CPSS
$4.15
Consumer Portfol
Earnings Details
1st Quarter March 2018
Wednesday, April 18, 2018 4:30:00 PM
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Summary

Consumer Portfol (CPSS) Recent Earnings

Consumer Portfol (CPSS) reported 1st Quarter March 2018 earnings of $0.12 per share on revenue of $103.6 million. The consensus earnings estimate was $0.19 per share on revenue of $108.4 million. Revenue fell 3.8% compared to the same quarter a year ago.

Consumer Portfolio Services Inc is engaged in purchasing & servicing retail automobile contracts originated by franchised automobile dealers and by independent dealers in the United States in the sale of new & used automobiles..

Results
Reported Earnings
$0.12
Earnings Whisper
-
Consensus Estimate
$0.19
Reported Revenue
$103.6 Mil
Revenue Estimate
$108.4 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

CPS Announces First Quarter 2018 Earnings

  • Pretax income of $4.6 million
  • Net income of $3.1 million, or $0.12 per diluted share
  • New contract purchases of $211 million

LAS VEGAS, NV, April 18, 2018 (GLOBE NEWSWIRE) -- Consumer Portfolio Services, Inc. (Nasdaq:CPSS) (“CPS” or the “Company”) today announced earnings of $3.1 million, or $0.12 per diluted share, for its first quarter ended March 31, 2018. This compares to net income of $4.5 million, or $0.16 per diluted share, in the first quarter of 2017. 

Revenues for the first quarter of 2018 were $103.6 million, a decrease of $4.0 million, or 3.8%, compared to $107.6 million for the first quarter of 2017.  Total operating expenses for the first quarter of 2018 were $99.0 million compared to $99.8 million for the 2017 period.  Pretax income for the first quarter of 2018 was $4.6 million compared to pretax income of $7.8 million in the first quarter of 2017, a decrease of 41.5%.

During the first quarter of 2018, CPS purchased $210.6 million of new contracts compared to $190.8 million during the fourth quarter of 2017 and $229.6 million during the first quarter of 2017.  The Company's receivables totaled $2.332 billion as of March 31, 2018, a decrease from $2.334 billion as of December 31, 2017 and an increase from $2.323 billion as of March 31, 2017.

Annualized net charge-offs for the first quarter of 2018 were 8.16% of the average portfolio as compared to 7.91% for the first quarter of 2017.  Delinquencies greater than 30 days (including repossession inventory) were 8.74% of the total portfolio as of March 31, 2018, as compared to 9.74% as of March 31, 2017.

“We are pleased to get 2018 off to a good start,” said Charles E. Bradley, Jr., Chairman and Chief Executive Officer.  “We’ve maintained a disciplined approach to pricing and credit in the face of a robust competitive environment, our asset-backed securities continue to be well received in the capital markets and we recorded our 26th consecutive quarter of positive pre-tax earnings.”

Conference Call

CPS announced that it will hold a conference call on Thursday, April 19, 2018, at 1:00 p.m. ET to discuss its quarterly operating results.  Those wishing to participate by telephone may dial-in at 877 312-5502 or 253 237-1131 approximately 10 minutes prior to the scheduled time. The conference identification number is 6382649.

A replay of the conference call will be available between April 19, 2018 and April 26, 2018, beginning two hours after conclusion of the call, by dialing 855 859-2056 or 404 537-3406 for international participants, with conference identification number 6382649.  A broadcast of the conference call will also be available live and for 90 days after the call via the Company’s web site at www.consumerportfolio.com.

About Consumer Portfolio Services, Inc.

Consumer Portfolio Services, Inc. is an independent specialty finance company that provides indirect automobile financing to individuals with past credit problems, low incomes or limited credit histories. We purchase retail installment sales contracts primarily from franchised automobile dealerships secured by late model used vehicles and, to a lesser extent, new vehicles. We fund these contract purchases on a long-term basis primarily through the securitization markets and service the contracts over their lives.

