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) October 11, 2005
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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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001-14116
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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
The
registrant, Consumer Portfolio Services, Inc. ("CPS") is today making available
two presentations. Copies thereof are attached hereto as exhibits. CPS
is not
undertaking to update these materials. This report should not be deemed
an
admission as to the materiality of any information contained in these materials.
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.
Two
exhibits are filed herewith:
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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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99.2
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Historical
Timeline of Significant Events
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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:
October 11, 2005
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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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99.2
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Historical
Timeline of Significant Events
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Exhibit
99.1
Consumer
Portfolio Services, Inc.Nasdaq: CPSS
Cautionary
Statement
Information
included in the following 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 nevertheless makes such an
inference, such inference would be a forward-looking statement, and would
be
subject to risks and uncertainties that could cause actual results to vary.
Such
risks include variable economic conditions, adverse portfolio performance
(resulting, for example, from increased defaults by the underlying obligors),
volatile wholesale values of collateral underlying CPS assets, reliance on
warehouse financing and on the capital markets, fluctuating interest rates,
increased competition, regulatory changes, the risk of obligor default inherent
sub-prime financing, and exposure to litigation.
Reference
to Public Reports Any person considering an investment in securities issued
by
CPS is urged to review the materials filed by CPS with the U.S. Securities
and
Exchange Commission ("Commission"). Such materials may be found by inquiring
of
the Commission's EDGAR search page
(http://www.sec.gov/edgar/searchedgar/companysearch.html) using CPS 'sticker
symbol, which is "CPSS." Risk factors that should be considered are described
under the caption "Forward-looking Statements" in Item 7 of CPS's annual
report
on Form 10-K, which report is on file with the Commission and available for
review at the Commission's website. Such description of risk factors is
incorporated herein by reference .In particular, any person considering an
investment in Redeemable Subordinated Notes issued by CPS must review the
prospectus, and supplements thereto, filed by CPS with respect to the offering
of such notes. Such prospectus is included in a registration statement filed
May
20, 2005 (at
http://www.sec.gov/Archives/edgar/data/889609/000101968705001454/0001019687-05-001454-index.htm)
and such supplements have been filed from time to time thereafter, under
Rule
424(b)(4). The most recent such supplement, as of September 27, 2005, may
be
found at
http://www.sec.gov/Archives/edgar/data/889609/000101968705002682/0001019687-05-002682-index.htm.
Consumer
Portfolio Services, Inc.Specialty finance company focused on sub-prime auto
marketEstablished in 1991; IPO in 1992 Through June 30, 2005, over $5.7 billion
in contract purchases from auto dealers
Consumer
Portfolio Services, Inc. As of June 30, 2005, managed portfolio of approximately
$1.0 billion Irvine, California headquarters and servicing branches in Virginia,
Florida, Georgia and Illinois Approximately 700 employees
U.S.
Auto Finance Market2004 U.S. auto financing = $392 billion*$207 billion new;
$185 billion used Company estimates 20%, or $78 billion is “sub-prime”
Historically fragmented market with few long-term dominant players* According
to
CNW Marketing Research, Inc.
Major
Market Participants AmeriCredit Capital One TriadHSBC/Household
CitiFinancial
The
CPS Landscape as of June 30, 2005Contracts with 6,075 dealers in 46 states61
employee marketing reps in field West coast headquarters and four strategically
located servicing branches
HQ
The
CPS Landscape Primarily factory franchised dealers87%2%11%Contract Purchases
January through June 2005
Factory
Franchised Rental Car Companies Independents
The
CPS LandscapeCPS’s risk-adjusted pricing results in program offerings covering a
wide band of the credit spectrum New contract acquisitions January through
June
2005n/a10,54928.0First Time Buyer51711,51726.4Mercury /
Delta52711,87323.2Standard51714,37119.2Alpha52816,91816.8Alpha
Plus52318,72315.4Super Alpha60620,13512.4PreferredAvgFICOAvgAmount Financed
$
Avg Yield % (1)Program (1) Contract APR as adjusted for fees charged (or
paid)
to dealer.
