Consumer Portfolio Services Inc (CPSS) 2008 Q3 法說會逐字稿

Good day, everyone. Welcome to the Consumer Portfolio Services third quarter 2008 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 within the meaning of the Private Securities Litigation Reform Act of 1995. any statements made during this call that are not statements of historical fact may be deemed to be forwarding-looking statements. Such forward-looking statements are subject to certain risks that could cause results to differ materially from those projected. I refer you to the Company's SEC filings for further clarification. The Company assumes no obligation to update publicly any forward-looking statements whether as a result of new information, future events or other wise.

With us here now is Mr. Charles Bradley, Chief Executive Officer and Mr. Jeffrey Fritz, Chief Financial Officer of Consumer Portfolio Services. I will turn the call over to Mr. Bradley.

Thank you and thank you all for joining us on this call this morning. As you can see by the results the third quarter was difficult for the Company. As we get through the call we can sort of give everybody an idea both the environment we are operating in, which is obviously not good and what we have done to really manage our way through this.

As I said, and for those who followed along all the other conference calls we keep thinking that we are sort of suffering through a problem that's going to get better and every quarter seems to get worse. The third quarter is certainly no different. We've seen the economy continue to decline, the markets continue to decline. We've seen the problems on Wall Street grow somewhat monumentally over the last quarter or two. Having said that, if you look at CPS as a Company and an island as much as the water around is turbulent the Company seems to be doing a pretty good job of staying afloat in this problem. The economy is worse. The dealership business is literally drying up, not as much press (inaudible) didn't on Wall Street, dealership community is extremely hurt in this economy and can't sell cars, foreign line problems, it's that is a trickle down affect to us.

Being how we are not trying (inaudible) originate a whole ton of paper it doesn't effect us that much; however the overall health of the dealer community is the concern to everyone in the economy and to our industry. The capital markets as much as people said gotten looser, that's true. The capital markets remain as tight for this kind of paper as they've been for over a year. We have been really a diligent course for that year to get in position where we were relying on capital markets and done a good job in executing that plan, which again in our island analogy puts us in a fairly good place today. We are hoping that market changes as of right now, due to securitization or having a exit strategy for the paper is difficult at best. Having said that, we did do a loan sale right at the end of the third quarter and that was for just about everything we had in the warehouse lines which in the overall picture was very significant and important because the warehouse lines have covenants removing the paper out into that nature. And much like the April securitization that we did, it was a deal we needed to get done in looking at the Company's future.

So getting it down was significant. It was costly, which is reflected in the quarterly numbers. It's worth mentioning that if we hasn't done a loan sale we would have had a profitable quarter. But again, doing that loan sale and having the paper move off the balance sheet, far out weighs keeping it there and suffering the swings and arrows that go along with tray strategy. Ironically, you remember the days of the loan sale better than most and doing the loan sale before it looked like very difficult deal and somewhat pricey deal. Four days later it would be possible to get the deal done, that would be more true today. Sometimes its rather to be lucky than good. But getting that deal done enormously significant and very important as much as it was somewhat costly to the Company.

Also by having the deal, by getting that deal done it does puts us in a position where we are in a good spot to weather the storm and get back to when the capital markets eventually open up. We will talk a little bit more about that later on. For now I'm going to switch over the Jeff and have him go through the operating results.

Thank you. Good morning. Looking first to revenues, revenues for our third quarter ended September 30, of '08 were $91.7 million, this is down about 7% from $98.8 million for the June quarter of '08 and down about 11% from $102.8 million for nine months ended September 2007. Excuse me--- for the quarter ended September 2007. For the nine month period in '08 our revenues were 293.8 million, that's up about 3% from the nine month period ended September 2007.

As we saw last quarter we are going to see with the low volumes of originations in our runoff of existing portfolio is going to greatly influence our revenue numbers over the coming months assuming that origination is retained at the lower levels. Operating expenses for the quarter, 104.4 million, up 9% from 96.1 million from the previous quarter and up about 8% from 96.4 million for the year ago quarter. As Brad mentioned these operating expenses were significantly influenced by the loss in the sale of receivables, actually not incurred that loss we would have seen a reduction in operating expenses both quarter-to-quarter and year-over-year.

