CPSS
$3.40
Consumer Portfol
($.12)
(3.41%)
Earnings Details
3rd Quarter September 2018
Wednesday, October 17, 2018 4:30:00 PM
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Summary

Consumer Portfol (CPSS) Recent Earnings

Consumer Portfol (CPSS) reported 3rd Quarter September 2018 earnings of $0.13 per share on revenue of $95.6 million. The consensus earnings estimate was $0.12 per share on revenue of $98.8 million. Revenue fell 12.7% 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
$0.13
Earnings Whisper
-
Consensus Estimate
$0.12
Reported Revenue
$95.6 Mil
Revenue Estimate
$98.8 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

CPS Announces Third Quarter 2018 Earnings

  • Pretax income of $4.7 million
  • Net income of $3.2 million, or $0.13 per diluted share
  • New contract purchases of $225 million

LAS VEGAS, NV, Oct. 17, 2018 (GLOBE NEWSWIRE) -- Consumer Portfolio Services, Inc. (Nasdaq: CPSS) (“CPS” or the “Company”) today announced earnings of $3.2 million, or $0.13 per diluted share, for its third quarter ended September 30, 2018. This compares to net income of $4.7 million, or $0.17 per diluted share, in the third quarter of 2017. 

Revenues for the third quarter of 2018 were $95.6 million, a decrease of $13.9 million, or 12.7%, compared to $109.5 million for the third quarter of 2017.  Total operating expenses for the third quarter of 2018 were $90.9 million compared to $101.4 million for the 2017 period.  Pretax income for the third quarter of 2018 was $4.7 million compared to pretax income of $8.1 million in the third quarter of 2017, a decrease of 42.0%.

For the nine months ended September 30, 2018 total revenues were $298.6 million compared to $327.2 million for the nine months ended September 30, 2017, a decrease of approximately $28.6 million, or 8.7%.  Total expenses for the nine months ended September 30, 2018 were $284.6 million, a decrease of $18.7 million, or 6.2%, compared to $303.3 million for the nine months ended September 30, 2017.  Pretax income for the nine months ended September 30, 2018 was $13.9 million, compared to $23.9 million for the nine months ended September 30, 2017.  Net income for the nine months ended September 30, 2018 was $9.5 million compared to $13.7 million for the nine months ended September 30, 2017

During the third quarter of 2018, CPS purchased $225.2 million of new contracts compared to $214.7 million during the second quarter of 2018 and $204.7 million during the third quarter of 2017.  The Company's receivables totaled $2.343 billion as of September 30, 2018, an increase from $2.329 billion as of June 30, 2018 and a decrease from $2.346 billion as of September 30, 2017.

Annualized net charge-offs for the third quarter of 2018 were 8.03% of the average portfolio as compared to 7.96% for the third quarter of 2017.  Delinquencies greater than 30 days (including repossession inventory) were 11.58% of the total portfolio as of September 30, 2018, as compared to 10.27% as of September 30, 2017.

We are pleased to record our 28th consecutive quarter of pre-tax earnings,” said Charles E. Bradley, Jr.  “In addition, in July we priced our third quarter securitization at the second-tightest spreads over the benchmarks since 2011, indicating continued high demand for our securitization bonds.”

Conference Call

CPS announced that it will hold a conference call on Thursday, October 18, 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 7899309.

A replay of the conference call will be available between October 18, 2018 and October 25, 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 7899309.  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    Nine months ended  
    September 30,    September 30,  
    2018    2017    2018    2017  
Revenues:             
Interest income  $  93,617   $  107,014   $  291,535   $  319,074  
Other income     2,014      2,474      7,022      8,084  
      95,631      109,488      298,557      327,158  
Expenses:             
Employee costs     18,806      18,455      59,288      53,807  
General and administrative     7,784      6,355      22,730      20,096  
Interest     25,808      23,317      75,057      68,641  
Provision for credit losses     31,959      47,336      107,997      143,053  
Other expenses     6,568      5,916      19,566      17,707  
      90,925      101,379      284,638      303,304  
Income before income taxes     4,706      8,109      13,919      23,854  
Income tax expense     1,508      3,446      4,409      10,138  
  Net income   $  3,198   $  4,663   $  9,510   $  13,716  
              
