CLEARWATER, Fla., July 30 /PRNewswire-FirstCall/ -- Nicholas
Financial, Inc. (NASDAQ:NICK) announced that for the three months
ended June 30, 2009, net earnings, excluding non-cash unrealized
mark-to-market gain on interest rate swaps increased 34% to
$2,081,000 as compared to $1,558,000 for the three months ended
June 30, 2008. Per share diluted net earnings, excluding non-cash
unrealized mark-to-market gain on interest rate swaps, increased
33% to $0.20 for the three months ended June 30, 2009 as compared
to $0.15 for the three months ended June 30, 2008. See
reconciliations of the non-GAAP measures on page 2. Revenue
increased 4% to $13,694,000 for the three months ended June 30,
2009 as compared to $13,119,000 for the three months ended June 30,
2008. According to Peter L. Vosotas, Chairman and CEO, "We are
pleased with our solid first quarter results. We concentrated on
basic careful lending and collecting fundamentals and will continue
to do so. Our results were favorably impacted by a reduction in the
net charge-off rate, lower operating expenses as a percentage of
average net receivables and a reduction in the cost of borrowed
funds. While we remain cautious, we are encouraged that the economy
is showing some signs of stability and we feel comfortable
proceeding with our planned expansion. This expansion will include
new branch locations in Akron, Ohio and in Gastonia, North
Carolina, which will bring our number of branch locations to 50 in
12 states. The Company remains open to acquisitions should an
opportunity present itself," added Vosotas. Nicholas Financial,
Inc. is one of the largest publicly traded specialty consumer
finance companies based in the Southeast. The Company presently
operates out of 48 branch locations in both the Southeast and the
Mid-West States. The Company has approximately 10,500,000 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 http://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, 2009. 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. This press release contains disclosures of non-GAAP
financial measures including: net earnings, excluding non-cash
unrealized mark-to-market gain on interest rate swaps and per share
diluted net earnings, excluding non-cash unrealized mark-to-market
gain on interest rate swaps. These measures utilize the GAAP terms
"net income" and "diluted earnings per share" and adjust the GAAP
terms to exclude the effect of mark to market adjustments and
reclassifications of previously recorded accumulated comprehensive
losses associated with interest rate swaps. Management believes
this presentation provides additional and meaningful measures for
the assessment of the Company's ongoing results and performance.
Because the Company has historically reported mark-to-market
(interest rate swaps) through other comprehensive income under
hedge accounting, management believes that the inclusion of this
non-GAAP measure provides consistency in its financial reporting
and facilitates investors' understanding of the Company's historic
operating trends by providing an additional basis for comparisons
to prior periods. Management recognizes that the use of non-GAAP
measures has limitations, including the fact that they may not be
directly comparable with similar non-GAAP financial measures used
by other companies. All non-GAAP financial measures are intended to
supplement the applicable GAAP disclosures and should not be
considered in isolation from, or as substitute for, financial
information prepared in accordance with GAAP. For a reconciliation
of non-GAAP measures from GAAP reported amounts, please see the
supplemental information included with this press release. Nicholas
Financial, Inc. Reconciliation of Non-GAAP Financial Measures
(Unaudited) The following tables include reconciliations of GAAP
reported net income to the non-GAAP measure, net earnings,
excluding non-cash unrealized mark-to-market gain on interest rate
swaps as well as GAAP reported diluted earnings per share to the
non-GAAP measure, per share diluted net earnings, excluding
non-cash unrealized mark-to-market gain on interest rate swaps. The
non-GAAP measures exclude the effect of mark-to-market adjustments
and reclassifications of previously recorded accumulated
comprehensive losses associated with interest rate swaps. Three
months ended June 30, 2009 2008 ---- ---- Net income, GAAP
$2,263,899 $1,557,693 Mark-to-market gain on interest rate swaps,
net of tax expense of $114,441 (182,863) - ---------- ----------
Net earnings, excluding non-cash unrealized mark-to-market gain on
interest rate swaps (a) $2,081,036 $1,557,693 ========== ==========
Three months ended June 30, 2009 2008 ---- ---- Diluted earnings
per share, GAAP $0.22 $0.15 Per diluted share mark-to-market gain
