- Originations year-over-year on new Contracts purchased for the three months ended September 30, 2019 increased by 12.7% compared to prior year second quarter
- Originations year-over-year on Direct Loans for the three months ended September 30, 2019 increased by 65.5% compared to prior year second quarter
- Gross Portfolio Yield for the three months ended September 30, 2019 decreased to 26.9% compared to 27.8% during the prior year second quarter
- Interest and fee income on finance receivables for the three months ended September 30, 2019 decreased 19.7% due to a 17.0% decrease in average finance receivables, compared to prior year second quarter
- Accounts 60+ days delinquent decreased to 3.2%, excluding Chapter 13 bankruptcy accounts, compared to 4.4% as of the prior year second quarter
- Average APR on new Contracts purchased was 23.5% for the three months ended September 30, 2019 and September 30, 2018, respectively
- Average APR on Direct Loan originations increased to 27.4% compared to 26.5% during the prior year second quarter
CLEARWATER, Fla., Nov. 08, 2019 (GLOBE NEWSWIRE) -- Nicholas Financial, Inc. (NASDAQ: NICK) announced net income for the three months ended September 30, 2019 of $0.3 million compared to $0.6 million for the three months ended September 30, 2018. Diluted net income per share was $0.03 for the three months ended September 30, 2019 as compared to $0.07 for the three months ended September 30, 2018. Revenue decreased 19.7% to $15.6 million for the three months ended September 30, 2019 as compared to $19.4 million for the three months ended September 30, 2018. The Company reported income before income taxes for the three months ended September 30, 2019 of $0.4 million compared $0.7 million for the three months ended September 30, 2018. The Company recorded an income tax expense of approximately $0.1 million during the three months ended September 30, 2019 compared to an income tax expense of $0.1 million during the three months ended September 30, 2018.
Net income for the six months ended September 30, 2019 of $0.9 million compared to $2.0 million for the six months ended September 30, 2018. Diluted net income per share was $0.11 for the six months ended September 30, 2019 as compared to $0.25 for the six months ended September 30, 2018. Revenue decreased 15.6% to $32.2 million for the six months ended September 30, 2019 as compared to $38.2 million for the six months ended September 30, 2018. The Company reported income before income taxes for the six months ended September 30, 2019 of $1.2 million compared $2.7 million for the six months ended September 30, 2018. The Company recorded an income tax expense of approximately $0.3 million during the six months ended September 30, 2019 compared to $0.7 million during the six months ended September 30, 2018.
“Although our earnings for the 2nd Quarter of Fiscal Year 2020 were modest, we are very pleased overall with our operational successes and improvements,” said Doug Marohn, President and CEO. “We were able to increase same store and overall loan production in both indirect contract purchases and direct loan originations with 51 branches for the three months ended for September 30, 2019 as compared to 59 branches for the three months ended September 30, 2018. We also saw improvement in overall delinquency and in accounts 60+ days delinquent as compared to the prior year second quarter. We did this while maintaining the integrity and discipline we desire in our new acquisition KPI’s in terms of structure (amount financed, APR, discount, term, etc.).”
Marohn continued, “We also remain focused on proliferating our direct loan product to all of the states in which we operate. We are now operational in Florida, North Carolina, Georgia, Ohio. Tennessee and Alabama. Indiana, Missouri, South Carolina and Kentucky are slated to go live in our 3rd Quarter. Nicholas is also continuing to grow our branch network through expansion efforts in Columbia, South Carolina; Wichita, Kansas; and Milwaukee, Wisconsin.”
