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) March 14, 2006
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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. Although
each
of the two exhibits is an update of similar documents filed as exhibits to
a
current report that CPS filed on January 12, 2006, which updated an earlier
report filed, CPS is not undertaking to update further 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:
March 14, 2006
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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's ticker
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.
Consumer
Portfolio Services, Inc. Specialty finance company focused on sub-prime auto
market Established in 1991; IPO in 1992 Through December 31, 2005, approximately
$6.1 billion in contract purchases from auto dealers
Consumer
Portfolio Services, Inc As of December 31, 2005, managed portfolio of
approximately $1.1 billion Irvine, California headquarters and servicing
branches in Virginia, Florida, Georgia and Illinois Approximately 740
employees
U.S.
Auto
Finance Market2004 U.S. auto financing = $392 billion(1)$207 billion new;
$185
billion used Company estimates 20%, or $78 billion is “sub-prime Historically
fragmented market with few long-term dominant players(1)According to CNW
Marketing Research, Inc.
Major
Market Participants AmeriCredit Capital One Triad HSBC/Household CitiFinancial
Wells Fargo Manufacturers’Captives Regional Financial Inst. Regional
Independents
The
CPS
Landscape as of December 31, 2005Contracts with over 7,300 dealers in 47
states80 employee marketing reps in field and four in-house West coast
headquarters and four strategically located servicing
branches
9The
CPS
Landscape Primarily factory franchised dealers Contract Purchases in 2005Factory
Franchised88%Rental Car Companies1%Independents(1)11%(1)Includes contract
purchases of TFC, a subsidiary that targets enlisted members of U.S. Armed
Forces.
The
CPS
Landscape CPS’s risk-adjusted pricing results in program offerings covering a
wide band of the credit spectrum New contract acquisitions in 2005 n/a10,721
27.9 First Time Buyer 515 11,567 26.5 Mercury / Delta 526 12,197 23.0 Standard
511 14,613 19.1 Alpha 52 417,070 16.9 Alpha Plus 517 18,981 15.3 Super Alpha
60
420,228 12.4 PreferredAvg FICO Avg Amount Financed $Avg Yield %
(1)Program.
(1)
Contract APR as adjusted for fees charged (or paid) to
dealer.
11
The
CPS Landscape Product Mix New contract acquisitions in 2005 0 10 20 30 40
50%
Preferred Super Alpha Alpha Plus Alpha Standard Mercury/Delta FTB
Military
0
5 10 15
20 25 30 35% 2006 2005 2004 2003 2002 2001 Earlier The CPS Landscape Primarily
late model pre-owned vehicles15% New85% Pre-owned Securitization 2005-D
Principal Balances by Model Year
13
The
CPS Landscape Affordable, basic transportation vehicles Average vehicle sales
price of $15,150Average monthly payment of $385 for 61 months New contract
acquisitions in 2005 FORD 19% CHEV 19% DODG 12% PONT 6% NISS 5% CHRY 5% SUZU
4%
MITS 4% TOYO 3% HYUN 3% Others 20%
The
CPS
Landscape 17%Percentage of homeowners $39,596 per year Average household
income
5 years Average time in residence 5 years Average time in job 38 years Average
age An emphasis on stable obligors with the ability to rehabilitate their
credit
profile New contract acquisitions in 2005
Contract
Originations Centralized contract originations at Irvine HQ Maximizes control
and efficiencies Proprietary auto-decisioning system Makes initial credit
decision on approximately 90% 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 December 2005 the Company has originate approximately $6.1
billion Annual Volumes ($ in millions) 0 200 400 600 800 1,000 $1,200 1991
1992
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
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
date Workloads 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. Supervision Front End 30-59 days Supervision Predictive Dialer 0-29
days
Supervision Back End 60-119 days Supervision SkipTracing 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 SeaWest 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 Two short-term warehouse facilities aggregating $350 million Quarterly
“AAA” rated asset-backed securities provide long-term matched funding Use of
multiple bond insurers enhances liquidity and structural flexibility Sale
of
subordinated tranches increases liquidity
($
in
millions)Portfolio Financing The Company has been a regular issuer of rated
ABS
since 1994Through December 2005: 40 deals aggregating over $4.0 billion 0
50 100
150 200 250 300 $350 1994-1 1994-2 1994-3 1994-4 1995-1 1995-2 1995-3 1995-4
1996-1 1996-2 1996-3 1997-1 1997-2 1997-3 1997-4 1997-5 1998-1 1998-2 1998-3
1998-4 2001-A 2002-A 2002-B 2002-C 2003-A 2003-B 2003-C 2003-D 2004-A 2004-B
2004-C 2004-D 2005-A 2005-B 2005-C 2005-D
Current
Balance Original Principal
Other
Financing Shelf registration effective May 2005Wtdrate 8.5%Wtdorigterm 27
months
Sub. Debt -Renewable Notes $4,655Sub. Debt -RISRs Senior Debt -Affiliate
of
Levine Leichtman Residual Interest Financing Source Publicly issued notes
from
1996 12.5% Maturing in 2006 $14,000(Fully repaid in January 2006)A lender
to CPS
since 1998 11.75% 2006 maturities $40,000 2nd
rated
“NIM” transaction by CPS 8.36% amortizing with related ABS $43,745 Comments
Terms Outstanding at December 31, 2005($ in thousands)
Asset
Performance Receivables and Repo Inventory 30 Plus Days Past Due Three quarter
rolling averages Consistent Performance and Positive Trends 0.00 2.00 4.00
6.00
8.00 10.00% 12.00% 14.00% Dec 95 Dec 96 Dec 97 Dec 98 Mar 99 Jun 99 Sep 99
Dec
99 Mar 00 Jun 00 Sep 00Dec-00 Mar 01 Jun 01 Sep 01 Dec 01 Mar 02 Jun 02 Sep
02
Dec 02 Mar 03 Jun 03 Sep 03 Dec 03 Mar 04 Jun 04 Sep 04 Dec 04 Mar 05Jun
05Sep
05 Dec 05CPS MFN TFC
Asset
Performance Average Annual Net Credit Losses Consistent Performance and Positive
Trends MFN recoveries now exceed incremental losses 0.00 2.00 4.00 6.00 8.00
10.00 12.00 14.00% 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
2005
0.0
2.0
4.0 6.0 8.0 10.0 12.01 4.0% 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
19 20
21 22 23 24 Asset Performance Average ABS Pool Cumulative Net Credit Losses
as
of December 31, 2005 Consistent Performance and Positive Trends ABS pools
from
2003 onward exhibit substantially better performance.
