================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 -------------------- FORM 11-K (Mark One) [x] Annual Report pursuant to Section 15(d) of the Securities Exchange of 1934 (No Fee Required) For the fiscal year ended December 31, 1997 OR [ ] Transition Report pursuant to Section 15(d) of the Securities Exchange Act of 1934 [No Fee Required] For the transition period from ______ to_______ Commission File Number 1-14116 A. Full title of the plan and the address of the plan, if different from that of the issuer named below: Consumer Portfolio Services, Inc. 401(k) Plan B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: Consumer Portfolio Services, Inc. 2 Ada Irvine, CA 92618 ================================================================================ REQUIRED INFORMATION I. Financial Statements. Financial statements and schedules prepared in accordance with the financial reporting requirements of the Employee Retirement Income Security Act of 1974, together with independent auditors' report thereon. II. Exhibits: Consent of Independent Auditors. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the Plan) have duly caused this annual report to be signed on its behalf by the undersigned, hereunto duly authorized. Consumer Portfolio Services, Inc. 401(k) Plan By: Consumer Portfolio Services, Inc. Date: June 29, 1998 By: /s/ Doris F. Warren ------------------------- ------------------------------------------ Doris F. Warren Vice President - Human Resources CONSUMER PORTFOLIO SERVICES, INC. 401(k) PLAN Financial Statements and Supplemental Schedules December 31, 1997 and 1996 (With Independent Auditors' Report Thereon) CONSUMER PORTFOLIO SERVICES, INC. 401(k) PLAN Index to Financial Statements and Supplemental Schedules -------------------------------------------------------- Page ---- Independent Auditors' Report 1 Statements of Net Assets Available for Plan Benefits - December 31, 1997 and 1996 2 Statements of Changes in Net Assets Available for Plan Benefits - Years ended December 31, 1997 and 1996 3 Notes to Financial Statements 4 Schedule -------- Item 27a - Schedule of Assets Held for Investment Purposes - December 31, 1997 1 Item 27d - Schedule of Reportable Transactions - Year ended December 31, 1997 2 INDEPENDENT AUDITORS' REPORT The Administrator Consumer Portfolio Services, Inc. 401(k) Plan: We have audited the accompanying statements of net assets available for Plan benefits of the Consumer Portfolio Services, Inc. 401(k) Plan (the Plan) as of December 31, 1997 and 1996 and the related statements of changes in net assets available for Plan benefits for the years then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for Plan benefits of the Plan as of December 31, 1997 and 1996 and the changes in net assets available for Plan benefits for the years then ended in conformity with generally accepted accounting principles. Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule of assets held for investment purposes and schedule of reportable transactions are presented for the purpose of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedules have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/ KPMG Peat Marwick Orange County, California June 24, 1998 1 CONSUMER PORTFOLIO SERVICES, INC. 401(k) PLAN Statements of Net Assets Available for Plan Benefits December 31, 1997 and 1996 2
ASSETS 1997 1996 -------------------- -------------------- Investments, at fair value: Money market fund $ 147,972 -- Guaranteed investment contract 126,085 71,176 Pooled separate accounts 858,206 496,948 Consumer Portfolio Services, Inc. common stock 260,664 170,662 Participant loans 31,475 1,503 ----------- ---------- 1,424,402 740,289 Receivables -- employees' individual rollover 5,088 12,290 Cash -- 32 ----------- ---------- Net assets available for Plan benefits $ 1,429,490 752,611 =========== ========== See accompanying notes to financial statements. CONSUMER PORTFOLIO SERVICES, INC. 401(k) PLAN Statements of Changes in Net Assets Available for Plan Benefits Years ended December 31, 1997 and 1996 3
1997 1996 ----------- ---------- Additions to net assets attributed to: Interest $ 7,041 3,097 Net appreciation in fair value of investments 76,896 37,831 ----------- ---------- 83,937 40,928 Contributions: Employer 111,070 63,853 Employees 612,906 321,300 Employees' individual rollover 23,487 33,567 ----------- ---------- Total additions 831,400 459,648 Deductions from net assets attributed to -- benefits paid to participants 154,521 28,685 ----------- ---------- Net increase 676,879 430,963 Net assets available for Plan benefits: Beginning of year 752,611 321,648 ----------- ---------- End of year $ 1,429,490 752,611 =========== ========== See accompanying notes to financial statements. CONSUMER PORTFOLIO SERVICES, INC. 401(k) PLAN