Exhibit 99.1
QC Holdings, Inc. Reports Third Quarter
Results; 53 Stores Added During the Quarter
OVERLAND PARK, Kan.--(BUSINESS WIRE)--Nov. 2, 2005--QC Holdings,
Inc. (Nasdaq:QCCO) reported a 31.2% increase in revenue during third
quarter 2005, improving $10.0 million compared to third quarter 2004.
The growth in revenues, from $32.1 million in prior year's third
quarter to $42.1 million in the current year quarter, reflects strong
payday loan volumes and an increase in unit store count quarter to
quarter. During third quarter 2005, the Company opened 53 de novo
stores, acquired two payday loan stores and closed two locations.
The Company reported a net loss of $976,000 in third quarter 2005
versus net income of $4.5 million in third quarter 2004. As previously
reported, the Company announced its intention to close its 19 stores
in North Carolina prior to December 1, 2005 (the North Carolina
closings). In connection with the North Carolina closings, the Company
recorded approximately $1.3 million in pre-tax charges during third
quarter 2005 ($816,000 after consideration of income tax benefits) and
expects to record an additional $750,000 of non-recurring charges
during fourth quarter 2005. In addition, the North Carolina operations
incurred pre-tax losses of $827,000 during third quarter 2005
($501,000 after-tax). To provide a more comparable basis for
evaluating the Company's operating results and financial performance
over time, the Company believes that it is useful to management and
investors to analyze results after adjusting for certain items that
are not ongoing or are non-operational in nature (see reconciliations
in tables below). Excluding the third quarter costs from the North
Carolina closings and net losses from the Company's North Carolina
operations during 2005, net income for the three months ended
September 30, 2005, totaled $341,000, a $4.2 million decline from
third quarter 2004. This decline in net income was attributable to
higher loan losses in the current year quarter and costs associated
with the Company's accelerated rate of growth during the last twelve
months.
For the nine months ended September 30, 2005, the Company reported
revenues of $115.2 million, a 29.3% improvement versus the nine months
ended September 30, 2004. Net income for the nine months ended
September 30, 2005, totaled $4.3 million compared to $13.6 million for
the same 2004 period. This decline was attributable to higher loan
losses in the current year, the costs associated with the Company's
accelerated rate of growth during the last year, the costs associated
with the North Carolina closings and higher corporate expenses in
connection with developing the Company's infrastructure. During the
nine months ended September 30, 2005, the Company opened 136 de novo
stores, acquired nine payday loan stores and closed four locations.
Don Early, QC's Chairman and Chief Executive Officer, commented:
"Third quarter was very challenging for the Company. While our revenue
and store growth continue to be very strong, our rate of loan losses
was unacceptably high during the quarter. This performance reflects
our own struggles, as well as an increasingly difficult collections
environment due to several factors, including higher energy costs,
increased bankruptcy filings and a general degradation in consumer
credit. We continue to address losses through call-focused field
training and region-specific loan origination procedures. Lastly, we
are still managing through our shutdown process in North Carolina. As
we commented previously, we are very grateful to our employees for
their many years of dedicated effort and loyalty, and are disappointed
that we can no longer provide our North Carolina customers with
solutions to their short-term financial needs."
Third Quarter
The 31.2% improvement in revenues quarter to quarter resulted from
higher payday loan volumes, which reflects the increase in the number
of stores and an increase in the number of customer transactions and
average loan size. QC originated approximately $281.9 million of
payday loans during third quarter 2005, which was an increase of 41.0%
over the $199.9 million during third quarter 2004. The average loan
(including fee) totaled $366.14 versus $341.57 during the three months
ended September 30, 2004. Average fees per loan increased 5.7%, from
$51.51 in third quarter 2004 to $54.43 in third quarter 2005 due to
the higher average loan size, partially offset by a decline in the fee
rate as the Company expands in states that have lower fee structures.
Revenues for comparable stores (defined as those stores that were
open for all of the two periods being compared, which means the 15
months since June 30, 2004) improved 11.0%, or $3.5 million, to $35.2
million during the three months ended September 30, 2005, reflecting
strong customer demand. Exclusive of revenues from the North Carolina
stores, revenues for comparable stores improved 14.6% quarter to
quarter. Third quarter 2005 revenues also included $3.7 million from
the stores that were added in the six months subsequent to June 30,
2004, and approximately $3.2 million from the stores that were added
during 2005.
