EXHIBIT 99.1
CPS LOGO NEWS RELEASE
CONSUMER PORTFOLIO SERVICES, INC. REPORTS
2004 FOURTH QUARTER AND FULL-YEAR RESULTS
IRVINE, CALIFORNIA, MARCH 24, 2005(BUSINESS WIRE)-- Consumer Portfolio Services,
Inc. (Nasdaq: CPSS) today announced results for its fourth quarter and year
ended December 31, 2004.
For the three months ended December 31, 2004 total revenues increased
approximately $7.1 million, or 23.3%, to $37.6 million, compared to $30.5
million for the three months ended December 31, 2003. Net loss for the quarter
ended December 31, 2004 was $(12.2) million, or $(0.57) per diluted share,
compared to net loss of $(5.7) million, or $(0.28) per diluted share, for the
quarter ended December 31, 2003. Diluted shares outstanding were 21.4 million
and 20.4 million for the quarters ended December 31, 2004 and 2003,
respectively. Results for the fourth quarter 2004 include two significant
non-cash charges: a $9.1 million impairment loss on the residual interest in
securitizations; and a $4.5 million provision for credit losses related to the
portfolio of receivables purchased from Seawest Financial Corporation in April
2004 as part of the $12.0 million provision for the quarter.
Revenues for the year ended December 31, 2004 totaled $132.7 million, an
increase of $27.7 million, or 26.4%, compared to $105.0 million for 2003.
Full-year 2004 net loss was $(15.9) million, or $(0.75) per diluted share. For
the year ended December 31, 2003 net income was $395,000, or $0.02 per diluted
share, including an income tax benefit of $3.4 million. The income tax benefit
was primarily the result of the resolution of certain IRS examinations of tax
returns filed by MFN Financial Corporation prior to its acquisition by Consumer
Portfolio Services, resulting in a tax benefit of $4.9 million, which was offset
in part by an income tax provision of $1.5 million. Diluted shares outstanding
were 21.1 million and 21.6 million for the years 2004 and 2003, respectively.
"While the financial results for the fourth quarter were not what we had
anticipated because of the two non-cash charges, we thought it was the correct,
conservative course of action to position the company for a profitable future,"
said Charles E. Bradley, President and Chief Executive Officer of Consumer
Portfolio Services. "Operationally, our initiatives from 2004 are showing
meaningful results. Purchases of new receivables for the fourth quarter were
once again the highest they have been in more than two years, despite the fourth
quarter being the weakest time of year. In addition, we are experiencing
continued originations growth during the first quarter this year."
"Another significant event was on the litigation front," said Bradley.
"Subsequent to year end, we settled the Stanwich case in California, which is
great to have behind us."
During the fourth quarter of 2004, Consumer Portfolio Services purchased $127.1
million of contracts from dealers as compared to $119.3 million during the third
quarter 2004 and $82.9 million during the fourth quarter 2003. In addition, the
Company continued its regular quarterly securitization program with the December
sale of $109.2 million of AAA/Aaa rated asset backed notes. As of December 31,
2004, the Company's managed receivables totaled $906.9 million, as follows ($ in
millions):
Owned by Consolidated Subsidiaries* $619.8
Owned by Non-Consolidated Subsidiaries 233.6
As Third Party Servicer for SeaWest Financial 53.5
----
Total $906.9
======
* Before $69.6 million of allowance for credit losses and deferred acquisition
fees.
As previously reported, in order to increase transparency 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 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, MARCH 25, 2005, AT 1:30 P.M. EST TO DISCUSS ITS QUARTERLY AND
FULL-YEAR RESULTS. THOSE WISHING TO PARTICIPATE BY TELEPHONE MAY DIAL-IN AT
973-409-9261 APPROXIMATELY 10 MINUTES PRIOR TO THE SCHEDULED TIME.
A replay will be available between March 25, 2005 and April 1, 2005, beginning
one hour after conclusion of the call, by dialing 877-519-4471 or 973-341-3080
for international participants, with pin number 5859610. 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
contracts originated by automobile dealers located throughout the United States.
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 generally would not
be expected to qualify for financing provided by banks or by automobile
manufacturers' captive finance companies.
Forward-looking statements 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. 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 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.
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 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 GAIN ON SALE
AND PROVISION FOR CREDIT LOSSES MAY AFFECT FUTURE PERFORMANCE.
INVESTOR RELATIONS CONTACT
Charles E. Bradley
Consumer Portfolio Services
949-753-6800
CONSUMER PORTFOLIO SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
Three months ended Twelve months ended
December 31, December 31,
----------------------- -----------------------
2004 2003 2004 2003
---------- ---------- ---------- ----------
REVENUES:
Net gain on sale of contracts -- -- -- $ 10,421
Interest income 31,709 21,559 105,818 58,164
Servicing fees 2,616 3,697 12,480 17,058
Other income 3,243 5,223 14,394 19,343
---------- ---------- ---------- ----------
37,568 30,479 132,692 104,986
---------- ---------- ---------- ----------
EXPENSES:
Employee costs 8,822 9,760 38,173 37,141
General and administrative 6,074 6,140 21,293 21,271
Interest 10,347 6,817 32,147 23,861
Provision for credit losses 11,964 7,200 32,574 11,390
Impairment loss on residual asset 9,100 2,295 11,750 4,052
Other expenses 3,507 3,941 12,643 10,310
---------- ---------- ---------- ----------
49,814 36,153 148,580 108,025
---------- ---------- ---------- ----------
Income (loss) before income tax benefit
(12,246) (5,674) (15,888) (3,039)
Income tax benefit -- -- -- (3,434)
---------- ---------- ---------- ----------
Net income (loss) $ (12,246) $ (5,674) $ (15,888) $ 395
========== ========== ========== ==========
Earnings (loss) per share:
Basic $ (0.57) $ (0.28) $ (0.75) $ 0.02
Diluted (0.57) (0.28) (0.75) 0.02
Number of shares used in computing earnings (loss) per share:
Basic 21,438 20,371 21,111 20,263
Diluted 21,438 20,371 21,111 21,578
CONDENSED CONSOLIDATED
BALANCE SHEETS
(IN THOUSANDS)
(UNAUDITED)
December 31, December 31,
2004 2003
------------ ------------
Cash and restricted cash $ 139,479 $ 100,486
Finance receivables, net 550,191 266,189
Residual interest in securitizations 50,430 111,702
Other assets 26,499 14,093
------------ ------------
$ 766,599 $ 492,470
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Accounts payable and other liabilities $ 22,552 $ 29,018
Warehouse lines of credit 34,279 33,709
Residual interest financing 22,204 --
Securitization trust debt 542,815 245,118
Senior secured debt 59,829 49,965
Subordinated debt 15,000 52,500
------------ ------------
696,679 410,310
------------ ------------
Shareholders Equity 69,920 82,160
------------ ------------
$ 766,599 $ 492,470
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