net income $0.09M; all sharply higher year over year and up sequentially vs Q1 ($0.73M revenue, $0.21M gross profit, $0.06M net income) .
• Backlog expanded: contracts outstanding increased to 22 totaling $3.51M by 6/30 (from 18 totaling $2.82M at 3/31), underpinning near-term revenue visibility .
• Strategic initiatives: launched a modular division with a Point Pleasant showroom and key hires; signed a materials/technology partnership with LIG Assets to transition toward next-gen, disaster‑resistant building materials .
• No formal guidance or Street estimates available; catalysts include ongoing profitability, backlog growth, and execution on two development pipelines (58 townhomes ~$13.0M; 13 SF homes ~$3.4M) slated to begin late 2017/early 2018 .
• Management emphasized profitable results despite public company costs and highlighted reputation-led share gains along the NJ shore rebuilding market .

What Went Well and What Went Wrong

• What Went Well

  • Returned to profitability: Q2 income from operations $0.13M and net income $0.09M, with sequential improvement from Q1 .
  • Backlog/inquiries rising: 22 active contracts ($3.51M) and >200 active prospects; pipeline estimates of ~$5.3M potential residential projects support sustained activity .
  • Strategic build-out: launched modular division and added VP Sales and VP Business Development to accelerate growth; new showroom enhances customer capture in northern Ocean/southern Monmouth .
  • Management quote: “able to deliver profitable results on a net basis despite costs associated with going public” and “completed almost 200 complete elevation and renovation projects, including 28 that other contractors had abandoned” .

• What Went Wrong

  • Limited disclosure controls: management concluded disclosure controls and procedures were not effective as of Q2, highlighting reporting process risk .
  • Scale/coverage constraints: no earnings call transcript and no observable Wall Street consensus, limiting external validation and liquidity catalysts (no transcript found in the company’s filing set for Q2 2017; consensus not available from S&P Global).
  • Working capital intensity: billings/costs timing remains material (billings in excess $0.34M; costs in excess $0.09M), requiring continued execution and cash management .

Financial Results

• Margin context (calculated from reported figures): Gross margin 30.4% in Q2 vs 29.4% in Q1; operating margin 12.8% in Q2 vs 7.7% in Q1 .

Segment breakdown (3 months):

KPIs and balance items (sequential):

Estimates vs. Actuals:

• S&P Global consensus estimates for Q2 2017 revenue/EPS: Not available; comparison to Street not possible for this period (consensus unavailable from S&P Global).

Guidance Changes

Note: Management provided project-level revenue potential and expected start windows but did not issue formal consolidated financial guidance .

Earnings Call Themes & Trends

Note: No Q2 2017 earnings call transcript was found in the company’s filing set; themes reflect filings and press releases.

Management Commentary

• Strategic message: Focus on profitable growth within NJ shore elevation/renovation and expansion into modular and development projects; emphasize operational reputation and integrated services .
• Quotes:
  • “Able to deliver profitable results on a net basis despite costs associated with going public.”
  • “Completed almost 200 complete elevation and renovation projects, including 28 that other contractors had abandoned.”
  • Modular launch/hires: “Point Pleasant… new showroom… complete kitchen, bath, flooring and finish design center… acquired four ongoing projects… Lou Obsuth… VP of Sales… Joe Pascucci… VP of Business Development.”
  • Development pipeline: 58 townhomes ($13.0M) and 13 SF lots ($3.4M) slated to begin late 2017/early 2018 .

Q&A Highlights

• No formal Q2 2017 earnings call transcript was found; no Q&A to report from company materials for the period.

Estimates Context

• Wall Street consensus (S&P Global) for Q2 2017 revenue/EPS was not available for DREM during this period; as a result, we cannot present a beat/miss analysis anchored to Street consensus. Management did not provide formal quantitative guidance in the press release or 10-Q .

Key Takeaways for Investors

• Profitability inflection with sequential acceleration: Revenue +43% QoQ to $1.04M and operating income more than doubled to $0.13M, with gross margin expanding ~100 bps QoQ—evidence of improving project mix and scale .
• Backlog growth supports near-term revenue: Contracts advanced to 22 totaling $3.51M by quarter-end; coupled with rising AR and stable cash, execution and billing cadence remain key watch items .
• Strategic catalysts: Modular division and LIG materials partnership could expand TAM, enhance cycle times, and differentiate on resilience/efficiency—potential margin and win‑rate drivers if executed .
• Pipeline visibility into 2018: Two development projects (~$16.4M combined projected gross sales) offer medium-term revenue layers beyond shoreline renovation work .
• Risk flags: Ineffective disclosure controls, working-capital timing (billings vs. costs), and reliance on CEO guarantees for project financing merit monitoring .
• Trading setup: Micro-cap with limited analyst coverage and no consensus—stock may react disproportionately to backlog updates, project milestones (approvals/groundbreakings), and modular division wins; absence of formal guidance raises event-driven volatility potential (catalyst: execution disclosures in future 8-Ks/10-Qs) .

Supporting Data Exhibits

• Cash Flow (6M 2017): Net cash provided by operating activities $179,855; investing $(107,700); ending cash $338,864 .
• Balance sheet: Cash $338,864; AR $350,588; billings in excess $344,179; total equity $224,932 at 6/30/17 .

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