EX-99.1 2 cps_8kex9901.htm NEWS RELEASE RE EARNINGS

Exhibit 99.1

 

 

 

 NEWS RELEASE

 

CPS ANNOUNCES THIRD QUARTER 2019 EARNINGS

 

§Pretax income of $2.8 million
§Net income of $1.8 million, or $0.08 per diluted share
§New contract purchases of $262 million

 

LAS VEGAS, NV, October 29, 2019 (GlobeNewswire) -- 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.”

 

 

 

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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 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   Nine months ended 
   September 30,   September 30, 
   2019   2018   2019   2018 
Revenues:                
Interest income  $83,528   $93,617   $253,822   $291,535 
Other income   1,994    2,014    6,255    7,022 
    85,522    95,631    260,077    298,557 
Expenses:                    
Employee costs   20,251    18,806    59,030    59,288 
General and administrative   8,185    7,784    25,109    22,730 
Interest   27,940    25,808    82,933    75,057 
Provision for credit losses   19,874    31,959    64,319    107,997 
Other expenses   6,443    6,568    20,411    19,566 
    82,693    90,925    251,802    284,638 
Income before income taxes   2,829    4,706    8,275    13,919 
Income tax expense   991    1,508    2,898    4,409 
Net income  $1,838   $3,198   $5,377   $9,510 
                     
Earnings per share:                    
Basic  $0.08   $0.14   $0.24   $0.44 
Diluted  $0.08   $0.13   $0.22   $0.38 
                     
                     
                     
Number of shares used in computing earnings per share:                    
Basic   22,526    22,636    22,378    21,800 
Diluted   24,066    24,735    24,102    25,178 

 

 

 

 

 

 

 

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Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)

 

    September 30,    December 31, 
    2019    2018 
Assets:          
Cash and cash equivalents  $8,799   $12,787 
Restricted cash and equivalents   128,556    117,323 
Total cash and cash equivalents   137,355    130,110 
           
Finance receivables   1,022,391    1,522,085 
Allowance for finance credit losses   (12,740)   (67,376)
Finance receivables, net   1,009,651    1,454,709 
           
Finance receivables measured at fair value   1,313,205    821,066 
Deferred tax assets, net   16,125    19,188 
Other assets   61,126    60,607 
   $2,537,462   $2,485,680 
           
Liabilities and Shareholders' Equity:          
Accounts payable and accrued expenses  $55,431   $31,692 
Warehouse lines of credit   157,761    136,847 
Residual interest financing   39,385    39,106 
Securitization trust debt   2,066,458    2,063,627 
Subordinated renewable notes   15,529    17,290 
    2,334,564    2,288,562 
           
Shareholders' equity   202,898    197,118 
   $2,537,462   $2,485,680 

 

 

 

 

 

 

 

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Operating and Performance Data ($ in millions)

 

 

 

   At and for the   At and for the 
   Three months ended   Nine months ended 
   September 30,   September 30, 
   2019   2018   2019   2018 
                 
Contracts purchased  $262.11   $225.24   $755.29   $650.58 
Contracts securitized   244.12    239.87    739.12    638.45 
                     
Total portfolio balance  $2,412.64   $2,342.89   $2,412.64   $2,342.89 
Average portfolio balance   2,409.10    2,334.90    2,400.08    2,332.26 
                     
Allowance for finance credit losses as % of fin. receivables   1.25%    4.86%           
                     
Aggregate allowance as % of fin. receivables (1)   3.83%    6.11%           
                     
Delinquencies                    
31+ Days   13.64%    10.13%           
Repossession Inventory   2.10%    1.45%           
Total Delinquencies and Repo. Inventory   15.74%    11.58%           
                     
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% 

 

 

 

 

 

 

 

 

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   For the   For the 
   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% 

 

 

(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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