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CPS Announces Third Quarter 2024 Earnings
Globe Newswire 31-Oct-2024 4:30 PM
Revenues of $100.6 million compared to $92.1 million in the prior year period
Net income of $4.8 million, or $0.20 per diluted share
Total portfolio balance of $3.330 billion, highest in company history
New contract purchases of $445.9 million, compared to $322.4 million in the prior year period
LAS VEGAS, NV, Oct. 31, 2024 (GLOBE NEWSWIRE) -- Consumer Portfolio Services, Inc. (NASDAQ:CPSS) ("CPS" or the "Company") today announced earnings of $4.8 million, or $0.20 per diluted share, for its third quarter ended September 30, 2024.
Revenues for the third quarter of 2024 were $100.6 million, an increase of $8.5 million, or 9.2%, compared to $92.1 million for the third quarter of 2023. Total operating expenses for the third quarter of 2024 were $93.7 million compared to $77.9 million for the 2023 period. Pretax income for the third quarter of 2024 was $6.9 million compared to pretax income of $14.2 million in the third quarter of 2023.
For the nine months ended September 30, 2024 total revenues were $288.2 million compared to $260.0 million for the nine months ended September 30, 2023, an increase of approximately $28.2 million, or 10.8%. Total operating expenses for the nine months ended September 30, 2024 were $268.1 million, compared to $208.8 million for the nine months ended September 30, 2023. Pretax income for the nine months ended September 30, 2024 was $20.1 million, compared to $51.3 million for the nine months ended September 30, 2023. Net income for the nine months ended September 30, 2024 was $14.1 million compared to $38.2 million for the nine months ended September 30, 2023.
During the third quarter of 2024, CPS purchased $445.9 million of new contracts compared to $431.9 million during the second quarter of 2024 and $322.4 million during the third quarter of 2023. The Company's receivables totaled $3.330 billion as of September 30, 2024, an increase from $3.173 billion as of June 30, 2024 and an increase from $2.943 billion as of September 30, 2023.
Annualized net charge-offs for the third quarter of 2024 were 7.32% of the average portfolio as compared to 6.86% for the third quarter of 2023. Delinquencies greater than 30 days (including repossession inventory) were 14.04% of the total portfolio as of September 30, 2024, compared to 13.31% as of September 30, 2023.
"New loan origination volumes have outpaced the prior quarter for a fourth consecutive quarter. This positions us well for future quarters," said Charles E. Bradley Jr., Chief Executive Officer. "With our operating efficiencies improving, we remain committed to driving the company forward in any environment."
Conference Call
CPS announced that it will hold a conference call on November 1, 2024 at 1:00 p.m. ET to discuss its third quarter 2024 operating results.
Those wishing to participate can pre-register for the conference call at the following link https://register.vevent.com/register/BIaadcdbbe0a7849aa918eac85c86475ff. Registered participants will receive an email containing conference call details for dial-in options. To avoid delays, we encourage participants to dial into the conference call fifteen minutes ahead of the schedule start time. A replay will be available beginning two hours after conclusion of the call for 12 months via the Company's website at https://ir.consumerportfolio.com/investor-relations.