Revenues from check cashing, title loans and other sources totaled
$3.0 million during the three months ended September 30, 2005, up
slightly from the $2.8 million in prior year's quarter. This increase
reflects a higher number of stores providing check cashing and title
loan services, substantially offset by declining volumes for these
services in existing stores.
Store operating costs increased to $36.6 million for the three
months ended September 30, 2005, from $20.4 million in prior year's
third quarter. Store-level salaries and benefits totaled $10.3
million, or 24.4% of revenues, in third quarter 2005 versus $6.8
million, or 21.2% of revenues, in third quarter 2004. This increase in
salaries and benefits is attributable to personnel at new stores. In
addition, the Company recorded approximately $256,000 in severance and
benefit costs associated with the North Carolina closings.
During the three months ended September 30, 2005, the Company
reported loan losses of $15.0 million compared to $7.8 million in the
same 2004 period. As a percentage of revenues, losses were 35.7% and
24.2% during third quarter 2005 and 2004, respectively. The increase
in the loss ratio was caused by accelerated unit store growth,
increased losses at comparable stores and a non-recurring $340,000
increase in the allowance for loan loss provision associated with the
North Carolina closings.
Stores not included in the comparable store group reported
provision for losses of approximately $3.7 million during third
quarter 2005. The Company's newer stores experience higher loss rates
than seasoned, comparable stores, as evidenced by the average loss
ratio of 37% after the first twelve months of operations for de novo
stores during 2003 and 2004 that were open for at least twelve months
as of September 30, 2005. With respect to comparable stores, losses
totaled $11.3 million, or 32.1% of comparable store revenues, in third
quarter 2005 versus $7.9 million, or 24.8% of comparable store
revenues, in the same 2004 period. The higher loss ratio in 2005 is
attributable to a more challenging collections environment as a result
of an increase in bankruptcy filings, higher energy prices and
increased competition in the lending industry.
Other expense components, including occupancy, depreciation and
amortization and impairment of goodwill increased $5.4 million
quarter to quarter. Occupancy costs as a percentage of revenues
increased from 9.3% to 12.8% in third quarter 2005, which reflects the
high number of stores at early stages in the store lifecycle.
Depreciation and amortization increased by $868,000, primarily due to
depreciation associated with capital expenditures for de novo stores.
During third quarter 2005, the Company recorded $662,000 of goodwill
impairment, $31,000 for operating lease terminations and $58,000 in
accelerated depreciation due to the North Carolina closings.
Store gross profit declined $6.1 million from $11.6 million in
third quarter 2004 to $5.5 million in the current year quarter.
Exclusive of the costs and operational losses related to North
Carolina stores, store gross profit was $7.1 million for the three
months ended September 30, 2005. Gross profit for comparable stores
during third quarter 2005 totaled $10.1 million versus $12.3 million
in prior year's third quarter. The stores added in the six months
subsequent to June 30, 2004, and during 2005 reported net losses of
$0.5 million and $2.9 million, respectively, in third quarter 2005.
Net losses associated with closed stores, other services and stores
that were not yet opened as of September 30, 2005, totaled $1.2
million.
Regional and corporate expenses increased $2.1 million during the
three months ended September 30, 2005, to $6.6 million from $4.5
million. Together, regional and corporate expenses were 15.7% of
revenues in third quarter 2005 (versus 14.0% in prior year's quarter).
The increase in expenses in third quarter 2005 is attributable to more
home office personnel, the costs associated with being a public
company (e.g., insurance, legal and compliance) and rent expense
associated with the Company's new corporate office. These increases
were partially offset by a reduction in performance-based incentive
compensation.
Commenting on the third quarter, Darrin Andersen, President and
Chief Operating Officer, noted: "Although we expected the seasonal
downswing in loan losses, we were disappointed with our loss
experience in the third quarter. We have stressed with our field
personnel the importance of improving our collections through higher
quality phone calls, attention to customer information details and
better management of the entire loan process. We remain confident that
diligence and thoughtful execution of these tasks will reverse our
recent loss experience. Meanwhile, we are pleased to have delivered on
our promise to grow the Company at an accelerated rate. We now must
focus on developing these newer stores to performance levels similar
to our historical comparable store results."
