<PAGE> 1
_______________________________________________________________
_______________________________________________________________
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES ACT OF 1934 FOR THE PERIOD ENDED JUNE 30, 1998
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from ________ to _________.
Commission file number: 0-26680
NICHOLAS FINANCIAL, INC.
(Exact name of registrant as specified in its Charter)
British Columbia, Canada 8736-3354
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
2454 McMullen Booth Road, Building C
Clearwater, Florida 33759
(Address of Principal Executive Offices) (Zip Code)
(813) 726-0763
(Registrant's telephone number, Including area code)
Not applicable
(Former name, former address and former fiscal year, if
changed since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 and 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter periods that the Registrant was required
to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No ____.
As of July 31, 1998 there were 2,357,013 shares of common
stock outstanding
This Form 10-QSB consists of 17 pages.
_______________________________________________________________
_______________________________________________________________
<PAGE> 2
Nicholas Financial, Inc.
Form 10-QSB
Index
Part I. Financial Information Page
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheet
as of June 30, 1998.......................................3
Condensed Consolidated Statements of Income for
the three months ended June 30, 1998......................4
Condensed Consolidated Statements of Cash Flows
for the three months ended June 30, 1998..................5
Notes to the Condensed Consolidated
Financial Statements......................................6
Item 2. Management's Discussion and Analysis of the
Financial Condition and Results of Operations.......10
Part II. Other Information
Item 1. Legal Proceedings...................................15
Item 2. Changes in Securities...............................15
Item 3. Defaults upon Senior Securities.....................15
Item 4. Submission of Matters to a Vote of
Security Holders...................................15
Item 5. Other Information...................................15
Item 6. Exhibits and Reports on Form 8-K....................15
Signatures..........................................16
Index of Exhibits...................................17
<PAGE> 3
<TABLE>
<CAPTION>
Nicholas Financial, Inc.
Condensed Consolidated Balance Sheet
(Unaudited)
June 30,
1998
---------------
<S> <C>
Assets
Cash $ 40,967
Finance receivables, net 35,013,135
Accounts receivable 20,202
Prepaid expenses and other assets 422,922
Property and equipment, net 208,056
Deferred income taxes 990,778
---------------
Total assets $36,696,060
===============
Liabilities
Line of credit $25,630,594
Notes payable - related party 1,615,595
Accounts payable 1,712,743
Income taxes payable 191,004
Deferred revenues 287,590
Other liabilities 22,483
--------------
29,460,009
Shareholders' equity
Preferred stock, no par: 5,000,000 shares
authorized; none issued and outstanding -
Common stock, no par: 50,000,000 shares
authorized; 2,357,013 shares issued and
outstanding 3,740,069
Retained earnings 3,495,982
--------------
7,236,051
--------------
Total liabilities and shareholders' equity $36,696,060
==============
See accompanying notes.
</TABLE>
<PAGE> 4
<TABLE>
<CAPTION>
Nicholas Financial, Inc.
Condensed Consolidated Statements of Income
(Unaudited)
Three months ended
June 30
1998 1997
------------------------
<S> <C> <C>
Revenue:
Interest income on finance receivables $2,078,087 $1,691,808
Sales 109,793 109,481
------------------------
2,187,880 1,801,289
Expenses:
Cost of sales 22,701 21,377
Marketing 73,492 67,620
Administrative 855,229 699,185
Provision for credit losses 184,457 132,322
Depreciation and amortization 25,451 25,500
Interest expense 603,063 499,234
------------------------
1,764,393 1,445,238
------------------------
Operating income before income taxes 423,487 356,051
Income tax expense (benefit):
Current 203,263 201,505
Deferred (40,000) (62,000)
------------------------
163,263 139,505
------------------------
Net Income $260,224 $216,546
========================
Earnings per share - Basic $0.11 $0.09
========================
Earnings per share - Diluted $0.11 $0.09
========================
See accompanying notes.