Summary
Balance Sheets $ 766,599 69,920 696,679 74,829 542,815 22,204 34,279 $ 22,552
$
766,599 26,499 50,430 550,191 125,113 $ 14,366 December 31, 2004 410,310
1,081,555 102,465 58,655 Other debt Liabilities $ 492,470 $ 1,155,144 33,709
35,350 Warehouse lines of credit $ 29,018 $ 19,779 Accounts payable and other
liabilities 245,118 924,026 Securitization trust debt 0 43,745 Residual interest
financing 82,160 73,589 Shareholders’ equity $ 492,470 $ 1,155,144 14,093 40,897
Other Assets111,702 25,220 Residual interest in securitizations 266,189 913,576
Finance receivables, net of allowance 67,277 157,662 Restricted Cash $ 33,209
$
17,789 Cash Assets December 31, 2003 December 31, 2005($ in
thousands)
Summary
Statements of Operations($ in thousands) 4,052 11,7500 Impairment on residual
$10,421 $ 0 $ 0 Net gain on sale of contracts Year Ended $ (15,888) 0 (15,888)
148,580 32,574 32,147 33,936 38,173 132,69 214,394 12,480 105,818 December
31,
2004 (3,434) 0 Income tax expense (benefit) (3,039) 3,372 Income (loss) 37,141
40,384 Employee costs Expenses 23,861 51,669 Interest 31,581 39,285 General
and
administrative108,025 190,325 11,390 58,987 Provision for credit losses $
395 $
3,372 Net income (loss) 104,986 193,697 19,343 15,216 Other income17,058
6,647
Servicing fees 58,1641 71,834Interest income Revenues December 31, 2003December
31, 2005
Investment
Merits Market participant since 1991; CPS has weathered industry turbulence
to
remain one of the few independent public auto finance companies Attractive
industry fundamentals Disciplined approach to credit quality and servicing
Disciplined growth in new contract acquisitions and total managed portfolio
Diverse sources of funding
Investment
Merits Improving asset performance Recurring revenue model and sound quality
of
earnings 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 GECC YTD $1.4 mm contracts purchased
1991
YTD
$16.1 mm contracts purchased IPO -$5.0 mm for 20% of Company @ $5.00 per
share1992GECC commitment fulfilled
5YTD
$35.9 mm contracts purchased $50.0 mm contract purchase commitment from
institutional investor -“A” rated ABS structures $2.0 mm convertible note issued
to institutional investor $3.0 mm convertible note issued to institutional
investor A second $50.0 mm contract purchase commitment from institutional
investor 1993
$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 $20.0 mm public RISRs
1995
$88.9
mm ABS(first public issuance)2 for 1 stock split1996 $92.9 mm ABS $88.9 mm
ABS(first public issuance)2 for 1 stock split $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 Union $105.9 mm ABS $102.3 mm ABS $15.0 mm Stanwich Financial debt $20.0 mm public PENs $150.0 mm ABS YTD $600.1 mm contracts purchased Managed portfolio = $902.7 mm
10
YTD $1.1 billion contracts purchased Managed portfolio = $1,538.9 mm $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
1999
YTD $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 terminated Fairlane flow purchase program start FSA agrees to 21%
enhancement on existing deals; ABS resume cash releases 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 Nuvel flow purchase program starts Residual facility paid of CPS named
in
Stanwich Financial litigation$75.0 mm warehouse facility with Greenwich &
FSA
2001
YTD $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 Nuvell 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 “NIM”ABS $100.0 mm replacement
warehouse with UBS YTD $447.2 mm contracts purchased Managed portfolio =
$906.9
mm
2005
$137.4 mm ABS Settlement of Stanwich Financial BK claim in CA$100.0 mm Renewable
Note registration First profitable quarter since change in ABS structures
to
portfolio accounting$137.5 mm ABSYTD $691.3 mm contracts purchased Managed
portfolio = $1,121.7 mm$195.0 mm ABS Second warehouse with Bear Stearns of
$150.0 mm$45.8 mm NIM ABS$228.5 mm ABS in two deals (TFC collateral insured
by
Assured Guaranty)
Consumer
Portfolio Services, Inc. Nasdaq: CPSS