Edgar Filing: CONSUMER PORTFOLIO SERVICES INC

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K/A

[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2002

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

COMMISSION FILE NUMBER: 1-14116
CONSUMER PORTFOLIO SERVICES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

CALIFORNIA 33-0459135
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)

16355 LAGUNA CANYON ROAD, IRVINE, CALIFORNIA 92618
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (949) 753-6800

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

Name of each exchange on
Title of each class: which registered:
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10.50% Participating Equity Notes due 2004 New York Stock Exchange
Rising Interest Subordinated Redeemable
Securities due 2006 New York Stock Exchange

SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
Common Stock, No Par Value

Indicate by check mark whether the registrant (1) filed all reports required to
be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months
(or for such shorter period that the registrant was required to file such
reports) and (2) has been subject to such filing requirements for the past 90
days. Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2). Yes [ ] No [ x ]

The aggregate market value of voting stock held by non-affiliates of the
registrant as of the last business day of the registrant's most recently
completed second fiscal quarter (June 28, 2002) was $23,273,922, based upon the
$2.65 per share closing price of the Common Stock on that date, as reported by
The Nasdaq Stock Market. The number of shares of the registrant's Common Stock
outstanding on April 25, 2003, was 20,245,976.

DOCUMENTS INCORPORATED BY REFERENCE: NONE
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This Amendment is filed to disclose the information required to be included in
Part III of the annual report on Form 10-K of Consumer Portfolio Services, Inc.
(the "registrant" or the "Company") for the year ended December 31, 2002, and to
file additional exhibits.

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS

The information appearing in Part I of this report under the caption "Executive
Officers" is incorporated herein by reference.

Information regarding the directors of the Company appears below:

NAME AGE POSITION(S) WITH THE COMPANY
---- --- ----------------------------
Charles E. Bradley, Jr. 43 President, Chief Executive Officer, and
Chairman of the Board of Directors
Thomas L. Chrystie 70 Director
E. Bruce Fredrikson 65 Director
John E. McConnaughy, Jr. 74 Director
John G. Poole 60 Vice Chairman of the Board of Directors
William B. Roberts 65 Director
John C. Warner 55 Director
Daniel S. Wood 44 Director

CHARLES E. BRADLEY, JR. has been the President and a director of the Company
since its formation in March 1991, and was elected Chairman of the Board of
Directors in July 2001. In January 1992, Mr. Bradley was appointed Chief
Executive Officer of the Company. From April 1989 to November 1990, he served as
Chief Operating Officer of Barnard and Company, a private investment firm. From
September 1987 to March 1989, Mr. Bradley, Jr. was an associate of The Harding
Group, a private investment banking firm. Mr. Bradley does not currently serve
on the board of directors of any other publicly-traded companies.

THOMAS L. CHRYSTIE has been a director of the Company since April 1995. He has
been self-employed as an investor, through Wycap Corporation, since 1988. His
previous experience includes 33 years at Merrill Lynch & Co. in various
capacities including heading Merrill Lynch's investment banking, capital markets
and merchant banking activities. In addition, he served as Merrill Lynch & Co.'s
Chief Financial Officer.

E. BRUCE FREDRIKSON has been a director of the Company since March 2003. He is a
Professor of Finance at the Syracuse University School of Management, where he
has taught since 1966. Mr. Fredrikson has published numerous papers on topics on
the theory and practice of corporate finance. He is also a director of Track
Data Corp.

JOHN E. MCCONNAUGHY, JR. has been a director of the Company since 2001. He is
the Chairman and Chief Executive Officer of JEMC Corporation. From 1981 to 1992
he was the Chairman and Chief Executive Officer of GEO International Corp, a
company in the business of nondestructive testing, screen-printing and oil field
services. Mr. McConnaughy was previously and concurrently Chairman and Chief
Executive Officer of Peabody International Corp., from 1969 to 1986. He
currently serves as a director of Levcor International, Inc., Varsity Brands,
Inc., Wave Systems, Inc., Fortune Natural Resources and Overhill Farms, Inc. Mr.
McConnaughy is also Chairman of the Board of Trustees of the Strang Clinic and
is the Chairman Emeritus of the Board of the Harlem School of the Arts.

JOHN G. POOLE has been a director of the Company since November 1993 and its
Vice Chairman since January 1996. He is now a private investor, having
previously been a director and Vice President of Stanwich Partners ("SPI") until
July 2001. SPI, which Mr. Poole co-founded in 1982, acquired controlling
interests in companies in conjunction with their existing management. Mr. Poole
is a director of Reunion Industries, Inc. and Sanitas, Inc.

