NVR L.P. ANNOUNCES RESULTS FOR THE QUARTER ENDED SEPT. 30, 1991
MCLEAN, Va., Nov. 14 /PRNewswire/ -- NVR L.P. (AMEX: NVR) today announced that it earned net income of $2.2 million, or $0.05 per unit, for the three month period ended Sept. 30, 1991, the partnership's third quarter of its 1991 fiscal year. It compares to a net loss of $172.3 million, or $6.02 per unit, for the same period last year, and represents the partnership's first profitable quarter since the first quarter of 1990. The partnership attributed the improved third quarter results over 1990 to the absence of any restructuring charges and to improved results from the partnership's homebuilding and financial services operations.
Total revenue for the quarter was $255.3 million, down from $285.6 million in the same quarter last year. The revenue decrease was attributed to the downsizing of the partnership, consistent with a new business plan implemented last year, and to general market conditions that have led to a larger percentage of its new home sales coming from lower priced homes.
"Our third quarter results reflect the benefits of the operational restructuring we began to put in place early in 1990," NVR Chairman Dwight C. Schar said. He noted that in the partnership's ongoing markets, the homebuilding operations obtained 730 orders for new homes in the 1991 third quarter compared to 475 new orders in the same period last year. Settlements on new homes in these markets increased to 1,236 from 1,169. The contract cancellation rate during the third quarter of 1991 was 29 percent, as compared to 64 percent during the same quarter of 1990.
"I believe the results of our homebuilding operations are the direct result of our employees' commitment to keep exceptional customer service the number one priority even during a very difficult period," Schar said. "As a result of this, our customers appreciate the value and quality of our products, and have rewarded us with a leading market share in many of our markets, including our core Washington market and the Pittsburgh area."
The partnership noted that the net income for its financial services group increased to $6.6 million from $3.1 million in the same quarter last year. The increase was attributed primarily to increases in gains from sales of mortgage servicing and higher servicing fees.
Schar said that because of the operational restructuring, the partnership can be profitable in a weak market. "Although our plans are based on the continuation of a generally weak market, from time to time we will see short periods of relative strength or weakness, and we will not be immune to them," Schar said. "Right now, we are encountering an adverse fluctuation in the already-down market. These market conditions will probably translate into a loss in our fourth quarter. Nevertheless, we are confident that losses of the magnitude that we incurred in recent times are behind us."
According to Schar, NVR's expected fourth-quarter loss will partially result from its continued limited access to working capital pending the partnership's financial restructuring effort, which Schar characterized as "an orderly and deliberate process." He said the effort encompasses a restructuring of the partnership's principal borrowing facilities and its subordinated debt obligations. The partnership first announced in December 1990 that it did not anticipate making any future payments on its subordinated debt unless and until those obligations are restructured in a manner consistent with its current and anticipated operating results and financial condition. Although the partnership has not paid the interest on its subordinated debt since it has lacked the liquidity and the approval of its banks to do so, its income statements incorporate the accrual of the interest as if it were paid. The partnership has not made any comment as to the prospective outcome of the financial restructuring effort.
Consolidated Statement of Operations
(in thousands, except per unit amounts)
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30,
1991 1990 1991 1990
Total Revenues $255,302 $285,579 $617,732 $847,947
Net Income (Loss) $ 2,171 $(172,279) $(20,349) $(224,465)
Income (Loss) $ 0.05 $ (6.02) $ (0.73) $ (7.89)
Weighted Average 30,387 28,067 29,878 28,077
/CONTACT: Doug Poretz of NVR L.P., 703-506-1778 or, after hours, 703-448-1312/
(NVR) CO: NVR L.P. ST: Virginia IN: FIN SU: ERN SB -- DC008 -- 4371 11/14/91 11:09 EST