EXHIBIT 99.1
[CPS LOGO] NEWS RELEASE
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CONSUMER PORTFOLIO SERVICES, INC. REPORTS
2005 FOURTH QUARTER AND FULL-YEAR EARNINGS
IRVINE, CALIFORNIA, FEBRUARY 28, 2006 (BUSINESS WIRE) -- Consumer Portfolio
Services, Inc. (Nasdaq: CPSS) today announced earnings for its fourth quarter
and year ended December 31, 2005.
Net income for the quarter ended December 31, 2005 was $1.7 million, or $0.07
per diluted 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 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 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
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 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* $1,000.6
Owned by Non-Consolidated Subsidiaries 103.1
As Third Party Servicer for SeaWest Financial 18.0
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Total $1,121.7
* Before $87.0 million of allowance for credit losses and
deferred acquisition fees.
The Company continued its regular quarterly securitization 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,
Assured Guaranty Corporation, with the issuance of $72.5 million of AAA/Aa1
rated asset backed notes. In addition, in November 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 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 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.
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
contracts originated by automobile dealers located throughout the United States.
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 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 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 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 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,
-------------------------------- -------------------------------
2005 2004 2005 2004
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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
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54,714 37,568 193,697 132,692
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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
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53,046 49,814 190,325 148,580
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Income (loss) before income taxes 1,668 (12,246) 3,372 (15,888)
Income taxes -- -- -- --
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Net income (loss) $ 1,668 $ (12,246) $ 3,372 $ (15,888)
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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
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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
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$ 1,155,144 $ 766,599
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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
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1,081,555 696,679
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Shareholders' equity 73,589 69,920
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$ 1,155,144 $ 766,599
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