Consumer Portfolio Services, Inc. (Nasdaq:CPSS) ("CPS" or the
"Company") today announced operating results for its third quarter
ended September 30, 2010.
Operating results for the third quarter of 2010 included
revenues of $36.8 million, a decrease of approximately $16.0
million, or 30.3%, compared to $52.8 million for the third quarter
of 2009. Total operating expenses for the third quarter of 2010
were $40.3 million, a decrease of $16.8 million, or 29.5%, as
compared to $57.1 million for the 2009 period. Pretax loss for
the third quarter of 2010 was $(3.5) million compared to pretax
loss of $(4.3) million in the third quarter of 2009. Net loss for
the third quarter of 2010 was $(4.5) million, or $(0.26) per
diluted share, compared to net loss of $(4.3) million, or $(0.23)
per diluted share, for the year-ago quarter. Net loss for the third
quarter of 2010 includes a charge to income tax expense of $(1.0)
million, or $(0.06) per diluted share, related to an addition to
the valuation allowance against the deferred tax asset.
For the nine months ended September 30, 2010 total revenues were
$119.9 million compared to $177.2 million for the nine months ended
September 30, 2009, a decrease of approximately $57.3 million, or
32.3%. Total expenses for the nine months ended September 30,
2010 were $134.6 million, a decrease of $53.4 million, or 28.4%, as
compared to $188.0 million for the nine months ended September 30,
2009. Pretax loss for the nine months ended September 30, 2010
was $(14.7) million, compared to pretax loss of $(10.8) million for
the nine months ended September 30, 2009. Net loss for the
nine months ended September 30, 2010 was $(19.3) million, or
$(1.10) per diluted share, compared to net loss of $(10.8) million,
or $(0.57) per diluted share, for the nine months ended September
30, 2009. Net loss for the first nine months of 2010 includes a
charge to income tax expense of $(4.6) million, or $(0.26) per
diluted share, related to additions to the valuation allowance
against the deferred tax asset.
During the third quarter of 2010, CPS purchased $35.3 million of
contracts from dealers as compared to $26.7 million during the
second quarter of 2010 and $506,000 during the third quarter of
2009. The Company's managed receivables totaled $843.0 million
as of September 30, 2010, a decrease of $354.3 million, or 29.6%,
from $1,197.3 million as of September 30, 2009, as follows ($ in
millions):
|
September 30, 2010 |
September 30, 2009 |
Owned by Consolidated Subsidiaries* |
$657.6 |
$1,049.3 |
Owned by Non-Consolidated Subsidiaries |
95.8 |
148.0 |
As Third Party Servicer |
89.6 |
0.0 |
Total |
$843.0 |
$1,197.3 |
|
|
|
* Before $49.3 million and $73.3
million of allowance for credit losses, deferred acquisition fees
and repossessed vehicles for 2010 and 2009, respectively. |
Annualized net charge-offs for the third quarter of 2010 were
6.98% of the average owned portfolio as compared to 8.82% in 2009.
Delinquencies greater than 30 days (including repossession
inventory) were 8.64% of the total owned portfolio as of September
30, 2010, as compared to 8.83% as of September 30, 2009. The third
quarter of 2010 represents the second consecutive quarter that
year-over-year portfolio net charge-off levels have improved since
the Company's managed portfolio began to decrease in 2008.
"Operational improvements continued in the third quarter with
another significant increase in new contract purchases and
favorable year-over-year credit performance levels," said Charles
E. Bradley, Jr., Chairman and Chief Executive Officer. "In
addition, we successfully completed our first term securitization
transaction in over two years, our first rated senior subordinate
term deal since 1993, at rates competitive with our
peers. Getting that deal closed should enhance our fund
raising efforts in the near term and set the stage for lower
funding costs in 2011."
Conference Call
CPS announced that it will hold a conference call on Tuesday,
November 16, 2010, at 1:30 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.
A replay will be available between November 16, 2010 and
November 22, 2010, beginning one hour after conclusion of the call,
by dialing 800 642-1687 or 706 645-9291 for international
participants, with conference identification number 25285298.
A broadcast of the conference call will also be available
live and for 30 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 future 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 or the effects of recent changes in bankruptcy
law, 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 provision for credit losses may
affect future performance.