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
Nicholas Financial, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Three months ended June 30
1998 1997
----------------------------
<S> <C> <C>
Operating activities
Net income $ 260,224 $ 216,546
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation of property and equipment 25,451 25,500
Provision for credit losses 184,457 132,322
Deferred income taxes (40,000) (62,000)
Changes in operating assets
and liabilities:
Accounts receivable 3,203 17,700
Prepaid expenses and other assets (176,077) 14,785
Deferred revenues 46,461 (16,379)
Accounts payable (29,715) (136,031)
Other liabilities 1,083 (700)
Income taxes payable 21,122 146,667
-----------------------------
Net cash provided by operating
activities 296,209 338,410
Investing activities
Increase in finance receivables,
net of principal collected (2,773,181) (1,270,193)
Purchase of property and equipment (10,021) (31,060)
-----------------------------
Net cash used by investing activities (2,783,202) (1,301,253)
Financing activities
Net proceeds from line of credit
borrowings and notes payable-
related party 2,224,000 935,500
----------------------------
Net cash provided by financing
activities 2,224,000 935,500
----------------------------
Net decrease in cash (262,993) (27,343)
Cash, beginning of period 303,960 108,148
----------------------------
Cash, end of period $40,967 $80,805
============================
See accompanying notes.
</TABLE>
<PAGE> 6
Nicholas Financial, Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
June 30, 1998
1. Basis of Presentation
The accompanying unaudited condensed consolidated financial
statements of Nicholas Financial Inc (the "Company") have been
prepared in accordance with generally accepted accounting
principles for interim financial information and with the
instructions to Form 10-QSB pursuant to the Securities and
Exchange Act of 1934, as amended in Article 10 of Regulation SB,
as amended. Accordingly, they do not include all of the
information and footnotes required by generally accepted
accounting principles for complete financial statements. In the
opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation
have been included. Operating results for the three months ended
June 30, 1998 are not necessarily indicative of the results that
may be expected for the year ended March 31, 1999. For further
information, refer to the consolidated financial statements and
footnotes thereto included in the Company's Annual Report on Form
10-K for the year ended March 31, 1998.
2. Earnings Per Share
In 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, Earnings per
Share. Statement 128 replaced the previously reported primary and
fully diluted earnings per share with basic and diluted earnings
per share. Unlike primary earnings per share, basic earnings per
share excludes any dilutive effects of options, warrants, and
convertible securities. Diluted earnings per share is very
similar to the previously reported fully diluted earnings per
share. Effective December 31, 1997 the Company adopted the
provisions of Statement 128. All earnings per share amounts for
all periods have been presented, and where necessary, restated to
conform to the Statement 128 requirements.
<PAGE> 7
Nicholas Financial, Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
June 30, 1998
<TABLE>
<CAPTION>
The following table sets forth the computation of Basic
and Fully Diluted Earnings per Share:
Three months ended June 30,
1998 1997
-----------------------------
<S> <C> <C>
Numerator:
Numerator for basic earnings per
share - Net income available to
common stockholders $260,224 $216,546
Effect of dilutive securities:
Convertible debt $24,909 -
--------------------------
Numerator for dilutive earnings
per share -income available to
common stockholders after assumed
conversions $ 285,133 $ 216,546
==========================
Denominator:
Denominator for basic earnings per
share - weighted average shares 2,357,013 2,330,181
Effect of dilutive securities: (A)
Employee stock options - 22,324
Convertible debt 264,798 -
--------------------------
Dilutive potential common shares 264,798 22,324
Denominator for diluted earnings
per share - adjusted weighted-
average shares and assumed
conversions 2,621,811 2,352,505
==========================
Earnings per share - basic $0.11 $0.09
==========================
Earnings per share - diluted $0.11 $0.09
==========================
Footnote A:
The following options and warrants
were outstanding but not included in
the computation of diluted earnings
per share because the exercise price
was greater than the average market
price of the common shares and,
therefore, the effect would be
antidilutive.
Options 230,700 85,500
Warrants 333,333 333,333
</TABLE>
<PAGE> 8
Nicholas Financial, Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
June 30, 1998
3. Finance Receivables
Finance receivables consist of consumer automobile finance
installment contracts and are detailed as follows:
<TABLE>
<S> <C>
Finance receivables, gross contract $54,992,834
Less:
Unearned interest (12,900,505)
------------
42,092,329
Nonrefundable dealer reserves (5,725,234)
Allowance for credit losses (1,353,960)
------------
Finance receivables, net $35,013,135
============
</TABLE>
The terms of the receivables range from 6 to 60 months and bear a
weighted average effective interest rate of 24%.