Provision for losses $26 million for the quarter, down bit from 30.9 million from the previous quarter and down about 28% from 36.3 million in the year ago quarter. Year to date loss provision of 91.8 million is down about 7% from last year to date provision of 98.5 million. As you may recall a provision is largely influenced by not only the portfolio size but significantly influenced by current originations, current originations volumes are low particularly compared to last year, and our portfolio only shrinking but becoming more aged with each passing month as we continue to originate the lower volumes of new paper.

Pretax loss for the quarter 12.6 million that compares to pretax income of 2.7 million in the prior quarter the June quarter. Pretax income of 6.3 million for the third quarter in 2007. Obviously number significantly influenced by the loss on sale. Prior year period also included about a 1.2 million in write up from residual asset last year in 2007 and we have the write ups throughout the year in 2007 and we really don't have corresponding other income in 2008 as we did for the 2007 with that one particular asset. On a year to date basis, the loss is now 6.2 million for 2008 that compares to pretax income of 6.5 million, last quarter-- June last quarter. Pretax income of 18 million in the year ago 9 month period.

Net income for this quarter, excuse me net loss for this quarter $6.3 million, that compares to net income last year of [$2.7] million for the third quarter, and net income in the previous June quarter of $1.5 million. On a year to date basis, loss is now $2.7 million, compares to year to date in 2007 at this time of net income of $10.4 million. We are also see a significant tax benefit in this periods as result. It's a combination of two things, one, of course, is the operating loss but we had a tax benefit of about $1.3 million, resulting from the resolution of certain tax contingencies that we previously recorded and reserved for. The diluted loss per share, $0.32 for this quarter, that compares to diluted income per share of $0.08 in the June quarter and $0.16 in the September quarter last year. The year to date loss is $0.32, compared to last year 9 month earnings per share diluted at $0.45.

Our cash balance, our unrestricted cash balance of September 30, $23.2 million. Up a little bit from the June quarter, up significantly compared to $17 million end of September 30, period last year. Unrestricted cash balances 167.8 million as of September 30, that's down a bit from 177 in the June quarter and down significantly from $258 million at this time last year. Last year at this time as of September 30, last year, $97 million in restricted cash that was associated with the prefunding of the O7C securitization. There is no securitization in this third quarter and no prefunding restricted cash balance. We are going to see restricted cash balances reduced somewhat along with the portfolio if we continue with these volumes. Our net financial receivables balance at September 30, is about $1.5 billion. Down from $1.8 billion in the June quarter and down from $1.9 billion in the September 30, period last year. Important to note that this September balance reflects reduction of approximately $200 million from the sale of the receivables near the end of the quarter. When we report, here in a minute, our management portfolio balance we are going to continue to service that portfolio and earn servicing fees on that portfolio then we will continue to report that number in our managed portfolio balance.

Looking at the debt side, the balance sheet warehouse lines at September 30, are down to 8.7 million, this compares to 148 million at June 30, this year and 79.2 million September 2007. As Brad indicated, completing this loan sale at the end of the quarter effectively paid down all but a small portion of the warehouse line balances and it was a significant reason and component of doing that transaction at that time. Residual interest financing, September 30, is 68.3 million, this is down from 86.8 million at June 30. and up a little bit from 60 million a year ago, you may recall we talked in the last call but amended and made a significant paydown of our residual interest financing facility in July of 2008. Securitization debt is about a $1.5 billion, $1.6 billion at June 30, that's down from $1.7 billion at June 30, and $2 billion a year ago. That's going to continue to decline, short-term that we don't anticipate doing significant securitization, long-term debt 48 million, September 30, compared to 34.5 at June 30, and $22 million a year ago. You may recall we raised about $25 million in additional long-term debt since June 30, or beginning on June 30, and through the the third quarter.

I mentioned the managed portfolio consists of $1.8 billion includes the $200 million we recently sold and continue to service and that's down from about almost $2 billion at June 30, $2.1 billion a year ago. Our net interest margin for the quarter was $46.7 million, this is down about 13% from $53.9 million in June and about 23% from $61 million in the September quarter last year. This decrease in [MIN] is a percentage is largely due to the higher cost of the debt, securitization debt associated with the '07 and '08 securitizations, compare to the earlier deals. The [MIN] for the 9 month period is $161 million, that compares to $167.8 million or down about 4% from the September 2007, 9 month period. The risk adjust MIN, which is the MIN less the allowance or the provision for losses for the quarter was $20.8 million, compared to $23 million in the June quarter, and $24.7 million in the year ago quarter. Quarter-to-quarter that's a reduction of about 10% in year-over-year reduction of about 16%.

