updated 3/31/2011 5:18:04 PM ET 2011-03-31T21:18:04

IRVINE, Calif., March 31, 2011 (GLOBE NEWSWIRE) -- Consumer Portfolio Services, Inc. (Nasdaq:CPSS) ("CPS" or the "Company") today announced operating results for its fourth quarter ended December 31, 2010.

Operating results for the fourth quarter of 2010 included revenues of $35.3 million, a decrease of approximately $11.4 million, or 24.5%, compared to $46.7 million for the fourth quarter of 2009. Total operating expenses for the fourth quarter of 2010 were $37.4 million, a decrease of $47.9 million, or 56.1%, as compared to $85.3 million for the 2009 period. Pretax loss for the fourth quarter of 2010 was $2.2 million compared to pretax loss of $38.6 million in the fourth quarter of 2009.

Net loss for the fourth quarter of 2010 was $14.5 million, or $0.84 per diluted share, compared to net loss of $46.4 million, or $2.55 per diluted share, for the year-ago quarter. Net loss for the fourth quarter of 2010 includes income tax expense of $12.4 million, or $0.71 per diluted share, which represents an addition to the valuation allowance against the Company's deferred tax asset. Net loss for the fourth quarter of 2009 includes income tax expense of $7.8 million, or $0.43 per diluted share, which represents an addition to the valuation allowance against the Company's deferred tax asset.

For the year ended December 31, 2010 total revenues were $155.2 million compared to $223.9 million for the year ended December 31, 2009, a decrease of approximately $68.7 million, or 30.7%. Total expenses for the year ended December 31, 2010 were $172.0 million, a decrease of $101.3 million, or 37.1%, as compared to $273.3 million for the year ended December 31, 2009. Pretax loss for the year ended December 31, 2010 was $16.8 million, compared to pretax loss of $49.4 million for the year ended December 31, 2009.

Net loss for the year ended December 31, 2010 was $33.8 million, or $1.94 per diluted share, compared to net loss of $57.2 million, or $3.07 per diluted share, for the year ended December 31, 2009. Net loss for the year of 2010 includes income tax expense of $17.0 million, or $0.97 per diluted share, which represents additions to the valuation allowance against the Company's deferred tax asset. Net loss for the year of 2009 includes income tax expense of $7.8 million, or $0.42 per diluted share, which represents additions to the valuation allowance against the Company's deferred tax asset.

During the fourth quarter of 2010, CPS purchased $33.6 million of contracts from dealers as compared to $35.3 million during the third quarter of 2010 and $6.1 million during the fourth quarter of 2009. The Company's managed receivables totaled $756.2 million as of December 31, 2010, a decrease of $438.5 million, or 36.7%, from $1,194.7 million as of December 31, 2009, as follows ($ in millions):

  December 31, 2010 December 31, 2009
Owned by Consolidated Subsidiaries* $597.1 $922.7
Owned by Non-Consolidated Subsidiaries 84.0 134.9
As Third Party Servicer 75.1 137.1
Total $756.2 $1,194.7
     
* Before $44.6 million and $82.6 million of allowance for credit losses, deferred acquisition fees and repossessed vehicles for 2010 and 2009, respectively.

Annualized net charge-offs for 2010 were 9.04% of the average owned portfolio as compared to 11.02% in 2009.  Delinquencies greater than 30 days (including repossession inventory) were 9.16% of the total owned portfolio as of December 31, 2010, as compared to 8.76% as of December 31, 2009.

"2010 and the last few months have been very productive for the Company," said Charles E. Bradley, Jr., Chairman and Chief Executive Officer. "We have established two new credit facilities for $200 million in new warehouse funding, raised $20 million in incremental growth capital and completed our first term securitization since early 2008. In addition, our new contract purchase initiatives within the dealership community are gaining traction. We purchased over $110 million in new contracts in 2010 vs. nominal amounts in 2009 and maintained attractive yields and credit metrics."

"Our two primary objectives for 2011 will be to increase new contract purchases to the point where our total managed portfolio starts growing again and to complete multiple term securitization transactions. We feel both of these goals are attainable and will mark important milestones in our rebuilding efforts from the impact we have felt from the Great Recession."

