Source: QC Holdings
ET

QC Holdings, Inc. Reports Second Quarter 2017 Results

OVERLAND PARK, Kan., Aug. 25, 2017 (GLOBE NEWSWIRE) -- QC Holdings, Inc. (OTC PINK:QCCO) reported a net loss of $1.9 million and revenues of $22.8 million for the second quarter ended June 30, 2017. For the six months ended June 30, 2017, net loss totaled $1.6 million and revenues were $46.2 million. For the three months ended June 30, 2016, net loss totaled $4.3 million and revenues were $29.2 million. Net loss totaled $3.1 million and revenues totaled $60.9 million for the six months ended June 30, 2016.

The three months and six months ended June 30, 2017 include severance charges of $77,000 and $313,000, respectively. The company recorded a charge of $2.7 million in second quarter 2016 due to a loan loss reserve for a business-to-business receivable and paid approximately $132,000 and $322,000 in severance and other costs during the three months and six months ended June 30, 2016, respectively. 

The decline in revenues during 2017 compared to 2016 was primarily attributable to the third quarter 2016 store swap transaction, whereby the company acquired 33 branches operated in Illinois, Kansas, Missouri and Utah and sold its 98 branches operated in Alabama, Arizona, California, Mississippi and Ohio. Loan loss rates were lower in 2017 due to the $2.7 million second quarter 2016 reserve noted above, as well as 2017 recoveries in the business-to-business portfolio and better-than-expected collections in the branches that were closed.

About QC Holdings, Inc.

Headquartered in Overland Park, Kansas, QC Holdings, Inc. is a leading provider of consumer loans in the United States and Canada. In the United States, QC offers various products, including single-pay, installment and title loans, check cashing, debit cards and money transfer services, through 264 branches in 14 states at July 31, 2017. In Canada, the company, through its subsidiary Direct Credit Holdings Inc., is engaged in short-term, consumer internet lending in various provinces.

Forward Looking Statement Disclaimer:  This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on the company’s current expectations and are subject to many risks and uncertainties, which could cause actual results to differ materially from those forward-looking statements. These risks include (1) changes in laws or regulations or governmental interpretations of existing laws and regulations governing consumer protection or short-term lending practices, (2) uncertainties relating to the interpretation, application and promulgation of regulations under the Dodd-Frank Wall Street Reform and Consumer Protection Act, including the impact of proposed rulemaking by the Consumer Financial Protection Bureau (CFPB), (3) ballot referendum initiatives by industry opponents to cap the rates and fees that can be charged to customers, (4) uncertainties related to the examination process by the CFPB and indirect rulemaking through the examination process, (5) litigation or regulatory action directed towards us or the short-term consumer loan industry, (6) volatility in our earnings, primarily as a result of fluctuations in loan loss experience and closures of branches, (7) risks associated with our dependence on cash management banking services and the Automated Clearing House for loan collections, (8) negative media reports and public perception of the short-term consumer loan industry and the impact on federal and state legislatures and federal and state regulators, (9) changes in our key management personnel, (10) risks associated with owning and managing non-U.S. businesses, and (11) other various risks. QC will not update any forward-looking statements made in this press release to reflect future events or developments.

(Financial and Statistical Information Follows)

QC Holdings, Inc.
Consolidated Condensed Statements of Operations
(in thousands, except per share amounts)
(Unaudited)
 
  Three Months Ended 
June 30,
   Six Months Ended 
June 30,
  2016   2017   2016   2017 
Revenues       
Consumer loan interest and fees$27,187  $20,555  $56,396  $41,712 
Other   2,035     2,261     4,499     4,522 
Total revenues 29,222   22,816   60,895   46,234 
Provision for losses 12,376   6,198   19,618   9,468 
Operating expenses   15,708     11,889     31,581     24,443 
Gross profit 1,138   4,729   9,696   12,323 
                        
Corporate and Regional expenses 7,264   6,025   13,794   12,294 
Other expense, net   475     563     588     1,382 
Loss before income taxes (6,601)  (1,859)  (4,686)  (1,353)
Provision (benefit) for income taxes   (2,258)    81     (1,565)    222 
Net loss$  (4,343) $  (1,940) $  (3,121) $  (1,575)
                        
Loss per share:       
Basic       
Net loss$  (0.25) $  (0.11) $  (0.18) $  (0.09)
                        
Diluted                       
Net loss$  (0.25) $  (0.11) $  (0.18) $  (0.09)
Weighted average number of common shares outstanding:                       
Basic 17,333   17,333   17,333   17,333 
Diluted 17,333   17,333   17,333   17,333 
         



QC Holdings, Inc.
Consolidated Condensed Balance Sheets
(in thousands)
 
  December 31,
2016

  June 30,
2017
ASSETS
     (Unaudited) 
Current assets      
Cash and cash equivalents$16,660 $17,293 
Restricted cash 1,865  1,872 
Loans receivable, less allowance for losses of $9,836 at December 31, 2016 and $7,578 at June 30, 2017 32,586  29,179 
Other current assets   6,500    4,091 
Total current assets 57,611  52,435 
Non-current loans receivable, less allowance for losses of $623 at December 31, 2016 and $179 at June 30, 2017 1,664  504 
Property and equipment, net 6,039  5,884 
Other assets, net   8,041    7,827 
Total assets$73,355 $66,650 
         
LIABILITIES AND STOCKHOLDERS’ EQUITY    
Current liabilities    
Accounts payable and other current liabilities$10,420 $8,144 
Revolving credit facility 2,250   
Subordinated debt   7,736    7,516 
Total current liabilities 20,406  15,660 
     
Non-current liabilities   3,361    2,979 
Total liabilities 23,767  18,639 
     
Stockholders’ equity   49,588    48,011 
Total liabilities and stockholders’ equity$73,355 $66,650 
         


QC Holdings, Inc.
Consolidated Condensed Statements of Cash Flows
(in thousands)
(Unaudited)
 
  Six Months Ended
June 30, 2016
  Six Months Ended
June 30, 2017
          
Operating activities:    
Net loss$(3,121) $(1,575) 
Adjustments to reconcile net loss to net cash 21,480   11,148  
Changes in assets and liabilities (15,199)  (4,968) 
Net operating 3,160   4,605  
           
Investing activities:    
Capital expenditures (1,581)  (1,407) 
Other 32   1  
Net investing (1,549)  (1,406) 
           
Financing activities:    
Net repayment of borrowings (4,500)  (2,625) 
Other          
Net financing (4,500)  (2,625) 
           
Effect of exchange rate changes on cash and cash equivalents 230   59  
           
Net increase (decrease) in cash and cash equivalents   (2,659)    633  
Cash and cash equivalents at beginning of year     16,115       16,660  
Cash and cash equivalents at end of period$  13,456  $  17,293  
           

 

Contact:	 	        
Douglas E. Nickerson  (913-234-5154)		
Chief Financial Officer