SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON
DC 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date of
Report (Date of earliest event reported) May 19, 2008
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CONSUMER
PORTFOLIO SERVICES, INC.
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(Exact
Name of Registrant as Specified in
Charter)
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CALIFORNIA
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0-51027
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33-0459135
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(State
or Other Jurisdiction
of
Incorporation)
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(Commission
File
Number)
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(IRS
Employer
Identification
No.)
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16355
Laguna Canyon Road, Irvine, CA 92618
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(Address
of Principal Executive Offices) (Zip
Code)
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Registrant's
telephone number, including area code (949) 753-6800
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Not
Applicable
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(Former
name or former address, if changed since last
report)
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Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
ITEM
7.01 REGULATION FD DISCLOSURE
CPS is
today making available one presentation consisting of 23 slides. A copy is
attached as an exhibit. Although the exhibit is an update of a
similar presentation made available on November 13, 2007 (as an exhibit to a
current report on Form 8-K). CPS is not undertaking to update
further any information contained in this presentation.
The
information furnished in this report shall not be deemed “filed” for purposes of
Section 18 of the Securities Act of 1933, as amended.
ITEM
9.01. FINANCIAL STATEMENTS AND EXHIBITS.
Neither
financial statements nor pro forma financial information are filed with this
report.
One
exhibit is attached:
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Exhibit
Number
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Description
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99.1
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Company
Summary
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
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CONSUMER
PORTFOLIO SERVICES, INC.
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Dated:
May 19, 2008
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By:
/s/ Charles E. Bradley,
Jr.
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Charles
E. Bradley, Jr.
President
and chief executive officer
Signing
on behalf of the registrant
and
as principal executive officer
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EXHIBIT
INDEX
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Exhibit
Number
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Description
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99.1
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Company
Summary.
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Exhibit 99.1
Investor Presentation As of March 31, 2008
Specialty finance company Irvine,
California headquarters and focused on the sub-prime auto market three
strategically located servicing branches in Virginia, Florida and Illinois
Established in 1991; IPO in 1992Approximately 933 employees Through
March 31, 2008, approximately $8.5 billion in contract purchases from
autocontract purchases from auto dealers As of March 31, 2008, managed portfolio
of approximately $2.1 billion billion
U.S. Auto Finance Market 2006
U.S. auto financing = $405 billion(1) $216 billion new; $189 billion
used Company estimates 20%, or $81 billion is“subprime”
Historically fragmented market Few dominant longterm
players Significant barriers to entry Major Other Market
Players AmeriCredit CapitalOne Triad HSBC/Household WellsFargo
CitiFinancial Santander/Drive Manufacturers’Captives
Purchase contracts from dealers in 47 states80employeemarketingrepsinthefieldand11in‐house80 employee marketing reps in the field and 11 inhousePrimarily factory franchised dealersContract Purchases for the three months ended March 20081%18%Factory FranchisedRental Car 81%CompaniesIndependents(1)Includes contract purchases of TFC, a subsidiary that serves enlisted members of U.S. Armed Forces.4<
/div>
Since inception through December 31,
2007 the Company has originated over $8.4 billion
Securitization 2008-A (1)Principal
Balances by Model Year Primarily late model pre-owned
vehicles •15% New•85% Pre-owned•71% Domestic29%Fi•29% Foreign
6(1)2008-A closed April 10, 2008.
CPS’s risk-adjusted pricing results in
program offerings covering a wide band of the credit spectrum Program (1)Avg.
Yield (2)Avg. Amount Financed Avg. FICO% of Purchases Preferred 12.0%
$18,682 573 5% Super Alpha 14.8% $18,863 524 11% AlphaPlus 16.6% $17,023 530 17%
p, Alpha 18.9% $15,470 519 43% Standard 23.4% $12,884 525 6% Mercury/ Delta
27.0% $11,815 524 11% First Time Buyer 27.7% $11,499 54 18% (1) Under the CPS
programs year‐to‐date through March
2008. (2)Contract APR as adjusted for fees charged (or paid) to dealer. 7
Borrower:•Average age 38 years•Average time in job 6 years•Average time in residence
0; 5 years•Average credit history 10 years•Average household income $41,652 per year•Percentage of homeowners 16%•Average amount financed &#
160; $15,032Contract:•Average monthly payment $374•Average term 62 months•Weighted Average APR 18.1%8(1)Under the CPS programs year‐to‐date through March 2008.