on interest rate swaps $(0.02) $ - ----- ----- Per share diluted
net earnings, excluding non-cash unrealized mark-to-market gain on
interest rate swaps (a) $0.20 $0.15 ===== ===== (a) Represents a
non-GAAP financial measure. See information on non-GAAP financial
measures above. Nicholas Financial, Inc. Condensed Consolidated
Statements of Income (Unaudited, Dollars in Thousands, Except Per
Share Amounts) Three months ended June 30, 2009 2008 ---- ----
Revenue: Interest and fee income on finance receivables $13,673
$13,104 Sales 21 15 ------ ------ 13,694 13,119 Expenses: Operating
5,714 5,849 Provision for credit losses 3,323 3,402 Interest
expense 1,273 1,409 Unrealized mark to market gain on interest rate
swaps (297) - ------ ------ 10,013 10,660 Operating income before
income taxes 3,681 2,459 Income tax expense 1,417 901 ----- -----
Net income $2,264 $1,558 ====== ====== Earnings per share: Basic
$0.22 $0.15 ===== ===== Diluted $0.22 $0.15 ===== ===== Weighted
average shares 10,364,000 10,187,000 ========== ========== Weighted
average shares and assumed dilution 10,505,000 10,393,000
========== ========== Condensed Consolidated Balance Sheets
(Unaudited, In Thousands) June 30, March 31, 2009 2009 ---- ----
Cash $1,931 $1,733 Finance receivables, net 192,076 186,694 Other
assets 9,554 9,355 -------- -------- Total assets $203,561 $197,782
======== ======== Line of credit $103,961 $102,030 Other
liabilities 12,025 10,734 -------- -------- Total liabilities
115,986 112,764 Shareholders' equity 87,575 85,018 ------ ------
Total liabilities and shareholders' equity $203,561 $197,782
======== ======== Three months ended June 30, Portfolio Summary
2009 2008 ----------------- ---- ---- Average finance receivables,
net of unearned interest (1) $215,721,582 $203,328,823 ============
============ Average indebtedness (2) $102,991,423 $101,856,230
============ ============ Finance revenue (3) $13,673,272
$13,103,966 Interest expense 1,272,677 1,409,336 ---------
--------- Net finance revenue $12,400,595 $11,694,630 ===========
=========== Weighted average contractual rate (4) 23.93% 24.28%
===== ===== Average cost of borrowed funds (2) 4.94% 5.53% ====
==== Gross portfolio yield (5) 25.35% 25.78% Interest expense as a
percentage of average finance receivables, net of unearned interest
2.36% 2.77% Provision for credit losses as a percentage of average
finance receivables, net of unearned interest 6.16% 6.69% ==== ====
Net portfolio yield (5) 16.83% 16.32% Marketing, salaries, employee
benefits, depreciation and administrative expenses as a percentage
of average finance receivables, net of unearned interest (6) 10.49%
11.10% ----- ----- Pre-tax yield as a percentage of average finance
receivables, net of unearned interest (7) 6.34% 5.22% ==== ====
Write-off to liquidation (8) 10.80% 11.24% Net charge-off
percentage (9) 7.72% 9.39% Note: All three 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) 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) Administrative expenses included in the
calculation above are net of administrative expenses associated
with NDS which approximated $52,000 and $202,000 during the
three-month periods ended June 30, 2009 and 2008, respectively. (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. The following tables present certain
information regarding the delinquency rates experienced by the
Company with respect to Contracts and under its direct loan
program: June 30, 2009 2008 ---- ---- Contracts --------- Gross
balance outstanding $301,549,799 $282,828,447 ============
============ Delinquencies ------------- 30 to 59 days $9,603,430
3.18% $7,066,773 2.50% 60 to 89 days 3,739,568 1.24% 2,734,258
0.97% 90 + days 1,080,901 0.36% 1,106,775 0.39% --------- ----
--------- ---- Total delinquencies $14,423,899 4.78% $10,907,806
3.86% =========== ==== =========== ==== Direct Loans ------------
Gross balance outstanding $6,311,182 $9,275,896 ==========
========== Delinquencies 30 to 59 days $137,623 2.18% $123,548
1.33% 60 to 89 days 103,786 1.64% 61,820 0.67% 90 + days 37,232
0.59% 44,009 0.47% ------ ---- ------ ---- Total delinquencies
$278,641 4.41% $229,377 2.47% ======== ==== ======== ==== The
following table presents selected information on Contracts
purchased by the Company, net of unearned interest: Three months
ended June 30, Contracts 2009 2008 --------- ---- ---- Purchases
$30,089,267 $33,324,451 Weighted APR 23.83% 24.19% Average discount
9.29% 8.87% Weighted average term (months) 49 49 Average loan
$9,444 $9,554 Number of contracts 3,186 3,488 -------------------
----- ----- DATASOURCE: Nicholas Financial, Inc. CONTACT: Ralph
Finkenbrink, Sr. Vice President, CFO, Nicholas Financial, Inc.,
+1-727-726-0763 Web Site: http://www.nicholasfinancial.com/
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