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) October 21, 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 2.02 Results of Operations and Financial Condition
Clearwater, Florida, - October 21, 2004: Nicholas Financial,
Inc. (NASDAQ, NICK), today announced record revenues, net
income and earnings per share for the three months ended
September 30, 2004. Revenues for the second quarter ended
September 30, 2004 increased 27% to $7,833,000 compared to
$6,145,000 for the period ended September 30, 2003. Net
income for the quarter increased 49% to $1,866,000 from
$1,249,000. Diluted earnings per share for the quarter
increased 17% to $0.27 per share from $0.23 per share last
year. The Company has reported record same quarter increases
in revenues and earnings for 56 out of the past 57 quarters.
Item 9.01 Financial Statements and Exhibits
Exhibit # Description
9 Press release dated October 21, 2004, announcing
record earnings for the second quarter ended
September 30, 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: October 21, 2004 /s/ Peter L. Vosotas
Peter L. Vosotas
Chairman, President,
Chief Executive Officer
(Principal Executive Officer)
Date: October 21, 2004 /s/ Ralph T. Finkenbrink
Ralph T. Finkenbrink
(Principal Financial Officer
and Accounting Officer)
4
Exhibit Index
Exhibit Description
9 Press release dated October 21, 2004, announcing
record earnings for the second quarter ended
September 30, 2004.
5
Exhibit 9
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 2nd Quarter Results
Clearwater, Florida, - October 21, 2004: Nicholas Financial,
Inc. (NASDAQ, NICK), today announced record revenues, net
income and earnings per share for the three months ended
September 30, 2004. Revenues for the second quarter ended
September 30, 2004 increased 27% to $7,833,000 compared to
$6,145,000 for the period ended September 30, 2003. Net
income for the quarter increased 49% to $1,866,000 from
$1,249,000. Diluted earnings per share for the quarter
increased 17% to $0.27 per share from $0.23 per share last
year. The Company has reported record same quarter increases
in revenues and earnings for 56 out of the past 57 quarters.
For the six months ended September 30, 2004, revenues
increased 24% to $15,110,000 compared to $12,205,000 for the
six months ended September 30, 2003. Net income for the six-
month period increased 45% to $3,498,000 from $2,415,000.
Diluted earnings per share increased 20% to $0.54 per share
compared to $0.45 per share last year.
Founded in 1985, with assets of $112,578,000 as of September
30, 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 34
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.
## More ##
6
Nicholas Financial, Inc.
Consolidated Income Statements
(Unaudited, Dollars in Thousands, Except Per Share Amounts)
Three Months Ended Six Months Ended
September 30, September 30,
2004 2003 2004 2003
----------------------------------------------
Revenue:
Finance charge income $ 7,797 $ 6,074 $ 15,011 $12,063
Other income 36 71 99 142
------- ------- ------- -------
7,833 6,145 15,110 12,205
Costs and expenses:
Operating expenses 3,269 2,777 6,426 5,390
Provision for losses 659 404 1,240 984
Interest expense 895 968 1,810 1,956
------ ------ ------ ------
4,823 4,149 9,476 8,330
Income before
income taxes 3,010 1,996 5,634 3,875
Income tax provision 1,144 747 2,136 1,460
------ ----- ------ ------
Net income $1,866 $1,249 $3,498 $2,415
====== ====== ======= ======
Earnings per share:
Basic $.29 $.25 $.58 $.48
====================================
Diluted $.27 $.23 $.54 $.45
====================================
Weighted average
shares 6,491,142 5,038,318 6,082,592 5,022,622
========================================
Weighted average
shares and
assumed dilution 6,876,739 5,405,176 6,472,724 5,352,817
========================================
Condensed Consolidated Balance Sheets
(Unaudited, Dollars in Thousands)
September 30, March 31,
2004 2004
-------------------------------
Cash $ 1,685 $ 958
Finance receivables, net 105,146 97,237
Other assets 5,747 5,028
---------- --------
Total assets $112,578 $103,223
Line of credit $ 63,540 $ 67,510
Other notes payable 1,001 1,593
Other liabilities 7,038 6,674
--------- --------
