February 23, 2016

CPS Announces Fourth Quarter 2015 Earnings

  • Fourth quarter pretax income of $15.8 million
  • Fourth quarter net income of $9.0 million, or $0.29  per diluted share
  • Full year pretax income increased 18% to $61.4 million
  • Full year net income increased 18% to $34.7 million, or $1.10 per diluted share
  • New contract purchases of $269 million for the fourth quarter
  • Total managed portfolio increases to $2.03 billion from $1.94 billion at September 30, 2015


LAS VEGAS, NV, Feb. 23, 2016 (GLOBE NEWSWIRE) -- Consumer Portfolio Services, Inc. (Nasdaq:CPSS) ("CPS" or the "Company") today announced earnings of $9.0 million, or $0.29 per diluted share, for its fourth quarter ended December 31, 2015.  This compares to net income of $8.0 million, or $0.25 per diluted share, in the fourth quarter of 2014, representing a 16.0% increase in diluted earnings per share.

Revenues for the fourth quarter of 2015 were $95.3 million, an increase of $11.8 million, or 14.2%, compared to $83.5 million for the fourth quarter of 2014.  Total operating expenses for the fourth quarter of 2015 were $79.5 million, an increase of $10.4 million, or 15.1%, compared to $69.1 million for the 2014 period.  Pretax income for the fourth quarter of 2015 was $15.8 million compared to pretax income of $14.3 million in the fourth quarter of 2014, an increase of 10.0%.

For the year ended December 31, 2015 total revenues were $363.7 million compared to $300.3 million for the year ended December 31, 2014, an increase of approximately $63.4 million , or 21.1%.  Total expenses for the year ended December 31, 2015 were $302.3 million, an increase of $54.3 million, or 21.9%, compared to $248.0 million for the year ended December 31, 2014.  Pretax income for the year ended December 31, 2015 was $61.4 million, compared to $52.2 million for the year ended December 31, 2014.  Net income for the year ended December 31, 2015 was $34.7 million, an increase of 17.5%, compared to $29.5 million for the year ended December 31, 2014

During the fourth quarter of 2015, CPS purchased $269.2 million of new contracts compared to $287.5 million during the third quarter of 2015 and $264.4 million during the fourth quarter of 2014.  The Company's managed receivables totaled $2.031 billion as of December 31, 2015, an increase from $1.941 billion as of September 30, 2015 and $1.644 billion as of December 31, 2014.

Annualized net charge-offs for the fourth quarter of 2015 were 6.23% of the average owned portfolio as compared to 6.44% for the fourth quarter of 2014. Delinquencies greater than 30 days (including repossession inventory) were 9.53% of the total owned portfolio as of December 31, 2015, as compared to 7.18% as of December 31, 2014.

"We are pleased with our operating results for the fourth quarter and for the year 2015," said Charles E. Bradley, Jr., Chairman and Chief Executive Officer.  "Our managed portfolio is now in excess of $2 billion and we achieved our 17th consecutive quarter of increasing quarterly earnings.  In addition, during the fourth quarter we added a third $100 million revolving credit facility with Credit Suisse and Ares, bringing our total short term funding capacity to $300 million."

Conference Call

CPS announced that it will hold a conference call on Wednesday, February 24, 2016, 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.

A replay of the conference call will be available between February 24, 2016 and March 2, 2016, beginning two hours after conclusion of the call, by dialing 855 859-2056 or 404 537-3406 for international participants, with conference identification number 49943840.  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.


 

Consumer Portfolio Services, Inc. and Subsidiaries       
Condensed Consolidated Statements of Operations       
(In thousands, except per share data)       
(Unaudited)       
               
   Three months ended  Twelve months ended  
   December 31,  December 31,  
    2015    2014    2015    2014   
Revenues:               
Interest income  $ 92,069   $79,652   $349,912    $286,734   
Servicing fees   36    218    319     1,376   
Other income   3,203    3,597    13,419    12,146   
    95,308    83,467    363,650    300,256   
Expenses:              
Employee costs   16,671     14,732    59,556    50,129    
General and administrative   5,212     4,772    20,160    19,254    
Interest   16,036    12,833    57,745    50,395   
Provision for credit losses   36,085     31,433    142,618    108,228   
Other expenses   5,521    5,351    22,189    20,008   
    79,525    69,121    302,268    248,014   
Income before income taxes   15,783    14,346    61,382    52,242   
Income tax expense   6,816    6,336    26,701    22,726   
Net income  $8,967   $8,010   $34,681   $29,516   
               
