EX-99.1 2 dex991.htm PRESS RELEASE Press Release

Exhibit 99.1

LOGO

FOR IMMEDIATE RELEASE

 

Nicholas

Nicholas Financial, Inc.

Corporate Headquarters

2454 McMullen-Booth Rd.

Building C, Suite 501

Clearwater, FL 33759

    Contact:   

Ralph Finkenbrink

Sr. Vice President, CFO

www.nicholasfinancial.com

Ph # 727-726-0763

   

NASDAQ: NICK

Web site:

Nicholas Financial Reports Results for the

4th Quarter & Year Ended March 31, 2007

May 4, 2007 – Clearwater, Florida—Nicholas Financial, Inc. (NASDAQ: NICK) announced that net income increased 3% to $3,012,000 for the three months ended March 31, 2007 as compared to $2,938,000 for the three months ended March 31, 2006. Diluted earnings per share increased 4% to $0.29 for the three months ended March 31, 2007 as compared to $0.28 for the three months ended March 31, 2006. Revenue decreased 1% to $12,044,000 for the three months ended March 31, 2007 as compared to $12,170,000 for the three months ended March 31, 2006.

Net income increased 10% to $11,580,000 for the year ended March 31, 2007 as compared to $10,559,000 for the year ended March 31, 2006. Diluted earnings per share increased 12% to $1.13 for the year ended March 31, 2007 as compared to $1.01 for the year ended March 31, 2006. Revenue increased 9% to $46,709,000 for the year ended March 31, 2007 as compared to $42,677,000 for the year ended March 31, 2006.

The Company has reported record increases in revenues, net income and earnings per share every year for the past 18 years.

In the past year the Company experienced 17% receivable growth (6% growth in Q4), which was in part driven by the 5 new branch offices opened during the year. Net income for the 4th quarter and full year were influenced by a downturn in the credit cycle.

Founded in 1985, with assets of $172,909,000 as of March 31, 2007, 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 10,000,000 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.

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, 2006. 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.

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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,

     2007    2006    2007    2006

Revenue:

            

Interest income on finance receivables

    $ 12,015    $ 12,130    $ 46,590    $ 42,503

Sales

      29      40      119      174
                           
     12,044      12,170      46,709      42,677

Expenses:

            

Operating

      4,874      4,779      18,745      17,396

Provision for credit losses

      834      1,477      3,690      3,909

Interest expense

      1,461      1,171      5,536      4,332
                           
     7,169      7,427      27,971      25,637

Operating income before income taxes

      4,875      4,743      18,738      17,040

Income tax expense

      1,863      1,805      7,158      6,481
                           

Net income

    $ 3,012    $ 2,938    $ 11,580    $ 10,559
                           

Earnings per share:

            

Basic

    $ 0.30    $ 0.30    $ 1.17    $ 1.07
                           

Diluted

    $ 0.29    $ 0.28    $ 1.13    $ 1.01
                           

Weighted average shares

      9,962,881      9,894,472      9,929,944      9,873,237
                           

Weighted average shares and assumed dilution

      10,327,215      10,488,415      10,286,786      10,474,291
                           

Condensed Consolidated Balance Sheets

(Unaudited, In Thousands)

 

    

March 31,

2007

   

March 31,

2006

Cash

    $ 1,499    $ 1,729

Finance receivables, net

      164,365      140,198

Other assets

      7,045      7,568
             

Total assets

    $ 172,909    $ 149,495
             

Line of credit

    $ 94,012    $ 82,416

Other liabilities

      9,063      8,830
             

Total liabilities

      103,075      91,246

Shareholders’ equity

      69,834      58,249
             

Total liabilities and shareholders’ equity

    $ 172,909    $ 149,495
             

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Three months ended

March 31,

    

Year ended

March 31,

  

Portfolio Summary

    2007     2006     2007     2006  

Average finance receivables, net of unearned interest (1)

    $ 181,120,319     $ 158,955,951     $ 172,508,750     $ 149,634,203  
                                

Average indebtedness (2)

    $ 92,420,346     $ 80,160,083     $ 87,392,132     $ 73,664,722  
                                

Finance revenue (3)

    $ 12,014,710     $ 12,129,940     $ 46,590,436     $ 42,502,615  

Interest expense

      1,461,058       1,171,024       5,535,599       4,332,414  
                                

Net finance revenue

    $ 10,553,652     $ 10,958,916     $ 41,054,837     $ 38,170,201  
                                

Weighted average contractual rate (4)

      24.10 %     24.45 %     23.99 %     24.14 %
                                

Average cost of borrowed funds (2)

      6.32 %     5.84 %     6.33 %     5.88 %
                                

Gross portfolio yield (5)

      26.53 %     30.52 %     27.01 %     28.40 %

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

      3.23 %     2.95 %     3.21 %     2.89 %

Provision for credit losses as a percentage of average finance receivables, net of unearned interest

      1.84 %     3.71 %     2.14 %     2.61 %
                                

Net portfolio yield (5)

      21.46 %     23.86 %     21.66 %     22.90 %

Operating expenses as a percentage of average finance receivables, net of unearned interest (6)

      10.69 %     11.94 %     10.77 %     11.45 %
                                

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

      10.77 %     11.92 %     10.89 %     11.45 %
                                

Write-off to liquidation (8)

      6.19 %     4.25 %     6.72 %     5.44 %

Net charge-off percentage (9)

      5.82 %     4.17 %     6.30 %     4.98 %

Note: All three 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.

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

 

     March 31,       
     2007          2006       

Contracts

           

Gross balance outstanding

    $ 247,002,051      $ 214,509,842   
                  

Delinquencies

           

30 to 59 days

    $ 4,072,821    1.65 %   $ 2,718,246    1.27 %

60 to 89 days

      921,097    0.37 %     521,319    0.24 %

90 + days

      506,433    0.21 %     220,664    0.10 %
                          

Total delinquencies

    $ 5,500,351    2.23 %   $ 3,460,229    1.61 %
                          

Direct Loans

           

Gross balance outstanding

    $ 9,990,060      $ 8,208,542   
                  

Delinquencies

           

30 to 59 days

    $ 65,982    0.66 %   $ 59,910    0.73 %

60 to 89 days

      12,024    0.12 %     16,258    0.20 %

90 + days

      21,476    0.22 %     10,139    0.12 %
                          

Total delinquencies

    $ 99,482    1.00 %   $ 86,307    1.05 %
                          

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,

  
     2007     2006     2007     2006  

Contracts

         

Purchases

    $ 34,358,039     $ 31,171,507     $ 120,192,997     $ 109,357,513  

Weighted APR

      24.03 %     24.40 %     23.90 %     24.03 %

Average discount

      8.42 %     8.93 %     8.45 %     8.78 %

Weighted average term (months)

      47       45       46       45  

Average loan

    $ 9,037     $ 8,756     $ 9,063     $ 8,795  

Number of contracts

      3,802       3,560       13,262       12,434  
                                

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