WILLIAM B. ROBERTS has been a director of the Company since its formation in
March 1991. Since 1981, he has been the President of Monmouth Capital Corp., an
investment firm that specializes in management buyouts. Mr. Roberts does not
currently serve on the board of directors of any other publicly-traded
companies.

JOHN C. WARNER was elected a director of the Company in April 2003. Mr. Warner
is president and chief executive officer of O'Neill Clothing, a manufacturer and
marketer of apparel and accessories. He has held those positions since 1996. Mr.
Warner does not currently serve on the board of directors of any other
publicly-traded companies.

DANIEL S. WOOD has been a director of the Company since July 2001. Mr. Wood is
president and chief executive officer of CTP Carrera, a manufacturer of custom
injection moldings. Previously, from 1988 to September 2000, he was the chief
operating officer and co-owner of CTP Carrera Corporation. Mr. Wood does not
currently serve on the board of directors of any other publicly-traded companies

BANKRUPTCY PROCEEDINGS. In December 2001 Mr. Bradley resigned from his position
as chairman of the board of LINC Acceptance Company, LLC ("LINC"). LINC was a
limited liability company organized under the laws of Delaware, and its board of
members has certain management authority. The operating agreement of LINC
designated the chairman of the board of members as LINC's chief executive
officer. LINC was a majority-owned subsidiary of the Company, which engaged in
the business of purchasing retail motor vehicle installment purchase contracts,
and selling such contracts to the Company or other affiliates. LINC ceased
operations in the second quarter of 1999. On October 29, 1999, three former
employees of LINC filed an involuntary petition in the United States Bankruptcy
Court for the District of Connecticut seeking LINC's liquidation under Chapter 7
of the United States Bankruptcy Code. Mr. McConnaughy was the Chairman of the
Board of the Excellence Group, LLC, which on January 13, 1999, filed a voluntary
petition for in the United States Bankruptcy Court for the District of
Connecticut for reorganization under Chapter 11 of the United States Bankruptcy
Code. The Excellence Group's subsidiaries produced labels for a variety of
customers.

SECTION 16 (a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Directors, executive officers and holders of in excess of 10% of the Company's
common stock are required to file reports concerning their transactions in and
holdings of equity securities of the Company. Based on a review of reports filed
by each such person, and inquiry of each regarding holdings and transactions,
the Company believes that all reports required with respect to the year 2002
were timely filed, except that Mr. Bradley filed four reports late, relating to
a total of 21 transactions.

ITEM 11. EXECUTIVE COMPENSATION

EXECUTIVE COMPENSATION

The following table summarizes all compensation earned during the three fiscal
years ended December 31, 2002, 2001, and 2000 by the Company's chief executive
officer and by the four most highly compensated individuals (such five
individuals, the "named executive officers") who were serving as executive
officers at December 31, 2002.

SUMMARY COMPENSATION TABLE

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Long Term All Other
Compensation for Compensation Compensation
period shown Awards (1) ($) (2)
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Name and Principal Position Year Salary ($) Bonus ($) Options/SARs
------------------------------- --------- ------------- ---------------- ------------------ --------------

CHARLES E. BRADLEY, JR. 2002 600,000 850,000 185,000 450
President & Chief 2001 565,000 1,100,000 166,666 846
Executive Officer 2000 525,000 750,000 333,333 1,446
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NICHOLAS P. BROCKMAN 2002 222,000 174,792 25,000 450
Senior Vice President - 2001 206,000 117,000 20,000 692
Collections 2000 165,000 116,000 10,000 1,292
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CURTIS K. POWELL 2002 222,000 154,734 25,000 450
Senior Vice President - 2001 206,000 124,000 20,000 830
Originations 2000 191,000 105,000 10,000 1,430
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WILLIAM L. BRUMMUND, JR. 2002 196,000 144,452 25,000 450
Senior Vice President - 2001 172,000 100,000 20,000 702
Administration 2000 161,000 89,000 10,000 1,302
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ROD RIFAI 2002 190,000 117,990 48,000 450
Senior Vice President - 2001 335,000 44,000 52,500 183
Marketing (3) 2000 373,000 - 2,500 -
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(1) Number of shares that might be purchased upon exercise of options that
were granted in the period shown.
(2) Amounts in this column represent (a) any Company contributions to the
Employee Savings Plan (401(k) Plan), and (b) premiums paid by the
Company for group life insurance, as applicable to the named executive
officers. Company contributions to the 401(k) Plan were $600 per
individual in 2000, and zero in 2001 and 2002.
(3) Mr. Rifai became an executive officer as Senior Vice President -
Marketing, in July 2001. All of the salary amount for 2000 and $228,000
of the salary amount for 2001 represents salary and commissions earned
while Mr. Rifai was serving as a regional vice president for CPS
Marketing, Inc., a subsidiary of the Company.

