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) January
27, 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)
2
Item 2.02 Results of Operations and Financial Condition
Clearwater, Florida, - January 27, 2005: Nicholas Financial, Inc.
(NASDAQ, NICK), today announced record revenues, net income and
earnings per share for the three months ended December 31, 2004.
Revenues for the third quarter ended December 31, 2004 increased
34% to $8,541,000 compared to $6,385,000 for the quarter ended
December 31, 2003. Net income for the quarter increased 70% to
$2,214,000 from $1,306,000 last year. Earnings per share for the
quarter increased 33% to $0.32 per share from $0.24 per share last
year. The Company has reported record same quarter increases in
revenues and earnings for 57 out of the past 58 quarters.
Item 9.01 Financial Statements and Exhibits
Exhibit # Description
9 Press release dated January 27, 2005, announcing
record earnings for the third quarter ended
December 31, 2004.
3
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: January 27, 2005 /s/ Peter L. Vosotas
Peter L. Vosotas
Chairman, President,
Chief Executive Officer
(Principal Executive Officer)
Date: January 27, 2005 /s/ Ralph T. Finkenbrink
Ralph T. Finkenbrink
(Principal Financial
Officer and Accounting
Officer)
4
Exhibit Index
Exhibit Description
9 Press release dated January 27, 2005, announcing
record earnings for the third quarter ended
December 31, 2004.
5
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 3rd Quarter Results & Expands
into Kentucky
Clearwater, Florida, - January 27, 2005: Nicholas Financial, Inc.
(NASDAQ, NICK), today announced record revenues, net income and
earnings per share for the three months ended December 31, 2004.
Revenues for the third quarter ended December 31, 2004 increased
34% to $8,541,000 compared to $6,385,000 for the quarter ended
December 31, 2003. Net income for the quarter increased 70% to
$2,214,000 from $1,306,000 last year. Earnings per share for the
quarter increased 33% to $0.32 per share from $0.24 per share last
year. The Company has reported record same quarter increases in
revenues and earnings for 57 out of the past 58 quarters.
For the nine months ended December 31, 2004, revenues increased 27%
to $23,651,000 compared to $18,590,000 for the nine months ended
December 31, 2003. Net income for the nine-month period increased
54% to $5,712,000 from $3,721,000 last year. Earnings per share
increased 25% to $0.86 per share compared to $0.69 per share last
year.
During the 3rd quarter, the Company opened its first branch office
in the state of Kentucky. The branch office is located in Florence,
Kentucky.
Founded in 1985, with assets of $114,029,000 as of December 31,
2004, Nicholas Financial, Inc. is one of the largest publicly
traded specialty consumer finance companies based in the Southeast.
The Company presently operates out of 35 branch locations in both
the Southeast and the Mid-West States. The Company has
approximately 6,550,000 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 Nine Months Ended
December 31, December 31,
2004 2003 2004 2003
------------------------------------------
Revenue:
Finance charge
income $ 8,485 $ 6,335 $ 23,496 $ 18,397
Other income 56 50 155 193
-------------------------------------------
8,541 6,385 23,651 18,590
Costs and expenses:
Operating expenses 3,506 2,700 9,930 8,090
Provision for losses 566 633 1,806 1,617
Interest expense 909 950 2,720 2,906
------------------------------------------
4,981 4,283 14,456 12,613
Income before
income taxes 3,560 2,102 9,195 5,977
------------------------------------------
Income tax provision 1,346 796 3,483 2,256
Net income $ 2,214 $ 1,306 $ 5,712 $ 3,721
===========================================
Earnings per share:
Basic $ .34 $ .26 $ .92 $ .74
===========================================
Diluted $ .32 $ .24 $ .86 $ .69
===========================================
Weighted
average shares 6,514,634 5,064,623 6,227,129 5,036,730
===========================================
Weighted average
shares and assumed
dilution 6,929,919 5,438,989 6,629,730 5,395,815
===========================================
Condensed Consolidated Balance Sheets
(Unaudited, Dollars in Thousands)
December 31, March 31,
2004 2004
----------------------------------------
Cash $ 1,494 $ 958