| |
| Key Performance Indicators on Contracts Purchased |
| (Purchases in thousands) |
| | | Number of
| | | | Average | | | | | | | | |
| Fiscal Year | | Contracts | | Principal Amount | | Amount | | Average | | | Average | | | Average |
| /Quarter | | Purchased | | Purchased | | Financed*^ | | APR* | | | Discount%* | | | Term* |
| 2020 | | 3,903 | | $ | 39,158 | | $ | 10,034 | | 23.5 | % | | 8.1 | % | | 47 |
| 2 | | 2,011 | | | 20,104 | | | 9,997 | | 23.5 | % | | 7.9 | % | | 46 |
| 1 | | 1,892 | | | 19,054 | | | 10,071 | | 23.4 | % | | 8.3 | % | | 47 |
| 2019 | | 7,684 | | $ | 77,499 | | $ | 10,086 | | 23.5 | % | | 8.2 | % | | 47 |
| 4 | | 2,151 | | | 21,233 | | | 9,871 | | 23.5 | % | | 8.0 | % | | 46 |
| 3 | | 1,625 | | | 16,476 | | | 10,139 | | 23.5 | % | | 8.1 | % | | 47 |
| 2 | | 1,761 | | | 17,845 | | | 10,133 | | 23.5 | % | | 8.4 | % | | 47 |
| 1 | | 2,147 | | | 21,945 | | | 10,221 | | 23.7 | % | | 8.3 | % | | 48 |
| 2018 | | 9,767 | | $ | 109,575 | | $ | 11,219 | | 22.4 | % | | 7.4 | % | | 54 |
| 4 | | 2,814 | | | 29,254 | | | 10,396 | | 23.3 | % | | 7.9 | % | | 50 |
| 3 | | 2,365 | | | 27,378 | | | 11,577 | | 21.7 | % | | 6.9 | % | | 54 |
| 2 | | 2,239 | | | 25,782 | | | 11,515 | | 22.0 | % | | 7.3 | % | | 55 |
| 1 | | 2,349 | | | 27,161 | | | 11,563 | | 22.3 | % | | 7.6 | % | | 55 |
| | | | | | | | | | | | | | | | | |
| Key Performance Indicators on Direct Loans Originated |
| (Originations in thousands) |
| | | Number of | | Principal | | | | | | | | |
| Fiscal Year | | Loans | | Amount | | Average Amount | | Average | | | Average |
| /Quarter | | Originated | | Originated | | Financed*^ | | APR* | | | Term* |
| 2020 | | 1,285 | | | 5,044 | | | 3,904 | | 27.8 | % | | 25 |
| 2 | | 739 | | | 2,988 | | | 4,043 | | 27.4 | % | | 25 |
| 1 | | 546 | | | 2,056 | | | 3,765 | | 28.2 | % | | 24 |
| 2019 | | 1,918 | | $ | 7,741 | | $ | 4,036 | | 26.4 | % | | 25 |
| 4 | | 236 | | | 1,240 | | | 4,654 | | 27.3 | % | | 26 |
| 3 | | 738 | | | 2,999 | | | 4,063 | | 25.9 | % | | 25 |
| 2 | | 495 | | | 1,805 | | | 3,646 | | 26.5 | % | | 25 |
| 1 | | 449 | | | 1,697 | | | 3,779 | | 25.7 | % | | 28 |
| 2018 | | 2,036 | | $ | 7,642 | | $ | 3,754 | | 25.2 | % | | 29 |
| 4 | | 380 | | | 1,445 | | | 3,752 | | 25.0 | % | | 29 |
| 3 | | 622 | | | 2,218 | | | 3,566 | | 25.2 | % | | 28 |
| 2 | | 501 | | | 1,953 | | | 3,897 | | 25.1 | % | | 29 |
| 1 | | 533 | | | 2,026 | | | 3,801 | | 25.4 | % | | 30 |
*Each average included in the tables is calculated as a simple average.
^Average amount financed is calculated as a single loan amount.
Nicholas Financial, Inc. is a publicly-traded specialty consumer finance company, operating branch locations in both Southeastern and Midwestern U.S. states. The Company has approximately 7.9 million shares of voting 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.
Cautionary Note regarding Forward-Looking Statements
Except for the historical information contained herein, the matters discussed in this news release include forward-looking statements that involve risks and uncertainties including risk relating to competition and our ability to increase and maintain yield and profitability at desirable levels, as well as risks relating to general economic conditions, access to bank financing, our ability to expand the geographical scope of, and otherwise continue growing, our Direct Loan operations, 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, 2019. When used in this document, the words “anticipate”, “estimate”, “expect”, “will”, “may”, “plan,” “believe”, “intend” and similar expressions are intended to identify forward-looking statements. Such statements are based on the beliefs of Company management as well as assumptions made by and information currently available to Company management. Actual events or results may differ materially from those anticipated, estimated or expect. All forward-looking statements and cautionary statements included in this document are made as of the date hereof 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, |
| | 2019 | | 2018 | | 2019 | | 2018 |
| Revenue: | | | | | | | | | | | |