Notes to Financial Statements December 31, 1997 and 1996 (1) DESCRIPTION OF THE PLAN GENERAL The Consumer Portfolio Services, Inc. (the Plan Sponsor) 401(k) Plan (the Plan) was established as a profit sharing plan with a cash or deferred arrangement on January 1, 1994. The Plan was restated as of January 1, 1996 to permit investment in the Plan Sponsor's common stock without regard to Section 407(a) of ERISA. The following description provides only general information. Participants should refer to the Plan agreement for a more complete description of the Plan's provisions. The Plan is a defined contribution plan which provides retirement benefits for eligible employees of the Plan Sponsor. It is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). ADMINISTRATION OF THE PLAN The Plan is administered by the Human Resources Department (the Plan Administrator) of the Plan Sponsor. The Plan Administrator consults with the Board of Directors and other key management of the Plan Sponsor when managing the operations and the administration of the Plan. The assets of the Plan are held in a nondiscretionary trust by Charles Schwab Trust Company (Trustee) and Aetna Life Insurance and Annuity Company (Insurance Company) and are administered under an agreement which requires that the Trustee and Insurance Company hold, administer and distribute the funds of the Plan in accordance with the text of the Plan and the instructions of the Plan Administrator or its designees. CONTRIBUTIONS All employees of the Plan Sponsor are eligible to participate in the Plan after they have completed 90 days of service. Each year participants may contribute up to 15% of their compensation, as defined in the Plan. Participants may roll over into the Plan amounts representing distributions from other qualified plans. Each quarter the Plan Sponsor makes a matching contribution equal to 40% of the participant's pretax contributions not to exceed $500 for the Plan year. Matching contributions shall be made in the form of the Plan Sponsor's common stock. PARTICIPANT ACCOUNTS Each participant's account is credited with the participant's contributions, allocations of the Plan Sponsor's matching contributions and the Plan's earnings and losses. Allocations are based on participant earnings or account balances, as defined. Forfeitures are reallocated to other Plan participants who contributed to the Plan in the Plan year of allocation. Reallocations shall be made on a pro-rata basis, based on each participant's pretax contributions for the Plan year. For the year ended December 31, 1997 and 1996, participant forfeitures totaled $27,486 and $6,907, respectively. 4 CONSUMER PORTFOLIO SERVICES, INC. 401(k) PLAN Notes to Financial Statements, Continued VESTING Participants are immediately vested in their contributions plus actual earnings thereon. Vesting in the Plan Sponsor's matching contributions plus actual earnings thereon is based on years of continuous service. A participant vests at the rate of 20% after two years of credited service and 20% each year thereafter until 100% is reached after six years of credited service. INVESTMENT OPTIONS Contributions may be invested at the participant's direction into the following options: Stock Fund -- The fund provides Plan participant's with an opportunity to invest in Consumer Portfolio Services, Inc. common stock. Aetna Income Shares -- Seeks to maximize total return over the long-term by investing primarily in long-term debt securities. Aetna Fixed Account -- Guarantees a minimum rate of interest. Aetna Variable Fund -- Seeks to maximize long-term total return by investing in a portfolio of common stocks and securities convertible to common stock. Aetna Investment Advisers Fund -- Seeks to maximize investment return consistent with reasonable safety of principal by investing in a combination of asset classes. Aetna Variable Encore Fund -- Seeks a high current return, consistent with the preservation of capital and liquidity by investing in high-quality money market instruments. Portfolio Partners MFS Emerging Equities Portfolio, formerly Alger American Small Capitalization Portfolio -- Seeks long-term capital appreciation by investing in companies with market capitalization. Fidelity VIP Equity-Income Portfolio -- Seeks reasonable income by investing primarily in income-producing equity securities. Fidelity VIP Growth Portfolio -- Seeks capital appreciation by investing primarily in common stock. Fidelity VIP Overseas Portfolio -- Seeks long-term growth of capital primarily through investments in foreign securities. Portfolio Partners Scudder International Growth Portfolio, formerly Scudder VLIF International Portfolio -- Seeks long-term growth of capital, primarily through diversified holdings of marketable foreign equity investments. Portfolio Partners MFS Research Growth Portfolio, formerly TCI Growth Fund -- Seeks capital growth over time by investing primarily in common stock considered by management to have better-than-average prospects for appreciation. 