Consumer Portfolio Services, Inc. Reports 1998 Third Quarter Results; Quarterly Earnings Up 30%.IRVINE Irvine, town, Scotland Irvine (ûr`vĭn), town (1991 pop. 32,507), North Ayrshire, SW Scotland, on the Irvine River estuary. Industries include iron and brass foundries. Other products are chemicals, electric goods, and clothing. , Calif.--(BUSINESS WIRE)--Oct. 21, 1998--Consumer Portfolio Services, Inc. (Nasdaq: CPSS CPSS Committee on Payment and Settlement Systems CPSS Commission on Public Secondary Schools CPSS Cincinnati Prehospital Stroke Scale (STR - Smile, Talk, Raise both arms) CPSS Certified Professional Soil Scientist ) Thursday Thursday: see week. announced financial results for its third quarter, ended September September: see month. 30, 1998. For the third quarter, total revenues increased 76% to $37.4 million, compared with $21.3 million for the same period in the prior year. The Company's net earnings increased 29.5% to $6.2 million, or $.38 per share, on 16.9 million diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. shares outstanding, compared with $4.8 million, or $.30 per share, on 16.5 million diluted shares outstanding for the same period in the prior year. For the nine months ended September 30, 1998, total revenues increased 83.2% to $102.0 million, compared with $55.7 million for the same period in the prior year. Net earnings increased 33.1% to $17.8 million, or $1.08 per share on 16.7 million diluted shares, compared with $13.3 million, or $.85 per share on 15.9 million diluted shares for the same period in the prior year. Purchases of contracts from automobile dealers increased 74.5% in the third quarter to $303.0 million, compared with $173.6 million for the same period in 1997. Contracts sold during the third quarter in the form of asset-backed securities Asset-backed security A security that is collateralized by loans, leases, receivables, or installment contracts on personal property, not real estate. asset-backed security A debt security collateralized by specific assets. increased 60.2% to $240.3 million compared with $150.0 million for the same period in the prior year. The aggregate outstanding balance of contracts serviced by the Company at September 30, 1998, increased by 87.9% to $1,489.4 million, compared with $792.7 million at September 30, 1997. Balances of accounts past due over 30 days represented 4.7% of the servicing portfolio at September 30, 1998, compared with 6.1% at September 30, 1997. The annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. net charge off rate for the three month period ended September 30, 1998, was 6.5%, compared to 6.2% for the three month period ended September 30, 1997. The Company's non-discounted allowance for credit losses equaled $131.7 million, or 11.2% of the contracts sold that it serviced as of September 30, 1998. The on-balance sheet allowance for credit losses was $14.1 million, or 4.6% of contracts held for sale at September 30, 1998. "We are very pleased with the Company's performance for our fiscal third quarter of 1998," said Charles E. Bradley, Jr., President and Chief Executive Officer. "The credit quality of our servicing portfolio continues to improve. Annualized net charge offs were 6.5%, approximately equal to second quarter 1998, and in line with our expectations. Delinquent delinquent 1) adj. not paid in full amount or on time. 2) n. short for an underage violator of the law as in juvenile delinquent. DELINQUENT, civil law. He who has been guilty of some crime, offence or failure of duty. accounts represented only 4.7% of the servicing portfolio, continuing a trend of lower delinquencies in 1998 compared to 1997. As of September 30, 1998, our inventory of repossessed vehicles declined to 1.9% of the servicing portfolio, compared to 2.2% for June 1998. Forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. in this news release include the company's allowances for credit losses, which necessarily depend on estimates of future events. The accuracy of such estimates may be adversely affected by various factors, which include (in addition to risks relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the economy generally) the following: possible increased delinquencies, foreclosures and losses on retail installment contracts installment contract n. an agreement in which payments of money, delivery of goods or performance of services are to be made in a series of payments, deliveries or performances, usually on specific dates or upon certain happenings. ; possible unavailability un·a·vail·a·ble adj. Not available, accessible, or at hand. un  a·vail of qualified personnel, which could
adversely affect the company's ability to service its portfolio;
possible increases in the rate of consumer bankruptcy bankruptcy, in law, settlement of the liabilities of a person or organization wholly or partially unable to meet financial obligations. The purposes are to distribute, through a court-appointed receiver, the bankrupt's assets equitably among creditors and, in most filings or changes
in bankruptcy law, 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.Consumer Portfolio Services Inc. purchases sells and services retail installment sales Installment sale The sale of an asset in exchange for a specified series of payments (the installments). installment sale A sale in which the buyer is scheduled to make a series of payments over a period of time. contracts originated predominantly pre·dom·i·nant adj. 1. Having greatest ascendancy, importance, influence, authority, or force. See Synonyms at dominant. 2. by franchised dealers for new and late model used cars. The Company has approximately 4,000 dealers under contract across the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. .
Consumer Portfolio Services, Inc. and Subsidiaries
Condensed Consolidated Statements of Income
(In thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
1998 1997 1998 1997
Revenues:
Gain on sale of contracts $18,184 $10,385 $47,525 $25,660
Interest income 12,060 6,632 35,655 18,305
Servicing fees 6,899 3,764 17,891 9,894
Other 305 503 886 1,793
37,448 21,284 101,957 55,652
Expenses:
Interest 5,958 3,035 14,487 6,694
Employee costs 8,333 4,388 20,684 10,921
General and administrative 6,335 3,312 15,911 9,493
Provision for credit losses 2,871 1,053 12,875 2,649
Other expenses 3,207 1,187 7,358 2,894
26,704 12,975 71,315 32,651
Earnings before income
taxes 10,744 8,309 30,642 23,001
Income taxes 4,506 3,493 12,876 9,654
Net earnings $ 6,238 $ 4,816 $17,766 $13,347
Earnings per share:
Basic $ 0.40 $ 0.34 $ 1.16 $ 0.94
Diluted $ 0.38 $ 0.30 $ 1.08 $ 0.85
Number of shares used in computing earnings
per share:
Basic 15,557 14,344 15,328 14,271
Diluted 16,948 16,523 16,745 15,943
Condensed Consolidated Balance Sheets
(In thousands)
September December
30, 31,
1998 1997
Cash $ 617 $ 1,745
Contracts held for sale 288,950 68,271
Residual interest in
securitizations 205,787 124,616
Other assets 41,329 31,263
Total assets $ 536,683 $ 225,895
Warehouse lines of credit $ 286,588 $ 61,666
Subordinated debt 60,906 55,055
Residual financing 33,000 --
Other liabilities 50,274 26,567
Total liabilities 430,768 143,288
Shareholders' equity 105,915 82,607
Total liabilities and
shareholders' equity $ 536,683 $ 225,895
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