Consumer Portfolio Services, Inc. Reports 2005 Second Quarter 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 second quarter ended June June: see month. 30, 2005. Net income for the quarter ended June 30, 2005 was $545,000, or $0.02 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 $(174,000), or $(0.01) per diluted share, for the quarter ended June 30, 2004. For the three months ended June 30, 2005 total revenues increased approximately $15.1 million, or 46.2%, to $47.8 million, compared to $32.7 million for the three months ended June 30, 2004. Total expenses for the three months ended June 30, 2005 were $47.2 million, an increase of $14.3 million, or 43.7%, as compared to $32.9 million for the three months ended June 30, 2004. Net income for the six months ended June 30, 2005 was $306,000, or $0.01 per diluted share, compared to net loss of $(1.6) million, or $(0.08) per diluted share, for the six months ended June 30, 2004. For the six months ended June 30, 2005 total revenues increased approximately $29.4 million, or 48.8%, to $89.6 million, compared to $60.2 million for the six months ended June 30, 2004. Total expenses for the six months ended June 30, 2005 were $89.3 million, an increase of $27.5 million, or 44.5%, as compared to $61.8 million for the six months ended June 30, 2004. "We are pleased with the financial results for the second quarter as we were profitable for the first time in almost two years," 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. "Now that our transition from gain on sale to portfolio accounting has resulted in our return to profitability, we would expect to see continued earnings in the coming quarters. Operationally, we built on the positive momentum from the last few quarters. Asset performance during the first half of the year has been stronger than it has been since the mid- mid- pref. Middle: midbrain. 1990s. Additionally, during the second quarter we continued our growth in 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 , which were once again the highest they have been in almost four years." During the second quarter of 2005, Consumer Portfolio Services purchased $153.9 million of contracts from dealers as compared to $144.2 million during the first quarter of 2005 and $107.4 million during the second quarter 2004. In addition, 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 June sale of $130.6 million of AAA/Aaa rated asset backed notes. As of June 30, 2005, the Company's managed receivables totaled $966.2 million, as follows ($ in millions):
Owned by Consolidated Subsidiaries (a) $772.6
Owned by Non-Consolidated Subsidiaries 162.3
As Third Party Servicer for SeaWest Financial 31.3
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Total $966.2
(a) Before $78.8 million of allowance for credit losses and deferred
acquisition fees.
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 loan loss provisions are recorded upon acquisition and during the life of the receivables. The effect is to accelerate recognition of expenses and defer de·fer 1 v. de·ferred, de·fer·ring, de·fers v.tr. 1. To put off; postpone. 2. To postpone the induction of (one eligible for the military draft). v.intr. recognition of revenue. As a result, reported earnings have been less than what they would have been had the Company continued to structure its securitizations to record a gain on sale. Conference Call Consumer Portfolio Services announced that it will hold a conference call tomorrow, July July: see month. 27, 2005, 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 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 July 27, 2005 and August 3, 2005, beginning one hour after conclusion of the call, by dialing 877-519-4471 or 973-341-3080 for international participants, with pin number 6295911. 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 automobile, self-propelled vehicle used for travel on land. The term is commonly applied to a four-wheeled vehicle designed to carry two to six passengers and a limited amount of cargo, as contrasted with a truck, which is designed primarily for the transportation of 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 38 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, gain on sale revenue 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 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.The statements concerning the intended structure of future securitizations and the effects of such structures on financial items are forward-looking statements. If the Company were to change the structure of future transactions, that could cause such forward-looking statements not to be accurate. 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 ended Six months ended
June 30, June 30,
----------------------------------------
2005 2004 2005 2004
----------------------------------------
Revenues:
Interest income $40,522 $25,722 $76,694 $46,145
Servicing fees 1,795 3,507 4,060 6,831
Other income 5,459 3,458 8,856 7,233
----------------------------------------
47,776 32,687 89,610 60,209
----------------------------------------
Expenses:
Employee costs 9,701 9,794 20,151 19,447
General and administrative 6,627 6,466 11,766 10,433
Interest 11,948 7,500 22,332 13,412
Provision for credit losses 15,224 6,300 27,536 13,050
Other expenses 3,731 2,801 7,519 5,448
----------------------------------------
47,231 32,861 89,304 61,790
----------------------------------------
Income (loss) before income
taxes 545 (174) 306 (1,581)
Income taxes - - - -
----------------------------------------
Net income (loss) $545 $(174) $306 $(1,581)
========================================
Earnings (loss) per share:
Basic $0.03 $(0.01) $0.01 $(0.08)
Diluted 0.02 (0.01) 0.01 (0.08)
Number of shares used in
computing earnings
(loss) per share:
Basic 21,623 21,016 21,576 20,827
Diluted 23,399 21,016 23,451 20,827
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
June 30, Dec. 31,
2005 2004
---------- ----------
Cash and restricted cash $155,301 $139,479
Finance receivables, net 693,847 550,191
Residual interest in
securitizations 38,053 50,430
Other assets 26,240 26,499
--------- ----------
$913,441 $766,599
========== ==========
Accounts payable and other
liabilities $19,876 $22,552
Warehouse lines of credit 45,315 34,279
Residual interest financing 12,031 22,204
Securitization trust debt 692,020 542,815
Senior secured debt 59,829 59,829
Subordinated debt 14,000 15,000
---------- ----------
843,071 696,679
---------- ----------
Shareholders' equity 70,370 69,920
---------- ----------
$913,441 $766,599
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