Aames Financial Corporation Announces March 2003 Quarter Results; Loan Production Increased 30.7% to $1.0 Billion from $778.2 Million a Year Ago.Business Editors LOS LOS Length of stay, see there ANGELES--(BUSINESS WIRE)--May 14, 2003 Aames Aames is a surname and may refer to:
This page or section lists people with the surname Aames. Financial Corporation (OTCBB OTCBB See OTC Bulletin Board (OTCBB). :AMSF AMSF Australian Motor Sport Foundation AMSF Area Maintenance and Supply Facility (US Army) AMSF Army Morale Support Fund AMSF Area Maintenance Support Facility AMSF Army Maintenance Supply Facilities AMSF Alkali Metal Storage Facility ): -- Net Income of $6.7 Million Compared to $2.2 Million a Year Ago -- Total Revenue Increased 13.7%, or $7.8 Million, to $65.5 Million -- Diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. Net Income Per Common Share of $0.07 Compared to Diluted Net Loss Per Common Share of $0.35 Aames Financial Corporation (OTCBB:AMSF), a leader in subprime home equity lending, today reported results of operations for the three and nine months ended March 31, 2003, announcing net income of $6.7 million and $18.7 million, respectively, compared to net income of $2.2 million and $4.4 million, respectively, during the comparable three and nine month periods a year ago. In making the announcement, A. Jay Meyerson Meyerson can refer to:
Excluding the $0.1 million of debt extinguishment The destruction or cancellation of a right, a power, a contract, or an estate. Extinguishment is sometimes confused with merger, though there is a clear distinction between them. income during the three months ended March 31, 2003, operating revenue operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. increased $7.8 million, or 13.7%, to $65.4 million during the three months ended March 31, 2003 over the $57.6 million of operating revenue reported during the same period a year ago. During the three and nine months ended March 31, 2003, the Company reported diluted net income to common stockholders of $6.7 million and $18.7 million, respectively, compared to diluted net loss to common stockholders of $2.3 million and $8.8 million during the three and nine months ended March 31, 2002, respectively. Diluted net income per common share was $0.07 and $0.20 for the three and nine months ended March 31, 2003, respectively, compared to diluted net loss per common share of $0.35 and $1.38 during the comparable three and nine month periods in 2002, respectively. Total revenue during the three months ended March 31, 2003 increased $7.9 million to $65.5 million from $57.6 million during the comparable three month period a year ago. Total revenue during the three months ended March 31, 2003 includes $0.1 million of debt extinguishment income recognized in connection with the redemption The liberation of an estate in real property from a mortgage. Redemption is the process by which land that has been mortgaged or pledged is bought back or reclaimed. It is accomplished through a payment of the debt owed or a fulfillment of the other conditions. of $3.0 million of its 9.125% Senior Notes due November November: see month. 2003. Excluding the $0.1 million of debt extinguishment income during the three months ended March 31, 2003, total revenue decreased $7.8 million during the three months ended March 31, 2003 from total revenue during the comparable three month period in 2002. The $7.8 million increase in total revenue was comprised of $12.7 million increase in gain on sale of loans, partially offset by decreases of $3.1 million and $1.8 million in interest income and loan servicing Loan servicing is the process by which a mortgage bank or subservicing firm collects the timely payment of interest and principal from borrowers. The level of service varies depending on the type loan and the terms negotiated between the firm and the investor seeking their services. , respectively. Total expenses during the three months ended March 31, 2003 increased $3.4 million to $57.9 million from $54.5 million during the three months ended March 31, 2002. The increase in expenses during the three months ended March 31, 2003 from expenses reported during the comparable period a year ago was attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk primarily to increases of $2.8 million, $1.2 million and $0.8 million in personnel, production and general and administrative expenses, respectively, partially offset by a $1.4 million decrease in interest expense. Summary of Three and Nine Month Financial Results Total revenues Total revenue increased $7.9 million and $31.5 million to $65.5 million and $196.8 million during the three and nine months ended March 31, 2003, respectively, from total revenue of $57.6 million and $165.3 million during the three and nine months ended March 31, 2002, respectively. The increase in total revenue during the three months ended March 31, 2003 from the same period a year ago resulted primarily from a $12.7 million increase in gain on sale of loans over amounts reported during the same period a year ago which was partially offset by decreases of $3.1 million and $1.8 million in interest income and loan servicing, respectively. Total revenue during the three months ended March 31, 2003 also includes the $0.1 million of debt extinguishment income. The $31.5 million increase in total revenue during the nine months ended March 31, 2003 over total revenue during the comparable nine month