- Income year-over-year before income taxes for the three months ended March 31, 2021 increased by 399.6% compared to prior year fourth quarter
- Pre-tax yield as a percentage of average finance receivables for the three months ended March 31, 2021 increased to 4.92% compared to 1.03% during the prior year fourth quarter
- Net Portfolio Yield for the three months ended March 31, 2021 increased to 24.22% compared to 17.10% during the prior year fourth quarter
- Contracts purchased year-over-year for the three months ended March 31, 2021 increased by 25.3% compared to prior year fourth quarter
- Amount financed year-over-year on Direct Loans for the three months ended March 31, 2021 increased by 5.8% compared to prior year fourth quarter
- Accounts 60+ days delinquent decreased to 1.9%, excluding Chapter 13 bankruptcy accounts, compared to 2.9% as of the prior year fourth quarter
CLEARWATER, Fla., June 02, 2021 (GLOBE NEWSWIRE) — Nicholas Financial, Inc. (NASDAQ: NICK) announced net income for the three months ended March 31, 2021 of $1.9 million compared to $2.3 million for the three months ended March 31, 2020. Diluted net income per share was $0.24 for the three months ended March 31, 2021 as compared to $0.29 for the three months ended March 31, 2020. Total revenue decreased 10.8% to $13.3 million for the three months ended March 31, 2021 as compared to $14.9 million for the three months ended March 31, 2020, which included gains of $0.5 million on equity investments during the three months ended March 31, 2021. The Company reported income before income taxes for the three months ended March 31, 2021 of $2.8 million compared to $0.6 million for the three months ended March 31, 2020. The Company recorded an income tax expense of approximately $0.9 million during the three months March 31, 2021 compared to an income tax benefit of $1.7 million during the three months ended March 31, 2020.
The Company announced net income for the year ended March 31, 2021 of $8.4 million compared to $3.5 million for the year ended March 31, 2020. Diluted net income per share was $1.09 for the year ended March 31, 2021 as compared to $0.45 for the year ended March 31, 2020. Total revenue decreased 9.8% to $56.0 million for the year ended March 31, 2021 as compared to $62.1 million for the year ended March 31, 2020, which included gains of $1.8 million on equity investments during the year ended March 31, 2021. The Company reported income before income taxes for the year ended March 31, 2021 of $10.9 million compared to $2.2 million for the year ended March 31, 2020. The Company recorded an income tax expense of approximately $2.6 million during the year ended March 31, 2021 compared to an income tax benefit of $1.2 million during the year ended March 31, 2020.
For the year ended March 31, 2021, the Company originated $88.2 million in finance receivables, collected $118.6 million in principal payments, reduced debt by a net amount of $35.3 million, repurchased $0.9 million of common stock, and increased cash by $8.3 million.
“We are very pleased with our 4th Quarter and overall Fiscal Year-end results,” commented Doug Marohn, President and CEO of Nicholas Financial, Inc. “We continue to produce excellent portfolio performance, recognizing very low delinquency and net write-offs, the likes of which we have not seen in years. We were also able to enjoy year-over-year increases in both Indirect and Direct originations and loan volumes. The year-over-year increase on Indirect originations was the first we have seen since my return to Nicholas, and it was especially gratifying to see this during the pandemic.”
“The ability to once again report substantially increased earnings is a testament to our core business strategy as well as to the hard-working men and women who execute that strategy every day,” Marohn continued. “Our commitment to the branch-based model with a local office in every market we service allows us to better support our dealer partners and our borrowing customers. This approach has also facilitated the expansion of our Direct Loan products to virtually every NFI branch office. As we continue to increase our core product market share in the existing branch markets, we remain focused on growing the Direct Loan business, as well as expanding our branch network in Western States.”
