Business Section, Page 1E
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Thursday, August 29, 1996 Business Section, Page 1E . |
| Finance Company aims higher Nicholas Financial, a specialist in bad-credit loans, toots its own horn and hopes Wall Street will notice. |
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| . By Helen Huntley Times Staff Writer |
| CLEARWATER - Wall Street has yet to take
notice of tiny Nicholas Financial Inc. However, the Clearwater company had no trouble
capturing shareholders' attention at its annual meeting Wednesday. A trio of "secret
agents" showed up in black suits hats and sunglasses with the Mission; Impossible
theme blaring in the background. They explained their mission at Nicholas, which includes
tracking down borrowers who skip town owing the company money. "We can be nice about it or we can be really bad -- it's their choice -- but we do get our money," said Soti Kakalis, manager of special operations. "I always tell people they can run, but thay can never hide." Nicholas needs tough guys supervising collections because it specializes in financing used cars for people with bad credit. (It does, however have some standards. " No repossessions in the last six months is one of the cardinal rules.) Not every debtor pays up, but Nicholas more than makes up for those losses with an average interest rate of more than 24 percent on its loans. After setting aside $486,440 for credit losses, the company made $828,958 last fiscal year. Revenues were up 42 percent and profits 50 percent. The company is on track to do even better this year, chairman Peter Vosotas said. It's also getting closer to getting some long-sought attention for its stock. Nicholas stock trades in the obscurity of the OTC Bulletin Board, as well as on the Vancouver Stock Exchange, where Vosotas went nine years ago to raise initial equity capital. His goal is to get to the Nasdaq market, but the shares now trade at about half Nasdaq'a $5 minimum for listing. |
That's where Interstate/Johnson Lane Corp. comes into the
picture. Nicholas hired the Charlotte, N.C.-based brokerage firm to manage an additional
public offering and improve shareholder value. "The company needs to build some liquidity in its stock," Interstate/Johnson investment banker Allen Hewett Jr. told share holders Wednesday. When a company has more shares outstanding, it becomes easier to buy and sell the stock, which makes the stock more attractive to potential buyers. Interstate/Johnson expects to sell 1.5-million Nicholas shares as early as this week through a private placement with wealthy investors, Hewett said. The price has not yet been determined, but Vosotas said Nicholas will use the proceeds to pay off debt. Additional shares may be offered to the public later. Hewett said selling Wall Street investors on Nicholas is "a challenge." He said rising personal bankruptcies have affected how investors think about finance companies. In addition, he said there already are about 20 public companies doing used-car financing. "There is some concern the market is a little saturated," he said In the meantime, Nicholas just keeps making money. Profits last quarter jumped 29 percent. Re-printed from: |