Nicholas Financial Inc (NICK) 10-K Annual Report June 2020

Originations year-over-year on new Contracts purchased and bulk portfolio purchases of approximately $19.9 million for the three months ended March 31, 2020 increased by 86.3% compared to prior year fourth quarter

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Originations year-over-year on Direct Loans for the three months ended March 31, 2020 increased by 150.3% compared to prior year fourth quarter

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Accounts 60+ days delinquent decreased to 2.9%, excluding Chapter 13 bankruptcy accounts, compared to 3.3% as of the prior year fourth quarter

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Gross Portfolio Yield for the three months ended March 31, 2020 increased to 27.9% compared to 26.9% during the prior year fourth quarter

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The Company obtained a loan in the amount of approximately $3.2 million from Fifth Third Bank in connection with the U.S. Small Business Administration’s Paycheck Protection Program

June 4, 2020 – Clearwater, Florida - Nicholas Financial, Inc. (NASDAQ: NICK) announced net income for the three months ended March 31, 2020 of $2.3 million as compared to net loss of $4.7 million for the three months ended March 31, 2019. Diluted net income per share was $0.29 for the three months ended March 31, 2020 as compared to net loss per share of $0.60 for the three months ended March 31, 2019. Revenue decreased 9.2% to $14.9 million for the three months ended March 31, 2020 as compared to $16.4 million for the three months ended March 31, 2019. The Company reported income before income taxes for the three months ended March 31, 2020 of $0.6 million as compared to a loss before income taxes of $6.0 million for the three months ended March 31, 2019. The Company recorded an income tax benefit of $1.7 million during the three months ended March 31, 2020 as compared to $1.2 million during the three months ended March 31, 2019.

In response to the global impacts of COVID-19 on U.S. companies and citizens, the government enacted the CARES Act on March 27, 2020. The CARES Act included several tax relief options for companies, which resulted in the following provisions available to the Company.

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The Company has elected to carryback its 2018 net operating losses of $9.7 million to 2013, thus generating an anticipated refund of $3.4 million and an income tax benefit of $1.3 million. The tax benefit is the result of the federal income tax rate differential between the current statutory rate of 21% and the 35% rate applicable to 2013.

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The Company plans to carryback its 2019 net operating losses of $2.9 million to 2014, thus generating an anticipated refund of $1.0 million and an income tax benefit of $0.4 million. The tax benefit is the result of the federal income tax rate differential between the current statutory rate of 21% and the 35% rate applicable to 2014.

During the quarter ended March 31, 2020, the Company had significant cash movements of approximately $19.9 million for the bulk portfolio purchases and approximately $7.4 million from the Credit Facility, which increased outstanding debt. The Company did not have any significant capital expenditures.

Net income for the year ended March 31, 2020 was $3.5 million as compared to net loss of $3.6 million for the year ended March 31, 2019. Diluted net income per share was $0.45 for the year ended March 31, 2020 as compared to net loss per share of $0.46 for the year ended March 31, 2019. Revenue decreased 12.9% to $62.1 million for the year ended March 31, 2020 as compared to $71.3 million for the year ended March 31, 2019. The Company reported income before income taxes for the year ended March 31, 2020 of $2.2 million as compared to loss before income taxes of 4.6 million for the year ended March 31, 2019. The Company recorded an income tax benefit of $1.2 million for the year ended March 31, 2020 as compared to $0.9 million for the year ended March 31, 2019.

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The following information was filed by Nicholas Financial Inc (NICK) on Thursday, June 4, 2020 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Inside Nicholas Financial Inc's 10-K Annual Report:

Financial - Expense Highlight
The Company is affected by inflation primarily through increased operating costs and expenses including increases in interest rates.

Financial - Expense Highlight
Using the prior method (discussed below), the allowance and provision expense for the first quarter of fiscal 2019 would have been approximately $151,000 lower.
Financial - Expense Highlight
Interest expense decreased to $8.5 million for the fiscal year ended March 31, 2020, as compared to $9.5 million for the fiscal year ended March 31, 2019, due to a decrease in average outstanding debt and interest rate.
Other - Other Highlight
The government stimulus checks, which briefly increased daily cash collections in April 2020, the expansion of unemployment benefits by the CARES Act to allow individuals to receive their weekly unemployment benefit for a maximum of 39 weeks, and the fact that unemployed customers are expected to be eligible to receive Pandemic Unemployment Compensation ("PUC") equal to an additional $600 per week through July 31, 2020, collectively are expected to have a beneficial effect on the Company.
Financial - Expense Highlight
Pursuant to the Paycheck Protection Program, all or a portion of the PPP Loan may be forgiven if the Company uses the proceeds of the PPP Loan for its payroll costs and other expenses in accordance with the requirements of the Paycheck Protection Program.
Financial - Debt
(2) Average indebtedness represents the...Read more
Financial - Earnings
The Company's diluted earnings per...Read more
Other - Other
Interest on outstanding borrowings under...Read more
Other - Other
The following table sets forth...Read more
Other - Other
In addition, the Company takes...Read more
Other - Other
In addition, the Company takes...Read more
Financial - Cash Flow
However, it is likely that...Read more
Other - Other
Pursuant to the Credit Agreement,...Read more
Financial - Expense
Operating expenses increased slightly to...Read more
Financial - Expense
Marketing expenses decreased approximately $0.9...Read more
Other - Other
Conversely, the Company could identify...Read more
Other - Other
(6) Net charge-off percentage represents...Read more
Revenue - Product
The Company's consolidated revenues decreased...Read more
Other - Other
The Company's critical accounting policy...Read more
Other - Other
The effective interest rate used...Read more
Financial - Expense
If an event of default...Read more
Other - Other
However, the Company experienced increased...Read more
Financial - Expense
(4) Pre-tax yield represents net...Read more
Financial - Expense
Administrative expense increased approximately $1.7...Read more
Financial - Cash Flow
However, the extent to which...Read more
Financial - Income
Interest and fee income on...Read more
Other - Other
The increase in APR (and...Read more

Financial Statements, Disclosures and Schedules

Inside this 10-K Annual Report

Material Contracts, Statements, Certifications & more

Nicholas Financial Inc provided additional information to their SEC Filing as exhibits

Exhibit 10.22.1: Material Contract

Exhibit 10.22.2: Material Contract

Exhibit 10.22.3: Material Contract

Exhibit 4.2: Instruments Defining The Rights Of Security Holders, Including Indentures

Exhibit 23.1: Consents Of Experts And Counsel

Exhibit 31.1: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 31.2: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 32.1: Section 1350 Certification

Exhibit 32.2: Section 1350 Certification

Ticker: NICK
CIK: 1000045
Form Type: 10-K Annual Report
Accession Number: 0001564590-20-030033
Submitted to the SEC: Mon Jun 22 2020 9:51:26 AM EST
Accepted by the SEC: Mon Jun 22 2020
Period: Tuesday, March 31, 2020
Industry: Short Term Business Credit Institutions

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Nicholas Financial Inc (NICK) SEC Filing 10-K Annual report for the fiscal year ending Tuesday, March 31, 2020

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