| Key Performance Indicators on Contracts Purchased | |||||||||||||||||||||||||||
| (Purchases in thousands) | |||||||||||||||||||||||||||
| Number of | Principal | Average | |||||||||||||||||||||||||
| Fiscal Year | Contracts | Amount | Amount | Average | Average | Average | |||||||||||||||||||||
| /Quarter | Purchased | Purchased# | Financed*^ | APR* | Discount%* | Term* | |||||||||||||||||||||
| 2021 | 7,307 | $ | 74,025 | $ | 10,135 | 23.4 | % | 7.5 | % | 46 | |||||||||||||||||
| 4 | 2,429 | 24,637 | 10,143 | 23.2 | % | 7.5 | % | 46 | |||||||||||||||||||
| 3 | 1,483 | 15,285 | 10,307 | 23.4 | % | 7.5 | % | 46 | |||||||||||||||||||
| 2 | 1,709 | 17,307 | 10,127 | 23.5 | % | 6.8 | % | 46 | |||||||||||||||||||
| 1 | 1,686 | 16,796 | 9,962 | 23.5 | % | 8.0 | % | 46 | |||||||||||||||||||
| 2020 | 7,647 | $ | 76,696 | $ | 10,035 | 23.4 | % | 7.9 | % | 47 | |||||||||||||||||
| 4 | 1,991 | 19,658 | 9,873 | 23.5 | % | 7.9 | % | 46 | |||||||||||||||||||
| 3 | 1,753 | 17,880 | 10,200 | 23.3 | % | 7.6 | % | 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 | |||||||||||||||||||
|
Key Performance Indicators on Direct Loans Originated (Originations in thousands) |
|||||||||||||||||||||
| Number of | Principal | Average | |||||||||||||||||||
| Fiscal Year | Loans | Amount | Amount | Average | Average | ||||||||||||||||
| /Quarter | Originated | Originated | Financed*^ | APR* | Term* | ||||||||||||||||
| 2021 | 3,497 | $ | 14,148 | $ | 4,131 | 29.6 | % | 25 | |||||||||||||
| 4 | 753 | 3,284 | 4,362 | 29.6 | % | 25 | |||||||||||||||
| 3 | 1,265 | 4,605 | 3,641 | 30.9 | % | 22 | |||||||||||||||
| 2 | 924 | 3,832 | 4,147 | 29.2 | % | 25 | |||||||||||||||
| 1 | 555 | 2,427 | 4,373 | 28.7 | % | 26 | |||||||||||||||
| 2020 | 3,142 | $ | 12,638 | $ | 4,017 | 28.2 | % | 25 | |||||||||||||
| 4 | 720 | 3,104 | 4,310 | 28.6 | % | 25 | |||||||||||||||
| 3 | 1,137 | 4,490 | 3,949 | 28.4 | % | 24 | |||||||||||||||
| 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 | % | 24 | |||||||||||||||
| 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 | |||||||||||||||
*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 primarily 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
Except for the historical information contained herein, the matters discussed in this news release include forward-looking statements, including expectations regarding the impact of COVID-19 on the Company’s business, its ability to obtain the expected financial and tax benefits from the CARES Act, and its ability to obtain loan forgiveness under its PPP loan, 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, including in connection with the current COVID-19 pandemic, 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, 2020. 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 | Twelve months ended | ||||||||||||||||
| March 31, | March 31, | ||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||
| Revenue: | |||||||||||||||||
| Interest and fee income on finance receivables | $ | 12,816 | $ | 14,896 | $ | 54,211 | $ | 62,095 | |||||||||
| Gain on equity investments | 470 | – | 1,809 | – | |||||||||||||
| Total revenue | 13,286 | 14,896 | 56,020 | 62,095 | |||||||||||||
| Expenses: | |||||||||||||||||
| Operating expenses | 8,963 | 8,583 | 31,844 | 34,432 | |||||||||||||