OPTION AND SAR GRANTS

The Company in the year ended December 31, 2002, did not grant any stock
appreciation rights to any of the named executive officers. The Company has from
time to time granted options to substantially all of its management and
marketing employees, and did so in July 2002. The grants approved in July 2002
would cause the limitations of the Company's 1997 Long-Term Incentive Plan to be
exceeded. The grants from July 2002, therefore, with respect to an aggregate of
1,589,200 shares, were made contingent on shareholder approval of an increase in
the maximum number of shares that may be issued under the Plan. All of the 2002
grants to the named executive officers are contingent on shareholder approval of
such amendment. Messrs. Brockman. Powell and Brummund received contingent grants
with respect to 25,000 shares, Mr. Rifai received a contingent grant with
respect to 48,000 shares, and the chief executive officer received a contingent
grant with respect to 185,000 shares. All such options are exercisable, if at
all, at $1.50 per share, and all are scheduled to become exercisable in five
equal annual increments, from 2003 through 2007.

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Potential Realizable
Value at Assumed Annual
Rates
of Stock Price
OPTIONS/GRANTS IN LAST FISCAL YEAR - Appreciation for Option
INDIVIDUAL GRANTS Term
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Number of Percent of
Shares Total Options Exercise
Underlying Granted to or Base
Options Employees Price Expiration
Name Granted in 2002 ($/Share) Date 5% ($) 10% ($) NOTES
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Charles E. Bradley, Jr. 185,000 10.29% $1.50 7/23/12 174,518 442,264 (1)

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Nicholas P. Brockman 25,000 1.39% $1.50 7/23/12 23,584 59,765 (1)

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Curtis K. Powell 25,000 1.39% $1.50 7/23/12 23,584 59,765 (1)

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William L. Brummund, Jr. 25,000 1.39% $1.50 7/23/12 23,584 59,765 (1)

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Rod Rifai 48,000 2.67% $1.50 7/23/12 45,280 114,749 (1)

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(1) Becomes exercisable in five equal installments on each January 1, 2003-2007,
provided however that these options have been granted subject to shareholder
approval, which will be sought at the 2003 annual meeting of shareholders.

AGGREGATED OPTION EXERCISES AND FISCAL YEAR END OPTION VALUE TABLE

The following table sets forth, as of December 31, 2002, and for the year then
ended, the number of unexercised options held by each of the named executive
officers, the number of shares subject to then exercisable and unexercisable
options held by such persons and the value of all unexercised options held by
such persons. Each option referred to in the table was granted under the
Company's 1991 Stock Option Plan, or under the 1997 Long-Term Incentive Stock
Plan, at an option price per share no less than the fair market value per share
on the date of grant.

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Value of Unexercised In-the-Money
Number of Unexercised Options at Options
December 31, 2002 at December 31, 2002 (1)

Name Exercisable Unexercisable Exercisable ($) Unexercisable ($)
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Charles E. Bradley, Jr. 283,334 285,399 96,334 199,986
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Nicholas P. Brockman 4,000 54,900 1,360 51,804
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Curtis K. Powell 71,000 67,000 99,515 69,530
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William L. Brummund, Jr. 4,000 48,700 1,360 42,721
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Rod Rifai 23,500 94,500 24,165 65,705
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(1) Valuation based on the last sales price on December 31, 2002 of $2.09
per share, as reported by Nasdaq.

BONUS PLAN

The named executive officers and other officers participate in a management
bonus plan, pursuant to which such employees are entitled to earn cash bonuses,
if the Company achieves certain net income levels or goals established by the
Board of Directors, and if such employees achieve certain individual objectives.
The amount of bonus payable to each officer is determined by the Board of
Directors upon recommendation of the Compensation Committee.