4. Line of Credit
The Company has a $30,000,000 line of credit facility (the Line)
with BA Business Credit, Inc. which expires on June 30, 2000.
Borrowings under the Line bear interest at the Bank of America
prime rate plus 0.50%. The Company also has several LIBOR pricing
options available. If the outstanding balance falls below
$10,000,000 the Line bears interest at the Bank of America prime
rate plus 1.75%. Pledged as collateral for this credit facility
are all of the assets of Nicholas Financial, Inc. and its
subsidiaries.
<PAGE> 9
Nicholas Financial, Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
June 30, 1998
5. Notes Payable - Related Party
Notes payable consisted of the following:
<TABLE>
<S> <C>
Notes payable, unsecured, with interest at
varying rates up to 12%, quarterly and
semiannual interest payments due through June
2001, at which time the entire principal balance
and unpaid interest is due, subordinated to the
Line. The notes are convertible at the option of
the holder, into common shares at prices from
$5.00 to $6.00 per share. $1,150,000
Note payable, unsecured, interest at 12%,
quarterly interest due through April 2000, at
which time the entire balance and unpaid
interest is due, subordinated to the Line. The
note is convertible at the option of the holder,
into common shares at $8.25 per share. 200,000
Notes payable, unsecured, interest at 12%,
principal and interest due through May 1999. 245,041
Note payable, unsecured, interest at 12%,
quarterly interest due through August 1999, at
which time the entire principal balance is due. 20,554
------------
$1,615,595
============
</TABLE>
6. Comprehensive Income
As of April 1, 1998, the Company adopted Statement 130,
Reporting Comprehensive Income, issued by the Financial
Accounting Standards Board. Statement 130 establishes new rules
for the reporting and display of comprehensive income and its
components; however, the adoption of this Statement has no
material impact on the Company's net income or stockholders'
equity.
<PAGE> 10
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Introduction
Consolidated net income increased for the three month period
ended June 30, 1998 to $260,224 from $216,546 for the three month
period ended June 30, 1997. Earnings were favorably impacted by
an increase in the outstanding loan portfolio. The Company's NDS
subsidiary did not contribute significantly to consolidated
operations in the three month periods ended June 30, 1998 or
1997.
<TABLE>
<CAPTION>
Three Months Ended June 30,
1998 1997
---------------------------
<S> <C> <C>
Average Net Finance Receivables(1) $40,782,423 $31,719,569
Average Indebtedness(2) 26,022,255 20,277,855
Total Revenues 2,078,087 1,691,808
Interest Expense 603,063 499,234
---------------------------
Net Interest Income 1,475,024 1,192,574
Gross Portfolio Yield (3) 20.38% 21.33%
Average Cost of Borrowed Funds(2) 9.27% 9.85%
---------------------------
Net Interest Spread (4) 11.11% 11.49%
Net Portfolio Yield (3) 14.47% 15.04%
Write-off to Liquidation (5) 7.03% 9.23%
Net Charge-Off Percentage (6) 6.00% 8.46%
</TABLE>
(1) Average net finance receivables represents the average of
net finance receivables throughout the period. Net finance
receivables represents gross finance receivables less any
unearned finance charges related to those receivables.
(2) Average indebtedness represents the average outstanding
borrowings under the Line of Credit and notes payable-
related party. Average cost of borrowed funds represents
interest expense as a percentage of average indebtedness.
(3) Gross portfolio yield represents total revenues as a
percentage of average net finance receivables. Net
portfolio yield represents net interest income as a
percentage of average finance receivables.
(4) Net interest spread represents the gross portfolio yield
less the average cost of borrowed funds.
(5) Liquidation is defined as beginning receivable balance plus
current period purchases minus voids and minus ending
receivable balance.
(6) Net charge-off percentage represents net charge-offs divided
by average net finance receivables outstanding during the
period.