Nine Months Ended September 30
For the nine months ended September 30, 2005, revenues grew $26.1
million to $115.2 million from $89.1 million during the nine months
ended September 30, 2004. The increase in revenues reflects higher
payday loan volumes as a result of the increase in the number of
stores and an increase in the number of customer transactions and
average loan size. QC originated approximately $743.8 million of
payday loans during the nine months ended September 30, 2005, a 35.3%
increase compared to $549.8 million during the prior year. The average
loan size (including fees) increased to $360.39 during the nine months
ended September 30, 2005, from $332.66 in comparable 2004, helping to
increase the average fees per loan from $50.30 during the nine months
ended September 30, 2004, to $53.81 in the current year period.
Revenues for comparable stores (defined as those stores that were
open for all of the two periods being compared, which means the 21
months since December 31, 2003) improved $12.0 million, or 13.7%, to
$99.4 million for the nine months ended September 30, 2005. Exclusive
of revenues from North Carolina stores, comparable store revenue
growth was 15.2% versus the prior year period. Revenues from stores
added during 2004 increased to $10.7 million from $0.5 million in
2004, and stores added in 2005 resulted in a $4.5 million increase in
revenues period to period. The aggregate increase from comparable
stores and new stores was partially offset by the loss of revenues
from stores that were closed.
Revenues from check cashing, title loans and other sources
improved to $9.8 million during the nine months ended September 30,
2005, from $9.3 million during the nine months ended September 30,
2004, for the same reasons noted in the quarterly discussion.
Salaries and benefits increased to $28.2 million in year-to-date
2005 versus $19.1 million in the same 2004 period, primarily due to
compensation for employees at new stores. Loan losses for the nine
months ended September 30, 2005, totaled $32.5 million, a $14.9
million increase over comparable 2004. The rate of increase in losses
was greater than revenue growth, resulting in losses as a percentage
of revenues of 28.2% in the nine months ended September 30, 2005,
versus 19.8% during the same prior year period. The less favorable
loss ratio period to period reflects the Company's accelerated rate of
unit store growth over the last year, very favorable experience in
first quarter 2004 attributable to the non-recurring tax benefits
received by our customers associated with the changes in the income
tax laws passed during mid-2003, and the collections issues noted in
the quarterly discussion.
Other expense components, including occupancy, depreciation and
amortization and impairment of goodwill, increased $10.3 million
period to period. The increase reflects the accelerated rate of unit
store growth, particularly with respect to occupancy costs, which grew
$5.1 million during the nine months ended September 30, 2005, versus
the same prior year period.
Store gross profit totaled $27.5 million for the nine months ended
September 30, 2005, compared to $35.6 million for the nine months
ended September 30, 2004. This decline reflects the higher loan losses
and the large number of early life-cycle stores. Comparable stores
during the nine months ended September 30, 2005, reported a gross
margin of 36.9% versus 42.0% in prior year's period. Through September
30, 2005, stores opened during 2004 and 2005 reported net losses of
$1.7 million and $5.9 million, respectively.
Regional and corporate expenses increased from $12.2 million
during the nine-month period in 2004 to $19.5 million in the current
year period for the same reasons noted in the quarterly discussion.
The Company reported interest income of $439,000 during the nine
months ended September 30, 2005, compared to interest expense of
$642,000 during the nine months ended September 30, 2004. This change
period to period is attributable to the repayment of all indebtedness
with a portion of the proceeds received in connection with the
Company's initial public offering in July 2004 and the investment of
the remaining proceeds in cash equivalents. Other expense during 2005
was nearly $1 million higher than the same period in 2004 as a result
of losses on the disposal of assets.
The effective income tax rate for the nine months ended September
30, 2005, totaled 39.2%, essentially unchanged from the 39.5% in prior
year's period.
Business Outlook
Mr. Early concluded: "We have added 211 stores since June 30,
2004, and still have between 30 and 40 stores to complete during the
fourth quarter. The investment in our infrastructure over the last
year has created significant capacity from a unit store and
operational perspective. We believe this focus on growth, together
with our recent announcements with respect to North Carolina and the
implementation of a credit services organization in Texas, which
completely eliminate the Company's exposure to the bank agency model,
provide great potential for our shareholders.