Forward-looking statements in this news release include the Company's recorded revenue, expense and provision for credit losses, because these items are dependent on the Company’s estimates of incurred losses.  The accuracy of such estimates may be adversely affected by various factors, which include (in addition to risks relating to the economy generally) the following: possible increased delinquencies; repossessions and losses on retail installment contracts; incorrect prepayment speed and/or discount rate assumptions; possible unavailability of qualified personnel, which could adversely affect the Company’s ability to service its portfolio; possible increases in the rate of consumer bankruptcy filings, which could adversely affect the Company’s rights to collect payments from its portfolio; other changes in government regulations affecting consumer credit; possible declines in the market price for used vehicles, which could adversely affect the Company’s realization upon repossessed vehicles; and economic conditions in geographic areas in which the Company's business is concentrated. All of such factors also may affect the Company’s future financial results, as to which there can be no assurance. Any implication that the results of the most recently completed quarter are indicative of future results is disclaimed, and the reader should draw no such inference. Factors such as those identified above in relation to the provision for credit losses may affect future performance.

Investor Relations Contact

Jeffrey P. Fritz, Chief Financial Officer
844 878-2777

Consumer Portfolio Services, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
        
    Three months ended 
    March 31, 
    2018    2017  
Revenues:       
Interest income  $100,906   $104,575  
Other income   2,657    3,023  
    103,563    107,598  
Expenses:       
Employee costs   20,641    17,780  
General and administrative   7,495    6,922  
Interest   24,062    22,088  
Provision for credit losses   40,507    47,167  
Other expenses   6,301    5,849  
    99,006    99,806  
Income before income taxes   4,557    7,792  
Income tax expense   1,412    3,312  
Net income  $3,145   $4,480  
        
Earnings per share:       
Basic  $0.15   $0.19  
Diluted  $0.12   $0.16  
        
        
Number of shares used in computing earnings       
per share:       
Basic   21,576    23,517  
Diluted   25,664    28,223  
        
        
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
        
   March 31,  December 31, 
    2018    2017  
Assets:       
Cash and cash equivalents  $11,573   $12,731  
Restricted cash and equivalents   130,798    111,965  
Total cash and cash equivalents   142,371    124,696  
        
Finance receivables   2,091,875    2,304,984  
Allowance for finance credit losses   (100,844)   (109,187) 
Finance receivables, net   1,991,031    2,195,797  
        
Finance receivables measured at fair value   209,847    -  
Deferred tax assets, net   32,302    32,446  
Other assets   63,426    71,902  
   $2,438,977   $2,424,841  
        
Liabilities and Shareholders' Equity:       
Accounts payable and accrued expenses  $33,569   $28,715  
Warehouse lines of credit   121,666    112,408  
Securitization trust debt   2,080,070    2,083,215  
Subordinated renewable notes   16,348    16,566  
    2,251,653    2,240,904  
        
Shareholders' equity   187,324    183,937  
   $2,438,977   $2,424,841  
        
        
Operating and Performance Data ($ in millions)       
     
    At and for the  
    Three months ended 
    March 31, 
    2018    2017  
        
Contracts purchased  $  210.59   $  229.64  
Contracts securitized     193.60      210.00  
        
Total portfolio balance  $  2,332.32   $  2,323.22  
Average portfolio balance     2,331.59      2,311.81  
        
Allowance for finance credit losses as % of fin. receivables   4.82%    4.34%  
        
Aggregate allowance as % of fin. receivables (1)   5.95%    5.43%  
        
Delinquencies       
31+ Days   7.14%    8.12%  
Repossession Inventory   1.60%    1.62%  
Total Delinquencies and Repo. Inventory   8.74%    9.74%  
        
Annualized net charge-offs as % of average portfolio   8.16%    7.91%  
        
Recovery rates (2)   33.8%    35.2%  
        
   For the
   Three months ended
   March 31,
    2018   2017 
   $ (3) % (4) $ (3) % (4)
Interest income  $100.91  17.3% $104.58  18.1%
Servicing fees and other income   2.66  0.5%  3.02  0.5%
Interest expense     (24.06) -4.1%    (22.09) -3.8%
Net interest margin   79.50  13.6%  85.51  14.8%
Provision for credit losses     (40.51) -6.9%    (47.17) -8.2%
Risk adjusted margin   38.99  6.7%  38.34  6.6%
Core operating expenses   (34.44) -5.9%  (30.55) -5.3%
Pre-tax income  $4.56  0.8% $7.79  1.3%
        
(1)  Includes allowance for finance credit losses and allowance for repossession inventory. 
(2)  Wholesale auction liquidation amounts (net of expenses) as a percentage of the account balance at the time of sale.
(3)  Numbers may not add due to rounding.       
(4)  Annualized percentage of the average portfolio balance.  Percentages may not add due to rounding.

 

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Source: Consumer Portfolio Services, Inc.