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Consumer Portfolio Services Inc (CPSS) is a specialized finance company dedicated to providing indirect automobile financing to individuals who face challenges such as past credit problems, low incomes, or limited credit histories. Founded in 1991, the company has built a robust portfolio by purchasing retail installment sales contracts from automobile dealerships. These contracts are primarily secured by late-model used vehicles, with a minor portion involving new vehicles.
The company's core business involves acquiring these contracts from franchised and select independent dealerships across the United States. By doing so, CPSS offers an alternative financing solution for customers who are often referred to as sub-prime due to their credit profiles. This approach not only aids consumers in securing vehicle financing but also supports dealerships in closing sales that might otherwise be unattainable.
CPSS funds its contract purchases primarily through the securitization markets, ensuring long-term stability and sustainability. The company then services these contracts over their entire lifespan, maintaining a steady revenue stream and fostering lasting relationships with its customers. As of June 2015, CPSS has purchased over $11.8 billion in contracts and is currently servicing a managed portfolio worth approximately $1.8 billion, encompassing around 140,000 customers.
Headquartered in Irvine, California, CPSS operates additional servicing branches in Florida, Illinois, Nevada, and Virginia, strategically positioned to optimize operational efficiency and customer service. With a dedicated workforce of approximately 900 employees and dealer relationships spanning across 48 states, CPSS stands as a significant player in the U.S. specialty finance sector.
Consumer Portfolio Services (Nasdaq: CPSS) announced the closing of its first term securitization of 2021, marking its 38th senior subordinate securitization since 2011. The transaction involved the sale of $230.5 million in asset-backed notes backed by $245.0 million in auto receivables. Notably, this is the 21st consecutive securitization to receive a triple 'A' rating. The securitization includes a pre-funding structure, projecting future sales of approximately $60.6 million in receivables.
Consumer Portfolio Services (CPSS) renewed its two-year revolving credit agreement with Citibank on December 18, 2020. This agreement allows CPS to secure loans against automobile receivables, either currently held or to be purchased. CPS can borrow on a revolving basis until December 18, 2022, with options for full repayment or amortization afterward.
The renewal supports CPS's strategy of maintaining three $100 million warehouse lines with multi-year revolving commitments, enhancing its financing capabilities.
Consumer Portfolio Services, Inc. (Nasdaq: CPSS) announced its board of directors has unanimously rejected an unsolicited acquisition offer from Auto Experience Inc. (AEI), stating the proposed price of $135 million significantly undervalues the company. After thorough consideration, the board concluded that accepting AEI's proposal would not serve the best interests of CPS shareholders. Furthermore, the board expressed doubts regarding the credibility of AEI's interest, emphasizing CPS’s strong long-term prospects.
Consumer Portfolio Services (CPSS) reported a net income of $3.8 million or $0.16 per diluted share for Q3 2020, up from $1.8 million in Q3 2019. Total revenues for Q3 2020 were $70.7 million, down 17.4% from $85.5 million in the same period last year. However, operating expenses decreased by 21.7% to $64.8 million. For the nine months ended September 30, 2020, revenues were $208.7 million, down 19.7% year-over-year. The company also purchased $174 million in new contracts during Q3 2020.
Consumer Portfolio Services, Inc. (CPSS) will hold a conference call on October 20, 2020, at 1:00 p.m. ET to discuss its third quarter 2020 results. Interested participants can join by calling 877-312-5502 for domestic or 253-237-1131 for international calls, 10 minutes prior to the start. A replay will be available from October 20 to October 27, and the call will be streamed live on the company’s website, www.consumerportfolio.com. CPSS specializes in indirect automobile financing for individuals with limited credit histories.
Consumer Portfolio Services, Inc. (Nasdaq: CPSS) has received a non-binding, unsolicited offer to acquire the company from Auto Experience Inc. (AEI) valued at $135 million. CPS asserts that AEI's press release misrepresents the proposal's terms, which are contingent on various conditions. The CPS Board will carefully evaluate the offer, considering AEI's ability to fulfill the proposal and its fiduciary duties to shareholders. CPS advises investors to critically review any future communications from AEI and rely on official filings with the U.S. Securities and Exchange Commission.
Auto Experience has proposed to acquire Consumer Portfolio Services (CPSS) in an all-cash deal valued at $135 million. This acquisition aims to enhance CPSS’s operations using advanced technology and digital capabilities. The proposal is set at $6.18 per share, nearly doubling CPSS’s closing price of $3.35 on October 7, 2020. Auto Experience's CEO, Samuel M. Ellis, believes that this transaction presents substantial growth opportunities for CPSS and its shareholders, leveraging Auto Experience's experience in automobile financing.
Consumer Portfolio Services (CPSS) announced the closing of its third term securitization in 2020, marking the 37th since 2011 and the 20th consecutive securitization receiving a triple 'A' rating from at least two agencies. The transaction raised $252.2 million from qualified institutional buyers backed by $260 million in automobile receivables. The securitization features a weighted average coupon of approximately 2.39% and initial credit enhancements. CPS plans an additional sale of about $63.7 million in receivables in October 2020 to support long-term financing.
Consumer Portfolio Services (CPSS) reported a net income of $3.0 million, equating to $0.13 per diluted share, for Q2 2020, compared to $1.8 million or $0.08 per diluted share in Q2 2019. Revenue saw a significant drop of 22% year-over-year to $67.3 million. Operating expenses decreased by 25% to $62.6 million. Despite pretax income rising 67.6% to $4.6 million, the company recorded pretax charges of $12.6 million due to pandemic-related losses. Total receivables decreased to $2.326 billion, with an annualized net charge-off rate of 7.39%.
Consumer Portfolio Services, Inc. (Nasdaq: CPSS) will hold a conference call on July 22, 2020, at 1:00 p.m. ET to discuss its Q2 2020 operating results. Participants can call 877-312-5502 or 253-237-1131 (international) to join. A replay will be available from July 22 to July 29 by calling 855-859-2056 or 404-537-3406 (international). The call will also be broadcast live and accessible for 90 days via the company’s website at www.consumerportfolio.com.
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