DIRECTOR COMPENSATION

During the year ended December 31, 2002, the Company paid all directors,
excluding Mr. Bradley, a retainer of $1,000 per month and an additional fee of
$1,000 PER DIEM for attendance at meetings ($500 for committee meetings or
telephonic meetings). Mr. Bradley, Jr., received no additional compensation for
his service as a director. In July 2002, the Board adopted as a policy that
non-employee directors should ordinarily be granted options to purchase 30,000
shares of the Company's stock upon first joining the Board, and options with
respect to 10,000 shares on an annual basis. Pursuant to that policy, and
recognizing that Mr. McConnaughy and Mr. Wood had first joined the Board in
2001, the Board granted to Mr. McConnaughy and Mr. Wood each an option to
purchase up to 30,000 shares of the Company's common stock at $1.50 per share,
which was the then-prevailing market price, and to each director other than Mr.
Bradley an option to purchase up to 10,000 shares of the Company's common stock
at $1.50 per share. In January 2003, the Board increased the monthly retainer
from $1,000 to $2,000.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth the number and percentage of shares of CPS Common
Stock (its only class of voting securities) owned beneficially as of April 24,
2003, by (i) each person known to CPS to own beneficially more than 5% of the
outstanding Common Stock, (ii) each director, nominee or named executive officer
of CPS, and (iii) all directors, nominees and executive officers of CPS as a
group. Except as otherwise indicated, and subject to applicable community
property and similar laws, each of the persons named has sole voting and
investment power with respect to the shares shown as beneficially owned by such
persons. The address of Messrs. Bradley, Jr., Brockman, Brummund, Jr., Powell
and Rifai is c/o Consumer Portfolio Services, Inc., 16355 Laguna Canyon Road,
Irvine, CA 92618.

Amount and Nature
of Beneficial Percent
Name and Address of Beneficial Owner Ownership (1) of Class
------------------------------------ ------------- --------

Charles E. Bradley, Jr. ......................................................... 2,723,931 (2) 13.2%
Thomas L. Chrystie............................................................... 192,100 0.9%
P.O. Box 640, Wilson, WY 83014
E. Bruce Fredrikson.............................................................. 0 0.0%
34437 N. 93rd Place, Scottsdale, AZ 85262
John E. McConnaughy, Jr.......................................................... 200,337 1.0%
Atlantic Capital Partners, 3 Parkland Drive, Darien, CT 06820
John G. Poole.................................................................... 677,193 (3) 3.3%
1 Rye Road, Port Chester, NY 10573
William B. Roberts............................................................... 1,073,982 5.3%
Monmouth Capital Corp., 126 East 56th Street, New York, NY 10022
John C. Warner................................................................... 0 0.0%
17 Pasteur, Irvine, CA 92618
Daniel S. Wood................................................................... 40,000 0.2%
600 Depot St., Latrobe, PA 05650
Nicholas P. Brockman............................................................. 186,191 0.9%
William L. Brummund, Jr.......................................................... 173,873 0.9%
Curtis K. Powell................................................................. 162,716 0.8%
Rod Rifai........................................................................ 39,359 0.2%
All directors, nominees and executive officers combined (16 persons) 5,628,376 (4) 26.4%
Charles E. Bradley, Sr........................................................... 1,931,819 (5) 9.5%
Stanwich Partners, Inc., 62 Southfield Avenue, Stamford, CT 06902
Levine Leichtman Capital Partners II, L.P........................................ 4,553,500 (6) 22.5%
335 North Maple Drive, Suite 240, Beverly Hills, CA 90210
FSA Portfolio Management Inc. ................................................... 1,702,334 (7) 7.8%

(1) Includes certain shares that may be acquired within 60 days after April
24, 2003 from the Company upon exercise of options, as follows: Mr.
Bradley, Jr., 403,582 shares; Mr. Chrystie, 10,000 shares; Mr.
McConnaughy, 40,000 shares; Mr. Poole, 40,000 shares; Mr. Roberts,
10,000 shares; Mr. Wood, 40,000 shares; Mr. Brockman, 29,100 shares;
Mr. Brummund, 25,100 shares; Mr. Powell, 97,000 shares; and Mr. Rifai,
36,100 shares. Shares deemed held by officers include shares underlying
certain options that are contingent on shareholder approval, which will
be sought at the Company's 2003 annual meeting of shareholders.

