Nicholas Financial Reports 2nd Quarter Results

Nicholas Financial Reports 2nd Quarter Results

CLEARWATER, Fla., Oct. 31, 2013 (GLOBE NEWSWIRE) -- Nicholas Financial, Inc.
(Nasdaq:NICK) announced that for the three months ended September 30, 2013 net
earnings decreased 16% to $4,317,000 as compared to $5,150,000 for the three
months ended September 30, 2012. Per share diluted net earnings decreased 17%
to $0.35 as compared to $0.42 for the three months ended September 30, 2012.
Revenue increased 1% to $20,949,000 for the three months ended September 30,
2012 as compared to $20,705,000 for the three months ended September 30, 2012.

For the six months ended September 30, 2013 net earnings decreased 5% to
$10,017,000 as compared to $10,558,000 for the six months ended September 30,
2012. Per share diluted net earnings decreased 6% to $0.82 as compared to
$0.87 for the six months ended September 30, 2012. Revenue increased 1% to
$41,425,000 for the six months ended September 30, 2013 as compared to
$41,133,000 for the six months ended September 30, 2012.

"Our results for the three months ended September 30, 2013 were adversely
affected by a non-cash charge related to the change in fair value of interest
rate swap agreements, an increase in operating expenses as a percentage of
finance receivables, net, and an increase in the net charge-off rate," stated
Peter L. Vosotas, Chairman and CEO. "We continue to develop additional markets
and expect to open between 1-3 new branch locations during the remainder of
our current fiscal year, which ends March 31, 2014."

Nicholas Financial, Inc. is one of the largest publically traded specialty
consumer finance companies in North America. The Company operates branch
locations in both the Southeastern and the Midwestern states. The Company has
approximately 12,200,000 shares of common stock outstanding. For an index of
Nicholas Financial, Inc. news releases and public filings please 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 general economic conditions, access to bank financing,
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, 2013. 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.


Nicholas Financial, Inc.
Condensed Consolidated Statements of Income
(Unaudited, Dollars in Thousands, Except Share and Per Share Amounts)
                                                                
                                                                
                                  Three months ended   Six months ended
                                  September 30,         September 30,
                                  2013       2012       2013       2012
Revenue:                                                         
Interest and fee income on finance $20,943    $20,696    $41,413    $41,114
receivables
Sales                              6          9          12         19
                                  20,949     20,705     41,425     41,133
Expenses:                                                        
Operating                          8,080      7,330      16,077     14,465
Provision for credit losses        3,973      3,262      6,615      6,365
Interest expense                   1,443      1,250      2,848      2,442
Change in fair value of interest   250        474        -583       683
rate swap agreements
                                  13,746     12,316     24,957     23,955
                                                                
Operating income before income     7,203      8,389      16,468     17,178
taxes
Income tax expense                 2,886      3,238      6,451      6,620
Net income                         $4,317     $5,150     $10,017    $10,558
                                                                
Earnings per share:                                              
Basic                              $0.36      $0.43      $0.83      $0.88
Diluted                            $0.35      $0.42      $0.82      $0.87
                                                                
Weighted average shares            12,092,000 11,964,000 12,079,000 11,956,000
                                                                
Weighted average shares and        12,315,000 12,182,000 12,274,000 12,189,000
assumed dilution


Condensed Consolidated Balance Sheets
(Unaudited, In Thousands)
                                                       
                                          September 30, March 31,
                                          2013          2013
Cash                                       $4,474        $2,798
Finance receivables, net                   260,494       249,826
Other assets                               11,634        11,211
                                                       
Total assets                               $276,602      $263,835
                                                       
Line of credit                             $131,000      $125,500
Other liabilities                          10,855        11,370
                                                       
