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) November 8,
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 a presentation. A copy is attached as an exhibit. Although the
exhibit is an update of a similar document filed as an exhibit to a current
report that CPS filed on August 7, 2006, 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 Exchange Act of 1934, 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 filed:
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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:
November 8, 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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EXHIBIT
99.1
Consumer
Portfolio Services, Inc. Nasdaq: CPSS As of September 30,
2006
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.
,
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 Irvine, California headquarters and
three servicing branches in Virginia, Florida and Illinois
Consumer
Portfolio Services, Inc. Through September 30, 2006, approximately $6.8 billion
in contract purchases from auto dealers As of September 30, 2006, managed
portfolio of approximately $1.48 billion Approximately 740 employees
U.S.
Auto Finance Market 2005 U.S. auto financing = $407 billion (1) $211 billion
new; $196 billion used Company estimates 20%, or $81 billion is “sub-prime”
Historically fragmented market with few long-term dominant players Significant
barriers to entry (1)According to CNW Marketing Research,
Inc.
Major
Market Participants AmeriCredit Capital One Triad HSBC/Household Wells Fargo
CitiFinancial Chase Custom Manufacturers’ Captives
The
CPS Landscape as of September 30, 2006 Contracts with over 7,300 dealers
in 47
states 81 employee marketing reps in the field and 6 in-house West coast
headquarters and three strategically located servicing branches
The
CPS Landscape Primarily factory franchised dealers Contract Purchases for
the
nine months ended September 30, 2006 Factory Franchised 89%Rental Car Companies
1% Independents (1) 10% (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 for the nine
months
ended September 30, 2006 Program Avg Yield % (1) Avg Amount Financed $ Avg
FICO
% of Purchases (2) Preferred 12.520,002604 518 523 512 519 519 n/a 3% Super
Alpha 15.319,507 12% Alpha Plus 17.117,570 19% Alpha 19.2 15,308 46% Standard
22.8 13,009 8% Mercury / Delta 26.411,589 7% First Time Buyer 27.2 11,366
5%
(1)Contract APR as adjusted for fees charged (or paid) to dealer. (2)Under
the
CPS programs
The
CPS Landscape Primarily late model pre-owned vehicles 17% New 83% Pre-owned
0%
5% 10% 15% 20% 25% 30% 2006 2005 2004 2003 2002 2001 Earlier Securitization
2006-C Principal Balances by Model Year The CPS Landscape Affordable, basic
transportation vehicles Average vehicle sales price of $15,677 Average monthly
payment of $386 for 63 months PONT 7% KIA 5% SUZU 4% CHEV 20% DODG 12% FORD
18%
MITS 3% CHRY 6% HYUN 3% TOYO 3% NISS 5% Others 14% New contract acquisitions
under the CPS programs for the nine months ended September 30,
2006
The
CPS Landscape Affordable, basic transportation vehicles Average vehicle sales
price of $15,677⑀⏇Average monthly payment of $386 for 63 months PONT
7% KIA 5% SUZU 4% CHEV 20% DODG 12% FORD 18% MITS 3% CHRY 6% HYUN 3% TOYO
3%
NISS 5% Others 14% New
contract acquisitions under the CPS programs for the nine months
The
CPS Landscape An emphasis on stable obligors with the ability to rehabilitate
their credit profile New contract acquisitions under the CPS programs for
the
nine months ended September 30, 2006 Average age - 37 years Average time
in job-
5 years Average time in residence- 5 years Average household income- $40,332
per
year Percentage of homeowners 18%
Contract
Originations Centralized contract originations at Irvine HQ Maximizes control
and efficiencies Proprietary auto-decisioning system Makes initial credit
decision on approximately 90% of incoming applications Enhances dealer service
by shortening response time Pre-funding verification of employment, income
and
residency Protects against dealer and obligor fraud
Contract
Originations Infrastructure to Support Significant Originations
Volumes02004006008001,0001,2001991199219931994199519961997199819992000200120022003200420052006
Annual Volumes ($ in millions) 2006 originations through September Since
inception through September 30, 2006 the Company has originated over $6.8
billion
Contract
Servicing Geographically dispersed servicing centers enhance coverage and
staffing flexibility and drive portfolio performance Offices are tied into
the
central database and paperless collection system Early contact on past due
accounts; commencing as early as first day after due date Early stage workload
supplemented by automated intelligent predictive dialer Workloads allocated
based on specialization which enhances efficiencies
Successful
Acquisitions Entity-Date and Purchase Price-Comments MFN Financial Corp.-March
2002 $123.2 million- $380 million portfolio $17.4 million negative goodwill
The
Finance Company-May 2003 $23.7 million- $150 million portfolio CPS maintains
presence in TFC military niche SeaWest Financial Corp. (Purchase of certain
