Nicholas Financial’s Earnings

Great news! NICK made 28 cents a share (adjusting for two cents lost on swaps):

CLEARWATER, Fla., May 4, 2010 — Nicholas Financial, Inc. announced that for the three months ended March 31, 2010, net earnings, excluding change in fair value of interest rate swaps, increased 52% to $3,113,000 as compared to $2,048,000 for the three months ended March 31, 2009. Per share diluted net earnings, excluding change in fair value of interest rate swaps, increased 44% to $0.26 as compared to $0.18 for the three months ended March 31, 2009. See reconciliations of the Non-GAAP measures below. Revenue increased 8% to $14,256,000 for the three months ended March 31, 2010 as compared to $13,224,000 for the three months ended March 31, 2009.
For the year ended March 31, 2010, net earnings, excluding change in fair value of interest rate swaps, increased 80% to $10,228,000 as compared to $5,673,000 for the year ended March 31, 2009. Per share diluted net earnings, excluding change in fair value of interest rate swaps, increased 74% to $0.87 for the year ended March 31, 2010 as compared to $0.50 for the year ended March 31, 2009. See reconciliations of the Non-GAAP measures below. Revenue increased 6% to $56,472,000 for the year ended March 31, 2010 as compared to $53,102,000 for the year ended March 31, 2009.
According to Peter L. Vosotas, Chairman and CEO, “Our positive results for the fourth quarter and year were favorably impacted by a solid increase in revenues and a reduction in the net charge-off percentage of 41% and 26% for the three and twelve months ended March 31, 2010, respectively. We plan to open three to five new branch locations this year and will continue to evaluate additional markets for future branch locations.”

Wow, the provision for credit losses dropped to 3.01%!! That’s huge! That’s the lowest since September 2007. This was another very good quarter for Nicholas.
Let’s run through some of the numbers. Most of my forecasts were pretty close to the mark. Average receivables rose to $229.4 million. I said to expect $230 million. Revenue was $14.2 million. I was expecting $14.5 million.
I pegged interest expense to rise to 2.4% but it rose even higher to 2.66%. However, NICK’s debt actually fell from last quarter so total interest expense was $1.5 million. I was expecting $1.4 million.
Even though I was slightly overly optimistic on those projections, I was too pessimistic on the provision for credit losses. I thought it would fall to 4.8%. Instead, it fell all the way to 3.01%. That made all the difference.
Twenty-eight cents is great news. Congratulations to everyone at Nicholas. This was a job well done.
The company made $3 million in three months. Now that cash can be used to grow the portfolio or pay down debt. If they keep this up, then NICK should easily make $1.10 for this calendar year.
For stat geeks, here are the numbers.

Posted by on May 4th, 2010 at 2:08 pm


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