Press Release Details


<< Back


Oct 19, 2020

CPS Announces Third Quarter 2020 Earnings
  • Pretax income of $5.9 million
  • Net income of $3.8 million, or $0.16 per diluted share
  • New contract purchases of $174 million

LAS VEGAS, NV, Oct. 19, 2020 (GLOBE NEWSWIRE) -- Consumer Portfolio Services, Inc. (Nasdaq: CPSS) (“CPS” or the “Company”) today announced earnings of $3.8 million, or $0.16 per diluted share, for its third quarter ended September 30, 2020. This compares to net income of $1.8 million, or $0.08 per diluted share, in the third quarter of 2019.

Revenues for the third quarter of 2020 were $70.7 million, a decrease of $14.9 million, or 17.4%, compared to $85.5 million for the third quarter of 2019. Total operating expenses for the third quarter of 2020 were $64.8 million compared to $82.7 million for the 2019 period for a decrease of $17.9 million, or 21.7%.   Pretax income for the third quarter of 2020 was $5.9 million compared to pretax income of $2.8 million in the third quarter of 2019, an increase of 108.2%.

For the nine months ended September 30, 2020 total revenues were $208.7 million compared to $260.1 million for the nine months ended September 30, 2019, a decrease of approximately $51.3 million, or 19.7%. Total expenses for the nine months ended September 30, 2020 were $195.1 million, a decrease of $56.7 million, or 22.5%, compared to $251.8 million for the nine months ended September 30, 2019. Pretax income for the nine months ended September 30, 2020 was $13.6 million, compared to $8.3 million for the nine months ended September 30, 2019. Net income for the nine months ended September 30, 2020 was $17.5 million compared to $5.4 million for the nine months ended September 30, 2019. Results for the nine months ended September 30, 2020 include a net tax benefit of $8.8 million related to the revaluation of the Company’s net operating losses and other tax adjustments. Without this tax benefit, net income and net income per diluted share for the nine months ended September 30, 2020 would have been $8.7 million and $0.37 per share, respectively.  

During the third quarter of 2020, CPS purchased $174.0 million of new contracts compared to $135.9 million during the second quarter of 2020 and $262.1 million during the third quarter of 2019. The Company's receivables totaled $2.250 billion as of September 30, 2020, a decrease from $2.326 billion as of June 30, 2020 and $2.413 billion as of September 30, 2019.

Annualized net charge-offs for the third quarter of 2020 were 6.39% of the average portfolio as compared to 8.07% for the third quarter of 2019. Delinquencies greater than 30 days (including repossession inventory) were 10.29% of the total portfolio as of September 30, 2020, as compared to 15.74% as of September 30, 2019.

Conference Call

CPS announced that it will hold a conference call on Tuesday, October 20, 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 2265436.

A replay of the conference call will be available between October 20 and October 27, beginning two hours after conclusion of the call, by dialing 855 859-2056 or 404 537-3406 for international participants, with conference identification number 2265436. 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 figures representing allowances for remaining expected lifetime credit losses, its pandemic-related markdown of carrying value for the portion of its portfolio accounted for at fair value, its pandemic-related charge to the provision for credit losses for the its legacy portfolio, 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 (in addition to risks relating to the COVID-19 pandemic and 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. The accuracy of such estimates may also be affected by the effects of the COVID-19 pandemic and of governmental responses to said pandemic, which have included prohibitions on certain means of enforcement of receivables, and may include additional restrictions, as yet unknown, in the future. 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

Jeffrey P. Fritz, Chief Financial Officer
844 878-2777


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,  
      2020     2019     2020     2019  
Revenues:                          
Interest income     $ 72,582       $ 83,528       $ 227,271       $ 253,822    
Mark to finance receivables measured at fair value     (3,152 )       -         (23,051 )       -    
Other income       1,239         1,994         4,508         6,255    
        70,669         85,522         208,728         260,077    
Expenses:                          
Employee costs       19,155         20,251         60,826         59,030    
General and administrative       7,846         8,185         24,352         25,109    
Interest       24,901         27,940         78,377         82,933    
Provision for credit losses       7,400         19,874         14,113         64,319    
Other expenses       5,478         6,443         17,416         20,411    
        64,780         82,693         195,084         251,802    
Income before income taxes       5,889         2,829         13,644         8,275    
Income tax expense       2,121         991         (3,888 )       2,898    
Net income     $ 3,768       $ 1,838       $ 17,532       $ 5,377    
                           