period a year ago is due primarily to higher gain on sale of loans and debt extinguishment income. The increase was partially offset by an increase in the write-down Write-Down Reducing the book value of an asset because it is overvalued compared to the market value. Notes: This is usually reflected in the company's income statement as an expense, thereby reducing net income. to the residual interest Residual Interest A type of interest payment received by investors in a real estate mortgage investment conduit (REMIC). Notes: Investors receive interest payments after all required regular interest has been paid to investors within higher priority tranches. of $4.9 million during the 2003 period over the write-down during the 2002 period, coupled with decreases in origination fees A charge imposed by a lending institution or a bank for the service of processing a loan. For example, a bank might charge an individual who has applied for a student loan an origination fee of one percent for processing the application and granting the loan. , loan servicing and interest income. Gain on sale of loans increased $21.1 million to $99.2 million during the nine months ended March 31, 2003 from $78.1 million during the same nine month period a year ago. Interest, loan servicing and origination fees declined by $7.4 million, $3.2 million and $1.3 million, respectively, to $55.9 million, $6.3 million and $40.1 million during the nine months ended March 31, 2003 from amounts reported during the same nine month period a year ago. Excluding the $31.9 million write-down to the residual interests and the $27.2 million of debt forgiveness Forgiveness Angelica, Suor is forgiven by the Virgin Mary for ill-considered suicide. [Ital. Opera: Puccini, Suor Angelica, Westerman, 364] Bishop of Digne income during the nine months ended March 31, 2003 and the $27.0 million write-down to the residual interests during the nine months ended March 31, 2002, total revenue increased $9.2 million during the nine months ended March 31, 2003 over total revenue during the same period a year ago. Total expenses Total expenses increased $3.4 million and $16.5 million to $57.9 million and $175.1 million during the three and nine months ended March 31, 2003, respectively, from $54.5 million and $158.6 million during the three and nine months ended March 31, 2002, respectively. The $3.4 million increase in total expenses during the three months ended March 31, 2003 over total expenses during the comparable period in 2002 was attributable to increases of $2.8 million, $1.2 million and $0.8 million in personnel, production and general and administrative expenses, respectively, partially offset by a decline of $1.4 million in interest expense. The $16.5 million increase in total expense during the nine months ended March 31, 2003 over total expense during the same nine month period in 2002 was attributable to increases of $14.7 million, $3.8 million and $3.0 million in personnel, production and general and administrative expenses, respectively, partially offset by a $5.0 million decline in interest expense. Loan Production Total Production. During the three months ended March 31, 2003, the Company originated a total of $1.0 billion of mortgage loans, a decrease of $289.9 million, or 22.2%, from the $1.3 billion of total loan production reported during the three months ended December 31, 2002, and an increase of $238.6 million, or 30.7% over the $778.2 million of total loan production during the three months ended March 31, 2002. Total loan production during the nine months ended March 31, 2003 was $3.3 billion, an increase of $956.9 million, or 41.0%, over the $2.3 billion of total mortgage loans originated during the comparable nine month period in 2002. The Company's loan origination The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. volumes increased during the three and nine months ended March 31, 2003 over those reported during the comparable periods a year ago due to the continuation continuation - continuation passing style of the favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. mortgage interest rate environment and, to a lesser extent, to the issuance of new uniform underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. guidelines guidelines, n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks. throughout the Company designed to improve the Company's competitive position and to provide greater underwriting consistency Consistency can refer to:
The process through which a mortgage lender creates a mortgage secured by some amount of the mortgagor's real property. Notes: Also known as loan origination, everyone must go through the origination process when securing a mortgage for a piece of real channels. Total Retail Production. The Company's total retail production was $394.2 million during the three months ended March 31, 2003, a decrease of $122.0 million, or 23.6%, from the $516.2 million reported during the three months ended December 31, 2002, and an increase of $19.6 million, or 5.2%, over the $374.6 million of total retail production during the three months ended March 31, 2002. During the nine months ended March 31, 2003, total retail production increased $196.7 million, or 16.9%, over the $1.2 billion of total retail production during the nine months ended March 31, 2002. Traditional Retail Branch Network During the three months ended March 31, 2003, loan origination through the Company's traditional retail branch network decreased $84.7 million, or 22.7%, to $287.8 million from the $372.5 million reported during the three months ended December 31, 2002, and decreased $8.2 million, or 2.8%, from the $296.0 million of traditional retail branch production reported during the three months ended March 31, 2002. During the nine months ended March 31, 2003, mortgage loan production through the Company's traditional retail branch network was $982.3 million, an increase of $30.4 million, or 3.2%, over the $951.9 million of traditional retail branch production reported during the comparable nine month period a year ago. National Loan Centers Loan production through the Company's National Loan Centers, which originate o·rig·i·nate v. 1. To bring into being; create. 