am pleased to report
that our Company once again achieved outstanding
financial results by recording its 15th
consecutive year of record revenues and profits, during fiscal 2005.
Last year marked our 20th year of business and
our 18thyear as a publicly
traded company. Several notable milestones
were achieved by our Company during the past year.
L. Vosotas, Chairman, CEO & President
Ralph T. Finkenbrink, CFO & Sr. Vice President - (left)
Net income for the year
ended March 31, 2005 increased 55% to $8,080,000 as compared to
$5,212,000 for the year ended March 31, 2004. Earnings per share
increased by 25% to $ 0.80 as compared to $0.64 last year (adjusted
for the three-for-two split). Revenue for the year increased 29% to
$32,832,000 as compared to $25,500,000 last year. The net worth of our
Company grew 71% from $27,409,000 to $46,758,000. In addition, the
Company announced record income and revenues in each quarter during
the past fiscal year.
In keeping with the
Company’s expansion strategy, Nicholas added six new locations to our
branch office network during the past fiscal year. We built our second
South Carolina branch in Greenville and our fourth North Carolina
branch in Greensboro. We added two offices in the state of Virginia
with new branch locations in Richmond and Fredericksburg. The Company
also extended its coverage of the Florida market from South Florida to
the Western Panhandle by opening a new branch in Pensacola. That
office became the 16th Nicholas location in the “Sunshine” state.
Finally we established our first presence in the state of Kentucky
this past December, by opening an office in Florence, a suburb south
of Cincinnati, Ohio.
strategy of carefully managed growth will continue in the coming year.
The Company intends to add 6 to 8 additional branch offices. We have
targeted locations in Atlanta, Baltimore, Indianapolis, Louisville,
Miami, and Raleigh-Durham at this time. After establishing an initial
branch location in a state, we try to open additional branches within
the same state, in order to create a market presence and increase
operational efficiencies. As of March 31, 2005, we have a total of 35
branch offices in Florida, Georgia, South Carolina, North Carolina,
Ohio, Kentucky, Michigan and Virginia. Our newest branch in
Indianapolis, Indiana, will become operational by the end of June,
On May 12th, 2005 the
Company announced a three for two stock split to shareholders of
record as of June 7, 2005. The stock split is payable on June 17,
2005, in the form of a 50% stock dividend. Effective June 20, 2005 our
stock will trade at the split adjusted price. In May 2004, the company
successfully sold 2,100,000 shares of its common stock to the public.
This secondary public offering, which was issued at $5.33 per share
(adjusted for the three-for-two split), increased the total number of
outstanding shares to approximately 9.8 million. As part of the
offering we also elected to move up from the Nasdaq Small Cap listing
to the Nasdaq National Market listing. The National Market has given
us greater media exposure and contributed to the expansion of our
shareholder base from approximately 800 shareholders to over 2,500
shareholders. We felt that it was extremely important to increase the
number of outstanding shares in the hands of the investing public.
This was effectively accomplished by the offering. The underwriter who
handled the transaction for the secondary offering was Ferris Baker
Watts, of Baltimore, Maryland.
In the course of the
offering, Ferris Baker introduced us to over 40 institutional
investors ranging from small investment managers that manage
portfolios of less than $50 million dollars to extremely large firms
that manage over $250 billion dollars. I am pleased to report that
many of the investment institutions that we visited elected to
purchase our stock. We estimate that the percentage of institutional
ownership of Nicholas Financial stock is currently greater than 25%.
The public exposure that Ferris Baker provided for Nicholas Financial
through its retail brokerage network, institutional relationships and
research coverage is immeasurable.
For many years I have
made the same statement regarding our accomplishments, “Our consistent
financial performance 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.” To the credit of our employees this statement rings as true
today as when it was first written. We, like all companies, have a
challenge to find good, hardworking, and qualified people. When we do,
we try our best to keep those who work hard and produce results. We
reward our employees with excellent benefits, including performance
based bonuses and strong career opportunities. As a result, we have
very low employee turnover. Our ability to mold and retain a veteran
team is one of the primary reasons for our success. The majority of
our senior managers, accounting staff and data processing staff have
been with the Company since its inception in the late 1980’s. During
the past year we maintained our close relationship with our current
lenders, as we continued to address our long-term financing needs.
During the year we were
pleased to announce the addition of the Bank of Scotland to our
lending consortium. As a result we successfully expanded our line of
credit to $85,000,000 and extended the credit facility by two years.
Our line of credit now includes, Bank of America, First Tennessee
Bank, Hibernia National Bank and the Bank of Scotland.
We look forward with
optimism toward the coming year. Any company that can say, “Our
potential customer base is over 250 billion dollars a year”, should be
excited about its business prospects. Our intention is to continue our
strategy of steady controlled growth by increasing our existing branch
loan portfolios and building new branch offices. We intend to continue
growing our company organically. However, we will stay alert to
possible acquisition opportunities that may come to our attention.
Overall, we are very pleased with what Nicholas Financial has
accomplished during the past year in spite of the distress caused by
four separate hurricanes in Florida.
We are very proud of our
employees, whose dedication, talent and loyalty have made Nicholas an
important force in automobile financing. 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. We are convinced that our shareholders will be
rewarded if we continue to build the net worth of our Company each
year. 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