Nicholas Financial Reports 1st Quarter Fiscal Year 2023 Results

• Originations year-over-year on new Contracts purchased for the three months ended June 30, 2022 increased by 10.1% compared to prior year first quarter.
• Originations year-over-year on Direct Loans for the three months ended June 30, 2022 increased by 43.2% compared to prior year first quarter.
• Finance Receivables, net grew by $0.8 million or 0.5% for the three months ended June 30, 2022.
  

CLEARWATER, Fla., July 29, 2022 (GLOBE NEWSWIRE) -- Nicholas Financial, Inc. (NASDAQ: NICK) announced a net loss for the three months ended June 30, 2022 of $1.8 million compared to net income of $1.7 million for the three months ended June 30, 2021. Diluted net loss per share was $0.24 for the three months ended June 30, 2022 as compared to diluted net income per share of $0.22 for the three months ended June 30, 2021. Interest and fee income on finance receivables decreased 4.2% to $12.1 million for the three months ended June 30, 2022 as compared to $12.6 million for the three months ended June 30, 2021. The Company total revenue included an unrealized loss of $0.8 million on equity investments in the three month ended June 30, 2022. The Company reported a loss before income taxes for the three months ended June 30, 2022 of $2.4 million compared to income before income taxes of $2.3 million for the three months ended June 30, 2021. The Company recorded an income tax benefit of approximately $0.6 million during the three months ended June 30, 2022 as compared to income tax expense of $0.6 million during the three months ended June 30, 2021.

For the quarter ended June 30, 2022, the Company originated $30.6 million in finance receivables, collected $28.3 million in principal payments, purchased $7.2 million of equity investments, increased debt by $11.8 million and decreased cash by $1.2 million.

“While we ended up with a net loss of $1.8 million this fiscal quarter, we increased our finance receivables by $1.3 million with a total of $30.6 million originated. Our underwriting and servicing were top priorities through the quarter, as we adhered to our core policies and procedures to ensure quality and compliance.” commented Mike Rost, interim CEO of Nicholas Financial.

“Adding another quarter of receivable growth is a great accomplishment for the Company, but the net financial results highlighted the need for an urgent reduction in operating expenses, especially in the environment of rising delinquencies and capital costs. As previously announced in July 2022, we executed a branch consolidation plan affecting several markets along with right-sizing the remaining branch network. We believe that this initiative will allow the Company to be better positioned for the possible economic downturn,” concluded Rost.

*Each average included in the tables is calculated as a simple average.
^Average amount financed is calculated as a single loan amount.
#Bulk portfolio purchase excluded for period-over-period comparability

Nicholas Financial, Inc. (NASDAQ:NICK) is a specialized consumer finance company, operating branch locations in both Southeastern and Midwestern U.S. States. The Company engages primarily in acquiring and servicing automobile finance installment contracts (“Contracts”) for purchases of used and new automobiles and light trucks. Additionally, Nicholas Financial originates direct consumer loans (“Direct Loans”) and sells consumer-finance related products. For an index of Nicholas Financial, Inc’s new releases or to obtain a specific release, please visit our website at www.nicholasfinancial.com.

Cautionary Note regarding Forward-Looking Statements

This press release may contain various “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, that represent the Company’s current expectations or beliefs concerning future events. Statements other than those of historical fact, as well as those identified by words such as “anticipate,” “estimate,” intend,” “plan,” “expect,” “project,” “believe,” “may,” “will,” “should,” “would,” “could,” “probable” and any variation of the foregoing and similar expressions are forward-looking statements. Such forward-looking statements are inherently subject to risks and uncertainties. The Company’s actual results and financial condition 28may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause actual results or performance to differ from the expectations expressed or implied in such forward-looking statements include the following: the ongoing impact of the COVID-19 pandemic and the mitigation efforts by governments and related effects on our financial condition, business operations and liquidity, our customers, our employees, and the overall economy; recently enacted, proposed or future legislation and the manner in which it is implemented; changes in the U.S. tax code; the nature and scope of regulatory authority, particularly discretionary authority, that may be exercised by regulators, including, but not limited to, the Securities and Exchange Commission (SEC), Department of Justice, U.S. Consumer Financial Protection Bureau, and individual state regulators having jurisdiction over the Company; the unpredictable nature of regulatory proceedings and litigation; employee misconduct or misconduct by third parties; uncertainties associated with management turnover and the effective succession of senior management; media and public characterization of consumer installment loans; labor unrest; the impact of changes in accounting rules and regulations, or their interpretation or application, which could materially and adversely affect the Company’s reported consolidated financial statements or necessitate material delays or changes in the issuance of the Company’s audited consolidated financial statements; the Company's assessment of its internal control over financial reporting; changes in interest rates; risks relating to the acquisition or sale of assets or businesses or other strategic initiatives, including increased loan delinquencies or net charge-offs, the loss of key personnel, integration or migration issues, the failure to achieve anticipated synergies, increased costs of servicing, incomplete records, and retention of customers; risks inherent in making loans, including repayment risks and value of collateral; cybersecurity threats, including the potential misappropriation of assets or sensitive information, corruption of data or operational disruption; our dependence on debt and the potential impact of limitations in the Company’s amended revolving line of credit or other impacts on the Company's ability to borrow money on favorable terms, or at all; the timing and amount of revenues that may be recognized by the Company; changes in current revenue and expense trends (including trends affecting delinquency and charge-offs); the impact of extreme weather events and natural disasters; changes in the Company’s markets and general changes in the economy (particularly in the markets served by the Company). 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)

Condensed Consolidated Balance Sheets
(Unaudited, In Thousands)

Note: All three-month statement of income performance indicators expressed as percentages have been annualized.

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)

The following table presents selected information on Contracts purchased and Direct Loans originated by the Company:

The following table presents selected information on the entire Contract and Direct Loan portfolios of the Company:

Contact: Irina Nashtatik CFO Ph # (727)-726-0763 Web site: www.nicholasfinancial.com