2. To come into being; start. mortgage loans primarily through affiliations with certain Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the sites, decreased $37.3 million, or 26.0%, to $106.4 million during the three months ended March 31, 2003 from $143.7 million reported during the three months ended December 31, 2002, and increased $27.8 million, or 35.3%, over the $78.6 million reported during the comparable three month period a year ago. Mortgage loan production through the Company's National Loan Centers was $380.4 million during the nine months ended March 31, 2003, an increase of $166.3 million, or 77.7%, over the $214.1 million of production during the comparable nine month period a year ago. The increase in the National Loan Centers' production during the three months and nine months ended March 31, 2003 over their production levels during the comparable periods in 2002 was due, in part, to a continuation of the generally favorable mortgage interest rate environment during those periods as compared to the same periods in 2002. Additionally, the increase in the National Loan Centers' production during the nine months ended March 2003 over that of a year ago was due, in part, to the fact that March 2002 period production included loan production from the Company's second National Loan Center that commenced operation in November 2001. Total Broker Production. The Company's total broker loan production during the three months ended March 31, 2003 was $622.6 million, a decrease of $167.9 million, or 21.2%, from the $790.5 million of total broker production reported during the three months ended December 31, 2002, and increased $219.1 million, or 54.3%, over the $403.5 million of total broker loan production during the three months ended March 31, 2002. Total broker loan production during the nine months ended March 31, 2003 was $1.9 billion, an increase of $760.3 million, or 65.0%, over the $1.2 billion of total broker production reported during the nine months ended March 31, 2002. The decrease in the Company's total broker production during the three months ended March 31, 2003 when compared to such production during the three months ended December 31, 2002 was due primarily to seasonality factors in the 2003 period. The increase in the Company's total broker production during the three and nine months ended March 31, 2002 was attributable to improved market penetration Noun 1. market penetration - the extent to which a product is recognized and bought by customers in a particular market penetration - the act of entering into or through something; "the penetration of upper management by women" due to changes in the Company's underwriting guidelines which improved product availability in the wholesale channel and increased utilization utilization, n 1. the extent to which a given group uses a particular service in a specified period. Although usually expressed as the number of services used per year per 100 or per 1000 persons eligible for the service, utilization rates may be by brokers of the Company's broker telemarketing telemarketing, the practice of selling goods or services to customers by means of the telephone or of surveying consumer preferences in telephone conversations. and Internet platform. In addition, the Company's broker production benefited from the continuation of the favorable mortgage interest rate environment. Traditional Regional Broker Office Network Mortgage loan production from the traditional regional broker office network during the three months ended March 31, 2003 was $543.8 million, which decreased $159.1 million, or 22.6%, from $702.9 million of traditional regional broker office network production during the three months ended December 31, 2002, and increased $173.8 million, or 47.0%, over the $370.0 million of traditional regional broker office network production during the three months ended March 31, 2002. During the nine months ended March 31, 2003, mortgage loan production through the Company's traditional regional broker office network was $1.7 billion, an increase of $626.6 million, or 57.7%, over the $1.1 billion of traditional regional broker office network production during the comparable nine month period in 2002. Broker Telemarketing and Internet Broker mortgage loan production through telemarketing and the Internet was $78.7 million during the three months ended March 31, 2003, a decrease of $8.9 million, or 10.2%, from the $87.6 million reported during the three months ended December 31, 2002, and an increase of $45.2 million over the $33.5 million reported during the three months ended March 31, 2002. During the nine months ended March 31, 2003, broker mortgage loan