5 CONSUMER PORTFOLIO SERVICES, INC. 401(k) PLAN Notes to Financial Statements, Continued PARTICIPANTS LOANS Participants may borrow from their fund accounts. Loan transactions are treated as a transfer to (from) the investment funds. The loans are secured by the balance in the participant's account and bear interest at a rate commensurate with local prevailing rates as determined by the Plan Administrator. Loans are limited to the lesser of $50,000 or 50% of the participants vested account balance. Principal and interest are paid ratably through payroll deductions. PAYMENTS OF BENEFITS Upon termination of service, a participant may elect to receive either a single sum payment in cash equal to the value of the vested interest in his or her account, or a series of substantially equal annual or more frequent installments over a period not to exceed the member's life expectancy. PLAN TERMINATION Although they have not expressed any intent to do so, the Plan Sponsor has the right under the Plan to discontinue contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants will become 100% vested in their accounts. (2) SIGNIFICANT ACCOUNTING POLICIES BASIS OF ACCOUNTING The financial statements of the Plan have been prepared on the accrual basis of accounting. INVESTMENTS Publicly traded securities are carried at fair value based on the published market quotations. The pooled separate account reflects amounts which have been deposited with Aetna Life Insurance and Annuity Company for which the carrying value of the investments are adjusted to market value based upon quoted prices determined by Aetna Life Insurance and Annuity Company at the end of each year, and the investment return is reflected in the ending balance of the investment. The guaranteed investment contract is valued at fair value adjusted for changes in investment value plus credited interest. Participant loans are valued at cost, which approximates fair value. Purchases and sales of investments are recorded on a trade-date basis. ADMINISTRATIVE EXPENSES All administrative costs of the Plan are paid by the Plan Sponsor. USE OF ESTIMATES The Plan Administrator has made a number of estimates and assumptions relating to the reporting of assets and liabilities to prepare these financial statements in conformity with generally accepted accounting principles. Accordingly, actual results may differ from those estimates. 6 CONSUMER PORTFOLIO SERVICES, INC. 401(k) PLAN Notes to Financial Statements, Continued BENEFITS DUE TO TERMINATED PARTICIPANTS Fund balances for employees that have been terminated but have yet to be paid have been included in net assets available for plan benefits. They will be reflected in the statements of changes in net assets available for plan benefits when actually paid. At December 31, 1997 and 1996, the amount due to terminated employees is $21,520 and $9,953, respectively. 7 CONSUMER PORTFOLIO SERVICES, INC. 401(k) PLAN Notes to Financial Statements, Continued (3) Net Assets Available for Plan Benefits The following presents net assets available for Plan benefits for each fund as of December 31, 1997:
Participant directed ---------------------------------------------------------------------------------------------- Portfolio Aetna Aetna Partners MFS Fidelity VIP Aetna Aetna Aetna Investment Variable Emerging Equity- Fidelity VIP Income Fixed Variable Advisers Encore Equities Income Growth Shares Account Fund Fund Fund Portfolio Portfolio Portfolio --------- --------- ---------- ---------- -------- ----------- ------------ ----------- Assets: Investments at fair value: Money market fund $ -- -- -- -- -- -- -- -- Guaranteed investment contract -- 126,085 -- -- -- -- -- -- Pooled separate accounts 27,859 -- 159,039 113,050 39,311 157,453 88,216 157,318 Consumer Portfolio Services, Inc. common stock -- -- -- -- -- -- -- -- Participant loans -- -- -- -- -- -- -- -- ------- ------- ------- ------- ------ ------- ------ ------- 27,859 126,085 159,039 113,050 39,311 157,453 88,216 157,318 Receivables - employees' individual rollover -- -- 1,696 -- -- -- -- -- ------- ------- ------- ------- ------ ------- ------ ------- Net assets available for Plan benefits $27,859 126,085 160,735 113,050 39,311 157,453 88,216 157,318 ======= ======= ======= ======= ====== ======= ====== ======= Participant directed ---------------------------------------------------------------- Portfolio Non- Partners Portfolio participant Scudder Partners MFS directed Fidelity VIP International Research ----------- Overseas Growth Growth Stock Participant Stock Portfolio Portfolio