Form 8-K NICHOLAS FINANCIAL INC For: Nov 04

�

�

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) November�4, 2014

�

�

NICHOLAS FINANCIAL, INC.

(Exact name of registrant as specified in its Charter)

�

�

�

British Columbia, Canada	�	0-26680	�	8736-3354
(State or Other Jurisdiction of Incorporation or Organization)	�	(Commission File Number)	�	(I.R.S. Employer Identification No.)
2454 McMullen Booth Road, Building C Clearwater, Florida			�	33759
(Address of Principal Executive Offices)			�	(Zip Code)

(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):

�

�	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

�

�	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

�

�	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

�

�	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

�

�

�

---

Item�2.02

Results of Operations and Financial Condition

November�4, 2014 � Clearwater, Florida�Nicholas Financial, Inc. (NASDAQ: NICK) announced that for the three months ended September�30, 2014 net earnings remained relatively flat at $4,330,000 as compared to $4,317,000 for the three months ended September�30, 2013. Per share diluted net earnings remained flat at $0.35 for the three months ended September�30, 2014 and 2013. Revenue increased 4% to $21,723,000 for the three months ended September�30, 2014 as compared to $20,949,000 for the three months ended September�30,�2013.

�

Item�9.01

Financial Statements and Exhibits

�

Exhibit�#	��	Description
99.1	��	Press release dated November 4, 2014.

---

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.

�

	�		�	NICHOLAS FINANCIAL, INC.
	�		�	����������������(Registrant)
Date: November 4, 2014	�		�	/s/ Ralph T. Finkenbrink
	�		�	Ralph T. Finkenbrink
	�		�	Chairman, President, Chief Executive Officer
	�		�	(Principal Executive Officer)
Date: November 4, 2014	�		�	/s/ Katie L. MacGillivary
	�		�	Katie L. MacGillivary
	�		�	Vice President, Chief Financial Officer
	�		�	(Principal Financial Officer and Accounting Officer)

---

Exhibit Index

�

Exhibit	��	Description
99.1	��	Press release dated November 4, 2014.

Exhibit 99.1

�

	�		��	FOR IMMEDIATE RELEASE �
	�	Contact:��Katie L. MacGillivary ��CFO�& VP Finance ��Ph # - 727-726-0763	��	NASDAQ: NICK Web site: www.nicholasfinancial.com
	�		��
	�		��
	�		��

Nicholas Financial Reports

2nd Quarter Results

November�4, 2014 � Clearwater, Florida�Nicholas Financial, Inc. (NASDAQ: NICK) announced that for the three months ended September�30, 2014 net earnings remained relatively flat at $4,330,000 as compared to $4,317,000 for the three months ended September�30, 2013. Per share diluted net earnings remained flat at $0.35 for the three months ended September�30, 2014 and 2013. Revenue increased 4% to $21,723,000 for the three months ended September�30, 2014 as compared to $20,949,000 for the three months ended September�30,�2013.

For the six months ended September�30, 2014 net earnings decreased 8% to $9,239,000 as compared to $10,017,000 for the six months ended September�30, 2013. Per share diluted net earnings decreased 9% to $0.75 as compared to $0.82 for the six months ended September�30, 2013. Revenue increased 4% to $43,056,000 for the six months ended September�30, 2014 as compared to $41,425,000 for the six months ended September�30, 2013.

Our results for the three months ended September�30, 2014 were adversely affected by a reduction in the gross portfolio yield and an increase in the provision for losses compared to corresponding period ended September�30, 2013. Our results were favorably impacted by a change in fair value of the interest rate swap agreements which resulted in a gain of $251,000 compared to a loss of $250,000 for the comparable three-month period.

