CPS Announces Third Quarter 2019 Earnings
October 29 2019 - 4:30PM
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
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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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2019 |
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2018 |
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2019 |
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2018 |
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Revenues: |
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Interest
income |
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$ |
83,528 |
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$ |
93,617 |
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$ |
253,822 |
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$ |
291,535 |
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Other
income |
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1,994 |
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2,014 |
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6,255 |
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7,022 |
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85,522 |
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95,631 |
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260,077 |
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298,557 |
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Expenses: |
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Employee
costs |
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20,251 |
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18,806 |
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59,030 |
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59,288 |
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General and
administrative |
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8,185 |
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7,784 |
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25,109 |
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22,730 |
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Interest |
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27,940 |
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25,808 |
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82,933 |
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|
75,057 |
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Provision
for credit losses |
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19,874 |
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31,959 |
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64,319 |
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107,997 |
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Other
expenses |
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|
6,443 |
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6,568 |
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|
20,411 |
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19,566 |
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82,693 |
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90,925 |
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251,802 |
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284,638 |
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Income
before income taxes |
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2,829 |
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4,706 |
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8,275 |
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13,919 |
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Income tax
expense |
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|
991 |
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1,508 |
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|
2,898 |
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|
4,409 |
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Net income |
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$ |
1,838 |
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$ |
3,198 |
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$ |
5,377 |
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$ |
9,510 |
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Earnings per
share: |
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Basic |
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$ |
0.08 |
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$ |
0.14 |
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$ |
0.24 |
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$ |
0.44 |
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Diluted |
|
|
$ |
0.08 |
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$ |
0.13 |
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$ |
0.22 |
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$ |
0.38 |
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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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22,526 |
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22,636 |
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22,378 |
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21,800 |
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Diluted |
|
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|
24,066 |
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24,735 |
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24,102 |
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25,178 |
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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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2019 |
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2018 |
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Assets: |
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Cash and
cash equivalents |
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$ |
8,799 |
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$ |
12,787 |
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Restricted
cash and equivalents |
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128,556 |
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117,323 |
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Total cash
and cash equivalents |
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137,355 |
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130,110 |
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Finance
receivables |
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|
1,022,391 |
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1,522,085 |
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Allowance
for finance credit losses |
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(12,740 |
) |
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(67,376 |
) |
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Finance
receivables, net |
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|
1,009,651 |
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1,454,709 |
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Finance
receivables measured at fair value |
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1,313,205 |
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821,066 |
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Deferred tax
assets, net |
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|
16,125 |
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19,188 |
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Other
assets |
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61,126 |
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60,607 |
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$ |
2,537,462 |
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$ |
2,485,680 |
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Liabilities and Shareholders' Equity: |
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Accounts
payable and accrued expenses |
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$ |
55,431 |
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$ |
31,692 |
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Warehouse
lines of credit |
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|
157,761 |
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|
136,847 |
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Residual
interest financing |
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|
39,385 |
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39,106 |
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Securitization trust debt |
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2,066,458 |
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2,063,627 |
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Subordinated
renewable notes |
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|
15,529 |
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17,290 |
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2,334,564 |
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2,288,562 |
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Shareholders' equity |
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|
202,898 |
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|
197,118 |
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|
$ |
2,537,462 |
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$ |
2,485,680 |
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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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|
2019 |
|
|
2018 |
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2019 |
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|
2018 |
|
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Contracts
purchased |
|
|
$ |
262.11 |
|
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$ |
225.24 |
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$ |
755.29 |
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$ |
650.58 |
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Contracts
securitized |
|
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|
244.12 |
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|
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|
239.87 |
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|
739.12 |
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|
638.45 |
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Total
portfolio balance |
|
|
$ |
2,412.64 |
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|
$ |
2,342.89 |
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|
$ |
2,412.64 |
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|
|
$ |
2,342.89 |
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|
Average
portfolio balance |
|
|
|
2,409.10 |
|
|
|
|
2,334.90 |
|
|
|
|
2,400.08 |
|
|
|
|
2,332.26 |
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance
for finance credit losses as % of fin. receivables |
|
|
|
1.25 |
% |
|
|
|
4.86 |
% |
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
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|
Aggregate
allowance as % of fin. receivables (1) |
|
|
|
3.83 |
% |
|
|
|
6.11 |
% |
|
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|
|
|
|
|
|
|
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|
|
|
|
|
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|
Delinquencies |
|
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|
31+
Days |
|
|
|
13.64 |
% |
|
|
|
10.13 |
% |
|
|
|
|
|
|
|
Repossession Inventory |
|
|
|
2.10 |
% |
|
|
|
1.45 |
% |
|
|
|
|
|
|
|
Total
Delinquencies and Repo. Inventory |
|
|
|
15.74 |
% |
|
|
|
11.58 |
% |
|
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Annualized
net charge-offs as % of average portfolio |
|
|
|
8.07 |
% |
|
|
|
8.03 |
% |
|
|
|
7.96 |
% |
|
|
|
7.92 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recovery
rates (2) |
|
|
|
34.4 |
% |
|
|
|
34.8 |
% |
|
|
|
34.0 |
% |
|
|
|
34.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the |
|
For the |
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|
|
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 losses |
|
|
|
(19.87 |
) |
-3.3 |
% |
|
|
(31.96 |
) |
-5.5 |
% |
|
|
(64.32 |
) |
-3.6 |
% |
|
|
(108.00 |
) |
-6.2 |
% |
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 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
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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 portfolio balance. Percentages may not
add due to rounding. |
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Consumer Portfolio Servi... (NASDAQ:CPSS)
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From Jul 2024 to Aug 2024
Consumer Portfolio Servi... (NASDAQ:CPSS)
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From Aug 2023 to Aug 2024