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PRESS RELEASE: Paid content from Globe Newswire
Press release content from Globe Newswire. The AP news staff was not involved in its creation.

CPS Announces Third Quarter 2019 Earnings

October 29, 2019

# Pretax income of $2.8 million # Net income of $1.8 million, or $0.08 per diluted share # New contract purchases of $262 million

LAS VEGAS, NV, Oct. 29, 2019 (GLOBE NEWSWIRE) -- Consumer Portfolio Services, Inc. (Nasdaq: CPSS) (“CPS” or the “Company”) today announced earnings of $1.8 million, or $0.08 per diluted share, for its third quarter ended September 30, 2019. This compares to net income of $3.2 million, or $0.13 per diluted share, in the third quarter of 2018.

Revenues for the third quarter of 2019 were $85.5 million, a decrease of $10.1 million, or 10.6%, compared to $95.6 million for the third quarter of 2018. Total operating expenses for the third quarter of 2019 were $82.7 million compared to $90.9 million for the 2018 period. Pretax income for the third quarter of 2019 was $2.8 million compared to pretax income of $4.7 million in the third quarter of 2018, a decrease of 39.9%.

For the nine months ended September 30, 2019 total revenues were $260.1 million compared to $298.6 million for the nine months ended September 30, 2018, a decrease of approximately $38.5 million, or 12.9%. Total expenses for the nine months ended September 30, 2019 were $251.8 million, a decrease of $32.8 million, or 11.5%, compared to $284.6 million for the nine months ended September 30, 2018. Pretax income for the nine months ended September 30, 2019 was $8.3 million, compared to $13.9 million for the nine months ended September 30, 2018. Net income for the nine months ended September 30, 2019 was $5.4 million compared to $9.5 million for the nine months ended September 30, 2018.

During the third quarter of 2019, CPS purchased $262.1 million of new contracts compared to $250.1 million during the second quarter of 2019 and $225.2 million during the third quarter of 2018. The Company’s receivables totaled $2.413 billion as of September 30, 2019, an increase from $2.399 billion as of June 30, 2019 and $2.343 billion as of September 30, 2018.

Annualized net charge-offs for the third quarter of 2019 were 8.07% of the average portfolio as compared to 8.03% for the third quarter of 2018. Delinquencies greater than 30 days (including repossession inventory) were 15.74% of the total portfolio as of September 30, 2019, as compared to 11.58% as of September 30, 2018.

“In our third quarter just ended, we marked our fifth consecutive quarter of year over year increases in originations volume and the fifth consecutive quarter of growth in our managed portfolio,” reported Charles E. Bradley, Jr., Chairman and Chief Executive Officer. “In addition, we notched our fourth consecutive quarter of year over year improvement in loan coupons and fees paid to dealers on new loans.”

Conference Call

CPS announced that it will hold a conference call on Wednesday, October 30, 2019, at 1:00 p.m. ET to discuss its quarterly operating results. Those wishing to participate by telephone may dial-in at 877 312-5502 or 253 237-1131 approximately 10 minutes prior to the scheduled time. The conference identification number is 7170238.

A replay of the conference call will be available between October 30, 2019 and November 6, 2019, beginning two hours after conclusion of the call, by dialing 855 859-2056 or 404 537-3406 for international participants, with conference identification number 7170238. A broadcast of the conference call will also be available live and for 90 days after the call via the Company’s web site at www.consumerportfolio.com.

About Consumer Portfolio Services, Inc.

Consumer Portfolio Services, Inc. is an independent specialty finance company that provides indirect automobile financing to individuals with past credit problems, low incomes or limited credit histories. We purchase retail installment sales contracts primarily from franchised automobile dealerships secured by late model used vehicles and, to a lesser extent, new vehicles. We fund these contract purchases on a long-term basis primarily through the securitization markets and service the contracts over their lives.

Forward-looking statements in this news release include the Company’s recorded revenue, expense and provision for credit losses, because these items are dependent on the Company’s estimates of incurred losses. The accuracy of such estimates may be adversely affected by various factors, which include (in addition to risks relating to the economy generally) the following: possible increased delinquencies; repossessions and losses on retail installment contracts; incorrect prepayment speed and/or discount rate assumptions; possible unavailability of qualified personnel, which could adversely affect the Company’s ability to service its portfolio; possible increases in the rate of consumer bankruptcy filings, which could adversely affect the Company’s rights to collect payments from its portfolio; other changes in government regulations affecting consumer credit; possible declines in the market price for used vehicles, which could adversely affect the Company’s realization upon repossessed vehicles; and economic conditions in geographic areas in which the Company’s business is concentrated. All of such factors also may affect the Company’s future financial results, as to which there can be no assurance. Any implication that the results of the most recently completed quarter are indicative of future results is disclaimed, and the reader should draw no such inference. Factors such as those identified above in relation to the provision for credit losses may affect future performance.