<PAGE> 11
Three months ended June 30, 1998 compared to three months ended
June 30, 1997
Interest Income and Loan Portfolio
Interest revenue increased 23% to $2.1 million for the
period ended June 30, 1998, from $1.7 million for the period
ended June 30, 1997. The net finance receivable balance totaled
$35.0 million at June 30, 1998, an increase of 29% from the $27.1
million at June 30, 1997. The gross finance receivable balance
increased 35% to $55.0 million at June 30, 1998 from $40.8
million at June 30, 1997. The primary reason interest revenue
increased was the increase in the outstanding loan portfolio. The
gross portfolio yield decreased from 21.33% for the period ended
June 30, 1997 to 20.38% for the period ended June 30, 1998. The
primary reason that the gross portfolio yield decreased is that
contracts purchased in the most recent 12 months carried a lower
weighted APR than those contracts purchased in the preceding 12
month period. The primary reason that net finance receivables
increased was the opening of three additional branches and
increasing the transaction volume in several existing branches.
Computer Software Business
Sales for the period ended June 30, 1998 were $109,793 compared
to $109,481 for the period ended June 30, 1997.
Operating Expenses
Operating expenses, excluding provision for credit losses
and interest expense, increased to $976,873 for the period ended
June 30, 1998 from $813,682 for the period ended June 30, 1997.
This increase of 20% was primarily attributable to the
opening of three additional branches. The Company also incurred
additional operating expenses as the result of increasing its
number of regional managers from two to three, as well as
increasing the number of home-office personnel.
Interest Expense
Interest expense increased to $603,063 for the period ended
June 30, 1998 as compared to $499,234 for the period ended June
30, 1997. This increase was due to an increase in average
outstanding borrowings from $20.3 million to $26.0 million during
the comparable periods. The impact of this increase was offset,
in part by a decrease in the average cost of funds borrowed from
9.85% for the period ended June 30, 1997 to 9.27% for the period
ended June 30, 1998 .
Analysis of Credit Losses
Because of the nature of the borrowers under the Contracts and
its direct consumer loan program, the Company considers the
establishment of adequate reserves for credit losses to be
imperative. The Company batches its Contracts into pools for
purposes of establishing reserves for losses. Each such pool
consists of the loans processed by a Company branch office during
a fiscal quarter. The average pool consists of 68 Contracts with
an aggregate initial principal amount of approximately $520,000.
As of June 30, 1998, the Company had 167 active pools.
The Company pools Contracts according to branch locations,
which are located in the States of Florida and Georgia. Pooling
by branch and quarter allows the Company to evaluate the
different markets where the branches operate. The pools allow
the Company to evaluate the performance of the branch personnel,
who are given the responsibility at the branch level to
underwrite and service their loan portfolio.
A pool retains an amount equal to 100% of the discount as a
reserve for credit losses. In situations where the discount is
determined to be insufficient to absorb all potential losses
associated with the pool, a portion of future unearned income
associated with that specific pool will be added to the reserves
for credit losses until total reserves have reached the
appropriate level. If the reserve for credit losses established
at inception is exhausted for a pool which is not fully
liquidated, then a charge to income will be used to reestablish
the reserves. If a pool is fully liquidated and has any
remaining reserves, the excess reserves are recognized as income.
<PAGE> 12
In analyzing a pool, the Company considers the performance of
prior pools originated by the branch office, the performance of
prior Contracts purchased from the dealers whose Contracts are
included in the current pool, the credit rating of the borrowers
under the Contracts in the pool, and current market and economic
conditions. Each pool is analyzed monthly to determine if the
loss reserves are adequate, and adjustments are made if they are
determined to be necessary. As of June 30, 1998, the Company had
reserves for losses on Contracts of $7,009,311, or 17% of net
outstanding receivables as compared to $4,751,769 (15%) for the
period ended June 30, 1997.
Because of the small number of direct consumer loans currently
outstanding, a reserve for losses is established at the time the
loan is made. As of June 30, 1998, the Company had reserves for
losses on direct loans of $69,883 or 7% of net outstanding
receivables as compared to $50,713 (7%) for the period ended June
30, 1997. When the volume of such loans increases, the Company
intends to utilize a pooling arrangement similar to that used in
connection with Contracts in establishing reserves. As of June
30, 1998, the Company had not experienced material losses under
its direct consumer loan program.
The provision for credit losses was $184,457 for the three
month period ended June 30, 1998 as compared to $132,322 for the
three month period ended June 30, 1997. This increase was due
primarily to the 29% increase in the net finance receivable
balance as of June 30, 1998 compared to June 30, 1997.