Finance receivables, net 106,989 97,237
Other assets 5,546 5,028
--------- --------
Total assets $114,029 $103,223
========= ========
Line of credit $ 62,208 $ 67,510
Other notes payable 1,552 1,593
Other liabilities 6,460 6,674
--------- ---------
Total liabilities 70,220 75,777
Shareholders' equity 43,809 27,446
--------- ---------
Total liabilities and
Shareholders' equity $114,029 $103,223
========= =========
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Three months ended Nine months ended
December 31, December 31,
Portfolio Summary 2004 2003 2004 2003
--------------------------------------------------------
Average finance receivables,
net of unearned interest(1) $130,157,442 $112,338,303 $127,149,953 $110,248,781
======================================================
Average indebtedness (2) $63,908,352 $66,328,452 $63,564,709 $64,243,278
======================================================
Finance revenue (3) $8,484,354 $6,334,652 $23,495,609 $18,397,452
Interest expense 909,468 950,109 2,719,551 2,905,747
-----------------------------------------------------
Net finance revenue $7,574,886 $5,384,543 $20,776,058 $15,491,708
=====================================================
Weighted average
contractual rate (4) 23.65% 23.85% 23.90% 24.02%
=====================================================
Average cost of
borrowed funds(2) 5.69% 5.73% 5.70% 6.03%
=====================================================
Gross portfolio yield (5) 26.07% 22.56% 24.63% 22.25%
Interest expense as a
percentage of average finance
receivables, net of unearned
interest 2.79% 3.38% 2.85% 3.51%
Provision for credit losses as
a percentage of average finance
receivables, net of unearned
interest 1.74% 2.25% 1.89% 1.96%
-----------------------------------------------------
Net portfolio yield (5) 21.54% 16.93% 19.89% 16.78%
Operating expenses as a
percentage of average finance
receivables, net of unearned
interest (6) 10.60% 9.39% 10.25% 9.51%
-----------------------------------------------------
Pre-tax yield as a percentage
of average finance receivables,
net of unearned interest (7) 10.94% 7.54% 9.64% 7.27%
=====================================================
Write-off to liquidation (8) 7.45% 9.64% 6.99% 9.12%
Net charge-off percentage (9) 6.52% 8.11% 6.03% 7.79%
Note: All three and nine 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
delinquency rates experienced by the Company with respect to
Contracts and under its direct loan program.
At December 31,
2004 2003
-------------------------------------
Contracts
Gross Balance
Outstanding $165,583,890 $143,113,043
Delinquencies
30 to 59 days $3,056,372 1.85% $2,836,531 1.98%
60 to 89 days 706,221 0.43% 805,643 0.56%
90 + days 327,077 0.19% 247,261 0.17%
---------- ----- ---------- -----
Total Delinquencies $4,089,670 2.47% $3,889,435 2.71%
Direct Loans
Gross Balance
Outstanding $5,583,074 $4,536,172
Delinquencies
30 to 59 days $61,980 1.11% $37,451 0.83%
60 to 89 days 16,758 0.30% 33,612 0.74%
90 + days 27,475 0.49% 30,354 0.67%
------- ----- ------- -----
Total Delinquencies $ 106,213 1.90% $ 101,417 2.24%
The amounts shown in the tables below represent the amount of
Contracts purchased, net of unearned interest.
Three months ended Nine months ended
December 31, December 31,
State 2004 2003 2004 2003
------------------------------------------------------------
FL $10,121,741 $8,226,294 $30,643,243 $27,210,545
GA 1,238,711 1,802,773 5,547,869 6,384,776
NC 2,081,482 1,581,909 6,577,416 5,548,857
SC 781,675 664,595 2,847,066 2,144,234
OH 2,064,868 2,267,575 8,635,938 8,453,317
MI 412,137 597,254 2,225,223 1,665,511
VA 1,400,228 438,850 4,270,114 611,901
KY 234,820 - 234,820 -
MD 414,908 - 414,908 -
----------------------------------------------------------
Total $18,750,570 $15,579,250 $61,396,597 $52,019,141
==========================================================
Three months ended Nine months ended
December 31, December 31,
Contracts 2004 2003 2004 2003
--------------------------------------------------------------------
Purchases $18,750,570 $15,579,250 $61,396,597 $52,019,141
Weighted APR 23.65% 23.66% 23.90% 23.88%
Average Discount 8.73% 8.80% 8.72% 8.91%
Average Term(months) 45 43 44 43
Average Loan $8,504 $8,110 $8,382 $8,128
Number of Contracts 2,205 1,921 7,325 6,400
--------------------------------------------------------------------
## End ##