On a year to date basis the risk adjusted MIN was $69.2 million, and that's roughly even with the year ago 9 month period of $69.3 million. The higher interest expense which influence the reduction in MIN and somewhat offset by the lower provision for losses which in turn is largely due to the reduction in the volumes. Our core operating expenses for the quarter were $37.4 million, this compares to 24.2 million for the June quarter and 23.7 million for the year ago quarter. Again these reflect the loss of the sale of the portfolio. Without the sale of the portfolio we will have seen a percentage reduction in core operating expenses for both the consecutive quarter and the year-over-year quarter.

The core operating expenses as a result of the managed portfolio were about 8% for the September quarter, and this is up significantly compared to 4.8% for the June quarter and 4.7% for the year ago quarter. Numbers reflect loss on sale-- had it not been for the loss on sale the numbers for the September quarter would have been much closer to nearly flat with both the previous quarter and slightly more than the year ago quarter. I will turn it back over to Brad.

Thank you, Jeff. Looking at the portfolio performance. Performance of the portfolio on one hand continues to slide somewhat, if you look from a relative basis it's doing quite well. Delinquency ended up at 7.68% that's up from 6.12 in June and up from year ago 6.06. The net losses for the quarter annualized were 7.89 for the quarter that's up a full point from 685 from previous quarter and up significantly from a year ago at 5.57.

Looking at the numbers there is a couple of things that are interesting to think about, one is as Jeff pointed out, the portfolio is shrinking, as it shrinks those numbers are going to go up no matter what you do, has nothing to do with the performance. Certainly that could help but if the portfolio shrinking it's uphill battle to have improving numbers. What is interesting to look at at least from the way we look at things, you go back ten years ago or so, not quite ten, to the time when this same kind of thing was going on in the industry and you look at our delinquencies from that period, delinquencies for September, the September quarter in 08, excuse me for the September quarter in 1999, delinquencies 8.8 versus 7.1 the following year. So looking at a significantly lower delinquency level today than in that time frame. Look at the loss numbers it's the same thing, back then looking at the third quarter '99 or third quarter '00, you had 9.8, 9.7 as the loss numbers and those compare 7 to 8.8 and 7.1, excuse me, I'm sorry to 7.9 and 5.6 for today.

So as much as-- I think the point I'm going to make the is as much as the numbers have come up somewhat, we done a lot to change the way CPS does business over the last ten years, so our overall performance is just that much better. The other thing to look at in terms of our performance. In terms of the Vintage performance of our current portfolio it's off about 10 to 20%. That may change if the economy continued to slide off into an abyss that wont help any. If you look at a lot of our competitors, many numbers are off by as much as 50, 60 or 80 or 90%. As much as our numbers are up, we are happy with the way things are working out. Were not real happy with the economy, were not really happy with consumers in the economy, but in terms of the way CPS is operating, we are pretty darn happy with how it's working, both in the fact, that 10 years ago our numbers were way worse, than they are today. And also compared to how everybody else is handling the problem we are doing very well. So having that, the numbers are up, they are going to continue to creep up as the portfolio shrinks, instead if the recession deepens, that's not going to help us particularly, but on the one hand it's working out pretty well.

So looking at the rest of the earnings today, in terms of the warehouses, as Jeff pointed out, our warehouses are empty. We intend to keep them that way. For anybody following the industry, having paper on your books today is a difficult thing, as I mentioned before finding a home for the paper, and somewhere to sell it is exceedingly difficult today. Those capital markets are not opened up, doing insecuritizations are really difficult so anyone with a lot of portfolio would have a real challenge to move it today. That is why we are happy to have gotten the deal done and also, why we now reduced originations to a very nominal levels so were are still in the marketplace but not accumulating a lot paper in the lines, our lines are up for renewal, in November in the Q4. We are not counting on renewal, we may have a renewal or replacement. We are looking for other lenders, to be honest, we prepared ourselves to have no lines, we have the cash and we can hold some paper on our own and a reliance on lines and having to get that paper get moved off the balance sheet puts you in a very dicey position today, and we already now done it twice. We did it with the April securitization and the September loan sale. Not putting ourselves in the position is on e of the things that will allows us to continue on into the future to when the market opens up.

