Consumer Portfolio Services, Inc. (NASDAQ:CPSS) Q4 2023 Earnings Call Transcript March 18, 2024

Consumer Portfolio Services, Inc. isn't one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Good day, everyone, and welcome to the Consumer Portfolio Services 2023 Fourth Quarter Operating Results 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. Any statements made during this call that are not statements of historical facts may be deemed forward-looking statements. Statements regarding current or historical valuations of receivables because dependent on estimates of future events also are forward-looking statements. All such forward-looking statements are subject to risks that could cause actual results to differ materially from those projected. I refer you to the company's annual report filed March 15th for further clarification.

The company assumes no obligation to update publicly any forward-looking statements, whether as a result of new information further events or otherwise. With us here is Mr. Charles Bradley, Chief Executive Officer; Mr. Danny Bharwani, Chief Financial Officer; and Mr. Mike Lavin, President and Chief Operating Officer of Consumer Portfolio Services. I will now turn the call over to Mr. Bradley.

Charles Bradley: Thank you, and welcome, everyone, to our fourth quarter and full year earnings call. Thinking about this call and what I should say, the real thing was '23 probably in retrospect, was what we'll loosely call a transitional year for us and in terms of where we want to go with the company, somewhat of a neutral year. And it harkens back to, I think, in late January of '23, when we were looking at our credit performance, we were somewhat surprised and/or dismayed, if not shocked that the '22 vintages weren't performing as well as we thought they would. And at that point, we decided we needed to do slow things down and figure out what was going on. And so we did. So really, unfortunately, at some level, we spend, I mean, there's good news, bad news.

Bad news is we spent most of '23 evaluating the '22 performance and figuring out what went wrong and how to make it better so that we can then move forward and it took some time. One of the things we did immediately was we tightened the credit, we improved the model, beefed up the collection team and kind of went after making that '22 paper perform as best as we possibly could. And so unfortunately, at some level, we spent most of '23 waiting to see how '22 would do rather than try and grow real fast in '23 and not really know how we were going to improve. So what we did find out as the year went on and actually just the first or second quarter, as much as we were somewhat dismayed in our performance and how our credit was performing, we found out that almost everyone else in the industry was doing far, far worse.