The results for the six-month period ended September�30, 2014 as compared to the six months ended September�30, 2013 were adversely affected by a reduction in the gross portfolio yield, an increase in the provision for losses, and a change in the fair value of the interest rate swap agreements, which was a gain of $39 thousand and $583 thousand, respectively. Our results were favorably impacted by a reduction in income tax expense earlier in the year related to professional fees associated with the previously announced potential sale of the Company. Such fees became deductible as a result of the termination of the Arrangement Agreement announced on July�1, 2014, resulting in a decrease in income tax expense of $804,000.

�We continue to experience elevated levels of aggressive competition which is putting pressure on margins and making it more difficult to acquire business that is consistent with our internal guidelines. We will continue to develop additional markets and we may open additional branch locations during the remainder of our current fiscal year, which ends March�31, 2015�, stated Ralph T. Finkenbrink, President and CEO�.

Nicholas Financial, Inc. is one of the largest publically traded specialty consumer finance companies in North America. The Company operates branch locations in both the Southeastern and the Midwestern states. The Company has approximately 12,300,000 shares of common stock outstanding. For an index of Nicholas Financial, Inc. news releases and public filings please 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 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, 2014. 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.

�

## More ##

---

Nicholas Financial, Inc.

Condensed Consolidated Statements of Income

(Unaudited, Dollars in Thousands, Except Share and Per Share Amounts)

�

�

��

Three months ended September�30,

�

��

Six months ended September�30,

�

�

��

2014

�

�

2013

�

��

2014

�

�

2013

�

Interest and fee income on finance receivables

��

$

21,723

��

�

$

20,949

��

��

$

43,056

��

�

$

41,425

��

Expenses:

��

�

��

�

Operating

��

�

8,147

��

�

�

7,597

��

��

�

16,238

��

�

�

15,126

��

Professional fees

��

�

193

��

�

�

483

��

��

�

811

��

�

�

951

��

Provision for credit losses

��

�

5,154

��

�

�

3,973

��

��

�

9,386

��

�

�

6,615

��

Interest expense

��

�

1,485

��

�

�

1,443

��

��

�

2,934

��

�

�

2,848

��

Change in fair value of interest rate swaps

��

�

(251

)�

�

�

250

��

��

�

(39

)�

�

�

(583

)�

��

�

�

�

�

�

�

�

��

�

�

�

�

�

�

�

��

�

14,728

��

�

�

13,746

��

��

�

29,330

��

�

�

24,957

��

Operating income before income taxes

��

�

6,995

��

�

�

7,203

��

��

�

13,726

��

�

�

16,468

��

Income tax expense

��

�

2,665

��

�

�

2,886

��

��

�

4,487

��

�

�

6,451

��

��

�

�

�

�

�

�

�

��

�

�

�

�

�

�

�

Net income

��

$

4,330

��

�

$

4,317

��

��

$

9,239

��

�

$

10,017

��

��

�

�

�

�

�

�

�

��

�

�

�

�

�

�

�

Earnings per share:

��

�

��

�

Basic

��

$

0.36

��

�

$

0.36

��

��

$

0.76

��

�

$

0.83

��

��

�

�

�

�

�

�

�

��

�

�

�

�

�

�

�

Diluted

��

$

0.35

��

�

$

0.35

��

��

$

0.75

��

�

$

0.82

��

��

�

�

�

�

�

�

�

��

�

�

�

�

�

�

�

Dividends declared per share

��

$

���

��

�

$

0.12

��

��

$

���

��

�

$

0.24

��

��

�

�

�

�

�

�

�

��

�

�

�

�

�

�

�

Weighted average shares

��

�

12,191,000

��

�

�

12,092,000

��

��

�

12,185,000

��

�

�

12,079,000

��

��

�

�

�

�

�

�

�

��

�

�

�

�

�

�

�

Weighted average shares and assumed dilution

��

�

12,365,000

��

�

�

12,315,000

��

��

�

12,371,000

��

�

�

12,274,000

��

��

�

�

�

�

�

�

�

��

�

�

�

�

�

�

�

Condensed Consolidated Balance Sheets

(Unaudited, In Thousands)