The
CPS Landscape Product Mix Alpha Alpha Plus Super Alpha Preferred Standard
Mercury / Delta FTB Military New contract acquisitions January through June
2005
The
CPS Landscape Primarily late model pre-owned vehicles17% New83%
Pre-owned0%5%10%15%20%25%30%20052004200320022001EarlierSecuritization 2005-A
Principal Balances by Model Year
13The
CPS Landscape Affordable, basic transportation vehicle Average vehicle sales
price of $14,797Average monthly payment of $367 for 61
monthsPONT6%NISS6%CHRY5%Others27%FORD19%DODG12%CHEV16%MITS5%TOYO4%New contract
acquisitions January through June 2005
The
CPS Landscape21%Percentage of homeowners$38,292 per year Average household
income5 years Average time in residence5 year Average time in job37 years
Average age An emphasis on stable obligors with the ability to rehabilitate
their credit profile New contract acquisitions January through June
2005
Contract
Originations Centralized contract originations at Irvine HQ Maximizes control
and efficiencies proprietary auto-decisioning system Makes initial credit
decision on approximately 70% of incoming applications Enhances dealer service
by shortening response time Pre-funding verification of employment, income
and
residency Protects against dealer and obligor fraud
Contract
Originations Infrastructure to Support Significant Originations Volumes Since
inception through June 2005 the Company has originated over $5.7
billion
1602004006008001,0001,200199119921993199419951996199719981999200020012002200320042005Annual
Volumes ($ in millions)Annualized 2005 originations as of June 30,
2005
Contract
Servicing Geographically dispersed servicing centers enhance coverage and
staffing flexibility Offices are tied into the central database and paperless
collection system Dynamic work queue monitoring and balancing among offices
Contract
Servicing Early contact on past due accounts; commencing sixth day after
due
dateWorkloads allocated based on specialization Front end workload supplemented
by automated intelligent predictive dialer
Contract
Servicing Automated paperless servicing system builds dynamic work queues
based
on the account’s characteristics. Agents are assigned to work queues based on
their specialization. Supervisors with appropriate expertise oversee specialized
groups.SupervisionFrontEnd30-59 daysSupervisionPredictiveDialer0-29
daysSupervisionBackEnd60-119 days Supervision Skip Tracing Supervision Insurance
Claims Supervision Military Supervision Legal Supervision Bankruptcy Supervision
Repossession Supervision Liquidation Supervision Deficiency
Successful
Acquisitions$75 million portfolio acquired Servicing for additional $100
million
April 2004$63.2 million Sea West Financial Corp.(Purchase of certain assets
only)$150 million portfolio CPS maintains presence in TFC military niche
May
2003$23.7 million THE Finance Company$380 million portfolio$17.4 million
negative goodwill March 2002$123.2 million MFN Financial Corp. Comments Date
and
Purchase Price Entity
Portfolio
Financing$200 million short-term warehouse facility Quarterly “AAA rated
asset-backed securities provide long-term matched funding Use of multiple
bond
insurers enhances liquidity and structural flexibility Sale of subordinated
tranches increases liquidity
0501001502002503003501994-11994-21994-31994-41995-11995-21995-31995-41996-11996-11996-21996-31997-11997-21997-31997-41997-51998-11998-21998-31998-42001-A2002-A2002-B2002-C2003-A2003-B2003-C2003-D2004-A2004-12004-B2004-C2004-D2005-A2005-BOutstanding
Balance Original Balance$ in millions Portfolio Financing The Company has
been a
regular issuer of rated ABS since 1994Through Q2 2005: 37 deals aggregating
over
$3.8 billion
Other
Financing($ in thousands)Sub. Debt -Renewable Notes Sub. Debt -RISRs Senior
Debt
-Affiliate of Levine Leichtman “BBB” rated “NIM” transaction Source Shelf
registration effective May 2005Wtdrate 7.7%Wtdorigterm 27 months $1,000Publicly
issued notes from 199612.5%Maturing 2006$14,000A lender to CPS since 199811.75%
2005 and 2006 maturities$59,8292004 original balance of $44,00010.0% Amortizing
with related ABS$12,031(since paid)Comments Terms Outstanding at June 30,
2005
0.00%1.00%2.00%3.00%4.00%5.00%6.00%7.00%8.00%9.00%10.00%
Dec 95 Dec 97 Mar 99 Sep 99 Mar 00 Sep 00 Mar 01 Sep 01 Mar 02 Sep 02 Mar
03 Sep
03 Mar 04 Sep 04 Mar 05CPS MFNTFC Asset Performance Receivables and Repo
Inventory 30 Plus Days Past Due Three month rolling averages Consistent