Conference Call

CPS announced that it will hold a conference call on Monday, April 4, 2011, at 1:30 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.

A replay will be available between April 4, 2011 and April 10, 2011, beginning two hours after conclusion of the call, by dialing 800 642-1687 or 706 645-9291 for international participants, with conference identification number 56806276.  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 .

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 revenue, expense 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, 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 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 provision for credit losses may affect future performance.

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, 
  2010 2009 2010 2009
Revenues:        
Interest income  $ 30,018  $ 42,737  $ 137,090  $ 208,196
Servicing fees  1,538  1,829  7,657  4,640
Other income  3,714  2,137  10,438  11,059
   35,270  46,703  155,185  223,895
Expenses:        
Employee costs 8,739 10,840  33,814  37,306
General and administrative  3,478  6,183  18,526  24,204
Interest  18,846  24,490  82,226  111,768
Provision for credit losses  4,179  42,175  29,921  92,011
Other expenses  2,188  1,653  7,542  8,013
   37,430  85,341  172,029  273,302
Income before income taxes  (2,160)  (38,638)  (16,844)  (49,407)
Income taxes  12,382  7,800  16,982  7,800
Net income   $ (14,542)  $ (46,438)  $ (33,826)  $ (57,207)
         
Earnings per share:        
Basic  $ (0.84)  $ (2.55)  $ (1.94)  $ (3.07)
Diluted  (0.84)  (2.55)  (1.94)  (3.07)
         
Number of shares used in computing earnings per share:        
Basic  17,321  18,216  17,477  18,643
Diluted  17,321  18,216  17,477  18,643
 
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
     
     
  December 31, December 31,
  2010 2009
     
Cash  $ 16,252  $ 12,433
Restricted cash 123,958 128,511
Total cash 140,210 140,944
Finance receivables 565,621 878,366
Allowance for finance credit losses (13,168) (38,274)
Finance receivables, net 552,453 840,092
Residual interest in securitizations 3,841 4,316
Deferred tax assets, net 15,000 33,450
Other assets 31,380 49,459
   $ 742,884  $ 1,068,261
     
Accounts payable and other liabilities  $ 20,394  $ 17,906
Warehouse line of credit 45,564 4,932
Residual interest financing 39,440 56,930
Securitization trust debt 567,722 904,833
Senior secured debt, related party 44,873 26,118
Subordinated debt 20,337 21,965
  738,330 1,032,684
     
Shareholders' equity 4,554 35,577
   $ 742,884  $ 1,068,261
     
Operating and Performance Data ($ in thousands)  At and for the   At and for the 
   Three months ended   Twelve months ended 
   December 31,   December 31, 
  2010 2009 2010 2009
         
Contract purchases 33,633 6,061 113,023 8,599
         
Total managed portfolio 756,211 1,194,721 756,211 1,194,721
         
Average managed portfolio 781,647 1,196,598 928,977 1,342,410
         
Net interest margin (1) 11,172 18,247 54,864 96,428
         
Risk adjusted margin (2) 6,993 (23,928) 24,943 4,417
         
Core operating expenses (3) 14,405 18,676 59,882 69,523
Annualized % of average managed portfolio 7.37% 6.24% 6.45% 5.18%
         
Allowance for finance credit losses as % of fin. receivables 2.33% 4.36%    
         
Aggregate allowance as % of fin. receivables (4) 5.02% 7.24%    
         
Delinquencies        
31+ Days 5.74% 4.90%    
         
Repossession Inventory 3.42% 3.86%    
         
Total Delinquencies and Repossession Inventory 9.16% 8.76%    
         
Annualized net charge-offs as % of average owned portfolio 6.65% 13.23% 9.04% 11.02%
         
(1) Interest income less interest expense.
(2) Net interest margin less provision for credit losses.
(3) Total expenses less interest and provision for credit losses.
(4) Includes allowance for finance credit losses and allowance for repossession inventory.
CONTACT: Investor Relations Contact
         
         Robert E. Riedl, Chief Investment Officer
         949 753-6800

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