How did NICK pay for this dividend. Their balance sheet shows they usually keep $2-3 million in cash on hand. And if they accumulated cash in the last quarter instead of paying towards debt, is that enough to accumulate $20 million so quickly?
The Company has an agreement with its consortium of lenders for a line of credit facility (the “Line”) for an amount of $150,000,000. The pricing of the Line, which expires on November 30, 2013, is 300 basis points above 30-day LIBOR with a 1% floor on LIBOR (4.00% at September 30, 2012 and March 31, 2012). Pledged as collateral for this credit facility are all of the assets of the Company. The outstanding amount of the credit facility was approximately $110,000,000 and $112,000,000 as of September 30, 2012 and March 31, 2012, respectively. The amount available under the line of credit was approximately $40,000,000 and $38,000,000 as of September 30, 2012 and March 31, 2012, respectively.
The facility requires compliance with certain financial ratios and covenants and satisfaction of specified financial tests, including maintenance of asset quality and performance tests. Dividends do not require consent in writing by the agent and majority lenders under the new facility as long as the Company is in compliance with a net income covenant. As of September 30, 2012, the Company was in full compliance with all debt covenants.
Nicholas Financial Announces Bank Credit Line Extension
December 26, 2012 - Clearwater, Florida., - Nicholas Financial, Inc. announced that the Company has executed an amendment to its Bank Credit Line that extends the maturity date to November 30, 2014. All other terms and conditions of the Company’s Credit Line remain in effect.
According to Peter L. Vosotas, Chairman and CEO, “We are pleased that our consortium of bank lenders has agreed to extend the maturity date of our Credit Line. The Credit Line will allow us to continue our careful expansion strategy during the next two years. Additionally, we are very pleased to announce our 64th branch located in a suburb of Detroit, Michigan.”
Founded in 1985, with assets of approximately $265,000,000 as of September 30, 2012, Nicholas Financial, Inc. is one of the largest publicly traded specialty consumer finance companies based in the Southeast. The Company presently operates out of 64 branch locations in both the Southeast and the Mid-West States. The Company has approximately 12,100,000 shares of common stock outstanding