(2) Includes 1,058,818 shares held by trusts of which Mr. Bradley is the
co-trustee, and as to which shares Mr. Bradley has shared voting and
investment power. One such trust holds 211,738 shares for the benefit
of Mr. Bradley. The co-trustee, who has shared voting and investment

power as to all such shares (representing 5.4% of outstanding shares),
is Kimball Bradley, whose address is 11 Stanwix Street, Pittsburgh, PA
15222.
(3) Includes 333,333 shares issuable upon conversion of $1,000,000 of
Company debt held by the named person.
(4) Includes 1,703,034 shares that may be acquired within 60 days after
April 24, 2003, upon exercise of options and conversion of convertible
securities.
(5) Includes 207,490 shares owned by the named person's spouse, as to which
he has no voting or investment power, and 697,791 shares owned by two
corporations (Stanwich Financial Services Corp. and Stanwich Partners,
Inc.) of which the named person is controlling stockholder, president
and a director.
(6) Comprises 4,552,500 issued shares and 1,000 shares that are issuable
upon exercise of an outstanding warrant.
(7) Represents shares issuable upon exercise of a presently exercisable
warrant.

ITEM 13. CERTAIN RELATIONS AND RELATED TRANSACTIONS

CPS LEASING. The Company holds 80% of the outstanding shares of the capital
stock of CPS Leasing, Inc. ("CPSL"). The remaining 20% of CPSL is held by
Charles E. Bradley, Jr., who is the President and a director of the Company.
CPSL engaged in the equipment leasing business, and is currently in the process
of liquidation as its leases come to term. CPSL financed its purchases of the
equipment that it leases to others through either of two lines of credit.
Amounts borrowed by CPSL under one of those two lines of credit have been
guaranteed by the Company. As of March 31, 2003, the total amount outstanding
under the two lines of credit was approximately $504,000, of which the Company
had guarantied approximately $180,000. The Company has also financed the
operations of CPSL by making operating advances and by advancing to CPSL the
fraction of the purchase prices of its leased equipment that CPSL did not borrow
under its lines of credit. The aggregate amount of advances made by the Company
to CPSL as of March 31, 2003, is approximately $2.0 million. The advances
related to operations bear interest at the rate of 8.5% per annum. The advances
related to the fraction of the purchase price of leased equipment are not
interest bearing.

CARS USA. In the ordinary course of its business operations, the Company from
time to time purchases retail automobile installment contracts from an
automobile dealer, Cars USA, which until August 2002 was owned by a corporation
of which Mr. Bradley, Sr., and Mr. Bradley, Jr., are the principal shareholders.
During the year 2002 and prior to the date of sale, the Company purchased 16
such contracts, with an aggregate principal balance of approximately $233,431
All such purchases were on the Company's normal business terms. Cars USA is
indebted to the Company in the amount of approximately $669,000 as of December
31, 2002. Cars USA ceased operations in August 2002, and has no apparent ability
to repay its debt.

LEVINE LEICHTMAN. At December 31, 2001, the Company was indebted to Levine
Leichtman Capital Partners II, L.P. ("LLCP") in the amount of approximately $26
million. Such debt (the "Term B Notes") is due November 2003, and bears interest
at 14.50% per annum. The interest rate is subject to increase by 2.0% in the
event of a default by the Company.

In March 2002, the Company and LLCP entered into a series of agreements under
which LLCP provided additional funding to enable the Company to acquire MFN
Financial Corporation. Under the March 2002 agreements, the Company borrowed $35
million from LLCP as "Bridge Notes," bearing interest at 13.50% per annum and
due February 2003, and approximately $8.5 million as "Term C Notes," bearing
interest on a deemed principal amount of approximately $11.2 million at 12.00%
per annum and due in March 2008. At December 31, 2002, the Company was indebted
to LLCP in the amount of approximately $50.1 million, comprising $21,8 million
of the Term B Notes, $21.0 million of the Bridge Notes, and $7.3 million of the
Term C Notes. The Bridge Notes were paid in full on February 21, 2003.

The Company borrowed an additional $25 million (the "Term D Notes" ) from LLCP
on February 3, 2003. The Term D Notes are due April 30, 2003; provided, however,
that the Company by payment of two successive extension fees, each in the amount
of $125,000, may extend the maturity to May 31, 2003 and January 14, 2004. The
Term D Notes bear interest at pre-determined rates that are 4.00% to 5.14% per
annum for the months of February through June 2003, and thereafter 12.00% per
annum. In connection with the issuance and sale of the Term D Notes, the Company
paid LLCP a structuring fee of $1,000,000, and paid LLCP's out-of-pocket
expenses of approximately $50,000.

