EX-99.1 2 cps_ex9901.htm NEWS RELEASE

Exhibit 99.1

 

NEWS RELEASE

 

CPS ANNOUNCES THIRD QUARTER 2022 EARNINGS

 

§Pretax income of $34.3 million, a 76% increase over the prior year period
§Net income of $25.4 million, an 85% increase over the $13.7 million in Q3 2021
§Diluted EPS of $0.95 compared to $0.52 in the prior year period
§New contract purchases of $468.2 million, a 43% increase over the prior year period

 

LAS VEGAS, NV, November 9, 2022 (GlobeNewswire) -- Consumer Portfolio Services, Inc. (Nasdaq: CPSS) (“CPS” or the “Company”) today announced earnings of $25.4 million, or $0.95 per diluted share, for its third quarter ended September 30, 2022. This compares to net income of $13.7 million, or $0.52 per diluted share, in the third quarter of 2021.

 

Revenues for the third quarter of 2022 were $90.3 million, compared to $68.6 million for the third quarter of 2021. Total operating expenses for the third quarter of 2022 were $56.0 million compared to $49.0 million for the 2021 period for an increase of $6.9 million, or 14.2%. Pretax income for the third quarter of 2022 was $34.3 million compared to pretax income of $19.5 million in the third quarter of 2021, an increase of $14.8 million.

 

For the nine months ended September 30, 2022 total revenues were $246.7 million compared to $198.4 million for the nine months ended September 30, 2021, an increase of approximately $48.2 million, or 24.3%. Total expenses for the nine months ended September 30, 2022 were $148.8 million, a decrease of $8.3 million, or 5.3%, compared to $157.1 million for the nine months ended September 30, 2021. Pretax income for the nine months ended September 30, 2022 was $97.9 million, compared to $41.4 million for the nine months ended September 30, 2021, an increase of $56.5 million. Net income for the nine months ended September 30, 2022 was $71.9 million compared to $28.6 million for the nine months ended September 30, 2021.

 

During the third quarter of 2022, CPS purchased $468.2 million of new contracts compared to $548.1 million during the second quarter of 2022 and $326.8 million during the third quarter of 2021. The Company's receivables totaled $2.687 billion as of September 30, 2022, an increase from $2.555 billion as of June 30, 2022 and $2.161 billion as of September 30, 2021.

 

Annualized net charge-offs for the third quarter of 2022 were 4.93% of the average portfolio as compared to 2.82% for the third quarter of 2021. Delinquencies greater than 30 days (including repossession inventory) were 10.85% of the total portfolio as of September 30, 2022, as compared to 9.44% as of September 30, 2021.

 

“Our third quarter results show a continuation of trends from the first half of the year,” said Charles E. Bradley, President and Chief Executive Officer. “Through three quarters, loan originations and pre-tax earnings have already surpassed any full year in the Company’s history.”

 

Conference Call

 

CPS announced that it will hold a conference call on Thursday, November 10, 2022 at 1:00 p.m. ET to discuss its third quarter 2022 operating results.

 

Those wishing to participate can pre-register for the conference call at the following link https://register.vevent.com/register/BI1c37e20cef8549cb8cb3cb345fa42915. Registered participants will receive an email containing conference call details for dial-in options. To avoid delays, we encourage participants to dial into the conference call fifteen minutes ahead of the schedule start time. A replay will be available beginning two hours after conclusion of the call for 12 months via the Company’s website at https://ir.consumerportfolio.com/investor-relations.

 

 

 1 

 

 

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 figures representing allowances for remaining expected lifetime credit losses, its estimates of fair value (most significantly for its receivables accounted for at fair value), its provision for credit losses, its entries offsetting the preceding, and figures derived from any of the preceding.  In each case, such figures are forward-looking statements because they are dependent on the Company’s estimates of losses to be incurred in the future. The accuracy of such estimates may be adversely affected by various factors, which include 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. Any or 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 losses to be incurred in the future may affect future performance.

