Form 8-K NICHOLAS FINANCIAL INC For: Jul 30

 

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) July 30, 2021

 

NICHOLAS FINANCIAL, INC.

(Exact name of registrant as specified in its Charter)

 

 

 

(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)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

Securities registered pursuant to Section 12(b) of the Act:

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

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On July 30, 2021 Nicholas Financial, Inc. (the “Company”) issued a press release announcing the Company’s financial results for its quarter ended June 30, 2021. A copy of this press release is attached hereto as Exhibit 99.1.

The information included in this Current Report on Form 8-K (including Exhibit 99.1 hereto) is furnished pursuant to this Item 2.02 and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended. In addition, the information included in this Current Report on Form 8-K (including Exhibit 99.1 hereto) shall not be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference into such filing.

 

 

 

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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.

 

 

Exhibit 99.1

 

 

Nicholas Financial Reports

1st Quarter Fiscal Year 2022 Results

 

July 30, 2021 – Clearwater, Florida - Nicholas Financial, Inc. (NASDAQ: NICK) announced net income for the three months ended June 30, 2021 of $1.7 million compared to $1.4 million for the three months ended June 30, 2020.  Diluted net income per share was $0.22 for the three months ended June 30, 2021 as compared to $0.18 for the three months ended June 30, 2020. Revenue decreased 11.0% to $12.6 million for the three months ended June 30, 2021 as compared to $14.2 million for the three months ended June 30, 2020. The Company reported income before income taxes for the three months ended June 30, 2021 of $2.3 million compared to $1.9 million for the three months ended June 30, 2020.  The Company recorded an income tax expense of approximately $0.6 million during the three months ended June 30, 2021 as compared to $0.4 million during the three months ended June 30, 2020.

During the quarter ended June 30, 2021, the Company originated $26.0 million in finance receivables, collected $30.0 million in principal payments, reduced debt by $13.4 million and cash by $9.5 million.

 

“The more exciting news this quarter is the realization of year-over-year increases in both new indirect contract purchases and direct loan originations,” stated Doug Marohn, President and CEO of Nicholas Financial, Inc.  “This has helped level off the liquidation rate of our portfolio.  We have not returned to a net portfolio growth situation quite yet, but the rate of shrinkage has slowed.”

 

“Helping to fuel those year-over-year increases in production is our continued focus on the Direct Loan product as well as the commitment to expanding our branch network.  The Direct Loan product continues to gain momentum and is becoming a larger portion of our portfolio every month.  In terms of expansion, we have reentered the Houston, Texas market and expect to open the branch in the 2nd Quarter of FY 2022. We are also actively working the Dallas, San Antonio and Austin markets in Texas and plan to open offices there this fiscal year. Phoenix, Arizona is currently being developed, as well,” continued Marohn.

 

“The elevated operational expense is attributed to our investments in our workforce and our network,” concluded Marohn.  “As a result of our improved financial results, we are able to reinvest in technology, training, personnel development as well the expansion of our branch network. These investments will yield positive results for years to come.”

 

The 2021 Annual General Meeting of Shareholders of Nicholas Financial, Inc. will be held at the Company’s Central Business Operations hub, located at 3600 Arco Corporate Drive, Charlotte, North Carolina 28273, Suite 210, on Thursday, September 2, 2021, at 11:00 a.m. EST.  The Company will simultaneously hold a virtual shareholder meeting. The URL Path for the virtual meeting is https://agm.issuerdirect.com/nick.

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*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 may 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

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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 credit facility 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.

 

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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)

 

 

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

 

 

 

 

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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:

 

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