Exhibit 34
Nicholas Financial, Inc.
Corporate Headquarters
Corporate Headquarters
2454 McMullen-Booth Rd.
Building C, Suite 501
Clearwater, FL 33759
Building C, Suite 501
Clearwater, FL 33759
| Contact: | Ralph Finkenbrink Sr. Vice President, CFO www.nicholasfinancial.com Ph # - 727-726-0763 |
FOR IMMEDIATE RELEASE
NASDAQ: NICK
Web site:
Web site:
Nicholas Financial Reports Record 2nd Quarter Results
October 20, 2005 -Nicholas Financial, Inc., (NASDAQ: NICK) announced that net income increased 34% to $2,509,000 for the three months ended September 30, 2005 as compared to $1,866,000 for the three months ended September 30, 2004. Diluted earnings per share increased 33% to $0.24 for the three months ended September 30, 2005 as compared to $0.18 for the three months ended September 30, 2004. Revenue increased 31% to $10,239,000 for the three months ended September 30, 2005 as compared to $7,833,000 for the three months ended September 30, 2004. The Company has reported record same quarter increases in revenues and earnings for 61 out of the past 62 quarters.
Net income increased 40% to $4,903,000 for the six months ended September 30, 2005 as compared to $3,498,000 for the six months ended September 30, 2004. Diluted earnings per share increased 31% to $0.47 for the six months ended September 30, 2005 as compared to $0.36 for the six months ended September 30, 2004. Revenue increased 28% to $19,399,000 for the six months ended September 30, 2005 as compared to $15,110,000 for the six months ended September 30, 2004.
Founded in 1985, with assets of $134,625,000 as of September 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 40 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 atwww.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.
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Nicholas Financial, Inc.
Condensed Consolidated Statements of Income
(Unaudited, Dollars in Thousands, Except Per Share Amounts)
Condensed Consolidated Statements of Income
(Unaudited, Dollars in Thousands, Except Per Share Amounts)
| Three months ended | Six months ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2005 | 2004 | 2005 | 2004 | |||||||||||||
| Revenue: | ||||||||||||||||
| Interest income on finance receivables | $ | 10,198 | $ | 7,797 | $ | 19,308 | $ | 15,011 | ||||||||
| Sales | 41 | 36 | 91 | 99 | ||||||||||||
| 10,239 | 7,833 | 19,399 | 15,110 | |||||||||||||
| Costs and expenses: | ||||||||||||||||
| Expenses | 4,295 | 3,269 | 8,191 | 6,426 | ||||||||||||
| Provision for credit losses | 832 | 659 | 1,260 | 1,240 | ||||||||||||
| Interest expense | 1,058 | 895 | 2,039 | 1,810 | ||||||||||||
| 6,185 | 4,823 | 11,490 | 9,476 | |||||||||||||
| Operating income before income taxes | 4,054 | 3,010 | 7,909 | 5,634 | ||||||||||||
| Income tax expense | 1,545 | 1,144 | 3,006 | 2,136 | ||||||||||||
| Net income | $ | 2,509 | $ | 1,866 | $ | 4,903 | $ | 3,498 | ||||||||
| Earnings per share: | ||||||||||||||||
| Basic | $ | .25 | $ | .19 | $ | .50 | $ | .38 | ||||||||
| Diluted | $ | .24 | $ | .18 | $ | .47 | $ | .36 | ||||||||
| Weighted average shares | 9,871,183 | 9,736,714 | 9,861,474 | 9,123,888 | ||||||||||||
| Weighted average shares and assumed dilution | 10,466,611 | 10,315,108 | 10,465,003 | 9,709,086 | ||||||||||||
(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)
(Unaudited, Dollars in Thousands)
| September 30, | March 31, | |||||||
| 2005 | 2005 | |||||||
| Cash | $ | 1,242 | $ | 853 | ||||
| Finance receivables, net | 126,141 | 113,708 | ||||||
| Other assets | 7,242 | 6,254 | ||||||
| Total assets | $ | 134,625 | $ | 120,815 | ||||
| Line of credit | $ | 74,154 | $ | 65,331 | ||||
| Other notes payable | 600 | 1,000 | ||||||
| Other liabilities | 7,994 | 7,726 | ||||||
| Total liabilities | 82,748 | 74,057 | ||||||