Portfolio Fund loans Fund Total ----------- ------------- ------------ ------- ----------- ----------- ----- Assets: Investments at fair value: Money market fund -- -- -- 76,508 -- 71,464 147,972 Guaranteed investment contract -- -- -- -- -- -- 126,085 Pooled separate accounts 29,716 48,318 37,926 -- -- -- 858,206 Consumer Portfolio Services, Inc. common stock -- -- -- 159,726 -- 100,938 260,664 Participant loans -- -- -- -- 31,475 -- 31,475 ------ ------ ------ ------- ------ ------- --------- 29,716 48,318 37,926 236,234 31,475 172,402 1,424,402 Receivables - employees' individual rollover -- -- -- 3,392 -- -- 5,088 ------ ------ ------ ------- ------ ------- --------- Net assets available for Plan benefits 29,716 48,318 37,926 239,626 31,475 172,402 1,429,490 ====== ====== ====== ======= ====== ======= ========= CONSUMER PORTFOLIO SERVICES, INC. 401(k) PLAN Notes to Financial Statements, Continued The following presents net assets available for Plan benefits for each Fund as of December 31, 1996:
Participant directed ----------------------------------------------------------------------------------------------- Alger Aetna Aetna American Fidelity VIP Aetna Aetna Aetna Investment Variable Small Equity- Fidelity VIP Income Fixed Variable Advisers Encore Capitalization Income Growth Shares Account Fund Fund Fund Portfolio Portfolio Portfolio --------- --------- -------- ---------- -------- -------------- ----------- ------------ Assets: Investments at fair value: Guaranteed investment contract $ -- 71,176 -- -- -- -- -- -- Pooled separate accounts 13,075 -- 85,188 65,429 26,650 126,611 35,508 70,010 Consumer Portfolio Services, Inc. common stock -- -- -- -- -- -- -- -- Participant loans -- -- -- -- -- -- -- -- -------- ------- ------- ------- ------- -------- ------- ------- 13,075 71,176 85,188 65,429 26,650 126,611 35,508 70,010 Receivables - employees' individual rollover -- -- 168 -- -- 7,206 168 3,688 Cash -- -- -- -- -- -- -- -- -------- ------- ------- ------- ------- -------- ------- ------- Net assets available for Plan benefits $ 13,075 71,176 85,356 65,429 26,650 133,817 35,676 73,698 ======== ======= ======= ======= ======= ======== ======= ======= Participant directed --------------------------------------------------------------- Non- participant Scudder directed Fidelity VIP VLIF ----------- Overseas International TCI Growth Stock Participant Stock Portfolio Portfolio Fund Fund loans Fund Total ------------ ------------- ---------- ----- ----------- ----------- ----- Assets: Investments at fair value: Guaranteed investment contract -- -- -- -- -- -- 71,176 Pooled separate accounts 7,430 27,220 39,827 -- -- -- 496,948 Consumer Portfolio Services, Inc. common stock -- -- -- 105,156 -- 65,506 170,662 Participant loans -- -- -- -- 1,503 -- 1,503 ------ ------- ------- -------- ------ ------- -------- 7,430 27,220 39,827 105,156 1,503 65,506 740,289 Receivables - employees' individual rollover -- -- -- 1,060 -- -- 12,290 Cash -- -- -- -- -- 32 32 ------ ------- ------- -------- ------ ------- -------- Net assets available for Plan benefits 7,430 27,220 39,827 106,216 1,503 65,538 752,611 ======= ======= ======= ======== ====== ======= ======== CONSUMER PORTFOLIO SERVICES, INC. 401(k) PLAN Notes to Financial Statements, Continued (4) Changes in Net Assets Available for Plan Benefits The following presents changes in net assets available for Plan benefits for each fund for the year ended December 31, 1997:
Participant directed ------------------------------------------------------------------------------------------ Portfolio Aetna Aetna Partners MFS Fidelity VIP Aetna Aetna Aetna Investment Variable Emerging Equity- Income Fixed Variable Advisers Encore Equities Income Shares Account Fund Fund Fund Portfolio Portfolio --------- ---------- ---------- ---------- -------- ------------ ------------ Additions to net assets attributed to: Interest $ -- 5,431 -- -- -- -- -- Net appreciation (depreciation) in fair value of investments 1,426 -- 29,189 17,012 1,445 16,995 14,882 -------- -------- -------- -------- ------- -------- -------- 1,426 5,431 29,189 17,012 1,445 16,995 14,882 Contributions: Employer -- -- -- -- -- -- -- Employees 13,277 46,007 57,457 39,723 20,242 89,333 48,689 Employees' individual rollover 408 1,309 2,909 824 941 2,892 1,799 -------- -------- -------- -------- ------- -------- -------- Total additions 15,111 52,747 89,555 57,559 22,628 109,220 65,370 Deductions from net assets attributed to - benefits paid to participants -- -- -- -- -- -- -- Interfund transfer (327) 2,162 (14,176) (9,938) (9,967) (85,584) (12,830) -------- -------- -------- -------- ------- -------- -------- Net increase (decrease) 14,784 54,909 75,379 47,621 12,661 23,636 52,540 Net assets available for Plan benefits: Beginning of year 13,075 71,176 