<PAGE> 13
The following tables present certain information regarding the
delinquency rates experienced by the Company with respect to
Contracts and under its direct consumer loan program:
<TABLE>
<CAPTION>
Three months ended Three months ended
June 30, 1998 June 30, 1997
------------------ ------------------
<S> <C> <C> <C> <C> <C> <C>
Contracts
Gross Balance Outstanding $53,698,222 $39,870,229
Dollar Dollar
Delinquencies Amount Percent* Amount Percent*
- ------------------ -------- -------- -------- --------
30 to 59 days $1,830,953 3.41% $1,485,071 3.72%
60 to 89 days 409,741 0.76% 303,133 0.76%
90 + days 225,804 0.42% 62,144 0.16%
---------- -------- ----------- -------
Total Delinquencies $2,466,498 $1,850,348
*Total Delinquencies as
percent of outstanding balance 4.59% 4.64%
Direct Loans
Net Balance Outstanding $1,032,810 $ 764,032
Delinquencies
- ------------------
30 to 59 days $ 3,662 0.35% $ 1,728 0.23%
60 to 89 days 762 0.07% 971 0.13%
90 + days 682 0.07% 800 0.10%
------- ----- ------ -----
Total Delinquencies $ 5,106 $ 3,499
*Total Delinquencies as a
percent of outstanding balance 0.50% 0.46%
</TABLE>
Income Taxes
The Company's effective tax rate remained relatively consistent
at 38.55% and 39.18% for the three months ended June 30, 1998 and
1997, respectively.
<PAGE> 14
Liquidity and Capital Resources
The Company's cash flows for the three months ended June 30, 1998
and June 30, 1997 are summarized as follows:
<TABLE>
<CAPTION>
Three months ended Three months ended
June 30, June 30,
1998 1997
------------------ ------------------
<S> <C> <C>
Cash provided by (used in):
Operating Activities - $ 296,209 $ 338,410
Investing Activities -
(primarily purchase of
Contracts) (2,783,202) (1,301,253)
Financing Activities 2,224,000 935,500
----------- -----------
Net increase(decrease) in cash (262,993) (27,343)
</TABLE>
The Company's primary use of working capital during the
three months ended June 30, 1998 was funding the purchase of
Contracts. The Contracts were financed substantially through
borrowings from the Company's Line of credit. The line of credit
is secured primarily by Contracts, and available borrowings are
based on a percentage of qualifying Contracts. As of June 30,
1998 the Company had approximately $4.4 million available under
the Line of credit. Since inception, the Company has also funded
a portion of its working capital needs through cash flows from
operating activities. The Company is currently negotiating with
its lending source to increase its Line of credit from 30 million
to 35 million.
The self-liquidating nature of installment Contracts and
other loans enables the Company to assume a higher debt-to-equity
ratio than in most businesses. The amount of debt the Company
incurs from time to time under these financing mechanisms depends
on the Company's need for cash and it's ability to borrow under
the terms of its Line of credit. The Company believes that
borrowings available under the line of credit as well as cash
flow from operations and, if necessary, the issuance of
additional subordinated debt or the sale of additional securities
in the capital markets, will be sufficient to meet its short and
long-term funding needs.
Future Expansion
The Company currently operates thirteen branch locations,
eleven in the State of Florida and two in the State of Georgia.
The Company expects to evaluate several markets in the southeast
for possible expansion.
The Company intends to continue its expansion through the
purchase of additional Contracts and the expansion of its direct
consumer loan program. In order to increase the size of its loan
portfolio of Contracts, the Company believes it will be necessary
to increase the size of its Line of Credit. The Company is
currently negotiating with its lending source to increase its
Line of credit from 30 million to 35 million.
The Company believes that opportunity for growth continues
to exist in the States of Florida and Georgia and for the
foreseeable future intends generally to concentrate its expansion
activities in those states. The Company has identified Orlando
and Atlanta as likely areas where it may open additional branches
during fiscal 1999.
Impact of Year 2000
The Company has completed an assessment that it will have to
modify portions of its software so that its computer systems will
function properly with respect to dates in the year 2000 and
thereafter. The total Year 2000 project cost is estimated to be
immaterial. The Company's NDS software subsidiary has designed,
implemented and maintained all in-house computer systems. To
date the Company has not incurred any material expenses related
to the Year 2000 issue and does not expect to incur any material
costs.