Total liabilities                          141,855       136,870
                                                       
Shareholders' equity                       134,747       126,965
                                                       
Total liabilities and shareholders' equity $276,602      $263,835

                                              
                   Three months ended          Six months ended
                   September 30,               September 30,
Portfolio Summary   2013          2012          2013          2012
Average finance
receivables, net of $290,071,860  $282,424,703  $287,854,928  $281,087,493
unearned interest
(1)
Average             $125,880,390  $109,000,000  $127,067,884  $109,875,000
indebtedness (2)
Interest and fee
income on finance   $20,943,161   $20,696,241   $41,412,533   $41,114,198
receivables (3)*
Interest expense    1,442,898     1,250,231     2,847,804     2,442,371
Net interest and
fee income on       $19,500,263   $19,446,010   $38,564,729   $38,671,827
finance
receivables*
Weighted average
contractual rate    23.30%        23.48%        23.14%        23.64%
(4)
Average cost of     4.58%         4.59%         4.48%         4.45%
borrowed funds (2)
Gross portfolio     28.88%        29.31%        28.77%        29.25%
yield (5)*
Interest expense as
a percentage of
average finance     1.99%         1.77%         1.98%         1.74%
receivables, net of
unearned interest
Provision for
credit losses as a
percentage of       5.48%         4.62%         4.60%         4.53%
average finance
receivables, net of
unearned interest*
Net portfolio yield 21.41%        22.92%        22.19%        22.98%
(5)*
Marketing,
salaries, employee
benefits,
depreciation and
administrative
expenses as a       11.07%        10.31%        11.10%        10.20%
percentage of
average finance
receivables, net of
unearned interest
(6)
Pre-tax yield as a
percentage of
average finance     10.34%        12.61%        11.09%        12.78%
receivables, net of
unearned interest
(7)*
Write-off to        8.19%         7.54%         7.05%         6.25%
liquidation (8)
Net charge-off      7.10%         6.39%         6.13%         5.23%
percentage (9)
                                                          
Note: All three and six 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) Interest and fee income on finance receivables 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 automobile finance installment          
contracts purchased and direct consumer loans originated during the
period.
(5) Gross portfolio yield represents interest and fee income on finance
receivables as a percentage of average finance receivables, net of unearned
interest. Net portfolio yield represents interest and fee income on finance
receivables minus (a) interest expense and (b) the provision for credit
losses as a percentage of average finance receivables, net of unearned
interest.
(6) Administrative expenses included in the calculation above are net of
administrative expenses associated with NDS which approximated $48,000 and
$50,000 during the three-month periods ended September 30, 2013 and 2012
and $103,000 and $117,000 during the six-month periods ended September 30,
2013 and 2012, respectively.
(7) Pre-tax yield represents net portfolio yield minus administrative
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 and 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.
* The amounts for the three and six months periods ended September 30, 2012
have been revised as discussed in Note 2 to the consolidated financial
statements.

The following tables present certain information regarding the delinquency
rates experienced by the Company with respect to automobile finance
installment contracts ("Contracts") and direct consumer loans ("Direct
Loans"): 

                                        
                                        Delinquencies
Contracts       Gross Balance 31 – 60 days 61 – 90 days 90 + days  Total
                Outstanding
September 30,   $400,057,098  $15,756,362  $3,239,528   $3,767,037 $22,762,927
2013
                            3.94%        0.81%        0.94%      5.69%
September 30,   $388,783,924  $15,310,139  $3,879,087   $1,739,015 $20,928,241
2012
                            3.94%        1.00%        0.44%      5.38%
Direct Loans    Gross Balance 31 – 60 days 61 – 90 days 90 + days  Total
                Outstanding
September 30,   $10,623,932   $104,983     $37,604      $30,877    $173,464
2013
                            0.99%        0.35%        0.29%      1.63%
September 30,   $8,075,902    $94,770      $6,822       $11,024    $112,616
2012
                            1.17%        0.08%        0.14%      1.39%

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

                                                     
                              Three months ended      Six months ended
                              September 30,           September 30,
Contracts                      2013        2012        2013        2012
Purchases                      $41,958,515 $39,244,000 $83,841,229 $76,475,932
Weighted APR                   23.05%      23.31%      22.93%      23.48%
Average discount               8.51%       8.14%       8.43%       8.57%
Weighted average term (months) 52          49          52          49
Average loan                   $10,685     $10,352     $10,664     $10,136
Number of contracts            3,927       3,791       7,862       7,545

CONTACT: Ralph Finkenbrink
         Sr. Vice President, CFO
         Ph # 727-726-0763

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