85,356 65,429 26,650 133,817 35,676 -------- -------- -------- -------- ------- -------- -------- End of year $ 27,859 126,085 160,735 113,050 39,311 157,453 88,216 ======== ======== ======== ======== ======= ======== ======== Participant directed ----------------------------------------------------------------------------- Portfolio Portfolio Non- Partners Partners participant Scudder MFS directed Fidelity VIP Fidelity VIP International Research ----------- Growth Overseas Growth Growth Stock Participant Stock Portfolio Portfolio Portfolio Portfolio Fund loans Fund ------------ ------------ -------------- --------- ------- ----------- ----------- Additions to net assets attributed to: Interest $ -- -- -- -- -- 1,610 -- Net appreciation (depreciation) in fair value of investments 22,035 294 2,703 (2,505) (24,680) -- (1,900) --------- ------- -------- -------- --------- ------- -------- 22,035 294 2,703 (2,505) (24,680) 1,610 (1,900) Contributions: Employer -- -- -- -- -- -- 111,070 Employees 98,643 21,503 33,584 25,538 118,910 -- -- Employees' individual rollover 5,066 -- 48 48 7,243 -- -- --------- ------- -------- -------- --------- ------- -------- Total additions 125,744 21,797 36,335 23,081 101,473 1,610 109,170 Deductions from net assets attributed to - benefits paid to participants -- -- -- -- 143,688 4,276 6,557 Interfund transfer (42,124) 489 (15,237) (24,982) 175,625 32,638 4,251 --------- ------- -------- -------- --------- ------- -------- Net increase (decrease) 83,620 22,286 21,098 (1,901) 133,410 29,972 106,864 Net assets available for Plan benefits: Beginning of year 73,698 7,430 27,220 39,827 106,216 1,503 65,538 --------- ------- -------- -------- --------- ------- -------- End of year $ 157,318 29,716 48,318 37,926 239,626 31,475 172,402 ========= ======= ======== ======== ========= ======= ======== Total ----------- Additions to net assets attributed to: Interest $ 7,041 Net appreciation (depreciation) in fair value of investments 76,896 ---------- 83,937 Contributions: Employer 111,070 Employees 612,906 Employees' individual rollover 23,487 ---------- Total additions 831,400 Deductions from net assets attributed to - benefits paid to participants 154,521 Interfund transfer -- ---------- Net increase (decrease) 676,879 Net assets available for Plan benefits: Beginning of year 752,611 ---------- End of year $ 1,429,490 ========== CONSUMER PORTFOLIO SERVICES, INC. 401(k) PLAN Notes to Financial Statements, Continued The following presents changes in net assets available for Plan benefits for each fund for the year ended December 31, 1996: 8
------------------------------------------------------------------------------------- Aetna Aetna Aetna Aetna Aetna Investment Variable Income Fixed Variable Advisers Encore Shares Account Fund Fund Fund ---------- ---------- ----------- ------------- ------------ Additions to net assets attributed to: Interest $ - 3,063 - - - Net appreciation (depreciation) in fair value of investments 257 - 14,383 6,461 1,103 ---------- ---------- ----------- ------------- ------------ 257 3,063 14,383 6,461 1,103 Contributions: Employer - 15 11 11 - Employees 6,904 23,883 23,444 24,851 10,391 Employees' individual rollover - 2,709 1,936 1,871 - ---------- ---------- ----------- ------------- ------------ Total additions 7,161 29,670 39,774 33,194 11,494 Deductions from net assets attributed to benefits paid to participants 805 815 46 680 489 Interfund transfer (640) (326) (18,038) (4,827) 3,284 ---------- ---------- ----------- ------------- ------------ Net increase (decrease) 5,716 28,529 21,690 27,687 14,289 Net assets available for Plan benefits: Beginning of year 7,359 42,647 63,666 37,742 12,361 ---------- ---------- ----------- ------------- ------------ End of year $ 13,075 71,176 85,356 65,429 26,650 ========== ========== =========== ============= ============ Participant directed -------------------------------------------------------------------- Alger American Fidelity VIP Small Equity Fidelity VIP Fidelity Capitalization Income Growth Overseas Portfolio Portfolio Portfolio Portfolio -------------- ------------- ------------- ---------- Additions to net assets attributed to: Interest - - - - Net appreciation (depreciation) in fair value of investments 414 2,572 3,097 411 -------------- ------------- ------------- ---------- 414 2,572 3,097 411 Contributions: Employer 15 - - - Employees 55,506 21,160 50,861 6,375 Employees' individual rollover 9,955 4,037 9,705 - -------------- ------------- ------------- ---------- Total additions 65,890 27,769 63,663 6,786 Deductions from net assets attributed to: benefits paid to participants 54 25 22 23 Interfund transfer (16,177) (1,881) 3,436 - -------------- ------------- ------------- ---------- Net increase (decrease) 49,659 25,863 67,077 6,763 Net