Unfortunately going along with reduced originations we had to reduce staffing to the appropriate levels to be in the same place as the origination levels. If things continue to do what they are doing, we should be fine. But it is part of the plan to keep the staffing at appropriate levels and finds other ways to reduce costs across the board to keep this business in this model operating on a strong footing. Having said that, we don't have liquidity problems, we don't need any cash, we have-- one of the attributes of having a declining portfolio is that cash does run off so we do have enough cash to operate the business and meet all requirements without problems. As we go forward we expect to that be the case.

What we have kind of done at this point is we basically worked ourselves into a position where we are an idle or (inaudible) mode where we can survive in this position until the markets open. Another thing that's probable worth pointing out, is what we have done sort of in our spare time, which is to work on pricing model to where we are in good position when the markets do open up. Give you just an idea of what we done compared to the 2007 [C-deal] basically a year ago, our APR is now 19.8 on average versus 18.12. Our average acquisition fee is close to 8%, up from around 1%. Across the board all of our numbers are better. Loan to value is down from 115 to 111, weighted average payment down half a point from 12.1, to 11.5. Our concentration lower tier credit pieces of our portfolio is down to 14% from 23. Our extended term, which is always pretty low is down from 51 to 46.

So we have in that picture, is we been choosing the relative importance, one, is we have improved the credit we are buying over the last year. And two, we increased our pricing rather dramatically given all the events going on. More importantly look at the pricing, we taken what we think to be the current market pricing of our paper today, which by the way is significantly lower than a year ago and we have adjusted our pricing model to accommodate that. Or say it another way, if there was a way to sell our paper, we would be making the same profit today if not more counting the improved credit than we were a year ago. The problem we have as a company today is the capital markets are closed. We done things where our company now survived this problem probably better than most, we have been able to get the paper moved off of the balance sheet when necessary and preserve liquidity,we made the appropriate cuts in both originations and staffing, we have done all the things to make this model work.

Like I said if the meantime changing pricing and our market appearance to where we could succeed in this market today even with exceedingly higher cost of funds of almost double what it was a year ago. Having done that, were in a position when the capital markets open we are going to be in a enormously strong position to go after this market, which we think will be there. And given an economy like this, what normally happen, obviously is a lot people have worst credit, everyone still needs a car. We think the opportunities could be extensive. If you look although at the way we changed model, you look at the way we done thing recently, we think we have really positioned the company rather well. Having said that, the markets terrible, the capital markets are closed and the economy isn't doing very well. You can only work with what you got and I think we have done a pretty good job of doing that. If somebody showed up today and said we will give you a $1 billion credit line to go get them, we can do it. We just can't find that person yet but we are looking diligently.

So that's really the future, the future is to keep the Company doing exactly what we are doing, were are not going anywhere, were are waiting for the markets to open. With any kind of luck they will open next year or sooner, and we will be off and running again, having proven our model works and proven we are one of the strongest in our industry and again with real opportunities. In the meantime, to the extent that we can see opportunities, opportunistic acquisitions, or portfolio we would certainly take a whack at that. Other wise we are just going to wait.

The problems with acquisitions today is market is skidding or going down, it's very difficult to put a handle on what is the value, you want to pay and in short in going around and lowballing everything it's better to wait it out. One thing we can't do and won't do, is you don't want to try an do an acquisition and grab an anchor that is going to pull you down. We done a good job of keeping where we are and staying where we are and having our future be rather bright so we really got to be careful in terms of doing. Having said that, we will, of course, look at the opportunities as they come along. With that we will open it up for questions.

The floor is now open for questions. (OPERATOR INSTRUCTIONS). First question comes from John Hecht with JMP Securities..

Thank you for taking my questions. You referred back to '99 period and stresses the industry went through, where peak charge offs, can you give me a sense when what period the peak charge offs occurred from origination in the time frame? I'm trying to understand the vintage affect here.

Probably if you were going to try and come up with the chronology to compare then to now, probably 1998 would have been equivalent to the 2007. I would think around the beginning Oh or middle of '98 was sort of the equivalent of early '07 in this vintage. Having said that you have '99 would be the bad year then. Compared to what would be '07. In this vintage. Then after that '00, and '09 should be improvement and then following year back to where you're supposed to be. If you recall, in 1998, '99 and 2000, it was all in auto. Previous calls we talked abut this. Back in that time it was really our fault, everybody bought aggressively and couldn't manage our own growth. That problem was sort of more lengthy than what might be today's because back then not only did people have a problem when they bought too aggressively, having triggers and liquidity problems. Today as much as the economic environment may be significantly worse, since it's not in our play ground or whatever, we are truly being dragged down with the other folks in the mortgage world, mortgage world a million times bigger than we are, the downdraft is severe. Job job learned from mistakes of ten years ago and if nothing else we say we certainly have, we didn't buy nearly aggressively when things were running fast in '05, '06. We saw the storm clouds coming faster. Made the adjustments quicker and thus we are sitting where we are today. To answer your question I would think that '98, '99. and 2000 would compare relatively speaking with '07, ' 08 and '09.

