Press Release Details
IRVINE, CA, May 14, 2010 (MARKETWIRE via COMTEX) --Consumer Portfolio Services, Inc. (NASDAQ: CPSS) ("CPS" or the "Company") today announced operating results for its first quarter ended March 31, 2010.
Operating results for the first quarter of 2010 included revenues of $44.6 million, a decrease of approximately $21.5 million, or 32.5%, compared to $66.1 million for the first quarter of 2009. Total operating expenses for the first quarter of 2010 were $50.4 million, a decrease of $16.2 million, or 24.3%, as compared to $66.6 million for the 2009 period. Pretax loss for the first quarter of 2010 was $(5.8) million compared to pretax loss of $(0.5) million in the first quarter of 2009. Net loss for the first quarter of 2010 was $(5.8) million, or $(0.33) per diluted share, compared to net loss of $(0.5) million, or $(0.03) per diluted share, for the year-ago quarter.
During the first quarter of 2010, CPS purchased $17.4 million of contracts from dealers as compared to $6.1 million during the fourth quarter of 2009 and $1.1 million during the first quarter of 2009. The Company's managed receivables totaled $1,044.1 million as of March 31, 2010, a decrease of $444.3 million, or 29.9%, from $1,488.4 million as of March 31, 2009, as follows ($ in millions):
March 31, March 31,
2010 2009
--------- ---------
Owned by Consolidated Subsidiaries* $ 805.2 $ 1,314.9
Owned by Non-Consolidated Subsidiaries 120.7 173.4
As Third Party Servicer 118.2 0.1
--------- ---------
Total $ 1,044.1 $ 1,488.4
* Before $66.4 million and $107.5 million of allowance for credit losses,
deferred acquisition fees and repossessed vehicles for 2010 and 2009,
respectively.
Annualized net charge-offs for the first quarter of 2010 were 12.19% of the average owned portfolio as compared to 11.59% in 2009. Delinquencies greater than 30 days (including repossession inventory) were 5.94% of the total owned portfolio as of March 31, 2010, as compared to 6.73% as of March 31, 2009. The first quarter of 2010 represents the first time that year-over-year portfolio delinquency levels have improved since the Company's managed portfolio began to decrease in 2008.
"We continue to make progress in our recovery from the Great Recession," said Charles E. Bradley, Jr., Chairman and Chief Executive Officer. "We almost tripled our new contract purchases in the first quarter over the fourth quarter of 2009 while maintaining similar yields and credit metrics. And the improving economy has finally shown up in our asset performance statistics as delinquencies improved vs. the first quarter of last year. We would expect to see similar comparisons going forward for net charge-offs."
"As we have previously reported, we closed a second $50 million funding facility in the first quarter as the capital markets continue to thaw. In addition, the first insured securitization transaction in almost two years closed last month. This was the primary securitization structure that we used in prior years and it demonstrates that more funding options are becoming available in the marketplace."
Conference Call
CPS announced that it will hold a conference call on Wednesday, May 19, 2010, at 1:30 p.m. ET to discuss its quarterly operating results. Those wishing to participate by telephone may dial-in at 973-582-2717 approximately 10 minutes prior to the scheduled time.
A replay will be available between May 19, 2010 and May 26, 2010, beginning one hour after conclusion of the call, by dialing 800-642-1687 or 706-645-9291 for international participants, with conference identification number 75531893. A broadcast of the conference call will also be available live and for 30 days after the call via the Company's web site at www.consumerportfolio.com and at www.streetevents.com.
About Consumer Portfolio Services, Inc.
Consumer Portfolio Services, Inc. is a specialty finance company engaged in purchasing and servicing new and used retail automobile contracts originated primarily by franchised automobile dealerships and, to a lesser extent, by select independent dealers of used automobiles in the United States. We serve as an alternative source of financing for dealers, facilitating sales to sub-prime customers, who have limited credit history, low income or past credit problems and who otherwise might not be able to obtain financing from traditional sources.
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 future 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 or the effects of recent changes in bankruptcy law, 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 provision for credit losses may affect future performance.
Consumer Portfolio Services, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
Three months ended
March 31,
--------------------------
2010 2009
------------ ------------
Revenues:
Interest income $ 38,969 $ 61,179
Servicing fees 2,387 1,029
Other income 3,232 3,842
------------ ------------
44,588 66,050
------------ ------------
Expenses:
Employee costs 8,779 9,263
General and administrative 5,875 6,611
Interest 22,349 32,131
Provision for credit losses 11,716 16,089
Other expenses 1,687 2,465
------------ ------------
50,406 66,559
------------ ------------
Income (loss) before income taxes (5,818) (509)
Income taxes - -
------------ ------------
Net income (loss) $ (5,818) $ (509)
============ ============
Earnings (loss) per share:
Basic $ (0.33) $ (0.03)
Diluted (0.33) (0.03)
Number of shares used in computing earnings
(loss) per share:
Basic 17,837 19,005
Diluted 17,837 19,005
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
March 31, December 31,
2010 2009
------------ ------------
Cash $ 22,788 $ 12,433
Restricted cash 126,917 128,511
------------ ------------
Total Cash 149,705 140,944
Finance receivables 770,347 878,366
Allowance for finance credit losses (31,520) (38,274)
------------ ------------
Finance receivables, net 738,827 840,092
Residual interest in securitizations 4,593 4,316
Deferred tax assets, net 33,450 33,450
Other assets 38,419 49,459
------------ ------------
$ 964,994 $ 1,068,261
============ ============
Accounts payable and other liabilities $ 19,852 $ 17,906
Warehouse line of credit 17,580 4,932
Residual interest financing 52,910 56,930
Securitization trust debt 796,451 904,833
Senior secured debt, related party 26,395 26,118
Subordinated debt 22,526 21,965
------------ ------------
935,714 1,032,684
------------ ------------
Shareholders' equity 29,280 35,577
------------ ------------
$ 964,994 $ 1,068,261
============ ============
Operating and Performance Data ($ in thousands) At and for the
Three months ended
March 31,
--------------------------
2010 2009
------------ ------------
Contract purchases 17,410 1,095
Total managed portfolio 1,044,088 1,488,357
Average managed portfolio 1,094,311 1,548,464
Net interest margin (1) 16,620 29,048
Risk adjusted margin (2) 4,904 12,959
Core operating expenses (3) 16,341 18,339
Annualized % of average managed portfolio 5.97% 4.74%
Allowance for finance credit losses as % of
fin. receivables 4.09% 4.18%
Aggregate allowance as % of fin. receivables (4) 6.36% 6.37%
Delinquencies
31+ Days 2.61% 3.59%
Repossession Inventory 3.33% 3.14%
Total Delinquencies and Repossession Inventory 5.94% 6.73%
Annualized net charge-offs as % of average
owned portfolio 12.19% 11.59%
(1) Interest income less interest expense.
(2) Net interest margin less provision for credit losses.
(3) Total expenses less interest and provision for credit losses.
(4) Includes allowance for finance credit losses and allowance for
repossession inventory.
Investor Relations Contact
Robert E. Riedl
Chief Investment Officer
949-753-6800
SOURCE: Consumer Portfolio Services, Inc.