assets available for Plan benefits: Beginning of year 84,158 9,813 6,621 667 -------------- ------------- ------------- ---------- End of year $ 133,817 35,676 73,698 7,430 ============== ============= ============= ========== -------------------------------------------------------------------------- Scudder Aetna VLIF Guaranteed International TCI Growth Accumulated Stock Participant Portfolio Fund Account Fund loans ------------- ---------- ----------- --------- ----------- Additions to net assets attributed to: Interest - - - - 34 Net appreciation (depreciation) in fair value of investments 2,734 (2,600) 6 7,676 - ------------- ---------- ----------- --------- ----------- 2,734 (2,600) 6 7,676 34 Contributions: Employer - - - - - Employees 17,013 23,432 - 57,480 - Employees' individual rollover - 422 - 2,932 - ------------- ---------- ----------- --------- ----------- Total additions 19,747 21,254 6 68,088 34 Deductions from net assets attributed to: benefits paid to participants - 22 - 25,392 - Interfund transfer (11,558) (16,410) (2,584) 63,520 1,469 ------------- ---------- ----------- --------- ----------- Net increase (decrease) 8,189 4,822 (2,578) 106,216 1,503 Net assets available for Plan benefits: Beginning of year 19,031 35,005 2,578 - - ------------- ---------- ----------- --------- ----------- End of year 27,220 39,827 - 106,216 1,503 ============= ========== =========== ========= =========== Non- Participant directed ------------ Stock Fund Total ------------- --------- Additions to net assets attributed to: Interest - 3,097 Net appreciation (depreciation) in fair value of investments 1,317 37,831 ------------- --------- 1,317 40,928 Contributions: Employer 63,801 63,853 Employees - 321,300 Employees' individual rollover - 33,567 ------------- --------- Total additions 65,118 459,648 Deductions from net assets attributed to: benefits paid to participants 312 28,685 Interfund transfer 732 - ------------- --------- Net increase (decrease) 65,538 430,963 Net assets available for Plan benefits: Beginning of year - 321,648 ------------- --------- End of year 65,538 752,611 ============= ========= CONSUMER PORTFOLIO SERVICES, INC. 401(k) PLAN Notes to Financial Statements, Continued (5) INVESTMENTS In accordance with the terms of the Plan Document and determined by the Plan Administrator, the Plan offers 12 investment options. Plan participants select the options they prefer and allocate their contributions between options as they deem appropriate. Participant loans are included in the statements of net assets available for Plan benefits at cost, which approximates fair value of the notes. The notes are payable through payroll deductions in installments of principal plus interest at a rate of 10.25% - 10.50%, with final payments due between April 1998 and October 2001, and are secured by the participants' vested account balances. The fair value of investments that represent 5% or more of the Plan's net assets consisted of: (6) TAX STATUS The Internal Revenue Service has determined and informed the Plan Sponsor by a letter dated February 7, 1996, that the Plan and related trust are designed in accordance with applicable sections of the Internal Revenue Code (IRC). The Plan has been amended since receiving the determination letter. However, the Plan Administrator believes that the Plan is designed and is currently being operated in compliance with the applicable requirements of the IRC. (7) RELATED PARTY TRANSACTIONS Certain Plan investments are units of a Variable Annuity Account managed by Aeltus Investment Management, Inc., an affiliate of Aetna Life Insurance and Annuity Company. Aetna Life Insurance and Annuity Company is defined as an insurance company by ERISA Sec. 403(b) and, therefore, these transactions qualify as party-in-interest. Fees for the investment management services are paid by the Plan Sponsor. In addition, the Plan held 27,082 and 15,170 shares of common stock of Consumer Portfolio Services, Inc. at December 31, 1997 and 1996, respectively. 9
INVESTMENT 1997 1996 -------------------------------------- -------------------- -------------------- Stock Fund $ 260,664 170,662 Schwab Advantage Money Market Fund 147,972 -- Aetna Variable Fund 159,039 85,188 Aetna Investment Advisers Fund 113,050 65,429 Aetna Fixed Account 126,085 71,176 Portfolio Partners MFS Research Growth Portfolio -- 39,827 Portfolio Partners MFS Emerging Equities Portfolio 157,453 126,611 Fidelity VIP Growth Portfolio 157,318 70,010 Fidelity VIP Equity-Income Portfolio 88,216 -- ----------- ---------- $ 1,209,797 628,903 =========== ========== Schedule 1 CONSUMER PORTFOLIO SERVICES, INC. 401(k) PLAN Item 27a -- Schedule of Assets Held for Investment Purposes December 31, 1997 * Denotes a party-in-interest. See accompanying independent auditors' reports.