production through telemarketing and the Internet was $218.1 million, an increase of $133.7 million over the $84.4 million reported during the nine months ended March 31, 2002. Loans dispositions and loan servicing Loan Dispositions Total loan dispositions through securitizations and whole loan sales for cash during the three and nine months ended March 31, 2003 were $1.2 billion and $3.3 billion, respectively, compared to $0.8 billion and $2.3 billion during the three and nine months ended March 31, 2002, respectively. The Company's increased loan dispositions during the three and nine months ended March 31, 2003 over the comparable periods a year ago are related to the Company's increased loan origination volumes during the 2003 periods over production levels reported during the same periods a year ago. During the three months ended March 31, 2003, the Company did not dispose of dis·pose v. dis·posed, dis·pos·ing, dis·pos·es v.tr. 1. To place or set in a particular order; arrange. 2. any of its mortgage loan production through securitizations, but securitized securitized Of, related to, or being debt securities that are secured with assets. For example, mortgage purchase bonds are secured by mortgages that have been purchased with the bond issue's proceeds. $132.8 million of mortgage loans during the comparable three month period a year ago. Whole loan sales for cash during the three months ended March 31, 2003 were $1.2 billion, double the $624.0 million of whole loan sales during the three months ended March 31, 2002. During the nine months ended March 31, 2003, the Company securitized $315.0 million of mortgage loans compared to $542.8 million during the comparable period a year ago. During the nine months ended March 31, 2003, the Company continued to be more reliant on whole loan sales, selling $3.0 billion of whole loans for cash compared to $1.8 billion of whole loan sales for cash during the nine months ended March 31, 2002. The Company relied more heavily upon whole loan sales than upon securitizations as its loan disposition Act of disposing; transferring to the care or possession of another. The parting with, alienation of, or giving up of property. The final settlement of a matter and, with reference to decisions announced by a court, a judge's ruling is commonly referred to as disposition, regardless of strategy during the three and nine months ended March 31, 2003 and 2002 due to attractive pricing conditions prevailing in the whole loan markets during such periods and, to a lesser extent, due to the limited capacity in the Forward Residual Residual See:Residual value Sale Facility ("Residual Facility"), which expired ex·pire v. ex·pired, ex·pir·ing, ex·pires v.intr. 1. To come to an end; terminate: My membership in the club has expired. 2. on March 31, 2003. As previously reported, the residual interest created in the $315.0 million securitization Securitization The process of creating a financial instrument by combining other financial assets and then marketing them to investors. Notes: Mortgage backed securities are a perfect example of securitization. May also be spelled as "securitisation. which closed during the nine months ended March 31, 2003 was sold for $8.7 million of cash to an affiliate Affiliate Relationship between two companies when one company owns substantial interest, but less than a majority of the voting stock of another company, or when two companies are both subsidiaries of a third company. See: Subsidiaries, parent company. of the Company under its Residual Facility. The Company sold for cash to an unrelated, third party mortgage banking company the mortgage servicing Mortgage servicing The collection of monthly payments and penalties, record keeping, payment of insurance and taxes, and possible settlement of default , involved with a mortgage loan. rights and the rights to the prepayment penalties Prepayment penalty A fee a borrower pays a lender when the borrower repays a loan before its scheduled time of maturity. on the underlying mortgage loans in the securitization. Loan servicing At March 31, 2003 and June June: see month. 30, 2002 the Company's total servicing portfolio was $2.0 billion and $2.3 billion, respectively, of which $1.9 billion and $2.2 billion, respectively, or 95.3% and 94.6%, respectively, was serviced in-house In-house In the context of general equities, keeping an activity within the firm. For example, rather than go to the marketplace and sell a security for a client to anyone, an attempt is made to find a buyer to complete the transaction with the firm. . Loans in securitization trusts serviced in-house declined to $852.7 million at March 31, 2003 from $1.2 billion at June 30, 2002 due to mortgage loan run-off run-off n (in contest, election) → desempate m (= extra race); carrera de desempate run-off n (in contest, election) → . The Company's servicing portfolio at March 31, 2003 and June 30, 2002 included approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $1.1 billion and $991.0 million, respectively, of loans serviced for others on an interim basis, which includes loans sold where servicing has yet to be transferred and loans held for sale. The Company's servicing portfolio was $2.4 billion at March 31, 2002, of which $2.2 billion, or 94.2%, was serviced in-house. Other announcements The Company also announced that it renewed re·new v. re·newed, re·new·ing, re·news v.tr. 1. To make new or as if new again; restore: renewed the antique chair. 