Total liabilities 71,579 75,777
Shareholders' equity 40,999 27,446
-------- -------
Total liabilities and
Shareholders' equity $112,578 $103,223
======== ========
## More ##
7
Three months ended Six months ended
September 30, September 30,
Portfolio Summary 2004 2003 2004 2003
--------------------------------------------------------
Average finance receivables,
net of unearned interest (1) 128,266, 971 111,195,574 125,646,208 109,204,020
===================================================
Average indebtedness (2) 63,070,954 64,162,081 63,392,887 63,200,691
===================================================
Finance revenue (3) 7,796,997 6,074,326 15,011,255 12,062,800
Interest expense 894,764 968,310 1,810,084 1,955,638
--------------------------------------------------
Net finance revenue 6,902,233 5,106,016 13,201,171 10,107,162
==================================================
Weighted average contractual
rate (4) 24.06% 24.13% 24.17% 24.10%
=============================================
Average cost of borrowed
funds (2) 5.67% 6.04% 5.71% 6.19%
=============================================
Gross portfolio yield (5) 24.31% 21.85% 23.89% 22.09%
Interest expense as a
percentage of average finance
receivables, net of unearned
interest 2.79% 3.48% 2.88% 3.58%
Provision for credit losses as
a percentage of average finance
receivables, net of unearned
interest 2.06% 1.45% 1.97% 1.80%
---------------------------------------------
Net portfolio yield (5) 19.46% 16.92% 19.04% 16.71%
Operating expenses as a
percentage of average finance
receivables, net of unearned
interest (6) 9.96% 9.71% 10.00% 9.57%
---------------------------------------------
Pre-tax yield as a percentage
of average finance receivables,
net of unearned interest (7) 9.51% 7.21% 9.04% 7.14%
=============================================
Write-off to liquidation (8) 7.99% 9.89% 6.75% 8.85%
=============================================
Net charge-off percentage (9) 6.85% 8.58% 5.77% 7.63%
=============================================
(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 and six months ended September 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 and six month key performance indicators
expressed as percentages have been annualized.
# More #
8
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,
2004 2003
-----------------------------------
Contracts
Gross Balance Outstanding $164,289,883 $142,611,322
Delinquencies
30 to 59 days $2,866,168 1.74% $2,554,310 1.79%
60 to 89 days 801,212 0.49% 921,969 0.65%
90 + days 253,180 0.15% 269,734 0.19%
---------- ----- ---------- -----
Total Delinquencies $3,920,560 2.38% $3,746,013 2.63%
Direct Loans
Gross Balance Outstanding $ 5,138,519 $4,378,131
Delinquencies
30 to 59 days $ 39,728 0.77% $ 67,549 1.54%
60 to 89 days 33,915 0.66% 15,716 0.36%
90 + days 27,475 0.54% 47,737 1.09%
--------- ----- -------- -----
Total Delinquencies $ 101,118 1.97% $ 131,002 2.99%
The amounts shown in the table below represent the amount of
finance receivables purchased, net of unearned interest.
Three months ended Six months ended
September 30, September 30,
State 2004 2003 2004 2003
------------------------------------------------------------
FL $9,500,663 $9,077,354 $20,521,502 $19,125,752
GA 1,798,615 2,263,364 4,309,158 4,570,548
NC 2,342,704 1,998,984 4,495,934 3,969,578
SC 930,773 743,924 2,065,391 1,479,639
OH 3,319,862 3,109,399 6,571,070 6,214,025
MI 861,955 612,723 1,813,086 1,068,257
VA 1,492,136 184,573 2,869,886 201,613
----------------------------------------------------------
Total $20,246,708 $17,990,321 $42,646,027 $36,629,412
==========================================================
## More ##
9
The following table represents information on Contracts
purchased by the Company, net of unearned interest:
Three months ended Six months ended
September 30, September 30,
Contracts 2004 2003 2004 2003
-------------------------------------------------------------------
Purchases $20,246,708 $17,990,321 $42,646,027 $36,629,412
Weighted APR 23.91% 24.00% 24.01% 23.96%
Average Discount 8.67% 8.95% 8.71% 8.95%
Average Term(months) 44 43 44 44
Average Loan $8,391 $8,082 $8,329 $8,138
Number of Contracts 2,413 2,226 5,120 4,501
## End ##