Nicholas Financial, Inc.
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FOR IMMEDIATE RELEASE

Contact: Ralph Finkenbrink
Nicholas Financial, Inc.
Ph # - (727) 726-0763
Fax # - (727) 726-2140
E-Mail - rfinkenbrink@nicfn

Investor Relations
Michael Marika
Ph # - (727) 726-0763
Fax # - (727) 726-2140
E-Mail - mmarika@nicfn.com

Stock Symbol:
         (NASDAQ): NICK.

Web Site -
         www.nicholasfinancial.com

Nicholas Financial Reports Results
for the 2nd
Quarter Ended
September 30, 2008


 

 

Clearwater, Florida, - November 5, 2008 - Nicholas Financial, Inc. (NASDAQ: NICK) announced that net income decreased 70% to $792,000 for the three months ended September 30, 2008 as compared to $2,597,000 for the three months ended September 30, 2007. Diluted earnings per share decreased 68% to $0.08 for the three months ended September 30, 2008 as compared to $0.25 for the three months ended September 30, 2007. Revenue increased 7% to $13,505,000 for the three months ended September 30, 2008 as compared to $12,578,000 for the three months ended September 30, 2007.

Net income decreased 56% to $2,350,000 for the six months ended September 30, 2008 as compared to $5,381,000 for the six months ended September 30, 2007. Diluted earnings per share decreased 56% to $0.23 for the six months ended September 30, 2008 as compared to $0.52 for the six months ended September 30, 2007. Revenue increased 8% to $26,624,000 for the six months ended September 30, 2008 as compared to $24,748,000 for the six months ended September 30, 2007.

According to Peter L. Vosotas, President and CEO, “It has been a very difficult year in the auto market and we do not expect to see much improvement in the near term. We believe there is a certain amount of pent-up demand for both new and used vehicles, and while we do not know how long this will take to manifest itself into consumer buying, we know that Americans love their cars and eventually will return to the market. We believe the near term employment outlook is weak, which will in turn affect our customers’ ability to service their debt loads. We are uncertain as to how long we will continue to experience economic weakness; in the meantime we are managing our operating expenses and continuing to evaluate the markets in which we operate branch locations. Twelve months ago we operated out of 47 branch locations; since that time we have closed three branch locations and opened three new locations for a net total of 47 branch locations. In the next few weeks we will be opening our second location in Columbus, Ohio, which brings our branch location total to 48.”

Founded in 1985, with assets of $197,367,000, Nicholas Financial, Inc. is one of the largest publicly traded specialty consumer finance companies based in the Southeast. The Company presently operates out of 47 branch locations in both the Southeast and the Mid-West States. The Company has approximately 10,300,000 shares of common stock outstanding. For an index of Nicholas Financial Inc.’s news releases or to obtain a specific release, visit our web site at www.NicholasFinancial,com.

Download Adobe Acrobat version of this press release.

 


 

 

 

Except for the historical information contained herein, the matters discussed in this news release include forward-looking statements that involve risks and uncertainties including competitive factors, the management of growth, and other risks detailed from time to time in the Company’s filings and reports with the Securities and Exchange Commission including the Company’s Annual Report on Form 10-K for the year ended March 31, 2008. Such statements are based on the beliefs of the Company’s management as well as assumptions made by and information currently available to Company management. Actual events or results may differ materially.  All forward looking statements and cautionary statements included in this document are made as of the date hereby based on information available to the Company as of the date hereof, and the Company assumes no obligation to update any forward looking statement or cautionary statement.

 

NICHOLAS FINANCIAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited, Dollars in Thousands, Except Per Share Amounts)


 

 

Three Months Ended
September 30,

Six Months Ended
September 30,

2008

2007

2008

2007

Revenue:
    Interest income on
        finance receivables

13,487

12,560

26,591

24,708

    Sales

            18

            18

            33

            40

      13,505

      12,578

      26,624

      24,748

Costs and expenses:
    Expenses

5,624

5,164

11,440

10,049

    Provision for credit losses

5,112

1,569

8,547

2,766

    Interest expense

       1,432

       1,643

        2,841

        3,232

       12,168

       8,376

       22,828

       16,047

         
Operating income before
     income taxes

       1,337

       4,202

3,796

8,701

Income tax expense

          545

       1,605

        1,446

        3,320

    Net income

   $   792
=======

   $   2,597
=======

   $  2,350
=======

   $  5,381
=======

..
Earnings per share:
    Basic

    $    0.08
=======

    $    0.26
=======

     $   0.23
=======

     $   0.54
=======

    Diluted

    $    0.08
=======

    $    0.25
=======

     $   0.23
=======

     $   0.52
=======

..
Weighted average shares

10,245,000
=======

10,036,000
=======

10,216,000
=======

10,010,000
=======

         
Weighted average shares & assumed dilution 10,426,000
========
10,326,000
========
10,409,000
=======
10,338,000
=======

 

NICHOLAS FINANCIAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, Dollars in Thousands)


 

 

September 30,

March 31,

2008     

2008    

Cash

$       2,551

$       2,298

Finance receivables, net

186,135

179,043

Other Assets

       8,681

       8,497

    Total Assets

$   197,367
=======

$   189,838
=======

Line of credit

  106,125

$     99,937

Other liabilities

       8,606

       11,325

     
    Total liabilities

114,731

111,262

..
Shareholder's equity

     82,636

     78,578

Total liabilities &
    shareholders' equity


    $   197,367
=======


    $   189,838
=======

 


