EXHIBIT 99.1
NEWS RELEASE
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CONSUMER PORTFOLIO SERVICES, INC. REPORTS
2006 THIRD QUARTER EARNINGS
IRVINE, CALIFORNIA, OCTOBER 18, 2006 (BUSINESS WIRE) -- Consumer Portfolio
Services, Inc. (Nasdaq: CPSS) today announced earnings for its third quarter
ended September 30, 2006.
Net income for the quarter ended September 30, 2006 was $4.3 million, or $0.18
per diluted share, compared to net income of $1.4 million, or $0.06 per diluted
share, for the quarter ended September 30, 2005. For the three months ended
September 30, 2006 total revenues increased approximately $24.3 million, or
49.3%, to $73.7 million, compared to $49.4 million for the three months ended
September 30, 2005. Total expenses for the three months ended September 30, 2006
were $69.4 million, an increase of $21.5 million, or 44.8%, as compared to $48.0
million for the three months ended September 30, 2005.
Net income for the nine months ended September 30, 2006 was $8.7 million, or
$0.36 per diluted share, compared to net income of $1.7 million, or $0.07 per
diluted share, for the nine months ended September 30, 2005. For the nine months
ended September 30, 2006 total revenues increased approximately $60.0 million,
or 43.2%, to $199.0 million, compared to $139.0 million for the nine months
ended September 30, 2005. Total expenses for the nine months ended September 30,
2006 were $190.3 million, an increase of $53.0 million, or 38.6%, as compared to
$137.3 million for the nine months ended September 30, 2005.
"We are very pleased with the financial results for the third quarter," said
Charles E. Bradley, Jr., President and Chief Executive Officer of Consumer
Portfolio Services. "Our improved earnings highlight our recurring theme of the
operating leverage inherent in our business model, as revenue growth has
continued to significantly outpace expense growth. This was our sixth straight
quarter of profitability, with each quarter showing sequential improvement.
Operations for the third quarter remained strong as we continued the growth of
our total managed portfolio while maintaining solid asset performance metrics."
During the third quarter of 2006, Consumer Portfolio Services purchased $254.4
million of contracts from dealers as compared to $268.8 million during the
second quarter of 2006 and $205.0 million during the third quarter 2005. During
the first three quarters of 2006, new contract purchases increased approximately
55% vs. the same period in 2005, increasing from $502.5 million in 2005 to
$777.7 million in 2006. In addition, the Company continued its regular quarterly
securitization program with the September sale of $247.5 million of asset backed
notes. As previously reported, the credit enhancement levels were 150 basis
points lower than those applicable to the Company's June transaction. As of
September 30, 2006, the Company's managed receivables totaled $1,480.7 million,
as follows ($ in millions):
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Owned by Consolidated Subsidiaries* $1,422.3
Owned by Non-Consolidated Subsidiaries 52.5
As Third Party Servicer for SeaWest Financial 5.9
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Total $1,480.7
* Before $116.9 million of allowance for credit losses,
deferred acquisition fees and repossessed vehicles.
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 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, October 19, 2006, at 1:30 p.m. 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.
A replay will be available between October 19, 2006 and October 27, 2006,
beginning one hour after conclusion of the call, by dialing 877-519-4471 or
973-341-3080 for international participants, with pin number 7996460. 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.
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ABOUT CONSUMER PORTFOLIO SERVICES, INC.
Consumer Portfolio Services, Inc. is a specialty finance company engaged in
purchasing and servicing new and used retail automobile contracts originated
primarily by franchised automobile dealerships and to a lesser extent by select
independent dealers of used automobiles in the United States. We serve as an
alternative source of financing for dealers, facilitating sales to sub-prime
customers, who have limited credit history, low income or past credit problems
and who otherwise might not be able to obtain financing from traditional
sources.
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
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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. 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
Robert E. Riedl
Consumer Portfolio Services
949-753-6800
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CONSUMER PORTFOLIO SERVICES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
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2006 2005 2006 2005
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REVENUES:
Interest income $ 70,623 $ 45,321 $188,189 $122,015
Servicing fees 633 1,432 2,436 5,492
Other income 2,457 2,621 8,344 11,477
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73,713 49,374 198,969 138,984
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EXPENSES:
Employee costs 9,273 9,506 28,349 29,657
General and administrative 6,159 4,923 16,948 16,689
Interest 25,075 13,510 65,412 35,842
Provision for credit losses 24,045 15,818 65,322 43,354
Other expenses 4,896 4,219 14,256 11,738
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69,448 47,976 190,287 137,280
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Income before income taxes 4,265 1,398 8,682 1,704
Income taxes -- -- -- --
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Net income $ 4,265 $ 1,398 $ 8,682 $ 1,704
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Earnings per share:
Basic $ 0.20 $ 0.06 $ 0.40 $ 0.08
Diluted 0.18 0.06 0.36 0.07
Number of shares used in computing earnings per share:
Basic 21,840 21,658 21,804 21,603
Diluted 23,850 23,419 24,139 23,435
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
(UNAUDITED)
September 30, December 31,
2006 2005
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Cash and restricted cash $ 212,376 $ 175,451
Finance receivables, net 1,305,293 913,576
Residual interest in securitizations 17,847 25,220
Other assets 63,004 40,897
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$1,598,520 $1,155,144
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Accounts payable and other liabilities $ 22,104 $ 19,779
Warehouse lines of credit 64,816 35,350
Residual interest financing 24,243 43,745
Securitization trust debt 1,355,722 924,026
Senior secured debt 40,000 40,000
Subordinated debt 9,936 18,655
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1,516,821 1,081,555
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Shareholders' equity 81,699 73,589
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$1,598,520 $1,155,144
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