2. two existing $300.0 million committed revolving repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. facilities with new maturity dates of July July: see month. 15, 2003 and September September: see month. 30, 2003. As previously reported, on April 25, 2003, the Company executed executed 1) adj. to have been completed. (Example: "it is an executed contract") 2) v. to have completed or fully performed. (Example: "he executed all the promises made in the contract") 3) v. a commitment letter with Greenwich Greenwich, borough, Greater London, England Greenwich (grĭn`īj, grĕn`–), outer borough (1991 pop. 200,800) of Greater London, SE England, on the Thames River. Manufactures include telephone equipment and underwater cable. Capital Financial Products, Inc. ("Greenwich"), pursuant to which Greenwich agreed to provide the Company with a financing facility of up to $82.9 million secured by certain of the Company's residual interests and servicing advances, subject to certain conditions, including the negotiation and execution of a definitive loan agreement. The Company intends to use the proceeds from this facility, along with other corporate funds, to redeem redeem v. to buy back, as when an owner who had mortgaged his/her real property pays off the debt. The term also refers to paying the amount due and all charges after a foreclosure (due to failure to make payments when due) has begun. the Company's outstanding 9.125% Senior Notes due November 2003. The Company anticipates completing the financing with Greenwich prior to the maturity of its 9.125% Senior Notes due November 2003. The Company can give no assurance that it will be able to successfully negotiate and execute To run a program, which causes the computer to carry out its instructions. See executable code, instruction and EXE file. execute - execution a definitive loan agreement or satisfy any other conditions required to complete the financing. Aames Financial Corporation is a leading home equity lender LENDER, contracts. He from whom a thing is borrowed. 2. The contract of loan confers rights, and imposes duties on the lender. 1. The lender has the right to revoke the loan at his mere pleasure; 9 Cowen, R. 687; 8 Johns. Rep. 432; 1 T. R. 480; 2 Campb. Rep. , and at March 31, 2003 operated 89 traditional retail branches, 2 National Loan Centers and 4 traditional regional broker offices throughout the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . From time to time the Company may publish forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc such matters as anticipated financial performance, business prospects and similar matters. The Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 provides a safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. for forward-looking statements. In order to comply with the terms of the safe harbor, the Company notes that a variety of factors could cause the Company's actual results and experience to differ materially from the anticipated results or other expectations expressed in the Company's forward-looking statements. The risks and uncertainties that may affect the operations, performance and results of the Company's business include the following: negative cash flow and continued access to outside sources of cash to fund operations; dependence on funding sources; third party rights to terminate Terminate (terminat.exe) was a shareware modem terminal and host program for MS-DOS and compatible operating systems developed from the early to the late 1990s by the Dane Bo Bendtsen. The last release (5. mortgage servicing; high delinquencies and losses in the Company's securitization trusts; prepayment risk Prepayment Risk The uncertainty related to unscheduled prepayment in excess of scheduled principal repayment. Notes: This risk is generally associated with mortgage securities. ; changes in interest rates; basis risk; prolonged pro·long tr.v. pro·longed, pro·long·ing, pro·longs 1. To lengthen in duration; protract. 2. To lengthen in extent. interruptions or reductions in the secondary market for mortgage loans; timing of loan sales; dependence on broker network; competition; concentration of operations in California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). and Florida Florida, state, United States Florida (flôr`ĭdə, flŏr`–), state in the extreme SE United States. A long, low peninsula between the Atlantic Ocean (E) and the Gulf of Mexico (W), Florida is bordered by Georgia and ; economic conditions; contingent Fortuitous; dependent upon the possible occurrence of a future event, the existence of which is not assured. The word contingent denotes that there is no present interest or right but only a conditional one which will become effective upon the happening of the risks on loans sold; government regulation; changes in federal income tax laws; ability to pay dividends and the concentrated ownership of the Company's controlling stockholder. For a more complete discussion of these risks and uncertainties, see "Item 7. Management's Discussion and Analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial of Financial Condition and Results of Operations - Risk Factors" in the Company's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended June 30, 2002; and, also see "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations" in subsequent quarterly filings by the Company with the United States Securities and Exchange Commission.
