EX-99.1 2 cps_ex9901.htm PRESS RELEASE

Exhibit 99.1

 

    NEWS RELEASE

 

 

 

CPS ANNOUNCES SECOND QUARTER 2018 EARNINGS

 

§Pretax income of $4.7 million
§Net income of $3.2 million, or $0.13 per diluted share
§New contract purchases of $215 million
§Residual interest securitization raises $40.0 million

 

LAS VEGAS, NV, July 24, 2018 (GlobeNewswire) -- 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 second quarter ended June 30, 2018. This compares to net income of $4.6 million, or $0.17 per diluted share, in the second quarter of 2017.

 

Revenues for the second quarter of 2018 were $99.4 million, a decrease of $10.7 million, or 9.7%, compared to $110.1 million for the second quarter of 2017. Total operating expenses for the second quarter of 2018 were $94.7 million compared to $102.1 million for the 2017 period. Pretax income for the second quarter of 2018 was $4.7 million compared to pretax income of $8.0 million in the second quarter of 2017, a decrease of 41.5%.

 

For the six months ended June 30, 2018 total revenues were $202.9 million compared to $217.7 million for the six months ended June 30, 2017, a decrease of approximately $14.7 million, or 6.8%. Total expenses for the six months ended June 30, 2018 were $193.7 million, a decrease of $8.2 million, or 4.1%, compared to $201.9 million for the six months ended June 30, 2017. Pretax income for the six months ended June 30, 2018 was $9.2 million, compared to $15.7 million for the six months ended June 30, 2017. Net income for the six months ended June 30, 2018 was $6.3 million compared to $9.1 million for the six months ended June 30, 2017.

 

During the second quarter of 2018, CPS purchased $214.7 million of new contracts compared to $210.6 million during the first quarter of 2018 and $233.9 million during the second quarter of 2017. The Company's receivables totaled $2.329 billion as of June 30, 2018, a decrease from $2.332 billion as of March 31, 2018 and $2.343 billion as of June 30, 2017.

 

Annualized net charge-offs for the second quarter of 2018 were 7.58% of the average portfolio as compared to 7.62% for the second quarter of 2017. Delinquencies greater than 30 days (including repossession inventory) were 10.07% of the total portfolio as of June 30, 2018, as compared to 9.64% as of June 30, 2017.

 

“We are pleased to record our 27th consecutive quarter of positive pre-tax earnings,” said Charles E. Bradley, Jr., Chairman and Chief Executive Officer. “Our quarterly asset-backed securities transactions continue to be well received and in May 2018 we also securitized our residual interests in 17 existing securitizations to raise $40 million in additional capital.”

 

 

 

 

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Conference Call

 

CPS announced that it will hold a conference call on Wednesday, July 25, 2018, at 2:00 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 3392867.

 

A replay of the conference call will be available between July 25, 2018 and August 1, 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 3392867. 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 Officer

844 878-2777

 

 

 

 

 

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Consumer Portfolio Services, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

                           

 

   Three months ended   Six months ended 
   June 30,   June 30, 
   2018   2017   2018   2017 
Revenues:                
Interest income  $97,012   $107,485   $197,918   $212,060 
Other income   2,350    2,587    5,008    5,610 
    99,362    110,072    202,926    217,670 
Expenses:                    
Employee costs   19,842    17,572    40,483    35,352 
General and administrative   7,450    6,819    14,946    13,741 
Interest   25,187    23,236    49,249    45,324 
Provision for credit losses   35,531    48,550    76,038    95,717 
Other expenses   6,698    5,943    12,997    11,792 
    94,708    102,120    193,713    201,926 
Income before income taxes   4,654    7,952    9,213    15,744 
Income tax expense   1,489    3,380    2,901    6,692 
      Net income  $3,165   $4,572   $6,312   $9,052 
                     
Earnings per share:                    
     Basic  $0.15   $0.20   $0.30   $0.39 
     Diluted  $0.13   $0.17   $0.25   $0.32 
                     
Number of shares used in computing earnings per share:                    
     Basic   21,178    23,076    21,375    23,296 
     Diluted   25,123    27,602    25,393    28,024 

 

 

 

 

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Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)

                           

 

   June 30,   December 31, 
   2018   2017 
Assets:          
Cash and cash equivalents  $17,435   $12,731 
Restricted cash and equivalents   119,940    111,965 
Total cash and cash equivalents   137,375    124,696 
           
Finance receivables   1,887,530    2,304,984 
Allowance for finance credit losses   (94,376)   (109,187)
Finance receivables, net   1,793,154    2,195,797 
           
Finance receivables measured at fair value   412,895     
Deferred tax assets, net   31,430    32,446 
Other assets   65,816    71,902 
   $2,440,670   $2,424,841 
           
Liabilities and Shareholders' Equity:          
Accounts payable and accrued expenses  $27,313   $28,715 
Warehouse lines of credit   137,930    112,408 
Residual interest financing   39,269     
Securitization trust debt   2,030,705    2,083,215 
Subordinated renewable notes   15,831    16,566 
    2,251,048    2,240,904 
           
Shareholders' equity   189,622    183,937 
   $2,440,670   $2,424,841 

 

 

 

 

 

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Operating and Performance Data ($ in millions)                      

 

   At and for the   At and for the 
   Three months ended   Six months ended 
   June 30,   June 30, 
   2018   2017   2018   2017 
                 
Contracts purchased  $214.74   $233.90   $425.34   $463.55 
Contracts securitized   205.00    230.00    398.58    440.00 
                     
Total portfolio balance  $2,329.18   $2,343.30   $2,329.18   $2,343.30 
Average portfolio balance   2,330.29    2,340.23    2,330.94    2,326.02 
                     
Allowance for finance credit losses as % of fin. receivables   5.00%    4.64%           
                     
Aggregate allowance as % of fin. receivables (1)   6.16%    5.56%           
                     
Delinquencies                    
31+ Days   8.60%    8.30%           
Repossession Inventory   1.47%    1.34%           
Total Delinquencies and Repo. Inventory   10.07%    9.64%           
                     
Annualized net charge-offs as % of average portfolio   7.58%    7.62%    7.87%    7.76% 
                     
Recovery rates (2)   34.9%    35.6%    34.4%    35.4% 

 

 

 

   For the   For the 
   Three months ended   Six months ended 
   June 30,   June 30, 
   2018   2017   2018   2017 
   $ (3)   %(4)   $ (3)   %(4)   $ (3)   %(4)   $ (3)   %(4) 
Interest income  $97.01    16.7%   $107.49    18.4%   $197.92    17.0%   $212.06    18.2% 
Servicing fees and other income   2.35    0.4%    2.59    0.4%    5.01    0.4%    5.61    0.5% 
Interest expense   (25.19)   -4.3%    (23.24)   -4.0%    (49.25)   -4.2%    (45.32)   -3.9% 
Net interest margin   74.18    12.7%    86.84    14.8%    153.68    13.2%    172.35    14.8% 
Provision for credit losses   (35.53)   -6.1%    (48.55)   -8.3%    (76.04)   -6.5%    (95.72)   -8.2% 
Risk adjusted margin   38.64    6.6%    38.29    6.5%    77.64    6.7%    76.63    6.6% 
Core operating expenses   (33.99)   -5.8%    (30.33)   -5.2%    (68.43)   -5.9%    (60.89)   -5.2% 
Pre-tax income  $4.65    0.8%   $7.95    1.4%   $9.21    0.8%   $15.74    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.

(3)  Numbers may not add due to rounding.  

(4)  Annualized percentage of the average portfolio balance.  Percentages may not add due to rounding.

 

 

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