"We recognize, however, that improving our loss experience must be
our primary objective over the next few months. We have communicated
this objective to our field personnel and instituted programs that we
expect to deliver meaningful benefits. As might be expected, our focus
on reducing losses is likely to have a negative impact on our rate of
revenue growth over the near term. Given the current environment, we
believe that focusing our efforts on preventing and collecting bad
loans is a better use of time than the effort required to make the six
or seven good loans otherwise needed to compensate for the single bad
loan. With this focus on improvement in losses and earnings, together
with a very manageable target for unit store growth of 75 to 125
stores in 2006, we believe the Company is well-positioned to take
advantage of the significant opportunities in the payday loan
industry."
QC will present its financial results for the three and nine
months ended September 30, 2005, in a conference call on November 2,
2005, at 11:00 a.m. EST. Stockholders and other interested parties are
invited to listen online at www.qcholdings.com or dial 800-561-2813,
code 30003885. The accompanying slides to the presentation are
expected to be available on the QC Web site prior to the conference
call on November 2. A replay of the audio portion of the presentation
will be available online until the close of business on December 2.
The replay can also be accessed by telephone for seven days at
888-286-8010, code 33355178.
About QC Holdings, Inc.
Headquartered in Overland Park, Kansas, QC Holdings, Inc. provides
consumer financial services, principally payday loans, through 512
stores in 25 states as of September 30, 2005 (including the 19 stores
in North Carolina scheduled to be closed prior to December 1, 2005).
With more than 20 years of operating experience in the retail consumer
finance industry, the Company entered the payday loan market in 1992
and, since 1998, has grown from 48 stores to 512 stores through a
combination of new, or de novo, stores and acquisitions. During fiscal
2004, the Company advanced more than $783 million to customers through
payday loans and reported total revenues of $124.8 million.
Forward-Looking Statement Disclaimer: This press release and the
conference call referenced above contain 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 a number of 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 payday lending
practices, (2) litigation or regulatory action directed towards us or
the payday loan industry, (3) volatility in our earnings, primarily as
a result of fluctuations in loan loss experience and the rate of
growth in unit stores, (4) negative media reports and public
perception of the payday loan industry and the impact on state
legislatures and federal and state regulators, (5) changes in our key
management personnel, (6) integration risks and costs associated with
acquisitions, and (7) the other risks detailed under the caption "Risk
Factors" in our Annual Report on Form 10-K for the year ended December
31, 2004, filed with the Securities and Exchange Commission. QC will
not update any forward-looking statements made in this press release
or the conference call referenced above to reflect future events or
developments.
QC Holdings, Inc.
Consolidated Statements of Income
(in thousands, except per share amounts)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2004 2005 2004 2005
---- ---- ---- ----
Revenues
Payday loan fees $29,282 $39,088 $79,838 $105,406
Other 2,793 3,020 9,271 9,818
------- ------- ------- -------
Total revenues 32,075 42,108 89,109 115,224
------- ------- ------- -------
Store expenses
Salaries and benefits 6,811 10,291 19,130 28,166
Provision for losses 7,769 15,036 17,609 32,459
Occupancy 2,975 5,375 8,957 14,055
Depreciation and amortization 438 1,306 1,197 2,420
Impairment of goodwill 662 662
Other 2,433 3,899 6,653 9,923
------- ------- ------- -------
Total store expenses 20,426 36,569 53,546 87,685
------- ------- ------- -------
Store gross profit 11,649 5,539 35,563 27,539
Regional expenses 1,846 2,587 5,516 7,285
Corporate expenses 2,637 4,046 6,636 12,231
Depreciation and amortization 283 243 566 608
Interest expense (income), net (40) (85) 642 (439)
Other expense, net (251) 278 (210) 733
------- ------- ------- -------
Income (loss) before taxes 7,174 (1,530) 22,413 7,121
Provision (benefit) for income
taxes 2,664 (554) 8,858 2,791
------- ------- ------- -------
Net income (loss) $4,510 $(976) $13,555 $4,330
======= ======= ======= =======
Earnings (loss) per share(a):
Basic $0.23 $(0.05) $0.80 $0.21
Diluted $0.22 $(0.05) $0.74 $0.20
Weighted average number of common
shares outstanding(a):
Basic 19,556 20,479 14,351 20,522
Diluted 20,807 20,479 15,378 21,505
(a) See computations of earnings per share on following page
QC Holdings, Inc.