DESCRIPTION OF INVESTMENT INCLUDING IDENTITY OF ISSUER BORROWER, LESSOR OR MATURITY DATE, RATE OF INTEREST, CURRENT VALUE SIMILAR PARTY COLLATERAL, PAR OR MATURITY VALUE COST --------------------------------------------- ------------------------------------ ------------- --------------- * Consumer Portfolio Services, Inc. 27,082 shares common stock $ 280,137 260,664 * Charles Schwab Institutional Schwab Advantage Money Market Fund, 147,972 units 147,972 147,972 * Aetna Life Insurance and Annuity Company Aetna Variable Fund, 7,964 units 159,039 159,039 * Aetna Life Insurance Aetna Variable Encore Fund, 3,247 and Annuity Company units 39,311 39,311 * Aetna Life Insurance Aetna Income Shares, 2,292 units and Annuity Company 27,859 27,859 * Aetna Life Insurance Aetna Investment Advisers Fund, and Annuity Company 6,669 units 113,050 113,050 * Aetna Life Insurance and Annuity Company Aetna Fixed Account, 10,137 units 126,085 126,085 * Aetna Life Insurance Portfolio Partners Scudder and Annuity Company International Growth Portfolio, 3,765 units 48,318 48,318 * Aetna Life Insurance Portfolio Partners MFS Research and Annuity Company Growth Portfolio, 3,426 units 37,926 37,926 * Aetna Life Insurance Portfolio Partners MFS Emerging and Annuity Company Equities Portfolio, 10,073 units 157,453 157,453 * Aetna Life Insurance Fidelity VIP Overseas Portfolio, and Annuity Company 2,316 units 29,716 29,716 * Aetna Life Insurance Fidelity VIP Equity-Income and Annuity Company Portfolio, 4,329 units 88,216 88,216 * Aetna Life Insurance Fidelity VIP Growth Portfolio, 8,209 and Annuity Company units 157,318 157,318 * Participant loans Participant loans; interest rate between 10.25% and 10.5%; maturing between April 1998 and October 2001 31,475 31,475 ----------- --------- $ 1,443,875 1,424,402 =========== ========= Schedule 2 CONSUMER PORTFOLIO SERVICES, INC. 401(k) PLAN Item 27d - Schedule of Reportable Transactions Year ended December 31, 1997 * Denotes a party-in-interest. See accompanying independent auditors' report.
Selling/ Identity of party Purchase redemption involved Description price price - -------------------------------------------- --------------------------------------------------- --------------- ----------- * Consumer Portfolio Services, Inc. Stock Fund series of 15 purchases $121,966 -- * Consumer Portfolio Services, Inc. Stock Fund series of 2 sales -- 4,083 * Schwab Advantage Money Market Fund Money market fund series of 54 purchases 453,826 -- * Schwab Advantage Money Market Fund Money market fund series of 30 sales -- 302,474 * Aetna Life Insurance and Annuity Company Aetna Variable Fund series of 51 purchases 75,306 -- * Aetna Life Insurance and Annuity Company Aetna Variable Fund series of 15 sales -- 30,644 * Aetna Life Insurance and Annuity Company Aetna Variable Encore Fund series of 54 purchases 78,958 -- * Aetna Life Insurance and Annuity Company Aetna Variable Encore Fund series of 20 sales -- 67,743 * Aetna Life Insurance and Annuity Company Aetna Investment Advisers Fund series of 50 purchases 42,879 -- * Aetna Life Insurance and Annuity Company Aetna Investment Advisers Fund series of 10 sales -- 12,270 * Aetna Life Insurance and Annuity Company Aetna Fixed Account series of 45 purchases 80,631 -- * Aetna Life Insurance and Annuity Company Aetna Fixed Account series of 11 sales -- 30,154 * Aetna Life Insurance and Annuity Company Portfolio Partners Scudder International Growth Portfolio series of 49 purchases 41,024 -- * Aetna Life Insurance and Annuity Company Portfolio Partners Scudder International Growth Portfolio series of 10 sales -- 22,627 * Aetna Life Insurance and Annuity Company Portfolio Partners MFS Research Growth Portfolio series of 44 purchases 25,660 -- * Aetna Life Insurance and Annuity Company Portfolio Partners MFS Research Growth Portfolio series of 12 sales -- 25,055 * Aetna Life Insurance and Annuity Company Portfolio Partners MFS Emerging Equities Portfolio series of 49 purchases 100,358 -- * Aetna Life Insurance and Annuity Company Portfolio Partners MFS Emerging Equities Portfolio series of 17 sales -- 86,510 * Aetna Life Insurance and Annuity Company Fidelity VIP Equity-Income Portfolio series of 53 purchases 61,003 -- * Aetna Life Insurance and Annuity Company Fidelity VIP Equity-Income Portfolio series of 7 sales -- 23,177 * Aetna Life Insurance and Annuity Company Fidelity VIP Growth Portfolio series of 52 purchases 108,896 -- * Aetna Life Insurance and Annuity Company Fidelity VIP Growth Portfolio series of 15 sales -- 43,622 ====== ====== Expense Current value of Identity of party Lease incurred with Cost of asset on Net gain (loss) involved rental transaction asset transaction date - -------------------------------------------- ------ ------------- ------- ---------------- --------------- * Consumer Portfolio