Consumer Portfolio Services, Inc. (NASDAQ:CPSS) Q4 2018 Earnings Conference Call - Final Transcript

Feb 13, 2019 • 01:00 pm ET


Consumer Portfolio Services, Inc. (NASDAQ:CPSS) Q4 2018 Earnings Conference Call - Final Transcript


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Good day, everyone, and welcome to the Consumer Portfolio Services 2018 Fourth Quarter and Full-Year Earnings Conference Call. Today's call is being recorded.

Before we begin, management has asked me to inform you that this conference call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements made during this call that are not statements of historical fact may be deemed to be forward-looking statements.

Such forward-looking statements are subject to certain risks that could cause actual results to differ materially from those projected. I refer you to the company's SEC filings for further clarification. The company assumes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

With us here now is Mr. Charles Bradley, Chief Executive Officer; and Mr. Jeff Fritz, Chief Financial Officer of Consumer Portfolio Services. I will now turn the call over to you Mr. Bradley.

Charles Bradley

Thank you, and welcome to our year-end conference call. I think -- in looking at the numbers -- looking at the numbers, they are a little bit garbled because in both December of this year in 2018, and December of 2017 we had some tax recurring that affected the overall numbers. Going forward, hopefully, the numbers will be a little cleaner, though easier to figure out. But looking to those, we actually had a pretty good quarter. I think importantly the fourth quarter was probably better than we expected. And if you notice, originations actually grew for the year, we actually thought we might have a down year in terms of portfolio size and in originations and of course, that wasn't true.

For the year, we actually originated $900 million versus $860 million last year. So, and that's really important, because what we don't want as a portfolio -- the managed portfolio to shrink. Once it starts shrinking it kind of takes a big effort to get back going again. So one of the things to take away from 2018 is that, in fact, the portfolio didn't shrink at all, it grew little bit and somewhat -- even as important is that, the overall originations grew. And so, in the year we thought it would be flat or slightly down, we actually made some progress coming up.

On the downside, the delinquencies are up in the fourth quarter. It's probably worse than it looks by a bit, because the fourth quarter is always toughest months for collections in DQ. Also, our portfolio hasn't been growing, it's now been fairly flat for almost three years, with that you're going to start to see the worst of the worst. This is when companies have bad delinquency numbers and they are growing like crazy, that should be a real red flag. But for us, fairly flat portfolio, you are seeing delinquencies up little bit. But really we weren't growing even a little bit, you wouldn't even notice them. So as much as we're certainly concerned with