GlobeNewswire Inc | Oct 19, 2020 04:30PM EDT

October 19, 2020

-- Pretax income of $5.9 million -- Net income of $3.8 million, or $0.16 per diluted share -- New contract purchases of $174 million

LAS VEGAS, NV, Oct. 19, 2020 (GLOBE NEWSWIRE) -- Consumer Portfolio Services, Inc. (Nasdaq: CPSS) (CPS or the Company) today announced earnings of $3.8 million, or $0.16 per diluted share, for its third quarter ended September 30, 2020. This compares to net income of $1.8 million, or $0.08 per diluted share, in the third quarter of 2019.

Revenues for the third quarter of 2020 were $70.7 million, a decrease of $14.9 million, or 17.4%, compared to $85.5 million for the third quarter of 2019. Total operating expenses for the third quarter of 2020 were $64.8 million compared to $82.7 million for the 2019 period for a decrease of $17.9 million, or 21.7%. Pretax income for the third quarter of 2020 was $5.9 million compared to pretax income of $2.8 million in the third quarter of 2019, an increase of 108.2%.

For the nine months ended September 30, 2020 total revenues were $208.7 million compared to $260.1 million for the nine months ended September 30, 2019, a decrease of approximately $51.3 million, or 19.7%. Total expenses for the nine months ended September 30, 2020 were $195.1 million, a decrease of $56.7 million, or 22.5%, compared to $251.8 million for the nine months ended September 30, 2019. Pretax income for the nine months ended September 30, 2020 was $13.6 million, compared to $8.3 million for the nine months ended September 30, 2019. Net income for the nine months ended September 30, 2020 was $17.5 million compared to $5.4 million for the nine months ended September 30, 2019. Results for the nine months ended September 30, 2020 include a net tax benefit of $8.8 million related to the revaluation of the Companys net operating losses and other tax adjustments. Without this tax benefit, net income and net income per diluted share for the nine months ended September 30, 2020 would have been $8.7 million and $0.37 per share, respectively.

During the third quarter of 2020, CPS purchased $174.0 million of new contracts compared to $135.9 million during the second quarter of 2020 and $262.1 million during the third quarter of 2019. The Company's receivables totaled $2.250 billion as of September 30, 2020, a decrease from $2.326 billion as of June 30, 2020 and $2.413 billion as of September 30, 2019.

Annualized net charge-offs for the third quarter of 2020 were 6.39% of the average portfolio as compared to 8.07% for the third quarter of 2019. Delinquencies greater than 30 days (including repossession inventory) were 10.29% of the total portfolio as of September 30, 2020, as compared to 15.74% as of September 30, 2019.

Conference Call

CPS announced that it will hold a conference call on Tuesday, October 20, 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 2265436.

A replay of the conference call will be available between October 20 and October 27, beginning two hours after conclusion of the call, by dialing 855 859-2056 or 404 537-3406 for international participants, with conference identification number 2265436. A broadcast of the conference call will also be available live and for 90 days after the call via the Companys 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 figures representing allowances for remaining expected lifetime credit losses, its pandemic-related markdown of carrying value for the portion of its portfolio accounted for at fair value, its pandemic-related charge to the provision for credit losses for the its legacy portfolio, its estimates of fair value (most significantly for its receivables accounted for at fair value), its provision for credit losses, its entries offsetting the preceding, and figures derived from any of the preceding. In each case, such figures are forward-looking statements because they are dependent on the Companys estimates of losses to be incurred in the future. The accuracy of such estimates may be adversely affected by various factors, which include (in addition to risks relating to the COVID-19 pandemic and 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 Companys ability to service its portfolio; possible increases in the rate of consumer bankruptcy filings, which could adversely affect the Companys 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 Companys realization upon repossessed vehicles; and economic conditions in geographic areas in which the Company's business is concentrated. The accuracy of such estimates may also be affected by the effects of the COVID-19 pandemic and of governmental responses to said pandemic, which have included prohibitions on certain means of enforcement of receivables, and may include additional restrictions, as yet unknown, in the future. Any or all of such factors also may affect the Companys 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 losses to be incurred in the future may affect future performance.