Services, Inc. -- 567 -- 121,966 -- * Consumer Portfolio Services, Inc. -- -- 3,313 -- 770 * Schwab Advantage Money Market Fund -- -- -- 453,826 -- * Schwab Advantage Money Market Fund -- -- 302,474 -- -- * Aetna Life Insurance and Annuity Company -- -- -- 75,306 -- * Aetna Life Insurance and Annuity Company -- -- 30,644 -- -- * Aetna Life Insurance and Annuity Company -- -- -- 78,958 -- * Aetna Life Insurance and Annuity Company -- -- 67,743 -- -- * Aetna Life Insurance and Annuity Company -- -- -- 42,879 -- * Aetna Life Insurance and Annuity Company -- -- 12,270 -- -- * Aetna Life Insurance and Annuity Company -- -- -- 80,631 -- * Aetna Life Insurance and Annuity Company -- -- 30,154 -- -- * Aetna Life Insurance and Annuity Company -- -- -- 41,024 -- * Aetna Life Insurance and Annuity Company -- -- 22,627 -- -- * Aetna Life Insurance and Annuity Company -- -- -- 25,660 -- * Aetna Life Insurance and Annuity Company -- -- 25,055 -- -- * Aetna Life Insurance and Annuity Company -- -- -- 100,358 -- * Aetna Life Insurance and Annuity Company -- -- 86,510 -- -- * Aetna Life Insurance and Annuity Company -- -- -- 61,003 -- * Aetna Life Insurance and Annuity Company -- -- 23,177 -- -- * Aetna Life Insurance and Annuity Company -- -- -- 108,896 -- * Aetna Life Insurance and Annuity Company -- -- 43,622 -- --CONSUMER PORTFOLIO SERVICES, INC. 401(k) PLAN Notes to Financial Statements, Continued (3) Net Assets Available for Plan Benefits The following presents net assets available for Plan benefits for each fund as of December 31, 1997: 8
Participant directed ------------------------------------------------------------------------------------- Portfolio Aetna Aetna Partners MFS Fidelity VIP Aetna Aetna Aetna Investment Variable Emerging Equity- Income Fixed Variable Advisers Encore Equities Income Shares Account Fund Fund Fund Portfolio Portfolio -------- -------- ---------- ----------- --------- ------------ ------------ Assets: Investments at fair value: Guaranteed investment contract $ -- 126,085 -- -- -- -- -- Pooled separate accounts 27,859 -- 159,039 113,050 39,311 157,453 88,216 Consumer Portfolio Services, Inc. common stock -- -- -- -- -- -- -- Participant loans -- -- -- -- -- -- -- ------- -------- -------- ------- ------ ------- ------- 27,859 126,085 159,039 113,050 39,311 157,453 88,216 Receivables -- employees' individual rollover -- -- 1,696 -- -- -- -- Cash -- -- -- -- -- -- -- ------- -------- -------- ------- ------ -------- ------- Net assets available for Plan benefits $27,859 126,085 160,735 113,050 39,311 157,453 88,216 ======= ======= ======= ======= ====== ======= ====== Participant directed --------------------------------------------------------------------------------- Portfolio Partners Portfolio Scudder Partners MFS Fidelity VIP Fidelity VIP International Research Growth Overseas Growth Growth Stock Participant Portfolio Portfolio Portfolio Portfolio Fund loans ------------ ------------ ------------- --------- ------ ----------- Assets: Investments at fair value: Guaranteed investment contract -- -- -- -- -- -- Pooled separate accounts 157,318 29,716 48,318 37,926 -- -- Consumer Portfolio Services, Inc. common stock -- -- -- -- 159,726 -- Participant loans -- -- -- -- -- 31,475 ------- ------ ------ ------ ------- ------ 157,318 29,716 48,318 37,926 159,726 31,475 Receivables -- employees' individual rollover -- -- -- -- 3,392 -- Cash -- -- -- -- 76,508 -- ------- ------ ------ ------ ------- ------ Net assets available for Plan benefits 157,318 29,716 48,318 37,926 239,626 31,475 ======= ====== ====== ====== ======= ====== Non- participant directed ----------- Stock Fund Total ----------- ----- Assets: Investments at fair value: Guaranteed investment contract -- 126,085 Pooled separate accounts -- 858,206 Consumer Portfolio Services, Inc. common stock 100,938 260,664 Participant loans -- 31,475 ------- --------- 100,938 1,276,430 Receivables -- employees' individual rollover -- 5,088 Cash 71,464 147,972 ------- --------- Net assets available for Plan benefits 172,402 1,429,490 ======= =========
EXHIBIT 23.1 Independent Auditors' Consent The Administrative Committee Consumer Portfolio Services, Inc. 401(k) Plan We consent to the incorporation by reference in the Registration Statement on Form S-8 of Consumer Portfolio Services, Inc. of our report dated June 24, 1998 relating to the statements of net assets available for plan benefits and the statements of changes in net assets available for plan benefits of the Consumer Portfolio Services, Inc. 401(k) Plan as of and for the years ended December 31, 1997 and 1996, and all related schedules, which report appears in the December 31, 1997, annual report on Form 11-K of the Consumer Portfolio Services, Inc. 401(k) Plan. /s/ KPMG Peat Marwick LLP Orange County, California June 29, 1998