Consumer Portfolio Services, Inc. Reports 2005 Fourth Quarter and Full-Year Earnings.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. -- 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 ) today announced earnings for its fourth quarter and year ended December December: see month. 31, 2005. Net income for the quarter ended December 31, 2005 was $1.7 million, or $0.07 per 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. share, compared to net loss of $(12.2) million, or $(0.57) per diluted share, for the quarter ended December 31, 2004. For the three months ended December 31, 2005 total revenues increased approximately $17.1 million, or 45.6%, to $54.7 million, compared to $37.6 million for the three months ended December 31, 2004. Total expenses for the three months ended December 31, 2005 were $53.0 million, an increase of $3.2 million, or 6.5%, as compared to $49.8 million for the three months ended December 31, 2004. Expenses for the fourth quarter of 2004 included two significant non-cash charges Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. totaling $13.6 million, which were not incurred in the fourth quarter of 2005. Net income for the year ended December 31, 2005 was $3.4 million, or $0.14 per diluted share, compared to net loss of $(15.9) million, or $(0.75) per diluted share, for the year ended December 31, 2004. For the year ended December 31, 2005 total revenues increased approximately $61.0 million, or 46.0%, to $193.7 million, compared to $132.7 million for the year ended December 31, 2004. Total expenses for the year ended December 31, 2005 were $190.3 million, an increase of $41.7 million, or 28.1%, as compared to $148.6 million for the year ended December 31, 2004. "We are pleased with the financial results for the fourth quarter as we have continued our profitability which began in the second quarter of 2005," said Charles Charles, archduke of Austria Charles, 1771–1847, archduke of Austria; brother of Holy Roman Emperor Francis II. Despite his epilepsy, he was the ablest Austrian commander in the French Revolutionary and Napoleonic wars; however, he was handicapped by E. Bradley, President and Chief Executive Officer of Consumer Portfolio Services. "As we have discussed the last few quarters, we would expect to see continued profitability in the coming periods." "With respect to operations, 2005 was a very good year for the Company as our growth initiatives have built momentum and our servicing platform has maintained solid asset performance. During the fourth quarter, purchases of new receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed remained strong although down slightly from the third quarter, which we expected given historical seasonal patterns. Delinquencies and net charge-offs for the fourth quarter remained well within seasonal ranges. We also had a busy quarter in the capital markets, completing two term securitizations and our second residual Residual See:Residual value financing and entering into a new warehouse line." During the fourth quarter of 2005, Consumer Portfolio Services purchased $188.1 million of contracts from dealers as compared to $205.0 million during the third quarter of 2005 and $127.1 million during the fourth quarter 2004. For 2005, new contract purchases increased approximately 55% vs. 2004, increasing from $447.2 million in 2004 to $691.3 million in 2005. As of December 31, 2005, the Company's managed receivables totaled $1,121.7 million, as follows ($ in millions):
Owned by Consolidated Subsidiaries(a) $1,000.6
Owned by Non-Consolidated Subsidiaries 103.1
As Third Party Servicer for SeaWest Financial 18.0
---------
Total $1,121.7
(a) Before $87.0 million of allowance for credit losses and deferred
acquisition fees.
The Company continued its regular quarterly securitization Securitization The process of creating a financial instrument by combining other financial assets and then marketing them to investors. Notes: Mortgage backed securities are a perfect example of securitization. May also be spelled as "securitisation. program with the December sale of $127.6 million of AAA/Aaa rated asset backed notes. It also completed a second term securitization in December with a new bond insurer An individual or company who, through a contractual agreement, undertakes to compensate specified losses, liability, or damages incurred by another individual. An insurer is frequently an insurance company and is also known as an underwriter. , Assured Guaranty As a verb, to agree to be responsible for the payment of another's debt or the performance of another's duty, liability, or obligation if that person does not perform as he or she is legally obligated to do; to assume the responsibility of a guarantor; to warrant. Corporation, with the issuance of $72.5 million of AAA/Aa1 rated asset backed notes. In addition, in November November: see month. the Company entered into a new $150 million warehouse facility and also completed a $45.8 million residual financing, its second such transaction in two years. As previously reported, in order to increase transparency (1) The quality of being able to see through a material. The terms transparency and translucency are often used synonymously; however, transparent would technically mean "seeing through clear glass," while translucent would mean "seeing through frosted glass." See alpha blending. of the Company's financial reports, in the third quarter of 2003 Consumer Portfolio Services began structuring its securitization transactions as secured financings, with receivables and associated debt remaining on the balance sheet, and without recognition of a gain on sale. Accordingly, net earnings are recognized over the life of the receivables as interest income and fee income, less related funding costs and a provision for losses. Such provisions for losses are recorded upon acquisition and during the life of the receivables. Conference Call Consumer Portfolio Services announced that it will hold a conference call tomorrow, March 1, 2006, at 1:30 p.