|
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, |
|
2010 |
2009 |
2010 |
2009 |
Revenues: |
|
|
|
|
Interest income |
$ 32,925 |
$ 49,320 |
$ 107,072 |
$ 165,459 |
Servicing fees |
1,768 |
839 |
6,119 |
2,811 |
Other income |
2,105 |
2,662 |
6,724 |
8,922 |
|
36,798 |
52,821 |
119,915 |
177,192 |
Expenses: |
|
|
|
|
Employee costs |
7,599 |
8,224 |
25,075 |
26,466 |
General and administrative |
3,593 |
5,569 |
15,048 |
18,021 |
Interest |
20,056 |
26,175 |
63,380 |
87,278 |
Provision for credit losses |
7,036 |
15,258 |
25,742 |
49,836 |
Other expenses |
2,011 |
1,902 |
5,354 |
6,360 |
|
40,295 |
57,128 |
134,599 |
187,961 |
Income before income taxes |
(3,497) |
(4,307) |
(14,684) |
(10,769) |
Income taxes |
1,000 |
-- |
4,600 |
-- |
Net income |
$ (4,497) |
$ (4,307) |
$ (19,284) |
$ (10,769) |
|
|
|
|
|
Earnings per share: |
|
|
|
|
Basic |
$ (0.26) |
$ (0.23) |
$ (1.10) |
$ (0.57) |
Diluted |
(0.26) |
(0.23) |
(1.10) |
(0.57) |
|
|
|
|
|
Number of shares used in computing earnings
per share: |
|
|
|
|
Basic |
17,309 |
18,583 |
17,530 |
18,776 |
Diluted |
17,309 |
18,583 |
17,530 |
18,776 |
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated
Balance Sheets |
(In
thousands) |
(Unaudited) |
|
|
|
|
|
|
September 30, |
December 31, |
|
|
|
2010 |
2009 |
|
|
|
|
|
|
|
Cash |
$ 11,293 |
$ 12,433 |
|
|
Restricted cash |
120,105 |
128,511 |
|
|
Total Cash |
131,398 |
140,944 |
|
|
Finance receivables |
629,508 |
878,366 |
|
|
Allowance for finance credit losses |
(21,198) |
(38,274) |
|
|
Finance receivables, net |
608,310 |
840,092 |
|
|
Residual interest in securitizations |
3,696 |
4,316 |
|
|
Deferred tax assets, net |
28,850 |
33,450 |
|
|
Other assets |
29,724 |
49,459 |
|
|
|
$ 801,978 |
$ 1,068,261 |
|
|
|
|
|
|
|
Accounts payable and other liabilities |
$ 20,932 |
$ 17,906 |
|
|
Warehouse line of credit |
39,692 |
4,932 |
|
|
Residual interest financing |
44,252 |
56,930 |
|
|
Securitization trust debt |
632,783 |
904,833 |
|
|
Senior secured debt, related party |
26,950 |
26,118 |
|
|
Subordinated debt |
21,300 |
21,965 |
|
|
|
785,909 |
1,032,684 |
|
|
|
|
|
|
|
Shareholders' equity |
16,069 |
35,577 |
|
|
|
$ 801,978 |
$ 1,068,261 |
|
|
|
|
|
|
|
Operating and Performance Data ($ in
thousands) |
At and for the |
At and for the |
|
Three months ended |
Nine months ended |
|
September 30, |
September 30, |
|
2010 |
2009 |
2010 |
2009 |
|
|
|
|
|
Contract purchases |
35,253 |
506 |
79,390 |
2,539 |
|
|
|
|
|
Total managed portfolio |
843,012 |
1,197,341 |
843,012 |
1,197,341 |
|
|
|
|
|
Average managed portfolio |
873,439 |
1,240,287 |
978,087 |
1,391,013 |
|
|
|
|
|
Net interest margin (1) |
12,869 |
23,145 |
43,692 |
78,181 |
|
|
|
|
|
Risk adjusted margin (2) |
5,833 |
7,887 |
17,950 |
28,345 |
|
|
|
|
|
Core operating expenses (3) |
13,203 |
15,695 |
45,477 |
50,847 |
Annualized % of average managed
portfolio |
6.05% |
5.06% |
6.20% |
4.87% |
|
|
|
|
|
Allowance for finance credit losses as % of
fin. receivables |
3.37% |
3.28% |
|
|
|
|
|
|
|
Aggregate allowance as % of fin. receivables
(4) |
5.40% |
5.57% |
|
|
|
|
|
|
|
Delinquencies |
|
|
|
|
31+ Days |
5.90% |
5.80% |
|
|
|
|
|
|
|
Repossession Inventory |
2.74% |
3.02% |
|
|
|
|
|
|
|
Total Delinquencies and Repossession
Inventory |
8.64% |
8.83% |
|
|
|
|
|
|
|
Annualized net charge-offs as % of average
owned portfolio |
6.98% |
8.82% |
9.69% |
10.44% |
|
|
|
|
|
(1) Interest income less
interest expense. |
(2) Net interest margin less
provision for credit losses. |
(3) Total expenses less
interest and provision for credit losses. |
(4) Includes allowance for
finance credit losses and allowance for repossession
inventory. |
CONTACT: Consumer Portfolio Services, Inc.
Investor Relations Contact:
Robert E. Riedl, Chief Investment Officer
949 753-6800
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