Consumer Portfolio Services, Inc. · NASDAQ:CPSS
Consumer Portfolio Services — Investor Presentation (May 2007)
29 slides from Consumer Portfolio Services's investor presentation, May 22, 2007
Slide 1: Safe Harbor Statement
Safe Harbor Statement Information included in the following slides is believed to be accurate, but is not necessarily complete. Such information should be reviewed in its appropriate context. The implication that historical trends will continue in the future, or that past performance is indicative o
Slide 2: Reference to Public Reports
Reference to Public Reports Any person considering an investment in securities issued by CPSis urged to review the materials filed by CPS with the U.S. Securities and Exchange Commission ("Commission"). Such materials may be foundby inquiring of the Commission's EDGAR search page (http://www.sec.gov
Slide 3: Company Overview
Company Overview ⑀⏇Specialty finance company focused on sub-prime auto market ⑀⏇Established in 1991; IPO in 1992 ⑀⏇Irvine, California headquarters and three servicing branches in Virginia, Florida and Illinois
Slide 4: Company Overview
Company Overview ⑀⏇Through March 31, 2007, approximately $7.4 billion in contract purchases from auto dealers ⑀⏇As of March 31, 2007, managed portfolio of approximately $1.73 billion ⑀⏇Approximately 846 employees
Slide 5: U.S. Auto Finance Market
U.S. Auto Finance Market ⑀⏇2005 U.S. auto financing = $407 billion(1) ⑀⍽$211 billion new; $196 billion used ⑀⏇Company estimates 20%, or $81 billion is “sub-prime” ⑀⏇Historically fragmented market with few long-term dominant players ⑀⏇Significant barriers to entry (1)According to CNW Marketing Resear
Slide 6: Major Market Participants
Major Market Participants ⑀⏇AmeriCredit ⑀⏇Capital One ⑀⏇Triad ⑀⏇HSBC/Household ⑀⏇Wells Fargo ⑀⏇CitiFinancial ⑀⏇Chase Custom ⑀⏇Manufacturers’ Captives
Slide 7: The CPS Landscape as of March 31, 2007
The CPS Landscape as of March 31, 2007 ⑀⏇Contracts with over 7,700 dealers in 47 states ⑀⏇101 employee marketing reps in the field and 7 in-house ⑀⏇West coast headquarters and three strategically located servicing branches ⑀⏇Primarily factory franchise dealers Independents(1)11% Rental Car Companies
Slide 8: Collateral Description
Collateral Description ⑀⏇Primarily late model pre-owned vehicles ⑀⍽16% New ⑀⍽84% Pre-owned ⑀⍽70% Domestic ⑀⍽30% Foreign 0%5%10%15%20%25%30%35%200720062005200420032002Earlier Securitization 2007-A Principal Balances by Model Year
Slide 9: Program Overview
Program Overview CPS’s risk-adjusted pricing results in program offerings covering a wide band of the credit spectrum New contract acquisitions for the three months ended March 31, 2007 Program Avg Yield(1) Avg Amount Financed Avg FICO % of Purchases(2) Preferred 11.9%$19,218557 521 525 517 519 518
Slide 10: Borrower and Contract Profile
Borrower and Contract Profile An emphasis on stable borrowers with the ability to rehabilitate their credit profile New contract acquisitions under the CPS programs for the three months ended March 31, 2007 Borrower: Average age-37 years Average time in job-5 years Average time in residence-5 years
Slide 11: Contract Originations
Contract Originations ⑀⏇Centralized contract originations at Irvine HQ ⑀⍽Maximizes control and efficiencies ⑀⏇Proprietary auto-decisioning system ⑀⍽Makes initial credit decision on approximately 90% of incoming applications ⑀⍽Enhances dealer service by shortening response time ⑀⏇Pre-funding verifica
Slide 12: Historical Origination Volume
Historical Origination Volume02004006008001,0001,20019911992199319941995199619971998199920002001200220032004200520062007Annual Volumes ($ in millions) Since inception through March 31, 2007 the Company has originated over $7.3 billion
Slide 13: Contract Servicing
Contract Servicing ⑀⏇Geographically dispersed servicing centers enhance coverage and staffing flexibility and drive portfolio performance ⑀⏇Offices are tied into the central database and paperless collection system ⑀⏇Early contact on past due accounts; commencing as early as first day after due date
Slide 14: Successful Acquisitions
Successful Acquisitions Entity - Date and Purchase Price - Comments MFN Financial Corp.-March 2002 $123.2 million- ⑀⏇$380 million portfolio ⑀⏇$17.4 million negative goodwill The Finance Company-May 2003 $23.7 million- ⑀⏇$150 million portfolio ⑀⏇CPS maintains presence in TFC military niche SeaWest Fi
Slide 15: Strategies for Future Growth
