Consumer Portfolio Services, Inc. (Nasdaq:CPSS) (“CPS” or the
“Company”) today announced earnings of $4.7 million, or $0.17 per
diluted share, for its third quarter ended September 30,
2017. This compares to net income of $7.3 million, or $0.26
per diluted share, in the third quarter of 2016.
Revenues for the third quarter of 2017 were
$109.5 million, an increase of $1.0 million, or 0.9%, compared to
$108.5 million for the third quarter of 2016. Total operating
expenses for the third quarter of 2017 were $101.4 million, an
increase of $5.3 million, or 5.5%, compared to $96.1 million for
the 2016 period. Pretax income for the third quarter of 2017
was $8.1 million compared to pretax income of $12.5 million in the
third quarter of 2016, a decrease of 34.9%.
For the nine months ended September 30, 2017
total revenues were $327.2 million compared to $314.1 million for
the nine months ended September 30, 2016, an increase of
approximately $13.1 million, or 4.2%. Total expenses for the
nine months ended September 30, 2017 were $303.3 million, an
increase of $26.2 million, or 9.5%, compared to $277.1 million for
the nine months ended September 30, 2016. Pretax income for
the nine months ended September 30, 2017 was $23.9 million,
compared to $37.0 million for the nine months ended September 30,
2016. Net income for the nine months ended September 30, 2017
was $13.7 million compared to $21.8 million for the nine months
ended September 30, 2016.
During the third quarter of 2017, CPS purchased
$204.7 million of new contracts compared to $233.9 million during
the second quarter of 2017 and $242.1 million during the third
quarter of 2016. The Company's managed receivables totaled
$2.346 billion as of September 30, 2017, an increase from $2.343
billion as of June 30, 2017 and $2.292 billion as of September 30,
2016.
Annualized net charge-offs for the third quarter
of 2017 were 7.96% of the average owned portfolio as compared to
6.69% for the third quarter of 2016. Delinquencies greater
than 30 days (including repossession inventory) were 10.27% of the
total owned portfolio as of September 30, 2017, as compared to
10.46% as of September 30, 2016.
In October, 2017 our board of directors approved
an increase to the aggregate authorization to repurchase our
outstanding securities by $10 million. During the third quarter of
2017, CPS purchased 1,189,660 shares of stock in the open market at
an average price of $4.28. For the nine months ended September 30,
2017, CPS purchased 2,292,070 shares at an average price of
$4.51.
"Once again, our quarterly results are in line with our
expectations as the company continues to prosper in a challenging
environment," said Charles E. Bradley, Jr., Chairman and Chief
Executive Officer. “Our third and fourth-quarter
securitizations, completed in July and October, respectively, were
both well received in the market, with the fourth quarter deal
pricing at the tightest weighted average spread since our 2014-B
securitization. In addition, we continue to return earnings
to shareholders by purchasing shares of the Company’s stock in the
open market.”
Conference
Call
CPS announced that it will hold a conference
call on Tuesday, October 24, 2017, 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 1857939.