AAMES FINANCIAL CORPORATION and SUBSIDIARIES
Financial tables
(In thousands, except per share data)
CONDENSED CONSOLIDATED INCOME
STATEMENTS Three Months Ended Nine Months Ended
(Unaudited) March 31, March 31,
------------------- ----------------
2003 2002 2003 2002
--------- --------- ------- --------
Revenue:
Gain on sale of loans $35,157 $22,513 $99,216 $78,149
Write-down of residual interests - - (31,923)(27,000)
Origination fees 12,435 12,484 40,125 41,363
Loan servicing 1,252 3,026 6,336 9,459
Debt extinguishment income 83 - 27,175 -
Interest 16,556 19,621 55,913 63,349
--------- --------- ------- --------
Total revenue, including
write-down of residual
interests 65,483 57,644 196,842 165,320
--------- --------- ------- --------
Expenses:
Personnel 31,904 29,127 98,781 84,142
Production 6,832 5,572 18,647 14,813
General and administrative 12,114 11,317 33,710 30,672
Interest 7,042 8,454 23,933 28,978
--------- --------- ------- --------
Total expenses 57,892 54,470 175,071 158,605
--------- --------- ------- --------
Income before income taxes 7,591 3,174 21,771 6,715
Provision for income taxes 900 977 3,086 2,355
--------- --------- ------- --------
Net income $6,691 $2,197 $18,685 $4,360
--------- --------- ------- --------
Net income (loss) to common
shareholders
Basic $2,919 $(2,279) $9,057 $(8,821)
--------- --------- ------- --------
Diluted $6,691 $(2,279) $18,685 $(8,821)
--------- --------- ------- --------
Net income (loss) per common
share:
Basic $0.44 $(0.35) $1.39 $(1.38)
--------- --------- ------- --------
Diluted $0.07 $(0.35) $0.20 $(1.38)
--------- --------- ------- --------
Weighted average number of common
shares:
Basic 6,595 6,451 6,530 6,372
--------- --------- ------- --------
Diluted 98,339 6,451 92,933 6,372
--------- --------- ------- --------
CONDENSED CONSOLIDATED BALANCE SHEETS March 31, June 30,
2003 2002
(Unaudited) (Audited)
------------ ------------
Cash and cash equivalents $21,033 $17,391
Loans held for sale, at lower of cost or
market 393,876 462,068
Accounts receivable 47,862 61,276
Residual interests, at estimated fair value 145,065 197,297
Mortgage servicing rights, net 812 2,920
Other assets 23,837 25,646
------------ ------------
Total assets $632,485 $766,598
------------ ------------
Borrowings $197,111 $263,970
Revolving warehouse and repurchase facilities 298,670 383,119
Accrued dividend on convertible preferred
stock 47,390 37,763
Other liabilities 42,986 44,561
------------ ------------
586,157 729,413
Stockholders' equity 46,328 37,185
------------ ------------
Total liabilities and stockholders'
equity $632,485 $766,598
------------ ------------
AAMES FINANCIAL CORPORATION and SUBSIDIARIES
Supplemental Information
(In thousands)
The following table sets forth information regarding basic and diluted
net income (loss) per common share for the three and nine months ended
March 31, 2003 and 2002 (amount in thousands, except per share data):
Three Months Nine Months
Ended Ended
March 31, March 31,
-------------- ----------------
2003 2002 2003 2002
------ ------- ------- --------
Basic net income (loss) per common
share:
Net income $6,691 $2,197 $18,685 $4,360
Less: Accrued dividends on Series B,
C and D Convertible Preferred Stock (3,772) (4,476) (9,628)(13,181)
------ ------- ------- --------
Basic net income (loss) to common
stockholders $2,919 $(2,279) $9,057 $(8,821)
------ ------- ------- --------
Basic weighted average number of
common shares outstanding 6,595 6,451 6,530 6,372
------ ------- ------- --------
Basic net income (loss) per common
share $0.44 $(0.35) $1.39 $(1.38)
------ ------- ------- --------
Diluted net income (loss) per common
share:
Basic net income (loss) to common
stockholders $2,919 $(2,279) $9,057 $(8,821)
Plus: Accrued dividends on Series B,
C and D Convertible Preferred Stock 3,772 - 9,628 -
------ ------- ------- --------
Diluted net income (loss) to common
stockholders $6,691 $(2,279)$18,685 $(8,821)
------ ------- ------- --------
Basic weighted average number of
common shares outstanding 6,595 6,451 6,530 6,372
Plus incremental shares from:
Assumed conversion of the Series B,
C and D Convertible Preferred
Stock 85,538 - 85,547 -
Exercise of warrants 1,911 - 266 -
Exercise of stock options 4,295 - 590 -
------- ------ ------- --------
Diluted weighted average number of
common shares outstanding 98,339 6,451 92,933 6,372
------- ------ ------- --------
Diluted net income (loss) per
common share $0.07 $(0.35) $0.20 $(1.38)
------- ------ ------- --------
Note: During the three and nine months ended March 31, 2003,
conversion of the 5.5% Convertible Subordinated Debentures due 2006
and 2012 into common shares was not assumed as the effects of assumed
conversion would have been antidilutive.