| Shareholders’ equity | 51,877 | 46,758 | ||||||
| Total liabilities and shareholders’ equity | $ | 134,625 | $ | 120,815 | ||||
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| Three months ended | Six months ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| Portfolio Summary | 2005 | 2004 | 2005 | 2004 | ||||||||||||
| Average finance receivables, net of unearned interest (1) | $ | 146,973,291 | $ | 128,266,971 | $ | 144,471,462 | $ | 125,646,208 | ||||||||
| Average indebtedness (2) | $ | 71,747,445 | $ | 63,070,954 | $ | 69,843,069 | $ | 63,392,887 | ||||||||
| Finance revenue (3) | $ | 10,197,903 | $ | 7,796,997 | $ | 19,307,604 | $ | 15,011,255 | ||||||||
| Interest expense | 1,058,479 | 894,764 | 2,039,032 | 1,810,084 | ||||||||||||
| Net finance revenue | $ | 9,139,424 | $ | 6,902,233 | $ | 17,268,572 | $ | 13,201,171 | ||||||||
| Weighted average contractual rate (4) | 23.92 | % | 24.06 | % | 24.02 | % | 24.17 | % | ||||||||
| Average cost of borrowed funds (2) | 5.90 | % | 5.67 | % | 5.84 | % | 5.71 | % | ||||||||
| Gross portfolio yield (5) | 27.75 | % | 24.31 | % | 26.73 | % | 23.89 | % | ||||||||
| Interest expense as a percentage of average finance receivables, net of unearned interest | 2.88 | % | 2.79 | % | 2.82 | % | 2.88 | % | ||||||||
| Provision for credit losses as a percentage of average finance receivables, net of unearned interest | 2.26 | % | 2.06 | % | 1.74 | % | 1.97 | % | ||||||||
| Net portfolio yield (5) | 22.61 | % | 19.46 | % | 22.17 | % | 19.04 | % | ||||||||
| Operating expenses as a percentage of average finance receivables, net of unearned interest (6) | 11.46 | % | 9.96 | % | 11.10 | % | 10.00 | % | ||||||||
| Pre-tax yield as a percentage of average finance receivables, net of unearned interest (7) | 11.15 | % | 9.50 | % | 11.07 | % | 9.04 | % | ||||||||
| Write-off to liquidation (8) | 6.48 | % | 7.99 | % | 5.77 | % | 6.75 | % | ||||||||
| Net charge-off percentage (9) | 5.83 | % | 6.85 | % | 5.13 | % | 5.77 | % | ||||||||
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 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 September 30, | ||||||||||||||||
| 2005 | 2004 | |||||||||||||||
Contracts | ||||||||||||||||
| Gross Balance Outstanding | $ | 194,489,189 | $ | 164,289,883 | ||||||||||||
Delinquencies | ||||||||||||||||
| 30 to 59 days | $ | 2,793,371 | 1.44 | % | $ | 2,866,168 | 1.75 | % | ||||||||
| 60 to 89 days | 707,902 | 0.36 | % | 801,212 | 0.49 | % | ||||||||||
| 90 + days | 375,156 | 0.19 | % | 253,180 | 0.15 | % | ||||||||||
| Total Delinquencies | $ | 3,876,429 | 1.99 | % | $ | 3,920,560 | 2.39 | % | ||||||||
Direct Loans | ||||||||||||||||
| Gross Balance Outstanding | $ | 7,077,542 | $ | 5,138,518 | ||||||||||||
| Delinquencies | ||||||||||||||||
| 30 to 59 days | $ | 42,556 | 0.60 | % | $ | 39,728 | 0.77 | % | ||||||||
| 60 to 89 days | 21,067 | 0.30 | % | 33,915 | 0.66 | % | ||||||||||
| 90 + days | 28,138 | 0.40 | % | 27,475 | 0.54 | % | ||||||||||
| Total Delinquencies | $ | 91,761 | 1.30 | % | $ | 101,118 | 1.97 | % | ||||||||
The following table presents selected information on Contracts purchased by the Company,
net of unearned interest:
net of unearned interest:
| Three months ended | Six months ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| Contracts | 2005 | 2004 | 2005 | 2004 | ||||||||||||
| Purchases | $ | 28,065,448 | $ | 20,246,708 | $ | 51,487,410 | $ | 42,646,027 | ||||||||
| Weighted APR | 23.79 | % | 23.91 | % | 23.88 | % | 24.01 | % | ||||||||
| Average Discount | 8.71 | % | 8.67 | % | 8.63 | % | 8.71 | % | ||||||||
| Weighted Average Term (months) | 46 | 44 | 45 | 44 | ||||||||||||
| Average Loan | $ | 8,884 | $ | 8,391 | $ | 8,801 | $ | 8,329 | ||||||||
| Number of Contracts | 3,159 | 2,413 | 5,850 | 5,120 | ||||||||||||
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