CPS Announces Third Quarter 2018 Earnings
October 17 2018 - 4:30PM
Consumer Portfolio Services, Inc. (Nasdaq: CPSS) (“CPS” or the
“Company”) today announced earnings of $3.2 million, or $0.13 per
diluted share, for its third quarter ended September 30, 2018. This
compares to net income of $4.7 million, or $0.17 per diluted share,
in the third quarter of 2017.
Revenues for the third quarter of 2018 were
$95.6 million, a decrease of $13.9 million, or 12.7%, compared to
$109.5 million for the third quarter of 2017. Total operating
expenses for the third quarter of 2018 were $90.9 million compared
to $101.4 million for the 2017 period. Pretax income for the
third quarter of 2018 was $4.7 million compared to pretax income of
$8.1 million in the third quarter of 2017, a decrease of 42.0%.
For the nine months ended September 30, 2018
total revenues were $298.6 million compared to $327.2 million for
the nine months ended September 30, 2017, a decrease of
approximately $28.6 million, or 8.7%. Total expenses for the
nine months ended September 30, 2018 were $284.6 million, a
decrease of $18.7 million, or 6.2%, compared to $303.3 million for
the nine months ended September 30, 2017. Pretax income for
the nine months ended September 30, 2018 was $13.9 million,
compared to $23.9 million for the nine months ended September 30,
2017. Net income for the nine months ended September 30, 2018
was $9.5 million compared to $13.7 million for the nine months
ended September 30, 2017.
During the third quarter of 2018, CPS purchased
$225.2 million of new contracts compared to $214.7 million during
the second quarter of 2018 and $204.7 million during the third
quarter of 2017. The Company's receivables totaled $2.343
billion as of September 30, 2018, an increase from $2.329 billion
as of June 30, 2018 and a decrease from $2.346 billion as of
September 30, 2017.
Annualized net charge-offs for the third quarter
of 2018 were 8.03% of the average portfolio as compared to 7.96%
for the third quarter of 2017. Delinquencies greater than 30
days (including repossession inventory) were 11.58% of the total
portfolio as of September 30, 2018, as compared to 10.27% as of
September 30, 2017.
We are pleased to record our 28th consecutive
quarter of pre-tax earnings,” said Charles E. Bradley, Jr.
“In addition, in July we priced our third quarter securitization at
the second-tightest spreads over the benchmarks since 2011,
indicating continued high demand for our securitization bonds.”
Conference
Call
CPS announced that it will hold a conference
call on Thursday, October 18, 2018, 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 7899309.
A replay of the conference call will be available between
October 18, 2018 and October 25, 2018, beginning two hours after
conclusion of the call, by dialing 855 859-2056 or 404 537-3406 for
international participants, with conference identification number
7899309. 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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2018 |
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2017 |
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2018 |
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2017 |
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Revenues: |
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Interest income |
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$ |
93,617 |
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$ |
107,014 |
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$ |
291,535 |
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$ |
319,074 |
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Other income |
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2,014 |
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2,474 |
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7,022 |
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8,084 |
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95,631 |
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109,488 |
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298,557 |
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327,158 |
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Expenses: |
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Employee costs |
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18,806 |
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18,455 |
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59,288 |
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53,807 |
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General and
administrative |
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7,784 |
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6,355 |
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22,730 |
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20,096 |
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Interest |
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25,808 |
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23,317 |
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75,057 |
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68,641 |
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Provision for credit
losses |
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31,959 |
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47,336 |
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107,997 |
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143,053 |
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Other expenses |
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6,568 |
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5,916 |
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19,566 |
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17,707 |
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90,925 |
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101,379 |
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284,638 |
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303,304 |
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Income before income
taxes |
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4,706 |
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8,109 |
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13,919 |
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23,854 |
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Income tax expense |
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1,508 |
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3,446 |
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4,409 |
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10,138 |
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Net
income |
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$ |
3,198 |
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$ |
4,663 |
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$ |
9,510 |
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$ |
13,716 |
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Earnings per
share: |
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Basic |
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$ |
0.14 |
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$ |
0.21 |
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$ |
0.44 |
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$ |
0.60 |
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Diluted |
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$ |
0.13 |
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$ |
0.17 |
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$ |
0.38 |
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$ |
0.50 |
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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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22,636 |
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22,473 |
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21,800 |
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23,019 |
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Diluted |
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24,735 |
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26,779 |
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25,178 |
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27,606 |
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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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2018 |
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2017 |
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Assets: |
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Cash and
cash equivalents |
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$ |
10,537 |