Performance and Positive Trends
250.00%2.00%4.00%6.00%8.00%10.00%12.00%14.00%1995199619971998199920002001200220032004CPSMFNTFCAsset
Performance Average Annual Net Credit Losses Consistent Performance and Positive
Trends MFN recoveries now exceed incremental lossesThroughQ2
2005
260.00%2.00%4.00%6.00%8.00%10.00%12.00%14.00%123456789101112131415161718192021222324199719982001200220032004Asset
Performance Average ABS Pool Cumulative Net Credit Losses as of June 30,
2005Consistent Performance and Positive Trends ABS pools from 2003 onward
exhibit substantially better performance. Months seasoned
Summary
Balance Sheets($ in thousands)$ 766,59969,920696,67974,829542,81522,20434,279$
22,552$ 766,59926,49950,430550,191125,113$ 14,366December 31,
2004410,310843,071102,46575,094Other debt Liabilities$ 492,470$
913,44133,70945,315Warehouse lines of credit$ 29,018 $ 18,611 Accounts payable
and other liabilities245,118692,020Securitization trust debt012,031Residual
interest financing82,16070,370Shareholders’equity$ 492,470$
843,07114,09326,240Other Assets111,70238,053Residual interest in
securitizations266,189693,847Finance receivables, net of
allowance67,277139,630Restricted Cash$ 33,209$ 15,671CashAssetsDecember 31,
2003June 30, 2005
Summary
Statements of Operations($ in thousands)4,05211,75000Impairment on residual$
306030689,30427,53622,33219,28520,15189,6108,8564,06076,694$ 0June 30,2005Six
Months Ended$ 10,421$ 0$ 0Net gain on sale of contractsYear Ended$
(15,888)0(15,888)148,58032,57432,14730,93938,173132,69214,39412,480105,818December
31, 2004(3,434)0Tax benefit(3,039)(1,581)Income (loss)37,14119,447Employee
costsExpenses23,86113,412Interest31,58115,881General and
administrative108,02561,79011,39013,050Provision for credit losses$ 395$
(1,581)Net income (loss)104,98660,20919,3437,233Other income17,0586,831Servicing
fees58,16446,145Interest income Revenues December 31, 2003June 30,
2004
Investment
Merits Market participant since 1991; CPS has weathered industry turbulence
to
remain one of the few independent public auto finance companies Disciplined
approach to credit quality and servicing Demonstrated growth in new contract
acquisitions and total managed portfolio Access to capital markets through
regular ABS issuance and “NIM” market
Investment
Merits Improving asset performance Portfolio accounting has gained traction
-June 2005 quarter profitable for the first time since June 2003 quarter
Opportunistic, successful acquisitions Stable senior management -President,
Senior Vice Presidents and Vice Presidents average 11 years of service with
the
Company
Consumer
Portfolio Services, Inc.Nasdaq: CPSS
Exhibit
99.2
Consumer
Portfolio Services, Inc. Historical Timeline of Significant Events Nasdaq:
CPSS
Cautionary
Statement Information included in the following slides is believed to be
accurate, but is not necessarily complete. Any person considering an investment
in securities issued by CPS is urged to review the materials filed by CPS
with
the U.S. Securities and Exchange Commission ("Commission"). Such materials
may
be found by inquiring of the Commission's EDGAR search page
(http://www.sec.gov/edgar/searchedgar/companysearch.html) using CPS'sticker
symbol, which is "CPSS."
Founded
March 1991AcquiredG&A Financial Appointed servicer of RTC portfolios, $16.5
million Flow purchase program with GECCYTD $1.4 mm contracts purchased
1991
YTD
$16.1 mm contracts purchased IPO -$5.0 mm for 20% of Company1992GECC commitment
fulfilled
1993
$2.0 mm convertible note issued to institutional investor 5YTD $35.9 mm
contracts purchased $50.0 mm contract purchase commitment from institutional
investor -“A” rated ABS structures $3.0 mm convertible note issued to
institutional investor A second $50.0 mm contract purchase commitment from
institutional investor
$24.0
mm “AAA”ABS insured by FSA (the Company’s first)$13.1 mm ABS$28.9 mm ABS1994 $50
mm warehouse facility with GECC $28.9 mm ABS YTD $132.0 mm contracts purchased
Managed portfolio = $168.4 mm
$20.0
mm public RISRs1995 YTD $192.5 mm contracts purchased Managed portfolio =
$288.9
mm$56.5 mm ABS (first “B” Piece)$100.0 mm warehouse with GECC$20.1 mm ABS$51.9
mm ABS$47.4 mm ABS$13.3 mm secondary equity offering
$88.9 mm ABS(first public issuance)2 for 1 stock split1996 $92.9 mm ABS $67.1 mm ABS $92.1 mm ABS YTD $351.4 mm contracts purchased Managed portfolio = $505.9 mm
Est.