| Interest and fee income on finance receivables | $ | 15,585 | | $ | 19,404 | | $ | 32,226 | | $ | 38,163 |
| Expenses: | | | | | | | | | | | |
| Operating expenses | | 8,927 | | | 7,966 | | | 17,898 | | | 16,767 |
| Provision for credit losses | | 4,000 | | | 8,374 | | | 8,385 | | | 13,801 |
| Interest expense | | 2,298 | | | 2,386 | | | 4,786 | | | 4,926 |
| Total expenses | | 15,225 | | | 18,726 | | | 31,069 | | | 35,494 |
| Income before income taxes | | 360 | | | 678 | | | 1,157 | | | 2,669 |
| Income tax expense | | 92 | | | 96 | | | 298 | | | 669 |
| Net income | $ | 268 | | $ | 582 | | $ | 859 | | $ | 2,000 |
| Earnings per share: | | | | | | | | | | | |
| Basic | $ | 0.03 | | $ | 0.07 | | $ | 0.11 | | $ | 0.25 |
| Diluted | $ | 0.03 | | $ | 0.07 | | $ | 0.11 | | $ | 0.25 |
| | | | | | | | | | | | |
Condensed Consolidated Balance Sheets
(Unaudited, In Thousands)
| | September 30, | | March 31, |
| | 2019 | | 2019 |
| Cash and restricted cash | $ | 13,928 | | $ | 37,642 |
| Finance receivables, net | | 199,452 | | | 202,042 |
| Other assets | | 14,137 | | | 12,736 |
| Intangibles | | 79 | | | - |
| Goodwill | | 350 | | | - |
| Total assets | $ | 227,946 | | $ | 252,420 |
| Credit facility | $ | 116,710 | | $ | 142,619 |
| Other liabilities | | 5,403 | | | 4,916 |
| Total liabilities | | 122,113 | | | 147,535 |
| Shareholders’ equity | | 105,833 | | | 104,885 |
| Total liabilities and shareholders’ equity | $ | 227,946 | | $ | 252,420 |
| Book value per share | $ | 13.36 | | $ | 13.26 |
| | | | | | |
| | Three months ended | | | Six months ended | |
| | September 30, | | | September 30, | |
| | (In thousands) | | | (In thousands) | |
| Portfolio Summary | 2019 | | | 2018 | | | 2019 | | 2018 | |
| Average finance receivables (1) | $ | 232,021 | | | $ | 279,680 | | | $ | 236,024 | | | $ | 287,980 | |
| Average indebtedness (2) | $ | 139,929 | | | $ | 143,882 | | | $ | 144,486 | | | $ | 152,467 | |
| Interest and fee income on finance receivables | $ | 15,585 | | | $ | 19,404 | | | $ | 32,226 | | | $ | 38,163 | |
| Interest expense | | 2,298 | | | | 2,386 | | | $ | 4,786 | | | $ | 4,926 | |
| Net interest and fee income on finance receivables | $ | 13,287 | | | $ | 17,018 | | | $ | 27,440 | | | $ | 33,237 | |
| Portfolio yield (3) | | 26.87 | % | | | 27.75 | % | | | 27.31 | % | | | 26.50 | % |
| Interest expense as a percentage of average finance receivables | | 3.96 | % | | | 3.41 | % | | | 4.06 | % | | | 3.42 | % |
| Provision for credit losses as a percentage of average finance receivables | | 6.90 | % | | | 11.98 | % | | | 7.11 | % | | | 9.58 | % |
| Net portfolio yield (3) | | 16.01 | % | | | 12.36 | % | | | 16.15 | % | | | 13.50 | % |
| Operating expenses as a percentage of average finance receivables | | 15.39 | % | | | 11.39 | % | | | 15.17 | % | | | 11.64 | % |
| Pre-tax yield as a percentage of average finance receivables (4) | | 0.62 | % | | | 0.97 | % | | | 0.98 | % | | | 1.86 | % |
| Net charge-off percentage (5) | | 11.40 | % | | | 11.85 | % | | | 10.01 | % | | | 10.37 | % |
| Allowance percentage (6) | | 5.82 | % | | | 6.86 | % | | | 5.72 | % | | | 6.66 | % |
Note: All three-month and six-month statement of income performance indicators expressed as percentages have been annualized.
(1) Average finance receivables represent the average of finance receivables throughout the period.
(2) Average indebtedness represents the average outstanding borrowings under the Credit Facility.
(3) Portfolio yield represents interest and fee income on finance receivables as a percentage of average finance receivables. Net portfolio yield represents (a) interest and fee income on finance receivables minus (b) interest expense minus (c) the provision for credit losses, as a percentage of average finance receivables.
(4) Pre-tax yield represents net portfolio yield minus operating expenses, as a percentage of average finance receivables.
(5) Net charge-off percentage represents net charge-offs (charge-offs less recoveries) divided by average finance receivables, outstanding during the period.
(6) Allowance percentage represents the allowance for credit losses divided by average finance receivables outstanding during the period.