�

�	��	September�30,		�	��	March�31,		�
�	��	2014		�	��	2014		�
Cash	��	$	4,982	��	��	$	����2,635	��
Finance receivables, net	��	�	279,182	��	��	�	����269,344	��
Other assets	��	�	11,611	��	��	�	����11,451	��
	��	�	�	�	��	�	�	�
Total assets	��	$	295,775	��	��	$	����283,430	��
	��	�	�	�	��	�	�	�
Line of credit	��	$	132,000	��	��	$	����127,900	��
Other liabilities	��	�	12,150	��	��	�	����13,592	��
	��	�	�	�	��	�	�	�
Total liabilities	��	�	144,150	��	��	�	����141,492	��
Shareholders� equity	��	�	151,625	��	��	�	����141,938	��
	��	�	�	�	��	�	�	�
Total liabilities and shareholders� equity	��	$	295,775	��	��	$	����283,430	��
	��	�	�	�	��	�	�	�

�

## More ##

---

�

��

Three months ended September�30,

�

�

Six months ended September�30,

�

Portfolio Summary

��

2014

�

�

2013

�

�

2014

�

�

2013

�

Average finance receivables, net of unearned interest (1)

��

$

309,836,832

��

�

$

290,071,860

��

�

$

307,376,210

��

�

$

287,854,928

��

��

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

Average indebtedness (2)

��

$

132,350,000

��

�

$

128,255,377

��

�

$

131,093,750

��

�

$

127,067,884

��

��

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

Interest and fee income on finance receivables

��

$

21,723,073

��

�

$

20,943,161

��

�

$

43,055,586

��

�

$

41,412,533

��

Interest expense

��

�

1,485,192

��

�

�

1,442,898

��

�

�

2,933,778

��

�

�

2,847,804

��

��

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

Net interest and fee income on finance receivables

��

$

20,237,881

��

�

$

19,500,263

��

�

$

40,121,808

��

�

$

38,564,729

��

��

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

Weighted average contractual rate (3)

��

�

23.10

%�

�

�

23.24

%�

�

�

23.10

%�

�

�

23.24

%�

��

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

Average cost of borrowed funds (2)

��

�

4.49

%�

�

�

4.50

%�

�

�

4.48

%�

�

�

4.48

%�

��

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

Gross portfolio yield (4)

��

�

28.04

%�

�

�

28.88

%�

�

�

28.01

%�

�

�

28.77

%�

Interest expense as a percentage of average finance receivables, net of unearned interest

��

�

1.92

%�

�

�

1.99

%�

�

�

1.91

%�

�

�

1.98

%�

Provision for credit losses as a percentage of average finance receivables, net of unearned interest

��

�

6.65

%�

�

�

5.48

%�

�

�

6.11

%�

�

�

4.60

%�

��

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

Net portfolio yield (4)

��

�

19.47

%�

�

�

21.41

%�

�

�

19.99

%�

�

�

22.19

%�

Marketing, salaries, employee benefits, depreciation, administrative, professional fee expenses and dividend taxes as a percentage of average finance receivables, net of unearned interest (5)

��

�

10.77

%�

�

�

11.07

%�

�

�

11.09

%�

�

�

11.10

%�

��

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

Pre-tax yield as a percentage of average finance receivables, net of unearned interest (6)

��

�

8.70

%�

�

�

10.34

%�

�

�

8.90

%�

�

�

11.09

%�

��

�

�

�

�

�

�

�

�

�

�

�

�

�

�

�

Write-off to liquidation (7)

��

�

9.01

%�

�

�

8.19

%�

�

�

7.77

%�

�

�

7.05

%�

Net charge-off percentage (8)

��

�

7.89

%�

�

�

7.10

%�

�

�

6.63

%�

�

�

6.13

%�

Note: All three- and six-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)	Weighted average contractual rate represents the weighted average annual percentage rate (�APR�) of all Contracts and Direct Loans.