Earnings per share:              
Basic  $0.35   $0.31   $1.34   $1.18   
Diluted  $0.29   $0.25   $1.10   $0.92   
               
                
Number of shares used in computing earnings per share:              
Basic   25,774    25,470    25,935    25,040   
Diluted   30,948    32,060    31,584    32,032   
                
               
Condensed Consolidated Balance Sheets       
(In thousands)       
(Unaudited)       
               
               
   December 31,  December 31,        
     2015    2014         
Assets:              
Cash and cash equivalents  $19,322   $17,859         
Restricted cash and equivalents   106,054    175,382         
Total cash and cash equivalents    125,376    193,241         
                
Finance receivables   1,985,093    1,595,956         
Allowance for finance credit losses   (75,603)   (61,460)        
Finance receivables, net   1,909,490    1,534,496         
               
Finance receivables measured at fair value   61    1,664         
Deferred tax assets, net   37,597    42,847         
Other assets   70,383    60,810         
   $2,142,907   $1,833,058          
               
Liabilities and Shareholders' Equity:              
Accounts payable and accrued expenses  $29,509   $21,660         
Warehouse lines of credit   196,461    56,839         
Residual interest financing   9,042    12,327          
Debt secured by receivables measured at fair value   --    1,250         
Securitization trust debt   1,731,598    1,598,496         
Subordinated renewable notes   15,138     15,233         
    1,981,748    1,705,805         
               
Shareholders' equity   161,159    127,253         
   $2,142,907   $1,833,058         
               
               
Operating and Performance Data ($ in millions) 
               
               
               
   At and for the  At and for the  
   Three months ended  Twelve months ended  
   December 31,  December 31,  
    2015    2014     2015    2014   
               
Contracts purchased  $269.20   $264.37   $1,060.54   $944.94   
Contracts securitized   102.10    269.93    880.33    901.07   
                
Total managed portfolio  $2,031.14   $1,643.92   $2,031.14   $1,643.92   
Average managed portfolio    2,000.10    1,605.04     1,847.94    1,422.87   
               
Allowance for finance credit losses as % of fin. receivables   3.81%   3.85%        
               
Aggregate allowance as % of fin. receivables (1)   5.06%   4.88%        
               
Delinquencies               
31+ Days   7.61%   5.46%         
Repossession Inventory   1.92%   1.72%        
Total Delinquencies and Repo. Inventory   9.53%   7.18%        
               
Annualized net charge-offs as % of average owned portfolio   6.23%   6.44%   6.42%   5.83%  
               
Recovery rates (2)   38.3%   42.7%   41.3%   46.0%  
                
   For the For the 
   Three months ended Twelve months ended 
   December 31, December 31, 
    2015   2014   2015   2014  
   $(3) % (4 ) $(3) % (4) $(3) % (4) $(3) % (4) 
Interest income  $92.07  18.4% $79.65  19.9% $349.91  18.9% $286.73  20.2% 
Servicing fees and other income    3.24  0.6%  3.82  1.0%  13.74  0.7%  13.52  1.0% 
Interest expense     (16.04) -3.2%    (12.83) -3.2%    (57.75 ) -3.1%    (50.40) -3.5% 
Net interest margin   79.27  15.9%  70.63  17.6%  305.91  16.6%  249.86  17.6% 
Provision for credit losses     (36.09) -7.2%    (31.43) -7.8%    (142.62) -7.7%    (108.23) -7.6% 
Risk adjusted margin   43.19  8.6%  39.20  9.8%  163.29  8.8%  141.63  10.0% 
Core operating expenses   (27.40) -5.5%  (24.86) -6.2%  (101.91) -5.5%  (89.39) -6.3% 
Pre-tax income  $15.78  3.2% $14.35  3.6% $61.38  3.3% $52.24  3.7% 
               
               
               
(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 managed portfolio.  Percentages may not add due to rounding.      
               

 

Investor Relations Contact



Jeffrey P. Fritz, Chief Financial Officer

844 878-2777

Source: Consumer Portfolio Services, Inc.

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