Earnings per share:             
  Basic  $  0.14   $  0.21   $  0.44   $  0.60  
  Diluted  $  0.13   $  0.17   $  0.38   $  0.50  
              
              
Number of shares used in computing earnings             
  per share:             
  Basic   22,636    22,473    21,800    23,019  
  Diluted   24,735    26,779    25,178    27,606  
              
              
Condensed Consolidated Balance Sheets      
(In thousands)      
(Unaudited)      
              
              
   September 30,  December 31,       
    2018    2017        
Assets:             
Cash and cash equivalents  $  10,537   $  12,731        
Restricted cash and equivalents   110,473     111,965         
Total cash and cash equivalents   121,010    124,696        
              
Finance receivables   1,697,841    2,304,984        
Allowance for finance credit losses   (82,472)   (109,187)       
Finance receivables, net   1,615,369    2,195,797        
              
Finance receivables measured at fair value   614,807      -         
Deferred tax assets, net   28,686    32,446        
Other assets   63,698    71,902        
   $  2,443,570   $  2,424,841        
              
Liabilities and Shareholders' Equity:             
Accounts payable and accrued expenses  $  33,324   $  28,715        
Warehouse lines of credit   127,695    112,408        
Residual interest financing   39,013      -         
Securitization trust debt   2,034,281    2,083,215        
Subordinated renewable notes   16,948    16,566        
    2,251,261    2,240,904        
              
Shareholders' equity   192,309    183,937        
   $  2,443,570   $  2,424,841        
              
              
Operating and Performance Data ($ in millions)             
              
           
    At and for the    At and for the  
    Three months ended    Nine months ended  
    September 30,    September 30,  
    2018    2017    2018    2017  
              
Contracts purchased  $  225.24   $  204.74   $  650.58   $  668.28  
Contracts securitized     239.87      230.00      638.45      670.00  
              
Total portfolio balance  $  2,342.89   $  2,346.00   $  2,342.89   $  2,346.00  
Average portfolio balance     2,334.90      2,344.96      2,332.26      2,332.33  
              
Allowance for finance credit losses as % of fin. receivables   4.86%   4.69%       
              
Aggregate allowance as % of fin. receivables (1)   6.11%   5.59%       
              
Delinquencies             
31+ Days   10.13%   8.90%       
Repossession Inventory   1.45%   1.37%       
Total Delinquencies and Repo. Inventory   11.58%   10.27%       
              
Annualized net charge-offs as % of average portfolio   8.03%   7.96%   7.92%   7.83% 
              
Recovery rates (2)   34.8%   34.6%   34.5%   35.2% 
              
    For the   For the 
    Three months ended   Nine months ended 
    September 30,   September 30, 
    2018   2017   2018   2017 
     $ (3) % (4)  $ (3) % (4)   $ (3) % (4)   $ (3) % (4)
Interest income  $  93.62 16.0% $  107.01 18.3% $  291.54 16.7% $  319.07 18.2%
Servicing fees and other income     2.01 0.3%    2.47 0.4%    7.02 0.4%    8.08 0.5%
Interest expense     (25.81)-4.4%    (23.32)-4.0%    (75.06)-4.3%    (68.64)-3.9%
Net interest margin      69.82 12.0%    86.17 14.7%    223.50 12.8%    258.52 14.8%
Provision for credit losses     (31.96)-5.5%    (47.34)-8.1%    (108.00)-6.2%    (143.05)-8.2%
Risk adjusted margin     37.86 6.5%    38.84 6.6%    115.50 6.6%    115.46 6.6%
Core operating expenses     (33.16)-5.7%    (30.73)-5.2%    (101.58)-5.8%    (91.61)-5.2%
Pre-tax income  $  4.71 0.8% $  8.11 1.4% $  13.92 0.8% $  23.85 1.4%
              
              
(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.