Investor Relations Contact

Jeffrey P. Fritz, Chief Financial Officer844 878-2777

Consumer Portfolio Services, Inc. and Subsidiaries Condensed Consolidated Statements of Operations (In thousands, except per share data) (Unaudited) Three months ended Nine months ended September 30, September 30, ----------------------------------- --------------------------------- 2019 2018 2019 2018 Revenues: Interest income $ 83,528 $ 93,617 $ 253,822 $ 291,535 Other income 1,994 2,014 6,255 7,022 85,522 95,631 260,077 298,557 - --------- - - --------- - - -------- - - -------- - Expenses: Employee costs 20,251 18,806 59,030 59,288 General and 8,185 7,784 25,109 22,730 administrative Interest 27,940 25,808 82,933 75,057 Provision for credit 19,874 31,959 64,319 107,997 losses Other expenses 6,443 6,568 20,411 19,566 - --------- - - --------- - - -------- - - -------- - 82,693 90,925 251,802 284,638 - --------- - - --------- - - -------- - - -------- - Income before income 2,829 4,706 8,275 13,919 taxes Income tax expense 991 1,508 2,898 4,409 - --------- - - --------- - - -------- - - -------- - Net income $ 1,838 $ 3,198 $ 5,377 $ 9,510 - --------- - - --------- - - -------- - - -------- - Earnings per share: Basic $ 0.08 $ 0.14 $ 0.24 $ 0.44 Diluted $ 0.08 $ 0.13 $ 0.22 $ 0.38 Number of shares used in computing earnings per share: Basic 22,526 22,636 22,378 21,800 Diluted 24,066 24,735 24,102 25,178 Condensed Consolidated Balance Sheets (In thousands) (Unaudited) September 30, December 31, 2019 2018 ------------- ------------- Assets: Cash and cash $ 8,799 $ 12,787 equivalents Restricted cash and 128,556 117,323 equivalents - --------- - - --------- - Total cash and cash 137,355 130,110 equivalents Finance receivables 1,022,391 1,522,085 Allowance for finance (12,740 ) (67,376 ) credit losses - --------- - - --------- - Finance receivables, 1,009,651 1,454,709 net Finance receivables 1,313,205 821,066 measured at fair value Deferred tax assets, 16,125 19,188 net Other assets 61,126 60,607 - --------- - - --------- - $ 2,537,462 $ 2,485,680 - --------- - - --------- - Liabilities and Shareholders’ Equity: Accounts payable and $ 55,431 $ 31,692 accrued expenses Warehouse lines of 157,761 136,847 credit Residual interest 39,385 39,106 financing Securitization trust 2,066,458 2,063,627 debt Subordinated renewable 15,529 17,290 notes - --------- - - --------- - 2,334,564 2,288,562 - --------- - - --------- - Shareholders’ equity 202,898 197,118 $ 2,537,462 $ 2,485,680 - --------- - - --------- - Operating and Performance Data ($ in millions) At and for the At and for the Three months ended Nine months ended September 30, September 30, ----------------------------------- --------------------------------- 2019 2018 2019 2018 Contracts purchased $ 262.11 $ 225.24 $ 755.29 $ 650.58 Contracts securitized 244.12 239.87 739.12 638.45 Total portfolio balance $ 2,412.64 $ 2,342.89 $ 2,412.64 $ 2,342.89 Average portfolio 2,409.10 2,334.90 2,400.08 2,332.26 balance Allowance for finance credit losses as % of 1.25 % 4.86 % fin. receivables Aggregate allowance as % of fin. receivables 3.83 % 6.11 % (1) Delinquencies 31+ Days 13.64 % 10.13 % Repossession Inventory 2.10 % 1.45 % Total Delinquencies and 15.74 % 11.58 % Repo. Inventory Annualized net charge-offs as % of 8.07 % 8.03 % 7.96 % 7.92 % average portfolio Recovery rates (2) 34.4 % 34.8 % 34.0 % 34.5 % For the For the Three months ended Nine months ended September 30, September 30, ------------------------------------------ ---------------------------------------- 2019 2018 2019 2018 $(3) % (4) $(3) % (4) $(3) % (4) $(3) % (4) Interest income $ 83.53 13.9 % $ 93.62 16.0 % $ 253.82 14.1 % $ 291.54 16.7 % Other income 1.99 0.3 % 2.01 0.3 % 6.26 0.3 % 7.02 0.4 % Interest expense (27.94 ) -4.6 % (25.81 ) -4.4 % (82.93 ) -4.6 % (75.06 ) -4.3 % - --------- - - --------- - - -------- - - -------- - Net interest margin 57.58 9.6 % 69.82 12.0 % 177.14 9.8 % 223.50 12.8 % Provision for credit (19.87 ) -3.3 % (31.96 ) -5.5 % (64.32 ) -3.6 % (108.00 ) -6.2 % losses - --------- - - --------- - - -------- - - -------- - Risk adjusted margin 37.71 6.3 % 37.86 6.5 % 112.83 6.3 % 115.50 6.6 % Core operating expenses (34.88 ) -5.8 % (33.16 ) -5.7 % (104.55 ) -5.8 % (101.58 ) -5.8 % - --------- - - --------- - - -------- - - -------- - Pre-tax income $ 2.83 0.5 % $ 4.71 0.8 % $ 8.28 0.5 % $ 13.92 0.8 % (1) Includes allowance for finance credit losses and allowance for repossession inventory. (2) Wholesale auction liquidation amounts (net of expenses) as a percentage of the account balance at the time of sale. (3) Numbers may not add due to rounding. (4) Annualized percentage of the average portfolio balance. Percentages may not add due to rounding.