A replay of the conference call will be available between
October 24, 2017 and October 31, 2017, beginning two hours after
conclusion of the call, by dialing 855 859-2056 or 404 537-3406 for
international participants, with conference identification number
1857939. 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
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Consumer Portfolio Services, Inc. and
Subsidiaries |
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Condensed Consolidated Statements of
Operations |
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(In thousands, except per share
data) |
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(Unaudited) |
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Three months ended |
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Nine months ended |
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September 30, |
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September 30, |
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2017 |
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2016 |
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2017 |
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2016 |
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Revenues: |
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Interest income |
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$ |
107,014 |
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$ |
105,376 |
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$ |
319,074 |
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$ |
303,748 |
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Other income |
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2,474 |
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|
3,140 |
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8,084 |
|
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|
10,351 |
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|
109,488 |
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108,516 |
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327,158 |
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314,099 |
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Expenses: |
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Employee costs |
|
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18,455 |
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16,688 |
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53,807 |
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|
47,510 |
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General and
administrative |
|
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6,355 |
|
|
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6,316 |
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|
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|
20,096 |
|
|
|
|
18,216 |
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Interest |
|
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23,317 |
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|
20,893 |
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68,641 |
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|
58,442 |
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Provision for credit
losses |
|
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47,336 |
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46,262 |
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143,053 |
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134,881 |
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Other expenses |
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5,916 |
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5,902 |
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|
17,707 |
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|
18,040 |
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|
|
|
|
101,379 |
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|
96,061 |
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|
303,304 |
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|
277,089 |
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Income before income
taxes |
|
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|
8,109 |
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|
12,455 |
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|
23,854 |
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|
37,010 |
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Income tax expense |
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|
3,446 |
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5,107 |
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|
10,138 |
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|
15,175 |
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Net
income |
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|
$ |
4,663 |
|
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|
$ |
7,348 |
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$ |
13,716 |
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$ |
21,835 |
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Earnings per
share: |
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Basic |
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$ |
0.21 |
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$ |
0.31 |
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$ |
0.60 |
|
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|
$ |
0.89 |
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Diluted |
|
|
$ |
0.17 |
|
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$ |
0.26 |
|
|
|
$ |
0.50 |
|
|
|
$ |
0.75 |
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Number of shares used
in computing earnings |
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per share: |
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Basic |
|
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|
22,473 |
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|
|
|
23,894 |
|
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|
23,019 |
|
|
|
|
24,574 |
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Diluted |
|
|
|
26,779 |
|
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28,503 |
|
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27,606 |
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29,253 |
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Condensed Consolidated Balance
Sheets |
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(In thousands) |
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(Unaudited) |
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September 30, |
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December 31, |
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2017 |
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2016 |
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Assets: |
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Cash and
cash equivalents |
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$ |
12,038 |
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$ |
13,936 |
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Restricted cash and equivalents |
|
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|
115,026 |
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|
112,754 |
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Total
cash and cash equivalents |
