Nicholas buying back $70M in shares

CLEARWATER -- Nicholas Financial Inc. has offered shareholders a chance to sell some of their shares back to the company in a Dutch auction that cost the Clearwater financing company up to $70 million.

Nicholas' goal is to purchase nearly 4.8 million shares, or about 39% of the shares outstanding, according to the company's filing with the U.S. Securities and Exchange Commission. Through the auction, the price of those repurchased shares will range from $14.60 to $15.60. At the maximum price, that would be a 6% premium from Monday's close of $14.67.

Nicholas Financial trades on the Nasdaq under the symbol NICK.

“In addition to providing a return of capital to shareholders, this buyback reflects our confidence in the company,” Ralph Finkenbrink, president and CEO of Nicholas, says in a release. “We remain enthusiastic about the future of Nicholas.”

Finkenbrink says he will offer 100,000 shares with a potential value of $1.46 million and $1.56 million. Two other directors will offer just under 32,000 shares, for a value between $466,000 and $498,000.

Nicholas released its quarterly financial report Monday for the three months ended Dec. 31, showing a profit of $3.8 million, or 31 cents per share, on revenue of $21.8 million. The year before, Nicholas had a profit of $3.8 million, or 32 cents per share, on revenue of $20.8 million.

Shareholders will have until March 13 to offer shares back to the company. Nicholas will use a new debt package announced last week that expanded its line of credit from $150 million to $225 million. However, if the stock buyback is not successful, the company's line of credit will return to $150 million.

Nicholas Financial has been publicly traded since 1987, and provides direct consumer loans and purchases installment sales contracts from automobile dealers for used cars and light trucks. It also operates an accounting software division for small businesses through its Nicholas Data Services Inc. subsidiary.