EX-34 2 v041352_ex34.htm
Exhibit 34

   
FOR IMMEDIATE RELEASE
Nicholas
     
 
Contact:  
Ralph Finkenbrink
NASDAQ: NICK

Nicholas Financial, Inc.
Corporate Headquarters

2454 McMullen-Booth Rd.
Building C, Suite 501
Clearwater, FL 33759
 
Sr. Vice President, CFO
Ph # - 727-726-0763
Web site: www.nicholasfinancial.com

Nicholas Financial Reports Record Results for the
4th Quarter & Year Ended March 31, 2006
 
April 26, 2006 - Clearwater, Florida - Nicholas Financial, Inc. (NASDAQ: NICK), announced that net income increased 24% to $2,938,000 for the three months ended March 31, 2006 as compared to $2,368,000 for the three months ended March 31, 2005. Diluted earnings per share increased 22% to $0.28 for the three months ended March 31, 2006 as compared to $0.23 for the three months ended March 31, 2005. Revenue increased 33% to $12,170,000 for the three months ended March 31, 2006 as compared to $9,181,000 for the three months ended March 31, 2005.

Net income increased 31% to $10,559,000 for the year ended March 31, 2006 as compared to $8,080,000 for the year ended March 31, 2005. Diluted earnings per share increased 26% to $1.01 for the year ended March 31, 2006 as compared to $0.80 for the year ended March 31, 2005. Revenue increased 30% to $42,677,000 for the year ended March 31, 2006 as compared to $32,832,000 for the year ended March 31, 2005. 

The Company has reported record increases in revenues, net income and earnings per share every year for the past 16 years.

In the past year, the Company opened 7 new branch offices bringing the total to 42 full service locations operating in; Florida, Georgia, South Carolina, North Carolina, Virginia, Maryland, Ohio, Michigan, Indiana and Kentucky. The Company expects to open 6 to 8 additional new branch offices during this year.

Founded in 1985, with assets of $149,495,000 as of March 31, 2006, Nicholas Financial, Inc. is one of the largest publicly traded specialty consumer finance companies based in the Southeast. The Company presently operates out of 42 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 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, 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)


   
Three months ended
March 31,
 
Year ended
March 31,
 
   
 2006
 
 2005
 
 2006
 
 2005
 
Revenue:
                         
Interest income on finance receivables
 
$
12,130
 
$
9,087
 
$
42,503
 
$
32,583
 
Sales
   
40
   
94
   
174
   
249
 
     
12,170
   
9,181
   
42,677
   
32,832
 
Expenses:
                         
Operating
   
4,779
   
3,761
   
17,396
   
13,692
 
Provision for credit losses
   
1,477
   
591
   
3,909
   
2,397
 
Interest expense
   
1,171
   
911
   
4,332
   
3,630
 
     
7,427
   
5,263
   
25,637
   
19,719
 
                           
Operating income before income taxes
   
4,743
   
3,918
   
17,040
   
13,113
 
Income tax expense
   
1,805
   
1,550
   
6,481
   
5,033
 
Net income
 
$
2,938
 
$
2,368
 
$
10,559
 
$
8,080
 
                           
Earnings per share:
                         
Basic
 
$
0.30
 
$
0.24
 
$
1.07
 
$
0.85
 
Diluted
 
$
0.28
 
$
0.23
 
$
1.01
 
$
0.80
 
                           
Weighted average shares
   
9,894,472
   
9,835,170
   
9,873,237
   
9,462,620
 
                           
Weighted average shares and assumed dilution
   
10,488,415
   
10,459,810
   
10,474,291
   
10,082,694
 
 
(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)
 
   
March 31,
 
March 31,
 
   
2006
 
2005
 
           
Cash
 
$
1,729
 
$
853
 
Finance receivables, net
   
140,198
   
113,708
 
Other assets
   
7,568
   
6,254
 
               
Total assets
 
$
149,495
 
$
120,815
 
               
Line of credit
 
$
82,416
 
$
65,331
 
Other notes payable
   
-
   
1,000
 
Other liabilities
   
8,830
   
7,726
 
               
Total liabilities
   
91,246
   
74,057
 
               
Shareholders' equity
   
58,249
   
46,758
 
               
Total liabilities and
             
shareholders’ equity
 
$
149,495
 
$
120,815
 

## More ##


   
Three months ended
 
Year ended
 
   
March 31,
 
March 31,
 
Portfolio Summary
 
2006
 
2005
 
2006
 
2005
 
                           
Average finance receivables, net of unearned interest (1)
 