With that you think that the charge off peak levels occurred over the next four quarters is that the way you're looking at the world?

True.

I know from a reserve perspective you guys -- you also have the specific reserves set aside. In terms of reserve policy, I know -- is there a policy based on how many quarters or losses you want to set aside reserves for or is it base on vintage analysis in the quarter.

We are looking at a 12 month window and make sure the allowance satisfies what we estimate the losses to be for the next 12 months and that includes both the losses associated with whatever is in the repo (inaudible) and the losses inherent in the portfolio. The other sort of features that have become (inaudible) over the last three quarters or so, which we maybe didn't look at so much in the past, where the weighted average age of the portfolio the fact that the portfolio is becoming seasoned with each passing month and quarter and so we are trying to develop analysis to take that in to affect as well.

Just out of curiosity, we heard a lot of anecdotal evidence that since middle September time frame things changed for the consumers now reacting to what is going on on Wall Street. Have you seen change in payment behavior since that time frame that would be reflected of that information?.

We haven't been able to make a correlation, October, front end DQ is better. We are not really, I think declining economy, unemployment rates creeping up, hasn't rocheted up, we really seen a direct affect other than a general weakening yet.

Last question is Brad with the you referred to ten years ago and back then slow agreements and then began purchasing distressed portfolios. What's your play book here? Is it going to be similar or more internally focused now before you start looking at opportunities? How does it play out in your mine over the next two years?

That's a good question. First and foremost needed to sure up where we were. We done that. We wish America all the luck. They are going to have issues. I'm sure they will get through it. Those are issues we face. Getting that done first, we managed to get that done. Going forward, I think we would certainly look for all sorts of things. Not like we are going to sit around and pay tidally winks until this goes by. (inaudible) Loan agreements long-term warehouses make an acquisition or two. (inaudible) The fact our portfolios done well is a good calling card in terms of what we can do in this industry either in tough times or good items. If you can make it through the tough times you are going to thrive in the good times. We had to make it through the tough times before. We are going to make it through it this time. The real trick is how much can we take advantage of this time. Last time as you may recall we got the take advantage of it quite a bit. Maybe economic environment is tougher time around but we will be looking for all sorts of things and ideas to see what we can do to sort of move the needle along. (inaudible)

Thank you for taking my questions.

(OPERATOR INSTRUCTIONS) . Your next question comes from Dan Fannon with

Did I miss understand you are you publishing the financial data on the web site?

Not yet.

I thought for some reason I thought you were mentioning the data shows improvements. What about trigger levels,(inaudible) any coming close to breeching?

No, we learned the last time around -- ten years ago we got stuck -- this time through we our main focus this doing securitizations when we started doing them again is make sure we didn't hit those triggers. We didn't want to get faced with a crapy economy again but the securitizations are in great shape in terms of triggers.

Without the benefit of the data, what would you say the odds of a trigger event in the next 6 months are assume nothing changes in the macro economy.

The only one would have a shot at is DQ trigger. We would say 90%?

I guess the warehouse line triggers aren't a concern because you don't expect to renew that line.

That's a way to look at it.

(inaudible) Silver lining, right?

I'm sure you're aware that would be the problem. Warehouses built differently than securitization, warehouses, you weren't expecting -- (inaudible) -- have those things get pushed. So they did and there is two ways to get around. (inaudible) You can empty the warehouse, we chose door number two.

I think what you're doing is correct in terms to the environment. You start to learn things, triggers and events that you didn't know existed until they sneak up on you. I'm trying to on that standpoint. In this portfolio have you guys run analysis or tried to figure out, let's take the draconian assumption that the economy never gets better, it's the ends of the world for everybody, what level of portfolio do you think you could support via internally generated cash flows? The credits is doing better than most competitors. (inaudible) How big could the fire be as you try to hold out through the winter?

