Net Income for the fiscal
year ended March 31, 2001 increased 32% to $3,410,877
compared to $2,577,568 for the year ended March 31, 2000. Diluted earnings per share
increased to $1.35 for the year ended March 31, 2001, as compared to $1.01 per share a
year ago. Revenue for the year ended March 31, 2001 increased 26% to $17,797,000,
compared to $14,075,000 for the year ended March 31, 2000. For the year, income
increased 32% to $3,410,877 while revenues increased 26% to $17,797,000. Earnings
per share rose 33% to $1.35. In addition, the Company announced record income and
revenues for every quarter during the year.
Our Chief Financial Officer, Ralph Finkenbrink for the past thirteen years, continues
to be conservative and cautious in his approach to the financial management of the Company.
Since Nicholas Financial entered the non-prime auto finance business in 1990, Ralph has
insisted on maintaining our loan loss reserves at a very conservative level. Because of
his fiscal prudence and conservative conduct, he has been able to secure extremely favorable
borrowing terms and rates with our lenders. During the past year, the Company increased its
credit facility from $45 million to $75 million, while adding Hibernia National Bank and Bank
One as participants with its lead bank, Bank of America.
In February we retained an outside investor relations company to
assist us in building greater awareness for our Company and its stock.
This firm, EPOCH Financial Group, Inc., based in Atlanta, Georgia, with
an office in Denver, Colorado, has assisted us in generating a good deal
of interest in our stock since we initiated this relationship. (Matthew
J. Foget, Vice President Sales shown at right) It specializes in telling a company's story to retail stockbrokers, buy and
sell side analysts, institutional investors, financial media and market
makers. Epoch has a great deal of experience in improving shareholder value,
increasing market capitalization and liquidity. We are very optimistic that
they will help to increase awareness and interest in our stock.
financial performance, highlighted by ten consecutive years of increasing
revenues and income, hasn’t happened by accident. It is the result of many
people working very hard over a long period. The cars of our employees are
usually the first to arrive in the parking lot each morning and invariably
the last to drive away at night. We, like many companies, have struggled to
find qualified people. When we do, we try our best to keep those that work
hard and produce results. We reward our employees with very good benefits,
profit sharing, performance bonuses and numerous career opportunities.
Surveys of industry salary rates indicate that we pay very well when
compared to our competitors. As a result, we have had minimal employee
turnover during the last few years. Our ability to mold and retain a
team with veterans at its core is the primary reason for our success.
Our accounting staff and the data processing staff, for example, have
been with the Company virtually since its inception in 1985.
We are convinced that our business model is a very sound and time-tested
approach to doing business in our market place. The way that we go about
establishing a presence in a market is simple. The first step is to identify
a market that meets our criteria for automobile dealerships, average household
income and lending regulations. (Sotirios
A. Kakalis, Director of Loss Recovery shown at right)
Once we decide to establish our Company in a
particular area, we then construct a Business Development Center (BDC) of roughly 1,400
square feet, built to our preset interior design specifications as well as
telecommunications systems that link the office to our corporate headquarters.
Normally, the BDC is initially staffed with a manager
and two assistants. Gradually assistants are added as needed until we reach a
full compliment of five to seven in all. The manager and his/her staff make all
lending and collection decisions for the BDC. The staff
is required to comply with strict corporate lending and collection guidelines.
All exceptions to these guidelines must be processed through the appropriate
levels of management and confirmed in writing. Our internal auditing staff
audits each of the BDC's on a quarterly basis. The
Corporate staff makes repossession decisions and controls the final disposition
of repossessions. Our goal is to have each BDC generate over $300,000 in
pre-tax income, within three years of opening. Most of our BDC's have met this goal.
Our Loss Recovery Department, based in our Clearwater headquarters,
is one of the most important contributors to the success of Nicholas
Financial. Soti Kakalis, a seven-year veteran with the Company, leads
this organization. He has a team comprised of former Company managers
and collectors that are all seasoned veterans. Soti’s staff handles
everything from repossessed vehicle logistics through vehicle disposition
to loan loss collections. In performing their specialized tasks they
interact with judges, attorneys and insurance companies on a daily basis.
This team traces skips and collects unpaid balances from former customers.
The Loss Recovery Department also supervises our licensing compliance in
every BDC location. In a pinch, any of the members
of this team can manage a BDC that is short handed
or faltering. Over the past three years, this very talented team has
recovered millions of dollars that would have written off by most of our
We continue to maintain and support many small businesses with our financial
software products through our data processing subsidiary, Nicholas Data Services
Inc. (NDS). NDS continues to sell and maintain our ROUTEMAN Accounts Receivable
software for pest control operators. ROUTEMAN, first introduced in 1984,
continues to get the highest marks for its reliability and design stability. (Michael
J. Marika, Chief Information Officer shown at
right) NDS also supplies Nicholas Financial with all of its data processing needs
ranging from the financial application software to networking hardware and
telecommunications equipment. Our NDS engineers have developed our web site
and Internet facilities internally. We continue to leverage our use of the
Internet for e-mail, business-to-business communications and software distribution.
Anyone wishing detailed information about our Company can find it by visiting our
web site at www.nicholasfinancial.com.
In May of 2000, the Company elected Mel Cutler and A. R. “Charlie” Neal to its
board of directors. Charlie is a prominent attorney in the Tampa bay area, who
specializes in Securities and Business law. Mel founded Cutler and Associates,
a construction company headquartered in Worcester, Massachusetts. Mr. Cutler is
also the founder and Chairman of Madison Bank, headquartered in Palm Harbor,
We look forward to a good year in Fiscal 2002. We expect to grow the Company
by increasing our existing loan portfolios and building new BDC's. We intend to open several new
BDC's over the
course of this year and next. We are presently planning to open additional
BDC's in Florida, Georgia and North Carolina. In
addition, we are exploring opportunities for BDC's in
South Carolina, Virginia, Kentucky and Ohio.
We are very proud of our employees, whose dedication, talent and loyalty
have made Nicholas an important force in automobile financing in the Southeast.
We are grateful for their ongoing efforts and for the support of our customers,
vendors and shareholders. We remain determined to increase the value of our
publicly traded stock. To all of you who have invested in Nicholas, we wish
to thank you for having continued faith in our Company. On behalf of our
Board of Directors and our employees, we thank you for the confidence that
you have entrusted in us.