The Term B Notes include terms that require partial prepayment, in amounts
representing a portion of cash releases from the Company's securitized pools.
One effect of such prepayment provisions is that it is not possible to predict
with assurance the amount of interest and principal that the Company will pay to
LLCP in any given year; however, the Company's payments on its indebtedness to
LLCP in the year 2002 comprised $22.2 million of principal and $7.8 million of
interest. In connection with the March 2002 agreements and the acquisition of
MFN Financial Corporation, the Company paid LLCP a structuring fee of $1.75
million and an investment banking fee of $1.0 million, and paid LLCP's
out-of-pocket expenses of approximately $315,000. In addition, the Company paid
LLCP certain other fees and interest amounting to $426,181. All of the Company's
indebtedness to LLCP is secured by a blanket security interest in favor of LLCP.
The terms of the transactions between the Company and LLCP were determined by
negotiation.

SFSC. At December 31, 2002, the Company was indebted to Stanwich Financial
Services Corp. ("SFSC") in the principal amount of $16.5 million. SFSC is a
corporation wholly-owned by Stanwich Holdings, Inc., which in turn is
wholly-owned by Charles E. Bradley, Sr. Mr. Bradley, Sr. holds in excess of 5%
of the Company's common stock, is the father of the Company's president, Charles
E. Bradley, Jr., and was the chairman of the Company's Board of Directors from
March 1991 until June 2001. The Company pays interest monthly with respect to
its debt to SFSC. Such interest payments totaled $1.6 million in 2002, and are
estimated to be the same for the current year. In June 2001 SFSC filed for
reorganization under the Bankruptcy Code, in the United States Bankruptcy Court
for the District of Connecticut. The Company also throughout 2002 was indebted
to John G. Poole, a director, in the principal amount of $1,000,000, and paid
interest monthly with respect to that debt. Such interest payments totaled
$125,000 in 2002, and are estimated to be the same in the current year.

EMPLOYEE INDEBTEDNESS. To assist certain officers in exercising stock options,
the Company or the subsidiary has lent to such officers the exercise price of
options such officers exercised in May and July 2002. The loans are fully
secured by common stock of the Company, bear interest at 5% per annum and are
due in 2007. The chief executive officer (Mr. Bradley), one other executive
officer (Mr. Brockman) and five officers other than executive officers borrowed
money on those terms. The highest balances of the loans for the period January
1, 2002 through April 15, 2003, were $350,000 for Mr. Bradley and $45,000 for
Mr. Brockman, which were the balances as of April 15, 2003, inclusive of accrued
interest. As a result of recent legislation, the Company has ceased providing
any loans to its executive officers.

FSA. In November 2000 the Company entered into a revolving note purchase
facility, using the proceeds of sale of such notes to purchase automotive
receivables. That facility was extended through July 2002, and was renewed for a
one-year term in January 2003. Financial Security Assurance Inc. ("FSA"), which
is the beneficial holder of in excess of 5% of the Company's stock, issued a
financial guaranty insurance policy with respect to all payments of principal
and interest called for by such notes, for which FSA receives fees and insurance
premiums. FSA has also issued financial guaranty insurance policies with respect
to payments of interest and principal due under specified asset-backed
securities sponsored by the Company and issued at various times since 1994,
including transactions in September 2001 and March 2002, for which it also
receives fees and insurance premiums. The amounts of such fees and premiums have
been determined by negotiation between the Company and FSA.

The agreements and transactions described above (other than those between the
Company and LLCP or the Company and FSA) were entered into by the Company with
parties who personally benefited from such transactions and who had a control or
fiduciary relationship with the Company. In each case such agreements and
transactions have been reviewed and approved by the members of the Company's
Board of Directors who are disinterested with respect thereto.

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8K

(a) 1. The following financial statements were filed as a part of this report on
April 30, 2003, and are unchanged by this amendment:
Independent Auditors' Report
Consolidated Balance Sheets as of December 31, 2002 and 2001
Consolidated Statements of Operations for the years ended December 31, 2002,
2001, and 2000
Consolidated Statements of Comprehensive Income (Loss) for the years ended
December 31, 2002, 2001, and 2000
Consolidated Statements of Shareholders' Equity for the years ended December 31,
2002, 2001, and 2000
Consolidated Statements of Cash Flows for the years ended December 31, 2002,
2001, and 2000
Notes to Consolidated Financial Statements for the years ended December 31,
2002, 2001, and 2000

2. No financial statement schedules are filed as the required information is
inapplicable or the information is presented in the Consolidated Financial
Statements or the related notes. Separate financial statements of the Company
have been omitted as the Company is primarily an operating company and its
subsidiaries are wholly owned and do not have minority equity interests and/or
indebtedness to any person other than the Company in amounts which together
exceed 5% of the total consolidated assets as shown by the most recent year-end
Consolidated Balance Sheet.
3. The exhibits listed below are filed as part of this report, whether filed
herewith or incorporated by reference to an exhibit filed with the report
identified in the parentheses following the description of such exhibit. Unless
otherwise indicated, each such identified report was filed by or with respect to
the registrant.

