Slide Into Red Accelerates for Newport’s Pacesetter Homes in ’91

Coping with foreclosures, deepening debt, tax troubles and a dearth of construction loans, Pacesetter Homes Inc. reported Tuesday that it sank deeper into the red in 1991.

The home builder said it lost $13.08 million, or $8.68 per share, for the year ended Dec. 31, compared to a net loss of $4.88 million, or $3.24 per share, for the previous fiscal year. The company also posted sharply lower revenue--$33.42 million, down from $48.6 million in 1990.

More than half of the 1991 loss is attributed to a $7.42-million reduction in the estimated value of six of the company’s 10 real estate projects, including four projects now in default.

The writedown, said Pacesetter Chairman John W. Klug, became necessary when recession-weary consumers stopped buying houses, and the company was forced to pay ever-rising interest payments on its unsold projects.

“Last year we had a lot of bad news,” said Klug, adding that he did not believe the company was on the brink of bankruptcy. In fact, he said he hoped the corporation would post profits within the next two quarters as it seeks partners on future projects.

But the disappointing year-end report, which marked Pacesetter’s worst performance to date, is the latest indicator of the company’s ongoing problems obtaining financing.