EX-99.1 2 dex991.htm PRESS RELEASE

Press release

Exhibit 99.1

						FOR IMMEDIATE RELEASE NASDAQ: NICK Web site: ww.nicholasfinancial.com
		Contact:		Ralph Finkenbrink Sr. Vice President, CFO Ph # - 727-726-0763
	Nicholas Financial, Inc.
Corporate Headquarters
2454 McMullen-Booth Rd.
Building C, Suite 501
Clearwater, FL 33759

Nicholas Financial Reports Results for the

2nd Quarter Ended September 30, 2007

November 6, 2007 – Clearwater, Florida - Nicholas Financial, Inc. (NASDAQ: NICK) announced that net income decreased 6% to $2,597,000 for the three months ended September 30, 2007 as compared to $2,769,000 for the three months ended September 30, 2006. Diluted earnings per share decreased 7% to $0.25 for the three months ended September 30, 2007 as compared to $0.27 for the three months ended September 30, 2006. Revenue increased 8% to $12,578,000 for the three months ended September 30, 2007 as compared to $11,607,000 for the three months ended September 30, 2006.

Net income decreased 7% to $5,381,000 for the six months ended September 30, 2007 as compared to $5,798,000 for the six months ended September 30, 2006. Diluted earnings per share decreased 7% to $0.52 for the six months ended September 30, 2007 as compared to $0.56 for the six months ended September 30, 2006. Revenue increased 8% to $24,748,000 for the six months ended September 30, 2007 as compared to $22,936,000 for the six months ended September 30, 2006.

According to Peter L Vosotas, Founder and CEO, “We are not surprised with the difficulties that this credit cycle has wrought, as we have known for the past twelve months that it was becoming tougher to collect from our target customers. During this time we have added additional collection professionals in many of our branches and to our Headquarters based, Loss Recovery Department. Historically we have elected to close a branch wherever we experienced poor results over a predetermined measurement period. To this end we have closed our Columbia, South Carolina, branch and consolidated their customer base into our Centralized Processing Facility. In the meantime, we are constantly looking for locations and opportunities where we can prudently expand our business. We are currently planning to add a second branch office in Birmingham, AL and a second branch in Indianapolis, Indiana. Our continued revenue growth is a testament to our employees and their efforts.”

Founded in 1985, with assets of $182,171,000, Nicholas Financial, Inc. is one of the largest publicly traded specialty consumer finance companies based in the Southeast. The Company presently operates out of 46 branch locations in both the Southeast and the Mid-West States. The Company has approximately 10,050,000 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, 2007. 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 September 30,						Six months ended September 30,
		2007			2006			2007			2006
Revenue:
Interest income on finance receivables		$	12,560		$	11,574		$	24,708		$	22,869
Sales			18			33			40			67
			12,578			11,607			24,748			22,936
Expenses:
Operating			5,116			4,910			10,001			9,267
Provision for credit losses			1,617			852			2,814			1,662
Interest expense			1,643			1,363			3,232			2,623
			8,376			7,125			16,047			13,552
Operating income before income taxes			4,202			4,482			8,701			9,384
Income tax expense			1,605			1,713			3,320			3,586
Net income		$	2,597		$	2,769		$	5,381		$	5,798
Earnings per share:
Basic		$	0.26		$	0.28		$	0.54		$	0.58
Diluted		$	0.25		$	0.27		$	0.52		$	0.56
Weighted average shares			10,036,000			9,931,000			10,010,000			9,923,000
Weighted average shares and assumed dilution			10,326,000			10,293,000			10,338,000			10,289,000

Condensed Consolidated Balance Sheets

(Unaudited, In Thousands)

		September 30, 2007			March 31, 2007
Cash		$	2,451		$	1,499
Finance receivables, net			172,311			164,365
Other assets			7,409			7,155
Total assets		$	182,171		$	173,019
Line of credit		$	97,552		$	94,012
Other liabilities			9,246			9,200
Total liabilities			106,798			103,212
Shareholders’ equity			75,373			69,807
Total liabilities and shareholders’ equity		$	182,171		$	173,019

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Portfolio Summary		Three months ended September 30,								Six months ended September 30,
		2007				2006				2007				2006
Average finance receivables, net of unearned interest (1)		$	189,954,242			$	169,312,348			$	188,223,821			$	167,235,278
Average indebtedness (2)		$	95,625,225			$	85,041,313			$	94,815,680			$	84,098,632
Finance revenue (3)		$	12,559,769			$	11,573,987			$	24,708,258			$	22,868,993
Interest expense			1,643,262				1,362,691				3,231,870				2,622,894
Net finance revenue		$	10,916,507			$	10,211,296			$	21,476,388			$	20,246,099
Weighted average contractual rate (4)			24.34	%			23.92	%			24.26	%			24.03	%
Average cost of borrowed funds (2)			6.87	%			6.41	%			6.82	%			6.24	%
Gross portfolio yield (5)			26.45	%			27.34	%			26.25	%			27.35	%
Interest expense as a percentage of average finance receivables, net of unearned interest			3.46	%			3.22	%			3.43	%			3.14	%
Provision for credit losses as a percentage of average finance receivables, net of unearned interest			3.40	%			2.01	%			2.99	%			1.99	%
Net portfolio yield (5)			19.59	%			22.11	%			19.83	%			22.22	%
Operating expenses as a percentage of average finance receivables, net of unearned interest (6)			10.65	%			11.50	%			10.51	%			10.98	%
Pre-tax yield as a percentage of average finance receivables, net of unearned interest (7)			8.94	%			10.61	%			9.32	%			11.24	%
Write-off to liquidation (8)			8.70	%			7.65	%			7.95	%			6.37	%
Net charge-off percentage (9)			7.79	%			7.26	%			7.20	%			6.00	%

Note: All three and six-month 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. Average cost of borrowed funds represents interest expense as a percentage of average indebtedness.

(3) Finance revenue is interest and fee income on finance receivables and 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 revenue 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:

		September 30,
		2007						2006
Contracts
Gross balance outstanding		$	257,975,631					$	227,469,373
Delinquencies
30 to 59 days		$	6,641,029		2.58	%		$	4,167,057		1.83	%
60 to 89 days			2,510,684		0.97	%			1,465,884		0.64	%
90 + days			1,161,006		0.45	%			563,469		0.25	%
Total delinquencies		$	10,312,719		4.00	%		$	6,196,410		2.72	%
Direct Loans
Gross balance outstanding		$	10,645,154					$	9,724,104
Delinquencies
30 to 59 days		$	220,321		2.07	%		$	162,706		1.67	%
60 to 89 days			86,784		0.82	%			26,303		0.27	%
90 + days			47,051		0.44	%			25,178		0.26	%
Total delinquencies		$	354,156		3.33	%		$	214,187		2.20	%

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

		Three months ended September 30,								Six months ended September 30,
		2007				2006				2007				2006
Contracts
Purchases		$	30,061,561			$	29,292,632			$	58,029,064			$	56,732,970
Weighted APR			24.25	%			23.82	%			24.16	%			23.92	%
Average discount			8.04	%			8.32	%			8.12	%			8.43	%
Weighted average term (months)			48				46				48				46
Average loan		$	9,483			$	9,100			$	9,393			$	9,060
Number of contracts			3,170				3,219				6,178				6,262

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