The project is expected to be completed no later than
December 31, 1998, which is prior to any anticipated impact on
its operating systems. The Company believes that with
modifications to existing software and conversions to new
software, the Year 2000 Issue will not pose any significant
operational problems for its computer systems.
<PAGE> 15
Forward-Looking Information
This 10-QSB contains various forward-looking statements and
information that are based on management's beliefs and
assumptions, as well as information currently available to
management. When used in this document, the words "anticipate",
"estimate", "expect", and similar expressions are intended to
identify forward-looking statements. Although the Company
believes that the expectations reflected in such forward-looking
statements are reasonable; it can give no assurance that such
expectations will prove to be correct. Such statements are
subject to certain risks, uncertainties and assumptions. Should
one or more of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, actual results may
vary materially from those anticipated, estimated or expected.
Among the key factors that may have a direct bearing on the
Company's operating results are fluctuations in the economy, the
degree and nature of competition, demand for consumer financing
in the markets served by the Company, the Company's products and
services, increases in the default rates experienced on
Contracts, adverse regulatory changes in the Company's existing
and future markets, the Company's ability to expand its business,
including its ability to complete acquisitions and integrate the
operations of acquired businesses, to recruit and retain
qualified employees, to expand into new markets and to maintain
profit margins in the face of increased pricing competition.
Part II - Other Information
Item 1. Legal Proceedings - None
Item 2. Changes in Securities - None
Item 3. Defaults upon Senior Securities - None
Item 4. Submission of Matters to a Vote of Security
Holders -None
Item 5. Other Information - None
Item 6. (a) Exhibits - See exhibit index following the
signature page.
<PAGE> 16
SIGNATURES
In accordance with the requirements of the Securities Act of
1934, the Registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form
10-QSB and authorized this Report to be signed on its behalf by
the undersigned, in the City of Clearwater, State of Florida, on
August 14, 1998.
NICHOLAS FINANCIAL, INC.
(Registrant)
Date: August 14, 1998 /s/ Peter L. Vosotas
---------------------------
Peter L. Vosotas
Chairman, President,
Chief Executive Officer
(Principal Executive
Officer)
Date: August 14, 1998 /s/ Ralph T. Finkenbrink
----------------------------
Ralph T. Finkenbrink
(Principal Financial
Officer and Accounting
Officer)
<PAGE> 17
EXHIBIT INDEX
Exhibit Document
---------- ------------
None
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary information extracted from the
condensed consolidated balance sheet at June 30, 1998, and the
condensed consolidated statements of income for the 3 months
ended June 30, 1998 and 1997. Both are qualified in their
entirety by reference to such.
</LEGEND>
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 3-MOS
<FISCAL-YEAR-END> MAR-31-1999 MAR-31-1998
<PERIOD-END> JUN-30-1998 JUN-30-1997
<CASH> 40,967 0
<SECURITIES> 0 0
<RECEIVABLES> 35,013,135 0
<ALLOWANCES> 7,079,194 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 0 0
<PP&E> 626,304 0
<DEPRECIATION> 418,248 0
<TOTAL-ASSETS> 36,696,060 0
<CURRENT-LIABILITIES> 29,460,009 0
<BONDS> 0 0
0 0
0 0
<COMMON> 3,740,069 0
<OTHER-SE> 3,495,982 0
<TOTAL-LIABILITY-AND-EQUITY> 36,696,060 0
<SALES> 109,793 109,481
<TOTAL-REVENUES> 2,187,880 1,801,289
<CGS> 22,701 21,377
<TOTAL-COSTS> 928,721 766,805
<OTHER-EXPENSES> 25,451 25,500
<LOSS-PROVISION> 184,457 132,322
<INTEREST-EXPENSE> 603,063 499,234
<INCOME-PRETAX> 423,487 356,051
<INCOME-TAX> 163,263 139,505
<INCOME-CONTINUING> 260,224 216,546
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 260,224 216,546
<EPS-PRIMARY> .11 .09
<EPS-DILUTED> .11 .09
<FN>
<F1> Receivables are presented net of unearned finance charges,
non-refundable dealer reserve and allowance for doubtful accounts.
<F2> Allowances are total reserves for credit losses, comprised
of non-refundable dealer reserve and allowances for doubtful accounts.
</TABLE>