servicing branch in Chesapeake, VA 1997 $119.4 mm ABS $150.0 mm warehouse
with
First Unionv $105.9 mm ABS $95.7 mm ABS $102.3 mm ABS $20.0 mm public PENs
$15.0
mm Stanwich Financial debt $150.0 mm ABS YTD $600.1 mm contracts purchased
Managed portfolio = $902.7 mm
10YTD
$1.1 billion contracts purchased Managed portfolio = $1.5 billion$187.0 mm
ABS$211.0 mm ABS$240.3 mm ABS$310.0 mm ABS$33.0 mm residual financing Cross
collateralized ABS hit default levels -Cash releases suspended Equity
downgraded; Stock to $2.00Global financial crisis temporarily cripples ABS
markets First LLCP debt; $25.0 mm plus 3 mm warrants1998
1999YTD
$424.4 mm contracts purchased Managed portfolio = $821.0 mm Approx. $420
mm
sold, servicing released$5.0 mm new LLCP debt; 1.3 mm warrants$318.0 mm contract
sale to GECC at discount; servicing released GECC & First Union warehouse
lines terminatedFairlane low purchase program start FSA agrees to 21%
enhancement on existing deals; ABS resume cash release YTD $28.0 mm spread
cash
released
2000
YTD $81.0 mm spread cash released YTD $607.0 mm contracts purchased Managed
portfolio = $411.9 mm Approx. $600 mm sold, servicing released$16.0 mm new
LLCP
debt Nuvell flow purchase program starts Residual facility paid off CPS named
in
Stanwich Financial litigation$75.0 mm warehouse facility with Greenwich &
FSA
2001YTD
$672.3 mm contracts purchased Managed portfolio = $285.5 mm Approx. $ 535
mm
sold, servicing released YTD $43.7 mm spread cash released$8.0 mm debt
repurchase from LLCP & Stanwich Financial Nuvel program terminated$82.6 mm
ABS, insured by FSA, marks return to ABS market
2002
$99.3 mm ABS YTD $463.3 mm contracts purchased Managed portfolio = $595.2
mm
Approx. $180 mm sold, servicing released Acquired MFN for $123.2 mm($380.0
mm
portfolio)Fairlane program terminated$100.0 mm additional warehouse with
West LB
& XL Capital$55.0 mm ABS$130.5 mm ABS; (first XL Capital
deal)
2003
Change in ABS structures to eliminate gain on sale in favor of portfolio
accounting YTD $357.3 mm contracts purchased Managed portfolio = $741.1 mm
Acquired TFC for $23.7 mm($150.0 mm portfolio)$25.0 mm new LLCP debt$87.5
mm
ABS$145.4 mm ABS$109.0 mm ABS$75.0 mm ABS
2004Acquired
SeaWest assets for $63.2 mm($75.0 mm portfolio)$25.0 mm new LLCP debt$100.0
mm
ABS $82.1 mm ABS $96.4 mm ABS $92.8 mm ABS insured by Radian & XL
Capital(TFC & SeaWest) $120.0 mm ABS Stanwich Financial debt repaid;
Settling primary claims in CA litigation $44.0 mm “BBB” rated residual ABS
$100.0 mm replacement warehouse with UBS YTD $447.2 mm contracts purchased
Managed portfolio = $906.9 mm
2005
First profitable quarter since change in ABS structures to portfolio accounting
$137.4 mm ABS Settlement of Stanwich Financial BK claim in CA$100.0 mm Renewable
Note registration $137.5 mm ABSYTD $298.1 mm contracts purchased Managed
portfolio = $966.2 mm
Consumer
Portfolio Services, Inc.Nasdaq: CPSS