The following table reconciles total revenue in conformity with
generally accepted accounting principles ("GAAP") to proforma amounts
discussed within the text of the accompanying press release (dollars
in thousands):
Three Months Nine Months Ended
Ended
March 31, March 31,
----------------- -------------------
2003 2002 2003 2002
-------- -------- --------- ---------
Total revenue per GAAP $65,483 $57,644 $196,842 $165,320
Add: write-down of residual
interests - - 31,923 27,000
Less: debt extinguishment income (83) - (27,175) -
-------- -------- --------- ---------
Proforma total operating revenue $65,400 $57,644 $201,590 $192,320
-------- -------- --------- ---------
Net income per GAAP $6,691 $2,197 $18,685 $4,360
Add: write-down of residual
interests - - 31,923 27,000
Less: debt extinguishment income (83) - (27,175) -
-------- -------- --------- ---------
Proforma net operating income $6,608 $2,197 $23,433 $31,360
-------- -------- --------- ---------
AAMES FINANCIAL CORPORATION and SUBSIDIARIES
Supplemental Information
(In thousands)
MORTGAGE LOAN ORIGINATION VOLUMES:
----------------------------------
Three Months Ended Nine Months Ended
--------------------------------- -----------------------
March 31, March 31, December 31, March 31,
2003 2002 2002 2003 2002
----------- --------- ----------- ----------- -----------
Retail:
Traditional
retail
branch
network $287,821 $296,034 $372,542 $982,278 $951,942
National
Loan
Center 106,417 78,600 143,691 380,407 214,097
----------- --------- ----------- ----------- -----------
394,238 374,634 516,233 1,362,685 1,166,039
Broker: (1)
Regional
office
network 543,813 370,007 702,928 1,711,904 1,085,301
Telemarketing
and Internet 78,742 33,540 87,574 218,098 84,418
----------- --------- ----------- ----------- -----------
622,555 403,547 790,502 1,930,002 1,169,719
----------- --------- ----------- ----------- -----------
Total $1,016,793 $778,181 $1,306,735 $3,292,687 $2,335,758
----------- --------- ----------- ----------- -----------
(1) Includes the purchase of closed loans on a flow basis from
correspondents of $6.7 million and $3.7 million during the three
months ended March 31, 2003 and 2002, respectively, and $10.4 million
and $17.2 million during the nine months ended March 31, 2003 and
2002, respectively.
SECURITIZATIONS AND WHOLE LOAN SALES:
-------------------------------------
Three Months Ended Nine Months Ended
March 31, March 31,
--------------------- -----------------------
2003 2002 2003 2002
----------- --------- ----------- -----------
Loans pooled and sold in
securitizations $- $132,836 $314,958 $542,800
Whole loan sales 1,248,096 623,964 3,029,769 1,794,842
----------- --------- ----------- -----------
Total $1,248,096 $756,800 $3,344,727 $2,337,642
----------- --------- ----------- -----------
LOAN SERVICING:
---------------
March 31, June 30,
2003 2002 2002
--------- ---------- -------------
Mortgage loans serviced:
Loans in securitization trusts
serviced in-house $852.7 $1,331.0 $1,192.0
Loans serviced on an interim basis 1,099.3 930.8 991.0
--------- ---------- -------------
Serviced in-house 1,952.0 2,261.8 2,183.0
Loans in securitization trusts
serviced in-house subserviced by
others 96.2 140.4 125.0
--------- ---------- -------------
Total servicing portfolio $2,048.2 $2,402.2 $2,308.0
--------- ---------- -------------
Percentage serviced in-house 95.3% 94.2% 94.6%
--------- ---------- -------------
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