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT to discuss its quarterly and full-year earnings. Those wishing to participate by telephone may dial-in at 973-409-9261 approximately 10 minutes prior to the scheduled time In rallying, the Scheduled Time of any crew is the time, calculated at the beginning of the event, that they should arrive at any given control. It is different from Due Time in that Due Time is dynamic, ie it can change throughout the event as competitors drop time; whereas . A replay will be available between March 1, 2006 and March 8, 2006, beginning one hour after conclusion of the call, by dialing 877-519-4471 or 973-341-3080 for international participants, with pin number 7091872. A broadcast of the conference call will also be available live and for 30 days after the call via the Company's web site at www.consumerportfolio.com and at www.streetevents.com. About Consumer Portfolio Services, Inc. Consumer Portfolio Services, Inc. is a consumer finance company that specializes in purchasing, selling and servicing retail automobile installment sale 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 by automobile dealers located throughout 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. . The Company is currently active in 47 states. Through its purchase of contracts, the Company provides indirect financing to car dealer customers with limited credit histories, low incomes or past credit problems, who are typically unable to obtain financing from traditional sources. 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 recorded revenue, expense and provision for credit losses, because these items are dependent on the Company's estimates of future losses, and also include the statement that continued earnings are expected. 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; repossessions 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. ; incorrect prepayment speed Prepayment speed Also called speed, the estimated rate at which mortgagors pay off their loans ahead of schedule, critical in assessing the value of mortgage pass-through securities. and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. discount rate assumptions; 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 the effects of
recent 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. All of such factors also may affect the
Company's future earnings, as to which there can be no assurance.Any implication implication In logic, a relation that holds between two propositions when they are linked as antecedent and consequent of a true conditional proposition. Logicians distinguish two main types of implication, material and strict. that the results of the most recently completed quarter are indicative of future results is disclaimed, and the reader should draw no such inference (logic) inference - The logical process by which new facts are derived from known facts by the application of inference rules. See also symbolic inference, type inference. . Factors such as those identified above in relation to gain on sale and provision for credit losses may affect future performance.
Consumer Portfolio Services, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
Three months Twelve months
ended ended
December 31, December 31,
------------------ -------------------
2005 2004 2005 2004
-------- --------- --------- ---------
Revenues:
Interest income $49,819 $31,709 $171,834 $105,818
Servicing fees 1,156 2,616 6,647 12,480
Other income 3,739 3,243 15,216 14,394
-------- --------- --------- ---------
54,714 37,568 193,697 132,692
-------- --------- --------- ---------
Expenses:
Employee costs 10,727 8,822 40,384 38,173
General and administrative 6,407 6,074 23,095 21,293
Interest 15,827 10,347 51,669 32,147
Provision for credit losses 15,633 11,964 58,987 32,574
Impairment loss on residual
asset - 9,100 - 11,750
Other expenses 4,452 3,507 16,190 12,643
-------- --------- --------- ---------
53,046 49,814 190,325 148,580
-------- --------- --------- ---------
Income (loss) before income
taxes 1,668 (12,246) 3,372 (15,888)
Income taxes - - - -
-------- --------- --------- ---------
Net income (loss) $1,668 $(12,246) $3,372 $(15,888)
======== ========= ========= =========
Earnings (loss) per share:
Basic $0.08 $(0.57) $0.16 $(0.75)
Diluted 0.07 (0.57) 0.14 (0.75)
Number of shares used in
computing earnings (loss) per
share:
Basic 21,698 21,438 21,627 21,111
Diluted 23,835 21,438 23,513 21,111
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
December 31, December 31,
2005 2004
------------ ------------
Cash and restricted cash $175,451 $139,479
Finance receivables, net 913,576 550,191
Residual interest in securitizations 25,220 50,430
Other assets 40,897 26,499
------------ ------------
$1,155,144 $766,599
============ ============
Accounts payable and other liabilities $19,779 $22,552
Warehouse lines of credit 35,350 34,279
Residual interest financing 43,745 22,204
Securitization trust debt 924,026 542,815
Senior secured debt 40,000 59,829
Subordinated debt 18,655 15,000
------------ ------------
1,081,555 696,679
------------ ------------
Shareholders' equity 73,589 69,920
------------ ------------
$1,155,144 $766,599
============ ============
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