Computations of Earnings per Share
(in thousands, except per share amounts)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2004 2005 2004 2005
---- ---- ---- ----
Net income (loss) $4,510 $(976) $13,555 $4,330
Less: dividend and participation
rights from mandatory stock
redemption(a) 2,135
------- ------- ------- -------
Income (loss) available to
common stockholders $4,510 $(976) $11,420 $4,330
======= ======= ======= =======
Weighted average number of
actual common shares
outstanding 19,556 20,479 16,755 20,522
Reduction in weighted average
shares from mandatory stock
redemption(a) 2,404
------- ------- ------- -------
Weighted average number of
common shares outstanding 19,556 20,479 14,351 20,522
Incremental shares from
assumed conversion of stock
options(b) 1,251 1,027 983
------- ------- ------- -------
Weighted average number of
diluted common shares
outstanding 20,807 20,479 15,378 21,505
======= ======= ======= =======
Basic earnings (loss) per
share $0.23 $(0.05) $0.80 $0.21
Diluted earnings (loss) per
share $0.22 $(0.05) $0.74 $0.20
Notes:
- ------
Basic and diluted earnings per share are computed by dividing income
available to common stockholders by the weighted average number of
common shares outstanding during the period. Through June 30, 2004,
the Company used the two-class method for computing basic and diluted
earnings per share to consider the effect of the mandatory stock
redemption under a Stockholders Agreement between the Company and two
principal stockholders. The Stockholders Agreement was terminated on
June 30, 2004.
(a) As set forth in Statement of Financial Accounting Standards No.
150 (SFAS 150), Accounting for Certain Financial Instruments with
Characteristics of Both Liabilities and Equity, which was adopted on
July 1, 2003, the shares considered to be subject to redemption under
the Stockholders Agreement for which a liability had been recorded
through June 30, 2004, are excluded from weighted average shares for
purposes of computing basic and diluted earnings per share. Further,
SFAS 150 requires that the portion of net income representing dividend
and participation rights associated with the mandatory redemption be
removed from income available to common stockholders pursuant to the
two-class method set forth by Statement of Financial Accounting
Standards No. 128, Earnings per Share. The Stockholders Agreement was
terminated effective June 30, 2004, and the computations for earnings
per share no longer require ongoing adjustments.
(b) Because the Company reported a net loss during the three months
ended September 30, 2005, inclusion of incremental shares from the
assumed conversion of stock options (totaling 969 shares during the
three months ended September 30, 2005) in the computation of diluted
earnings per share would be anti-dilutive.
QC Holdings, Inc.
Non-GAAP Reconciliations
Consolidated Statements of Income
(in thousands, except per share amounts)
(Unaudited)
The Company analyzes historical results after adjusting for certain
items that are not ongoing or are non-operational in nature. As
previously reported, the Company announced its intention to close its
19 stores in North Carolina prior to December 1, 2005. The Company
believes that excluding items associated with its North Carolina
operations and related closing charges is useful to management and
investors because it provides a more comparable basis for evaluating
the Company's operating results and financial performance over time.
Internally, these adjusted results are used to evaluate the
performance of the Company.