| Provision for credit losses | 250 | 3,919 | 7,250 | 16,901 | |||||||||||||
| Interest expense | 1,320 | 1,843 | 5,980 | 8,515 | |||||||||||||
| Total expenses | 10,533 | 14,345 | 45,074 | 59,848 | |||||||||||||
| Income before income taxes | 2,753 | 551 | 10,946 | 2,247 | |||||||||||||
| Income tax expense (benefit) | 884 | (1,744 | ) | 2,595 | (1,219 | ) | |||||||||||
| Net income | $ | 1,869 | $ | 2,295 | $ | 8,351 | $ | 3,466 | |||||||||
| Earnings per share: | |||||||||||||||||
| Basic | $ | 0.24 | $ | 0.29 | $ | 1.09 | $ | 0.45 | |||||||||
| Diluted | $ | 0.24 | $ | 0.29 | $ | 1.09 | $ | 0.45 | |||||||||
Condensed Consolidated Balance Sheets
(Unaudited, In Thousands)
| March 31, | March 31, | |||||||
| 2021 | 2020 | |||||||
| Cash and restricted cash | $ | 32,977 | $ | 24,684 | ||||
| Finance receivables, net | 170,318 | 199,781 | ||||||
| Repossessed assets | 685 | 1,340 | ||||||
| Operating lease right-of-use assets | 3,392 | 2,598 | ||||||
| Other assets | 5,066 | 10,415 | ||||||
| Total assets | $ | 212,438 | $ | 238,818 | ||||
| Credit facility, net of debt issuance costs | $ | 86,154 | $ | 124,255 | ||||
| Note payable | 3,244 | – | ||||||
| Operating lease liabilities | 3,367 | 2,652 | ||||||
| Other liabilities | 4,451 | 4,332 | ||||||
| Total liabilities | 97,216 | 131,239 | ||||||
| Shareholders’ equity | 115,222 | 107,579 | ||||||
| Total liabilities and shareholders’ equity | $ | 212,438 | $ | 238,818 | ||||
| Book value per share | $ | 14.95 | $ | 13.78 | ||||
| Three months ended | Twelve months ended | |||||||||||||||||
| March 31, | March 31, | |||||||||||||||||
| (In thousands) | (In thousands) | |||||||||||||||||
| Portfolio Summary | 2021 | 2020 | 2021 | 2020 | ||||||||||||||
| Average finance receivables (1) | $ | 185,750 | $ | 213,666 | $ | 199,102 | $ | 226,541 | ||||||||||
| Average indebtedness (2) | $ | 92,761 | $ | 121,733 | $ | 107,615 | $ | 132,552 | ||||||||||
| Interest and fee income on finance receivables | $ | 12,816 | $ | 14,896 | $ | 54,211 | $ | 62,095 | ||||||||||
| Interest expense | 1,320 | 1,843 | 5,980 | 8,515 | ||||||||||||||
| Net interest and fee income on finance receivables | $ | 11,496 | $ | 13,053 | $ | 48,231 | $ | 53,580 | ||||||||||
| Portfolio yield (3) | 27.60 | % | 27.89 | % | 27.23 | % | 27.41 | % | ||||||||||
| Interest expense as a percentage of average finance receivables | 2.84 | % | 3.45 | % | 3.00 | % | 3.76 | % | ||||||||||
| Provision for credit losses as a percentage of average finance receivables | 0.54 | % | 7.34 | % | 3.64 | % | 7.46 | % | ||||||||||
| Net portfolio yield (3) | 24.22 | % | 17.10 | % | 20.59 | % | 16.19 | % | ||||||||||
| Operating expenses as a percentage of average finance receivables | 19.30 | % | 16.07 | % | 15.99 | % | 15.20 | % | ||||||||||
| Pre-tax yield as a percentage of average finance receivables (4) | 4.92 | % | 1.03 | % | 4.60 | % | 0.99 | % | ||||||||||
| Net charge-off percentage (5) | 6.83 | % | 11.29 | % | 6.16 | % | 10.01 | % | ||||||||||
| Finance receivables | $ | 184,237 | $ | 219,366 | ||||||||||||||
| Allowance percentage (6) | 3.34 | % | 5.09 | % | ||||||||||||||
| Total reserves percentage (7) | 7.49 | % | 9.18 | % | ||||||||||||||
Note: All three-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 finance receivables outstanding as of ending balance sheet date. |
