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 22, 2004
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)
2
Item 12. Results of Operations and Financial Condition
Nicholas Financial, Inc., (NASDAQ:NICK) today announced
record revenue and earnings for the first quarter ended June
30, 2004. The Company reported that net income increased 40%
to $1,632,392 for the three months ended June 30, 2004 as
compared to $1,165,975 for the three months ended June 30,
2003. Earnings per share increased 23% to $0.27 as compared
to $0.22 for the three months ended June 30, 2003. Revenue
for the first quarter increased 20% to $7,276,655 as
compared to $6,060,031 for the three months ended June 30,
2003.
Item 7. Financial Statements and Exhibits
Exhibit # Description
99 Press release dated July 22, 2004, announcing
record revenue and earnings for the first
quarter ended June 30, 2004.
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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 22, 2004 /s/ Peter L. Vosotas
Peter L. Vosotas
Chairman, President,
Chief Executive Officer
(Principal Executive Officer)
Date: July 22, 2004 /s/ Ralph T. Finkenbrink
Ralph T. Finkenbrink
(Principal Financial Officer
and Accounting Officer)
4
Exhibit Index
Exhibit Description
99 Press release dated July 22, 2004, announcing
record revenue and earnings for the first quarter
ended June 30, 2004.
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Exhibit 99
FOR IMMEDIATE RELEASE
Nicholas Financial, Inc.
Corporate Headquarters
2454 McMullen-Booth Rd.
Building C, Suite 501
Clearwater, FL 33759
Contact: Ralph Finkenbrink
Sr.Vice President, CFO
NASDAQ: NICK
Web Site: www.nicholasfinancial.com
Ph # - 727-726-0763
Nicholas Financial Reports Record 1st Quarter Results
Clearwater, Florida, - July 22, 2004 Nicholas Financial,
Inc., (NASDAQ:NICK) today announced record revenue and
earnings for the first quarter ended June 30, 2004. The
Company reported that net income increased 40% to $1,632,392
for the three months ended June 30, 2004 as compared to
$1,165,975 for the three months ended June 30, 2003.
Earnings per share increased 23% to $0.27 as compared to
$0.22 for the three months ended June 30, 2003. Revenue for
the first quarter increased 20% to $7,276,655 as compared to
$6,060,031 for the three months ended June 30, 2003. The
Company has now reported same quarter record increases
for revenue and earnings in 55 out of the past 56 quarters.
The Company will hold its 2004 Annual Meeting on August 11,
2004 in Clearwater, Florida at the Countryside Country Club
at 10 AM.
Founded in 1985, with assets of $108,600,000 as of June 30,
2004, Nicholas Financial is one of the largest publicly
traded specialty consumer finance companies based in the
Southeast. The Company presently operates out of 32 branch
locations in both the Southeast and the Mid-West States. The
Company has approximately 6,500,000 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, 2004. 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.
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Nicholas Financial, Inc.
Consolidated Income Statements
(Unaudited, Dollars in Thousands, Except Per Share Amounts)
Three Months Ended June 30,
2004 2003
-------------------------------
Revenue:
Finance charge income $ 7,214 $ 5,988
Other income 63 72
--------- ---------
7,277 6,060
Costs and expenses:
General & Administrative
Expenses 3,157 2,614
Provision for losses 581 580
Interest expense 915 987
--------- ---------
4,653 4,181
Income before income taxes 2,624 1,879
Income tax provision 992 713
--------- ---------
Net income $ 1,632 $ 1,166
========= =========
Earnings per share:
Basic $ 0.29 $ 0.23
========= =========
Diluted $ 0.27 $ 0.22
========= =========
Weighted average shares 5,669,552 5,006,926
========= =========
Weighted average shares and
assumed dilution 6,063,622 5,300,458
========= =========
Condensed Consolidated Balance Sheets
(Unaudited, Dollars in Thousands)
June 30, March 31,
2004 2004
Cash $ 1,781 $ 958
Finance receivables, net 102,031 97,237
Other assets 4,788 5,028
---------- ----------
Total assets $ 108,600 $ 103,223
========= =========
Line of credit $ 60,060 $ 67,510
Other notes payable 630 682
Other liabilities 7,886 7,585
---------- ----------
Total liabilities 68,576 75,777
Shareholders' equity 40,024 27,446
---------- ----------
Total liabilities and
Shareholders' equity $ 108,600 $ 103,223
========= =========
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Portfolio Summary
Three months ended June 30,
2004 2003
------------------------------
Average finance receivables,
net of unearned interest (1) $123,025,445 $107,212,467
===========================
Average indebtedness (2) 63,714,820 62,239,301
===========================
Finance revenue (3) 7,214,258 5,988,473
===========================
Interest expense 915,320 987,328
---------------------------
Net finance revenue 6,298,938 5,001,145
===========================
Weighted average contractual
rate (4) 24.29% 24.10%
===========================
Average Cost of Borrowed Funds(2) 5.75% 6.35%
===========================
Gross Portfolio Yield (5) 23.46% 22.34%
Interest expense as a percentage
of average finance receivables,
net of unearned interest 2.98% 3.68%
Provision for credit losses as a
percentage of average finance
receivables, net of unearned
interest 1.89% 2.16%
---------------------------
Net portfolio yield (5) 18.59% 16.50%
Operating expenses as a
percentage of average finance
receivables, net of unearned
interest (6) 10.04% 9.43%
---------------------------
Pre-tax yield as a percentage of
average finance receivables, net
of unearned interest (7) 8.55% 7.07%
===========================
Write-off to liquidation (8) 5.46% 7.76%
Net charge-off percentage (9) 4.65% 6.64%
(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 three months ended June 30, 2004 and 2003,
respectively.
(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.
Note: All three month key performance indicators expressed as
percentages have been annualized.
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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,
2004 2003
--------- ------
Contracts
Gross Balance Outstanding $159,959,107 $138,823,707
Dollar Dollar
Delinquencies Amount Percent Amount Percent
------------- ---------------------------------------
30 to 59 days $2,704,294 1.69% $2,647,022 1.91%
60 to 89 days 539,691 0.34% 736,415 0.53%
90 + days 219,687 0.14% 307,405 0.22%
--------- ----- ---------- -----
Total Delinquencies $3,463,672 2.17% $3,690,842 2.66%
Direct Loans
Gross Balance Outstanding $4,726,746 $4,346,709
Delinquencies
-------------
30 to 59 days $26,903 0.57% $49,582 1.14%
60 to 89 days 20,089 0.43% 12,760 0.29%
90 + days 26,998 0.57% 38,609 0.89%
-------- ----- ------- -----
Total Delinquencies $73,990 1.57% $100,951 2.32%
The amounts shown in the table below represent the amount of
finance receivables purchased, net of unearned interest.
--------------------------------------
Three Months Ended June 30,
State 2004 2003
--------------------------------------
FL $11,020,839 $10,148,495
GA 2,510,543 2,331,056
NC 2,153,230 1,998,035
SC 1,134,618 760,698
OH 3,251,208 3,125,301
MI 951,131 455,534
VA 1,377,750 17,040
----------------------------
Total $22,399,319 $18,836,159
============================
The following table represents information on Contracts
purchased by the Company, net of unearned interest:
Three months ended June 30,
Contracts 2004 2003
------------------------------------------------
Purchases $22,399,319 $18,836,159
Weighted APR 24.11% 23.90%
Average Discount 8.76% 8.96%
Average Term(months) 44 44
Average Loan $8,275 $8,186
Number of Contracts 2,707 2,301
-------------------------------------------------