Back to GetFilings.com

Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

              Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes   ý   No       o   

              Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).    Yes    o       No   ý  

              At May 11, 2004, Registrant had 7,170,569 shares of common stock outstanding.

Table of Contents

Table of Contents

Item 1. Financial Statements

AAMES FINANCIAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

2

Table of Contents

See accompanying notes to condensed consolidated financial statements.

3

Table of Contents

See accompanying notes to condensed consolidated financial statements.

4

Table of Contents

AAMES FINANCIAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

Note 1: Basis of Presentation

        The condensed consolidated financial statements of Aames Financial Corporation, a Delaware corporation (the “Parent”), and its subsidiaries (collectively, with the Parent, the “Company”) included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the United States Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been omitted.

        The condensed consolidated financial statements include the accounts of the Company and all of its subsidiaries after eliminating all significant intercompany transactions and reflect all normal, recurring adjustments which are, in the opinion of management, necessary to present a fair statement of the results of operations of the Company in conformity with accounting principles generally accepted in the United States for the interim periods reported. The results of operations for the Company for the three and nine months ended March 31, 2004 are not necessarily indicative of the results expected for the full fiscal year.

        At March 31, 2004, Specialty Finance Partners (“SFP”), a partnership controlled by Capital Z Financial Services Fund, II, L.P., a Bermuda partnership (together with SFP, “Capital Z”) owned preferred stock representing approximately 42.7% of the Company’s combined voting power in the election of directors and approximately 90.0% of the combined voting power in all matters other than the election of directors. Representatives or nominees of Capital Z have five of the nine seats on the Board of Directors, and as current members’ terms expire, Capital Z has the continuing right to appoint and elect four directors and nominate one additional director. As a result of its beneficial ownership and Board representation, Capital Z has, and will continue to have, sufficient power to determine the Company’s direction and policies.

Note 2: Residual Forward Sale Facility with Related Party

        The Company’s Residual Forward Sale Facility (the “Residual Facility”), as amended with Capital Z Investments, L.P., a Bermuda partnership (“CZI”), an affiliate of Capital Z, the Company’s largest shareholder, expired on March 31, 2003.

        The Company did not dispose of any of its loans through a securitization during the nine months ended March 31, 2004. During the three months ended March 31, 2004 and 2003, the Company did not dispose of any of its loans through a securitization. During the nine months ended March 31, 2003, the Company securitized $315.0 million of mortgage loans and sold the residual interest created therein to CZI for $8.7 million under the Residual Facility.

5

Table of Contents

        In connection with obtaining the Residual Facility, the Company initially capitalized $3.3 million of costs, of which $3.0 million related to a facility fee paid to CZI. During the three months ended March 31, 2003, the Company wrote off the remaining unamortized Residual Facility costs of $0.2 million by charging gain on sale. During the nine months ended March 31, 2003, amortization of total capitalized Residual Facility costs charged to gain on sale of loans was $0.8 million.

Note 3: Guaranty Arrangements

        The Parent has guaranteed amounts outstanding under certain revolving warehouse and repurchase agreements pursuant to which certain of its wholly-owned operating subsidiaries are the contractual borrowers. The Parent has also guaranteed amounts outstanding under a borrowing facility, secured by certain of the operating subsidiary’s residual interests and certain of that subsidiary’s advance receivables (the “Financing Facility”), pursuant to which that subsidiary is the contractual borrower. The Parent’s guarantees are full, complete and unconditional. On November 17, 2003, the Company made a $33.0 million principal reduction on the Financing Facility and Capital Z was released from its role as a limited guarantor on the Financing Facility.

Note 4: Per Share Data

        The following table sets forth information regarding basic and diluted net income per common share for the three and nine months ended March 31, 2004 and 2003 (amounts in thousands, except per share data):

6

Table of Contents