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 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 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 Company's estimates of losses to be incurred in the future. The accuracy of such estimates may be adversely affected by various factors, which include 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, 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. Any or all of such factors also may affect the Company's 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
Danny Bharwani, Chief Financial Officer
949-753-6811
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,
2024
2023
2024
2023
Revenues:
Interest income
$
93,158
$
83,261
$
265,812
$
245,960
Mark to finance receivables measured at fair value
5,500
6,000
16,000
6,000
Other income
1,922
2,818
6,391
8,077
100,580
92,079
288,203
260,037
Expenses:
Employee costs
24,162
21,812
72,303
64,991
General and administrative
13,276
13,045
40,288
36,224
Interest
50,056
37,889
138,735
106,354
Provision for credit losses
(994
)
(2,000
)
(4,579
)
(20,700
)
Other expenses
7,229
7,115
21,376
21,915
93,729
77,861
268,123
208,784
Income before income taxes
6,851
14,218
20,080
51,253
Income tax expense
2,055
3,839
6,022
13,097
Net income
$
4,796
$
10,379
$
14,058
$
38,156
Earnings per share:
Basic
$
0.22
$
0.49
$
0.66
$
1.83
Diluted
$
0.20
$
0.41
$
0.58
$
1.51
Number of shares used in computing earnings per share:
Basic
21,343
21,154
21,250
20,815
Diluted
24,153
25,218
24,340
25,331
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
September 30,
December 31,
2024
2023
Assets:
Cash and cash equivalents
$
8,071
$
6,174
Restricted cash and equivalents
270,981
119,257
Finance receivables measured at fair value
3,132,310
2,722,662
Finance receivables
8,274
27,553
Allowance for finance credit losses
-486
-2,869
Finance receivables, net
7,788
24,684
Deferred tax assets, net
1,565
3,736
Other assets
41,977
27,233
$
3,462,692
$
2,903,746
Liabilities and Shareholders' Equity:
Accounts payable and accrued expenses
$
72,626
$
62,544
Warehouse lines of credit
105,783
234,025
Residual interest financing
99,127
49,875
Securitization trust debt
2,875,777
2,265,446
Subordinated renewable notes
24,288
17,188
3,177,601
2,629,078
Shareholders' equity
285,091
274,668
$
3,462,692
$
2,903,746
Operating and Performance Data ($ in millions)
At and for the
At and for the
Three months ended
Nine months ended
September 30,
September 30,
2024
2023
2024
2023
Contracts purchased
$
445.95
$
322.42
$
1,224.13
$
1,055.96
Contracts securitized
$
298.42
$
312.68
1,256.13
1,045.42
Total portfolio balance (1)
$
3,329.84
$
2,943.33
$
3,329.84
$
2,943.33
Average portfolio balance (1)
$
3,278.34
$
2,934.75
3,131.48
2,898.44
Delinquencies (1)
31+ Days
11.25
%
11.74
%
Repossession Inventory
2.79
%
1.57
%
Total Delinquencies and Repo. Inventory
14.04
%
13.31
%
Annualized Net Charge-offs as % of Average Portfolio (1)
7.32
%
6.86
%
7.47
%
6.12
%
Recovery rates (1), (2)
29.1
%
37.8
%
31.1
%
41.1
%
For the
For the
Three months ended
Nine months ended
September 30,
September 30,
2024
2023
2024
2023
$ (3)
% (4)
$ (3)
% (4)
$ (3)
% (4)
$ (3)
% (4)
Interest income
$
93.16
11.4
%
$
83.26
11.3
%
$
265.81
11.3
%
$
245.96
11.3
%
Mark to finance receivables measured at fair value
5.50
0.7
%
6.00
0.8
%
16.00
0.7
%
6.00
0.3
%
Other income
1.92
0.2
%
2.82
0.4
%
6.39
0.3
%
8.08
0.4
%
Interest expense
(50.06
)
-6.1
%
(37.89
)
-5.2
%
(138.74
)
-5.9
%
(106.35
)
-4.9
%
Net interest margin
50.52
6.2
%
54.19
7.4
%
149.47
6.4
%
153.68
7.1
%
Provision for credit losses
0.99
0.1
%
2.00
0.3
%
4.58
0.2
%
20.70
1.0
%
Risk adjusted margin
51.52
6.3
%
56.19
7.7
%
154.05
6.6
%
174.38
8.0
%
Other operating expenses (5)
(44.67
)
-5.4
%
(41.97
)
-5.7
%
(133.97
)
-5.7
%
(123.13
)
-5.7
%
Pre-tax income
$
6.85
0.8
%
$
14.22
1.9
%
$
20.08
0.9
%
$
51.25
2.4
%
(1) Excludes third party portfolios.
(2) Wholesale auction liquidation amounts (net of expenses) as a percentage of the 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 not add due to rounding.
(5) Total pre-tax expenses less provision for credit losses and interest expense.