$
158,955,951
 
$
135,721,213
 
$
149,634,203
 
$
129,292,768
 
Average indebtedness (2)
 
$
80,160,083
 
$
64,093,923
 
$
73,664,722
 
$
63,697,012
 
Finance revenue (3)
 
$
12,129,940
 
$
9,087,356
 
$
42,502,615
 
$
32,582,965
 
Interest expense
   
1,171,024
   
910,716
   
4,332,414
   
3,630,267
 
Net finance revenue
 
$
10,958,916
 
$
8,176,640
 
$
38,170,201
 
$
28,952,698
 
Weighted average contractual rate (4)
   
24.45
%
 
24.39
%
 
24.14
%
 
24.15
%
Average cost of borrowed funds (2)
   
5.84
%
 
5.68
%
 
5.88
%
 
5.70
%
Gross portfolio yield (5)
   
30.52
%
 
26.78
%
 
28.40
%
 
25.20
%
Interest expense as a percentage of average finance receivables, net of unearned interest
   
2.95
%
 
2.68
%
 
2.89
%
 
2.81
%
Provision for credit losses as a percentage of average finance receivables, net of unearned interest
   
3.71
%
 
1.74
%
 
2.61
%
 
1.85
%
Net portfolio yield (5)
   
23.86
%
 
22.36
%
 
22.90
%
 
20.54
%
Operating expenses as a percentage of average finance receivables, net of unearned interest (6)
   
11.94
%
 
10.88
%
 
11.45
%
 
10.36
%
Pre-tax yield as a percentage of average finance receivables, net of unearned interest (7)
   
11.92
%
 
11.48
%
 
11.45
%
 
10.18
%
Write-off to liquidation (8)
   
4.25
%
 
4.35
%
 
5.44
%
 
6.28
%
Net charge-off percentage (9)
   
4.17
%
 
3.88
%
 
4.98
%
 
5.46
%

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 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.

## More ##



The following tables present certain information regarding the delinquency rates experienced by the Company with respect to Contracts and under its direct loan program:
 
   
At March 31,
 
   
2006
   
2005
     
Contracts
   
 
                   
Gross balance outstanding
 
$
214,509,842
       
$
176,758,883
       
                           
Delinquencies
                         
                           
30 to 59 days
 
$
2,718,246
   
1.27
%
$
1,934,136
   
1.10
%
60 to 89 days
   
521,319
   
0.24
%
 
408,651
   
0.23
%
90 + days
   
220,664
   
0.10
%
 
249,547
   
0.14
%
                           
Total delinquencies
 
$
3,460,229
   
1.61
%
$
2,592,334
   
1.47
%
                           
                           
Direct Loans
                         
Gross balance outstanding
 
$
8,208,542
       
$
5,627,852
       
                           
Delinquencies
                         
                           
30 to 59 days
 
$
59,910
   
0.73
%
$
37,520
   
0.67
%
60 to 89 days
   
16,258
   
0.20
%
 
6,945
   
0.12
%
90 + days
   
10,139
   
0.12
%
 
23,892
   
0.42
%
                           
Total delinquencies
 
$
86,307
   
1.05
%
$
68,357
   
1.21
%

The following table presents selected information on Contracts purchased by the Company, net of unearned interest: 
           
   
Three months ended
March 31,
 
Year ended
March 31,
 
Contracts  
2006
 
2005
 
2006
 
2005
 
Purchases
 
$
31,171,507
 
$
26,150,114
 
$
109,357,511
 
$
87,546,711
 
Weighted APR
   
24.40
%
 
24.33
%
 
24.03
%
 
24.05
%
Average discount
   
8.93
%
 
8.91
%
 
8.78
%
 
8.78
%
Weighted average term (months)
   
45
   
44
   
45
   
44
 
Average loan
 
$
8,756
 
$
8,398
 
$
8,795
 
$
8,387
 
Number of contracts
   
3,560
   
3,114
   
12,434
   
10,439
 

## End ##