| (7) | Total reserves percentage represents the allowance for credit losses, purchase price discount, and unearned dealer discounts divided by finance receivables outstanding as of ending balance sheet date. |
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 | |||||||||||||||||||||||
| March 31, 2021 | $ | 170,195 | $ | 6,289 | $ | 2,430 | $ | 896 | $ | 42 | $ | 9,657 | ||||||||||||||||
| 3.70 | % | 1.43 | % | 0.53 | % | 0.02 | % | 5.67 | % | |||||||||||||||||||
| March 31, 2020 | $ | 207,247 | $ | 14,977 | $ | 4,290 | $ | 1,893 | $ | 19 | $ | 21,179 | ||||||||||||||||
| 7.23 | % | 2.07 | % | 0.91 | % | 0.01 | % | 10.22 | % | |||||||||||||||||||
| Direct Loans | Balance | |||||||||||||||||||||||||||
| Outstanding | 30 – 59 days | 60 – 89 days | 90 – 119 days | 120+ | Total | |||||||||||||||||||||||
| March 31, 2021 | $ | 13,909 | $ | 253 | $ | 101 | $ | 81 | $ | 10 | $ | 445 | ||||||||||||||||
| 1.82 | % | 0.73 | % | 0.58 | % | 0.07 | % | 3.20 | % | |||||||||||||||||||
| March 31, 2020 | $ | 11,844 | $ | 344 | $ | 136 | $ | 59 | $ | 0 | $ | 539 | ||||||||||||||||
| 2.90 | % | 1.15 | % | 0.50 | % | 0.00 | % | 4.55 | % | |||||||||||||||||||
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 | |||||||||||||||||
| March 31, | March 31, | |||||||||||||||||
| (Purchases in thousands) | (Originations in thousands) | |||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||||
| Purchases/Originations | $ | 24,637 | $ | 19,658 | $ | 3,284 | $ | 3,104 | ||||||||||
| Average APR | 23.2 | % | 23.5 | % | 29.6 | % | 28.6 | % | ||||||||||
| Average discount | 7.5 | % | 7.9 | % | N/A | N/A | ||||||||||||
| Average term (months) | 46 | 46 | 25 | 25 | ||||||||||||||
| Average amount financed | $ | 10,143 | $ | 9,873 | $ | 4,362 | $ | 4,310 | ||||||||||
| Number of contracts | 2,429 | 1,991 | 753 | 720 | ||||||||||||||
| Contracts | Direct Loans | |||||||||||||||||
| Twelve months ended | Twelve months ended | |||||||||||||||||
| March 31, | March 31, | |||||||||||||||||
| (Purchases in thousands) | (Originations in thousands) | |||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||||
| Purchases/Originations | $ | 74,025 | $ | 76,696 | $ | 14,148 | $ | 12,638 | ||||||||||
| Average APR | 23.4 | % | 23.4 | % | 29.6 | % | 28.2 | % | ||||||||||
| Average discount | 7.5 | % | 7.9 | % | N/A | N/A | ||||||||||||
| Average term (months) | 46 | 47 | 25 | 25 | ||||||||||||||
| Average amount financed | $ | 10,135 | $ | 10,035 | $ | 4,131 | $ | 4,017 | ||||||||||
| Number of contracts | 7,307 | 7,647 | 3,497 | 3,142 | ||||||||||||||
The following table presents selected information on the entire Contract and Direct Loan portfolios of the Company:
| Contracts | Direct Loans | |||||||||||||||||
| As of | As of | |||||||||||||||||
| March 31, | March 31, | |||||||||||||||||
| Portfolio | 2021 | 2020 | 2021 | 2020 | ||||||||||||||
| Average APR | 22.8 | % | 22.6 | % | 28.5 | % | 27.3 | % | ||||||||||
| Average discount | 7.6 | % | 7.6 | % | N/A | N/A | ||||||||||||
| Average term (months) | 51 | 52 | 26 | 26 | ||||||||||||||
| Number of active contracts | 22,760 | 26,894 | 4,017 | 3,481 | ||||||||||||||
| Contact: | Irina Nashtatik | NASDAQ: NICK | |
| CFO Ph # (727)-726-0763 |
Web site: www.nicholasfinancial.com |