UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) July 21,
2005
NICHOLAS FINANCIAL, INC.
(Exact name of registrant as specified in its Charter)
British Columbia, Canada 0-26680 8736-3354
(State or Other Jurisdiction of (Commission (I.R.S. Employer
Incorporation or Organization) File Number) Identification No.)
2454 McMullen Booth Road, Building C
Clearwater, Florida 33759
(Address of Principal Executive Offices) (Zip Code)
(727) 726-0763
(Registrant's telephone number, Including area code)
Not applicable
(Former name, former address and former fiscal year, if
changed since last report)
1
Item 2.02 Results of Operations and Financial Condition
July 21, 2005 - Nicholas Financial, Inc., (NASDAQ: NICK)
announced that net income increased 47% to $2,394,000 for
the three months ended June 30, 2005 as compared to
$1,632,000 for the three months ended June 30, 2004. Diluted
earnings per share increased 28% to $0.23 for the three
months ended June 30, 2005 as compared to $0.18 for the
three months ended June 30, 2004. Revenue increased 26% to
$9,160,000 for the three months ended June 30, 2005 as
compared to $7,277,000 for the three months ended June 30,
2004. "These excellent results are a direct reflection of
our disciplined underwriting," according to Peter L.
Vosotas, Chairman and CEO of the Company.
Item 9.01 Financial Statements and Exhibits
Exhibit # Description
9 Press release dated July 21, 2005, announcing
record earnings for the quarter ended June 30,
2005.
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the Registrant has duly caused this Report to
be signed on its behalf by the undersigned, hereunto duly
authorized.
NICHOLAS FINANCIAL, INC.
(Registrant)
Date: July 21, 2005 /s/ Peter L. Vosotas
Peter L. Vosotas
Chairman, President, Chief
Executive Officer
(Principal Executive Officer)
Date: July 21, 2005 /s/ Ralph T. Finkenbrink
Ralph T. Finkenbrink
(Principal Financial
Officer and Accounting
Officer)
3
Exhibit Index
Exhibit Description
9 Press release dated July 21, 2005, announcing
record earnings for the quarter ended June 30,
2005.
4
Exhibit 9
FOR IMMEDIATE RELEASE
Nicholas Financial, Inc.
Corporate Headquarters
2454 McMullen-Booth Rd.
Building C, Suite 501
Clearwater, FL 33759
Contact: Ralph Finkenbrink NASDAQ: NICK
Sr.Vice President, CFO Web Site: www.nicholasfinancial.com
Ph # - 727-726-0763
Nicholas Financial Reports Record 1st Quarter Results
July 21, 2005 - Nicholas Financial, Inc., (NASDAQ: NICK)
announced that net income increased 47% to $2,394,000 for
the three months ended June 30, 2005 as compared to
$1,632,000 for the three months ended June 30, 2004. Diluted
earnings per share increased 28% to $0.23 for the three
months ended June 30, 2005 as compared to $0.18 for the
three months ended June 30, 2004. Revenue increased 26% to
$9,160,000 for the three months ended June 30, 2005 as
compared to $7,277,000 for the three months ended June 30,
2004. "These excellent results are a direct reflection of
our disciplined underwriting," according to Peter L.
Vosotas, Chairman and CEO of the Company.
The Company has now reported same quarter record increases
for revenue and earnings in 60 out of the past 61 quarters.
The Company opened its 36th branch location in Indianapolis,
Indiana during the first quarter. The Company currently has
committed to opening additional locations in Conyers, GA,
Raleigh-Durham, NC, and Baltimore, MD. The Company expects
all three of these new branch offices to be open and fully
operational during the second quarter.
The Company will hold its 2005 Annual Meeting at 10:00am on
August 10, 2005 at the Company's headquarters located in
Clearwater, Florida.
Founded in 1985, with assets of $125,820,000 as of June 30,
2005, Nicholas Financial, Inc. is one of the largest
publicly traded specialty consumer finance companies based
in the Southeast. The Company presently operates out of 36
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-KSB for the year ended
March 31, 2005. 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.
5
Nicholas Financial, Inc.