Three Months Ended Three Months Ended
September 30, 2004 September 30, 2005
------------------------- -------------------------
Non-GAAP Non-GAAP
Adjustments Adjustments
GAAP (a) Adjusted GAAP (b) Adjusted
---- ----------- -------- ---- ----------- --------
Revenues
Payday loan
fees $29,282 $(1,558) $27,724 $39,088 $(641) $38,447
Other 2,793 (112) 2,681 3,020 (78) 2,942
------- ------- ------- ------- ------- -------
Total
revenues 32,075 (1,670) 30,405 42,108 (719) 41,389
------- ------- ------- ------- ------- -------
Store expenses
Salaries and
benefits 6,811 (430) 6,381 10,291 (630) 9,661
Provision for
losses 7,769 (431) 7,338 15,036 (600) 14,436
Occupancy 2,975 (192) 2,783 5,375 (232) 5,143
Depreciation
and
amortization 438 (16) 422 1,306 (76) 1,230
Impairment of
goodwill 662 (662)
Other 2,433 (117) 2,316 3,899 (110) 3,789
------- ------- ------- ------- ------- -------
Total store
expenses 20,426 (1,186) 19,240 36,569 (2,310) 34,259
------- ------- ------- ------- ------- -------
Store gross
profit 11,649 (484) 11,165 5,539 1,591 7,130
Regional
expenses 1,846 (111) 1,735 2,587 (143) 2,444
Corporate
expenses 2,637 (294) 2,343 4,046 (301) 3,745
Depreciation
and
amortization 283 (4) 279 243 (3) 240
Interest
expense
(income), net (40) (113) (153) (85) (136) (221)
Other expense,
net (251) 1 (250) 278 278
------- ------- ------- ------- ------- -------
Income
(loss)
before
taxes 7,174 37 7,211 (1,530) 2,174 644
Provision
(benefit) for
income taxes 2,664 15 2,679 (554) 857 303
------- ------- ------- ------- ------- -------
Net
income
(loss) $4,510 $22 $4,532 $(976) $1,317 $341
======= ======= ======= ======= ======= =======
Earnings (loss)
per share:
Basic $0.23 $- $0.23 $(0.05) $0.06 $0.01
Diluted $0.22 $- $0.22 $(0.05) $0.06 $0.01
(a) These adjustments reflect the elimination of the operations
associated with the North Carolina stores.
(b) These adjustments reflect the elimination of the operations
associated with the North Carolina stores. In addition, adjustments
reflect charges during third quarter 2005 that are not ongoing,
including $662,000 for goodwill impairment, $256,000 for severance and
benefits, $340,000 for estimated loan losses, $58,000 for accelerated
depreciation on property and $31,000 for terminations of operating
leases.
QC Holdings, Inc.
Non-GAAP Reconciliations
Consolidated Statements of Income
(in thousands, except per share amounts)
(Unaudited)
Nine Months Ended Nine Months Ended
September 30, 2004 September 30, 2005
------------------------- -------------------------
Non-GAAP Non-GAAP
Adjustments Adjustments
GAAP (a) Adjusted GAAP (b) Adjusted
---- ----------- -------- ---- ----------- --------
Revenues
Payday loan
fees $79,838 $(4,386) $75,452 $105,406 $(3,869) $101,537
Other 9,271 (463) 8,808 9,818 (373) 9,445
------- ------- ------- ------- ------- -------
Total
revenues 89,109 (4,849) 84,260 115,224 (4,242) 110,982
------- ------- ------- ------- ------- -------
Store expenses
Salaries and
benefits 19,130 (1,228) 17,902 28,166 (1,566) 26,600
Provision for
losses 17,609 (1,000) 16,609 32,459 (1,144) 31,315
Occupancy 8,957 (586) 8,371 14,055 (659) 13,396
Depreciation
and
amortization 1,197 (39) 1,158 2,420 (111) 2,309
Impairment of
goodwill 662 (662)
Other 6,653 (395) 6,258 9,923 (313) 9,610
------- ------- ------- ------- ------- -------
Total store
expenses 53,546 (3,248) 50,298 87,685 (4,455) 83,230
------- ------- ------- ------- ------- -------
Store gross
profit 35,563 (1,601) 33,962 27,539 213 27,752
Regional
expenses 5,516 (376) 5,140 7,285 (400) 6,885
Corporate
expenses 6,636 (908) 5,728 12,231 (916) 11,315
Depreciation
and
amortization 566 (7) 559 608 (11) 597
Interest
expense
(income), net 642 (340) 302 (439) (377) (816)
Other expense,
net (210) (24) (234) 733 (22) 711
------- ------- ------- ------- ------- -------
Income
(loss)
before
taxes 22,413 54 22,467 7,121 1,939 9,060
Provision
(benefit) for
income taxes 8,858 22 8,880 2,791 762 3,553
------- ------- ------- ------- ------- -------
Net
income
(loss) $13,555 $32 $13,587 $4,330 $1,177 $5,507
======= ======= ======= ======= ======= =======
Earnings (loss)
per share:
Basic $0.80 $- $0.80 $0.21 $0.06 $0.27
Diluted $0.74 $- $0.74 $0.20 $0.06 $0.26
(a) These adjustments reflect the elimination of the operations
associated with the North Carolina stores.