2.1 Agreement and Plan of Merger, dated as of November 18, 2001,
by and among the Registrant, CPS Mergersub, Inc. and MFN
Financial Corporation. (Form 8-K filed on November 19, 2001 by
MFN Financial Corporation).
2.2 Agreement and Plan of Merger, dated as of March 31, 2003,
by and among the Registrant, CPS Mergersub, Inc. and TFC
Enterprises, Inc. (Form 8-K filed on April 1, 2003 by
TFC Enterprises, Inc.).
3.1 Restated Articles of Incorporation (Form 10-KSB dated December
31, 1995).
3.2 Amended and Restated Bylaws (Form 10-K dated December 31,
1997).
4.1 Indenture re Rising Interest Subordinated Redeemable
Securities ("RISRS") (Form 8-K filed December 26, 1995).
4.2 First Supplemental Indenture re RISRS (Form 8-K filed December
26, 1995).

4.3 Form of Indenture re 10.50% Participating Equity Notes
("PENs") (Form S-3, no. 333-21289).
4.4 Form of First Supplemental Indenture re PENs (Form S-3, no.
333-21289).
4.5 Second Amended and Restated Securities Purchase Agreement,
dated as of March 8, 2002, by and between Levine Leichtman
Capital Partners II, L.P. and the Registrant. (Form 8-K filed
on March 25, 2002).
4.5a First Amendment to the Second Amended and Restated Securities
Purchase Agreement dated as of March 8, 2002. (Schedule 13D
filed with respect to the Company on February 11, 2003).
4.5b Second Amendment to the Second Amended and Restated Securities
Purchase Agreement dated as of March 8, 2002. (Schedule 13D
filed with respect to the Company on February 11, 2003).
4.6 Secured Senior Note due February 28, 2003 issued by the
Registrant to Levine Leichtman Capital Partners II, L.P. (Form
8-K filed on March 25, 2002).
4.7 Second Amended and Restated Secured Senior Note due November
30, 2003 issued by the Registrant to Levine Leichtman Capital
Partners II, L.P. (Form 8-K filed on March 25, 2002).
4.8 12.00% Secured Senior Note due 2008 issued by the Registrant
to Levine Leichtman Capital Partners II, L.P. (Form 8-K filed
on March 25, 2002).
4.8.1 Secured Senior Note dated February 3, 2003, issued by the
Registrant to Levine Leichtman Capital Partners II, L.P.
(Schedule 13D filed with respect to the Company on February
11, 2003).
10.1 1991 Stock Option Plan & forms of Option Agreements thereunder
(Form 10-KSB dated March 31, 1994).
10.2 1997 Long-Term Incentive Stock Plan (Form 10-K dated March
10, 1998).
10.3 Lease Agreement re Chesapeake Collection Facility (Form 10-K
dated December 31, 1996).
10.4 Lease of Headquarters Building (Form 10-Q dated September 30,
1997).
10.5 Partially Convertible Subordinated Note (Form 10-Q dated
September 30, 1997).
10.13 FSA Warrant Agreement dated November 30, 1998 (Form 10-K dated
December 31, 1998).
10.29 Warrant to Purchase 1,335,000 Shares of Common Stock (Schedule
13D filed on April 21, 1999).
10.32 Amendment to Master Spread Account Agreement (Form 10-K dated
December 31, 1999).
10.33 Sale and Servicing Agreement dated as of March 7, 2002 among
CPS Warehouse Trust, as Purchaser, Consumer Portfolio
Services, Inc., as Seller and Servicer, Systems & Services
Technologies, Inc., as Backup Servicer and Bank One Trust
Company, N.A., as Standby Servicer and Trustee (filed
herewith).
10.34 Amendment No. 1 dated as of April 18, 2002 to Sale and
Servicing Agreement dated as of March 7, 2002 among CPS
Warehouse Trust, as Purchaser, Consumer Portfolio Services,
Inc., as Seller and Servicer, Systems & Services Technologies,
Inc., as Backup Servicer and Bank One Trust Company, N.A., as
Standby Servicer and Trustee. (filed herewith).
10.35 Omnibus Amendment Agreement containing Amendment No. 2 to the
Sale and Servicing Agreement and Supplemental Indenture No. 1
dated as of July 25, 2002 among CPS Warehouse Trust, as
Purchaser and Issuer, Consumer Portfolio Services, Inc., as
Seller and Servicer, Systems & Services Technologies, Inc., as
Backup Servicer, Bank One Trust Company, N.A., as Standby
Servicer and Trustee and Westdeutsche Landesbank Girozentrale,
as Agent. (filed herewith).
10.36 Second Omnibus Amendment Agreement containing Amendment No. 3
to the Sale and Servicing Agreement and Supplemental Indenture
No. 2 dated as of October 31, 2002 among CPS Warehouse Trust,
as Purchaser and Issuer, Consumer Portfolio Services, Inc., as
Seller and Servicer, Systems & Services Technologies, Inc., as
Backup Servicer, Bank One Trust Company, N.A., as Standby
Servicer and Trustee and WestLB AG, as Agent. (filed
herewith).

