KANSAS CITY, Mo., May 17 /PRNewswire-FirstCall/ -- NovaStar Financial, Inc. (Pink Sheets: NOVS) announced its first quarter results, which included a large non-recurring, non-cash gain due to the derecognition of certain loan trusts. For the quarter ended March 31, 2010, NovaStar reported net income attributable to NFI of $982.4 million. The income represents $87.27 per diluted common share, which excludes the income allocated to NovaStar''s convertible preferred shareholders.
(Logo: http://photos.prnewswire.com/prnh/20090205/NY68545LOGO)
Certain events occurring during the first quarter of 2010 required reconsideration of the accounting for three loan trusts. Prior to the reconsideration, NovaStar consolidated the assets, liabilities and operations of these trusts. At the time of the reconsideration, management determined that all requirements for derecognition were met under applicable accounting guidelines. The derecognition of these assets and liabilities resulted in a gain during the three month period ending March 31, 2010 of $993.1 million. The gain was non-cash in nature and therefore did not impact NovaStar''s liquidity.
"While I believe the impact of these events is an improved financial statement presentation, the resulting gains have no economic impact on the Company. Shareholders should take that into consideration when evaluating our recent operating performance," said Lance Anderson, Chief Executive Officer.
The gains are discussed in the footnotes to NovaStar''s condensed consolidated financial statements as of and for the quarter ended March 31, 2010 and in Item 2. - Management''s Discussion and Analysis of Financial Condition and Results of Operations - of our quarterly report as filed on form 10Q.
About NovaStar
NovaStar Financial, Inc. (OTCPK: NOVS), headquartered in Kansas City, Missouri, is the majority owner of a residential mortgage appraisal management company based in Indianapolis, Indiana. NovaStar is also the majority owner of a start-up operation which provides access to tailored banking accounts, small dollar banking products and related services to meet the needs of low and moderate income level individuals. NovaStar seeks to acquire or develop new operating business with its available liquidity resources.
This Press Release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, regarding management''s beliefs, estimates, projections, and assumptions with respect to, among other things, our future operations, business plans and strategies, as well as industry and market conditions, all of which are subject to change at any time without notice. Actual results and operations for any future period may vary materially from those projected herein and from past results. Some important factors that could cause actual results to differ materially from those anticipated include: our ability to generate and maintain sufficient liquidity on favorable terms or at all; our ability to successfully operate our appraisal management operations; our ability to successfully develop and operate other operating entities; our ability to use our net loss carryforwards and net unrealized built-in losses; our ability to improve and maintain effective internal control over financial reporting and disclosure controls and procedures in the future; the outcome of pending litigation actions against us or other legal contingencies; and the risks that are from time to time included in our filings with the SEC, including our Annual Report filed on Form 10-K for the year ended December 31, 2009 and our quarterly report filed on Form 10-Q for the periods ending March 31, 2010. Other factors not presently identified may also cause actual results to differ. Words such as "believe," "expect," "anticipate," "promise," "plan," "intend" and other expressions or words of similar meanings, as well as future or conditional verbs such as "will," "would," "should," "could," or "may" are generally intended to identify forward-looking statements. This press release speaks only as of its date and we expressly disclaim any duty to update the information herein.
PRN Photo Desk photodesk@prnewswire.com
http://photos.prnewswire.com/prnh/20090205/NY68545LOGO
NovaStar Financial, Inc.
CONTACT: Rodney Schwatken, Chief Financial Officer of NovaStar
Financial, Inc., +1-816-237-7532
Web Site: http://www.novastarfinancial.com/
