Consumer Portfolio Services Inc. Reports 2004 Fourth Quarter and Full-Year Results

IRVINE, CA – Consumer Portfolio Services Inc. (Nasdaq: CPSS) today announced results for its fourth quarter and year ended December 31, 2004.

For the three months ended December 31, 2004, total revenues increased approximately $7.1 million, or 23.3%, to $37.6 million, compared to $30.5 million for the three months ended December 31, 2003. Net loss for the quarter ended December 31, 2004, was $(12.2) million, or $(0.57) per diluted share, compared to net loss of $(5.7) million, or $(0.28) per diluted share, for the quarter ended December 31, 2003. Diluted shares outstanding were 21.4 million and 20.4 million for the quarters ended December 31, 2004 and 2003, respectively. Results for the fourth quarter 2004 include two significant non-cash charges: a $9.1 million impairment loss on the residual interest in securitizations; and a $4.5 million provision for credit losses related to the portfolio of receivables purchased from SeaWest Financial Corporation in April 2004 as part of the $12.0 million provision for the quarter.

Revenues for the year ended December 31, 2004, totaled $132.7 million, an increase of $27.7 million, or 26.4%, compared to $105.0 million for 2003. Full-year 2004 net loss was $(15.9) million, or $(0.75) per diluted share. For the year ended December 31, 2003, net income was $395,000, or $0.02 per diluted share, including an income tax benefit of $3.4 million. The income tax benefit was primarily the result of the resolution of certain IRS examinations of tax returns filed by MFN Financial Corporation prior to its acquisition by Consumer Portfolio Services, resulting in a tax benefit of $4.9 million, which was offset in part by an income tax provision of $1.5 million. Diluted shares outstanding were 21.1 million and 21.6 million for the years 2004 and 2003, respectively.

“While the financial results for the fourth quarter were not what we had anticipated because of the two non-cash charges, we thought it was the correct, conservative course of action to position the company for a profitable future,” said Charles E. Bradley, president and chief executive officer of Consumer Portfolio Services. “Operationally, our initiatives from 2004 are showing meaningful results. Purchases of new receivables for the fourth quarter were once again the highest they have been in more than two years, despite the fourth quarter being the weakest time of year. In addition, we are experiencing continued originations growth during the first quarter this year.”

“Another significant event was on the litigation front,” said Bradley. “Subsequent to year end, we settled the Stanwich case in California, which is great to have behind us.”

During the fourth quarter of 2004, Consumer Portfolio Services purchased $127.1 million of contracts from dealers as compared to $119.3 million during the third quarter 2004 and $82.9 million during the fourth quarter 2003. In addition, the company continued its regular quarterly securitization program with the December sale of $109.2 million of AAA/Aaa rated asset-backed notes. As of December 31, 2004, the company’s managed receivables totaled $906.9 million.