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$ |
12,731 |
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Restricted cash and equivalents |
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110,473 |
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111,965 |
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Total
cash and cash equivalents |
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121,010 |
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124,696 |
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Finance
receivables |
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1,697,841 |
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2,304,984 |
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Allowance for finance credit losses |
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(82,472 |
) |
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(109,187 |
) |
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Finance
receivables, net |
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1,615,369 |
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2,195,797 |
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Finance
receivables measured at fair value |
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614,807 |
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- |
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Deferred
tax assets, net |
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28,686 |
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32,446 |
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Other
assets |
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63,698 |
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71,902 |
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$ |
2,443,570 |
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$ |
2,424,841 |
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Liabilities and
Shareholders' Equity: |
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Accounts payable and
accrued expenses |
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$ |
33,324 |
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$ |
28,715 |
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Warehouse lines of
credit |
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|
127,695 |
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|
112,408 |
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Residual interest
financing |
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39,013 |
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- |
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Securitization trust
debt |
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2,034,281 |
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2,083,215 |
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Subordinated renewable
notes |
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16,948 |
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16,566 |
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2,251,261 |
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2,240,904 |
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Shareholders'
equity |
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|
192,309 |
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|
183,937 |
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$ |
2,443,570 |
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$ |
2,424,841 |
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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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|
2018 |
|
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2017 |
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2018 |
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2017 |
|
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Contracts
purchased |
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$ |
225.24 |
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$ |
204.74 |
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$ |
650.58 |
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$ |
668.28 |
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Contracts
securitized |
|
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|
239.87 |
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|
|
|
230.00 |
|
|
|
|
638.45 |
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|
|
|
670.00 |
|
|
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|
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|
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Total portfolio
balance |
|
|
$ |
2,342.89 |
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|
$ |
2,346.00 |
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$ |
2,342.89 |
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|
$ |
2,346.00 |
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|
Average portfolio balance |
|
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|
2,334.90 |
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|
|
|
2,344.96 |
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|
|
|
2,332.26 |
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|
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|
2,332.33 |
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|
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|
|
|
|
|
|
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Allowance for finance credit losses as % of fin. receivables |
|
|
|
4.86 |
% |
|
|
|
4.69 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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Aggregate allowance as % of fin. receivables (1) |
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|
|
6.11 |
% |
|
|
|
5.59 |
% |
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
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Delinquencies |
|
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|
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|
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31+
Days |
|
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|
10.13 |
% |
|
|
|
8.90 |
% |
|
|
|
|
|
|
|
Repossession Inventory |
|
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|
1.45 |
% |
|
|
|
1.37 |
% |
|
|
|
|
|
|
|
Total Delinquencies and Repo. Inventory |
|
|
|
11.58 |
% |
|
|
|
10.27 |
% |
|
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|
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|
|
|
|
|
|
|
|
|
|
|
|
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|
Annualized net charge-offs as % of average portfolio |
|
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|
8.03 |
% |
|
|
|
7.96 |
% |
|
|
|
7.92 |
% |
|
|
|
7.83 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recovery
rates (2) |
|
|
|
34.8 |
% |
|
|
|
34.6 |
% |
|
|
|
34.5 |
% |
|
|
|
35.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the |
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For the |
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|
Three months ended |
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Nine months ended |
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|
September 30, |
|
September 30, |
|
|
|
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
|
|
$ (3) |
|
% (4) |
|
|
$ (3) |
|
% (4) |
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|
$ (3) |
|
% (4) |
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$ (3) |
|
% (4) |
Interest income |
|
|
$ |
93.62 |
|
16.0 |
% |
|
$ |
107.01 |
|
18.3 |
% |
|
$ |
291.54 |
|
16.7 |
% |
|
$ |
319.07 |
|
18.2 |
% |
Servicing fees and
other income |
|
|
|
2.01 |
|
0.3 |
% |
|
|
2.47 |
|
0.4 |
% |
|
|
7.02 |
|
0.4 |
% |
|
|
8.08 |
|
0.5 |
% |
Interest expense |
|
|
|
(25.81 |
) |
-4.4 |
% |
|
|
(23.32 |
) |
-4.0 |
% |
|
|
(75.06 |
) |
-4.3 |
% |
|
|
(68.64 |
) |
-3.9 |
% |
Net interest
margin |
|
|
|
69.82 |
|
12.0 |
% |
|
|
86.17 |
|
14.7 |
% |
|
|
223.50 |
|
12.8 |
% |
|
|
258.52 |
|
14.8 |
% |
Provision for credit
losses |
|
|
|
(31.96 |
) |
-5.5 |
% |
|
|
(47.34 |
) |
-8.1 |
% |
|
|
(108.00 |
) |
-6.2 |
% |
|
|
(143.05 |
) |
-8.2 |
% |
Risk adjusted
margin |
|
|
|
37.86 |
|
6.5 |
% |
|
|
38.84 |
|
6.6 |
% |
|
|
115.50 |
|
6.6 |
% |
|
|
115.46 |
|
6.6 |
% |
Core operating
expenses |
|
|
|
(33.16 |
) |
-5.7 |
% |
|
|
(30.73 |
) |
-5.2 |
% |
|
|
(101.58 |
) |
-5.8 |
% |
|
|
(91.61 |
) |
-5.2 |
% |
Pre-tax income |
|
|
$ |
4.71 |
|
0.8 |
% |
|
$ |
8.11 |
|
1.4 |
% |
|
$ |
13.92 |
|
0.8 |
% |
|
$ |
23.85 |
|
1.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
(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. |
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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 Mar 2024 to Apr 2024
Consumer Portfolio Servi... (NASDAQ:CPSS)
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From Apr 2023 to Apr 2024