SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Form 8-k
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): August 7, 1996
AAMES FINANCIAL CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 33-43237 95-4340340
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
3731 Wilshire Boulevard, 10th Floor
Los Angeles, California 90010
(Address of principal executive offices)
(213) 351-6100
(Registrant's telephone number)
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ITEM 5. OTHER EVENTS
Reference is made to the press releases of Registrant, both issued on
August 7, 1996, which contain information meeting the requirements of this Item
5 and which are incorporated herein by this reference. Copies of the press
releases are attached to this Form 8_K as Exhibits "1" and "2".
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this Current Report on Form 8-k to be
signed on its behalf by the undersigned hereunto duly authorized.
August 7, 1996 AAMES FINANCIAL CORPORATION
by: /s/ Gregory J. Witherspoon
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Gregory J. Witherspoon
Executive Vice President - Finance and
Chief Financial Officer
[LETTERHEAD OF PONDEL PARSONS & WILKINSON]
NEWS RELEASE
Contact: Gregory J. Witherspoon
Aames Financial Corporation
213/351-6153
Cecilia A. Wilkinson/Roger S. Pondel
Pondel Parsons & Wilkinson
310/207-9300
FOR IMMEDIATE RELEASE
AAMES FINANCIAL REPORTS RECORD RESULTS
FOR THE FOURTH QUARTER AND FISCAL YEAR
- - -- Ninth Consecutive Quarter of Unprecedented Performance --
Los Angeles, California -- August 7, 1996 -- Aames Financial Corporation
(NYSE:AAM) today reported that net income for the fiscal year ended June 30,
1996 tripled on revenues that more than doubled, marking Aames' ninth
consecutive quarter of record financial performance.
For the 1996 fiscal year, Aames reported net income of $31.0 million, up
209 percent from fiscal 1995 net income of $10.0 million. Net income per
share, based on significantly more weighted average shares outstanding, rose to
$2.20 primary and $2.09 fully diluted, from $1.11 per share on both a primary
and fully diluted basis in fiscal 1995. The greater number of shares
outstanding primarily reflects the effect of a three-for-two stock split on May
6, 1996 and $115 million of 5-1/2% convertible subordinated debentures due 2006
that were issued in February 1996. Revenues for the year rose 134 percent to
$128 million from $54.9 million a year ago.
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For the three months ended June 30, 1996, Aames reported net income of
$10.7 million versus $3.1 million a year earlier. On a per share basis, on
more weighted average shares outstanding, net income rose to $0.75 primary and
$0.63 fully diluted for the fiscal 1996 fourth quarter compared with $0.32,
both primary and fully diluted, for the three months ended June 30, 1995.
Revenues for the fourth quarter advanced 185 percent to $44.1 million, up from
$15.5 million a year ago.
"Aames' record results reflect the success of our national retail
expansion, coupled with the strong growth of our correspondent and bulk
purchase programs," said Gary K. Judis, chairman and chief executive officer.
"Strong financial performance is only part of the Aames success story in fiscal
1996. We particularly focused during the year on adding depth to our
management team, enhancing our infrastructure and installing state-of-the-art
systems to keep pace with our growth."
Judis noted that during the past fiscal year Aames opened 17 new retail
loan offices in 10 new states.
Total loan originations and purchases in fiscal 1996 reached a record
$896
million, the majority of which were sold through four Aames-sponsored mortgage
loan securitizations aggregating $791 million in the year, more than double the
volume of a year ago. As a result, Aames recognized a 241 percent increase in
excess servicing gain for the year.
Aames' loan servicing portfolio surpassed the billion-dollar mark at
fiscal year end 1996, reaching $1.25 billion, which is more than double that of
year end 1995. Total revenue from loan servicing also more than doubled during
the year to $18.2 million.
Results for fiscal 1996 reflect the company's adoption at the beginning
of
the fiscal year of Statement of Financial Accounting Standard No. 122. The
primary difference between SFAS 122 and prior accounting standards is the
accounting treatment of mortgage servicing rights. Previously, the company
allocated the entire cost of originating or purchasing a mortgage loan to the
carrying value of the loan. Under SFAS 122, mortgage servicing rights are
treated as an asset separate from the related loans and, as a result, the total
cost of originating or purchasing a mortgage loan is now allocated at the time
of origination or purchase between the loan and the related servicing right
based upon their respective fair values. The adoption of SFAS 122 increased
fully diluted earnings per share in the full year by $0.37 and in the fourth
quarter by $0.11. The results of operations of the company for periods prior to
fiscal 1996 have not been restated, as SFAS 122 prohibits retroactive
treatment.