(4)

Gross portfolio yield represents interest and fee income on finance receivables as a percentage of average finance receivables, net of unearned interest. Net portfolio yield represents interest and fee income on finance receivables minus (a)�interest expense and (b)�the provision for credit losses as a percentage of average finance receivables, net of unearned interest.

(5)

The numerators include expenses associated with the potential sale of the Company and include taxes associated with the payments of cash dividends. Absent these expenses, the percentages would have been 10.72% and 10.81% for the three months ended September�30, 2014 and 2013, respectively, and 10.86% and 10.75% for the six months ended September�30, 2014 and 2013, respectively.

(6)	Pre-tax yield represents net portfolio yield minus administrative expenses as a percentage of average finance receivables, net of unearned interest.

(7)	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 and ending receivable balance.

(8)	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 automobile finance installment contracts (�Contracts�) and direct consumer loans (�Direct Loans�), excluding Chapter 13 bankrupt accounts:

�

�

��

Gross Balance Outstanding

�

��

Delinquencies

�

Contracts

��

��

31 � 60 days

�

�

61 � 90 days

�

�

90 + days

�

�

Total

�

September�30, 2014

��

$

427,196,623

��

��

$

19,923,081

��

�

$

5,241,042

��

�

$

2,844,277

��

�

$

28,008,400

��

��

��

�

4.66

%�

�

�

1.23

%�

�

�

0.67

%�

�

�

6.56

%�

September�30, 2013

��

$

397,098,910

��

��

$

15,504,636

��

�

$

2,855,032

��

�

$

1,841,390

��

�

$

20,201,058

��

��

��

�

3.91

%�

�

�

0.72

%�

�

�

0.46

%�

�

�

5.09

%�

Direct Loans

��

Gross Balance Outstanding

�

��

31 � 60 days

�

�

61 � 90 days

�

�

90 + days

�

�

Total

�

September�30, 2014

��

$

11,369,476

��

��

$

215,570

��

�

$

77,219

��

�

$

23,852

��

�

$

316,641

��

��

��

�

1.90

%�

�

�

0.68

%�

�

�

0.21

%�

�

�

2.79

%�

September�30, 2013

��

$

10,614,301

��

��

$

104,983

��

�

$

37,604

��

�

$

21,246

��

�

$

163,833

��

��

��

�

0.99

%�

�

�

0.35

%�

�

�

0.20

%�

�

�

1.54

%�

The following table presents selected information on Contracts purchased by the Company, net of unearned interest:

�

�

��

Three months ended September�30,

�

�

Six months ended September�30,

�

Contracts

��

2014

�

�

2013

�

�

2014

�

�

2013

�

Purchases

��

$

40,876,742

��

�

$

41,958,515

��

�

$

87,646,344

��

�

$

83,841,229

��

Weighted APR

��

�

23.07

%�

�

�

23.05

%�

�

�

23.04

%�

�

�

22.93

%�

Average discount

��

�

8.18

%�

�

�

8.51

%�

�

�

8.16

%�

�

�

8.43

%�

Weighted average term (months)

��

�

55

��

�

�

52

��

�

�

55

��

�

�

52

��

Average loan

��

$

10,953

��

�

$

10,685

��

�

$

10,989

��

�

$

10,664

��

Number of contracts

��

�

3,732

��

�

�

3,927

��

�

�

7,976

��

�

�

7,862

��

�

## End ##

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• FastNetMon Launches Netomics, a Self-Hosted Routing Intelligence Platform
• Next Crypto to Explode in July 2026 as Bitcoin Bounces From $58K Low and Smart Money Rotates
• Hemab Therapeutics Presents New Clinical Data from HMB-002 in Von Willebrand Disease and Introduces HMB-003 for Heavy Menstrual Bleeding at the ISTH 2026 Congress