Contract OriginationsServicingCentralized contract originations at Irvine HQMaximizes control and efficienciesGeographically dispersed servicing centers enhance coverage and staffing flexibility and drive portfolio performanceProprietary auto‐decisioning system Makes initial credit decision on il90%fiiperformanceEarly contact on past due accounts; commencing as early as first day after due dateapproximately&#
160;90% of incoming applicationsEnhances dealer service by shortening response timePfdiifitifEarly stage workload supplemented by automated intelligent predictive dialerWkldlltdbdPre‐funding verification of employment, income and residencyProtects again potential fraudWorkloads allocated based on specialization and behavioral scorecards, which enhances efficiencies
Average LTV and Average PTI ratios have
steadily decreased 118%Loan-to-Value Ratio Payment-to-Income Ratio15%
114%116% 13%14% PTI
2003 Vintage -Home Owner 2004 Vintage
- -Home Owner 2005 Vintage -Home Owner 2006 Vintage -Home Owner 2003 Vintage
- -Non-Homeowner 2004 Vintage -Non-Homeowner 2005 Vintage -Non-Homeowner 2006
Vintage -Non-Homeowner Homeowner Performance Analysis14.00% 8.00%10.00%12.00% 4.00%6.00% 200%2.00% 0.00%
Two senior warehouse facilities
aggregating $400 million Quarterly “AAA” rated asset-backed securities provide
long-term matched funding -$6.4 billion in 48 deals since 1994 (including 2008-A
that closed April 10, 2008)(gp) Sale of subordinated tranches increases
liquidity $120 million residual credit facility reduces cost of capital$120
million residual credit facility reduces cost of capital (opened July
2007)Pursuing alternative sources of liquiditg Portfolio
Fiancial
Total Managed Portfolio
Primary Driver of Growth is CPS “Organic” Contract Purchases with over 99% now On Balance Sheet2,5002,126.22,092.1
2,5001,5002,000595.2743.5906.91,121.7Millions)5001,000($ in
Primary Driver of Growth is CPS “Organic” Contract Purchases with over 99% now On Balance Sheet2,500156592,126.22,092.11,5002,000595.2743.5906.91,121.71,565.9Millions)5001,000($
in
Three Quarter Rolling Average (31 or
more days past
due)800%9.00%10.00%CPS Portfolio5.00%6.00%7.00%8.00%1.00%2.00%3.00%4.00%0.00%1.00%
Delinquencies and Repo Inventory
Average ABS Pool Cumulative Net Losses as of March 31, 2008ABS pools from 2003 onward exhibit substantially better performance1400%16.00%18.00%1997199810.00%12.00%14.00%2001200220034.00%6.00%8.00%20032004200520060.00%2.00%20062007
LT Debt (left axis) Residual Interest
Debt (left axis) Residual and LT Debt to Managed Portfolio (right axis)
30.00%35.00% 15.00%20.00%25.00% 12015.00%20.00%25.00%6080 100 120
Millions5.00%10.00%20 40 60 $ in M 0.00%-Historical Corporate
Debt
Recovery Rates Correlate to Manheim Index ManheimUsedVehicleValueIndex(QuarterlyAvg)(1)50.00%120.00Manheim IndexRecovery RateManheim Used Vehicle Value Index (Quarterly Avg.) (1)CPS Recovery Rate Quarterly Avg. (2) 115.00 11000110.00 100.00105.00 Autcion Values
Summary Balance Sheets ($ in millions)
March 31,2008 December 31,2007 December 31,2006 December 31,2005 2008 2007 2006
2005 Assets
Cash$ 18.5$ 20.9$ 14.2$ 17.8Restricted
Cash176.6170.3193.0157.7 Finance receivables, net of
allowance1,931.91,967.91,401.4913.6Residual interest in
securitizations1.92.313.825.2Deferred tax assets, net58.858.854.77.5 Other
Assets59.5 62.6 51.5 33.4 $ 2,247.2 $ 2,282.8
$ 1,728.6 $ 1,155.1 Liabilities Accounts
payable and other
liabilities$ 15.8$ 18.4 $ 20.6
$ 19.8Warehouse lines of
credit368.0235.973.035.4Income taxes payable19.017.710.3--- Residual interest
financing Securitization trust debt1,610.61,798.31,443.0924.0Other
debt28.428.138.658.7 90.0 70.0 31.4 43.7 2,131.9 2,168.5 1,617.1,1081.6 115.4
114.4 111.5 73.6 $ 2,247.2 $ 2,282.8 $ 1,728.6
$ 1,155.1 Shareholder’s equity
($ in millions)March31, 2008
March 31,2007 ($ in millions)March31, 2008March
31,2007December 31,2007December 31,2006December 31,2005 Interest
income$ 99.4$ 80.5$ 370.3$ 263.6$ 171.8Servicing
fees0.40.31.22.96.6Other income3.55.723.112.415.2 Employee
costs13.510.846.738.540.4 Interest39.029.5139.293.151.7Provision for
credit losses34.929.5137.392.159.0 General and administrative12.,
11.3 47.4 42.0 39.3 Interest39.029.5139.293.151.7Provision for
credit losses34.929.5137.392.159.0 Pretax income
(loss)3.85.424.013.23.4Incometax expense (gain)1.72.210.1(26.4)0.0 99.5 81.1
370.6 365.7 190.3 Net Incoe 2.1 3.2 13.9 39.6 3.4 1.7 202 10.1 (26.4) 3.4 2.1
3.2 13.9 39.6 3.4 0.11 0.14 0.61 1.64 0.414 19EPS
