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Thursday, July 29, 2010

NICK Q1 results

Nicholas Financial announced their Q4 results today.

I'll be comparing it to the Q4 results of the previous post.

Weighted diluted shares is largely unchanged.

According to Peter L. Vosotas, Chairman and CEO, "We are pleased to report record 1st quarter revenue and earnings. Our results were primarily impacted by an increase in revenues, a reduction in the net charge-off rate and an increase in the cost of borrowed funds. During the first quarter we have added four branch offices to our 12 state branch network, bringing the total to 54 locations. The Company continues to evaluate additional markets for future branch locations and subject to market conditions, could open additional branch locations during the year. The Company remains open to acquisitions should an opportunity present itself."

Revenue is up slightly. Expenses are up a bit. Provision for losses continues to drop down to $1.6 million from $1.7 million. Interest expense is essentially the same.

Net income is $3.6 million, up from $3.3 million. It's now up to 30 cents a share, up from 28 cents (25 cents in Q3).

Ave finance receivables is up slightly. Gross portfolio yield is up slightly. Ave cost of borrowed funds is up slightly. Provision is down to 2.68% of net rxables from 3.01%.

Net portfolio yield: 19.82%! up from 19.15%. Expenses as a % of net rxables increased from 10.12% to 10.26%. Pre-tax yield: 9.43%, up from 8.89%.

Writeoffs and chargeoffs are down.

For contract purchases (direct loans are too minor to have much impact)
30-59 days late: UP TO $9.4 million FROM $7.6 million
60-89 days late: $2.7 million, up from $1.8 million
90 days late: 755K, down from 779K.

They're purchasing loans with an average discount of 8.91%, down from 9.22%. I would have expected to see this going up if the competition is getting knocked out.


It's hard to say, but it looks like the customer base is deteriorating again, but slightly. Of course it first shows up in the 30-59 days late column, with maybe an uptick in the 60-89 days column.

Looks like a double-dip recession? NICK looks very solid and they should be fine if there's a continued downturn.

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