Condensed Consolidated Statements of Income
(Unaudited, Dollars in Thousands, Except Per Share Amounts)
Three Months Ended June 30,
2005 2004
---------------------
Revenue:
Interest income on
finance receivables $ 9,110 $ 7,214
Sales 50 63
-------- -------
9,160 7,277
Costs and expenses:
Expenses 3,896 3,157
Provision for credit losses 428 581
Interest expense 981 915
-------- --------
5,305 4,653
Operating income
before income taxes 3,855 2,624
Income tax expense 1,461 992
-------- --------
Net income $ 2,394 $ 1,632
======== ========
Earnings per share:
Basic $ 0.24 $ 0.19
======== ========
Diluted $ 0.23 $ 0.18
======== ========
Weighted average shares 9,851,657 8,504,328
========= =========
Weighted average shares and
assumed dilution 10,481,773 9,095,433
========== =========
(Historical shares outstanding and earnings per share have
been adjusted for the June 17, 2005 stock split)
Condensed Consolidated Balance Sheets
(Unaudited, Dollars in Thousands)
June 30, March 31,
2005 2005
--------- ---------
Cash $ 1,442 $ 853
Finance receivables, net 118,089 113,708
Other assets 6,289 6,254
--------- ---------
Total assets $ 125,820 $ 120,815
========= =========
Line of credit $ 67,042 $ 65,331
Other notes payable 600 1,000
Other liabilities 9,236 7,726
--------- ---------
Total liabilities 76,878 74,057
Shareholders' equity 48,942 46,758
--------- ---------
Total liabilities and
shareholders' equity $ 125,820 $ 120,815
========= =========
6
Portfolio Summary Three months ended June 30,
2005 2004
-------------------------------
Average finance receivables,
net of unearned interest (1) $140,718,717 $123,025,445
Average indebtedness (2) $ 66,986,506 63,714,820
Finance revenue (3) $ 9,109,701 $ 7,214,258
Interest expense 980,553 915,320
--------------------------
Net finance revenue $ 8,129,148 $ 6,298,938
==========================
Weighted average
contractual rate (4) 24.12% 24.29%
==========================
Average cost of
borrowed funds (2) 5.86% 5.75%
==========================
Gross portfolio yield (5) 25.90% 23.46%
Interest expense as a percentage
of average finance receivables,
net of unearned interest 2.79% 2.98%
Provision for credit losses as a
percentage of average finance
receivables, net of unearned
interest 1.22% 1.89%
--------------------------
Net portfolio yield (5) 21.89% 18.59%
Operating expenses as a
percentage of average finance
receivables, net of unearned
interest (6) 10.83% 10.04%
--------------------------
Pre-tax yield as a percentage of
average finance receivables, net
of unearned interest (7) 11.06% 8.55%
==========================
Write-off to liquidation (8) 5.03% 5.46%
Net charge-off percentage (9) 4.44% 4.65%
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.
7
The following tables present certain information regarding
delinquency rates experienced by the Company with respect to
Contracts and under its direct loan program.
At June 30,
2005 2004
-----------------------------------------
Contracts
Gross Balance
Outstanding $183,005,750 $159,986,743
============= ============
Delinquencies
30 to 59 days $ 2,440,862 1.33% $ 2,704,294 1.68%
60 to 89 days 649,406 0.35% 539,691 0.34%
90 + days 174,630 0.10% 219,687 0.14%
----------- ----- ----------- -----
Total Delinquencies $ 3,264,898 1.78% $ 3,463,672 2.16%
=========== ===== =========== =====
Direct Loans
Gross Balance
Outstanding $ 6,498,264 $ 4,726,746
============ ============
Delinquencies
30 to 59 days $ 70,102 1.08% $ 26,903 0.57%
60 to 89 days 28,183 0.43% 20,089 0.43%
90 + days 14,144 0.22% 26,998 0.57%
----------- ----- ----------- -----
Total Delinquencies $ 112,429 1.73% $ 73,990 1.57%
=========== ===== =========== =====
The amounts shown in the tables below represent the amount of
Contracts purchased, net of unearned interest.
--------------------------------------------------
Three months ended
June 30,
Contracts 2005 2004
--------------------------------------------------
Purchases $23,421,962 $22,399,319
Weighted APR 23.99% 24.11%
Average Discount 8.55% 8.76%
Average Term (months) 45 44
Average Loan $8,704 $8,275
Number of Contracts 2,691 2,707
----------------------------------------------------