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 4th Quarter & Year
Ended March 31, 200
9


 

 

Clearwater, Florida, - May 5, 2009 - Nicholas Financial, Inc. (Nasdaq: NICK), announced that for the three months ended March 31, 2009, net earnings, excluding non-cash unrealized mark-to-market (gain) loss of interest rate swaps was $2,048,000 as compared to $2,055,000 for the three months ended March 31, 2008. Per share diluted net earnings, excluding non-cash unrealized mark-to-market (gain) loss of interest rate swaps, was $0.20 for both the three months ended March 31, 2009 and 2008. See reconciliations of the Non-GAAP measures on page 2. Revenue increased 4% to $13,224,000 for the three months ended March 31, 2009 as compared to $12,721,000 for the three months ended March 31, 2008.

For the year ended March 31, 2009, net earnings, excluding non-cash unrealized mark-to-market loss of interest rate swaps, decreased 41% to $5,673,000 as compared to $9,672,000 for the year ended March 31, 2008. Per share diluted net earnings, excluding non-cash unrealized mark-to-market (gain) loss of interest rate swaps, decreased 41% to $0.55 for the year ended March 31, 2009 as compared to $0.94 for the year ended March 31, 2008. See reconciliations of the Non-GAAP measures on page 2. Revenue increased 6% to $53,102,000 for the year ended March 31, 2009 as compared to $50,083,000 for the year ended March 31, 2008.

According to Peter L. Vosotas, Chairman and CEO, “We are pleased to have increased our revenue 6% for the year and also increased our net worth 8% from $78.6 million to $85.2 million or $8.21 per share. We are currently evaluating several existing markets in which we plan to expand our market presence through additional branch locations. While we believe the current economic weakness will remain throughout 2009 we also believe there will be opportunities to grow our portfolio. In the event we see further deterioration in the economy we may elect to postpone any expansion efforts until we see stabilization in the labor markets.”

Nicholas Financial, Inc. is one of the largest publicly traded specialty consumer finance companies based in the Southeast. The Company presently operates out of 48 branch locations in both the Southeast and the Mid-West States. The Company has approximately 10,400,000 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 Except for the historical information contained herein, the matters discussed in this news release include forward-looking statements that involve risks and uncertainties including general economic conditions, access to bank financing, 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.

This press release contains disclosures of non-GAAP financial measures including: net earnings, excluding non-cash unrealized mark-to-market (gain) loss of interest rate swaps and share diluted net earnings, excluding non-cash unrealized mark-to-market (gain) loss of interest rate swaps. These measures utilize the GAAP terms “net income” and “diluted earnings per share” and adjust the GAAP terms to exclude the effect of mark to market adjustments and reclassifications of previously recorded accumulated comprehensive losses associated with interest rate swaps. Management believes this presentation provides additional and meaningful measures for the assessment of the Company's ongoing results and performance. Because the Company has historically reported mark-to-market (interest rate swaps) through other comprehensive income under hedge accounting, management believes that the inclusion of this non-GAAP measure provides consistency in its financial reporting and facilitates investors' understanding of the Company's historic operating trends by providing an additional basis for comparisons to prior periods. Management recognizes that the use of non-GAAP measures has limitations, including the fact that they may not be directly comparable with similar non-GAAP financial measures used by other companies. All non-GAAP financial measures are intended to supplement the applicable GAAP disclosures and should not be considered in isolation from, or as substitute for, financial information prepared in accordance with GAAP. For a reconciliation of non-GAAP measures from GAAP reported amounts, please see the supplemental information included with this press release.

 

NICHOLAS FINANCIAL, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES - **
(Unaudited)


 

 

The following tables include reconciliations of GAAP reported net income to the non-GAAP measure, net earnings, excluding non-cash unrealized mark-to-market loss of interest rate swaps as well as GAAP reported diluted earnings per share to the non-GAAP measure, per share diluted net earnings, excluding non-cash unrealized mark-to-market loss of interest rate swaps. The non-GAAP measures exclude the effect of mark-to-market adjustments and reclassifications of previously recorded accumulated comprehensive losses associated with interest rate swaps.

Three months ended March 31,

Year ended
March 31,

    2009     

    2008     

    2009     

    2008     


Net income, GAAP

$  2,133,119

$2,055,246

$4,717,562

$9,672,176


Mark-to-market of interest rate swaps (net of tax expense (benefit) of $49,441 and ($574,157), respectively.

      (84,774)

               -

    955,848

               -


Net earnings, excluding non-cash unrealized mark-to-market (gain) loss of interest rate swaps  (a)

$2,048,345
=======

$2,055,246
=======

$5,673,410
=======

$9,672,176
=======

 

Three months ended March 31,

Year ended
March 31,

..

     2009      

    2008     

    2009     

    2008     


Diluted earnings per share, GAAP

$0.20

$0.20

$0.45

$0.94


Per diluted share mark-to-market of interest rate swaps

                - 

              -

       $0.10 

              -


Per share diluted net earnings, excluding non-cash unrealized mark-to-market (gain) loss of interest rate swaps  (a)

$0.20
=======

$0.20
=======

$0.55
=======

$0.94
=======

(a) Represents a non-GAAP financial measure.  See information on non-GAAP financial measures above.