 

Investor Relations Contact

 

Danny Bharwani, Chief Financial Officer

 

949-753-6811

 

 

 2 

 

 

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, 
   2022   2021   2022   2021 
Revenues:                
Interest income  $79,817   $67,018   $225,547   $198,551 
Mark to finance receivables measured at fair value   8,183    –    15,283    (4,417)
Other income   2,305    1,547    5,859    4,312 
    90,305    68,565    246,689    198,446 
Expenses:                    
Employee costs   20,671    18,170    63,414    57,777 
General and administrative   9,408    7,455    25,920    23,034 
Interest   23,483    18,334    58,654    58,260 
Provision for credit losses   (6,000)   (1,590)   (23,400)   (1,590)
Other expenses   8,399    6,649    24,213    19,599 
    55,961    49,018    148,801    157,080 
Income before income taxes   34,344    19,547    97,888    41,366 
Income tax expense   8,931    5,864    26,040    12,807 
Net income  $25,413   $13,683   $71,848   $28,559 
                     
Earnings per share:                    
Basic  $1.22   $0.59   $3.39   $1.25 
Diluted  $0.95   $0.52   $2.61   $1.12 
                     
Number of shares used in computing earnings per share                    
Basic   20,911    23,011    21,166    22,866 
Diluted   26,654    26,218    27,512    25,439 

 

 

 

 3 

 

 

Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)

 

   September 30,   December 31, 
   2022   2021 
Assets:        
Cash and cash equivalents  $12,944   $29,928 
Restricted cash and equivalents   159,762    146,620 
Finance receivables measured at fair value   2,343,253    1,749,098 
           
Finance receivables   117,686    232,390 
Allowance for finance credit losses   (27,996)   (56,206)
Finance receivables, net   89,690    176,184 
           
Deferred tax assets, net   14,570    19,575 
Other assets   30,305    38,173 
   $2,650,524   $2,159,578 
           
Liabilities and Shareholders' Equity:          
Accounts payable and accrued expenses  $55,982   $43,648 
Warehouse lines of credit   242,449    105,610 
Residual interest financing   49,560    53,682 
Securitization trust debt   2,057,100    1,759,972 
Subordinated renewable notes   27,249    26,459 
    2,432,340    1,989,371 
           
Shareholders' equity   218,184    170,207 
   $2,650,524   $2,159,578 

 

 

 4 

 

 

Operating and Performance Data ($ in millions)

 

   At and for the   At and for the 
   Three months ended   Nine months ended 
   September 30,   September 30, 
   2022   2021   2022   2021 
                 
Contracts purchased  $468.21   $326.85   $1,426.30   $818.34 
Contracts securitized   440.00    300.00    1,200.00    785.00 
                     
Total portfolio balance (5)  $2,687.31   $2,161.50   $2,687.31   $2,161.50 
Average portfolio balance (5)   2,648.21    2,142.96    2,463.88    2,133.43 
                     
Allowance for finance credit losses as % of fin. receivables   23.79%    24.32%           
                     
Delinquencies (5)                    
31+ Days   9.72%    8.44%           
Repossession Inventory   1.13%    1.00%           
Total Delinquencies and Repo. Inventory   10.85%    9.44%           
                     
Annualized Net Charge-offs as % of Average Portfolio (5)                    
Legacy portfolio   5.82%    3.75%    4.40%    7.06% 
Fair Value portfolio   4.90%    2.67%    4.03%    3.16% 
Total portfolio   4.93%    2.82%    4.04%    3.85% 
                     
                     
Recovery rates (2)   51.1%    56.5%    55.9%    52.2% 

 

 

   For the   For the 
   Three months ended   Nine months ended 
   September 30,   September 30, 
   2022   2021   2022   2021 
   $(3)   %(4)   $(3)   %(4)   $(3)   %(4)   $(3)   %(4) 
Interest income  $79.82    12.1%   $67.02    12.5%   $225.55    12.2%   $198.55    12.4% 
Mark to finance receivables measured at fair value   8.18    1.2%    –    0.0%    15.28    0.8%    (4.42)   -0.3% 
Other income   2.31    0.3%    1.55    0.3%    5.86    0.3%    4.31    0.3% 
Interest expense   (23.48)   -3.5%    (18.33)   -3.4%    (58.65)   -3.2%    (58.26)   -3.6% 
Net interest margin   66.82    10.1%    50.23    9.4%    188.04    10.2%    140.19    8.8% 
Provision for credit losses   6.00    0.9%    1.59    0.3%    23.40    1.3%    1.59    0.1% 
Risk adjusted margin   72.82    11.0%    51.82    9.7%    211.44    11.4%    141.78    8.9% 
Core operating expenses   (38.48)   -5.8%    (32.27)   -6.0%    (113.55)   -6.1%    (100.41)   -6.3% 
Pre-tax income  $34.34    5.2%   $19.55    3.6%   $97.89    5.3%   $41.37    2.6% 

 

(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.

(5)  Excludes third party portfolios.

 

 

 

 5