(inaudible) Four years or five years, no securitizations or capital markets, put the money under their mattress, that's not going to happen. Let's say it does and people decide treasuries are the only thing worth doing or something, what we would do is manage down the portfolio. We did this once before. This ten year thing is annoying. (inaudible) Nonetheless we did also learn, you start looking hard at your documents to find out where the triggers are, we had that problem ten years ago. Done a good job of making sure there is no domino affect down here. (inaudible) As you got small ore you have to keep cutting. It's not something we want to do like other folks said. Platforms and franchise is job number one around here or other company for that matter. If if you had to, we could do. (inaudible) Let the portfolio just run down, manage it off, performing fine. Not going to hit triggers and collect a lot of cash and use the cash to run the company. Do that for several years if not longer.

If this thing comes every ten years expect to see your resignation around 2016?

(inaudible) Ten years from now there won be a cans in the world you will be talking the me. (inaudible) Next time the wave goes up, right at the top telephone wave and get off.

I think 8 years the s average life before you need to bail. Have a good rest of the quarter.

Next question come from Nicholas Park, private investor.

Hi. I wonder if you could be more precise as to the loss on the sale of the $200 million package to City Bank?

I think somewhere might come out in the queue and data but at the moment it's confidentiality stuff we are not in the position to disclose that.

From my sense of the world is we are never going to see the kind of leverage available to financial companies like we saw during the last five years. Prepared for that? Is that part of your game plan?

Yes, it is. (inaudible) I think the best example bond insurance market is almost phon existent and that provided leverage, to think that's coming back. It may come back. (inaudible) We are looking at this experience in this is good and sucks because it means you got to do it again. Our experience has led us to believe you can't count on anything and leverage is something we are not looking for either. (inaudible) that the market is there the sub prime auto market, I don't know what's going to happen to the sub prime mortgage market. I hope it doesn't exist again and not under the terms it did to cause this problem. I think coincidentally the auto market is going to exist in a hugely leveraged environment but I think it's opportunity is better, the more -- auto credit card and student loans are going to follow. Those asset classes have done okay. Over the long-term auto there l prove to be the strongest of all of them. That's the viable part of the game. Wont be as leveraged but you're going to be able to -- the trick is even though the leverage wont be there as much the pricing and the margins will increase to cover leverage. Get back to the same place as I pointed out in terms of pricing and margin we are better off today than we were a year ago. So I any that allows for you to deleverage even further.

Why is it your employee costs are higher during the last quarter and last three quarters compared to a year earlier.

(inaudible) The rapid sort of decline in growth of originations in the portfolio, it's not maybe not apparent from looking at the press release but the actual average balance of the portfolio is greater for the first nine moths of 2008 than the average balance portfolio for 2007. We have obviously significant service and costs associated with servicing the portfolio, we added a lot of employees during the second half of '07. Response too really what was then our plan to grow the marketing department. Grow the portfolio. Reacting to the servicing effort. Throughout 2008, although we lost employees, we retain the employees, maybe longer during the first quarter in the first half of '08. Than in retrospect would have had to because we were optimistic and hopeful for the first six months ago, things would improve. Of course that happened. We have seen some monthly declines in employee expenses over the last couple of months and a quarter decline I'm sure in the -- decline I'm sure in the Q4.

Once again, if you do have a question, press star one on your touch-tone telephone. At this time there are no further questions, I will now turn the floor over to the speaker Mr. Charles Bradley for any additional or closing remarks.

That sums it where we are, I think third quarter much like the second and the first quarter has been a down head slide for the whole economy and the capital markets. But as I pointed out (inaudible) different ways CPS has done a good job of distinguishing ourselves within the problem and well positioning ourselves so when this gets through we will be in good shape to do well . Maybe in the interim we can find things to do that are interesting. Bottom line is we done what we needed to do to keep the Company in survivor mode. I think we done all that. We look forward to what the future will bring, hopefully this market is near the bottom. But if it's not we will keep riding it and wait until it does and get there eventually. Not the best of news but it is I think a good idea of what we have done to make this work for the Company. Look forward to talking to everybody next quarter. Thank

Thank you, this does conclude the teleconference, a replay will be available beginning two hours from now until wednesday November 5, by dialing 800-642-1687, or 706-645-9291. With pin number 68472980. A Broadcast of the conference call will be available live and for 30 days after the call via the Company's web site at www.Consumer Portfolio.com. and at www.Street Events.com. Please disconnect your lines at this time and have a wonderful day