Earnings per share:                          
Basic     $ 0.17       $ 0.08       $ 0.77       $ 0.24    
Diluted     $ 0.16       $ 0.08       $ 0.74       $ 0.22    
                           
                           
Number of shares used in computing earnings                          
per share:                          
Basic       22,666         22,526         22,630         22,378    
Diluted       23,908         24,066         23,825         24,102    
                           
                           
Condensed Consolidated Balance Sheets            
(In thousands)            
(Unaudited)            
                           
                           
      September 30,       December 31,                
       2020       2019               
Assets:                          
Cash and cash equivalents     $ 11,253       $ 5,295                
Restricted cash and equivalents       200,912         135,537                
Finance receivables measured at fair value       1,540,955         1,444,038                
                           
Finance receivables       577,281         897,530                
Allowance for finance credit losses       (94,218 )       (11,640 )              
Finance receivables, net       483,063         885,890                
                           
Deferred tax assets, net       31,026         15,480                
Other assets       42,023         53,009                
      $ 2,309,232       $ 2,539,249                
                           
Liabilities and Shareholders' Equity:                          
Accounts payable and accrued expenses     $ 49,056       $ 47,077                
Warehouse lines of credit       31,201         134,791                
Residual interest financing       32,000         39,478                
Securitization trust debt       2,048,089         2,097,728                
Subordinated renewable notes       20,242         17,534                
        2,180,588         2,336,608                
                           
Shareholders' equity       128,644         202,641                
      $ 2,309,232       $ 2,539,249                
                           
                           
Operating and Performance Data ($ in millions)                          
                     
      At and for the     At and for the  
      Three months ended     Nine months ended  
      September 30,     September 30,  
        2020         2019         2020         2019    
                           
Contracts purchased     $ 174.02       $ 262.11       $ 575.88       $ 755.29    
Contracts securitized       260.00         244.12         741.87         739.12    
                           
Total portfolio balance     $ 2,250.39       $ 2,412.64       $ 2,250.39       $ 2,412.64    
Average portfolio balance       2,270.55         2,409.10         2,353.59         2,400.08    
                           
Allowance for finance credit losses as % of fin. receivables       16.32 %       1.25 %              
                           
Aggregate allowance as % of fin. receivables (1)       18.02 %       3.83 %              
                           
Delinquencies                          
31+ Days       8.85 %       13.64 %              
Repossession Inventory       1.44 %       2.10 %              
Total Delinquencies and Repo. Inventory       10.29 %       15.74 %              
                           
Annualized net charge-offs as % of average portfolio                          
Legacy portfolio       14.09 %       12.97 %       12.20 %       12.19 %  
Fair value portfolio       3.46 %       3.93 %       4.54 %       3.21 %  
Total portfolio       6.39 %       8.07 %       6.93 %       7.96 %  
                           
Recovery rates (2)       45.1 %       34.4 %       37.8 %       34.0 %  
                           
      For the   For the
      Three months ended   Nine months ended
      September 30,   September 30,
        2020      2019      2020      2019 
        $ (3)   % (4)     $ (3)   % (4)     $ (3)   % (4)     $ (3)   % (4)
Interest income     $ 72.58   12.8 %   $ 83.53   13.9 %   $ 227.27   12.9 %   $ 253.82   14.1 %
Mark to finance receivables measured at fair value     (3.15 ) -0.6 %     -   0.0 %     (23.05 ) -1.3 %     -   0.0 %
Servicing fees and other income       1.24   0.2 %     1.99   0.3 %     4.51   0.3 %     6.26   0.3 %
Interest expense       (24.90 ) -4.4 %     (27.94 ) -4.6 %     (78.38 ) -4.4 %     (82.93 ) -4.6 %
Net interest margin       45.77   8.1 %     57.58   9.6 %     130.35   7.4 %     177.14   9.8 %
Provision for credit losses       (7.40 ) -1.3 %     (19.87 ) -3.3 %     (14.11 ) -0.8 %     (64.32 ) -3.6 %
Risk adjusted margin       38.37   6.8 %     37.71   6.3 %     116.24   6.6 %     112.83   6.3 %
Core operating expenses       (32.48 ) -5.7 %     (34.88 ) -5.8 %     (102.59 ) -5.8 %     (104.55 ) -5.8 %
Pre-tax income     $ 5.89   1.0 %   $ 2.83   0.5 %   $ 13.64   0.8 %   $ 8.28   0.5 %
                           
                           
                           
(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.    
                           



Clipboard01.jpg

Source: Consumer Portfolio Services, Inc.