 

 

Portfolio Summary

         Three Months Ended
         September
30

         Six Months Ended
         September
30

         2008

         2007

         2008

         2007

Average finance receivables, net of unearned interest (1)


$ 208,674
,423
============


$ 189,954
,242
============

$   206,001,623
============

$   188,223,821
============


Average indebtedness (2)

 
$105,150
,419
============

 
$ 95,625
,225
============

 $ 103,503,324
============

 $ 94,815,680
============


Finance revenue (3)

$ 13,487,161

$ 12,559,769

$ 26,591,127

$ 24,708,258


Interest expense
         1,431,677          1,643,262            2,841,013            3,231,870

Net finance revenue


$    12,055
,484
============


$    10,916
,507
============

$    23,750,114
============

$    21,476,388
============


Weighted average contractual rate (4)


24.15%
============


24.34%
============

24.16%
============

24.26%
============


Average Cost of Borrowed Funds (2)


5.45%
============


6.87%
============

5.49%
============

6.82%
============


Gross Portfolio Yield (5)

25.85%

26.45%


25.82%
 


26.25%
 

Interest expense as a percentage of average finance receivables, net of unearned interest

2.74%

3.46%

2.76%

3.43%


Provision for credit losses as a percentage of average finance receivables, net of unearned interest
               9.86%                3.35%                8.30%                2.94%

Net portfolio yield (5)

13.25%

19.64%

14.76%

19.88%


Operating expenses as a percentage of average finance receivables, net of unearned interest (6)
               10.75%                10.70%               10.89%               10.56%

Pre-tax yield as a percentage of average finance receivables, net of unearned interest (7)




2.50%
============




8.94%
============

3.87%
============

9.32%
============


Write-off to liquidation (8)


12.97%


8.70%


12.09%


7.95%


Net charge-off percentage (9)
 

10.25%
 

7.79%
 

9.82%
 

7.20%
 

Note: All three and six month key performance indicators expressed as percentages have been annualized

(1)  Average finance receivables, net of unearned interest, represents the average of gross finance receivables, less unearned interest throughout the period.

(2)  Average indebtedness represents the average outstanding borrowings under the Line and notes payable-related party.  Average cost of borrowed funds represents interest expense as a percentage of average indebtedness. 

(3)  Finance revenue does not include revenue generated by Nicholas Data Services, Inc. (NDS) the wholly-owned software subsidiary of Nicholas Financial, Inc.

(4)  Weighted average contractual rate represents the weighted average annual percentage rate (APR) of all Contracts purchased and direct loans originated during the period.   

(5)  Gross portfolio yield represents finance revenues as a percentage of average finance receivables, net of unearned interest. Net portfolio yield represents finance revenue minus (a) interest expense and (b) the provision for credit losses as a percentage of average finance receivables, net of unearned interest. 

(6)  Operating expenses represent total expenses, less interest expense, the provision for credit losses and operating costs associated with NDS.

(7)  Pre-tax yield represents net portfolio yield minus operating expenses as a percentage of average finance receivables, net of unearned interest.

(8)  Write-off to liquidation percentage is defined as net charge-offs divided by liquidation. Liquidation is defined as beginning receivable balance plus current period purchases minus voids and refinances minus ending receivable balance.

(9)  Net charge-off percentage represents net charge-offs divided by average finance receivables, net of unearned interest,
              outstanding during the period.

 


 

 

The following tables present certain information regarding delinquency rates experienced by the Company with respect to Contracts and under its direct loan program.
 

 

At September 30,

2008

2007

Contracts    
Gross Balance Outstanding

$ 287,272,780

$ 257,975,631

         
Delinquencies

 

 

 

 

 
30 to 59 days

$9,621,940

3.35%

$6,641,029

2.58%

60 to 89 days

3,763,896

1.31%

2,510,684

0.97%

90 + days

 1,407,925

    0.49%

 1,161,006

      0.45%

         
Total Delinquencies

$14,793,761

4.00%

$10,312,719

4.00%

         
Direct Loans        
Gross balance outstanding

$ 8,472,099

$ 10,645,154

..
Delinquencies        
         
30 to 59 days

$145,174

1.71%

$220,321

2.07%

60 to 89 days

64,682

0.76%

86,784

0.82%

90 + days

      67,351

   0..80%

      47,051

      0.44%

         
Total Delinquencies

$277,207

3.27%

$354,156

3.33%

 


 

 

The following  table represents information on Contracts purchased by the Company, net of unearned interest.

Three Months Ended
September 30

Six Months Ended
September 30

Contracts

2008

2007

2008

2007


Purchases

$27,662,818

$30,061,561

$60,987,269

$58,029,064


Weighted APR

24.15%

24.25%

24.16%

24.16%


Avg. Discount

9.06%

8.04%

8.95%

8.12%

Weighted
Avg. Term
(months)

48

48

48

48


Average Loan

$  9,400

$  9,483

$  9,483

$  9,393


# of Contracts
  2,943   3,170          6,431          6,178

 



Contact Information

Telephone
727-726-0763
FAX
727-726-2140
Postal address
2454 McMullen-Booth Rd., Bldg. C, Clearwater, FL 33759
Electronic mail
Nicholas Employee E-Mail Directory
Investor Information: mmarika@nicfn.com
Webmaster: mmarika@nicfn.com

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Last modified: 11
/5/08  10:30 am