assets only)-April 2004 $63.2 million- $75 million portfolio acquired
⑀⏇Servicing for additional $100 million
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
Portfolio
Financing The
Company has been a regular issuer of rated ABS since 1994 Through Q3 2006:
42
deals aggregating over $4.9 billion 0501001502002503003501994-11994-21994-31994-41995-11995-21995-31995-41996-11996-11996-21996-31997-11997-21997-31997-41997-51998-11998-21998-31998-42001-A2002-A2002-B2002-C2003-A2003-B2003-C2003-D2004-A2004-12004-B2004-C2004-D2005-A2005-B2005-C2005-TFC2005-D2006-A2006-B2006-C
Outstanding Balance Original Balance$ in millions
Other
Financing ($ in thousands) Outstanding at September 30, 2006 Source Terms
Comments $24,243, Residual Interest Financing, 8.36% Amortizing with related
ABS, 2ndrated “NIM” transaction by CPS $40,000, Senior Debt -Affiliate of Levine
Leichtman, 11.75% 2006 and 2007 maturities, A lender to CPS since 1998 $9,936,
Sub. Debt - Renewable Notes, Wtdrate 9.46% Wtdorigterm 28 months , Shelf
registration effective May 2005
Total
Managed Portfolio Composition by Source ($ in
millions)$0$200$400$600$800$1,000$1,200$1,400$1,600Dec-02Dec-03Dec-04Dec-05Sep-06SeaWest
3rd PartySeaWest TFCMFN CPS Primary Driver of Growth is CPS “Organic” Contract
Purchases with over 95% now On Balance Sheet$1,481 mm$595 mm
Asset
Performance Average Annual Net Credit Losses Consistent Performance and Positive
Trends MFN recoveries now exceed incremental losses Through Q3 2006 CPS MFN
TFC
TFC
Asset Performance Receivables and Repo Inventory 30 Plus Days Past Due Three
quarter rolling averages Consistent Performance and Positive Trends* MFN
transactions called in August 2005. 06CPS MFN*
Asset
Performance Average ABS Pool Cumulative Net Credit Losses as of September
30,
2006Consistent Performance and Positive Trends ABS pools from 2003 onward
exhibit substantially better performance Months seasoned
Asset
Performance Auction Values for Repossession Sales Have Steadily Improved
(1) 50%
Mar-03 Jun-03 Sep-03 Dec-03 Mar-04 Jun-04 Sep-04 Dec-04 Mar-05 Jun-05 Sep-05
Dec-05 Mar-06 Jun-06 Sep-06 CPS Portfolio
Asset
Performance Repossession Sales for CPS Portfolio in Q3 2006⑀⏇Least fuel
efficient vehicles comprised less than 10% of all vehicles sold Full-size
SUV’s
and trucks sold for 48% of contract balance vs. 45% for other
vehicles25%5%3%6%34%14%11%2%Compact Ca Full-size Car Full-size SUV Full-size
Truck Mid-size Car Mid-size SUV Mid-size Truck Sports Car
Summary
Balance Sheets ($ in thousands) September 30, 2006 December 31, 2005 December
31, 2004 Assets $ 17,789 157,662 913,576 25,220 40,897 $ 1,155,144 $ 19,779
35,350 43,745 924,026 58,655 1,081,555 73,589 $ 1,155,144 Cash $ 15,302 $
14,366
Restricted Cash 197,074 125,113 Finance receivables, net of allowance 1,305,293
550,191 Residual interest in securitizations 17,847 50,430 Other Assets 63,004
26,499 $ 1,598,520 $ 766,599 Liabilities Other debt 49,936 74,829 1,516,821
696,679 Accounts payable and other liabilities $ 22,104 $ 22,552 Warehouse
lines
of credit 64,816 34,279 Residual interest financing 24,243 22,204 Securitization
trust debt 1,355,722 542,815 Shareholders’ equity 81,699 69,920 $ 1,598,520 $
766,599
Summary
Statements of Operations ($ in thousands) Nine Months Ended Year Ended September
30, 2006 $ 188,189 2,436 8,344 198,969 28,349 31,204 65,412 Impairment on
residual 0 0 0 11,750 65,322 190,287 8,6820 $ 8,682 $0.36 September 30, 2005
December 31, 2005 December 31, 2004 Revenues $ 171,834 6,647 15,216 193,697
40,384 39,285 51,669 58,987 190,325 3,3720 $ 3,372 $0.14 Interest income
$
122,015 $ 105,818 Servicing fees 5,492 12,480 Other income 11,477 14,394
138,984
132,692 Expenses Employee costs 29,657 38,173 Income (loss) 1,704 (15,888)
Income tax expense 0 0 General and administrative 28,427 33,936 Interest
35,842
32,147 Provision for credit losses 43,354 32,574 137,280 148,580 Net income
(loss) $ 1,704 $ (15,888) EPS (fully diluted) $0.07 $(0.75)
Selected
Financial Data ($ in millions) Nine Months Ended Years Ended December 31,
Auto
contract purchases Total managed portfolio Risk-adjusted margin (1) Core
operating expenses (2) $ amount % of average managed portfolio Total
delinquencies and repossessions (% of total managed portfolio) Annualized
net
charge-offs (% of average managed portfolio) September 30, 2005 $502.5 $1,480.7
$1,055.9$1,121.7 $906.9 $743.5 57.5 $ 42.8$ $61.2$41.1$22.9 58.1$ 7.9% 4.9%
4.9%
September 30, 2006 2005 2004 2003 $777.7 $691.3 $447.2 $72.1 8.4% 5.6% 7.8%
$357.3 59.6$ $79.7 $68.7 6.1% 8.0% 10.4% 4.0% 5.3% 6.8% 5.0% (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.
Investment
Merits 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 Demonstrated growth
in new
contract acquisitions and total managed portfolio
Investment
Merits Recurring revenue model and sound quality of earnings Operating leverage
through economies of scale Opportunistic, successful acquisitions Stable
senior
management team with significant equity ownership -senior management, including
vice presidents, average 12 years of service with the Company
Consumer
Portfolio Services, Inc. Nasdaq: CPSS
