Aames’ 1st-Quarter Profit Falls 6% on Accounting Change
Aames Financial Corp. said Wednesday that fiscal first-quarter earnings fell 6% as it used more conservative accounting for recording revenue.
The Los Angeles-based mortgage lender said it had net profit of $13.1 million, or 45 cents a share, in the quarter ended Sept. 30, compared with $14 million, or 56 cents a share, excluding a $28-million charge, for the same period a year ago.
For the record:
12:00 a.m. Oct. 31, 1997 For the Record
Los Angeles Times Friday October 31, 1997 Home Edition Business Part D Page 4 Financial Desk 2 inches; 51 words Type of Material: Correction
Aames financial results--Los Angeles-based Aames Financial Corp. reported fiscal first-quarter net income of $13.1 million, or 40 cents a fully diluted share, in the quarter ended Sept. 30, compared with $14 million, or 46 cents a share, excluding a one-time charge in the year-ago period. The year-ago results were misstated in Wednesday’s Business section.
That exceeded the average estimate by analysts of 40 cents a share.
The decline in earnings reflected an 11.5% drop in “gain-on-sale” revenue to $49.75 million. Gain-on-sale is an accounting technique in which anticipated income is recorded as current revenue.
On a conference call, company executives told analysts they reduced negative cash flow to about $25 million in the quarter, from more than $50 million a year ago. The company expects to cut negative cash flow to $15 million by year-end.
Aames and other sub-prime lenders, which specialize in customers with credit problems, have financed negative cash flow by selling debt and equity.
Aames shares rose 50 cents to close at $13.13 on the New York Stock Exchange.
Aames officials declined to comment on reports that the company has received buyout offers below the target price set by management and the board. The company said in August that it had begun to explore selling the company.
At a Glance:
Los Angeles-based Sanwa Bank California said third-quarter earnings rose 34% to $23.5 million, compared with $22.7 million in the year-earlier quarter. The bank, a unit of Japan’s Sanwa Bank, cited gains in net interest income from higher loan and core deposit balances.
Guess Inc., based in Los Angeles, reported third-quarter net income of $13.1 million, or 31 cents per share, compared with $16.3 million, or 38 cents, a year ago.
Agoura Hills-based Guitar Center reported third-quarter net income of $3.3 million, or 11 cents per share on a pro forma adjusted basis, compared with net income of $698,000, or 7 cents, in the year-ago quarter.
Veterinary Centers of America Inc., based in Santa Monica, reported third-quarter net income of $3.4 million, or 16 cents per share, contrasted with a net loss of $11.5 million, or 66 cents, a year ago that included a charge.
Los Angeles-based Kilroy Realty Corp. reported third-quarter net income of $6.5 million, or 34 cents per share. The company went public in January.
Il Fornaio Corp. of San Francisco said third-quarter net income rose 87% to $583,000, or 12 cents per share, compared with $312,000, or 7 cents, a year ago.
Pacoima-based Zegarelli Group International Inc. reported a third-quarter net loss of $1.9 million, or 34 cents per share, contrasted with net income of $26,000, or 1 cent, a year ago. The firm said it is considering selling its hair-care line.
Galoob Toys Inc., based in South San Francisco, reported a third-quarter net loss, including a charge, of $11.1 million, or 62 cents per share, contrasted with net income of $9.2 million, or 57 cents, a year ago.
