pleased to report that
Company has once again achieved outstanding
results by recording its twelfth consecutive year of record profits, during fiscal 2002.
L. Vosotas, Chairman, CEO & President -
shown at right) Let me begin by reviewing what we achieved during the past fiscal
The past year, which was a trying
year for all Americans, marked our 17th year of business and our 15th year as a public company. Let
me begin by reviewing several important milestones that were achieved during the past fiscal year.
Net income for the fiscal year ended March 31, 2002 increased 15% to $3,932,139 compared to $3,410,877
for the year ended March 31, 2001. Diluted earnings per share increased 10% to $.75, as compared to
$.68 per share a year ago. Revenue for the year increased 14% to $20,218,000, compared to $17,797,000
last year. In addition, the Company announced record income and revenues for every quarter during the
year. The net worth of our Company grew 25% from $14,428,000 to $17,996,000. In fact our net worth
has increased 111% in the past five years. We are convinced if we continue to build the net worth of
our Company each year, our shareholders will be rewarded accordingly.
Our consistent financial
performance, highlighted by eleven (11) consecutive years of increasing revenues and income, hasn’t
happened by accident. It is the result of many people working very hard over a long period of time.
The automobiles of our employees are usually the first to arrive in the parking lot each morning and
invariably the last to drive away at night. We, like all companies have a challenge to find decent,
hardworking, and qualified people. When we do, we try our best to keep those that work hard and
produce results. We reward our employees with excellent benefits, including profit sharing,
performance bonuses and numerous career opportunities. As a result, we have had very little
employee turnover during the last few years. Our ability to mold and retain a team with veterans
is one of the primary reasons for our success. Most of our senior managers, accounting staff and
data processing staff, for example, have been with the Company since its inception in 1985.
We are convinced that our business model is
a very sound and time-tested approach to doing business in our market place. The way that we go
about establishing a presence in a market is extremely simple. The first step is to identify a market
that meets our criteria for automobile dealerships, average household income and lending regulations.
J. Vosotas, Manager
of Corporate Collections
- shown at right) Once
we decide to establish our Company in a particular area, we then
construct a branch office and build it out to our preset
specifications. The branch is initially staffed with a manager and two
to three assistants. Gradually assistants are added as needed until we
reach a full compliment of five to seven. The manager and his/her
staff make all lending and collection decisions for the branch office.
The branch personnel are required to comply with strict corporate
lending and collection guidelines. All exceptions to these guidelines
must be processed through the appropriate levels of management and
confirmed in writing. Our internal auditing staff audits all branch
offices on a quarterly basis. Our goal is to have each branch generate
over $300,000 in pre-tax income, within three years of opening. Many
of our branches have met this goal.
As we stated last year, our Loss Recovery Department, based in our
Clearwater headquarters, is one of the most important contributors to
the success of Nicholas Financial. Soti Kakalis, a ten-year
veteran with the Company leads this organization.
He has a team comprised of former Company
Managers and Collectors that are all seasoned veterans. Soti’s staff
handles everything from repossessed vehicle logistics through vehicle
disposition to loan loss collections. In performing their specialized
tasks they interact with judges, attorneys
and insurance companies on a daily basis. This team traces skips and
collects unpaid balances from former customers. The Loss Recovery
Department also supervises our licensing compliance in every branch
location. In a pinch, any member of this team can manage a branch that
is short handed or faltering. Over the past few years, this very
talented team has recovered millions of dollars.
We continue to maintain and support many small businesses with our financial software products through our
data processing subsidiary, Nicholas Data Services Inc. (NDS).
NDS also supplies Nicholas Financial with all of its data processing needs ranging from the
application software to networking hardware and telecommunications equipment.
(Michael J. Marika, Chief Information Officer
- shown at right)
engineers have developed all web site and Internet facilities internally. We continue
to leverage our use of the Internet for e-mail, business-to-business communications and
software distribution. Anyone wishing detailed information about our Company may find it
by visiting our web site at www.nicholasfinancial.com.
In the next few years we believe that we will require additional financing sources to satisfy our
growth. In doing so we will inevitably have to do business with investment bankers who have the
means and methods to help us. To this end we have met and discussed our long- term financing needs
with several brokerage firms and expect to continue this process throughout the year.
As part of
our ongoing investor relations program to increase awareness of the Company’s financial performance
and attract a larger shareholder base, we recently joined the National Association of Investors
Corporation, as a corporate sponsor. The NAIC is a non-profit organization, which is made up of
over 500,000 individual investors and investment clubs worldwide.
The NAIC provides investment
education to inexperienced and experienced investors, with the goal of increasing the number of
individual investors in common stock.
This past February, we presented our Company to a
convention of NAIC members in Atlanta, Georgia. Our presentation was extremely
well received by the attendees. We plan to continue this method of presenting
the “Nicholas Story” in the future.
look forward with optimism towards the new year. We expect to grow the Company
by increasing our existing branch loan portfolios and building new branch
offices. We intend to open several new branches over the course of this year and
next. We are presently planning to open additional branches in Florida and Ohio.
(Matthew J. Foget, Vice President
Marketing - shown at right)
In addition, we are exploring opportunities for new
branches in the Southeast and possibly the Midwest. To this end, we promoted
Matthew J. Foget to Vice President of Marketing. Matt, formerly Vice President
of Sales, has worked very hard over the past 8 years and has developed an
excellent branch organization. We believe that Matt possesses the necessary
skills to expand our frontiers and establish many new branches during the coming
Marohn, a four-year veteran with the Company has been promoted to Vice President
of Sales. Doug was the Company’s leading branch manager for three consecutive
years. He was promoted to Regional Manager a year ago and excelled in that
capacity as well. We are confident that Doug will do an outstanding job in his
new position. (Douglas
W. Marohn, Vice President Sales
- shown at right)
While we are very pleased and proud of what Nicholas Financial accomplished in a
year traumatized by tough economic times and the worst attack of terrorism to
ever occur on American soil, we want to express our heartfelt grief and sympathy
to all Americans and especially our employees who lost family members in the
World Trade Center and Pentagon terrorist attacks. Our carefree American way of
life was changed forever on September 11th. However our faith in the United
States and all it stands for is unshakeable. The challenge for our Company and
all American institutions is to forge ahead and insure the victory of freedom
and democracy. We are very proud of our employees, whose dedication, talent and
loyalty have made Nicholas an important force in automobile financing in the
Southeast. We are grateful for their ongoing efforts and for the support of our
customers, bankers, vendors and shareholders. We remain determined to increase
the value of our publicly traded stock. To all of you who have invested in
Nicholas, we wish to thank you for having continued faith in our Company. On
behalf of our Board of Directors and our employees, we thank you for the
confidence that you have entrusted in us.
Peter L. Vosotas
Chairman, CEO & President