Strategies for Future Growth ⑀⏇Increase dealer penetration and expand dealer network ⑀⍽Expansion of marketing rep network ⑀⍽Continue high level of dealer contact with improved service levels ⑀⍽Expansion of risk-based pricing model ⑀⍽Expansion of the independent dealer program ⑀⍽Retention of existing
Slide 16: Portfolio Financing
Portfolio Financing ⑀⏇Two senior warehouse facilities aggregating $400 million ⑀⏇$25 million subordinated warehouse facility allows advance ratesup to 93% across both senior lines ⑀⏇Quarterly “AAA” rated asset-backed securities provide long-term matched funding -$5.4 billion in 44 deals since 1994 ⑀
Slide 17: Historical Corporate Debt
Historical Corporate Debt-20406080100120140160Dec-95Dec-96Dec-97Dec-98Dec-99Dec-00Dec-01Dec-02Dec-03Dec-04Dec-05Dec-06Mar-07Period Ending$ in millions0.00%5.00%10.00%15.00%20.00%25.00%30.00%35.00%Residual Interest Debt (left axis)LT Debt (left axis)Residual and LT Debt to ManagedPortfolio (right axi
Slide 18: Total Managed Portfolio Composition by Source
Total Managed Portfolio Composition by Source ($ in millions) $0$200$400$600$800$1,000$1,200$1,400$1,600$1,800Dec-02Dec-03Dec-04Dec-05Dec-06Mar-07SeaWest 3rd PartySeaWestTFCMFNCPS Primary Driver of Growth is CPS “Organic” Contract Purchases with over 95% now On Balance Sheet $1,727 mm$595 mm$1,566 m
Slide 19: Delinquencies and Repo Inventory
Delinquencies and RepoInventory (1) Three quarter rolling averagesConsistent Performance and Positive Trends (1)30 or more days past due.(2)MFN transactions called in August 2005. 9.00% Dec 95 Dec 96 Dec 97 Dec 98 Mar 99 Jun 99 Sep 99 Dec 99 Mar 00 Jun 00 Sep 00Dec-00 Mar 01 Jun 01 Sep 01 Dec 01 Mar
Slide 20: Static Pool Performance
12345678910111213141516171819202122232419971998200120022003200420052006 Static Pool PerformanceAverage ABS Pool Cumulative Net Losses as of March 31, 2007 Consistent Performance and Positive Trends ABS pools from 2003 onward exhibit substantially better performance.Months seasoned 0.00%2.00%4.00%6.0
Slide 21: Portfolio Auction Values
Portfolio Auction Values Liquidation Values for RepoSales Have Increased from 2003(1) (1) Net liquidation proceeds as a percentage of the net balanceat the time of sale of the vehicle. 50%Mar-03Jun-03Sep-03Dec-03Mar-04Jun-04Sep-04Dec-04Mar-05Jun-05Sep-05Dec-05Mar-06Jun-06Sep-06Dec-06Mar-07 0%10%20%3
Slide 22: Repossession Sales in Q1 2007
Repossession Sales in Q1 2007(1)⑀⏇Least fuel efficient vehicles comprised less than 10% of all vehicles sold⑀⏇Full-size SUV’s and trucks sold for 52% of contract balance vs. 45% for other vehicles 25%5%3%6%34%14%11%2% Compact CarFull-size CarFull-size SUVFull-size TruckMid-size CarMid-size SUVMid-si
Slide 23: Summary Balance Sheets
Summary Balance Sheets ($ in millions) March 31, 2007 December 31, 2006 December 31, 2005 Assets $ 14.2 193.0 1,401.4 Residual interest in securitizations 10.6 13.8 25.2 54.7 51.2 $1,728.3 $ 20.6 73.0 Income taxes payable 12.4 10.3 --- 1,817.9 1,616.8 1,081.6 31.4 1,443.0 38.6 111.5 $1,728.3 Cash $
Slide 24: Summary Statements of Operations
Summary Statements of Operations Three Months Ended Years Ended ($ in millions) March 31, 2007 $ 80.5 0.3 5.7 86.5 10.8 11.3 29.5 29.5 81.1 5.4 2.2 $ 3.2 $0.14 $0.14 EPS (fully diluted) $0.07 $1.64 $0.14 March 31, 2006 December 31, 2006 December 31, 2005 Revenues $ 263.6 2.9 12.4 278.9 38.5 42.0 93.
Slide 25: Selected Financial Data
Selected Financial Data ($ in millions) Three Months Ended March 31, 2007 $330.3 $1,727.7 $21.5 $22.1 5.30% 1.30% 3.55% 5.12% March 31, 2006 December 31, 2006 December 31, 2005 December 31, 2004 $254.5 $1,240.0 $17.4 $19.1 6.41% 0.60% 2.73% 4.83% Auto contract purchases $1,019.0 $691.3$447.2 Total m
Slide 26: Investment Merits
Investment Merits ⑀⏇CPS has weathered industry turbulence to remain one of the few independent public auto finance companies ⑀⏇Attractive industry fundamentals ⑀⏇Disciplined approach to credit quality and servicing ⑀⏇Demonstrated growth in new contract acquisitions and total managed portfolio
Slide 27: Investment Merits
Investment Merits ⑀⏇Recurring revenue model and sound quality of earnings ⑀⏇Operating leverage through economies of scale ⑀⏇Opportunistic, successful acquisitions ⑀⏇Stable senior management team with significant equity ownership -senior management, including vice presidents, average 12 years of serv
Slide 28: Consumer Portfolio Services, Inc.
Consumer Portfolio Services, Inc. Nasdaq: CPSS
Slide 29: Consumer Portfolio Services, Inc.
Consumer Portfolio Services — Investor Presentation (May 2007) on 6ix