(fullydiluted)$ 0.11$ 0.14$ 0.61$ 1.64$ 0.14EPS
without tax
gain$ 0.11$ 0.14$ 0.61$ 0.55$ 0.14
Three MonthsEnded Years Ended ($ in
millions)March31, 2008 March 31,2007 ($ in
millions)March31, 2008March
31,2007December 31,2007December 31,2006December 31,2005 Revenues
Interest
income$ 99.4$ 80.5$ 370.3$ 263.6$ 171.8Servicing
fees0.40.31.22.96.6Other income3.55.723.112.415.2
103.386.5394.6278.9193.7Expenses Employee costs13.510.846.738.540.4 General and
administrative 11.3 12.1 47.4 42.0 39.3 Interest39.029.5139.293.151.7Provision
for credit losses34.929.5137.392.159.0 Pretax income
(loss)3.85.424.013.23.4Incometax expense (gain)1.72.210.1(26.4)0.0 19EPS
(fullydiluted)$ 0.11$ 0.14$ 0.61$ 1.64$ 0.14EPS
without tax
gain$ 0.11$ 0.14$ 0.61$ 0.55$ 0.14
Net income 2.1 3.2 13.9 39.6 3.4 (% of total owned
portfolio)4.8%3.6%6.3%5.5%5.0%Annualized net charge-offs(% of average owned
portfolio)6.7%5.1%5.3%4.5%5.3%(1)Interest income less interest expense and provision for credit losses.(2)Total expenses less provision for credit losses less interest expense and impairment loss on residual asset.(3)Pretax income divided by average managed portfolio.20
Three MonthsEnded Years Ended ($ in
millions)March31, 2008 March 31,2007 ($ in
millions)March31, 2008March
31,2007December 31,2007December 31,2006December 31,2005 Revenues
Interest
income$ 99.4$ 80.5$ 370.3$ 263.6$ 171.8Servicing
fees0.40.31.22.96.6Other income3.55.723.112.415.2
103.386.5394.6278.9193.7Expenses Employee costs13.510.846.738.540.4 General and
administrative 11.3 12.1 47.4 42.0 39.3 Interest39.029.5139.293.151.7Provision
for credit losses34.929.5137.392.159.0 Pretax income
(loss)3.85.424.013.23.4Incometax expense (gain)1.72.210.1(26.4)0.0 19EPS
(fullydiluted)$ 0.11$ 0.14$ 0.61$ 1.64$ 0.14EPS
without tax
gain$ 0.11$ 0.14$ 0.61$ 0.55$ 0.14
Net income 2.1 3.2 13.9 39.6 3.4 (% of total owned
portfolio)4.8%3.6%6.3%5.5%5.0%Annualized net charge-offs(% of average owned
portfolio)6.7%5.1%5.3%4.5%5.3%(1)Interest income less interest expense and provision for credit losses.(2)Total expenses less provision for credit losses less interest expense and impairment loss on residual asset.(3)Pretax income divided by average managed portfolio.20
CPS has weathered industry
turbulencetoremainoneoftheRecurring revenue model and
soundqualityofearningsturbulence to remain one of the few independent public
auto finance companiessound quality of earnings Attractive industry
fundamentalsDisciplined approach to credit Operating leverage through economies
of scaleOpportunistic,successfulpppquality and servicingDemonstrated growth in
new contractacquisitionstotalOpportunistic, successful acquisitionsStable senior
management team withsignificantequitycontract acquisitions, total managed
portfolio, and pre-tax incomewith significant equity ownership –senior
management, including vice presidents, average 12 years of
servicewiththeCompanyservice with the Company 21
AnypersonconsideringaninvestmentinsecuritiesissuedbyCPSisurgedtoreviewthematerialsfiledbyCPSwiththeU.S.SecuritiesandExchangeCommissionyg("Commission").SuchmaterialsmaybefoundbyinquiringoftheCommission‘sEDGARsearchpage(http://www.sec.gov/edgar/searchedgar/companysearch.html)usingCPS'stickersymbol,whichis"CPSS."RiskfactorsthatshouldbeconsideredaredescribedinItem1A“RiskFactors"ofCPS'sannualreportonForm10KaredescribedinItem1A,RiskFactors,ofCPSsannualreportonForm10-K,whichreportisonfilewiththeCommissionandavailableforreviewattheCommission'swebsite.Suchdescriptionofriskfactorsisincorporatedhereinbyreference.
Reference to Public Reports
Information included in the preceding
slides is believed to be accurate, but is not necessarily complete. Such
information should be reviewed in its appropriate context.The implication that
historical trends will continue in the future, or that past performance is
indicative of future results, is disclaimed.To the extent that one reading the
following material never the less makes such an inference, such inference would
be a forward-looking statement, and would be subject to risks and certainties
that could
causeactualresultstovary.Suchrisksincludevariableeconomicconditions,adverseportfolioperformance(resulting,forexample,fromincreaseddefaultsbytheunderlyingobligors),volatilewholesalevalue
collateralunderlyingCPSassets,relianceonwarehousefinancingandonthecapitalmarkets,fluctuatinginterestrates,increasedcompetition,regulatorychanges,theriskofobligordefaultinherentsub-primefinancing,andexposuretolitigation.
Safe Harbor Statement.