EX-99.5 6 cps_8kaex99-5.txt Exhibit 99.5 - Pro Forma Financial Data CONSUMER PORTFOLIO SERVICES, INC. AND SUBSIDIARIES UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2002: (In thousands, except per share information)
Historical Unaudited Pro Forma ------------------------------ ------------------------ CPS MFN Combined Adjustments Combined REVENUES: Gain on sale of Contracts, net $ 1,772 - 1,772 $ 1,772 Interest income 4,299 20,008 24,307 24,307 Servicing fees 2,786 604 3,390 3,390 Other income 184 886 1,070 1,070 ------------------------------ ---------- ---------- 9,041 21,498 30,539 - 30,539 ------------------------------ ---------- ---------- EXPENSES: Employee costs 6,874 7,431 14,305 14,305 General and administrative 3,475 5,665 9,140 9,140 Interest 3,396 9,091 12,487 1,528 (1) 14,015 Marketing 1,450 - 1,450 1,450 Occupancy 797 491 1,288 1,288 Depreciation and amortization 288 - 288 288 Provision for credit losses on finance Contracts - 6,000 6,000 6,000 ------------------------------ ---------- ---------- 16,280 28,678 44,958 1,528 46,486 ------------------------------ ---------- ---------- Income (loss) before income tax expense (benefit) and extraordinary item (7,239) (7,180) (14,419) (1,528) (15,947) Income tax expense (benefit) (5,794) - (5,794) (581) (2) (6,375) ------------------------------ ---------- ---------- Income (loss) before extraordinary item (1,445) (7,180) (8,625) (947) (9,572) Extraordinary item, unallocated negative goodwill - 17,412 17,412 - 17,412 ------------------------------ ---------- ---------- Net income $ (1,445) 10,232 8,787 (947) 7,840 ============================== ========== ========== EARNINGS PER SHARE: Basic earnings per share before extraordinary item $ (0.50) Extraordinary item 0.90 ---------- Basic earnings per share $ 0.41 ========== Diluted earnings per share before extraordinary item $ (0.44) Extraordinary item 0.80 ---------- Diluted earnings per share $ 0.36 ========== NUMBER OF SHARES USED IN COMPUTING EARNINGS PER SHARE: Basic 19,286 Diluted 21,659
CONSUMER PORTFOLIO SERVICES, INC. AND SUBSIDIARIES UNAUDITED PRO FORMA COMBINED STATEMENT OF EARNINGS FOR THE YEAR ENDED DECEMBER 31, 2001: (In thousands, except per share information)
HISTORICAL UNAUDITED PRO FORMA ------------------------------ ----------------------- CPS MFN COMBINED ADJUSTMENTS COMBINED REVENUES: Gain on sale of Contracts, net $ 32,765 - $ 32,765 $ $ 32,765 Interest income 17,205 113,887 131,092 131,092 Servicing fees 10,666 - 10,666 10,666 Other income 1,369 6,231 7,600 7,600 ------------------------------ ---------- ---------- 62,005 120,118 182,123 182,123 ------------------------------ ---------- ---------- EXPENSES: Employee costs 23,994 33,061 57,055 57,055 General and administrative 12,645 17,897 30,542 30,542 Interest 14,335 28,561 42,896 6,112 (1) 49,008 Marketing 6,525 - 6,525 6,525 Occupancy 3,167 3,198 6,365 6,365 Depreciation and amortization 1,019 - 1,019 1,019 Provision for credit losses on finance Contracts - 29,097 29,097 29,097 ------------------------------ ---------- ---------- 61,685 111,814 173,499 6,112 179,611 ------------------------------ ---------- ---------- Income before income tax benefit 320 8,304 8,624 (6,112) 2,512 Income tax benefit - (7,725) (7,725) (2,323)(2) (10,048) ------------------------------ ---------- ---------- Net income before extraordinary item $ 320 16,029 16,349 (3,789) $ 12,560 ============================== ========== ========== EARNINGS PER SHARE: ---------- ---------- Basic earnings per share $ 0.02 $ 0.64 ========== ========== ---------- ---------- Diluted earnings per share $ 0.02 $ 0.60 ========== ========== NUMBER OF SHARES USED IN COMPUTING EARNINGS PER SHARE: Basic 19,480 19,480 Diluted 21,018 21,018 43
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL DATA The Unaudited Pro Forma Combined Statement of Operations for the three months ended March 31, 2002 and the Unaudited Pro Forma Combined Statement of Earnings for the year ended December 31, 2001 included herein have been prepared including the impact of the merger of MFN Financial Corporation with and into Consumer Portfolio Services, Inc., as if the Merger had been consummated on January 1, 2002 and January 1, 2001, respectively. The Merger has been accounted for using the purchase method of accounting. The Pro Forma Combined Financial Data are provided for comparative purposes only. They do not purport to be indicative of the results that actually would have occurred if the acquisition had been consummated on the dates indicated or the results that may be obtained in the future. The Company has recorded certain preliminary purchase accounting adjustments, which are based on estimates utilizing available information. Such purchase accounting adjustments may be refined as additional information becomes available. No material adjustments to the carrying values of the assets and liabilities of MFN have been made, and no material acquired intangible assets have been recognized. In addition, the Company's Unaudited Pro Forma Combined Statement of Operations for the three-month period ended March 31, 2002 includes the recognition of an extraordinary gain related to the excess of net assets acquired over purchase price ("negative goodwill") totaling $17.4 million. The following table summarizes the estimated fair value of the assets acquired and liabilities assumed at the date of acquisition. AT MARCH 8, 2002 ---------------- (IN THOUSANDS) Cash .................................................... $ 93,782 Restricted cash ......................................... 25,499 Finance Contracts, net .................................. 186,554 Residual interest in securitizations .................... 32,485 Other assets ............................................ 12,006 --------- Total assets acquired ........................... 350,326 --------- Securitization trust debt ............................... 156,923 Subordinated debt ....................................... 22,500 Accounts payable and other liabilities .................. 30,242 --------- Total liabilities assumed ....................... 209,665 --------- Net assets acquired ............................. 140,661 Less: purchase price ............................ 123,249 --------- Excess of net assets acquired over purchase price $ 17,412 ========= In connection with the termination of MFN origination activities and the integration and consolidation of certain activities, which are expected to be completed by year end, the Company has recognized certain liabilities related to the costs to exit these activities and terminate the affected employees of MFN. These activities include service departments such as accounting, finance, human resources, information technology, administration, payroll and executive management. These costs include the following:
AT MARCH 8, 2002 ---------------- (IN THOUSANDS) Severance payments and consulting contracts .................... $ 3,215 Facilities closures ............................................ 2,152 Termination of contracts, leases, services and other obligations....................................... 597 Acquisition expenses accrued but unpaid, e.g., legal expenses .. 250 --------- Total liabilities assumed ................................ $ 6,214 =========
No adjustment has been made in the Unaudited Pro Forma Combined Statement of Earnings for these activities. The following footnotes describe the Pro Forma Adjustments made: (1) Reflects interest expense incurred on merger related debt of approximately $35.0 million at an interest rate of 13.5% and the amortization of merger-related debt issuance costs of approximately $1.4 million using the effective interest method over one year. (2) Reflects income tax benefit of interest expense and amortization of debt issuance costs at an expected marginal tax rate of thirty-eight percent. 44