Aames Financial Corporation is a leading home equity lender and currently
operates 48 loan offices in 16 states throughout the United States.
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AAMES FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands except per share data)
Three Months Ended Twelve Months Ended
June 30, June 30,
--------------------- ---------------------
1996 1995 1996 1995
---------- --------- ---------- ---------
Revenue:
Excess servicing gain $29,385 $7,824 $78,274 $22,954
Commissions 5,450 3,154 19,880 15,799
Loan service 5,013 2,471 18,185 8,246
Fees and other 4,250 2,046 12,069 7,940
-------- ------- -------- --------
Total revenue 44,098 15,495 128,408 54,939
-------- ------- -------- -------
Expenses:
Compensation and related
expenses 10,634 4,358 33,241 17,610
Sales and advertising costs 5,932 3,075 18,362 9,906
General and administrative
expenses 5,005 1,776 13,926 7,067
Interest expense 4,045 908 9,348 3,205
------ ------ ------- ------
Total expenses 25,616 10,117 74,877 37,788
------ ------ ------ ------
Income before income taxes 18,482 5,378 53,531 17,151
Provision for income taxes 7,769 2,231 22,483 7,117
------- ------- ------- -------
Net income $10,713 $ 3,147 $31,048 $10,034
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Net income per share:
Primary $ 0.75 $ 0.32 $ 2.20 $ 1.11
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Fully diluted $ 0.63 $ 0.32 $ 2.09 $ 1.11
======= ======= ======= =======
Weighted average number
of shares outstanding:
Primary 14,329 9,819 14,096 9,021
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Fully diluted 18,436 9,819 15,465 9,021
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<PAGE>
AAMES FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
June 30, 1996 June 30, 1995
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Assets
Cash and cash equivalents $ 18,216,000 $20,359,000
Loans held for sale, at cost which
approximates market 64,535,000 23,775,000
Accounts receivable, less allowance for
doubtful accounts of $425,000 and $360,000 8,600,000 6,090,000
Excess servicing receivable 129,113,000 42,078,000
Mortgage servicing rights 10,902,000
Residual assets 44,676,000 14,882,000
Equipment and improvements, net 5,612,000 2,063,000
Prepaid assets and other 12,343,000 5,376,000
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Total assets $293,997.000 $114,623,000
============ ============
Liabilities and Stockholders' Equity
Amounts outstanding under warehouse agreements $ 11,026,000 $
Notes payable and obligations under
capital leases 138,045,000 23,144,000
Accounts payable and accrued expenses 8,976,000 6,141,000
Accrued compensation and related expenses 3,949,000 1,703,000
Income taxes payable 21,831,000 3,588,000
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Total liabilities 183,827,000 34,576,000
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Stockholders' equity:
Preferred Stock, par value $.001 per share,
1,000,000 shares authorized; none outstanding
Common Stock, par value $.001 per share,
50,000,000 and 10,000,000 shares authorized;
8,980,500 and 8,813,979 shares outstanding 14,000 9,000
Additional paid-in capital 63,628,000 61,869,000
Retained earnings 46,528,000 18,169,000
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Total stockholders' equity 110,170,000 80,047,000
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Total liabilities and stockholders' equity $293,997,000 $114,623,000
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[LETTERHEAD OF PONDEL PARSONS & WILKINSON]
NEWS RELEASE
CONTACT: Gregory J. Witherspoon
Aames Financial Corporation
213/ 351-6100
Cecilia A. Wilkinson/Roger S. Pondel
Pondel Parsons & Wilkinson
310/ 207-9300
FOR IMMEDIATE RELEASE
AAMES DECLARES REGULAR QUARTERLY CASH DIVIDEND
Los Angeles, California -- August 7, 1996 -- The board of directors of
Aames Financial Corporation (NYSE:AAM) today declared a regular quarterly cash
dividend of $0.05 per share, payable on August 29, 1996 to stockholders of
record as of August 15, 1996.
Aames Financial Corporation is a leading home equity lender and currently
operates 48 loan offices in 16 states throughout the United States.
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