(b) These adjustments reflect the elimination of the operations
associated with the North Carolina stores. In addition, adjustments
reflect charges during third quarter 2005 that are not ongoing,
including $662,000 for goodwill impairment, $256,000 for severance and
benefits, $340,000 for estimated loan losses, $58,000 for accelerated
depreciation on property and $31,000 for terminations of operating
leases.
QC Holdings, Inc.
Consolidated Balance Sheets
(in thousands, except share and per share amounts)
December 31, September 30,
2004 2005
------------ -------------
ASSETS (Unaudited)
Current assets
Cash, cash equivalents and short-term
investments $40,526 $34,523
Loans receivable, less allowance for
losses of $1,520 at December 31, 2004
and $2,530 at September 30, 2005 49,385 50,650
Prepaid expenses and other current assets 2,893 3,608
------- -------
Total current assets 92,804 88,781
Property and equipment, net 17,236 30,694
Goodwill 7,298 7,265
Other assets, net 1,098 1,305
------- -------
Total assets $118,436 $128,045
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $396 $732
Accrued expenses and other liabilities 2,751 5,742
Deferred revenue 2,926 4,046
Deferred income taxes 3,428 3,681
------- -------
Total current liabilities 9,501 14,201
Non-current liabilities 772
Deferred income taxes 2,643 2,648
------- -------
Total liabilities 12,144 17,621
------- -------
Commitments and contingencies
Stockholders' equity
Common stock, $0.01 par value: 75,000,000
shares authorized; 20,371,000 shares
issued and outstanding at December 31,
2004; 20,700,250 shares issued and
20,478,950 outstanding at September
30, 2005 204 207
Additional paid-in capital 69,417 71,790
Retained earnings 36,671 41,001
Treasury stock (2,574)
------- -------
Total stockholders' equity 106,292 110,424
------- -------
Total liabilities and stockholders'
equity $118,436 $128,045
======= =======
QC Holdings, Inc.
Selected Statistical and Operating Data
(in thousands, except Store Data, Average Loan and Average Fee)
Three Months Ended Nine Months Ended
September 30, September 30,
2004 2005 2004 2005
---- ---- ---- ----
Unaudited Unaudited
Store Data:
Number of stores, beginning
of period 301 459 294 371
De novo stores opened 23 53 32 136
Acquired stores 2 9
Stores closed (2) (2) (4) (4)
--------- --------- --------- ---------
Number of stores, end of
period 322 512 322 512
========= ========= ========= =========
Comparable Store Data:
Total revenues generated by
all comparable stores $31,711 $35,228 $87,436 $99,380
Total number of comparable
stores 293 293 285 285
Average revenue per
comparable store $108 $120 $307 $349
Percentage increase in
comparable store revenues 11.0% 13.7%
Operating Data:
Loan volume $199,925 $281,890 $549,829 $743,792
Average loan (principal plus
fee) 341.57 366.14 332.66 360.39
Average fee 51.51 54.43 50.30 53.81
Loss Data:
Allowance for loan losses:
Balance, beginning of
period $960 $1,820 $1,090 $1,520
Adjustment to provision for
losses based on evaluation
of outstanding receivables 200 710 70 1,010
--------- --------- --------- ---------
Balance, period end $1,160 $2,530 $1,160 $2,530
========= ========= ========= =========
Provision for losses:
Charged-off to expense $14,382 $24,736 $37,036 $58,738
Recoveries (6,813) (10,410) (19,497) (27,289)
Adjustment to provision for
losses based on evaluation
of outstanding receivables 200 710 70 1,010
--------- --------- --------- ---------
Total provision for losses $7,769 $15,036 $17,609 $32,459
========= ========= ========= =========
Provision for losses as a
percentage of revenues 24.2% 35.7% 19.8% 28.2%
Provision for losses as a
percentage of loan volume 3.9% 5.3% 3.2% 4.4%
CONTACT: QC Holdings, Inc.
Douglas E. Nickerson, 913-234-5154