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”), excluding any Chapter 13 bankruptcy accounts:
(In thousands, except percentages)
| Contracts | Balance | | | | | | | | | | | | | | | | | | | |
| | Outstanding | | 30 – 59 days | | 60 – 89 days | | | 90 – 119 days | | | 120+ | | | Total | |
| September 30, 2019 | $ | 212,396 | | $ | 13,981 | | $ | 4,950 | | | $ | 1,946 | | | $ | 42 | | | $ | 20,919 | |
| | | | | | 6.58 | % | | 2.33 | % | | | 0.92 | % | | | 0.02 | % | | | 9.85 | % |
| September 30, 2018 | $ | 256,095 | | $ | 17,399 | | $ | 7,132 | | | $ | 2,190 | | | $ | 2,043 | | | $ | 28,764 | |
| | | | | | 6.79 | % | | 2.78 | % | | | 0.86 | % | | | 0.80 | % | | | 11.23 | % |
| | | | | | | |
| Direct Loans | Balance | | | | | | | | | | | | | | | | | | | |
| | Outstanding | | 30 – 59 days | | 60 – 89 days | | | 90 – 119 days | | | 120+ | | | Total | |
| September 30, 2019 | $ | 9,480 | | $ | 219 | | $ | 115 | | | $ | 56 | | | - | | | $ | 390 | |
| | | | | | 2.31 | % | | 1.21 | % | | | 0.59 | % | | | - | % | | | 4.11 | % |
| September 30, 2018 | $ | 7,465 | | $ | 162 | | $ | 122 | | | $ | 27 | | | $ | 68 | | | $ | 379 | |
| | | | | | 2.17 | % | | 1.63 | % | | | 0.36 | % | | | 0.91 | % | | | 5.08 | % |
| | | | | | | | | | | | | | | | | | | | | | |
The following table presents selected information on Contracts purchased and Direct Loans originated by the Company:
| | | | | | |
| | Contracts | | | Direct Loans | |
| | Three months ended | | | Three months ended | |
| | September 30, | | | September 30, | |
| | (Purchases in thousands) | | | (Originations in thousands) | |
| | 2019 | | | 2018 | | | 2019 | | | 2018 | |
| Purchases/Originations | $ | 20,104 | | | $ | 17,845 | | | $ | 2,988 | | | $ | 1,805 | |
| Average APR | | 23.5 | % | | | 23.5 | % | | 27.4 | % | | 26.5 | % |
| Average discount | | 7.9 | % | | | 8.4 | % | | N/A | | | N/A | |
| Average term (months) | | 46 | | | | 47 | | | | 25 | | | | 25 | |
| Average amount financed | $ | 9,997 | | | $ | 10,133 | | | $ | 4,043 | | | $ | 3,646 | |
| Number of contracts | | 2,011 | | | | 1,761 | | | | 739 | | | | 495 | |
| | | | | | | | | | | | | | | | |
| | Contracts | | | Direct Loans | |
| | Six months ended | | | Six months ended | |
| | September 30, | | | September 30, | |
| | (Purchases in thousands) | | | (Originations in thousands) | |
| | 2019 | | | 2018 | | | 2019 | | | 2018 | |
| Purchases/Originations | $ | 39,158 | | | $ | 39,790 | | | $ | 5,044 | | | $ | 3,502 | |
| Average APR | | 23.5 | % | | | 23.6 | % | | 27.8 | % | | 26.1 | % |
| Average discount | | 8.1 | % | | | 8.4 | % | | N/A | | | N/A | |
| Average term (months) | | 47 | | | | 48 | | | | 25 | | | | 27 | |
| Average amount financed | $ | 10,034 | | | $ | 10,177 | | | $ | 3,904 | | | $ | 3,713 | |
| Number of contracts | | 3,903 | | | | 3,908 | | | | 1,285 | | | | 944 | |
| | | | | | | | | | | | | | | | |
The following table presents selected information on the entire Contract and Direct Loan portfolios of the Company:
| | | | | | |
| | Contracts | | | Direct Loans | |
| | As of | | | As of | |
| | September 30, | | | September 30, | |
| Portfolio | 2019 | | | 2018 | | | 2019 | | | 2018 | |
| Average APR | 22.7 | % | | 22.4 | % | | 26.5 | % | | 25.1 | % |
| Average discount | 7.7 | % | | 7.2 | % | | N/A | | | N/A | |
| Average term (months) | 52 | | | 54 | | | 27 | | | 32 | |
| Number of active contracts | 27,294 | | | 30,548 | | | 2,921 | | | 2,458 | |
| | | | | | | | | | | | |
| | | | |
| Nicholas | | Contact: | NASDAQ: NICK |
Nicholas Financial, Inc.
Corporate Headquarters
2454 McMullen-Booth Rd.
Building C, Suite 501
Clearwater, FL 33759 | | Kelly Malson
CFO
Ph # (727)-726-0763 | Web site: www.nicholasfinancial.com |
| | | | |