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|
127,064 |
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|
126,690 |
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Finance
receivables |
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|
2,317,727 |
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2,267,943 |
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Allowance for finance credit losses |
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(108,619 |
) |
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|
(95,578 |
) |
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Finance
receivables, net |
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2,209,108 |
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2,172,365 |
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Deferred
tax assets, net |
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|
47,652 |
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42,845 |
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Other
assets |
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|
66,561 |
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|
68,502 |
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$ |
2,450,385 |
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$ |
2,410,402 |
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Liabilities and
Shareholders' Equity: |
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Accounts payable and
accrued expenses |
|
|
$ |
29,262 |
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$ |
24,977 |
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|
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|
Warehouse lines of
credit |
|
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|
106,632 |
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|
103,358 |
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Securitization trust
debt |
|
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|
2,103,567 |
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|
2,080,900 |
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Subordinated renewable
notes |
|
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|
16,229 |
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|
|
|
14,949 |
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|
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|
|
|
|
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|
2,255,690 |
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|
2,224,184 |
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Shareholders'
equity |
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|
194,695 |
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|
186,218 |
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$ |
2,450,385 |
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$ |
2,410,402 |
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Operating and
Performance Data ($ in millions) |
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At and for the |
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At and for the |
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Three months ended |
|
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Nine months ended |
|
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|
September 30, |
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September 30, |
|
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|
|
|
2017 |
|
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|
|
2016 |
|
|
|
|
2017 |
|
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|
|
2016 |
|
|
|
|
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|
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Contracts
purchased |
|
|
$ |
204.74 |
|
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|
$ |
242.09 |
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|
$ |
668.28 |
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|
|
$ |
873.50 |
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|
Contracts
securitized |
|
|
|
230.00 |
|
|
|
|
325.00 |
|
|
|
|
670.00 |
|
|
|
|
1,005.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Total managed
portfolio |
|
|
$ |
2,346.00 |
|
|
|
$ |
2,291.86 |
|
|
|
$ |
2,346.00 |
|
|
|
$ |
2,291.86 |
|
|
Average managed
portfolio |
|
|
|
2,344.96 |
|
|
|
|
2,281.62 |
|
|
|
|
2,332.33 |
|
|
|
|
2,198.93 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for finance
credit losses as % of fin. receivables |
|
|
|
4.69 |
% |
|
|
|
4.29 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregate allowance as
% of fin. receivables (1) |
|
|
|
5.59 |
% |
|
|
|
5.28 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Delinquencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
31+
Days |
|
|
|
8.90 |
% |
|
|
|
8.98 |
% |
|
|
|
|
|
|
|
Repossession Inventory |
|
|
|
1.37 |
% |
|
|
|
1.48 |
% |
|
|
|
|
|
|
|
Total
Delinquencies and Repo. Inventory |
|
|
|
10.27 |
% |
|
|
|
10.46 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annualized net
charge-offs as % of average owned portfolio |
|
|
|
7.96 |
% |
|
|
|
6.69 |
% |
|
|
|
7.83 |
% |
|
|
|
7.05 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recovery rates (2) |
|
|
|
34.6 |
% |
|
|
|
36.1 |
% |
|
|
|
35.2 |
% |
|
|
|
38.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the |
|
For the |
|
|
|
Three months ended |
|
Nine months ended |
|
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|
September 30, |
|
September 30, |
|
|
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
|
|
$(3 |
) |
% (4) |
|
|
$(3 |
) |
% (4) |
|
|
$(3 |
) |
% (4) |
|
|
$(3 |
) |
% (4) |
Interest income |
|
|
$ |
107.01 |
|
18.3 |
% |
|
$ |
105.38 |
|
18.5 |
% |
|
$ |
319.07 |
|
18.2 |
% |
|
$ |
303.75 |
|
18.4 |
% |
Servicing fees and
other income |
|
|
|
2.47 |
|
0.4 |
% |
|
|
3.14 |
|
0.6 |
% |
|
|
8.08 |
|
0.5 |
% |
|
|
10.35 |
|
0.6 |
% |
Interest expense |
|
|
|
(23.32 |
) |
-4.0 |
% |
|
|
(20.89 |
) |
-3.7 |
% |
|
|
(68.64 |
) |
-3.9 |
% |
|
|
(58.44 |
) |
-3.5 |
% |
Net interest
margin |
|
|
|
86.17 |
|
14.7 |
% |
|
|
87.62 |
|
15.4 |
% |
|
|
258.52 |
|
14.8 |
% |
|
|
255.66 |
|
15.5 |
% |
Provision for credit
losses |
|
|
|
(47.34 |
) |
-8.1 |
% |
|
|
(46.26 |
) |
-8.1 |
% |
|
|
(143.05 |
) |
-8.2 |
% |
|
|
(134.88 |
) |
-8.2 |
% |
Risk adjusted
margin |
|
|
|
38.84 |
|
6.6 |
% |
|
|
41.36 |
|
7.3 |
% |
|
|
115.46 |
|
6.6 |
% |
|
|
120.78 |
|
7.3 |
% |
Core operating
expenses |
|
|
|
(30.73 |
) |
-5.2 |
% |
|
|
(28.91 |
) |
-5.1 |
% |
|
|
(91.61 |
) |
-5.2 |
% |
|
|
(83.77 |
) |
-5.1 |
% |
Pre-tax income |
|
|
$ |
8.11 |
|
1.4 |
% |
|
$ |
12.46 |
|
2.2 |
% |
|
$ |
23.85 |
|
1.4 |
% |
|
$ |
37.01 |
|
2.2 |
% |
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(1)
Includes allowance for finance credit losses and allowance for
repossession inventory. |
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(2)
Wholesale auction liquidation amounts (net of expenses) as a
percentage of the account balance at the time of sale. |
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(3) Numbers may
not add due to rounding. |
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(4)
Annualized percentage of the average managed portfolio.
Percentages may not add due to rounding. |
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Consumer Portfolio Servi... (NASDAQ:CPSS)
Historical Stock Chart
From Sep 2024 to Oct 2024
Consumer Portfolio Servi... (NASDAQ:CPSS)
Historical Stock Chart
From Oct 2023 to Oct 2024