Monday, Feb. 25, 2008, 07:00 PM UPDATED 11:59 AMBy Nick Zulovich
IRVINE, Calif. — According to the president and chief executive officer of Consumer Portfolio Services, 2007 was a banner year in terms of contract purchases and portfolio level.
Charles Bradley Jr., president and CEO, indicated, "2007 was a landmark year for CPS as our new contract purchases and total managed portfolio both reached their highest level in our history.
"Our execution of the managed growth strategy we set in motion four years ago has gone very well as our year-over-year pretax income growth continues," he highlighted.
More specifically, pretax income came in at $24 million for the year, compared with $13.2 million in 2006. As for net income, it reached $13.9 million, compared with $39.6 million.
However, officials pointed out that 2006 results included a net tax benefit of $26.4 million. Therefore if this gain is removed, in actuality, 2007 net income was up from $7.8 million posted in the previous year.
Moving on, CPS also reported that revenue increased about $115.7 million, or 41.5 percent, hitting $394.6 million for the year. This is compared to $278.9 million garnered in 2006.
Operating expenses also increased, reaching $370.6 million, up $104.9 million, or 39.5 percent, from the prior year.
For the year, the company said it purchased $1.282.3 billion of contracts from dealers, as opposed to $1.019 billion in 2006, up 25.8 percent.
Moreover, managed receivables came in at $2.126.2 billion, a $560.3-million jump from $1.565.9 billion in the prior year.
As for net charge-offs, officials said they were 5.3 percent of the average-owned portfolio for the year, compared with 4.5 percent in 2006. Delinquencies were also up. Accounts greater than 30 days past due, including repossession inventory, were 6.3 percent of the portfolio, compared with 5.5 percent in 2006.
"While asset performance metrics deteriorated a modest amount in 2007 versus 2006, we expected a bit of normalization as 2006 was one of the best years for consumer credit in the last 10 years," Bradley explained.
"Despite these increases, net charge-offs and delinquencies for the quarter and year remain within the range of our seasonal expectations," he continued.
For the fourth quarter, pretax income grew to $6 million, compared with $4.5 million, executives indicated.
Meanwhile, net income for the period was $3.5 million, compared with $30.9 million. Again referring to the $26.4 million tax gain in 2006, officials said if this were removed from results, net income for the fourth quarter of 2006 would have been $2.7 million.
Continuing on, CPS reported that revenue for the time frame was up about $29.6 million, or 37.1 percent. It came in at $109.5 million, compared with $79.9 million in the fourth quarter of 2006.
Like the full-year results, operating expenses were up for the quarter. They hit $103.5 million, up $28.2 million, or 37.1 percent, compared with $75.4 million for the same period of 2006.
For the time frame, the company purchased $265.8 million of dealer contracts, compared with $340.2 million during the third quarter of 2007 and $241.4 million during the fourth quarter of 2006.
As for charge-offs, officials said annualized net charge-offs for the period were 6.3 percent, compared with 5.9 percent in 2006.