10.37 Amendment No. 4 dated as of December 10, 2002 to Sale and
Servicing Agreement dated as of March 7, 2002 among CPS
Warehouse Trust, as Purchaser, Consumer Portfolio Services,
Inc., as Seller and Servicer, Systems & Services Technologies,
Inc., as Backup Servicer and Bank One Trust Company, N.A., as
Standby Servicer and Trustee and WestLB AG, as Agent. (filed
herewith).
10.38 Amendment No. 5 dated as of March 6, 2003 to Sale and
Servicing Agreement dated as of March 7, 2002 among CPS
Warehouse Trust, as Purchaser, Consumer Portfolio Services,
Inc., as Seller and Servicer, Systems & Services Technologies,
Inc., as Backup Servicer and Bank One Trust Company, N.A., as
Standby Servicer and Trustee and WestLB AG, as Agent.(filed
herewith).
10.39 Indenture dated as of March 7, 2002 between CPS Warehouse
Trust, as Issuer and Bank One Trust Company, N.A., as Trustee.
(filed herewith).
10.40 Sale and Servicing Agreement dated as of January 9, 2003 among
CPS Funding LLC, as Purchaser, Consumer Portfolio Services,
Inc., as Seller and Servicer, Systems & Services Technologies,
Inc., as Backup Servicer and Bank One Trust Company, N.A., as
Standby Servicer and Trustee. (filed herewith).
10.41 Amendment No. 1 dated as of April 15, 2003 to Sale and
Servicing Agreement dated as of January 9, 2003 among CPS
Funding LLC, Consumer Portfolio Services, Inc., Systems &
Services Technologies, Inc., and Bank One Trust Company, N.A.
(filed herewith).
10.42 Indenture dated as of January 9, 2003 between CPS Funding LLC,
as Issuer and Bank One Trust Company, N.A., as Trustee. (filed
herewith).
23.1 Consent of independent auditors (filed as part of this report
on March 26, 2003).

(b) Reports on Form 8-K

The Company did not file any reports on Form 8-K during the fourth quarter of
the year ended December 31, 2002.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has caused this amendment to Form 10-K
report to be signed on its behalf by the undersigned, thereunto duly authorized.

CONSUMER PORTFOLIO SERVICES, INC. (Registrant)

April 30, 2003 By: /S/ CHARLES E. BRADLEY, JR.
---------------------------
Charles E. Bradley, Jr., President

CERTIFICATION

I, Charles E. Bradley, Jr., certify that:

1. I have reviewed this annual report on Form 10-K of Consumer Portfolio
Services, Inc.;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this annual report is
being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this annual report (the "Evaluation Date"); and

c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):

a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and

b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and

6. The registrant's other certifying officers and I have indicated in this
annual report whether there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

April 30, 2003 By: /s/ Charles E. Bradley, Jr.
--------------------------------------
Charles E. Bradley, Jr.
PRESIDENT AND CHIEF EXECUTIVE OFFICER

CERTIFICATION

I, David N. Kenneally, certify that:

1. I have reviewed this annual report on Form 10-K of Consumer Portfolio
Services, Inc.;

b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this annual report (the "Evaluation Date"); and

c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;

b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and

April 30, 2003 By: /s/ David N. Kenneally
--------------------------------------------
David N. Kenneally, CHIEF FINANCIAL OFFICER