CPSS
$4.01
Consumer Portfol
$.09
2.30%
Earnings Details
2nd Quarter June 2018
Tuesday, July 24, 2018 4:43:00 PM
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Summary

Consumer Portfol (CPSS) Recent Earnings

Consumer Portfol (CPSS) reported 2nd Quarter June 2018 earnings of $0.13 per share on revenue of $99.4 million. The consensus earnings estimate was $0.15 per share on revenue of $104.8 million. Revenue fell 9.7% 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
$0.15
Reported Revenue
$99.4 Mil
Revenue Estimate
$104.8 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

CPS Announces Second 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 $215 million
  • Residual interest securitization raises $40.0 million

LAS VEGAS, NV, July 24, 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 second quarter ended June 30, 2018. This compares to net income of $4.6 million, or $0.17 per diluted share, in the second quarter of 2017.

Revenues for the second quarter of 2018 were $99.4 million, a decrease of $10.7 million, or 9.7%, compared to $110.1 million for the second quarter of 2017.  Total operating expenses for the second quarter of 2018 were $94.7 million compared to $102.1 million for the 2017 period.  Pretax income for the second quarter of 2018 was $4.7 million compared to pretax income of $8.0 million in the second quarter of 2017, a decrease of 41.5%.

For the six months ended June 30, 2018 total revenues were $202.9 million compared to $217.7 million for the six months ended June 30, 2017, a decrease of approximately $14.7 million, or 6.8%.  Total expenses for the six months ended June 30, 2018 were $193.7 million, a decrease of $8.2 million, or 4.1%, compared to $201.9 million for the six months ended June 30, 2017.  Pretax income for the six months ended June 30, 2018 was $9.2 million, compared to $15.7 million for the six months ended June 30, 2017.  Net income for the six months ended June 30, 2018 was $6.3 million compared to $9.1 million for the six months ended June 30, 2017

During the second quarter of 2018, CPS purchased $214.7 million of new contracts compared to $210.6 million during the first quarter of 2018 and $233.9 million during the second quarter of 2017.  The Company's receivables totaled $2.329 billion as of June 30, 2018, a decrease from $2.332 billion as of March 31, 2018 and $2.343 billion as of June 30, 2017.

Annualized net charge-offs for the second quarter of 2018 were 7.58% of the average portfolio as compared to 7.62% for the second quarter of 2017.  Delinquencies greater than 30 days (including repossession inventory) were 10.07% of the total portfolio as of June 30, 2018, as compared to 9.64% as of June 30, 2017.

“We are pleased to record our 27th consecutive quarter of positive pre-tax earnings,” said Charles E. Bradley, Jr., Chairman and Chief Executive Officer.  “Our quarterly asset-backed securities transactions continue to be well received and in May 2018 we also securitized our residual interests in 17 existing securitizations to raise $40 million in additional capital.”

Conference Call

CPS announced that it will hold a conference call on Wednesday, July 25, 2018, at 2:00 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 3392867.

A replay of the conference call will be available between July 25, 2018 and August 1, 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 3392867.  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    Six months ended  
    June 30,    June 30,  
    2018    2017    2018    2017  
Revenues:             
Interest income  $  97,012   $  107,485   $  197,918   $  212,060  
Other income     2,350      2,587      5,008      5,610  
      99,362      110,072      202,926      217,670  
Expenses:             
Employee costs     19,842      17,572      40,483      35,352  
General and administrative     7,450      6,819      14,946      13,741  
Interest     25,187      23,236      49,249      45,324  
Provision for credit losses     35,531      48,550      76,038      95,717  
Other expenses     6,698      5,943      12,997      11,792  
      94,708      102,120      193,713      201,926  
Income before income taxes     4,654      7,952      9,213      15,744  
Income tax expense     1,489      3,380      2,901      6,692  
  Net income   $  3,165   $  4,572   $  6,312   $  9,052  
              
Earnings per share:             
  Basic  $  0.15   $  0.20   $  0.30   $  0.39  
  Diluted  $  0.13   $  0.17   $  0.25   $  0.32  
              
              
Number of shares used in computing earnings             
  per share:             
    Basic   21,178    23,076    21,375    23,296  
    Diluted   25,123    27,602    25,393    28,024  
              
              
Condensed Consolidated Balance Sheets      
(In thousands)      
(Unaudited)      
              
              
   June 30,  December 31,       
    2018    2017        
Assets:             
Cash and cash equivalents  $  17,435   $  12,731        
Restricted cash and equivalents   119,940     111,965         
Total cash and cash equivalents   137,375    124,696        
              
Finance receivables   1,887,530    2,304,984        
Allowance for finance credit losses   (94,376)   (109,187)       
Finance receivables, net   1,793,154    2,195,797        
              
Finance receivables measured at fair value   412,895    -        
Deferred tax assets, net   31,430    32,446        
Other assets   65,816    71,902        
   $  2,440,670   $  2,424,841        
              
Liabilities and Shareholders' Equity:             
Accounts payable and accrued expenses  $  27,313   $  28,715        
Warehouse lines of credit   137,930    112,408        
Residual interest financing   39,269    -        
Securitization trust debt   2,030,705    2,083,215        
Subordinated renewable notes   15,831    16,566        
    2,251,048    2,240,904        
              
Shareholders' equity   189,622    183,937        
   $  2,440,670   $  2,424,841        
              
              
              
Operating and Performance Data ($ in millions)             
              
           
           
    At and for the    At and for the  
    Three months ended    Six months ended  
    June 30,    June 30,  
    2018    2017    2018    2017  
              
Contracts purchased  $  214.74   $  233.90   $  425.34   $  463.55  
Contracts securitized     205.00      230.00      398.58      440.00  
              
Total portfolio balance  $  2,329.18   $  2,343.30   $  2,329.18   $  2,343.30  
Average portfolio balance     2,330.29      2,340.23      2,330.94      2,326.02  
              
Allowance for finance credit losses as % of fin. receivables   5.00%   4.64%       
              
Aggregate allowance as % of fin. receivables (1)   6.16%   5.56%       
              
Delinquencies             
31+ Days   8.60%   8.30%       
Repossession Inventory   1.47%   1.34%       
Total Delinquencies and Repo. Inventory   10.07%   9.64%       
              
Annualized net charge-offs as % of average portfolio   7.58%   7.62%   7.87%   7.76% 
              
Recovery rates (2)   34.9%   35.6%   34.4%   35.4% 
              
    For the   For the 
    Three months ended   Six months ended 
    June 30,   June 30, 
    2018   2017   2018   2017 
   $ (3)% (4) $ (3)% (4) $ (3)% (4) $ (3)% (4)
Interest income  $  97.01 16.7% $  107.49 18.4% $  197.92 17.0% $  212.06 18.2%
Servicing fees and other income     2.35 0.4%    2.59 0.4%    5.01 0.4%    5.61 0.5%
Interest expense     (25.19)-4.3%    (23.24)-4.0%    (49.25)-4.2%    (45.32)-3.9%
Net interest margin      74.18 12.7%    86.84 14.8%    153.68 13.2%    172.35 14.8%
Provision for credit losses     (35.53)-6.1%    (48.55)-8.3%    (76.04)-6.5%    (95.72)-8.2%
Risk adjusted margin     38.64 6.6%    38.29 6.5%    77.64 6.7%    76.63 6.6%
Core operating expenses     (33.99)-5.8%    (30.33)-5.2%    (68.43)-5.9%    (60.89)-5.2%
Pre-tax income  $  4.65 0.8% $  7.95 1.4% $  9.21 0.8% $  15.74 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.