 

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


 

 

Three Months Ended
March 31,

Year Ended
March 31,

2009

2008

2009

2008

Revenue:
    Interest income on
       finance receivables

13,202

12,707

53,032

50,008

    Sales

            22

            14

            70

            75

       13,721

       12,721

      53,102

      50,083

Expenses:
   Operating

5,435

5,406

22,249

20,389

   Provision for credit losses

3,271

2,537

16,386

7,818

   Interest expense

       1,275

       1,467

       5,385

       6,310

   Unrealized mark to market
   (gain) loss on interest
   swaps

        (134)

            -  

       1,530

              -

       9,847

       9,410

      45,550

      34,517

         
Operating Income before
    income taxes

3,377

3,311

7,552

15,566

Income tax expense

       1,244

       1,256

        2,834

        5,894

    Net income

   $   2,133
=======

   $   2,055
=======

   $ 4,718
=======

   $ 9,672
=======

..
Earnings per share:
    Basic

    $    0.21
=======

    $    0.20
=======

     $   0.46
=======

     $   0.97
=======

    Diluted

    $    0.20
=======

    $    0.20
=======

     $   0.45
=======

     $   0.94
=======

..
Weighted average shares

10,304,831
=======

10,058,883
=======

10,248,919
=======

10,002,505
=======

..
Weighted average shares
    and assumed dilution


10,421,360
=======


10,306,098
=======

10,400,284
=======

10,298,679
=======

         

 

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


 

 

March 31,

March 31,

2009    

2008     

Cash

$         1,733

$         2,298

Finance receivables, net

186,694

179,043

Other Assets

        9,542

        8,497

    Total Assets

$     197,969
=======

$     189,838
=======

Line of credit

$     102,030

$     99,937

Other liabilities

      10,781

     11,325


    Total Liabilities

112,811

111,262

..
Shareholder's Equity

      85,158

      78,576

..
Total Liabilities &
    Shareholders' equity


    $      197,969
=======


    $      189,838
=======

 


 

 

Portfolio Summary

         Three Months Ended
         March
31

         Year Ended
         March
31

         2009

         2008

         2009

         2008

Average finance receivables, net of unearned interest (1)


$ 209,166
,023
============


$ 195,192
,013
============

$   207,402,047
============

$   191,012,129
============


Average indebtedness (2)

 
$ 101,390
,054
============

 
$   99,967
,626
============

 $  103,126,653
============

 $    97,124,666
============


Finance revenue (3)

$   13,201,938

$   12,705,855

$    53,032,438

$    50,007,510


Interest expense
            1,274,850             1,467,837            5,384,532            6,310,465

Net finance revenue


$   11,927
,088
============


$   11,238
,018
============

$   47,647,906
============

$   43,697,045
============


Weighted average contractual rate (4)


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


24.50%
============

24.17%
============

24.32%
============


Average Cost of Borrowed Funds (2)


5.03%
============


5.87%
============

5.22%
============

6.50%
============


Gross Portfolio Yield (5)

25.25%

26.04%


25.57%
 


26.18%
 

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

2.44%

3.01%

2.60%

3.30%


Provision for credit losses as a percentage of average finance receivables, net of unearned interest
               6.26%                5.20%               7.90%                4.09%

Net portfolio yield (5)

16.55%

17.83%

15.07%

18.79%


Operating expenses as a percentage of average finance receivables, net of unearned interest (6)
               10.27%                11.05%               10.57%               10.61%

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




6.28%
============




6.78%
============

4.50%
============

8.18%
============


Write-off to liquidation (8)


10.91%


9.96%


12.39%


9.08%


Net charge-off percentage (9)
 

8.94%
 

8.98%
 

9.93%
 

8.24%
 

Note: All three 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 March 31,

2009

2008

Contracts    
Gross Balance Outstanding

$ 291,034,770

$ 270,053,583

         

Delinquencies
       
 
30 to 59 days

$8,737,694

3.00%

$6,747,067

2.50%

60 to 89 days

2,666,484

0.92%

1,798,287

0.66%

90 + days

    848,608

      0.29%

    831,647

      0.31%

         
Total Delinquencies

$12,252,786
========

4.21%
========

$9,377,001
========

3.47%
========

         
Direct Loans        
Gross Balance Outstanding

$ 6,890,705
=========

$ 10,161,920
=========

..
Delinquencies        
         
30 to 59 days

$173,516

2.52%

$181,244

1.79%

60 to 89 days

49,780

0.72%

51,974

0.51%

90 + days

      42,672

      0.62%

      58,065

      0.57%

         
Total Delinquencies

$265,968
========

3.86%
========

$291,283
========

2.87%
========

 


 

 

The following table presents selected information on Contracts purchased by the Company, net of unearned interest:

Three Months Ended
March 31

Year Ended
March 31

Contracts

2009

2008

2009

2008

Purchases

$30,614,559

$35,030,604

$113,327,259

$118,529,430

Weighted APR

24.08%

24.47%

24.06%

24.23%

Avg. Discount

9.44%

8.66%

9.14%

8.32%

Avg.Term (months)

49

48

48

48

Average Loan

$  9,042

$  9,187

$  9,340

$  9,315

# of Contracts    3,386    3,813         12,134         12,725

 



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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