Investor Relations Contact

Jeffrey P. Fritz, Chief Financial Officer844 878-2777

Consumer Portfolio Services, Inc. and SubsidiariesCondensed Consolidated Statements of Operations(In thousands, except per share data)(Unaudited) Three months ended Nine months ended September 30, September 30, 2020 2019 2020 2019 Revenues: Interest $ 72,582 $ 83,528 $ 227,271 $ 253,822 incomeMark to financereceivables (3,152 ) - (23,051 ) - measured at fairvalueOther income 1,239 1,994 4,508 6,255 70,669 85,522 208,728 260,077 Expenses: Employee costs 19,155 20,251 60,826 59,030 General and 7,846 8,185 24,352 25,109 administrativeInterest 24,901 27,940 78,377 82,933 Provision for 7,400 19,874 14,113 64,319 credit lossesOther expenses 5,478 6,443 17,416 20,411 64,780 82,693 195,084 251,802 Income before 5,889 2,829 13,644 8,275 income taxesIncome tax 2,121 991 (3,888 ) 2,898 expenseNet income $ 3,768 $ 1,838 $ 17,532 $ 5,377 Earnings per share:Basic $ 0.17 $ 0.08 $ 0.77 $ 0.24 Diluted $ 0.16 $ 0.08 $ 0.74 $ 0.22 Number ofshares used in computingearningsper share: Basic 22,666 22,526 22,630 22,378 Diluted 23,908 24,066 23,825 24,102 Condensed Consolidated Balance Sheets (In thousands) (Unaudited) September 30, December 31, 2020 2019 Assets: Cash and cash $ 11,253 $ 5,295 equivalentsRestrictedcash and 200,912 135,537 equivalentsFinancereceivables 1,540,955 1,444,038 measured atfair value Finance 577,281 897,530 receivablesAllowance forfinance credit (94,218 ) (11,640 ) lossesFinancereceivables, 483,063 885,890 net Deferred tax 31,026 15,480 assets, netOther assets 42,023 53,009 $ 2,309,232 $ 2,539,249 Liabilitiesand Shareholders'Equity:Accountspayable and $ 49,056 $ 47,077 accruedexpensesWarehouselines of 31,201 134,791 creditResidualinterest 32,000 39,478 financingSecuritization 2,048,089 2,097,728 trust debtSubordinatedrenewable 20,242 17,534 notes 2,180,588 2,336,608 Shareholders' 128,644 202,641 equity $ 2,309,232 $ 2,539,249 Operating andPerformance Data ($ inmillions) At and for the At and for the Three months ended Nine months ended September 30, September 30, 2020 2019 2020 2019 Contracts $ 174.02 $ 262.11 $ 575.88 $ 755.29 purchasedContracts 260.00 244.12 741.87 739.12 securitized Totalportfolio $ 2,250.39 $ 2,412.64 $ 2,250.39 $ 2,412.64 balanceAverageportfolio 2,270.55 2,409.10 2,353.59 2,400.08 balance Allowance forfinance creditlosses as % of 16.32 % 1.25 % fin.receivables Aggregateallowance as %of fin. 18.02 % 3.83 % receivables(1) Delinquencies 31+ Days 8.85 % 13.64 % Repossession 1.44 % 2.10 % InventoryTotalDelinquencies 10.29 % 15.74 % and Repo.Inventory Annualized netcharge-offs as % of averageportfolioLegacy 14.09 % 12.97 % 12.20 % 12.19 % portfolioFair value 3.46 % 3.93 % 4.54 % 3.21 % portfolioTotal 6.39 % 8.07 % 6.93 % 7.96 % portfolio Recovery rates 45.1 % 34.4 % 37.8 % 34.0 % (2) For the For the Three months ended Nine months ended September 30, September 30, 2020 2019 2020 2019 $ (3) % (4) $ (3) % (4) $ (3) % (4) $ (3) % (4)Interest $ 72.58 12.8 % $ 83.53 13.9 % $ 227.27 12.9 % $ 253.82 14.1 %incomeMark to financereceivables (3.15 ) -0.6 % - 0.0 % (23.05 ) -1.3 % - 0.0 %measured at fairvalueServicing feesand other 1.24 0.2 % 1.99 0.3 % 4.51 0.3 % 6.26 0.3 %incomeInterest (24.90 ) -4.4 % (27.94 ) -4.6 % (78.38 ) -4.4 % (82.93 ) -4.6 %expenseNet interest 45.77 8.1 % 57.58 9.6 % 130.35 7.4 % 177.14 9.8 %marginProvision for (7.40 ) -1.3 % (19.87 ) -3.3 % (14.11 ) -0.8 % (64.32 ) -3.6 %credit lossesRisk adjusted 38.37 6.8 % 37.71 6.3 % 116.24 6.6 % 112.83 6.3 %marginCore operating (32.48 ) -5.7 % (34.88 ) -5.8 % (102.59 ) -5.8 % (104.55 ) -5.8 %expensesPre-tax income $ 5.89 1.0 % $ 2.83 0.5 % $ 13.64 0.8 % $ 8.28 0.5 % (1) Includes allowance for finance credit losses and allowance for repossessioninventory.(2) Wholesale auction liquidation amounts (net of expenses) as a percentage ofthe 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 notadd due to rounding.