CPS(US:CPSS)2023-05-09 16:00Financial Performance - Revenues for the three months ended March 31, 2023, were $83.1 million, an increase of $8.7 million, or 11.7%, from $74.4 million in the prior year[108]. - Interest income increased by $10.0 million, or 14.3%, to $80.1 million, driven by a 34.4% increase in the average balance of finance receivables measured at fair value[109]. - Total operating expenses rose to $64.7 million, an increase of $19.6 million, or 43.6%, primarily due to higher interest and general administrative expenses[112]. - Interest expense for the three months ended March 31, 2023, was $32.8 million, representing 50.7% of total operating expenses, compared to $16.4 million, or 36.4%, in the prior year[114]. - Other income for the three months ended March 31, 2023, was $3.0 million, a 59.4% increase from $1.9 million in the comparable period in 2022[109]. - Income tax expense for the three months ended March 31, 2023, was $4.6 million, representing a 25% effective tax rate, down from $8.2 million and 28% in the prior period[127]. Portfolio and Contracts - Contracts purchased in dollars for the three months ended March 31, 2023, were $415.2 million, compared to $410.0 million in the same period of the previous year[113]. - The managed portfolio outstanding increased to $2.8818 billion, up from $2.3816 billion in the prior year[113]. - The average servicing portfolio outstanding as of March 31, 2023, was $2,856,598,000, compared to $2,273,483,000 in 2022, reflecting a year-over-year increase of approximately 25.6%[134]. - The total managed portfolio, excluding portfolios originated and owned by third parties, was $2,687,308,000 as of March 31, 2023, compared to $2,184,142,000 in the previous year[141]. Debt and Financing - As of March 31, 2023, the company had a short-term funding capacity of $400 million across two credit facilities[102]. - Total outstanding debt as of March 31, 2023, was approximately $2,534.0 million, consisting of $2,175.1 million in securitization trust debt and $285.8 million from warehouse lines of credit[154]. - The company completed one securitization totaling $324.8 million of notes sold during Q1 2023[151]. - Net cash provided by financing activities was $62.3 million in Q1 2023, down from $80.9 million in the prior year, with $324.8 million in new securitization trust debt issued[148]. Cash Flow and Investments - Net cash provided by operating activities for Q1 2023 was $65.1 million, a decrease of 4.7% from $68.3 million in Q1 2022[146]. - Net cash used in investing activities decreased to $121.2 million in Q1 2023 from $139.5 million in the prior year, with purchases of finance receivables at $353.9 million compared to $393.4 million[147]. - As of March 31, 2023, the company had $10.2 million in unrestricted cash and $114.2 million in available borrowings under warehouse credit facilities[151]. Credit Performance and Risk - A reduction to provision for credit losses on finance receivables was recorded at $9.0 million for the three months ended March 31, 2023, compared to $9.4 million in the prior year[122]. - Total delinquencies as a percentage of gross servicing portfolio increased to 11.0% as of March 31, 2023, compared to 9.9% in the prior year[130]. - Annualized net charge-offs as a percentage of the average servicing portfolio increased to 5.2% for the three months ended March 31, 2023, up from 3.3% in the same period of 2022[134]. - The company considers any charge-offs occurring more than six months after an extension to be at least partially successful, as it reflects additional payments made by obligors[140]. Extensions and Customer Base - The company granted an average of 6,089 extensions per month in the three months ended March 31, 2023, compared to 4,869 in the same period of 2022, representing a 25% increase[141]. - As of March 31, 2023, 69.9% of accounts granted extensions in 2019 were either paid in full or active and performing, indicating the effectiveness of the extension program[139]. - The total number of contracts with one extension as of March 31, 2023, was 31,198, with an outstanding amount of $547,720,000[141]. - The average number of outstanding accounts increased to 173,731 as of March 31, 2023, from 162,264 in the previous year, indicating growth in the customer base[141]. Economic Outlook - Future cash flows and earnings are uncertain, which may impair the ability to service and repay debt[155]. - Forward-looking statements indicate that factors such as economic conditions and market changes could significantly impact revenues and expenses[156].