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CPS Announces Second Quarter 2020 Earnings

Written by Customer Service on . Posted in Public Companies.

Pretax income of $4.6 millionNet income of $3.0 million, or $0.13 per diluted shareNew contract purchases of $136 millionPretax charges of $12.6 million related to potential losses from the pandemicLAS VEGAS, July 21, 2020 (GLOBE NEWSWIRE) — Consumer Portfolio Services, Inc. (Nasdaq: CPSS) (“CPS” or the “Company”) today announced earnings of $3.0 million, or $0.13 per diluted share, for its second quarter ended June 30, 2020. This compares to net income of $1.8 million, or $0.08 per diluted share, in the second quarter of 2019.Revenues for the second quarter of 2020 were $67.3 million, a decrease of $19.0 million, or 22.0%, compared to $86.3 million for the second quarter of 2019.  Total operating expenses for the second quarter of 2020 were $62.6 million compared to $83.6 million for the 2019 period for a decrease of $20.9 million, or 25.0%.  Pretax income for the second quarter of 2020 was $4.6 million compared to pretax income of $2.8 million in the second quarter of 2019, an increase of 67.6%.Results for the second quarter include two specific charges related to estimated potential impact on credit performance resulting from the pandemic.  The Company recorded a $9.5 million mark down to the carrying value of the portion of the receivables portfolio accounted for at fair value.  The mark down is reflected as a reduction in revenue for the quarter.  The Company also recorded a $3.1 million charge to the provision for credit losses for the legacy portfolio accounted for under the Current Expected Credit Loss (CECL) model.  Without the charges related to the pandemic, revenues, total operating expenses and pretax income for the second quarter of 2020 would have been $76.8 million, $59.5 million and $17.3 million, respectively.For the six months ended June 30, 2020 total revenues were $138.1 million compared to $174.6 million for the six months ended June 30, 2019, a decrease of approximately $36.5 million, or 20.9%.  Total expenses for the six months ended June 30, 2020 were $130.3 million, a decrease of $38.8 million, or 23.0%, compared to $169.1 million for the six months ended June 30, 2019.  Pretax income for the six months ended June 30, 2020 was $7.8 million, compared to $5.4 million for the six months ended June 30, 2019.  Net income for the six months ended June 30, 2020 was $13.8 million compared to $3.5 million for the six months ended June 30, 2019. Results for the six months ended June 30, 2020 include a net tax benefit of $8.8 million related to the revaluation of the Company’s net operating losses and other tax adjustments. Without this tax benefit, net income and net income per diluted share for the six months ended June 30, 2020 would have been $5.0 million and $0.21 per share, respectively. During the second quarter of 2020, CPS purchased $135.9 million of new contracts compared to $266.0 million during the first quarter of 2020 and $250.1 million during the second quarter of 2019.  The Company’s receivables totaled $2.326 billion as of June 30, 2020, a decrease from $2.435 billion as of March 31, 2020 and $2.399 billion as of June 30, 2019.Annualized net charge-offs for the second quarter of 2020 were 7.39% of the average portfolio as compared to 7.82% for the second quarter of 2019.  Delinquencies greater than 30 days (including repossession inventory) were 9.59% of the total portfolio as of June 30, 2020, as compared to 14.83% as of June 30, 2019.“We began our second quarter of 2020 with many uncertainties related to the pandemic,” reported Charles E. Bradley, Jr., Chairman and Chief Executive Officer.  “During the quarter, we sent home, and later returned to the office, more than half of our workforce with no significant interruption to our operations or the services we provide our dealers and customers.  We postponed our planned asset-backed securitization, then completed it when the markets recovered.  Despite the challenges of the times, we are pleased with the resiliency of our staff, our customers and the subprime auto finance industry.”Conference Call

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